Young People Feel The Pain AgainTuesday 15 October 2013 14.16
Prime Time’s George Lee blogs ahead of the Budget 2014 announcements
The fact that budget day comes two months earlier than normal this year meant less time for leaks and political kite flying about what it will contain. Perhaps that was not such a bad thing. Because delivering bad news through dribs and drabs, and snippets, and half truths as we have experienced budget leaks in recent years, is downright demoralising for citizens.
The run in to last year’s budget with all the leaks about property tax seriously undermined consumer confidence, and brought the economy to a standstill.
This year the Government is trying to do the opposite. Senior and junior Ministers from both Coalition parties have been on the airwaves talking up the prospects for the budget. If fact if you didn’t know any better you could be fooled into thinking this is going to be a give-away budget.
It’s all PR spin of course, because you cannot take two and a half billion euro out of a fragile economy like ours
without hurting the people.
It is unlikely that there will be any significant changes in income taxes so at least take-home pay should hardly be touched. But we don’t need any budget leaks to tell us that they’re going to catch us elsewhere.
We all pay carbon tax, VAT, and excise duties - on the old reliable, cigarettes, petrol, and alcohol. Small changes could be introduced on any of these. The rate of property tax won’t be changed, but they’re still going to take twice as much property tax from us because they will get it for the full year next year instead of just six months this year.
We don’t need a leak either to tell us the spending cuts are going to hurt too. Nearly three quarters of a billion euro will be accounted for by sacrifices made in the Haddington Road Agreement by the public service unions. That’s more money out of people’s pockets whatever way you look at it. Sure it will affect public servants first, but money is made round to go round. If our public servants have less to spend that has a knock on effect in shops and businesses all over the country. We are all connected.
The leak however, that has most grabbed my attention this year is the one about unemployment assistance for young people, those under the age of 26. It seems it is to be hit hard, and not the first time.
Dole payments for young people were first cut in Budget 2010 when Fianna Fail’s Mary Hanafin was Minister for Social Welfare. She needed savings of €425 million that year. She got half of it by cutting Child Benefit payments by €16 per month, and another quarter of it by slashing the dole for young people. Unemployment Assistance for people up to the age of 21 was cut to just €100 per week. For those aged 22 to 24 the new rate was €150. Those aged 25 and over were to be left on the full rate of €196 per week.
What surprised me most at the time was how little reaction there was to the change. Up to that point the recession had been particularly brutal on young people. Youth unemployment was at record highs and emigration was on the rise. Yet for whatever there was very little public sympathy over the issue. The clever thing from the Government’s point of view off course was that the new changes were to being introduced for new entrants to the Live Register only. That meant it didn’t affect anybody already unemployed - only those who would become unemployed in the future. So the victims didn’t really exist yet, hence there was nobody to organise a protest. The change sailed through without much of a protest.
Since then of course the rates have been cut a little further. The full rate of Unemployment Assistance is down to €188 per week; the rate of those aged between 22 and 25 is down to €144 per week; while the rate for those aged under 22 is still at €100 per week.
Now according to the latest leak the budget is going to slash the rate again. The weekly unemployment assistance rate for all newly unemployed people under the age of 26 years is being slashed to €100. And those who are aged 26 - who currently qualify for the full rate, are to have their entitlement cut to €144 per week. If this leak turns out to be true, then the potential for social hardship for young people is enormous.
On a recent trip to Waterford for a programme item we were filming for Prime Time I paid a visit to the local Society of St Vincent de Paul. The volunteers there told me of a four-fold increase in the number of calls they were receiving for help. They told me too of that there were more young people in hardship than ever before. David O’Neill the Regional Administrator for the Society described a huge surge in homelessness among young people in the region. His members have told him that the key reason for the rise in homelessness among young people is the fact that their dole payments have been cut so much already.
Labour’s Joan Burton is now the Minister in charge of Social Welfare. She has been under great pressure from her Ministerial colleagues to decide on savings of €290 million. She is also deeply involved in transforming the way the Welfare State deals with job seekers into a far more active form of labour market intervention. People are no longer going to be allowed to sit on the dole twiddling their thumbs for years -- it’s not good for them because they will become unemployable and the State simply cannot afford to keep paying them. So changes must be made in the way the Live Register is operated. That is well and good, because the State has not been very good at getting unemployed back to work until now. The system has been far too passive to generate the jobs the Government are needed.
However, is that a good enough reason to target unemployed young people for further cuts?
Why is it that a person aged between 18 and 25 years can vote, pay taxes, participate fully in society, and be held fully responsible for their actions in exactly same way as a person aged 27, or 37, or 57, but yet when it comes to them falling on hard times they are treated very differently
One wonders if the Government has received any legal advice to justify the discrimination that is at the heart of the decision to slash dole payments for young people yet again. And if they have received such legal advice should they not publish it?
The fact that young unemployed are to be treated so harshly puts them at a significant disadvantage in the labour market. It weakens their ability to look for a decent wage from an employer. All employers will know that they have little option but to work for very low wages because they will get so little support on the dole. It should not go unnoticed that a dole payment of €100 per week is equivalent to less than 30 per cent of the minimum wage.
The overwhelming majority of young people in this country are fine, intelligent, well-educated, socially responsible and upstanding people. They have been particularly hard hit by the recession as reports from organisations like the ESRI and others have repeatedly shown. There are no easy choices in Budget 2014 but many young people will be forgiven for feeling that they are being singled out again.