I move:
That a sum not exceeding £21,394,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1968, for the Salaries and Expenses of the Office of the Minister for Posts and Telegraphs and of certain other Services administered by that Office, and for payment of a Grant-in-Aid.
The net Estimate of £21,394,000 for my Department is shown in the Estimates volume as £1,788,000 greater than last year's. The figures for last year, however, do not include an additional £1,302,000 provided near the end of the year in the supplementary estimate for increases in remuneration to meet the cost of the tenth round and other pay awards for the Civil Service generally. When allowance is also made for an increase of £75,000 in broadcasting licence revenue transferred by way of Subhead K to Radio Telefís Éireann, the actual increase in the provision for my Department is £411,000, and is substantially due to higher capital repayments—in Subhead G—arising from the expanding capital investment in the telephone service.
Other subheads with variations of some size as compared with last year are:
The increase shown under Subhead A—Salaries, Wages and Allowances— is £1,667,000, of which approximately £1,200,000 is to meet the cost during this year of the pay revisions just mentioned. The greater part of the balance is to provide for additional labour force and overtime to meet the needs of the engineering programme for telephone development. Numerically, the staffing position in the Department as a whole shows a slight reduction.
The increase of £47,000 under Subhead D—Conveyance of Mails—is mainly to provide for increased airmail traffic.
The largest elements in the increase of £58,000 under Subhead E—Postal and General Stores—are some £30,000 more for the expansion of the postal motor fleet and some £10,000 more for purchases of uniform clothing.
The main reasons for the decrease of £290,000 under Subhead F—Engineering Stores and Equipment—are that about £150,000 less is being provided for the purchase of stores and about £125,000 less for contract works. These reductions arise from casual variations in provisions totalling over £5 million.
The increase of £341,000 under Subhead T—Appropriations in Aid—arises mainly from the increased recovery expected from telephone capital funds under this year's programme.
Letter traffic in 1966 was about one per cent higher than in the previous year. Approximately 427 million items were handled. The volume of air postings continued to show a substantial increase, first-class mail being up by over five per cent and second-class mail by 27 per cent.
There was no appreciable change in the level of inland parcel traffic during the year. Foreign parcel postings rose by over eight per cent. In all 8 million parcels approximately were handled.
The number of meter-franked postings in 1966 increased by nearly seven per cent and now constitutes about 28 per cent of total postings. This growth in the volume of prefranked mail is a welcome development and one which the Department has encouraged by relaxing the conditions governing postings by firms using postage meter-franking machines.
The British seamen's strike in May and June, 1966, caused some delay to parcel mails to and from Britain and to foreign surface mails normally routed through Britain. The services were, however, kept going despite the difficulties.
A high standard of mails service continues to be provided. Over 92 per cent of first-class letter postings is delivered throughout the country by the following working day and second-class mail and parcels get almost as good a service. The bulk of mail for places outside the country goes by air on the day of posting and most mail received from abroad is delivered on the day of receipt or on the following working day. By providing a postal delivery at least once on each weekday for every house on the mainland, however remotely situated, the Department is giving a service which compares favourably with that given by any other postal administration.
Approximately 77 per cent of postal service expenditure consists of staff and related costs. The scope for reducing the high staff content in postal operations by improved methods, including mechanisation, is generally accepted to be limited and there is certainly no prospect of absorbing the additional expenditure of about £60,000 a year which follows each 1 per cent wage increase in the postal service. It is nevertheless important that every practicable means should be availed of to increase productivity although this inevitably means employing fewer men to do the same amount of work.
Amalgamation of posts on motorisation resulted in a reduction of 64 rural posts. On the other hand, it was necessary to create 26 new full-time posts in cities and larger towns to cater for increase in business, due mainly to housing development.
Twenty-three sub-post offices, where the amount of business transacted was trivial, were closed in 1966 on the occurrence of vacancies. Three further offices have been closed since the beginning of this year. In addition to 98 departmentally staffed offices, the country is served by 2,136 sub-offices. These figures represent facilities on a more generous scale than obtains in most other countries.
In line with the earlier closing hours introduced last year, the hours of closing of Dublin branch post offices have recently been altered to provide for a 6.0 p.m. closing. There has been no change in the hours of business at St. Andrew Street Post Office or at the GPO, O'Connell Street.
