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Ó Snodaigh moves motion to safeguard child benefit

29 November, 2011 - by Aengus Ó Snodaigh TD

Sinn Féin Social Protection Spokesperson Aengus Ó Snodaigh this evening moved a motion in the Dáil that called on the government to maintain the current child benefit rate and other social welfare rates.

The following is the text of Deputy Ó Snodaigh’s comments:

Two years ago the following words were uttered,

“Child benefit is keeping many families afloat. Child benefit is keeping bread on the table. It is paying the food bills of a significant number of families who have had a massive reduction in their income. Often the grandparents are helping to pay the mortgage to keep the wolf from the door, put food on the table and keep the house from being repossessed. That is true of so many families in so many parts of the country to which I have spoken recently and it constitutes a kind of stimulus in the current extraordinarily difficult economic conditions for so many families.”

Laudable words I hear you say, but when you consider that they were spoken during a debate on a Labour Party tabled private members motion demanding that the then Fianna Fáil/Green/Independent government not to cut child benefit. You can see how far the Labour Party is moving to the right in pursuit of power, as it is contemplating with its collaborators in Fine Gael. Having heard the words of Joan Burton TD back two years ago, it should remind and embolden Labour Party TDs in particular that they should have no difficutly supporting tonight’s Sinn Féin motion.

In fact the Labour Party Motion was moved by Minister for Primary Care Róisín Shortall on December 1st 2009 and called on the Dáil to note: “the ongoing high cost of raising children in Ireland today and the significant cuts that have already been made to family income” and stated “that every child deserves to be cherished and recognised by the State, regardless of the circumstances of its parents”. It went on to call “on the Government to maintain child benefit at the current level in the forthcoming budget."

The Sinn Féin motion tonight reiterates that call.

Over 205,000 children (19%) are ‘at risk of poverty’ while another 96,000 children (9%) are living in consistent poverty. This means they are experiencing material deprivation e.g. don’t have a warm waterproof coat or go without a substantial meal daily.

These are the most recent figures on child poverty relate to 2009. EU Survey in Income and Living Conditions. The CSO are due to publish the figures for 2010 tomorrow morning. And we anticipate that the numbers of children experiencing consistent poverty will have risen further.

The role played by Child Benefit in tackling child poverty is irrefutable and was acknowledged last week by the Minister during a debate with me. In 2005 consistent child poverty stood at 11%. Subsequent child benefit increases helped reduce that figure to 6% in 2008. But that trend is now reversing following the cuts to child benefit imposed by Fianna Fáil and any cut next Tuesday would further accelerate that reversal.

Media reports have suggested that a cut of €10 is on the cards. To some people on high wages €10 per month might sound like nothing. But to a low or middle income family with three children that’s an annual cut of €360. Consider that against the minimum cost of sending one 12 year old to school which is €815.

Not only is it wrong to cut child benefit but it is also unnecessary. Cutting child benefit by €10 per week would save the state in the region of €150 million. But as Sinn Féin illustrated in our pre-budget submission the government have a whole host of alternative options available to choose from if they want to protect children, while closing the budget deficit. For example, a 48% third rate of tax on incomes in excess of €100,000 would raise €410 million, and a wealth tax of 1% on assets worth more than €1 million would raise €800 million. It’s a question of political choice.

And cutting child benefit would have a further negative impact on our struggling economy. And I know that the Labour Party, at least used to agree we me on this. Their 2009 private member’s motion stated that “cutting child benefit would be far more deflationary than alternative revenue raising or cost-saving measures open to the Government”. And this remains the case. Speaking on that motion Deputy Joan Burton, then spokesperson on Finance, said “it should be remembered that child benefit is spent in this country — on children’s shoes, food and school books. It is probably one of the best stimuli.” And of course, the same could be said of all social welfare payments.

Last week ISME highlighted the multiplier effect of spending in the local economy. They stated that spending €10 locally generates an additional €24 due to multiplier effects. Likewise and conversely for every €10 child benefit cut €34 will effectively be drained from the local economy. The result of which would be even more job losses.

