Budget debates

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Budget 2014

The Dail and Seanad approved the 2014 budget and the subsequent Social welfare and pensions Bill, 2013, which put its decisions into effect (Dail Eireann, Debates, 15th October, 1-118; 16th October 340-457 (budget); 24th October 2013, 638-679, 720-768 (Bill, second stage); 25th October, 906-982 (third and remaining stages);  Seanad Eireann, 15th October, 685-719 (budget); 5th November, 196-242 (Bill, second stage); 6th November, 299-384 (third stage); 7th November, 411-434 (fourth and fifth stage)).   


Dealing with the budget first, announcing its spending decisions, the Minister for Public Expenditure and Reform, Brendan Howlin spoke of how this was the last budget under the troika programme.  Although there were those who argued that there were alternatives to austerity, nobody was ideologically committed to austerity but austerity was what was left after Fianna Fail drove the economy into the ground and let us beholden, like famine victims of old, to seek relief outside the country.  The government had introduced a €17.1bn investment programme to 2017 and last July he had announced a €2.25bn infrastructure stimulus package.  The government had awarded the National Lottery licence for more than €400m, of which €200m would go to the children’s hospital, and another €200m for roads, sports capital grants, a new indoor training arena, the Better energy programme, housing adaptation grants for people with disabilities, the national city of culture initiative, a multi-functional events centre in Cork, the Atlantic Way driving route and 1916 commemorative projects, with a further €10m for Priory Hall and €30m for house building for 500 new units.  There would be €14m for the youth guarantee fund and the reduced rate of jobseeker benefit would now apply to those aged up to 24.


Mick Wallace (ind, Wexford) welcomed the investment in social housing but described it as ‘a drop in the ocean’ which would build 180 houses.  He criticized the government for not looking for alternatives but pretending that the troika had forced its hand in increasing inequality and poverty.  Disadvantaged social groups had suffered the most and lone parent households and those with children had been hardest hit.  The government had followed a socially regressive path and failed to learn from the disastrous austerity experiences of countries in Latin America and southeast Asia.  It had promoted inequality and only looked after the financial markets, banks, captains of industry and protected professionals and global corporations.  It had declared economic war on its own people.  Similarly, Seamus Healy (ind, Tipperary S) accused the government of targeting the sickest and poorest.  Next year, €9bn would be paid to service the debt borrowed to bail out rich investors.  Sick and older people were traumatized in fear of losing their medical cards and he called on civil society organizations to force the government to reverse this decision.  


Joan Collins (PBP, Dublin SC) asked the minister was he serious about the €30m for the house-building programme: that would build only 200 to 300 houses, not even enough to cover those likely to be evicted over the next few months, never mind the 100,000 on the waiting list.  Her colleague Richard Boyd Barrett (PBP, Dun Laoghaire) said that a serious housing programme would spend €3bn and build 50,000 council houses – but that would pay for itself by saving €500m rents a year and bring revenue to the state.  Caoimhghin O Caolain (SF, Cavan Monaghan) described the commitment as ‘pathetic’ in the light of the cut in local authority housing budgets from €55.336m in 2013 to €40m in 2014, with voluntary and cooperative housing down from €55.5m to €40.92m in 2014.


The Minister for Social Protection, Joan Burton told them that when negotiations on the budget began, the department was originally requested to reduce spending by €440m, but she had been able to lower that amount to €226m.  She was aware that this would have an impact on and cause difficulties for social welfare recipients, but she had protected core weekly payments.  She would raise a further €30m by rooting out welfare fraud.  Maureen O’Sullivan (ind, Dublin C) had listened to the budget in the Centre for Independent Living in the Macro Resource Centre and they were disappointed that equality was not at the centre of the budget.  The Disability Federation of Ireland commented that the budget did not protect people with disabilities.  As for the €30m allocated to housing from the lottery, it was only scratching the surface.  Dessie Ellis (SF, Dublin NW) contrasted the €30m promised for social housing with the €58m cut from the the housing budget.  Seamus Kirk (FF, Louth) criticized the abolition of the telephone allowance, which, according to ALONE, would further isolate older people, while Age Action Ireland said older people would face ever more difficult choices with dwindling incomes.  The National Youth Council of Ireland accused the government of seeing young people as a soft target in extending the €100 rate of jobseeker allowance from 21 year olds to 24.  Combined with the failure to implement effective labour activation measures, this would push young people to emigration.  


