Cutting the welfare budget without cutting welfare rates

Instead of reducing social welfare rates (such as the proposed halving of job-seekers for the under-24’s), could we use a bit of lateral thinking and modern technology to come up with solutions that may provide cost savings without reducing benefits? The (Irish) government may be able to leverage it’s buying power to get a better price for daily essentials purchased by welfare recipients. What it could attempt to do, is negotiate a price for preferred vendor status for a range of goods – principally groceries & clothes – with some of the major supermarkets and other stores operating here. Recipients of social welfare, and other state benefits, could be given a debit card which would only work at preferred vendor stores and each week the card would be automatically topped up with a proportion of their welfare / benefit payments. If the government was able to negotiate a 10% discount and 50% of welfare benefits were delivered via the debit card, a 5% saving could be achieved without badly impacting those on welfare. Such a scheme could have the added advantage of ensuring that benefits paid out by the state were spent within the state and not across the border in Northern Ireland.

What do you think? Crazy idea? Is a 10% discount achievable?

No bio, some books worth reading – The Rational Optimist: How Prosperity Evolves – Matt Ridley .

Crisis Economics: A Crash Course in the Future of Finance -Nouriel Roubini, Stephen Mihm