Léim ar aghaidh chuig an bpríomhábhar

Seanad Éireann díospóireacht -
Tuesday, 18 Dec 2001

Vol. 168 No. 26

Social Welfare (No. 2) Bill, 2001: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

This is the first of two Bills I intend to bring before the Seanad to implement the £850 million social welfare package announced in last week's budget. This is the second year running in which the social welfare package amounts to £850 million and the first time in many a year in which it has exceeded the income tax package. In the five years since this Government came into office Ireland has changed dramatically for the better. The Government has delivered on its commitment to ensure that social welfare recipients have benefited from economic growth.

Over the lifetime of the Government contributory old age pensioners received increases of almost 50%, compared to 10% under the rainbow coalition. Non-contributory pensioners got increases of no less than 56% compared to 11% under the previous Government. Child benefit was increased by over £60 per month per child for the first two children compared to only £10 under the previous Government.

The Government has massively increased spending on social welfare from £4.5 billion in 1997 to £7.4 billion in 2002 – an increase of almost two-thirds in just five years and over 20% on 2001. That gives the lie to some of the criticism from lobby groups.

The recent budget has been welcomed by a wide range of groups. The Combat Poverty Agency commended the policy direction of increasing welfare payments in line with earnings. People with Disabilities in Ireland, the representative body for people with disabilities, welcomed the improvements for people with disabilities.

In line with the commitments in our action programme and in the Programme for Prosperity and Fairness, all old age pensions have been increased by more than the rate of earnings growth over the period. When we came into office, the old age contributory pension stood at only 28% of average industrial earnings. We have increased that in each year to 31% in 2002 – well on the way towards the target set by the national pensions policy initiative of 34%.

The Bill addresses commitments set out in the Government Action Programme aimed at building an inclusive society, improves the living standards of everyone on social welfare and fulfils our commitments under the Programme for Prosperity and Fairness. With increases ranging from 9% to 11.8%, people dependent on social welfare will see real and significant increases in their incomes next year.

These are the key provisions of the Bill. While in Government we have given pensioners weekly increases of £5, £6, £7 and £10 in both 2001 and 2002 compared to increases of between £1.50 and £3 given by the previous Government. The increases provided for in sections 2 and 3 of this Bill more than delivers on our commitments. Last year I gave a commitment to increase the widow's and widower's contributory pension for those over 66 to the full old age contributory pension. The special increase provided for in section 2 of the Bill of £12.04 will bring the new rate to £114.04, within £2 of the full old age contributory rate.

The Government is also committed to substantial increases in other social welfare payments. Over the period from 1997, general social welfare increases have increased well ahead of inflation and indeed ahead of increases in gross average industrial earnings. In this budget, despite the difficult times caused by the world economic downturn and the resulting pressure on resources, we are giving very significant increases to those who are least well off. The increases being provided this year for people on the lowest payments are greater than last year and indeed much earlier. We are providing a general increase of £8 per week in respect of social welfare customers under pension and retirement age. In per centage terms, the £8 increase is between 7.4% to 9.4%, depending on the payment concerned.

In addition, we are providing a special increase of £9.56 for those on the lowest rates of social welfare rates, supplementary welfare allowance and short-term unemployment assistance. This brings the lowest social welfare rate up to £93.60. This increase of £9.56 is consistent with the majority recommendation of the Social Welfare Benchmarking and Indexation Group, which was established under the PPF and reported last September.

There is considerable merit in raising all payments, as and when this is possible, with the objective of ensuring a reasonable relationship in due course between the average living standards in the community and the level of social welfare payments. Not only have we made substantial progress towards the PPF target of £100 for lowest social welfare payments, we have almost reached this target this year and I have no doubt that the target will be exceeded in the remaining budget in the period of the programme. This Bill is fully in keeping with our commitments under the PPF.

We are also providing further very significant increases of £10 per week for qualified adults aged 66 and over and of pensioners with lesser amounts for those on reduced payments, a pensioner couple on a full social welfare payment will therefore get an increase of £20 per week. The qualified adult allowance for a person over 66 has been increased from 72% of the old age contributory pension in 1997 to 77% in 2002 and now represents 85% of the old age non-contributory pension. As I promised last year this will be increased in the coming years to the full old age non-contributory pension rate to benefit women in the home who do not qualify for the contributory pension.

There are also substantial increases for qualified adults under age 66. The qualified adult allowances are being increased by £8 and £9 per week. For example, a couple on the lowest rate of payment of supplementary welfare allowance will get a total increase of £17.50, bringing their weekly payment up to £155.60. If they have children obviously they will also benefit from the substantial increases in child benefit.

It has been a source of some complaint in the past that social welfare increases used to come into effect later than budget tax changes. We were berated on all sides of the House that increases were announced in December and not delivered until much later – the second week in June when we came to office. It was also a source of complaint that tax changes came in much earlier than social welfare increases. Last year I brought forward the implementation date of social welfare weekly rate increases to the start of the tax year, 6 April. Now that the tax year has moved to the start of January I am bringing forward the budget increases in weekly rates of payment to 1 January. This means that in 2002 social welfare clients will be paid their increase for the full 52 weeks of the year compared to 29 weeks when we came into office in 1997. In the case of an old age contributory pensioner, this is equivalent to an extra 4.4% annual increase, quite apart from the actual increases.

People receiving short-term payments such as unemployment payments will receive their increases immediately in the first week of January. In the case of people on longer term payments such as pensions, because of the time needed to print and distribute pension books, pensioners will receive their increases somewhat later. Some 210,000 people, mainly widows and widowers, one parent families, invalidity pensioners and persons receiving carer's allowance, will receive a lump sum payment for six weeks of the budget increases on 14 February, obviously backdated to 1 January. This will be included in their new order books effective from that date. For example, a widow on a contributory pension over 66 years of age will receive a backdated payment of £72.24, €92. A further 393,000 recipients, mainly old age and retirement pensioners and disability allowance recipients, who are due to get their new order books in April, will receive a special payment in mid-February comprising six weeks arrears of the budget increase and seven weeks' advance payment. For example, a pensioner couple over age 66 will receive a lump sum payment of £260 or €330 on 15 February.

Section 4 increases the weekly income thresholds for family income supplement from January next by amounts ranging from £34.22 to £35.09 for all families on FIS. This will lead to a net gain of £16 per week in the average FIS family payment; I must correct that – it is €34.22 to €35.09. The increased payments will be paid in the first week in January.