Finian McGrath (ind, Dublin NC) described it as a horror: a mean and miserable budget that hit the sick, the old, the disabled, young mothers and jobless young, ‘a blitz on the poor’.  The Disability Federation of Ireland had expressed its disappointment at its failure to protect people with disabilities and to save €113m on medical cards and the telephone allowance.  St Michael’s House and Prosper Fingal had lost €12m and waiting lists for essential residential care, respite care and other support services had grown.


In the Seanad debate on the budget, Jillian van Turnout (ind, Taoiseach nominee) described her increasing sense of disillusionment.  There was a strong public perception that the decision had been made to persistently target vulnerable groups.  Groups working with lone parents had convinced her, though, of the importance of ensuring that their voices were put on the record: the voice of civil society organizations and Non Governmental Organizations (NGOs) on the ground must be heard.  She did welcome the allocation of an additional €6.7m to child protection and for the new child and family support agency, as well as funding for the pre-school quality agenda, projects to tackle child poverty and that the cut for youth funding was only €2m rather than the €3m expected, a sector which had been disproportionately cut.



Social welfare Bill

Introducing the Social welfare and pensions Bill, the Minister for Social Protection, Joan Burton spoke of the progress made by the government in reducing unemployment, as a result of which her department’s spending would fall below €20bn.  The full roll-out of the Intreo service would be completed next year.  It was important to prevent welfare dependency: signing on on one’s 18th birthday was not a start to adult life -  we must be more ambitious for our young people.   She said she would make changes to jobseeker allowance to ensure that young people were always better off in education, employment or training rather than claiming.  The department was committed to spending €1,080m on these places and related supports, up €85m.


Willie O’Dea (FF, Limerick city) objected to the presentation of this change as some sort of character-building measure for young people that if their welfare was cut sufficiently they would be forced into education, training or employment.  The snide inference was that young people were too lazy or shiftless to seek out opportunities.  The number of extra places being created was just over 3,000: if someone cannot get a place, how was more employment created by slashing their social welfare?  It seemed to have escaped the government’s attention that many people were languishing on social welfare who had plenty of training and education.  There were 32 applicants for every vacancy, or more.  The reduction in welfare would not help people into education or non-existent employment, but to emigrate.  This policy would speed them to the nearest airport.  The Irish National Organization of the Unemployed (INOU) stated that the way forward was imaginative activation measures that worked and we were a long way from that.  The €14m for the youth guarantee scheme would cover about 2,000 places, which was welcome, but with 1,600 people emigrating a week, it would handle emigration for only nine or ten days.  


