I propose to share time with Deputy Barry Cowen if he appears in the Chamber.
The central defence made by the Minister is that core social welfare rates will remain unchanged. Like many things, that is not completely true but it is partly true. I wish to draw the attention of the House to a phenomenon known as the poverty line. The poverty line is an internationally accepted standard. It defines the minimum income that a family in particular circumstances will need to live in conditions of decency and dignity. For a single adult living alone in the country the poverty line is €208 per week, precisely €20 per week more than the rate of jobseeker's allowance or jobseeker's benefit, to which he would be entitled. In the case of two adults, the joint income falls €32 per week below the poverty line. To say that we have kept rates intact and that we have not driven people further into poverty is something of a hollow boast.
Since the downturn in the economy in 2008 there have been eight austerity budgets in total. The ESRI, Social Justice Ireland and several other organisations, which have no political axe to grind and no affiliation to any party on this or the other side of the House but simply tell it as they see it, have stated unequivocally that last year's budget, the first introduced by this Government, was the first to be regressive in its scope.
Social Justice Ireland and a number of other organisations, which have no political axe to grind and no affiliation to any party but simply tell it as they see it, have stated unequivocally that last year's budget, the first introduced by this Government, was regressive. While previous budgets were cruel and harsh and they hurt a great number of people, they were at least progressive.
According to the Economic and Social Research Institute, ESRI, as a result of last year's budget the income of the poorest 40% of households decreased by between 2% and 2.5% while the income of the richest 30% decreased by only 0.7%. As stated by Social Justice Ireland and the ESRI, in its initial report, all the indicators are that this budget continues the trend of favouring the better off at the expense of the less well off. In its commentary on the budget, Social Justice Ireland said:
Budget 2013 is unjust and regressive. For the second year in a row this Government has introduced a budget which is deeply regressive both socially and economically. Socially, it hits people on low income more than the better off. The cumulative effect will be devastating.
It could be devastating. For example, one family could be hit by some or all of the following: the reduction in child benefit, abolition of the PRSI allowance, the property tax, the trebling of prescription charges, the cuts to the back to school clothing and footwear allowance, abolition of the back to education allowance and the increase in the drug repayment threshold. For a family which is already vulnerable and in poverty, the cumulative effect of these changes, on top of last year's changes, will be a devastating affect on its already precarious situation.
As regards the poverty line and basic social welfare rates in this country, some recipients of social welfare do not rely totally on their basic social welfare payment. Some receive ancillary benefits such as the respite care grant, living alone allowance, fuel allowance, free travel allowance and free household benefits and so on. In most cases, the net effect of these ancillary benefits is to bring people close to the poverty line. Rarely do they bring people over that line. These are the precise benefits which the Government has targeted.
The Government has stated that it intends to make the following savings in 2013: €17 million from cuts to the back to school clothing and footwear allowance, €4 million from the cuts to the farm assist scheme, €33 million from cuts to jobseeker's benefit, €6 million from cuts in social welfare exceptional needs payments, €11 million from cuts to the back to education allowance, €26 million from cuts to the respite care grant and €81 million in total from cuts to household benefits, including electricity and telephone allowances, which amounts to a grand total of €178 million in savings. On 8 November last my colleague, Deputy Sean Fleming, asked the Minister for Finance, Deputy Noonan, by way of parliamentary question what would be the yield to the Exchequer if the rate of universal social charge on the incomes of employees and the self employed which exceed €100,000 were raised. The proposed increase in this regard was 3% on the part of their income which exceeded €100,000. The Minister replied stating that such an increase would yield €200 million to the Exchequer. The sum of €200 million exceeds €178 million. We understood from the media that it was the policy of the Labour Party to support this proposal and to have this increased universal social charge imposed on high earners. Had the Labour Party not caved in but succeeded in doing this, the Government would have had €200 million extra to play with and none of these cuts would be necessary.
The Government was faced with a simple choice, namely, to increase tax on high earners or punish the poor. The Government chose the latter option. That choice was not dictated by the troika, the IMF, EMU, EFSF, ECB and so on. It was the choice of Government. It had freedom of choice to take a little more from the rich or take a lot, relatively speaking, from the poor and it chose the latter. I do not propose to embarrass the Minister by quoting all that she and the Labour Party said prior to the last election. However, I will say this. Many of the votes which the Labour Party - I know this because I canvassed in many areas outside of my constituency - received in the last general election were based on its promises not to cut child benefit. That is a fact.