Section 5 of the Bill provides for an increase in the earnings ceiling for employees' social insurance contributions and the income ceiling for payment of optional contributions. Section 6 provides for a reduction of 1.25% in the employers' higher rate of social insurance contribution. The earnings ceiling is being increased in line with projected increases in average industrial earnings in 2002, by 8% from £28,250 to €38,740, with effect from the start of the income tax year in January. The employers' higher rate of social insurance contribution is being reduced from 11.3% to 10.05% from the beginning of March 2002, at a cost of €237 million in 2002 and €347 million in a full year.

Section 7 provides for a one-off transfer of €635 million in the 2002 financial year from the social insurance fund to the central fund of the Exchequer. This measure has provoked considerable debate over the past week. It is important to remind Senators that the fund was established in 1953 and that for all but the past five of the intervening 48 years, income contributed to the fund was insufficient to meet demand. During the first 43 years of the fund's existence, the shortfall in income has been met from Exchequer funds; in other words, by the taxpayer. Since 1997, income to the social insurance fund has exceeded spending, a remarkable turnaround resulting from the Government's prudent management of the economy. The social insurance fund now enjoys an accumulated surplus of over £1 billion. It is projected that the surplus will increase cumulatively to about £3 billion in 2004. It is entirely appropriate, therefore, that part of this surplus should be returned to the source from which earlier shortfalls were met. The value in real terms of transfers in the opposite direction since 1953 exceeds £11 billion.

The social welfare package in this year's budget equals last year's record amount of £850 million. As the public finances are so tight, it would not have been possible, if the transfer from the fund had not occurred, to achieve this level of spending without recourse to borrowing. In spite of the transfer, the social insurance fund will remain in a very healthy financial position. After the changes in this year's budget are taken into account, the projected accumulated surplus in the fund at the end of 2002 will be more than £960 million. It would not make any sense to have this money in the bank while borrowing to pay for social welfare improvements. Despite comments in the other House, the social insurance fund is the people's money and it is right that we should give it back to them. I do not doubt that the House agrees that the Government's prudent and successful management of the economy over the past four years has provided the foundation upon which the healthy state of the social insurance fund rests. It is appropriate that the taxpayer, who has contributed to much to the fund since its inception, should benefit in the circumstances I have outlined.

The Social Welfare (No. 2) Bill, the first of two instalments, clearly demonstrates the Government's commitment to looking after the needs of the elderly, widowed persons, carers, the unemployed and others who are dependent on our social welfare system. The Bill ensures that the £850 million package provided for in the budget will be directed to those most in need. I commend the Bill to the House.

I welcome the Minister for Social, Community and Family Affairs to the House. He seems to have become somewhat smug, however, as he praised himself far too much in his speech. I admit there are many good elements in this Bill. During the Second Stage debate in the Dáil, the Minister asked Deputy McGrath to clarify the nature of the yellow documents from which he was reading. I have two parts of the same important document. I am irritated when politicians claim, as the Minister has today, that they have displayed "prudent management" of the economy. One would hope that all Governments would be able to manage in a prudent manner.

The fact that I will refer to statistics supplied by the Society of St. Vincent de Paul should not be seen as an indication that I am unable to compose my own script. The statistics are relevant as a contrast to the arguments made by the Minister in favour of his good budget. Ireland has the highest GDP growth rate of 28 OECD countries and has the best total productivity growth factor country in the EU. It is the second best of 20 OECD countries in terms of having a regulatory environment conducive to competitiveness and ranks fourth in the EU in terms of Government debt as a percentage of GDP. Ireland is fifth among 19 OECD countries for return of capital in the business sector and barriers to trade and investment here are lower than in 25 OECD countries. These statistics are worthy of merit and I congratulate all concerned.

Equality and fairness are governing factors when determining social welfare policy and Ireland's statistics in this regard are unimpressive. Life expectancy and Government consumption expenditure as a percentage of GDP are lower in Ireland than in any other EU country. Ireland ranks 14th of 20 OECD countries in terms of its literacy rates, according to the latest report. The cornerstone of my contribution today, however, is the fact that income equality in Ireland is better than only three other EU countries. Ireland is one of the worst countries in the European Union in terms of child poverty and is the sixth worst country in the EU in terms of early school leaving. I appreciate that the Minister's remit does not encompass all the issues I have raised but the reduction of social inadequacy must be addressed as the gap between those who have benefited from Ireland's economic success and those who have not is not being lessened by the Bill's provisions.

Many commentators have claimed that the Bill means the less well off will not benefit as much as those who are better-off and I believe there is a level of truth behind such a claim. I welcome the fact that social welfare recipients will receive higher benefits and allowances as a result of this Bill, but the increases do not match the growth in the salaries of income earners. I appreciate that the Minister is not a miracle worker, as I have said on each occasion that he has come to this House during the last four years.

This is my fifth year.

This is the fifth time the Minister and I have admired each other's policies. I admit that he has done exceptionally well and is an excellent Minister. Nobody is beyond reproach, however, as Solomon is not always Solomon and even Homer nods.

I wish to discuss the effects of the Minister's social welfare proposals on the people I represent. The Minister is probably sick of hearing about the sale of the family silver, or the raid on the social insurance fund, but he is paid to get tired listening to us. I admire whoever wrote the Minister's speech, but I doubt it was the Minister. I began to wonder if the man or woman who wrote the speech is on the same planet as the rest of us when I saw the way in which such a negative was turned into a positive.

I guarantee the Senator that I wrote that part of the speech.

That explains my confusion, as I was not sure if the comments related to the matter about which I have been concerned. The Minister has been a little naughty in that, last year, he congratulated himself and pointed out my faulty thinking with regard to the invasion of any kind of fund which was for the nation's good. He stated that could never be done. We spoke in particular about pension increases and the Minister was most emphatic. He obviously had a change of heart or mind.

That was with regard to different legislation.

Perhaps the Minister saw the month of May looming – the World Cup takes place in June – and decided to deliver an election special. I like the way the provision is worded in the Minister's speech to the effect that the fund was in deficit for so long, but now it is so plentiful that we almost have to throw it away. That is dazzling, but I am not dazzled by it. This is not, and never could be, the right thing to do. If I was disbursing funds, I would bear in mind that this is the Social Welfare Bill and not a Bill designed for the aggrandisement of any political party. The Bill is supposed to help those who cannot help themselves.

The £8 increase per week is not sufficient; a £10 increase would have been better. Who makes the final decisions on who gets the money? Ministers and officials work for their own Departments, but the £8 provision is miserable. I thought the Minister was going to lower the eligibility threshold for the medical card. The drugs refund scheme is excellent, but £42 per month is a lot of money for those who are just about surviving on low incomes.

