Labour: €1bn bailout savings must protect welfare
LABOUR is going to demand that the €1bn in savings from the Anglo promissory note deal be used to reduce social welfare cuts in the Budget – in a move which will raise tensions with Fine Gael.
The battlelines are already being drawn ahead of the October Budget - with Fine Gael ministers keener to use the savings to reduce income taxes or increase spending on capital projects.
But Tanaiste Eamon Gilmore and his ministers are going to back demands from Social Protection Minister Joan Burton to use some of the money to ease back on a planned €440m cut in the social welfare budget.
A Labour source said this could be done if the promissory deal savings were used to reduce the planned spending cuts in the Budget. The source said the €440m target for social welfare cuts was just a starting point – and that Ms Burton would get full support from other Labour ministers to reduce it.
"We are determined to maintain our pledge to maintain core social welfare rates," the source said.
It came as Ms Burton launched a pre-Budget forum to listen to the concerns of groups such as carers and people with disabilities about possible future cuts. She pledged to work to protect "core weekly payments", such as the state pension, the jobseekers allowance and disability allowance.
And she said that the €440m target for social welfare cuts was just an "indicative figure" before the Budget discussions started.
"The spending on social welfare is the most important item in terms of maintaining domestic demand. The vast bulk of that money is spent in Ireland, and it's spent in local shops and local businesses," she said.
If the €440m cuts target is not reduced, it would be technically possible for Ms Burton to maintain core social welfare rates. But it would require a range of deep cuts in other areas.
Ms Burton noted yesterday that she had gone out of her way as a minister to protect carers – and mentioned the €102-per-week half-rate carer's allowance for 21,000 people which had been under threat in the last Budget.
"I have been thanked last year and continuously by carers in relation to the retention of the half-rate carers allowance," she said.
Ms Burton made it clear there was no prospect of increasing social welfare rates in the Budget following a demand from Social Justice Ireland for a €5 per week rise in payments.
"As the economy recovers, I would hope that we will be in a position to basically enter a period of growth which would allow us then to make an additional provision, but we're not at that point yet," she said.
But Fianna Fail social protection spokesman Willie O'Dea said that Ms Burton should clarify the core social welfare rates she was going to protect after last year's welfare cuts.
"Parents in receipt of child benefit, maternity benefit and the back-to-school allowance, carers in receipt of the respite care grant and elderly people in receipt of the household benefits package will strenuously argue that their core payments were cut," he said.