The new Central Sorting Office at Sheriff Street, Dublin, will be fully operational within the next few months. The office block has already been occupied and at present the work of installing and testing equipment is nearing completion. The transfer of staff and operations from the four other premises in the Dublin area will be carried out in stages. Certain mail distribution work now being performed under contract will be taken over by the Department. A fine garage and workshop equipped to service over 100 vehicles adjoins the main building.
The new sorting office is being equipped with the most modern mail-handling machinery, including semi-automatic parcel and packet machines and conveying equipment of various kinds. It is intended to provide other automatic equipment according as prototypes have been developed to a satisfactory stage elsewhere. There is no doubt that a high degree of mechanisation in the handling and sorting of letter post in large centres such as Dublin will become practicable within the next few years. The standardisation of the sizes of envelopes will be important in facilitating mechanisation. During the past year manufacturing and other interests in this country have been consulted on the question of adopting certain standards of sizes recommended by the Universal Postal Union. I hope to be in a position to make an announcement in this regard during the year.
The public are continuing to co-operate in the use of postal district numbers on letters addressed to places in Dublin and the volume of letters bearing district numbers continues to increase. The question of extending the numbering scheme is being examined.
The dual-aperture boxes provided in the Dublin central city area have proved very satisfactory in reducing the pressure of sorting work in the evening peak traffic period. Here again there has been excellent co-operation on the part of the posting public.
Machines for vending books of stamps introduced on trial in the GPO and some other Dublin Offices in December 1966 have proved satisfactory, as has a change-giving machine which has been in use at the GPO. It is proposed to provide further units of both types of machines at other offices.
Special postage stamps were issued in 1966 to commemorate the 50th anniversary of the 1916 Rising and the Signatories of the Proclamation of the Republic, the 50th anniversary of the death of Roger Casement and the 750th anniversary of the founding of Ballintubber Abbey. We also joined with other members of the European Conference of Postal and Telecommunications Administrations in producing a "Europa" stamp in 1966.
The special stamp programme for 1967 has already commenced with the recent "Europa" issue. During the year we will have stamps commemorating the centenary of the Fenian Rising, the centenary of the Canadian Confederation, the tercentenary of the death of Jonathan Swift, and a stamp marking International Tourist year.
Designs for the proposed new series of permanent postage stamps have now been approved by the Government and I expect to be in a position to make an announcement shortly.
The decline in telegraph traffic was somewhat less than in the previous year. A total of 1,346,000 telegrams was handled during 1966. This represents a decrease of 2.7 per cent on the figure for 1965, as compared with a drop of six per cent last year. The decline was greatest in telegrams to Great Britain and Northern Ireland which fell by ten per cent. Telegrams from Great Britain and Northern Ireland and internal traffic were both down by a little over one per cent and the number of foreign telegrams handled, which had been increasing steadily in recent years, remained more or less static.
Although it will be some time before firm figures for 1966-67 become available, the indications are that the deficit on the telegraph service, which can be found in almost all European countries, will be somewhat less than the deficit of £192,000 in 1965-66.
The Gentex system, which provides for direct transmission of telegrams by means of automatic switching, was extended during the year to include Italy. Accordingly, Ireland now ex-exchanges telegrams directly with seven continental countries, namely Belgium, The Netherlands, Germany, Luxembourg, France, Norway and Italy.
Working to a telegraph relay unit in London, to which over 70 countries are connected, was introduced during the year. During periods of heavy traffic, in particular, this greatly expedites the re-transmission in London of telegrams between Ireland and those countries with which direct working is not available.
The continuing decline in telegraph traffic made it possible during the year to cease teleprinter working at another office—Wexford—formerly connected to the teleprinter automatic switching system. Traffic formerly handled by this office is now diverted to a neighbouring office—Waterford—which is capable of handling the traffic more economically.
As from the 1st April, 1967, responsibility for the operation, maintenance and staffing of the coast radio stations at Malin Head and Valentia was transferred to the Department of Transport and Power. The main purpose of the coast radio stations is, of course, to provide a maritime safety service. This is the responsibility of the Department of Transport and Power and that Department has in recent years made good the deficit on the operation of the stations. The change in control brings the position regarding the coast radio service into line with the position on the civil aviation radio side. The Post Office Engineering Branch will continue to carry out all engineering work at the stations on behalf of the Department of Transport and Power. Malin Head and Valentia will continue to handle commercial radio telegrams and the Post Office will remain responsible for the accounting arrangements for that traffic.
