I will come to that point. They have increased the tax-free allowances very substantially and in so far as would be possible in that time they have fulfilled the promises given. In addition, inflation has been kept down to 7.6 per cent which means in effect that the allowances and the benefits are worth something in real terms and are not whittled away by inflation as soon as you have them in your pocket. I welcome those substantial increases. I personally favoured higher increases in the 12 to 18 age group for children's allowances and I hope that at some stage in the future the Minister will consider that proposal further.
In relation to Deputy Horgan's interjection, I was speaking about the mother in that case. I turn now to her husband, because the child allowance generally affects the husband at this stage. That represents minus £22 and that has a varying effect depending on the tax position. It is a complicated thing to discuss in a short few moments, but the basic principle of giving the greater increase to the lower income people will be agreed to by most fair-minded and reasonable people. I accept that as a measure. I welcome also the measures for the one-parent families in respect of whom there is another special increase of £250 in the tax-free allowances, and this will be very valuable for widows, deserted wives, unmarried mothers and separated parents.
Another measure relates to the increased allowance in respect of interest on house mortgages. Any increase in this area is welcome, and this is a definite attempt to keep in touch with the change in house costs.
Turning to the tax package, the £500 increase is an advantage to families. A man earning the average industrial wage and with two children can now earn £2,750 or with three children, £3,000 before he is liable for tax. This represents the equivalent of a 4 per cent wage increase.
I have said that I consider this budget to be an important one for youth. I will refer briefly to a few of the points which come to my attention in relation to the Minister's speech. For instance, we have a work experience programme for which there is an extra £1.8 million, bringing a total of £3 million and providing 6,000 places. There is a temporary scheme for youth employment in community work operated by the Department of Education. Development officers are to be appointed. The AnCO training programme has been tremendously increased, providing total AnCO places of 6,370. There is the temporary hire agency which could also play an important part for young people seeking jobs. There is provision for further employment creation of £3.2 million for the creation of the equivalent of 1,000 temporary posts. There is thus a total of £20 million which will be spent mainly on young people in special job creation.
There are commitments in this budget to improvements in the tax system. There has been a sense of grievance felt by PAYE taxpayers about inequity in the system, and a number of measures have been taken in this regard. There is a commitment to provide 25,000 more jobs which will mean 25,000 more people paying tax in the first instance. There is a commitment to people on higher incomes paying more tax and an extra 6,000 farmers will be brought into the tax net. In addition to this there is the agricultural levy which at 2 per cent is expected to bring in £16 million during 1979. There has been a considerable amount of comment on this already in the media and elsewhere, and in this case a number of possible anomalies are raised which have to be discussed and sorted out in a rational way, but the principle remains that the volume of money must be collected from the farming community. The Minister for Finance has a duty to all of the people to collect this money and in that he has been quite forthright. He has also said that he is quite prepared to discuss in a rational and reasonable way any anomalies or hardships that may arise, and I am sure that representations will be made to ensure that any anomalies are dealt with effectively.
The PAYE taxpayers are concerned about the self-employed and there has been a certain amount of grievance in this regard. The Minister for Finance has made a commitment to additional staff in an attempt to cover this more effectively. He has powers which can be used in legal proceedings but which have not generally been used. I know he is going to consider this seriously, but I would hope that this facility would not be over-used. There should be a speeding up of the agreement of accounts of self-employed people. There is too much delay in finally agreeing accounts. I understand that there is a considerable volume of money in bank accounts awaiting final agreement and settlement. I hope that the additional staff who will be provided will enable the Revenue Commissioners to clear up these accounts and get on to chasing people who are evading tax. There should be a register of accountants approved by the Department of Finance and the list should be published in the public interest. The public should know whether accountants are reliable. I believe that the vast majority of them are, and in the kind of society that we have I would prefer a situation where they take the onus and carry out the task and the Revenue Commissioners are involved only in checking and from time to time sample checking. In this way the system could be much more efficient and the backlog of accounts of increasing numbers of people, including the farmers who are coming into the accounting system, could be cleared. People are sometimes suspicious of accountants, and it has been said that an accountant can make a story whichever way you like it. I do not believe that. There may be accountants who would do this but it is not generally the case, and that should be recognised by the Revenue Commissioners in their dealing with accountants. If we are to set about duplicating this work nationally we will lose a great deal, and obviously it will take a whole ocean of Revenue Commissioners to duplicate the work of the accountants. I would like to see more efficiency and effectiveness in this regard.
