Welfare keeps economy going, says Joan Burton

Minister ‘very hopeful’ she can protect core welfare payments in Budget

Minister for Social Protection Joan  Burton said the live register was slowly coming down – now at 13.6 per cent – but not in some of the communities worst affected by unemployment. Photograph: Cyril Byrne/The Irish Times

Minister for Social Protection Joan Burton said the live register was slowly coming down – now at 13.6 per cent – but not in some of the communities worst affected by unemployment. Photograph: Cyril Byrne/The Irish Times

Thu, Jul 11, 2013, 10:28

Social welfare payments are keeping the economy going, Minister for Social Protection Joan Burton has said, adding it was her “objective” there would be no cuts to core welfare payments in the upcoming budget.

At a briefing to the Oireachtas Joint Committee on Social Protection yesterday, the Minister was asked, given savings of €440 million were required of her department in the October budget, whether core social welfare rates would be protected.

“I would be extremely hopeful. Budgetary decisions are for the whole Government, and substantial discussions haven’t begun - but that’s certainly my objective. I think it makes social sense and it makes a lot of economic sense.

“As American studies have shown, the most important stimulus is the extent of welfare payments to the unemployed. European studies show social welfare payments are a key Keynesian stabiliser, which people spend in their local economy. The immediate impact of the social transfers we make is the impact on poverty levels. They reduce poverty by up to 60 per cent.

“The second impact is the contribution to the country’s recovery. The spend of my department puts money in the tills of almost every business and shop in the State. They are keeping the economy going.”

Chair of the Committee Joanna Tuffy TD asked: “Can the €440 million be negotiated down in terms of how much we take from people?”

Ms Burton replied that in previous years she had been able to negotiate down the “ask” being made of her department by the Department of Finance.

Spend ceiling

The ceiling on her department’s spend next year had been set at €610 million lower than this year. Savings as a result of measures already taken would begin to bear fruit next year, and so the “ask” was a cut of €440 million.

There were also increasing “asks” being made by changing demographics. There were more pensioners who were also living longer, the Minister said.

The live register was slowly coming down – now at 13.6 per cent – but not in some of the communities worst affected by unemployment. While foreign investment in job creation was healthy, the types of jobs being created were not helping the communities worst-affected by unemployment, she said.

Ms Burton said fraud prevention measures, such as identity checks and biometric identity cards, were saving €700 million a year.

She also said a 14-week processing time for Garda vetting was preventing people from taking up community employment scheme places. “We have nearly 3,000 people who we could place in CE schemes tomorrow but they could not start because of delays having candidates vetted by gardaí,” she said.