A previous Administration, led by Fianna Fáil, made a choice which I believe was the wrong one. When faced with a situation whereby child care was grossly under-developed and the choice was to invest in the development of a proper child care system or increase child benefit substantially to enable people pay for child care themselves it chose the latter option. While there were arguments on both sides and the issue was well debated internally, the then Government opted for the latter choice. It would not have been my choice but that was the choice made. The result is that child care in this country remains grossly underdeveloped. An OECD report in 2012 estimates that families with children in this country spend up to 41% of their disposable income on child care, which is double the OECD average. Child care is a significant cost for families. This has come about not by chance but because of a deliberate decision. One either has the money to pay for child care or one has a properly developed system that does not cost too much. If we continue on the current course we will have neither. That is the reality. In 2010, the then Fianna Fáil led Government increased child care benefit by approximately 300%. This was recognised by the current Minister, Deputy Burton, when on 10 December 2010, almost two years to the day, she stated:
I congratulate Fianna Fáil on past increases in child benefit. Child benefit has succeeded in lifting children out of poverty.
Barnardos has stated that the combined cuts to child benefit and the back to school clothing and footwear allowance this year will cost the average family with three children €606 per annum on top of the additional cost of €383 per annum last year, which when combined amounts to almost €1,000 per annum. The Irish League of Credit Unions published a survey recently which stated that 2 million people, half the population, have only €100 per month disposable income left after they meet all essential bills. These two reductions amount to 60% of that sum. Taking this change, in conjunction with the tax on maternity benefits and the cut in the back to school clothing and footwear allowance, Ms Niamh Ó Ceallaigh, spokesperson for a leading parent's group, said it is as if the Government does not want women to have children. Allied to the cuts in child benefit is the decision to tax maternity benefits. This will affect 46,000 women and will yield €40 million for the Government, which means that on average a woman who gets pregnant and has a child will be €833 per annum worse off. What I object to most about this change is the spurious reason for it given by the Minister for Finance on budget day. He said the measure is designed to correct an anomaly in the tax system. He also made the point that other short term social welfare benefits are counted for tax purposes and maternity benefit was not. If it is an anomaly in the tax system, it is one with which we have lived for many years. It is coincidental and surprising that just as the country is at its nadir and women are under the worst possible pressure the Minister falls in love with uniformity in the tax system and makes this change.
This has nothing to do with anomalies or uniformity in the tax system. This is a direct increase in taxation to prise an extra €40 million out of women from the allowance they receive before and after they give birth to a child.
The Minister will be aware of the public's view on the cut to the respite care grant. It is cruel, callous and beyond the bounds of decency. The Government has spun that there is no reduction in the basic carer's allowance but there is because everybody in receipt of carer's allowance is automatically entitled to the respite care grant. The carer's allowance is €204 and the respite care grant works out at €32.50 per week, giving a carer's payment of €236.50 per week. That has been reduced by €6.50 per week. There are also approximately 5,000 people in the country who are in receipt of the respite care grant and who, for one reason or another, do not qualify for the carer's allowance at all. Those people are suffering a cut of up to 20%. I believe that for the sake of €26 million, this is unconscionable, frankly.
The Taoiseach told us on the Order of Business this morning that the Government spent €770 million on carers this year. Even if it did, the contribution of carers, which has been independently costed, is reckoned to be worth about €5 billion to this country. Carers should be cherished. We are told that the budget cannot be unravelled and that for the sake of €26 million in a financial adjustment of €3,500 million, the whole budget will come crashing down. Who seriously believes that? It is doubly ironic that this change has been announced in a week in which the HSE advertised for 35 leadership coaches, if you please, to help managers with the personal transition that might happen if they are promoted. The HSE wants 35 leadership coaches to help the people promoted to cope with promotion. It is a classic case of insiders looking after insiders and to hell with the needy. I could quote many things from many newspaper articles about this particular change but will just quote the editorial from the Irish Examiner of Monday last which says:
All of us are prepared to make sacrifices to rebuild our economy but that does not mean supporting cruelty. There were very many difficult measures in Wednesday's budget but cutting the carer's allowance is too cruel and unfair. Do the right thing, Taoiseach, and drop this proposal; find the money elsewhere. You know where to look.
And so say all of us. Of course, that respite care grant cut would not have been necessary if the Government had been prepared to increase slightly the USC on the better off.
When we look at the change to jobseeker's benefit, we really get into the Alice in Wonderland world of language, where a word "means just what I choose it to mean - neither more nor less". Fine Gael is committed to not increasing tax, while the Labour Party is committed to not reducing social welfare benefits. An increase in the USC is an increase in tax, but an increase in PRSI is not an increase in tax at all, particularly if one does it by way of withdrawing an allowance. As far as social welfare is concerned, the Government is not reducing jobseeker's benefit but is cutting the time for which such benefit is paid. Therefore, a cut in the period during which something is paid is not equivalent to a reduction but I beg to differ. It is outrageous that somebody who has put up five years of stamps, which is 260 contributions, will be taken off jobseeker's benefit after nine months. I am informed by many social welfare officers throughout the country that many of the wives and spouses of those people have low-paid, menial and sometimes part-time jobs and of course, the jobseekers will be assessed on that income and that is the purpose of this. This is allied to what was done to 130,000 casual workers last year when they were moved, in the blink of an eye, from a six day week to a five day week - a surreptitious cut.