At the end of three regressive budgets, 16% of people were in poverty, 19.5% of children.  The basic weekly social welfare rate for a single person was €25 below the poverty line.  He criticized government spin in which a reduction in maternity rate was called ‘standardization’ and a reduction in jobseeker allowance was termed a ‘movement’ to a different category.  Social Justice Ireland had characterized budget 2014 as providing no guiding vision, no sense of direction and no sustainable solutions, with the government dismantling our social model.  In the view of the Society of St Vincent de Paul, the budget provided little hope for the poor, the old, those in ill-health or the vulnerable.  Aengus O Snodaigh (SF, Dublin SC) quoted research by the Vincentian Partnership for Social Justice which found that the minimum weekly cost of keeping a young adult at home to a minimum standard of living was €183.99, for which payments were far short.  The Society of St Vincent de Paul described the cut as resulting in further stress, struggling and hardship for low income families and individuals.  Focus Ireland estimated that a couple of hundred young people will be pushed into homelessness.  Joe Higgins (SP, Dublin W) described this as ‘a terrible week for social protection in Ireland’, the budget making swinging economic attacks on the elderly and the young.  Cuts to the young unemployed were being justified to save the financial market system, banks and bondholders.  Maureen O’Sullivan (ind, Dublin C)  wanted to see a budget that could be welcomed by those on low incomes who instead found themselves outside the gates of Leinster House demonstrating.  Organizations such as the Society of St Vincent de Paul, Focus Ireland, the Simon Community and Social Justice Ireland were those most directly involved and worked with those communities affected most.  We could have a fair budget if we collected all the corporate tax and even increased it a little.  The Bill was passed by the Dail 79-44.


On committee stage, Willie O’Dea referred to cuts in bereavements grants and exceptional needs payments which had been reduced repeatedly.  At a recent meeting of the social affairs committee, he had confirmed that this budget had been cut to the extent that community welfare officers referred people to the Society of St Vincent de Paul on the basis that their own funds had expired.  Aengus O Snodaigh asked the minister to listen to the views of Focus Ireland and the National Youth Council, which drew attention to the way in which austerity was forcing people into homelessness and emigration.  


In the Seanad, Paschal Mooney (FF, agricultural) condemned the reduction in the jobseeker allowance for young people.  The INOU had stated that the government had abandoned those up to 26 on the basis that it would provide them with all sorts of schemes.  He quoted Brid O’Brien of the INOU:


It is extraordinary that people can vote at 18, but in our social welfare system you’re not seen as a fully adult until you’re 25 and if this measure comes through you won’t be seen as a full adult until you’re 26.  I think it will send out a very negative message to young people in this country, many of whom feel they don’t have a future here.


Jillian van Turnhout quoted statistics presented by the National Women’s Council of Ireland as to the cost of the cut in maternity benefit.  As for the cut in the jobseeker allowance, she did not believe that there were enough appropriate training places.  There had been successive cuts to youth organizations.  She had listened to the narrative about incentivizing young people to out to work, but the figures did not support it.  40% of young people aged 16 to 24 were already at risk of poverty, the highest rate in the EU and the group whose payments were being cut.  David Norris (ind, Dublin University) referred to Focus Ireland, ‘a wonderful organization’ which had predicted 200 more young people homelessness – the minister should ask for a briefing.  According to David Cullinane (SF, labour), the Simon Community and the Peter McVerry Trust and other NGOs working with homeless people had warned that young people might end up on the streets.  Katherine Zappone (ind, Taoiseach nominee)  quoted Barnardos comments about the cut to maternity benefit as not a child-friendly measure: Ireland was regressing and we were already behind Europe in our provision.  The Bill was passed 32-20.


On the committee stage, Jillian van Turnhout cited the opposition of both the National Women’s Council and the Children’s Rights Alliance to the cuts in maternity benefit.  It was not just NGOs that were warning about this, but also the Irish Business and Employers’ Confederation (IBEC). On the cut in the jobseeker allowance, Averil Power (FF, industrial & commercial ) spoke of the different groups that had appeared before the Joint Committee for Social Protection, such as the Union of Students in Ireland and the National Youth Council: young people were being handed a one-way ticket to Canada. Paschal Mooney pointed out that that each caseworker in the Department of Social Protection oversaw no less than 800 jobseekers.  In Ireland, we spent only 0.05% of our GDP on placement services, compared to 0.19% in Britain and 0.21% in the Nordic countries. David Cullinane quoted figures from the NationalYouth Council which showed that 20,853 young jobseekers were affected by the measure, but that only 3,250 places were available into which they were to be incentivized.  This was a loaves and fishes approach and when he went to school, those figures did not match one another: ‘let us make sure we provide places for them’.