The financing of a country's operation differs from time to time. I believe the total saving to the public by scrapping the wealth tax is about £10 million. I do not know what share of that will be enjoyed by some of the larger farmers and what share of it will go to other classes. The point has been made—I do not know how valid it is—that because of the change in the multiplier, lowering the threshold and having to pay for far more in rates a great number of farmers who up to this did not pay wealth tax and some of whom did not pay income tax as well as those who paid wealth tax will collectively this year pay more in taxation than was taken from them by wealth tax. If that is the case surely there is an indication of sleight of hand on the part of the Government. On the one hand, they tell the farmers they are abolishing wealth tax and, on the other hand, through a more complicated system they are hoping to achieve over the next 12 months a greater return and get more farmers into the tax net than there were through wealth tax. That should be clarified.
Rates for farmers are to be charged against income tax payments. If a farmer shows a nil profit return and consequently is not liable for income tax at all he will still be liable for rates. If he was a businessman he would be entitled to charge rates against his accounts and carry forward his loss. I am surprised, considering how very vocal the organised farming groups were during the last few years whenever there was a suggestion of any move whether here or through the EEC which might adversely affect them, that very little representations have been made on this. I am amazed at the puny representations that have been made by the farming organisations on behalf of the middle farmer because he is the fellow who got hit hard. He has been brought into the tax net. The threshold is being reduced. The middle farmer of £60 to £70 valuation has lost the agricultural relief and is being made to pay far more rates than before. The multiplier has been jacked up. There has not been a great deal of talk about that middle farmer from those who operate farming organisations although there was a great deal of talk in the last couple of years about the large farmer being hard done by.
I find this quite extraordinary because all the political indicators are that if any group of farmers changed their political allegiance more than any other in the last general election it was the middle farmers; it was not to such a large extent the farmer who was already taxed or the farmer whose valuation was so low that he had never even heard of income tax. It was the farmer of £60 to £70 valuation who was told consistently, day by day, by Fianna Fáil during the election campaign that if "that other crowd" got back they would tax him. All the indications and surveys show that it was the middle group who changed their votes out of a fear, instilled in them by the party now in Government, that if the previous Government were returned they would be made pay tax. What they conveniently forgot to tell them was that Fianna Fáil would make them pay tax in a big way and pay rates in a big way and pay tax at a higher multiplier rate, that they would abolish the fertiliser subsidy and would double veterinary fees in factories, that they would remove the subsidy on cheese so that the housewife and the producer would suffer. They did not tell them that the remaining food subsidies would be scrapped, which I believe is part of the background budgetary strategy which has not yet been announced. I am convinced that before 1978 is out, the other food subsidies introduced by the last Government to help the housewife, especially the poorer housewife, in meeting the cost of basic foodstuffs and to help the producer, will be scrapped.
As I said in relation to something else yesterday, the man-in-the-street often says when a budget has been introduced: "I do not know how they are going to take it from me but they will get it from me some way." That is one of the ways they will get it. I am convinced that they are going to scrap the remaining food subsidies. If so, that should have been announced in the budget, just as the 28 per cent increase in the health contribution stamp, introduced yesterday, inappropriately by the Minister for Health, although it is really a taxation measure should have been announced in the budget, just as the intention to increase the level of health contribution was announced in the Financial Statement in 1977. If it is not the Government's intention to scrap the remaining food subsidies, they should state that categorically.
Democracy and democratic institutions in Europe over the next ten to 15 years are at risk. Therefore, it is to be hoped that budgetary policies and Government management of affairs will be carried out at the highest level so as to rekindle—I deliberately use the word "rekindle"—public confidence in democracy and democratic institutions. I am becoming increasingly fearful that the public are losing faith in democratic institutions; that they are losing faith in the ability of this House and other democratic parliaments to deal adequately with day-to-day crises as they arise and with long-term difficulties. The deliberate blocking and exclusion of consideration by this House of, for instance, the serious economic and social difficulties being created by the existing telephone crisis, the blocking of discussion by this House and of possible solutions by the House—all that sort of thing—shakes public confidence in the ability of the House and consequently of elected representatives and ultimately of democracy to work in a meaningful way. That is happening not just here but in Britain and the continent. It is happening throughout the democracies.
