Welfare move will hurt local economy

Irish retail sales have fallen further than nearly every other country in Europe this year, a further indication of the perilous state of the Irish economy as we head into what is traditionally the biggest spending period of the year. This year, more than ever before, people are choosing to hold on to what they have rather than splurge as they await their fate on budget day in early December. At a time of the year when retail sales would be expected to start picking up in advance of the Christmas spending spree, there is as yet no evidence of any kind of lift in the amount of cash going into tills in shops and stores around the county. Everyone is adopting a wait-and-see policy as regards spending this December to see how much pain is going to be inflicted by Finance Minister Brian Lenihan in three weeks' time. Meanwhile, Irish retailers and businesses are appealing to people to consider carefully their spending plans this Christmas and to buy locally and buy Irish as much as possible in order to preserve jobs. For one group of people, however, it will certainly be a more difficult Christmas than most. Those of social welfare who depend on the traditional double payment bonus to make ends meet at Christmas will be deprived of the extra payment this year following the Government's decision to scrap the double payment for this year. The sad reality is that many households may end up going without a turkey on 25th December and some children without a promised gift as a result of the Government's move, which will save €156 million this year and €171 million in 2010. In County Meath, it is estimated that the removal of the supplementary payment will remove up to €9 million from the county's economy next month. In Navan alone, an estimated €1m to €1.5m will be removed from circulation. It may well also drive many of the so-called 'new poor' into the arms of moneylenders whose punitive rates of interest will ensure those caught in their spider's web will spend most of next year trying to repay the money simply for trying to give their families the sort of decent Christmas they deserve after a year in which the breadwinner may have lost his or her job. It is difficult on an economic level in these recessionary times to argue with the Finance Minister when he says that, when times were good, payments were increased to those who were vulnerable, but now that Ireland is in recession, the Government must look at how it can use the €21 billion welfare budget to afford maximum protection to those most in need. However, economists and government advisors don't factor in the human suffering that sometimes impacts from their strategies, and this is one occasion where real hardship will follow. As the Mayor of Navan, Cllr Joe Reilly, pointed out this week, the scrapping of the Christmas bonus will impact most on families with young children who do not have the extra cash for those few additional luxuries at this time of year. These are people who do not have any savings to fall back upon to cope with this unexpected income reduction. Indeed, many pensioners use the money to heat their homes over the cold winter months but may now have to endure unheated homes as a result. The loss of this money from circulation will also have significant consequences for retailers and businesses across County Meath, depressing further the local economy and putting many already marginal retailers under even more pressure. It will also have a major impact on organisations like the St Vincent de Paul who do sterling work in towns the length and breadth of Ireland at this time of year. Bodies like the SVP have already said they are at breaking point due to the enormous increase in demand for their services at a time when charity-giving has already taken a massive hit from the recession. The only crumb of comfort for those at the margins of society - and it is a small crumb - is that tumbling consumer prices of almost seven per cent this year may offset some of the pain being experienced, and shops are competing like never before for business, which is always good for the consumer.