I acknowledge the budget's provisions regarding rental accommodation which will release more units onto the market. However, the Government should hang its head in shame given the lack of consideration shown to those on lower incomes, particularly those who cannot obtain housing. I am older than the Minister, but I have never seen housing waiting lists as long as they are now. The last time such a situation prevailed was in the late 1950s when the Dublin housing action group was so frustrated that it took to the streets. Unfortunately, we are almost back to that situation. I do not approve of rent control, but I do not see how we can stand over a situation where rents for the most miserable accommodation are being increased without any intervention on the part of the Government. There must be some way of providing basic shelter for people. The Government has introduced many excellent innovations, but it will be remembered and damned for its handling of housing waiting lists and the homeless.

I will not speak about the issue of health as I do not wish to stray from the legislation. However, I have never seen so many people unable to buy their own homes, or to rent or obtain a house from a local authority. Something is radically wrong. The Minister knows that the social housing provision never materialised. It was a dream which did not become a reality and shows no signs of doing so.

I wish to refer to the miserable £2 increase in the fuel allowance. The term "fuel allowance" seems archaic in this day and age when most homes have some form of heating system. Unfortunately, in my local authority area only 20% of houses built over the past 20 years have central heating. For many elderly people their only source of heat is an open fire. It is reprehensible that we have not provided such people with the money to install central heating. The Minister will be aware of a Norwegian study on the effects of heating on the health of the elderly. Every year about 2,000 elderly people die during cold weather, many because they have been so cold for so long. It is untenable that nothing has been done for such people.

The section of the Minister's speech dealing with the timing of payments was beautifully phrased in that it made a delay seem beneficial. However, the only people who will benefit from this provision are those in the Government as the small lump sum payments will be made before the election in May. Some of the payments will be made on St. Valentine's Day which is appropriate as the Minister will be a combination of Santa Claus and St. Valentine. I do not know about St. Valentine, but we are still trying to figure out whether Santa Claus is a dream.

The budget could have done more for widows. It would not cost much to include them in the free telephone and television licence schemes. This should have been done in what was an embracing budget. The Minister was generous in several areas, but not regarding the basic issues. He has been genuinely busy and hard working over the past number of years, but some of us represent areas of deprivation or marginalisation in which more people are in receipt of the £8 per week increase than increased tax credits. The Minister does not seem to realise how bad the situation is. We see so much success that we have forgotten that some social welfare payments are shamefully inadequate. The Minister has not increased these payments.

The Minister and I have a high regard for each other. He only annoys me when he tries to pretend that he is whiter than white, when we all know there is a little grey in everyone. This is not a whiter than white Bill.

An Leas-Chathaoirleach

That issue does not arise under the Bill.

The Senator is talking about my grey hair.

The Minister knows what I mean and that is the main thing. We have not served those whom the Department is supposed to serve. We have adequately served some of them, but we have grossly neglected others. I hope the Minister will take cognisance of the £2 per week increase in the fuel allowance. Such an increase would just about pay for ten cigarettes. I am not suggesting that smoking is good for one, as obviously it is not. However, £2 per week is not adequate.

The problem is that in some cases houses are divided in the middle by a hallway so that the bedroom is always freezing due to its lack of a fireplace. Ridiculously, the water has boiled over and the boiler has burst. The only way the water can be kept hot is by keeping the fire going all day. It is ludicrous and I wish the Minister would take another look and find some way of dealing with it, although I appreciate that his colleague, the Minister for the Environment and Local Government, would actually allocate the money. Some people find it impossible to keep the fire going all day; £2 per week is just not good enough. There is no heart in that offer. It is disgracefully minimal.

The Minister has shown thought and generosity in some of his other proposals and I wish that he would reconsider only these two issues. He will be pleased to hear that I have not put down any amendments. It is not that the exercise would be futile but that foregone conclusions sometimes change one's reasons for doing things. I am appalled that the family silver has been raided and I hope it will be replaced next year, although I doubt it. I hope the Minister has no intention of doing this more than once. I also ask the Minister to bring the £8 up to £10 for the sector I mentioned and to review the meagre fuel allowance.

I welcome the Minister to the House, although I understand that he may have to leave to attend a ministerial meeting. I welcome the Bill. It is a significant day, as we are bringing part of our Social Welfare Bill through the House before the end of the year due to the commencement of increased social welfare payments on 1 January, five months earlier than has previously occurred. The reason is that the Government and the Minister made a commitment to that effect. The lateness of the payment of social welfare changes announced in the budget has previously been a bone of contention. The reason we are here the week before Christmas to deal with this Bill is to ensure that the people most in need will receive their payments earlier than ever before. I welcome that change.

By this time next week Santa Claus will have arrived, but Senator Ridge is old enough to be realistic. She should realise that Santa's sack can only carry so much. Every child in the country could write down a list of what he would like. We all did, but my mother always said that if I were too greedy he would bring me nothing. As an adult one must be realistic and recognise that although Santa Claus is always very good, regardless of what he brings, we all have our wishes and one must accept that change has come about that is better for most people in society.

To be fair, the Minister for Social, Community and Family Affairs, the Minister for Finance and the Government, despite the negativity prior to the budget, the slowdown in the economy and all the rumours, predictions and speculation from the media, have delivered to the less well off. We received a budget of £850 million, the same as last year. We must give credit where credit is due. There will always be people who may not gain to the same extent as others, but we have to acknowledge what has been done.

I have congratulated the Government for moving the payments forward but I must also congratulate the Minister, Deputy Dermot Ahern, and his Department officials for the information which has been relayed to the general public over recent months about the transition to the euro. It is a difficult time in the Department, with payments being moved forward to 1 January and the euro changeover being dealt with at the same time. A remarkable job has been done by the Minister and the Department to ensure that people are well informed about their entitlements and that they receive them from 1 January.

Senator Ridge produced the age-old argument that the budget was unjust and that inequality is being extended. Some of the comments in an article in The Irish Times after the budget finished off the myth about inequality. I am sure everybody would agree that this newspaper has not always been favourable to the Government. It was stated, on 12 December, that “the impact of Budget 2002 is highly progressive, favouring those with the lowest incomes.” Another section of the same article stated that “the balance of the budgetary package is tilted firmly away from tax reduction towards increased benefits, including child benefit.” A statement like that from The Irish Times is a backhanded compliment to the Government, which I accept wholeheartedly on its behalf.