The telex service continues to expand. During the financial year 1966-67 the number of subscribers increased from 342 to 430. Demand for the service has remained at a reasonably high level and there is every indication that this position will obtain for quite some time. In view of the anticipated future expansion, my Department is planning the installation of an extension which will double the capacity of the existing exchange.
In his speech on the Estimate last October, my predecessor said that it had been necessary to suspend the connection of new subscribers for a couple of months last summer, that there was at that time a waiting list of 135, that additional engineering staff were being trained on telex work, but that in general new applicants would have to wait at least six months for service. I am glad to report that, although there is still a shortage of trained staff for telex installation and maintenance, considerable progress has been made in clearing the backlog. The waiting list has been reduced to 65 and of these 25 are in course of installation and a further 24 have been offered service. Of the 16 deferred applications, two are in Dublin and the balance in the provinces. It is hoped to provide service for the majority of the deferred applicants within the next few months. In a small number of cases delay may be greater, for example, where a local telephone circuit is not available or where voice frequency telegraph equipment has to be specially provided to cater for a provincial subscriber.
I am glad to say that, on the assumption that the future level of demand will not exceed that of 1966, we expect to be able to provide service generally within a few months of application in Dublin and Cork city areas and also at Shannon Airport. In other areas the time needed to meet applicants' requirements may be somewhat greater for the reasons already mentioned and because of the shortage of experienced local fitting staff in some engineering districts.
Telex service is now available to 105 countries.
During the year my Department received many inquiries regarding the importation and use of walkie-talkie equipment operating on frequencies in the 27 megacycles band. I am not prepared to license this particular type of walkie-talkie equipment because the 27 megacycles band has been allocated for industrial, scientific and medical use and because of the danger of serious interference to television reception and possibly other radio services. In December, 1966, my Department issued a statement to the press on this particular matter pointing out that possestion of unlicensed transmitting apparatus contravenes the 1926 Wireless Telegraphy Act, and that the Minister for Posts and Telegraphs is empowered to get a "search and seize" warrant on the grounds that anyone who keeps one in his possession and has not the appropriate licence is contravening the section concerned in the Act.
Of course, persons who have a genuine need for walkie-talkie equipment can get a licence from my Department for the use of type-approved equipment operating in a different frequency band.
Business Radio was first introduced here in 1947 and since then its use has increased steadily. Licences are issued in cases where other forms of telecommunication are not suitable, for example, where companies require to use radiotelephone units to maintain direct communication between vehicles and offices. Some of the larger users are the ESB, Bord na Móna, CIE, radio taxis, TV maintenance services and, in a smaller way, veterinary surgeons and doctors. The number of licences current on 31st March last was 295 as compared with 258 a year ago. The number of stations licensed on the same date was 2,146. The revenue derived from Business Radio over the past year was about £14,000.
Expansion of the telephone service continued at a satisfactory rate in 1966. The traffic dealt with was 9.2 per cent more than in the previous year, and amounted to 235 million calls, 211 million local calls and 24 million trunk calls. Eighty-one per cent of all calls were dialled directly without the intervention of operators.
The extension and improvement of the trunk system, which has received special attention in recent years, was continued. During the year 1,500 additional trunk circuits, comprising some 53,000 circuit miles, were provided on 235 routes, mainly in underground cables and radio links. The number of routes dependent on open wire circuits was further reduced, with consequent improvement in the quality and reliability of the service in the areas affected. Over 60 main routes received additional circuits and five new underground schemes and 56 new aerial cable schemes were completed.
Twenty additional circuits were provided on the cross-Channel route and a further 110 are being provided this year.
Considerable progress was made with the extension of the automatic system. Seventy-two manual exchanges were converted to automatic working during the year, including such important ones as Ballinasloe, Enniscorthy, Mallow, Mountmellick. Portarlington, Tipperary and Youghal. So far this year 11 more new automatic exchanges have been opened including those at Bandon and Clonakilty. A further 50 will be opened during the remainder of the year including one at Kilkenny which, with 800 subscribers, is the biggest manual exchange now remaining in the country.
A new exchange was opened at Coolock in Dublin and an underground cabling scheme costing over £90,000 has been virtually completed in the same area. These developments will enable a major clearance of waiting applications to be carried out in this district, where subscriber development has been slow for some time past.
