asked the Minister for Transport and Power on what grounds he sanctioned the new increase in CIE fares; and if he will make a comprehensive statement on the financial position of CIE.
32.
Ceisteanna—Questions. Oral Answers. - CIE Fares.
31.
asked the Minister for Transport and Power whether he will initiate an inquiry into the reasons for the new increase in CIE fares; and, if not, why.
33.
asked the Minister for Transport and Power when application was made by Córas Iompair Éireann for the recent increase in fares; on what date sanction was given; and what factors influenced his decision to grant permission.
34.
asked the Minister for Transport and Power if, in view of the wages freeze, he will reduce bus fares to the level which they were at prior to recent increases.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 31, 32, 33 and 34 together.
Under section 8 of the Transport Act, 1958, CIE are free to fix such charges as the board think fit for any service provided by the board.
Last June, at the request of the Government, CIE agreed to limit the increases in fares and rates notified on 11th May, 1970 and modified increases were brought into effect from 22nd June, 1970. The financial consequences of this decision have recently been under consideration. Without a further increase in fares and rates, CIE's deficit for the year to 31st March, 1971 would reach an estimated £7.56 million before taking account of the statutory subvention of £2.65 million per annum. The estimated net deficit of approximately £5 million is accounted for almost entirely by increased labour costs, which for the current financial year are expected to amount to £4.5 million.
The Government consider that an additional burden of this magnitude cannot be placed entirely on the shoulders of the taxpayer but should be borne, as far as possible, by the users of public transport. The Government agreed, therefore to further increases in fares and rates by CIE, as announced by the board, with effect from 26th October, 1970.
In order to alleviate hardships for parents of schoolchildren, the Government decided that fares of schoolchildren should be maintained at their existing level for the next 12 months. A special subsidy will be paid to CIE for this purpose by the Department of Education. The cost of the subsidy is estimated at £228,000.
Even with the proposed increases in fares and rates, there will still be an estimated gap of £2.98 million to be bridged by 31st March, 1971.
I am gravely disturbed by the progressively deteriorating financial position of CIE. The position is at present being investigated by a joint committee of my Department the Department of Finance and CIE with a view to identifying possible corrective measures and I shall have more to say about this aspect in the near future.
The increased labour costs of some £4½ million for the current year ending 31/3/71 are already incurred or committed for. The introduction of the proposed statutory controls on prices and incomes will reduce them by a mere £36,000 or less than one per cent. There will still remain a gap of nearly £3 million between revenue and expenditure to be bridged in the current year if CIE is not to become insolvent with consequent widespread disemployment and reduction of services.
Would the Minister not agree that a situation such as he indicated today in relation to the finances of CIE is an extraordinary one particularly in view of the fact that only last December the Minister introduced a Transport Bill in the Dáil making financial provision for CIE over the next five years. What I and many people would like to know is why did not the Minister on 9th December last when introducing that Bill avail of the opportunity to explain to the House and the people the exact financial situation in CIE. At that time the picture painted by the Minister was that everything was rosy in the garden and £2.6 million would be OK. There was no indication given that CIE would have to increase their fares on two occasions this year. The Minister will, I think, agree that this calls for an investigation of some kind. The public are not satisfied with the situation. Could the Minister say why he did not examine the full financial situation last December before he introduced the Transport Bill here?
The situation is symptomatic of the situation in the country generally, the situation which has prompted the Government to take the measures announced by the Minister for Finance yesterday. The sort of inflation that has been developing has developed in the past 12 months since the Transport Bill was debated and passed here 12 months ago. The fact is that of 20,000 CIE employees 10,000 are employed on the railways. The railways are losing substantially. Pending the investigation I have mentioned —I shall be giving more details about it later—the option is very realistic: it is an option between employment and disemployment and the House and the public generally will have to weigh the costs both socially and economically very seriously in regard to this matter.
Since last May or June—I think it was in June the first increase in fares took place—what discussions did the Minister have with CIE or what investigation did he make into the financial situation of CIE? Surely he will agree that it was a despicable thing to increase bus and rail fares by 45 per cent in some cases and that on the eve of the Minister for Finance's repressive measures?
We cannot discuss the whole question of CIE finances on this question.
Can the Minister state why last May or June he asked CIE to stall their increases until he would inquire and why he now allows CIE to increase fares by as much as 45 to 50 per cent on Dublin workers and, having done that, now tells us he will institute an inquiry? Why not institute the inquiry before the Dublin workers were faced with an increase of between 45 to 50 per cent in bus fares? The fares for school children in Dublin have been increased by as much as 25 per cent.
The Deputy will appreciate my concern with Dublin and other workers throughout the country in CIE and the preservation of their employment.
We cannot discuss the question of CIE finances at this stage. I am calling Question No. 35.
On a point of order.
There is no point of order. I have called Question No. 35.