With this Bill the Government fulfils the commitment it made when it came into office and which was reinforced through An Action Programme for the Millennium and through the PPF. Before coming into office Fianna Fáil's manifesto indicated that it would deliver £100 a week to old age pensioners. This has now been far exceeded. In 1997, when we came into office, the contributory old age pension stood at only 28% of the average industrial wage. We have increased that, in 2002, to 31%, which is well on the way to the target of 34% set by the national pension policy initiative.

Senator Ridge referred to the free schemes and the extension of fuel allowance. I do not know who the Senator has been talking to but I know that at the other end of the country, rural people are looking forward to the increase in fuel allowance and appreciate its extension over recent years, particularly in last year's budget. It is often argued that the fuel allowance should be increased continuously but one must decide whether it is better to increase the fuel allowance or the old age pension. I feel that the general public and old age pensioners appreciate more the increase in their pensions throughout the year and see it as an added bonus to have the fuel allowance throughout the winter months. It is my opinion that this is the general feeling of the people I speak to.

The Minister referred to the old age pension but it is worth repeating that since taking office the Government has, in its five budgets, increased the pension by £5, £6, £7 and £10 and once again by £10 this year. It does not take a mathematician to work out that this is £38 in five budgets compared to £7 in the three budgets of the rainbow coalition. I leave it to Senator Ridge to calculate that one for herself.

Regardless of the spin the Opposition wish to put on it, the pensioners appreciate what has been done for them by the Government over the past four years. I referred very briefly to the free schemes and the fuel allowance. These type of improvements are often glossed over but to the elderly person they are extremely important and they are appreciated. I am glad we have been able to fulfil our commitment and hope the elderly will continue to be provided for as they deserve. Not only have old age pensioners benefited over the past four years but all other social welfare recipi ents have had increases well ahead of inflation. This year alone, the weekly increase of £8 is being provided for social welfare recipients under 66. Senator Ridge referred to inequality and quoted from a document we all received, but she did not indicate the initiatives which were welcomed by CORI.

I knew Senator Leonard would.

She said the lack of distribution of resources was neither fair nor just. I take umbrage with that. I have no difficulty with the increases gained by social welfare recipients. This document gives an example of a working couple earning £40,000 and the increases they received as opposed to the increases a social welfare recipient received. I am not earning £40,000 but I do not have a problem with couples who are working hard and getting increases. I would not like to be part of a Government which says to working people that they deserve to get less than someone on social welfare. We all know the problems faced by people trying to look after families and purchase their own homes. They have to work hard and should be entitled to the same increases as somebody who does not work. When one looks at the figures the increases may not seem very good for people on social welfare but relatively speaking the increases in this budget were geared towards the less well-off.

I regard the focus on the social insurance fund as a joke. Coming into the Christmas period we get into the silly season, but the debate on this in the other House capped all. What is the big deal. The social insurance fund has been in existence for 48 years and for the past five years what has been put into it has far exceeded spending. I am not a financial wizard but if I have a great deal of savings and require some money—

They are not Senator Leonard's savings.

They are the savings of the taxpayers and it is to those people that the money is being returned, not to me. If one has a billion pounds surplus and money is required in the short-term what is the difficulty in borrowing that money? It is not for paying me or my like and goes back to the individuals from whom the money was originally taken. That would be a prudent management of finances and correspondingly is prudent management of the economy. This is basic mathematics. It is not a matter of stealing, it is delivering back to the people money that is in excess and I do not see the problem with that.

I did not hear any logical or coherent arguments in the other House from the Opposition as regards what we should have done. We would not have been able to deliver this level of spending to social welfare recipients who we all say are the most in need. We are in general agreement that the more we can deliver to them the better, but we would not have been able to do that if we had not borrowed from this surplus fund. Can someone tell me where to get money for social welfare increases without borrowing? There is a limit to what is in the bottom of Santa Claus' sack.

I look forward to hearing what Senator O'Meara will say about the social insurance fund. I have yet to hear a logical explanation from the Opposition as to where they would get the money to provide all their proposed increases.

Senator Ridge spoke of an extra £2 in fuel allowances and this, that and the other. I would love to do that and more but one has to be realistic. We must decide where the money will come from. She criticised the Minister for using money from the social insurance fund but did not say where he should have got it.

Why was there a need to borrow?

An Leas-Chathaoirleach

Senator Leonard without interruption please.

It is good that Senator O'Meara and the Labour Party are not in Government because we would borrow a great deal more to implement all their policies and the national debt would go through the roof. The talk here today is all aspirational—

Does that include the Minister?

I may not be affected, come the election, but the people will speak—

They will, wait and see, Senator Leonard.

People appreciate what has been done for them in recent years. The most deserving have been looked after.

We all focus on the major changes that take place in the social welfare Bill, but every year the Minister, Deputy Dermot Ahern has introduced a small change which has benefited a huge number of people and this year has been no different.

I welcome the special increase for qualified adult dependants over 66. It is important to recognise the contribution of these people, mainly women, who have spent their lives working in the home. Another small adjustment was referred to by Senator Ridge who spoke of the anomalies that exist within the widows' pensions as opposed to other types. The Minister gave a special increase to widows and widowers over 66 years up to £114 this year. This sum is only £2 short of the full contributory pension and I welcome this fact. At last we are giving recognition to widows and I am sure people under 66 years will be dealt with in years to come. It does not affect a huge number of people but, for those who are left with dependent children following the loss of a partner, it eases the financial burden. While we tend to look at the wider scope of the Bill, it is often the specifics that mean most to individuals. I welcome the fact that these individuals have been taken care of in the Bill.

Pre-budget commentators did not anticipate any significant improvements for social welfare recipients. As a result of the social welfare improvements, social welfare expenditure in 2002 will be two thirds greater than in 1997. Increases for those dependent on social welfare will now be payable more than five months earlier than when the Government took office.

Improvements sometimes tend to be overlooked. The amount of media attention generated is one significant yardstick by which a budget can be measured. I believe the recent budget got less media attention than most previous ones. It was practically forgotten within a very short time, perhaps, partly, because George Lee of RTÉ was not jumping up and down excitedly on the six o'clock news bulletin. There was relatively little media discussion on it after the Thursday evening and I interpret that as an indication of success. If media people had found something controversial to take issue with, they would have done so. It is an excellent tribute to the Minister for Social, Community and Family Affairs, Deputy Dermot Ahern, the Minister for Finance, Deputy McCreevy, and the Government collectively that this budget and the social welfare provisions attracted so little media attention.

Did the Senator read The Irish Times?

Unfortunately, I very seldom read The Irish Times.

Or fortunately?