The equipment of 20 automatic and 75 manual exchanges was substantially extended to provide for future subscriber and traffic growth. There are about 260 automatic exchanges in the system and there is now adequate spare capacity at all but a handful of them. These latter will be extended this year. The capacity of all exchanges is reviewed regularly in the light of actual and prospective development with a view to ensuring that additional equipment will be ordered and installed in advance of requirements. For various reasons delays sometimes occur, but generally the picture is satisfactory.
Good progress has been made with the provision of service for new subscribers and with the clearance of the waiting list. At the end of April this year the waiting list, excluding some 2,900 cases in course of installation, was down to 7,000, and preliminary arrangements were in train for provision of service for 1,750 of these. Connections during 1966 totalled 13,245, and would have been much higher but for unusual labour difficulties encountered during the early part of the year. Connections for the financial year 1966-67 totalled 15,528, the highest figure ever reached in any 12 month period.
The target for the current financial year is 18,000. Given freedom from exceptionally bad weather and from other abnormal difficulties, the target should be achieved. I am confident that even with rising demand, it will be possible to make a further significant reduction in the waiting list this year. This is very real progress. Indeed, the figures in themselves do not give the full picture, as connections last year included a large number of long line cases which had been deferred repeatedly owing to their high work content and the need to give precedence to improvement of the trunk network. Already service has been offered to all but about 100 of pre-1966 applicants in the provinces. Those still waiting will be offered service during the coming months. By the end of this financial year it is hoped to have offered service to virtually all pre-1967 cases. We will then be dealing only with relatively recent applications, a position we have not been in for several years. The back of the waiting list will have been broken therefore and this will be a relief to everyone, not least to my Department.
When I took charge of the Department, I was fully aware that the standard of service to subscribers was far from satisfactory and I have been examining the faulty dialling analyses for the different exchanges. The results showed a noticeable improvement in many exchanges in the last 12 months but a very specific need for great improvement.
The poor service experienced by many subscribers is due to the difficulties arising in providing telephone service on an enormously expanded demand basis. The greatest single problem is in connection with recruitment of staff and their training in the special skills necessary for the maintenance of the latest equipment and the linking of old and new exchange apparatus in the city area.
Delays in answering during peak periods are not yet solved but I hope will be dealt with in the future. The percentage of calls connected immediately or within five minutes in a recent peak period was 94.4 but this standard is not adequate. In certain areas where delays are exceptionally long at peak periods, new equipment will be provided.
The standard of subscriber trunk dialling is still extremely inadequate from certain exchanges but is improving. I have given instructions to the officers that the improvement of the existing service to subscribers is number one priority together with connection of new subscribers to whom the telephone is a vital necessity for essential services and business communication. Installation depends on a continuous five-year programme of circuit and exchange installation and it should be observed that for many types of equipment five years are required from designing to commissioning stage as in the case of the ESB.
Major extensions of equipment usually require new sites and buildings and the provision of these and the manufacture and installation of the equipment are always a slow business which calls for a high standard of advance planning and co-ordination. This long-term planning which is constantly proceeding is not, of course, confined to equipment. It is equally necessary to build up the force of skilled men engaged in installation and maintenance work, and this involves academic and field training over a long period.
As a result of the growth in the telephone network over the years, additional skilled staff are naturally required to attend to its maintenance. More skilled staff are needed too to meet the higher installation rate for telephones and equipment generally. The Department has been aware that it would have to face these increased staffing demands and it took action some years ago to ensure as far as possible that qualified staff would be available in the required numbers. The Department has to train all its own skilled workman staff as there is no pool of skilled staff from which it can draw.
The intake of technician trainees, the main recruitment grade for skilled workman staff, which had been increased from 25 to 50 in 1960 was again doubled to 100 in 1963 when it became possible for the vocational schools to provide the necessary academic training facilities for the additional numbers required. The intake has been maintained at almost 100 a year since then and there are now close on 400 youths in training for the more highly skilled work involved in the installation and maintenance of the telecommunications services. The training of this staff naturally takes time, the training course being approximately a four year one. The course involves full-time attendance for about three months in each of three years at special classes provided by selected vocational schools, full-time attendance at training courses provided by the Department and, of course, training on the job. I am glad to say that we have had very full co-operation from the vocational schools concerned in making available the special courses required.
The training both at the Departmental courses and on the job has, naturally, taken somewhat over the years from the effort in installing more telephones but it was of course vital to direct the necessary stall effort into the training of these youths if the telecommunications system was to be maintained adequately. The effort put into this training will begin to pay dividends from this year onwards when the first group of the increased intake of 100 a year completes its initial training, and with a regular flow of about 100 a year becoming available each year from now on problems resulting from staff shortages should ease considerably, with overall benefit to the standard of service.
