Labour party needs to break its addiction to the welfare sacred cow

The budget is not until 2014 but already the battle lines are being drawn within the Coalition Government about where the cuts should fall. Again yesterday Tanaiste Eamon Gilmore said firmly that social welfare rates must remain untouched and that the spare cash from the Promissory Notes should be used to sustain this, rather than be used for an overall jobs stimulus as FG had hoped and which would seem the most sensible option to many of us. Or even, God help us, a possible income let-off for the hard pressed coping classes, who have been hit by a raft of cuts and stealth taxes.

No one wants to be hard hearted but welfare rates, through their many different accrued benefits- are still too high in Ireland and are simply unsustainable. The dole, with potential extras, especially for young families, is at such a level that SME’s are finding it hard to get people to work for new companies, at the modest salaries of our post-boom economy. We need to introduce proper job seeker assistants, as the EU recently told Minister Burton, and start reducing long term benefits to get people incentivised to come off welfare. But Gilmore and his party seem to be wedded to the welfare sacred cow, even to the extent of paying for it with money that could otherwise create jobs!

Welfare, not jobs seems to be the Labour priority. And so, even the usually tame European Commission slammed the Governments’ lack of provision of proper ‘job seeker’ experts to get people off the dole. The EC discovered that there were only 300 case workers dealing with over 400,000 people on the live register, with an expected rise to 600 by the end of 2013 and perhaps 800 in 2014. Paltry. And this was an increase due to be reached through the redeployment of existing staff, most of whom do not have the required qualifications. “Rapid decisions and actions on the possible outsourcing of some services are therefore needed,” demanded the EC. And as for the promise to open 43 ‘one-stop-shops’ for the unemployed by the end of the year, this has fallen well short of the target.

But instead of addressing these priorities Minister Burton seems to be dreaming up new ways to penalise the business community and the very people who are providing employment and trying to get the economy moving again. One was her proposal for the minimum wage level to be increased, despite the fact that we have one of the highest such rates in Europe and one which is, according to employers, deterring employers from actually taking on people – thanks to Minister Burton’s generous welfare rates.

But of course, Minister Burton is under pressure here to trim her huge welfare budget. Her big idea is to cut spending on the Family Income Supplement which costs €230m per annum, but she wants our employers, already struggling, to make up the shortfall. But why doesn’t she just bite the bullet here, and cut some of these welfare rates anyway, with proper means-testing. After all, in fairness to Joan Burton, she has already rooted out overspending and fraud in social welfare.

But, no, instead we got Burton’s other strange proposal: that unemployment benefit should be tied to what an applicant was previously earning. This would mean that a person on a large salary could be getting a very large dole payment – all paid for by the rest of us, who are still working. As if we’re not broke enough, as it is. Is this Labour’s way of making us solvent again and getting people back to work?!

The Labour party needs to lose its fixation with our welfare system and start focussing on the sort of jobs creation that will get us out of this mess. The core rates of social welfare are always going to remain untouched, but the huge overall budget for welfare has simply got to come down. This is what the Troika demanded, with good reason, and this is what we should do. Otherwise, we will never get competitive again.