Thursday 8 December 2016

Government nearly halved its targets for cuts in social welfare spending

Michael Brennan Deputy Political Editor

Published 07/12/2011 | 06:00

THE Government nearly halved its targets to slash social welfare spending, avoiding enormous cutbacks which would have included a general reduction in child benefit.

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The target for Social Protection Minister Joan Burton's department was twice revised downward, given that they were politically unpalatable and could hit people highly dependent on such payments to survive.

The Irish Independent has learned that at one stage the proposed figure for cutbacks in Ms Burton's department was €800m. That included an across-the-board cut in child benefit payments. But according to a senior government source, the figure was later revised to €655m and then dropped again to €475m.

An acceptance at Cabinet that there were 40,000 more people on the live register than budgeted for also made it impossible to impose extra cuts.

Public Expenditure Minister Brendan Howlin said the social welfare spending cuts were €190m less than the previous Government's four-year budgetary plan.

At a news conference in Government Buildings last night, Mr Howlin defended the Government's decision to reduce child benefit for the third and fourth child to the standard €140 rate -- which breached a Labour Party general election promise to prevent any cuts in this area.

"Genuinely from the analysis we have done, the cost of the third and fourth child is no greater than the first child. Many would argue from the studies that we've seen that the first child is more expensive," he said.

The social welfare cuts were greeted with relief by Labour backbenchers last night, even though they included cuts in fuel allowance, disability allowance for young people and back-to-school grants.

Mr Howlin said the Government was getting its funding under "heavy" conditions from the EU, IMF and ECB.

In his Dail speech, Mr Howlin pointed out that tax revenue had dropped from €47.25bn in 2007 to €31.75bn last year -- a fall of one third in three years.

"We are now re-building our revenue base but we do not have the resources to fund all the services that we would like to provide," he said.

Mr Howlin said his decisions would reduce public spending from €57.8bn this year to €55.8bn next year. He promised that he would be changing the way that Government spending was managed.

"The old budgeting system that we have inherited from our past is secretive and opaque. It has not led to sustainable spending policies, to proper value for money, or to good outcomes for our citizens," he said.

Mr Howlin said that "performance information" would be included in future. The example given stated that the social welfare budget could show how many long-term unemployed people took part in training after being contacted by the department.

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