Cut in child benefit must be a first step in rebuilding our economy

I CAN be mature about this.

I’d lose €200 a month. €2,400 a year. Exactly the cost of our annual holiday in the West of Ireland, as it happens.

We might have a cheaper holiday or we might cut something else. But we definitely wouldn’t have to cut down on food.

Somewhere down the line, someone might have to, of course. I spend that money in Ireland and it employs Irish people. Taking that money out of the system hundreds of thousands of times is going to have huge repercussions for the economy.

But I do understand the basic maths. This country had a deficit of €11bn for the first nine months of this year. Something has got to go. A few of my family’s luxuries are a good start.

I think the advisory group on tax and social welfare has come up with a good plan to rationalise child benefit payments. This would see the basic payment for each child going down from €140 per month to €100, with additional measures promised to meet the needs of less fortunate families.

It’s a radical plan, a huge drop. It would take guts to implement. This would show, for the first time, that this Government isn’t frightened of making politically unpopular choices. And that might make us more confident that they can manage us out of recession.

I confess so far I have despaired. The Government’s first budget last December was considered “regressive” by the ERSI — it hit the poor more than the rich — by comparison with the previous five budgets which were “progressive” — they hit the rich more than the poor.

I have despaired over the failure to cut public sector allowances. I have despaired over the septic tank U-turn, and the cack-handed, “this is hurting me more than you” €100 household charge.

But if they cut the bejaysus out of my child benefit and put in impressive safeguards for families less fortunate than us, I’ll start to show a bit of respect.

It will all depend on the efficacy of those redistributive measures, however. I know a family of six children with both parents in and out of self-employment. The face of their fifth child looms in front of me whenever cuts in child benefit are mentioned. If she gets hit, I get angry.

Like many other severely stretched families I know, these young people have never been on social welfare. They reckon they have skills and can manage somehow. But the managing has got harder and harder. If they have to take a cut of nearly a third in their child benefit they won’t be able to manage any more. Effective schemes have to be put in place to help families like them who are suffering hardship but are not in the social welfare net.

It would be so much better if the benefit could be taxed, rather than making struggling families go through the demeaning process of proving they need extra help. But I understand the difficulty. Couples have been assessed for tax as individuals since Charlie McCreevy’s Celtic Tiger budget in 1999. There is no assessment of household income and so no way to judge the neediness of particular families.

And even taxing the benefit at source would not make it fully sensitive to the difficulties of families with big debts. Debt changes everything. Without it, costs can be reduced. But what do you do if your income keeps reducing and your debt doesn’t? Taking €40 per child per month our of the equation could trigger a financial meltdown.

Child benefit was never meant to be about servicing debt and it shouldn’t be, but other measures are going to have to be taken to help overwhelmed families.

But if there are really clever, really compassionate schemes there to stop families going over the edge, I’d be ready to vote for the two-tier system.

Will the Irish people? Will the media be able to resist the sales they achieve when they fuel the public’s anger? They need the sales, and the more they push the economy down the more desperate they become.

The opposition is already whipping up that anger. Of course, Sinn Féin is first out of the traps saying there is no need for the cut and proposing a 48% tax on incomes over €100,000.

Then there’s Fianna Fáil, who impressed me with the maturity of their role in opposition for some time, and then returned to good old populist politics. What a stomach-turner it was to see Michael McGrath in this newspaper on Sep 10 saying that if it were up to him he wouldn’t introduce a property tax! Except that, not even two years ago, it was up to him. He — or at least, his party — planned it.

I suppose he’s getting his own back. Labour and Fine Gael milked the country’s difficulties, under the last government, all they could. Fergus Finlay appealed in Tuesday’s Irish Examiner for opposition leaders who knew that there was “a time to criticise and a time to support” and added: “It’s clear from reading last week’s Dáil debates that we don’t have opposition leaders like that any more.”

So what did he make of the performance of his own party, Labour, in the terrifying run-up to the bailout in 2010? With our bond spreads going through the roof, neither Labour nor Fine Gael would entertain the idea of entering a national government for the good of the country. Nor would they support Budget 2011 on which the vital bailout depended, but they conspired to let it through.

BEFORE the last election Labour plastered the place with pictures of chubby babies and the slogan, “Protect Child Benefit — Vote Labour”, although the cut which Fine Gael was suggesting was just over half of the cut recommended by the expert group, which Joan Burton is considering.

Is this the same Joan Burton who said, before the last election: “For parents with a large mortgage and high childcare costs, any further cut to child benefit would be a genuine crisis.”?

Sorry, my mistake, it’s not the same Joan Burton. That was Opposition Joan, not Government Joan.

“It’s like there’s two parties,” said my 13-year-old. “And the only difference between them is who’s in government and who isn’t.”

How can I contradict him? Clientelism on both sides of the house has been our modus operandi since long before the foundation of the State. In Preventing the Future, historian Tom Garvin argues that we learned it from the British, who attempted to buy us off with massive land redistribution.

We continued the tradition of spending politically rather than strategically. And during the recessions of the 1950s and the 1980s electorally weak coalitions prolonged the agony by failing to act decisively.

Garvin shows how we eventually dug ourselves out of those crises. There’s still time for this coalition to pick up its spade and for the opposition to get out of the way.

And for those of us who can afford it to give up our €40 per child per month with good grace.