Those who more than anybody else are losing confidence, if they ever had it, in democratic institutions are the young people. They are losing it because of their disillusionment after the high promises offered to them when they were school-leavers and as they went through school, as compared with the opportunities available to them and the moneys they can attain and the prospects that would appear to be available to them in the workplace, not just in this country but throughout Europe.
It is fair to say that the problem of youth unemployment has been concerning the leaders, not just of small economies like ours, but of the strongest economies in Europe and has been discussed at length by heads of State in the European Economic Community on more than one occasion. No one has been able to suggest a solution or to put forward a plan to create sufficient jobs to provide full employment or near full employment for young people. Even the strongest economies will not be able over the next ten years to provide sufficient jobs for their young people. This country has the highest proportion of young people relative to the entire population in Europe. Perhaps for some historical reason, perhaps because of the traditional blood-letting of emigration, the make-up of our society is different from that of some of our European partners. Emigration is no longer a soft option of a Government or a soft answer. In addition to having the highest proportion of young people relative to the population, we probably have the highest proportion of young persons unemployed in the EEC. I am inclined to think that we have fewer real plans and less real hope of providing full employment for that high proportion of young persons than many European countries have.
I do not want it to appear that I say this in a political way but I do not think that the sort of things the Minister for Labour has been talking about that or the Youth Employment Action Team has been talking about or that are contained in the proposals put forward by that team which the Minister outlined in the House last Thursday and which were reported in the Press over the weekend will satisfy young people or restore their faith in democracy. I do not believe that the thousands of young people will be satisfied when they are told that 800-900 will be given crash courses with a view to becoming physical fitness instructors and will be sent out in a temporary capacity to train other young persons in physical fitness. I do not believe that they will regard that as the panacea for all their ills.
I agree that it is a good idea that local authorities are being allowed to take on apprentices. That will amount to 150 permanent jobs. I do not think they will be satisfied with being told that 20, 30 or 40 of them will be allowed to become involved in a project in Ballyfermot doing a census. A census provides useful statistical information but all the jobs the Minister announced, something in the region of 1,000 altogether, apart from the 150 apprentices, are temporary and of short duration.
The fourth aspect of the scheme, to which I did not refer, is a scheme to have young people work on environmental projects, building parks, clearing up definite areas, working on the foreshore and beaches. This is a very good idea in concept and useful for those of us who are members of a local authority; we shall get many jobs done that we have wanted done for years and it will improve the general ambience and appearance of scenic areas but it will not create a long-term solution for young people. They will be offered 1,000 part-time jobs, some of which will run for a few months, some perhaps for six months. That will not meet the expectations of those who are unemployed, those who have never worked, those coming out of school next year who will have no employment waiting for them.
It has been estimated that in ten years' time some people could be well into their 30s and never have worked in their lives, never have been in gainful employment; their only source of income, apart from their parents, since they left school will have been the State in some form, unemployment assistance or welfare allowances. That will not improve the general character of the Irish people or make them have confidence in democracy. It will not induce them every three or four years to continue to vote for Fianna Fáil, Fine Gael or Labour. We can all come in here and not be allowed talk about strikes, about issues that are putting people out of employment until such time as those issues are over and dead. People will not continue to accept that. They will not accept Deputy MacSharry as a Minister of State or Deputy Creed as Chief Whip for the Opposition. They will not be interested in those things if our coming here and going through these exercises does not ultimately provide them with jobs and put a wage packet in their pockets on Friday evening. We are failing and we are not alone in failing, because our counterparts in Europe are failing.
We all regularly get a very good magazine, the OECD Observer, which deals at length with youth unemployment in the OECD countries and the top level conference of OECD Ministers which took place some time ago in an effort to provide solutions for the youth unemployment problem, and the conclusions they came to are frightening as to how to cure European unemployment—the creation of jobs through increased economic activity whenever possible, the intensification of special measures to increase employment opportunities for youth and without breaching existing labour protection of young workers and an improved transition from school to work. That is the best OECD could do towards suggesting how Europe is to provide millions of new jobs over the next ten years. That is not good enough.