I should make it clear that the character of service varies from exchange to exchange. The North European target of subscriber service is that faulty dialling on local calls must not exceed 1½ per cent of all calls and subscriber trunk dialled three per cent. We are not in that category but approaching it in many areas and in some large exchanges. I am determined that our standard will be at the highest level. This is not a question of staff ineffectiveness but of better organisation and training for which we have already had the benefit of recommendations by two consultants in the last ten years.
And now to mention some of the development works that will come to fruition in the near future. For the trunk service a great deal of important work is in the pipeline. A contract has been placed for new radio link routes to Britain, and between Dublin, Portlaoise, Athlone and Cork. These links will have an ultimate capacity of 960 circuits each and as well as increasing capacity they will be most valuable as alternative routes in the event of break-downs. Contracts have also been placed for new underground or aerial co-axial cables between the following places:—
Athlone - Castlerea - Claremorris -Castlebar-Ballina.
Arklow-Gorey-Enniscorthy.
Cahirciveen-Killorglin.
Dundalk-Castleblayney.
Castleblayney-Monaghan.
Cavan-Mullingar.
Ennis-Ennistymon.
Ennis-Kilrush.
Letterkenny-Dungloe.
Waterford-Dungarvan.
Carrier equipment for the expansion of a number of existing underground cables is also on order. When these orders are completed, and most of them are expected to mature within three years, the trunk system of the country will be sound in all areas. These schemes together with what has been achieved in recent years will lay the foundations for an excellent telephone system, which will be far better placed to meet the challenges of the future than it was to meet those of the past.
A contract covering replacement of 100 manual exchanges has been placed to continue the automation programme. This contract will overlap earlier orders and will take about three years to complete. Preparation for the next stage of the programme, which will include some 260 exchanges, is in hands.
The capital development programme planned for 1967-68 is estimated to cost £6.9 million compared with approximately £5.75 million paid in 1966-67, an increase of £1.15 million. Of this £6.9 million nearly 30 per cent is for trunk circuit development, over 25 per cent for local underground cabling, nearly 25 per cent for connection of new subscribers, and the balance of 20 per cent approximately is in respect of the current auto conversion programme, the extension of automatic and manual exchanges, provision of buildings and satellite telecommunications development.
Contracts have been placed for equipment for a new automatic exchange at Rochestown Avenue in Dublin, for new automatic exchanges at Cobh and Swords to replace the existing ones, and for very substantial extensions and replacements at Crown Alley and Clontarf exchanges.
A significant development on the international front recently was the introduction of a station-to-station service to the United States accompanied by a substantial reduction in charges. Traffic with the United States is increasing rapidly. At the moment we have six circuits to New York, four in transatlantic cables and two through the satellite. We plan to bring further circuits into service this year. We are also studying the question of providing direct circuits to certain European countries with which traffic has been rising rapidly. The most significant development internationally, of course, would be the introduction of subscriber dialling but until the new route to Britain is brought into service there will not be sufficient circuits available to enable this facility to be introduced to Britain and further afield.
So far as the telephone service is concerned, the verdict must be that substantial progress has been achieved in the past 12 to 15 months. I hope to report equally good progress next year but it must be realised that it will be some time yet before we are fully out of the wood. The importance of a rapid and reliable telephone service to the efficient conduct of business and to the economic and social life of the country is fully recognised, and no effort will be spared to achieve the desired standard.
Deposits in the Post Office Saving Bank amounted to £25.8 million during 1966 and withdrawals to £27.8 million. At 31st December, 1966, the total balance due to depositors, including interest, was approximately £110.6 million as compared with £109.9 million at the end of the previous year.
Deposits and withdrawals by the Trustee Saving Banks during the year amounted to £1.44 million and £1.45 million respectively, and the total amount, including interest, to the credit of the Trustee Banks at the end of the year, was £19.94 million, an increase of £0.57 million over the previous year.
The rate of interest payable on deposits in the Post Office Saving Bank and Trustee Saving Banks was increased from 2½ per cent to 3½ per cent per annum as from 1st January, 1967, and the amount of annual interest which is exempt from income tax and surtax raised from £50 to £70. It is possible to have up to £2,000 on deposit with interest free of tax, and up to double that amount in the case of a husband and wife. On deposits which qualify for the tax exemption, the gross yield is over 5? per cent per annum to an income tax payer.
