Under-23s could face 20% cut in dole

YOUNG people face cuts in dole payments under Government plans being considered for next week’s budget and an alternative proposal to be put forward by the opposition.

Ministers are considering cutting the jobseeker’s allowance more than 20% from €204 a week to €160 for unemployed people under 23 as part of €1 billion savings on welfare payments in next month’s budget. The measure would also offer an incentive to young people to stay in training programmes by allowing them to keep their standard payments if they do so.

Fine Gael last night claimed that €5bn is being spent this year on unemployment benefit for people who can work.

The party will launch a jobs strategy this week which will propose spending this €5bn on back to work and training schemes, particularly for those under 25. Under the plan, young people who refuse to take up training courses offered to them will face a €50 cut in their dole.

Party leader Enda Kenny said: “I have mothers writing to me from all over the country saying get them out, provide training places for them, provide jobs for them. What we would see under a Fine Gael proposal would be the opportunity to create those training places, to create those jobs. And for those who would refuse to accept those jobs or those training places I would see a cut of €50 after six months if they didn’t do it.”

He told RTÉ’s The Week in Politics: “There are those who cannot work, the disabled, the carers, the pensioners and the children. You are spending €5bn every year on those who are out of work but who can work. What we want to do is shift some of that €5bn into retraining and work opportunities.”

Mr Kenny said his party would make savings of €500m in welfare spending while protecting children and pensioners from any cuts. He said his party would also abolish the €10 airport tax introduced in April’s emergency budget.

Finance Minister Brian Lenihan has reiterated that the €4bn savings in next week’s budget will focus on spending cuts rather than tax hikes, following reports that some cabinet ministers think higher taxes on the rich will be necessary.

Mr Lenihan believes tax increases would further suppress economic activity and damage consumer confidence and spending in the run-up to Christmas.

Writing in a Sunday newspaper, he said the budget deficit “has emerged not because the share of Government revenues in our economy has become disproportionately small, but because the share of government spending has become disproportionately large”.

He said: “The upcoming budget must focus on reducing spending.”