On the question of doctors, dentists, consultants and such categories on whom there has been a good deal of comment recently, I may be naïve about this but I believe that most of these people, even for peace of mind apart from anything else, put forward their accounts fairly honestly. It could be valuable to publish a list of the top 20 or 50 different professional groups, not naming the people concerned but publishing the kinds of tax paid in the areas so that people would realise the volume of tax which is paid. Quite a few of these people pay substantial amounts of tax. These figures and facts are available to the Revenue Commissioners and we are not really aware of the details of them.
In the controversy which has been going on recently, there is considerable confusion about the statistics which are involved in the collection of taxes generally. The latest report of the Revenue Commissioners which was available in 1976 shows that 614,277 PAYE people were actually paying tax. In income tax in general, which would include all income tax, 110,000 did not qualify to pay because of low incomes; 289,000 on incomes below £1,500 paid 5.54 per cent of tax under PAYE. In other words about 35 per cent of the PAYE people paid 5.5 per cent of the PAYE tax, so there are variations within PAYE as well as within other areas. If we look at that as tax per head, we find that of the 614,000 PAYE earners the tax paid per head in that year was an average of £372. If we take those who are earning under £1,500, the 289,000 we find that their average was £43 per head but if we go on up to the remainder who pay the bulk of the tax the 325,277 paid £663 per head. These figures relate to 1976 which is the latest report available. In contrast to that, the self-employed which at that stage numbered 344,202 paid £1,257,000 and the unearned incomes group of 14,376 paid £876. The very low number of unearned income people is striking and it reflects the fact that not many people own shares and other means of having unearned income. People are inclined to talk about this at times as if there were vast numbers of people with unearned incomes. Unfortunately, that is not the case.
On the budget in general, I have noticed that the small savings for the year 1978 increased to a record £65 million, and I also note that the State currently lends £660 million to farmers in business enterprises but that they lend nothing to low income but trustworthy individuals who are often in the clutches of hire purchase companies or money lenders. We could do with another device to deal with that situation. We need a small man's bank, or a division of the banks which would cater for the short-term needs of small individuals which would operate within the local communities. In my day-to-day experiences I see a great number of hard-working trustworthy people who because of their positions do not come into the echelon which can get a small bank overdraft, and I am concerned about people in that situation. About £5 million should be advanced as risk money to assist people like that. The policy of commercial banks, is shown on television by advertisements showing a fairly well dressed person who obviously has a good job and good future becoming a client of the bank. That is very good and I am glad to see such people being involved and being able to get money without having to turn to hire purchase firms or money lenders but I would like to see more of the people on lower incomes, whose future is improving within the economy being able to obtain money in this way. We should look at the possibility of making a positive move in this direction.
In relation to the policy of commercial banks, one could ask, how much do they lose per year to small defaulters? The amount is negligible. They should be prepared to lose up to 2 per cent to this category because if they are not doing that they are not going after the market, they are only taking the most secure risks and consequently they are leaving a large number of people outside of their influence and leaving them depending on high interest charges elsewhere. Changes are coming and there will be a situation where a far greater number of people will be paying by cheque and will be paid by cheque. This affords an opportunity to encourage people into this way of saving and of dealing in their business. If the private commercial interests, particularly the banks are not prepared to do this, the State should encourage the trustee banks to expand in that direction and provide a small man's bank. This may not seem very important when we are talking in terms of the multi-million pounds provided for industry and agriculture. But we are talking about people on the ground, people on low incomes, people who have to face great difficulties, who still get money from money lenders at a very high price. The people in that situation have to pay the highest hire purchase rates which is a very severe depressant on their well-being and on their sharing in the increasing wealth and prosperity of the country.