Sales of saving certificates for 1966 amounted to £11.9 million and repayments, including interest, amounted to £7.7 million. The principal remaining invested at the end of the year was £41.6 million as compared with £35.7 million last year.
The seventh issue of saving certificates was placed on sale as from 14th March, 1966. The compound interest rate over the eight years to maturity of the new certificates averages 5¼ per cent per annum. As the interest is exempt from income tax and surtax, the gross yield is 8 per cent per annum to an income tax payer.
I should like to join with the Minister for Finance in paying a tribute to the excellent work in promoting small savings done by the National Savings Committee.
In 1966, the Department's remittance services transmitted an abnormal volume of funds, mainly because of the bank strike last summer. The total value of money orders issued amounted to £47.8 million as compared with £20.4 million in 1965, and postal orders issued amounted to £8.8 million as compared with £7.5 million in 1965.
Agency service payments, mainly for the Department of Social Welfare, went up from £42 million to £47 million. As usual, post offices took part in the half-yearly sales of Prize Bonds, handling about 30 per cent of the total collected.
During the past year three major building schemes were completed, namely, a new trunk telephone exchange at Dame Court, Dublin, an auto-manual exchange at Tralee and the new sorting office at Sheriff Street, Dublin. In addition, 59 rural automatic exchanges were erected, a major extension was made to Mullingar telephone exchange and improvements were carried out at Greystones (Wicklow) and Blackrock (Dublin) post offices.
Work is nearing completion on additional office accommodation at Distillery Road (Dublin) engineering premises, on new telephone exchanges at Gorey and at Swords and on extensions to Dennehy's Cross (Cork) and Walkinstown (Dublin) exchanges, Improvement schemes at Tuam and West-port post offices will also be finished shortly.
Other constructional works in progress include extensive new warehouses at St. John's Road Stores Depot, a new post office and engineering centre at Carlow, a new telephone exchange and engineering accommodation at Fermoy, a new telephone exchange at Killarney, an extension to the repeater station at Portlaoise, and 43 rural automatic exchange buildings.
The number of staff provided for in this year's Estimates—18,880—shows a small reduction of 43 on last year's figure. The main decreases are 164 in telephone operating staff and 59 in postal staff but these are partially offset by an increase of about 200 in engineering force.
I am happy to report that the technician trainee scheme continues to be successful. Last year we recruited 93 trainees, and this year we propose to recruit much the same number.
Having had experience of the Department's operations in the years 1951-54, I have decided that the time is opportune to examine the entire organisation of the telephone service to ascertain what fundamental changes may be required as a result of the explosive expansion in the last seven years.
Under my predecessor's guidance, an exhaustive review of the organisation, grading and methods of work at the sub-professional level in the Department's Engineering Branch, has been in progress for the last year. This review is being carried out by a firm of industrial consultants. After reading their report, I have concluded that this is too narrow a field for investigation. Management structure, the effect of Civil Service procedures in a commercial organisation, cost benefit analysis, cost accountancy in relation to productivity and training are all involved. In fact, I think there are fundamental issues at stake which relate to the comparison between a commercial telephone system as in the United States, state company operation and our form of administration.
Taking one year with another there is no reason why the telephone system should not include the present non-profitable element of social service while making an overall profit. There is, therefore, no question of changing the present character of service in order to save costs. The investigation now in progress will proceed on the basis that changes in methods, the growth of productivity and all the conditions attached to them must be acceptable to the staff. Changes in methods will in fact lead to more effective work carried out to the advantage of the staff who will experience the satisfaction of greater productivity—which in effect means more effective work—greater satisfaction in work performed making greater reward.
The postal service, while capable of improvement, is not associated with complex procedures such as are involved in the installation and maintenance of telephones.
I should say that the officers of the Department have been meeting a flood of demands for service. Credit restriction has had the inevitable effect of frustrating the more methodical approach to expansion on the basis of a five year plan which is obligatory in the case of the ESB but no less essential to telephone development.
The Department has, of course, its own full-time organisation and methods staff which continues to effect improvements and economies in the clerical field. Moreover labour-saving schemes such as the motorisation of mail delivery and automatisation of the telephone service are in progress all the time. In all these ways it is hoped to ease the impact of the rising costs of providing our services.
