Belfast Telegraph

Sunday 31 August 2014

Taoiseach defends dole cut policy

Enda Kenny insisted Government-led education and training initiatives usually result in jobs.

Taoiseach Enda Kenny has claimed savage cuts to young people's dole payments will ultimately leave them better off.

As he faced the budget backlash from opposition parties who accused him of failing the nation's youth, he insisted Government-led education and training initiatives usually result in jobs.

"Over 65% of those who go on a Job Bridge scheme find full employment as a consequence," Mr Kenny said.

In a heated row with Sinn Fein deputy leader Mary Lou McDonald, the Taoiseach dismissed her charges that such internships were "half-baked Mickey Mouse schemes" aimed at massaging unemployment figures.

"If you think that's a Mickey Mouse operation then go and speak to the young people," Mr Kenny said.

"How dare you insult their intelligence? How dare you insult their motivation? How dare you insult their right to have a job? How dare you with your Sinn Fein antics?"

Following a raft of tax hikes and spending cuts to the tune of 2.5 billion euro in what was dubbed a "cradle to the grave" budget, the Taoiseach defended moves to slash young people's dole by nearly a third.

He said the Government cannot allow a situation where young people are incentivised to graduate from school onto welfare.

Anyone aged 25 and under who signs on from January will get just 100 euro a week, down from 144 euro, while 25-year-olds can claim 144 euro, reduced from 188 euro - the full rate which will still be available to those aged 26 years and over.

"Our young people should be in education and training, not languishing on dole queues," Mr Kenny said.

"This is the context of yesterday's changes to the jobseeker's allowance rates.

"These budget changes will ensure that young people will be at least 60 euro better off in education, employment or training than claiming welfare."

In a speech to the Dail, the Taoiseach claimed that people under 26 who participate in a back to education course would actually have their jobseeker's allowance increased to 160 euro per week.

"That means that in addition to the enhanced career and job prospects from improving skills and education levels, there is a huge financial incentive for young people to participate in education, employment or training," he said.

"These actions are part of a much bigger strategy to address the problem and should not be viewed in isolation."

Elsewhere, Finance Minister Michael Noonan and Public Expenditure Minister Brendan Howlin were forced to defend the measures unveiled in yesterday's budget.

They insisted that despite a series of cutbacks targeting the elderly, they strived to protect them.

Even with the tightening up of the eligibility for over-70s medical cards, the removal of the telephone allowance of 9.50 euro per month and the scrapping of the so-called bereavement grant, Mr Howlin said there was still "a very robust package" for pensioners.

Mr Noonan added: "We are protecting the older generation, because we appreciate the contribution they have made to the country. We didn't touch pensions, either contributory or non-contributory pensions.

"But more importantly, we didn't touch income tax credits for the elderly, which are very enhanced. If you take for example a couple of pensioners living together - man and wife, husband and wife - they pay no tax until their income passes 36,000 euro.

"And we have single people going into the 41% rate of tax, just above that level. So the benefits in the tax law for elderly couples are totally preserved."

The finance minister was also criticised for hiking the cost of beer, cider and a measure of spirits by 10 cent, and a bottle of wine by 50 cent.

But he insisted that while he increased excise duty on alcohol, budgetary measures to stimulate the economy will eventually result in people having more money to spend in pubs.

"Alcohol is a discretionary item and rather than tax the necessities of life, I think it is reasonable to put an imposition on excise by way of alcohol and tobacco," Mr Noonan told RTE radio.

He said he maintained the special rate of VAT on tourism and leisure-related services at 9%, left income tax rates and the Universal Social Charge untouched, and put a lot of money into getting people back to work.

"As we grow the economy, stimulate the economy, get more people working, you will see the benefit coming into you if you run a good business," he told a hard-pressed publican.

The ministers were challenged on plans for a major review of medical cards, in which they hope to save 113 million euro.

Health Minister James Reilly was unable yesterday to give even an estimate of how many people will lose a card as a result of increased scrutiny of eligibility.

He did confirm that up to 35,000 elderly people - over the age of 70 - will lose their full medical cards, which will be replaced with a free GP card.

Mr Noonan and Mr Howlin also faced criticism for cutting dole payments to young people and their decision to increase prescription charges to 2.50 euro - up one euro, with a cap of 25 euro a month.

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