Budget debates

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VAT increase regressive

The budget was also discussed in the Seanad (Seanad Eireann, Debates,  6th December 2011, 44-73; 13th December, 328 – 365; 15th December 2011, 441-498).  Katharine Zappone (ind, Taoiseach nominee), questioned the balance between tax increases and spending cuts and whether it would lead to a more inclusive society.  Those with wealth and economic security should share more of their resources with those experiencing poverty and social exclusion, she argued, which was not only more equal and fair, but was a more solid formula for economic prosperity, as countries like Norway and Finland demonstrated.  She commended a number of aspects of the budget, such as maintaining social welfare rates and reducing the social charge for the lower paid, but challenged the decision to increase VAT to 23%, for there was solid evidence that the current VAT rate was highly regressive.  Even at 21%, there was evidence that lower household incomes paid a higher proportion on VAT. Marie Moloney (Lab, labour) spoke of her grave reservations about the effect of budgetary changes on people with profound or severe disabilities and the role of the domiciliary care allowance, saying that we had had several years to deal with the issue before.


On the Social welfare Bill, 2011, David Norris (ind, Dublin University), objected to the Bill being called a social ‘welfare’ Bill, arguing that the term ‘social devastation’ was more appropriate.  It reminded him of the ‘safe zones’ during the Balkan war, because that was there lives were destroyed.  He quoted Barnardos’ claim that the budget would push many more children into poverty.  ‘We cannot slash, tax and cut our way out’, he argued and the present approach would have an appalling impact, compounded by the fact that one of the people most involved in this was being appointed to a position in Europe with a 50% increase and he wanted to commend the courageous Nessa Children for pointing this out.  


Demand for the services of Focus Ireland was up 18% and the Society of St Vincent de Paul reported something similar.  What does this tell the minister?  The most commonly presenting issues were help with food, fuel, education and housing costs.  These were basic requirements.  ‘Forget about cherishing all the children of the nation equally: allow them to survive’, he pleaded.  He had heard of many bogus excuses being given to deny people social welfare.  He criticized the government for its comments on Sinn Fein’s analysis: I do not like political point-scoring when people were being driven to the edge of poverty and their comments had been mild, well-manned, well targeted and presented respectfully, he stated.


Ivanna Bacik (ind, Dublin University), commended the minister for preserving the basic rates of welfare during an economic crisis.  Fianna Fail would have made a €665m adjustment, not €475m.  She welcomed the move from a dependency culture to one of enablement and empowerment.  She had received letters from organizations such as OPEN and the Irish Feminist Network, the aims of which she fully supported.  Over the years that it had been in operation, the one-parent family payment had not had the desired effect of tackling poverty and social exclusion for single-parent families and it was time this payment was examined and efforts made to reform it.  The reduction in payment age was based on the notions of supporting the route out of poverty through paid employment, reducing the stereotyping of one-parent families and the way in which fathers had been kept away from children, but we must ensure that supports were available in child care provision, where this country had always been poor.