My predecessor was able to introduce wider delegated powers for the Department with the agreement of the Minister for Finance in 1963. This was a step on the way to modern procedures.
I have recently set up a Departmental study group to inquire into the matter generally; they may require the help of consultants. The Civil Service group who will be examining the higher organisation of the service as a whole will find when they reach my Department that investigation into some aspects of the problem in the Post Office is already taking place.
The Department continues to participate in the activities of the Universal Postal Union and the International Telecommunications Union, the international organisations which concern themselves with postal and telecommunications matters. At a recent meeting a senior official of my Department was elected Chairman of the Administrative Council of the International Telecommunications Union. This is the first time this important office has been held by an Irish official.
Before leaving staffing matters, I should like to take this opportunity of thanking publicly all the staff of the Department for their efforts during the year.
The commercial accounts for 1965-66 have been laid before the House. A summary of the results for that year and for the four preceding years is given in Appendix C to the Estimate.
As Deputies are aware, the commercial accounts present the position of the Department as a trading concern. They are compiled in accordance with commercial practice to show the expenditure incurred and the income earned during the year of account, such charges as interest and depreciation being included in the expenditure. A balance sheet and statement of assets gives details of the Department's very large capital investments, mainly in telephone plant. The accounts are audited by the Comptroller and Auditor General.
It is on the basis of the trading results of the Department that we determine financial policy, including the fixing of charges. The basic principle of that policy is that the Post Office should pay its way, taking one year with another. That means that the Department must earn a surplus in good years to meet the losses in bad years and to provide a reserve against contingencies. If the Post Office does not pay its way, the loss has to be made good by taxpayers generally.
I should perhaps say that there are real difficulties in adhering to that apparently simple basic principle. About 60 per cent of the Department's expenditure is on wages, salaries and related payments for travelling, subsistence, superannuation, and so on. Such costs tend to rise steadily, and they press particularly on the postal service. As Deputies are aware, that service is a labour-intensive one, employing comparatively little machinery or other capital equipment. The nature of the mails, which consist of a huge volume of small low-priced items requiring individual treatment, and of the systems of collection and delivery, limits the opportunities for mechanisation or for other methods of increasing the productivity of the large labour force employed.
Mail business expands slowly and, in any case, the individual treatment of items that is necessary does not permit much economy of scale. The steady growth of cities and towns, which has been a feature of recent years, has required us to provide additional offices and collection and delivery services, for the outlying areas. On the other hand, the scope for savings in areas where population is declining is slight, because in effect, our services have to be provided on a territorial rather than a population basis. While efforts are being made to achieve greater productivity, with success in some directions, the over-all financial position of the postal service is such that any substantial increase in costs faces us with the choices of increasing charges, or drastically reducing services, or incurring a deficit, to be made good by the other services, or by the general taxpayer. As Deputies can see from Appendix C, only once in the past five years has the postal service avoided a deficit. The telegraph service has never paid its way and, despite many economics and re-organisations of the service, it is still incurring a substantial deficit, though one comparatively less than in the past.
The current position is that there was an over-all surplus on the Department's services in 1965-66 of £341,000 approximately, compared with a deficit of £67,000 approximately in the previous year. In both years there was a deficit on the telegraph service and a surplus on the telephone service, while the postal service showed a surplus of £39,000 in 1965-66 as against a deficit of £145,000 in 1964-65. Final figures for last year are not yet available but the indications are that, mainly because of pay increases, there will be an overall deficit, probably of the order of £200,000-£300,000 on a total expenditure of nearly £21½ million. I would expect that in the current year that deficit would be wiped out if costs do not rise substantially above their present level. That is, however, a most important qualification, and it is obvious that the finances of the Department will need to be watched very closely.
I propose to follow the example of my predecessors by confining my remarks about Radio Telefís Éireann to the more important matters concerning the Authority's development and to those in which, as Minister. I have a statutory function. As there was a full debate on RTE affairs on the Estimate for Posts and Telegraphs last October, I shall not deal with happenings before then.
After deducting the costs of licence collection, a sum of about £630,000 is being provided for sound broadcasting in 1967-68 and the balance £1,170,000 is for the television service. These figures take into account that £1 5s out of each £5 licence is intended for the sound broadcasting service. The amount being provided for sound broadcasting plus sound advertising revenue will not be sufficient to meet the expenditure on that service in 1967-68 and the deficit must be made good out of the Authority's general revenue.