Yes, fortunately. It was not a Freudian slip. That is what I meant. However, my point is that the lack of criticism reflects well on the Government for doing a good job on the day.

I join in welcoming the Minister of State, Deputy Jacob, to the House. I also thank Senator Leonard for her incisive media analysis in relation to the budget. Effectively, media coverage of the budget has become a one day wonder – it is purely a matter of habit at this stage. Regardless of whether it generates political controversy, the media just moves on to the next story the following day.

This Social Welfare Bill is, in effect, the main part of the recent budget. Unfortunately, the late and unexpected change to the Order of Business led me to change the main thrust of my remarks this afternoon. I intended to table more than one amendment to the Bill which, I expected, we would discuss tomorrow. Since that is not now to be, I have concentrated on the issue of the social welfare fund which I did not intend to address until Committee Stage but, in the light of Senator Leonard's remarks, I may as well deal with it now.

I posed the question as to why the Minister for Finance needed to raid the social welfare fund to the extent of €600 million. He needed to raid the social welfare fund as well as the Central Bank fund and others because of the way he has totally screwed up his management of the economy. Within the short period of a year, he has gone from what was a healthy financial position to a disastrous financial position. The country now faces a very serious and difficult period of economic management . Undoubtedly, the next Government will be a different Government, not led by the Fianna Fáil Party. People have seen how the Government has completely mismanaged the nation's finances and its prosperity. While the media may not have paid much attention beyond budget day and its immediate aftermath, the people know full well that the raiding of the social insurance fund actually represents stealing. It involved raiding a fund specifically put there by workers and employers to shore up the position of people, particularly in hard times.

The Minister for Social, Community and Family Affairs, Deputy Dermot Ahern, said the insurance fund has only been in surplus for the last five years. That is stating the obvious, but why is that the case? It is only in recent years that we have had significant prosperity in this country and the Minister should stop claiming it as his own. This Government knows it inherited a sound, well-managed financial position which, as it also knows, it has squandered and blown to an unbelievable extent. The Minister for Finance has attempted to mask the situation with his amazing magical tricks in the budget. I will return to the social welfare fund on Committee Stage.

The budget and this Bill represent another missed opportunity in a long line of missed opportunities. It is particularly tragic for people living with the day to day reality of poverty in this country. They are the people we meet in our clinics and elsewhere in the course of our work as politicians and they are to be found in every community in Ireland. They cannot survive on the social welfare income they are given by the Government and Christmas, for them, is a source of great anxiety, stress and pressure. Despite all that has been said about social welfare increases, the fact remains that Ireland spends proportionately less on social welfare than it ever did before. Total State expenditure on social welfare, as a percentage of gross national product, has declined from 9.9% in 1997 to 9.1% in 1998, 8.4% in 1999 and 7.9% in 2000 to an estimated 7.5% this year. As the country's prosperity has increased, as the Government has had more to spend on social welfare, it has chosen to spend less. That just about sums up the policy of the Government.

Senator Leonard said that people who are at work should not feel that people on social welfare are getting more than they should. That reflects the views of the Tánaiste that we should be a work driven economy and, to a large extent, we should be such an economy. We should welcome a situation in which more people are at work because the best counter to poverty is to have a job. However, we have a moral responsibility to take care of those who are not at work, for whatever reason, those who cannot work and who are vulnerable in our society and those who are elderly or widowed. The fact is that we are not doing that adequately. The scandalous aspect is that, for the first time ever, we could have done so in the last five years but the Government did not do it, for its own reasons, which I suspect were ideologically driven. We have passed up the best opportunity ever to eradicate poverty once and for all in this country.

On this matter, the justice commission of the Conference of Religious in Ireland concluded:

The poorest people in Irish society have been betrayed in Budget 2001. With sufficient resources available to enable it to eliminate income poverty from both adults and children the Government chose instead to give these resources in superabundance to those who were already better off. As a result this Government's legacy after four budgets is to have substantially widened the rich-poor gap which was already the worst in the EU.

The facts, therefore, speak for themselves.

That is not to say that some aspects of the Social Welfare Bill are not to be welcomed. I welcome the increase in child benefit for what I hope it is, namely, a measure designed to deal with the matter of child poverty. However, I suspect it is the view of the Government that it is designed to somehow meet the increasing needs of those parents at every level of society – not just those who are totally dependent on social welfare – who are obliged to avail of child care. If that is the aim of the increase, it appears quite miserly because it will do nothing to help meet the increasing costs working couples who incur in providing adequate child care for their offspring. The other side of the equation is – this again shows how the Government has failed in respect of child care – that the issue of provision has not been dealt with.

I have raised this matter on more than one occasion in the House. Despite the fact that the Minister for Justice, Equality and Law Reform has been allocated millions of pounds to assist with the provision of child care across the country, this simply has not happened. That money has become stuck in the works somewhere. I recently made inquiries at local level about the child care committees and was informed, I am sure absolutely correctly, that structures have to be established. In other words, we must first build the framework to deliver child care before we can even contemplate spending the money that has been provided. This issue has been managed in the most ham-fisted way and I wonder why parents do not become worked up about it. I suppose the reason is that they are so busy working, in the first instance, and, in the second, they know they cannot rely on the Government to deliver what is should be delivering, namely, good quality, accessible and affordable child care.

There are a number of other points I would like to raise in the context of this Second Stage debate but I am more anxious to proceed to Committee Stage. I will, therefore, keep my remarks to a minimum. However, I do wish to refer to two groups, one of which is carers. The sense of disappointment among carers at the inadequacy of the Government's response in the budget is monumental. Everyone in the House pays lip service to the work done by carers. We meet these people and we know many of them. One of the best things to happen in recent years was that carers became organised and began to demand their rights. However, we have a long way to go in terms of meeting their real needs. Carers are one of the most neglected groups in society in the sense that we pay lip service to the wonderful work they do but then do not do enough to meet their needs by providing tangible resources.

I recently met a man who is involved with the Centre for Independent Living in Thurles. He specifically asked me to raise with the Minister the question of the money allocated for personal assistants by the Government in the budget. The individual in question understands that this money will be spent through the health boards and he has asked that it be ring-fenced in order to guarantee that it will only be spent on personal assistants. This will ensure that the raison d'être behind providing the funding will be met. I ask the Minister to pay particular attention to this matter.

