Benefits for new claimants under-25 to be cut in budget
Free GP care for children aged five and under to be introduced
The budget, which will be unveiled tomorrow by Mr Noonan and Mr Howlin, will see €290 million cut from welfare expenditure managed by Minister for Social Protection Joan Burton.
It emerged as the Cabinet met that cutbacks from at least one of the major secondary benefit schemes under which pensioners receive telephone, gas and electricity allowances remained in play.
This, however, was still subject to final agreement. Such cuts would be likely to prove contentious if introduced.
The budget embraces a €2.5 billion retrenchment, two-thirds from spending cutbacks and one-third from tax measures.
However, the Government is also expected to earmark half the proceeds from privatisations and the sale of Bord Gáis assets for investment purposes to create employment.
This includes new budget measures to boost the construction industry and house-building particularly, a priority for Fine Gael.
The initiative is unlikely, however, to include a special VAT rate for the construction sector. The budget is also expected to include a new levy on the banking sector to raise between €150 million and €200 million.
This will apply to banks which are in receipt of State support and those which are not.
Increases in deposit income retention tax, capital gains tax and capital acquisitions are also in prospect. These are dubbed the “new old reliables.”
Fianna Fáil finance spokesman Michael McGrath said the imperative from his party’s point of view was that tomorrow’s budget “is seen to be fair”.
“We all accept you won’t get a consensus on what is fair but I think the litmus test is whether or not the distribution of the burden of the adjustment is carried by those who have the best capacity to pay it,” he said.
Mr McGrath noted the proposed introduction of free GP care for under fives and said there were undoubtedly families with young children who could not afford the cost of bringing them to see a doctor.
However, he asked “at whose expense” the scheme would be funded given the fact the medical card system was in chaos.
“Will it be at the expense of children over the age of five who might have autism, who might have Down’s Syndrome, or at the expense of adults who have lifelong debilitating illness, such as Motor Neuron Disease, such as MS, people who are profoundly disabled… that is the key question the Government will have to answer tomorrow.”
On proposals to change welfare entitlements for young jobseekers, Mr McGrath said “much more rigorous activity on the labour activation side” would be needed if payments were to be cut.
“What we will be looking for tomorrow, is that if there is a change to the rate being paid to young people on the live register, that it is accompanied by meaningful labour activation, that they can be guaranteed that they will be offered a place that is tangible, whether it be in education or in training which gives them the best possible prospect of securing work.”