It will be recalled that the Authority had an overall surplus of £373,000 in 1964-65 and that this was reduced to £273,000 in the following year, when a surplus of £492,000 on television was partly offset by a deficit of £219,000 on sound radio.
The accounts for 1966-67 will not be available for some time, but I understand that they will show a further substantial reduction in the overall surplus as a result of an increased deficit on sound and a reduced surplus on television. The Authority see little hope of this trend being arrested because costs are still increasing, whereas receipts from licences and from advertisements are becoming less buoyant. Indeed, the Authority considers that there is every likelihood of a substantial over-all deficit on current account in 1968-69, unless licence fees and television advertising rates are increased in the meantime.
Largely as a result of the operating surpluses it has made in recent years, the Authority has not had to seek any repayable advances from the Exchequer for capital purposes since February, 1964. Before then, it had drawn £1,816,000 from the Exchequer in repayable advances. None of these advances has so far been repaid but the Authority is, of course, paying interest on them. All its capital expenditure in the past three years, amounting to about £1,300,000, has been financed from its own resources, that is, depreciation provisions and surpluses. This money has been laid out on essential commitments, for example, on the building extension at Donnybrook, on the provision of VHF radio transmitters, low-power television satellite transmitters and technical equipment. When fixing the public capital programme for the current year, the Government decided that the Authority may spend up to £500,000 on various capital projects on condition that the expenditure is financed from its own resources. The money is mainly intended to cover further payments on the Donnybrook building extension and to provide an additional outside broadcasting unit and general broadcasting equipment.
The Authority foresees that over the next eight years an expenditure of almost £4½ million will be needed for various capital items, excluding renewals and replacements. It has yet to be decided how much of this programme will be undertaken and how it is to be financed.
When the previous Estimate for my Department was before the House last October only three of the five main VHF transmitters were in operation, namely, Maghera and Mullaghanish which had commenced on 24th July, 1966, followed by Truskmore on 4th September, 1966. Mount Leinster began to transmit on VHF on 30th October, 1966, and Kippure on 4th December, 1966. Four satellite transmitters have yet to be provided, namely, at Moville, Fanad, Castle-town-Berehaven and Cahirciveen. These will be brought into operation as soon as practicable and VHF reception will then be available to 99 per cent of the country.
I have received complaints from Deputies and others regarding unsatisfactory television reception in certain areas. The Authority is aware that although 13 transposers have been erected to extend the area of coverage of the main TV transmitters, reception is still not satisfactory in many small areas comprising about two per cent of the country. Plans are being worked out for the coverage of some of the more populous of these pockets. I understand that it will be extremely difficult, if not impossible, to give completely satisfactory coverage in all of them. Disproportionately heavy capital expenditure would be involved in filling in many of them and I cannot say, at present, how far money will be available for further transposers. I also know that technical difficulties connected with some of the present transposers have resulted in an unusual number of service interruptions and that the Authority's technical staff are doing everything possible to improve the reliability of reception in the areas concerned.
I mentioned already the Authority's worsening financial position and the possibility that it may be necessary before long to increase broadcasting licence fees. In this connection I am advised that there is considerable evasion of payment of such fees. My Department intends to carry out another big drive against holders of unlicensed sets. It is also considering the question of introducing fresh legislation to help to deal with this problem. For example, the present fines which the District Courts can impose in cases of unlicensed television sets are no deterrent to those who do not mind being prosecuted, but it might be a different story if the courts had authority to impose substantial penalties. Another matter being examined is whether radio and television dealers and rental companies should be required by law to notify my Department of the names and addresses of customers who buy or rent sets from them.
The House may wish to be given some basic information on the Radio Telefís Éireann service. At 30th April, 1967, there were 215,037 sound and 316,738 combined sound and television licences. It is estimated that about 50 per cent of dwellings are television-equipped. The proportion of home produced programme services in the TV service is about 53 per cent. In both the TV and the sound service about 18 per cent of the programme can be considered as instructive or educational in general.
In the course of a reply to a Parliamentary question on 25th October, 1966, my predecessor said that the Department was considering the heads of a Bill to deal with the problem of pirate broadcasting from ships outside national territories. Since then, the Government have authorised the drafting of the Bill and it will come before the House in due course. The measure will make it possible for Ireland to ratify the Council of Europe Agreement on the subject. Under it, the establishment or operation of broadcasting stations of these kinds and acts of collaboration knowingly performed will be punishable offences.
