The Government has made efforts to seek to appease its supporters by putting it out that social welfare rates have not been cut but have been maintained, when, in fact, what it has done is targeted vulnerable and poor families, rural dwellers, the disabled, the elderly, students — primary, secondary and even third level — employers, SMEs and community employment schemes.
It could be argued that last year's rate cuts, as harsh as they were, were fairer than what we have heard announced this week. Last year €875 million was saved in expenditure on social protection measures. The proposed budget will save €475 million in the same area. The growth rates on which the budget is predicated are the most worrying of all because it could well be that the Government could be back before the House next year trying to entice backbenchers to support a cut of €800 million or €900 million.
When Deputy Michael McGrath, our party spokesperson on finance, responded to the budget on Tuesday, he said we would be constructive and responsible in opposition. We have voted for measures since the Dáil was convened. We have not opposed for the sake of opposition. We agree that a €3.8 billion correction is necessary, but we do not agree with the means by which the Government is seeking to achieve it. We produced an alternative document and will propose amendments to the social welfare Bill. As a party, some of us met the troika which gave us the same indications that they gave to the Minister for Finance, Deputy Noonan. As he indicated to the House on Tuesday, "The troika made it clear that they had no difficulty in substituting one fiscal measure for another of equal value." The budget is not progressive; it is socially regressive.
The Taoiseach's announcement yesterday that a review group would "look at" the callous cuts to disability allowance for young people is simply not good enough. Despite being handed the opportunity by the Minister for Finance, the Taoiseach refused to acknowledge that the Government had made a mistake in singling out young adults with disabilities in the budget. He has had opportunities in the past two days to acknowledge that the cuts were cruel and that they should be reversed forthwith. Instead, he has kicked the issue down the road and announced the establishment of a review group. We do not need a review group to tell us that this is a callous and discriminatory cut that singles out a particularly vulnerable group which is not in a position to earn a wage. At approximately €7 million, the savings to the Exchequer are paltry, but the impact on the lives of the young people concerned is enormous.
There appears to be a Government split on how to respond to the cuts. On Tuesday night, in response to Deputy Michael McGrath, the Minister for Finance signalled a climbdown on the issue. Yesterday the Taoiseach pulled back, presumably on the insistence of the Minister for Social Protection. Who would have thought it would fall to the Minister for Finance to be the conscience of the Labour Party? The young people due to qualify for disability allowance, and their families, need certainty, not Civil Service reviews.
It is time for the Labour Party to swallow its pride and take the lead of the Minister for Finance to hold up their hands, admit their mistake and reverse the cut permanently and forthwith.
The provision whereby the rate for the third and subsequent children is to be standardised makes a mockery of the Labour Party's "red line" approach to child benefit reductions. Only last February the Tánaiste said enough was enough and that families could take no more. He said that was a prerequisite, not for entering Government with Fine Gael, but for entering discussions with the party. However, on Monday a Labour Party Minister announced that the rate of child benefit for the third and subsequent children would be standardised in the next two years at €140. For a family with five children, this will mean a loss of more than €100 a month. That is another critical blow to families struggling to make ends meet and is a breach of the trust given to the Labour Party.
It also flies in the face of the spin successfully sold to the media in the previous week. The Labour Party launched its pre-election manifesto on child care with a strong defence of child benefit, declaring that it was against any cuts because, first, family incomes had already taken a substantial hit in the previous few budgets; second, it was the State's own recognition that Ireland remained a very expensive place to raise a child; and, third, to do so would create poverty traps, work disincentives and increase the number of children living in poverty. All of that is still true; the only thing to change is the Labour Party's position. There is a growing pile of broken promises on social welfare rates, fuel allowance, one-parent families and hitting the most vulnerable. The Fianna Fáil pre-budget submission earmarked child benefit rates for protection, building on the major advances made in the past decade.
The announcement of a significant cut in fuel allowance is a crude and cruel cost-cutting measure, further exposing the hypocrisy of Fine Gael and the Labour Party. The programme for Government states: "We will complete and publish a strategy to tackle fuel poverty", but all we have seen is a six week reduction in the fuel allowance period from 32 weeks to 26. No strategy has emerged, only cuts. That leaves old age pensioners and welfare recipients increasingly exposed to poor weather conditions and heating cost increases. Contrary to its election promises and the programme for Government, the Government has produced nothing to tackle fuel poverty. To make matters worse, there are further increases in carbon taxes, which will raise fuel prices and put further pressure on vulnerable members of our community.
Only last year the Tánaiste criticised the reduction in the fuel allowance period and asked what would happen to the pensioners who were left in the cold. The previous Government gave those experiencing fuel poverty an additional €40 for the cold weather. The Tánaiste's cynicism on the issue has now been exposed. Several months ago on Question Time, the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, went a little too far in espousing the Government's virtues by claiming that even the weather has improved since it came to power. I did not think he was enough of an expert on the climate to advise the Cabinet that the weather would improve over the next five years to the extent that it could reduce the fuel allowance period by six weeks. Fuel allowance is crucial for low income households and old-age pensioners. These cutbacks hit them directly and will have an immediate and negative effect on their quality of life.
The retrofit allowances are also being cut by 50% in some cases. These allowances were lauded when the Government came up with its jobs budget — sorry, initiative — which lacked targets for job creation. This is yet another election promise which the Labour Party has abandoned, perhaps forever.
The announcement of reductions in the six day week for jobseeker's benefit calculation is a cynical smoke and mirrors exercise aimed at covering up a major cut-back. The rate for part-time workers is in effect being reduced. People who can only get part-time work or who are caring for their children during the week will be hit hardest by this change. What is now calculated on a six day basis will be reduced to five days. This direct attack on the welfare rights of part-time workers reflects another broken promise by the Government. It is hiding behind the technical details but it cannot cover up the fact that the welfare benefits for these people will be reduced. It makes a mockery of the claim in the programme for Government that social welfare rates will not be reduced. That promise was repeated by the Tánaiste on the day Deputy Nulty was elected to the Dáil. I commend Deputy Nulty on the stance he has taken because the budget is at odds with what he had said during his campaign.
The reduction in the rent supplement is a crude cost cutting exercise that will not offer a long-term solution to the social housing waiting lists despite the Government's promises to introduce fundamental reform. The programme for Government stated that the rent supplement scheme would be reformed to move people off it to the rental accommodation scheme using local authorities. There was merit in this idea but while the Minister indicated previously that the reforms are still on track the budget says nothing about them. Once again the Government is failing to live up to its promises of reform.
This Social Welfare Bill is clearly anti-family. In addition to child benefit cuts, it will discontinue the once-off grant for multiple births of €635 per child and further grants for children at the age of four and 12. The back-to-school allowance is being eliminated for children aged between two and four. School transport charges will increase from €50 to €100 and the maximum payment is being doubled to €220. The increase in minimum contributions on mortgage interest subsidy does nothing to help those affected by mortgage arrears.
A previous Government fell after trying to introduce VAT on children's clothes and shoes. We have been reminded several times that the 2% increase in the higher rate of VAT is not applicable to children's clothes and shoes but hard pressed vulnerable families will have to contribute an extra €55, and €50 for additional children, to clothe their families. Will the real socialists in the Labour Party follow the lead of the late Mr. Jim Kemmy, who brought down a Government on this issue?