Each elected Dáil to this State is charged with great responsibility to this republic. Our republic guarantees religious and civil liberty, equal rights and equal opportunities to all its citizens and resolves to pursue the happiness and prosperity of the whole nation and cherish all children equally. Many Dáileanna have been charged with dealing with various crises but no particular Dáil can claim to have been more important than another.
From the well-flagged date of the elections to this Dáil, the enormity of the task faced by the subsequently elected Government was known by all parties and none, as well as the electorate. Our people had been well aware of the gap to be bridged between the State’s income and expenditure. Our people had been burdened by measures taken in closing that gap by €6 billion up to last year’s budget, bringing the cumulative amount over three or four years to nearly €21 billion of an adjustment. There was a significant onus of responsibility therefore on all parties to be open, honest and forthright with the engagement with the public.
The outgoing Government made available to the then finance spokespersons all relevant accounts and finances of the State for their inspection. Department of Finance officials briefed these spokespersons, including Deputy Noonan of Fine Gael and the Minister, Deputy Burton of the Labour Party. The press reported at the time how ashen faced these persons were having emerged from these briefings and discussions. They had just opposed vehemently, as was their privilege, the recent budget and the recently passed Finance Bill. The language used in those debates could be described as the politics of anger, where damaging remarks, such as the nation being “banjaxed”, and allegations of economic treason were made against people. These people had bestowed 150% increases in old-age pensions, 150% increases in social welfare payments and 330% increases in child benefits over many years previously.
The electorate hung on to the irresponsible manner in which the then Opposition of Labour and Fine Gael had promised that, in Government, it would reverse many of the unfortunate measures proposed in that budget and Finance Bill. It is necessary to remind our citizens of those comments, and I will take a few of them. Deputy Michael Ring stated “This budget is anti-elderly, anti-family and anti-children and it will have an effect on the most vulnerable in society.” Deputy Roisín Shortall stated “child benefit should be available to the most vulnerable, the people who need it most, particularly those with large families.”
The electorate was fearful and filled with trepidation. Especially at the time, the public expected politicians in a potential Government to say it as it was and be truthful in describing how it would proceed.
During that election, Fine Gael and Labour gave the distinct impression that there would be an easier and softer way of tackling our problems.
It is only right and proper that the people are reminded of some of the contributions made by the leading lights in the Government. The Tánaiste, Deputy Gilmore, said, “Child benefit is a red line issue.” The phrase “Every little hurts” was used in a campaign by the Labour Party which lambasted its colleague, Fine Gael, for its proposed cuts in child benefit. The Taoiseach was quoted as saying in opposition, “I wish it to be clear in this regard that my party will achieve the savings that are required without touching child benefit.” The Minister for Social Protection, Deputy Burton, said she would reverse welfare cuts when in office. Then we had the phrase, “Frankfurt’s way or Labour’s way.” What we have is disarray.
We were promised 165,000 jobs in NewERA. The Minister for Transport, Tourism and Sport, Deputy Varadkar, spoke about “not another cent.” Various promises were made on hospitals, Army barracks, Garda stations and health reform. All these promises allowed the Government to obtain its goal – more luck to it, as it secured a massive majority. We suffered a heavy, crushing defeat, which we will take on the chin. Decisions taken by previous Governments were immensely difficult. They were most unpopular but, unfortunately, necessary.
They were so necessary that the Government, on assuming office, immediately carried out its first U-turn, namely, to implement the same budget and provisions within the finance Bill that it had vehemently opposed. They were great men in opposition with great populist rhetoric. They made marvellous promises when standing on a soapbox in Roscommon, the back of a lorry in Castlebar or on the grounds of a barracks in Mullingar.
They were like Mighty Mouse but in government they are nothing but Mickey Mouse. They promised a new way of doing politics – transparent, open and reforming – but on 9 March at the first Cabinet meeting it was decided to adhere to, support and implement the Fianna Fáil budget, the one the Government parties had voted against and, more importantly, campaigned against. The Government has since claimed much credit for it. The electorate that voted for the Government has since been abandoned by it as we watch promise after promise being broken.
I refer to promises on hospitals, Army barracks, bondholders who cannot and will not be burned, child benefit and welfare cuts and student fees.
The beauty of the budget, if it could be so described, from a political prospective, is that at last – we have waited nine months – the Government of Fine Gael and the Labour Party can be adjudicated on its choice, decisions and cuts in specific and vulnerable areas.
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 accomodation 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?
The budget and the Social Welfare Bill is not only anti-family, it is anti-women. Child benefits will be cut. From 2014 the one-parent family allowance will only be paid until the youngest child reaches the age of seven. Last year the Fine Gael finance spokesperson asked Mr. Brian Lenihan what he had against third children. What has the Minister against children over the age of seven?
The double child dependant allowance will be discontinued where a lone parent is on a community employment scheme. The earnings disregard will be reduced over five years from €146 to €60. The disregard for income from employment as a home help with the HSE will be abolished in all social assistance payment schemes. It just gets worse. The number of contributions for the widow’s contributory pension will be increased from €156 to €520.
The entitlement for certain new claimants to a concurrent half-rate of jobseeker’s benefit or illness benefit will be discontinued.
The Bill is not only anti-family and anti-women but also anti-rural. The means test for farm assist will be changed, school transport charges will be increased and REPS and disadvantaged area payments will be reduced by 10%. The community employment schemes will be decimated by the loss of 1,500 capitation grants. That equates to the guts of €50,000 for a scheme employing 30 people. God help the person who is offered a job on a CE scheme as a grave-digger because he will not be given a shovel.
Small businesses, retailers and SMEs employ 750,000 people but I do not know how much longer they will do so because of the VAT hike and the broken promises on upward only rent reviews. There were more soapbox promises on reforming rates to make them less regressive. The sick pay issue has been parked or, in the new buzz word, paused.
Fair play to all the small and medium enterprises that have managed to hang on over the past few years. They will work with their accountants to hang on until the new year. Perhaps they will launch new campaigns, target certain niches or announce special offers to hang on to their employees. If their efforts do not work where will they be? They will decide to let their staff go now if the Government is going to take 50% from them. This is what employers are saying to me. If the Members opposite have not yet heard from employers because their telephones are too busy or turned off, I am sure they will meet them in their clinics this weekend. I advise them to make arrangements for a long day.
The question most people remember from last year’s budget is: “what have you got against third children?”
What has the Minister got against children of eight years and more? What has she got against the disabled, large families and the elderly? It is not too late to change this. The Minister has made one row back of sorts. She should reverse this straight away rather than wait for Pat Kenny to show a video of something in February that will force a climbdown on some issue. Children, the elderly, home helps and the disabled all face cuts. The list is endless. Today the cut in terms of home helps was thrown at us, but I am sure there are many other issues. I urge the Minister, seriously and earnestly, to listen to the contributions of the rest of the House and the Opposition who have been listening to their constituents over recent days. Let us engage with one another to come up with a formula that will achieve the savings necessary to close the gap, but which will be a lot more fair and appropriate and which will have more widespread approval in the House. Let the Minister join the rest of us in the House in doing what we were elected to do, namely, to get the economy and our finances back on track. While this will be at the expense of the taxpayer, let it be at their expense in a more fair, just and equal way. Then we can all progress and bring the country back to where it should be. I will not support the Bill in its current form.