I do not know the solution; I am not just critical of this Government. I am reflecting on the fact that democracy is at risk and every Government and every political party had better realise that and get down to meeting the needs and legitimate aspirations of young people if they want to continue to have democracy work and be accepted and respected. For instance, I do not think that young people who were promised a £20 million scheme to create employment last summer during the election campaign will be very enamoured of the budget announcement in January of a £5 million scheme. I am not sure that a £20 million scheme would have met their wants but they will certainly feel more frustrated and more sour and disillusioned when they discover that the promised £20 million scheme turns out to be a £5 million scheme.
In regard to the document "Principle Features of the Budget" I was a little surprised to find in relation to the claim that 5,000 extra jobs had been created in the period between the Government taking office and the end of the calendar year, that it was claimed that just 5,000 extra jobs had been created. There was a breakdown into small figures such as 30 people directly employed on hospital building, 500 here and 140 there, and all that came to 2,170 in the public sector. Underneath that there is a column: SDA loans, income limits and new house grants—1,000 extra jobs, direct and indirect to the end of 1977. Where did the extra 1,000 jobs come from? I do not see how they came in the public sector through the increase in the loans or new house grants. I do not see how 1,000 jobs can be clearly shown to result from the increase in new house grants in the private sector. If they are there, I am delighted, but it looks as if the Government were in the region of 1,000 jobs short and the type of area that cannot be identified and in which things cannot be proved or disproved is an area like this and it is a simple area in which to include 1,000 extra jobs and say: "There they are; we created them and we have reached a target of 5,000." This deserves some explanation.
As regards employment generally in the next decade I think the official figure for the work force at present is in the region of 107,000. It is interesting to look at the figures put forward by the City of Dublin Planning Office and also by the County of Dublin Planning Office, based on the existing population of Dublin City and County together with a very modest figure for net immigration, a figure of 5,000 per annum moving into Dublin from the country. We estimate that probably a higher number than that have moved in on average over the past ten years but, assuming an average 5,000 per year moving into Dublin over the next ten years and taking the existing population—not the 1971 census—as the two planning officers jointly know the population to be within the nearest 20,000 or 30,000 it is estimated that by 1991 there will be a total work force in Dublin of 460,000 people.
For that work force there will be 392,000 jobs available and that will only be so if between now and 1991 we manage in Dublin, through the IDA. Government agencies, and local authorities to create 3,750 jobs a year. I take that figure because the highest average rate of job creation ever reached in Dublin was 3,750 and that was in the period 1961-1971. We have never got anything like that since. If we could get back to equalling that figure between now and 1991 there would be a total shortfall of 68,000 jobs for the work force. If we created 2,500 jobs a year in Dublin—the second highest average of new jobs created in Dublin ever—per year every year until 1991, there would be something in the region of 93,000 jobs short, almost as many as there are officially unemployed in the whole country. That is what I am talking about when I say democracy is at risk.
We are talking about up to 100,000 of the workforce in Dublin being unemployed in 1991, some of whom will never have worked. We are talking about between one in four and one in five of the total number of people available for work without a job; we are talking about a very high proportion of them never having had a job, some of them in their thirties or forties who have never had money in their pockets unless it was State aid in some form or another. Do we think they will meekly go out every three or four years during the elections to vote for Fianna Fáil, Fine Gael or Labour? They certainly will not. In my view this budget has not done anything to help improve their belief that democracy will work for them. These people are already in our Dublin schools. It is not a case that these numbers can be controlled through an alteration in the birth rate and there is nothing in this budget to impress those potential unemployed.
I turn now to social welfare benefits. It is wrong to give an across-the-board increase in social welfare as was done, whether it is for 15 per cent, 10 per cent or 5 per cent. Of course that is a simple thing to do. The Minister for Social Welfare does not have to worry about it too much nor do the people administering the scheme. Calculations can be done very easily. Because of very high unemployment it could be suggested that certain people on social welfare benefits are getting too high a level, while there are many more socially deprived people who are getting too little, and sometimes nothing at all from the social welfare system. To give a 10 per cent across-the-board increase is in no way improving their situation or even allowing the situation to stand still.