I also want to refer to the issue of widows and widowers. I am sure other Senators have had experiences similar to mine. Perhaps it is because I am a woman, but I am approached on a worryingly regular basis by widows, in particular, who inform me in graphic terms that they cannot manage to live on the pension payments they receive. One woman told me that she has to depend on a family member to buy her a winter coat from time to time because she is so badly off for money. She cannot keep a car on the road under any circumstances and is dependent on her neighbours to bring her to town to do her shopping. This woman is living a life of poverty. Widows are one of the most forgotten groups in society. Again, we pay great lip service to them but do nothing to meet their real needs.

I will now deal with the fact that social welfare payments are not inflation-proof. The Minister could have taken action in that regard in the legislation had he chosen to do so. The rate of inflation last year was so high that it effectively neutralised the impact or benefit of the increases provided in budget 2001. It appears this may also happen in 2002. I have stated on more than one occasion that a person on a fixed social welfare income will have to make provision throughout the year to pay waste collection charges, for example. People, particularly pensioners, find that charges of this nature eat into the annual increases they receive. While we may not be able to take action in this regard, we could certainly deal in the legislation with the impact of inflation on the increases being provided. Unless we do so, we will not be taking a realistic approach to tackling the effects of inflation and ensuring – I am sure this would be the desire of the Minister and the Government – that the increases have the required impact.

In budget coverage on the radio and television, various Ministers and spokespersons refer to percentage increases here and percentage increases there. A percentage increase on a small amount of money does not add up to much. In my opinion we are again contemplating, not only in the budget but also in the Social Welfare Bill, another in a long series of missed opportunities. It is probably appropriate that we are debating the Bill in the week before Christmas, a time of unprecedented spending in the economy which, according to some commentators, is possibly due to the euro changeover. However, it is also a time of extraordinary pressure for people, particularly single parents, due to the poverty in which they live. The reality of these people's day to day lives is that they are extremely dependent on the few pounds they receive through their fuel allowance which helps them to stay warm during cold weather. The diets of these individuals and their children are probably inadequate. They inevitably fall into debt at this time of year because they want to ensure that their children enjoy Christmas and are then obliged to face the reality of doing so in the new year.

The attitude of the Government in respect of how it has managed our prosperity can only be condemned for the reasons I have outlined – I will continue to concentrate on them on Committee Stage – in relation to the social fund, but also because, despite having a unique opportunity to do so, it has failed not only to tackle or eliminate poverty but has also widened the gap between rich and poor.

Tá fáilte roimh an Aire go dtí an Teach. I welcome the opportunity of speaking on the Social Welfare (No. 2) Bill, 2001. I commend the Minister for Social, Community and Family Affairs, Deputy Ahern, for the advances he has made in looking after those who are not in a position to look after themselves.

The Minister for Social, Community and Family Affairs has secured a social welfare package of £850 million extra for 2001. This sum matches the record increases provided last year. It also includes £326 million for child benefit increases, as promised by the Minister last December. Others promise, we deliver. The current Minister has proven that he is a man of his word. The £850 million provided will bring up the Department's spend next year to over £7.4 billion – an increase of over 20% on 2001 and an increase of almost two-thirds on the 1997 spend. The Opposition when in Government were in a position to do all the things they say we should have done, yet they did nothing and it took them three years to do exactly that.

I hope Senator Glynn is not referring to me.

The main budget improvements are an increase in the personal rate for pensioners of £10 per week on maximum personal rate – that is very much welcomed and exceeds what the Government set out to do in the context of old age pensions, an increase of £20 per week for pensioner couples, a £12 increase per week for widows and widowers aged 66 years and over – I was amused to hear Senator O'Meara, who has, regrettably, left the House—

I am back.

I am glad the Senator is present to hear what I have to say.

Senator Glynn should confine his remarks to the Bill.

Yes. If we were depending on the party in Government, of which Senator O'Meara is a member, we would not be speaking about cars, we would be speaking about the Jerusalem two-stroke, commonly known as an ass and cart – which is all people would be able to afford.

That is because the Senator's party screwed up so badly.

Senator Glynn should not say things like that; it is not nice.

It is very important that those on the lower end of the social scale are looked after. This budget and the previous four budgets have done exactly that.

There is a £10 increase for people aged 66 years or over who are in receipt of the full rate of qualified adult allowances with proportionate increases for those on reduced payments. That is very important. We are again talking about the most vulnerable section of our community.

If the current Minister for Social, Community and Family Affairs were ever to be called Santa Claus it would be with full justification. He might not wear the garb or the beard of Santa but his action in bringing forward by 23 weeks social welfare payments is another ground breaking decision. Child benefit payments have been increased by £25 each for the first and second child and a £30 each for the third and all subsequent children. We all know the budget is not about child benefit increases but increases in this area is one of the fairest and most effective ways of eliminating child poverty. The back to school clothing and footwear allowance for children aged 12 years or over has been increased from £78 to £94. That again is a very welcome development. The income limit for the back to school clothing and footwear allowance is to be increased from £5 to £39.

What has been said pertaining to the pension fund can be compared to the piggy bank and who is more entitled to raid the piggy bank than those who fund it. This Government funded the piggy bank and has prepared for the rainy days. Our national finances were in a serious state when the Opposition was in Government. The Minister for Finance took the correct action when he made his very courageous decision. I wonder what CORI had to say – I appreciate it, and every other organisation, is entitled to comment on this – when old age pensioners received an increase of £1.80.

I welcome this Bill which goes a long way towards looking after those in society who are unable to look after themselves. Some of the relevant points from the health strategy are: community groups will be funded to facilitate volunteers in providing support services such as shopping, visiting and transport for older people; the introduction of a respite care grant for dependent older persons. This will cover two weeks respite care per annum; the detailed arrangements for the operation of this scheme will be worked out by the Department of Social, Community and Family Affairs and reform of the operation of existing schemes, including the carer's allowance to introduce an integrated care subvention scheme which maximises support for home care. The Department of Health and Children will begin work immediately with the Department of Social, Community and Family Affairs to develop detailed proposals for the new scheme with a view to its introduction as soon as possible; a co-ordinated action plan to meet the needs of ageing and older people will be developed by the Departments of Health and Children, Environment and Local Government, Social, Community and Family Affairs and Public Enterprise and a major study of the funding of long-term care for older people led by the Department of Social, Community and Family Affairs is nearing completion. Policy proposals will be prepared following publication of the consultancy report. Funding options to meet the cost of care will be outlined for public debate prior to the preparation of legislation; development of care management approaches involving packages of care for groups with multiple needs – again, a very welcome development; appointment of key workers in the context of care planning, in particular, dependent older people such as those on the margins of home and residential care and children with disabilities and recruitment of a multi-disciplinary range of staff to support the development of primary care services such as domiciliary care and day and respite services.