I want to address the debate surrounding universalism versus means-testing or ‘targeting’. Child benefit is our sole universal payment. The countries that base their social protection systems on universal payments are faring best in this time of financial crisis. Generous universal social welfare payments act as an automatic stabiliser during a financial crash. Universal payments buffer demand in the local economy thereby protecting jobs which in turn protects state revenues. Generous universal payments also enable a workforce to be ‘flexible’ which is a key requirement of competitiveness.

Child benefit should remain a universal payment. Talk of “targeting” will merely dig us deeper into our recessionary hole.

A range of child benefit reforms have been and are being considered by this and previous governments including means-testing the payment or taxing it, both of which are thankfully being deemed an administrative nightmare. If people are genuinely concerned that spending on child benefit profits the wealthy then the fairest and simplest thing to do is to maintain it as a universal payment and use the general tax system to tax wealthy people more.

There has been some speculation that child benefit will be cut and the Qualified Child Increase will be raised. And the government would use the Qualified Child Increase to claim that the vulnerable have been protected. But such a measure would be no compensation at all for the hundreds of thousands of low and middle income families who do not qualify for social welfare. A move like this would also reinforce poverty traps and unemployment traps as the gap between income outside of employment and in employment would be narrowed as a result.

I want to pre-empt some of the arguments that will be made that Ireland’s child benefit rate and other relevant social welfare rates are relatively high. Someone will undoubtedly raise the fact that child benefit is significantly lower in the Six Counties and charge my party with engaging in double standards. Such an argument would be based on two key false assumptions. Firstly that my party has the fiscal powers – we don’t they are retained by Britain primarily because previous administration here didn’t have the commitment to support republic demands for a full transfer of powers.

Secondly that ‘like’ is being compared with ‘like’, which it isn’t. For example, in the Six Counties you don’t have to fork out €60 plus every time your child gets sick. Likewise across Europe countries may have a lower specific child benefit rate, but the state contributes to the cost of raising the next generation in a range of other ways that far exceed the difference. For example in Finland, which is world renowned for it’s literacy outcomes, education is truly free for all – there are no school fees, books are free and a free lunch is available to all children regardless of means. In addition unlike many other countries, the Irish tax system doesn’t even recognise the existence of children, unless they have a serious and permanent disability. Under our tax system a couple with a child pay the same tax as a couple without a child despite the huge and growing costs of raising children.

It’s anyone’s guess whether the €10 cut to child benefit is really on the cards or if it’s a kite. One way or the other with this motion we are providing all TDs in this house with an opportunity this evening to make it clear that child benefit is off the table when it comes to the Budget. We are offering government TDs the opportunity to declare that you will exempt all children from the burden of recovery. We are offering government TDs the opportunity to live up to their pre-election promises and to their Programme for Government commitment “We will maintain social welfare rates”.

Fianna Fáil already shouldered children with the burden of recovery/the sins of their cronies by twice cutting child benefit. The people voted for a change in government – I am calling on government deputies to support this motion and demonstrate a real change.

In the final days of the General Election Campaign the Labour Party sold themselves on a promise to protect child benefit from cuts. Speaking to a group of mothers in my own constituency at the St. Nicholas of Myra parish centre Eamonn Gilmore promised that his party would protect families “[Things] like not cutting child benefit any further. Enough is enough. Families can take no more.” The Labour Party made this a red-line issue pre-election. The time has come to deliver. If the Labour Party cuts child benefit or other social welfare rates impacting on children it will commit nothing short of electoral fraud.

Don’t give us the tired old lines – ‘no decision has yet been taken’, ‘we cannot disclose under the budgetary process’ or ‘everything is on the table’. Fine Gael Ministers have had no problem making unequivocal commitments not to raise income taxes on the wealthy so there is no barrier preventing any of you from voting in support of the Sinn Féin motion.

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