The widow, the old person, the weak, that small number of people who are not organised and do not have an electoral voice, are not able to shout for themselves or exercise political muscle on political parties at election time and force them to offer them a soft option. They will never change a Government. They cannot put enough political pressure on a political party which is so mad to attain power that they will make any offer they think will bring them an extra block of votes. It is ridiculous to think they will keep pace with the ordinary workforce or even with some of the people at the other end of the social welfare scale who are also getting a 10 per cent increase.
The old age pensioner and the widow will not benefit from the soft options given to the workers. They will not benefit from the abolition of car tax. The old age pensioners will not benefit from the increase in the personal income tax allowances. Unfortunately from their point of view most of them are not near the level of being able to pay income tax. They will not benefit from the abolition of rates because people on very low social welfare benefits have not been paying rates for years. They do not have the additional real benefits that might accrue to a worker who might be enticed into agreeing to an 8 per cent wage increase because he is also getting these benefits.
To offer 10 per cent to the aged, to the widows and the weak who cannot fight for themselves, is making them worse off than they were last month. That is not the mark of a Government with a social conscience. That is not living up to the promise the Government made that they would keep all social welfare benefits at least in line with the cost of living. They will not be in line with the cost of living nor will pensioners be in line with the people in the workforce and consequently that it is very unfair.
It was regrettable that there was a return to the concept of a once yearly increase in social welfare benefits. There should have been an allowance that from the autumn there would be a review if the cost of living had materially changed and there would be provision for an additional payment to social welfare recipients, especially the weaker members. That was not done. During the general election this Government clearly said they would keep all social welfare payments at least in line with the cost of living. There was no increase in or mention of children's allowances. They are part of the social welfare code. By not giving that increase the Government clearly broke their manifesto promise.
Another promise was made in the manifesto—to remove all areas of discrimination against women. No steps have been taken to make women equal. In this budget not even lip service was paid to them. A few weeks later the Minister paid lip service to the well-heeled and articulate women. I doubt if many of those women the Minister so roundly condemned benefited from the abolition of the wealth tax. The Minister benefits every year when he does his financial sums because he is making them pay tax on the double by taxing them through their husband's taxation accounts. During the elections they must not have put on enough political pressure or shouted loudly enough or perhaps they did not make a big enough contribution to party funds.
Another undertaking was given in the manifesto in relation to social welfare and that was that Fianna Fáil would introduce additional tax concessions to encourage the development of voluntary health insurance. I am not sure what that means because at present payments to the Voluntary Health Insurance Board are allowable against tax. The voluntary health insurance mentioned in the manifesto was not in capital letters so perhaps it was being suggested that additional forms of insurance would be tax-allowable also. I tabled a question on this to the Minister for Social Welfare and was told it would not be answered here because it was more appropriate to the budget. When the Minister is replying perhaps he would explain what this additional tax concession to encourage the development of voluntary health insurance was all about, why it was not mentioned in this budget and when it is going to be introduced.
As far as social welfare is concerned, I have been calling for a long time for index linking of all social welfare benefits and of tax allowances. This should be done after ensuring first of all that social welfare benefits are equitable, that those at the weaker end will be given a fair share of the cake. We are moving further away from that concept when we give a flat 10 per cent increase across the board and say: "Forget about them now, we have done something."
For the sake of the country I hope the budget will work, but I have doubts because of the level of borrowing. The Minister for Finance has committed the Government to a drastic reduction in the current account deficit and I do not see how that can be done if the budget fails. If there is not an increase in employment and an expansion in the economy, if £416 million of borrowing is to go to finance current account deficit, disaster could ensue. The taxpayers and the general public will suffer greatly if this budget fails because it will mean a series of severe budgets. If it fails because of over-reliance on the private sector, the businessman will be blamed and the Government can say: "We gave you the opportunity and this is all your fault."
That is why the concept in the budget is wrong, the concept of over-reliance on the private sector and on borrowing, and the amount that is to go to financing current account deficit, which is too high. However, as I have said, from the country's point of view and in the interest of the continuance of democracy I hope it will be successful. That is not probable but I would exhort everyone to play his part in making it a success, although that is not a politically attractive thing to say.