This is very welcome legislation. The Minister has gone a long way towards improving things. I respect the right of Members on the other side to criticise and oppose – that is their job – but it is important to note that old bones are cold bones. The increase in the free fuel allowance, taken in tandem with the expansion of the scheme last year by a further three weeks has been welcomed by all the old people to whom I have spoken.

This year's budget has been a brave one and this Bill contains many significant proposals. This is chapter five of book number one. Let us wait for the next chapter.

There is optimism.

Is there any chance of fewer superlatives?

Acting Chairman

Do you wish to speak, Senator Ridge?

I have already spoken. I am exhausted listening to Senator Glynn.

I welcome the Bill. One of the greatest barometers of the test of a Government, particularly in the changed economic climate, is the manner in which it has distributed its resources, recognises the changes that have taken within the economic progress of the country and the wealth that has been made and recognises the relationship it has with its social partnership in providing a balanced ordered community from the point of view of sharing the wealth of the national cake.

I compliment the Minister for Social, Community and Family Affairs on his performance in this Government, in particular the huge allocations made in the two most recent budgets. Those changes recognise the needs of and change in the wealth of the nation and the prosperity of a large section of our nation who, in turn, have made accumulated wealth available to the State, thereby putting the Government in the position of recognising the changed needs of our society. The increases in social welfare across the board are to be welcomed as a positive recognition by the Government of the needs of our people and an attempt to address those needs.

We have seen the Government's recognition of social change. The emphasis on direct payments to the family recognises what CORI and the social partners have said on directly supporting the family. This is supported by the increase in child benefit, which gets the money to where it is needed at the core of the family, be they single parent or two parent families. Those with children will benefit.

There has been a recognition of the changing needs of elderly people. There is co-ordination between the Department of Social, Community and Family Affairs and the health service in the provision of community homes, capital projects, support for private development of community homes and community welfare hospitals. The concept of caring for the elderly has changed throughout the peripheral parts of Ireland, and new measures have been put in place. In our most peripheral regions, there are community support groups, good transport facilities and new community homes now in place. There is great interaction between the elderly and their families and more is being done by the Government in this area and extra money is provided for it in the budget.

I support the Minister's decision to use money from the social insurance fund on the basis that it has been provided from the wealth of the nation and is there to support the needs of the nation. I compliment the Minister for Finance on his approach to financing the budget and providing the necessary funding. This Government and the Minister for Social, Community and Family Affairs have supported this area in a very positive way, recognising the inflation rate and the growth within the sector and addressing its needs. This budget of £850 million follows on from a similar provision in the previous year. It continues to provide for this sector within a growing economy.

The budget was based on growth within the economy. There are now 170,000 extra people working within the economic structures of the State, providing extra capital. That welcome growth enables the economy to create more wealth which can be distributed among the sectors which need it most. A recent OECD report pointed to the positive Government move to support children and families. It also said that there was a greater need for single mothers to participate in the economic structure. The Government is prepared to take such issues on board. However, there is a responsibility on both Government and people in this area. If we are to support all the children in the State by providing care facilities, while also caring for our growing elderly population, there is a huge responsibility on the Department of Social, Community and Family Affairs and on the Department of Health and Children to prepare for the substantial changes to come in our economy.

I compliment the Minister on providing funding for the Centre for Independent Living. I support Senator O'Meara's proposal that money provided for personal assistance to people in the care of the Centre for Independent Living should not be distributed in any other way. It should not be spent on other projects but should be used where it was intended. One has only to look at today's Public Accounts Committee meeting which dealt with hospital treatment for the elderly, where money was taken out of one pot and put into another—

As is the case with the social insurance fund.

It was not spent by the health boards in the sectors where it was intended. It is important that we focus on that. I compliment the Minister on bringing this Bill before the House, on the provisions within the Bill, on the recognition of the needs of people in the State, on the adjustments made to address recent changes and to provide for future needs in a changed economic environment, and for the Government's attempt to redistribute the wealth of the State in a reasonable, fair and balanced way.

I thank the Senators for their remarks in relation to the Social Welfare Bill, 2001, and on the recent budget changes. I cannot agree with everything that has been said on the opposite side of the House but I take in good spirit the remarks made.

I want to pick up on a number of issues. Senator Ridge referred to the £2 increase in the fuel allowance. This will be payable from next January to almost 300,000 people, mainly pensioners, at a cost of £17.5 million. That is a substantial amount of money. As I have said previously in both Houses, one of the last decisions I had to make in relation to the budget package was whether I would put money into the free fuel allowance or give that money in the general weekly increase. Over the last four years, I have decided that it is better to give people a sum of money for 52 weeks of a year rather than give an extra pound or two on free fuel for 29 weeks of the year, or 26 weeks of the year as it was until I increased the number of weeks by three last year. The more the free fuel allowance increases, the worse the sudden death is when that money is lost to claimants in mid-April.

The Minister might extend the summer.

That is one of the reasons I said last year in both Houses that I thought it was best to extend the free fuel allowance for the 52 weeks of each year and subsume it into overall payments.

The cost is £17.5 million, which is a substantial amount of money. I would have liked to increase it by more but I was conscious of the sudden death issue, and I wanted to keep the increases in the personal rates – of £8, and £10 per week for pensioners – equal to the amounts that were received last year. This year, I gave in to the pressure to do something in relation to the free fuel allowance. However, that was tempered by the knowledge that the more the allowance is increased, the worse the sudden death is when the payment is lost. A policy decision needs to be made on whether we go down the route of increasing the allowance exponentially over a number of years or subsume it into the overall yearly payments, which might be best. Fuel difficulties will not be solved by a free fuel allowance but, as Senator Ridge said, by the implementation of resources in relation to proper central heating and other fuel sources in the houses of the elderly and less well-off.

Senators referred to the adequacy of social welfare payments. Under the PPF, we are subject to the benchmarking and indexation group. It reported some time back and said the majority of the group considered that the target of 27% of gross average industrial earnings on a current year basis for the lowest social welfare payments was not an unreasonable policy, and that should be achieved between now and 2007. If we were to do that between now and 2007, it would imply an increase for the lowest social welfare rates of £9.70 per year over the six-year period. We have increased it by £9.56 this year, which is just slightly under the target figure.

It is important to refer to the recent article by the ESRI which appeared in one of the daily newspapers after the budget. It stated that the budget was highly progressive and favoured people on low incomes, whether one examined it from a tax or social welfare point of view. Equally, the Combat Poverty Agency complimented the Government both this year and last year on policy direction, particularly on child benefit increases.