Last year children aged two to four no longer qualified for the back to school clothing and footwear allowance. It was cancelled for those children. When this Government came into office, the allowance for children aged between four and 11 was €200. Now it is €100, which is a reduction of 50%. The allowance for a child over 12 years was €305. Now it is €200, which is a reduction of more than 33%. This is an allowance that only the poorest get and therefore, only the poorest are hurt by this cut. I note that the Minister said there is a lot of good value in the shops and that people can shop around. The last time I heard of any politician uttering such sentiments was when Margaret Thatcher was in power in Britain and approximately 4 million people were unemployed. The high priest of the Tory right, Norman Tebbit, who was the Employment Secretary, suggested that the unemployed were lazy, shiftless people who should get on their bikes and get a job. This is the Irish version of get on your bike. I would expect it from the Tory right in the United Kingdom but to hear it coming from a Minister who describes herself as a socialist is a surprise indeed. The Children's Rights Alliance asked a very simple question: how is this change in the best interests of children. It is a simple question and the silence is deafening. This cut could also have been avoided by a slight increase in tax on the rich.
The back to education allowance has been cut even though the programme for Government states that the coalition would "expand eligibility for the back to education allowance". In substitution for weekly social welfare payments, there was a books and materials allowance of €500. Last year, that was reduced to €300 but this year it has been reduced to zero. I repeat, the programme for Government contained a commitment to expand eligibility for the back to education allowance. I consulted a dictionary at the weekend in search of a definition of the word "expand" and found amplify, augment, broaden, increase, grow, magnify and multiply. The dictionary also gave opposites for "expand" which included abbreviate, condense, decrease, reduce, shorten and shrink. Therefore, according to the Oxford English Dictionary, the Government has done precisely the reverse of what it said it would do. Does the Minister really want to encourage young people into the system or not? This represents a barrier to young people, many of whom are from disadvantaged backgrounds, who want to take the initiative and return to education and learn new skills. In addition, of course, there is a sneaky cut to €160 per week for anyone under 21 who goes into the back to education system. The Minister need not think that cut slipped by us either.
The household benefits package has been savaged to the extent of about 30%. The old, infirm and vulnerable will now have to get on their bikes and shop around in the same way. We proposed that the Department of Social Protection would do the negotiating with the various utility providers. As I understand it now, it will be up to people to negotiate themselves. The possibility of some of the elderly I know, who are living alone and who have a very scant knowledge of computers, going online to shop around is very limited indeed.
The budget also includes a €6 million cut to the exceptional needs payments fund. Within the last ten days we learned through the media that community welfare officers who distribute exceptional needs payments have been writing to charities such as the Society of St. Vincent de Paul to ask them to help out some of their clients because they have not enough money in the exceptional needs fund to pay them. I know of charities in my own city that are much smaller and much less well known than the Society of St. Vincent de Paul, to whom people have been sent by community welfare officers working for this State. The people involved are very deserving cases but the welfare officers have no money left to help them. They are asking charities to give hampers to people for Christmas and so forth. What is the Government's reaction? To cut the exceptional needs fund by a further €6 million.
We are all familiar with Charles Dickens' A Tale of Two Cities. What we have reached now, unfortunately, at this point in our history, is a tale of two countries, or maybe even a tale of three countries. On one side we have the wealthy and the protected elite, whose privileges are protected and left intact. On the other side, we have over 700,000 people, or one in six - it may even be one in five now given the age of the data - who are living below the internationally defined poverty line and the internationally defined standard of dignity and decency. At least 250,000 of these are children. That poverty line, below which they are living, has actually come down by 10% since 2009.
Yeats wrote a poem about a man who was trying to impress his chosen woman. After telling her what he could do if he was wealthy, he admitted "But I, being poor, have only my dreams". The sad fact is that as 2012 expires and we slip into 2013, the poor people of Ireland do not even have dreams because many of them are living in abject poverty without hope or belief that they will ever escape the conditions to which they are shackled. These are the very people who are most targeted by this budget. The Government has asked them to contribute the most to pay for mistakes in which they played no hand, act or part. It could have avoided making matters worse in the budget but it spurned the opportunity to do so. President John F. Kennedy said in his inaugural speech more than 50 years ago, "If a free society cannot help the many who are poor, it cannot save the few who are rich". The last two budgets have taken an enormous step towards a cruder, meaner, harsher and more pitiless society.
I leave the last word to Social Justice Ireland, which stated:
The choices Government is making are undermining Irish society and dismantling the social model that has underpinned Ireland’s development for more than half a century. Fair and balanced development is being replaced by choices that are producing a deeply divided two-tier society.
The Government has no mandate to make societal choices that move Ireland in this direction.
That is a damning indictment of the Labour Party.
