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Column: Should the rich give back their benefits? No – it’s the wrong question.

This idea is a cover for the Government’s ineptitude, writes Aaron McKenna. Have we forgotten the point of social welfare?

Aaron McKenna

IN A GOVERNMENT stuffed full of Benjamin Franklin disciples, no minister enjoys flying a kite more than Joan Burton. The Minister for Social Protection loves to enrage, scare and mystify us with proposals flown off the top of her grisly fortress in Dublin city center, and in the run up to this Budget, her €21billion Goliath is settling its beady eye on €2billion worth of child benefit.

Various unnammed spokespersons and anonymous sources have, through sheer coincidence, been suggesting ways and means to cut the bill, with the most original suggestion yet being that we should ask rich folk if they’d like to give their monthly stipend back. That kite was quickly retracted when the derisory reply came from the great unwashed that government is happy to take from the poor, why should it be politely asking the rich?

It’s a good question, and not without merit, but it is the wrong one to be asking of one of our biggest departments. The question is far too philosophical for the well insulated mandarins of government who are themselves, to employ something Samuel Beckett once said, the cream of Ireland – rich and thick.

The more prescient question is: Why is it we entrust a €21billion-a-year-spending department to people too feeble-minded – politicians and apparatchiks alike – to develop a proper, modern system for accomplishing their goals?

The aim of the welfare state is to prevent people starving, not to give an additional €140 a month to people who earn six figures for the pleasure of having children. This we all agree on, yet the back and forth and back and forth from this department – now under two governments – agonising over both the political and technical hurdles to reforming this wasteful spending in a time of thrift has been goading to watch.

‘Computers won’t talk’

“The computers in Revenue won’t talk to the computers in Social Protection,” we’re told by the minister, by the last minister and by various ever enduring senior civil servants. Well colour me blue, the computers don’t talk, can’t talk, and four years into the crisis ‘top people’ (as the Indiana Jones line goes) still haven’t managed to figure it out.

Meanwhile, in the real world, companies like Google and Apple keep doing their things (with offices in Ireland to boot); we found the God Particle; NASA landed the Curiosity Rover on Mars; and two Irish schoolboys are turning the world of online payments upside down and are on their way to running a billion-dollar company on the back of it. But, you know, them computers in the department are tricky fellas.

Not, in any event, that taxing the benefit is the smartest route to take in the first place. It just shows up the capacity of government for innovation that they’ve not figured it out yet.

If you step back and think about it, for government to pay you child benefit and later tax it is a multi-step process. Firstly, they tax your income. Secondly, they move the money around inside their departments. Thirdly, they pay you the child benefit. Fourthly, they’ll now tax you on the benefit. The water cycle works like that, but the difference is that there isn’t a bureaucrat on a good pensionable salary pushing buttons every step of the way when it rains.

Safety net

Committed socialists believe in a universal payment such as child benefit, for mumble-mumble some non-specific reason unrelated to votes. One Senator recently told me that an argument for it is that everyone who puts something into the social safety net should get something back out of it. This attitude is symptomatic of the rot in our welfare state, the purpose of which was lost beneath years of giveaway budgets paid for out of transitory property taxes by people who should have known better.

The thing we all get out of the social safety net is that it exists, so should we ever fall it will catch us. We should pray that we never need a cent from it, that our money will help those less fortunate but should we ourselves run into hard times – let’s say, by some improbable confluence of stupidity, something terrible happened to the entire economy – it’s there for us.

You can’t have more people on the wagon than pulling it, not for long anyway. Yet there are 600,000 families in receipt of child benefit. This universal payment probably does plenty to aid child poverty by papering over the problem, and by diverting cash from the most needy.

What we ought to have is a proper payment that is given based on means and needs, not on whether it’s your first child or the unlucky third one. We should accomplish this by ending child benefit as we know it and make people apply for a new benefit, aimed to help the needy, with stricter means tests. The department already processes paperwork from families every few months to prove their children are still eligible for the existing benefit.

Army of people

Once again, the resourceful bods at the department tell us that would be a quite intensive effort. Again, however, they try and construct the most difficult route to success so that they can shy from taking it. Make the people come to you, so that folks will de-select themselves because they’re ineligible – like those €100,000 a year families (there’s 115,000 people earning over that amount, though we don’t know how many families. But lets be generous and say that 20 per cent of the work is done and dusted).

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If processing all that paperwork takes a lot of effort, get creative. Call Google. Or just hire a bunch of temps for a few months (the department already has a fairly substantial army of people on its books it could hire). The point is to make savings over many years, and make child welfare payments fairer and more useful at achieving the core goal of welfare.

Of course, upsetting the apple cart and making everyone apply would be politically unpalatable. It’s a chief perk of being a politician that you get to spend other people’s money in stupid ways to maintain your own popularity.

Even the limits proposed are political sops. €100,000 a year is a nice round number, just like 100,000 new jobs. But a married couple with children, earning €50,000 a year each, are taking home around €5,856 a month after tax as it is – why shouldn’t the limit be lower, and then raised according to the number of children you have? As things sound today, if that family earns €99,000 they’ll get their €140 a month for their child. That doesn’t sound very logical.

The Department of Social Protection is one of our biggest and most important. What it does affects the lives of our most vulnerable citizens. Its policy making is haphazard, and its capability to deliver innovative solutions to the problems thrown at it in the past years has been negligible.

Yet here we are, with the same old tenured civil servants running it and the same old ministerial and political cover sought at the cost of delivering real value for money and programs that make a real change for the better.

Sounds like business as usual in Irish government land.

Aaron McKenna is a businessman and a columnist for TheJournal.ie. You can find out more about him at aaronmckenna.com or follow him on Twitter @aaronmckenna.

Read: More columns from Aaron McKenna on TheJournal.ie>

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