Senator Ridge referred to the transfer of £500 million from the social insurance fund. It is important to ask some very basic questions. On the one hand, she argues that £8 is not sufficient and the amount should be increased, while on the other she opposes taking money from the social insurance fund. Where should the money come from? In the Dáil, I specifically asked the Opposition how it would have funded the record £850 million package. Would it have increased borrowings? Would it have decided against borrowing or taking money from the social insurance fund? In other words, would it have returned to the position of making increases in the order of £1.50 and £3, which was the case just five years ago? Would it have borrowed money when there is money in the bank? As this money was collected from the people, it belongs to them, not the Government.

The economy is in such a healthy state that it would be ludicrous to leave a huge sum of money in a fund and give less to people on social welfare or, alternatively, to borrow in order to increase social welfare payments. In our domestic circum stances none of us would borrow money for day to day spending if we had money on deposit in a bank. We would use whatever money we had. It is not as if the picture into the future is not rosy. Given the increase in employment, from 1 million ten years ago to 1.8 million now, this step is absolutely logical. The ongoing actuarial review of the social insurance fund indicates that the fund will be in the black for a considerable period.

Had the Government not allocated money to the national pensions fund, I would partly accept the argument against using money from the social insurance fund. There is £5.5 billion in the pension reserve fund this year. We will put 1% of GDP into it next year, which is an extra £800 million, giving a total of £6.3 billion. In addition, there will still be £1 billion in the social insurance fund. It is not logical to borrow to fund payment increases or reduce benefits when this money is available.

I have already told Labour Deputies, who espouse the redistribution of wealth and resources, that giving some of the social insurance fund to less well-off people is, in a way, redistributing resources. We would have been criticised had we not reduced taxes or the national debt, both of which we cut substantially. The Government's action on the social insurance fund was logical. Deputy Quinn said of one economist, Moore McDowell, that one could not describe him as left wing. Equally, one could not describe Colm Rapple as a right wing economist, yet he has been exhorting us to use the fund in recent years, the latest occasion being just a few days before the budget. It was illogical, he said, that the Government was being advised to borrow when there was money in the fund. Three days before the budget the Labour Party argued that the Government should use for day to day spending the 1% of GDP, a sum of £815 million, which it put into the pensions fund. Now, it criticises us for using a smaller amount from the social insurance fund. The argument defies logic.

When the Government came to office, it was roundly criticised by all parties for announcing payment increases in the budget and not delivering them until months later as well as for delivering social welfare increases later than tax increases. This year, for the first time, we have aligned tax cuts and social welfare increases. In one fell swoop we are bringing them forward a further three months at a cost of £80 million to the taxpayer. People on social welfare, in other words, will benefit again. I estimate that this will amount to an extra 4% or 5% in annual income on top of the social welfare increases. People will see the justification for the measure.

As regards how the increases are implemented, I offered the committee on social affairs the opportunity to question my officials. The procedure we adopted is the only way it can be done. Some people argued we should have introduced the budget in October. Even if we had, we could not have delivered the payments in a different way and we could have been accused of announcing increases months before implementation. The Government decided it would try to keep the gap between announcement and delivery as short as possible and I assure the House this is the case.

Senator O'Meara referred to the widening of the poverty gap. In times of economic boom the issue of relative income becomes more topical because the more people in work, the more income at their disposal. At a time of recession, relative income becomes less of an issue. As I said in the Dáil, if one of ten residents of a small village in the midlands earning £10,000 wins the lotto, the issue of relative income disparity becomes more critical, but does not mean that the people on £10,000 are poorer than before the lotto win. It is superficial to judge everything in relative terms. Again, I refer to the ESRI research which showed that the impact of the 2002 budget is highly progressive, favouring those people on the lowest social welfare rates. In its last budgets the Government pegged social welfare increases to increases in earnings. This has not happened for many years.

Senator O'Meara referred to the effects of inflation on the level of social welfare increases, both this year and last year. In 2001 the main rates of social welfare increased by an average of 10.3% in long-term assistance payments and 10.4% in old age pensions, both of which are well ahead of the rate of inflation which was running at 3.8% at the end of November. There were real increases this year and as the projected level of inflation in 2002 is 4.2%, the real increases in social welfare next year range from 8.4% to 11.8%. We are running at twice the rate of inflation with regard to the lowest payments and three times the rate of inflation with regard to higher payments.

Senator O'Meara and others referred to carers. I do not accept that carers were left out of the budget. One only has to examine the Government's record, particularly in the last four budgets, to see the changes that have been made in the carer's allowance since its inception. The expenditure on carer's allowance has increased by 184%, from £36 million when I came to office to approximately £130 million. The numbers in receipt of carer's allowance when I came to office were 9,200, and they will increase to approximately 23,000 or 25,000 as a result of the budget changes. A total of 3,400 extra carers will receive the carer's allowance as a result of the changes, and another 2,300 already in receipt of carer's allowance will get an increased amount on their payment. The total cost of these changes is £12.62 million.

As Minister I instituted the respite care grant, which started off at £200. It will now increase to £500, which is very much welcomed by all recipients of carer's allowance.

On the broader issue, there is only so much one can do about a social welfare payment which is designed for people on low income. The carer's allowance was not designed to repay people for taking care of a relation or a loved one. We should examine the broader issue of caring, in the context of the health strategy, taking into account the health board subvention, the home help service and the carer's allowance and devise a more integrated scheme to deal with the issue of caring into the future. It is important – and this is the view of the Minister for Health and Children also – to plan for the medium and long term.

Senator O'Meara referred to child care. The Government made the decision last year to invest £1 billion over a three year period in the area of child benefit. There was a lengthy debate on the way to address the issue of child care and we came down on the side of giving money to mothers to assist them, in whatever circumstances they find themselves, in their child rearing responsibilities. Providing a universal, tax free payment, which generally goes to the female of a union, is the most beneficial means and addresses all the arguments about giving tax relief. Because of the major tax changes, approximately 30% of the population do not pay tax so any tax changes would be of no use to those people on low income. Equally, tax changes probably would not benefit women who stay at home and who have an equal entitlement to assistance in terms of their child rearing responsibilities. It is illustrative to see how much child benefit has increased under the stewardship of this Government, from £398 million in 1997 to approximately £1.2 billion this year. Obviously that figure will increase by another £300 million or so, regardless of which party is in Government after the next election, which will bring it to £1.5 billion.

I hope I have covered most of the issues raised by Senators. I thank them for their comments and look forward to the later Stages of the Bill.

Question put and declared carried.
Agreed to take Committee Stage now.