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Feeding our dependency culture is an insane policy

The best way for the Irish State to become less burdensome on taxpayers is to reduce dependency on it. That is not happening in any meaningful way. On the contrary, in fact.

A few weeks ago, this newspaper ran a story with the headline 'Welfare trap is stopping people from taking jobs'. That is to say, the welfare system is trapping people in dependency.

It was based on a report from the Citizens Information Board and listed numerous ways in which our welfare system does this. One of the big ways is through the rent supplement.

In Dublin, that is worth up to €1,000 per month for a family of four. Around 85,000 people receive rent supplement so the amount we spend on it is eye-watering. Once recipients are dependent on it, it's hard to come off.

It's a classic example of a measure designed to help people that can actually hurt people. The people it hurts specifically are those who could work more hours but don't for fear of losing the benefit.

It stops people taking up full-time employment, which is almost always the best way of getting ahead in life financially.

Reducing dependency should be a big part of the debate every time the Budget comes around. Instead, the debate is invariably dominated by what government handouts should be spared the knife or even meaningful reform.

Fine Gael is there to try and ensure that income tax isn't increased. However, instead of any big income tax increases, we've seen the introduction of the pension levy, the universal social charge, the property tax etc. All sorts of new ways have been found to take more money out of our pockets.

But taxpayers never complain as loudly as the various interest groups who have become dependent on this or that welfare benefit. There is nothing like the Taxpayers' Alliance in the United States.

In fact, the reaction to this Budget and to previous Budgets since austerity began is entirely and completely reminiscent of the attitude that drove public spending to ludicrous levels during the boom.

No one ever wants to cut anything. The instinct is always to spend more, to introduce some new benefit at the taxpayers' expense. This time around, we have free GP care for children aged five and under.

Politicians know that the single best way to buy votes is to fight cuts to benefits and, when they can, increase current benefits and introduce new ones.

This is exactly what helped get this country into its present mess. That and artificially inflating the property bubble. The last government, in common with other governments overseas, encouraged banks to lend and lend in order to inflate the economy, so they could raise more tax revenue, spend more and get into office again.

But if Fine Gael and Labour had been in power it wouldn't have been different in any important respect. Labour was in power in Britain during the boom and Britain is in a mess as well – although not quite as big a mess as us.

The pressure to grow the State is still enormous. Politicians love lashing out the money. It's easy to condemn anyone who isn't so fond of benefits as 'hard-hearted'. It's the most fantastic trick ever; at one and the same time you can spend other people's money and get to call yourself 'compassionate'.

The pressure on the State to grow is also being exerted by our ageing population. As the number of people aged over 65 grows, so will the pressure on our health and pension budgets.

What is the Government's answer to this in the latest Budget? It has altered the medical card scheme a bit, but apart from that its response has been entirely perverse. It has attacked private health cover again, it is punishing savers and increasing tax on another form of savings, namely private pensions.

This is a certain way to increase dependency on the State and therefore to further increase public spending at a time of huge public and private debt. It is insane.

The entire instinct in Irish politics is to regard people who have private health cover and private pensions and savings as 'rich'. They are there purely to be taxed and must be made to feel guilty that they have these things. How dare they?

The logic of this is scarcely believable. First, no one should be made to feel guilty because they are able to put money aside for a pension or private health cover, or a fee-paying school, for that matter.

Secondly, we should be encouraging people to do all this because it saves the State money.

If the State makes it harder for people to buy private health cover or to have a private pension, that will make an ever bigger proportion of our growing population of over-65s entirely dependent on the State for their health and pension needs.

Furthermore, by discouraging private pensions and savings, there will be fewer people in that generation with real spending power and this will be disastrous for the economy and society as a whole.

State policy has to be aimed at reducing dependency, not increasing it. We cannot afford the State we have and therefore only those who must be dependent on it should be dependent on it.

If Lucinda Creighton and co go ahead and set up that new party they seem to be thinking about, reducing dependency on the State has to be one of its top priorities.

Irish Independent