In relation to economic development I am pleased to see the Government commitment to job creation. The target of 25,000 extra jobs is ambitious. I welcome the Government's direct contribution of an additional 7,170, jobs. As far as industry and agriculture are concerned we are now in phase 2. They have been given the impetus and the assistance and now it is time to deliver the goods, particularly in terms of increased job creation. Job creation is getting major backing from the State and is one of our major planks in the present economic development. However, it is important that we do not lose sight of the potential and the opportunities still existing in the semi-State sector who have a vital part to play and must not be overlooked. In relation to the IDA, for instance, I can only echo the views of other Members of the House in congratulating them on their dynamic performance and the success they have been achieving in stimulating job creation and development. As far as CTT are concerned new goods whether agricultural or industrial must be sold. We must promote the sale of new products and we must continue to give leadership and assistance to industry in this area.
There is a great deal to be done as yet. I should like to see a greater allocation of resources to CTT because they have the task of promoting exports and developing new markets. All the other work we do will be frustrated if we do not match our other efforts in the area of responsibility of CTT. I should like to see more vigorous export campaigns to match our EMS entry. EMS membership offers many possibilities for us, particularly in relation to continental markets, and I should like to see increased investment in that area. With the tremendous numbers of young people we have and the help of our educational and training facilities, I believe we can produce the goods, but we must sell these goods in highly competitive export markets.
The Buy Irish campaign is closely allied to this. It would be a great mistake to weaken in any way our efforts in this campaign. We must maintain and intensify our efforts in every possible way. Guinness and Kerrygold are major brand names and their sales campaigns do not relent at any time; neither should we relent in the Buy Irish campaign. We must keep up the pressure.
There are too many stores which do not stock a fair share of Irish goods. We talk about the farmer contributing a fair share of tax but we could also talk about stores stocking a fair share of Irish goods. I am often reminded by my constituents of stores which do not stock Irish goods. The quality of Irish goods is improving all the time. In the period after Christmas I was very glad to see a good variety of Irish goods, such as shoes, in competition with imported ones. There is certainly an improvement, but we must continue to support this development and intensify the Buy Irish campaign.
We should encourage groups within industry to mount promotional campaigns. While individual sectors may be too small to mount such campaigns themselves, by grouping together they have many common interests which could be promoted.
The semi-State sector has a major contribution to make to economic development, and I should like to see this sector being given the opportunity to make that contribution. I should welcome an immediate review of the objectives, operations and priorities of the semi-State bodies. I know that the joint committee are looking at the activities of some semi-State bodies and I have listed these in various categories. Under the financial heading there are bodies such as Irish Life, VHI, ACC, ICC and Fóir Teoranta. Then there are the energy bodies such as the ESB, Bord na Móna and An Bord Gais. There are also the manufacturing and transport bodies and some others. I have looked at their contribution to the economy in current terms.
Taking the 1977 statistics in relation to finance companies, they had a gross profit before tax of £80 million. The energy companies had a gross profit of £30 million; the manufacturing companies had a loss of £3.5 million, and the transport companies, as we may have guessed, had a deficit of £30.2 million. The other bodies had a total profit of £1.5 million. The total profit was £78.4 million. The bulk of the profit came from Irish Life and this represented £78.6 million; the profit of VHI was £.2 million; ACC £1.7 million; ICC £1.9 million and Fóir Teoranta minus £1.8 million, giving a total of £80.5 million. The ESB made a profit before tax of £29 million, while Bord na Móna had a profit of £.9 million. In the manufacturing area, CSET made a profit of £3 million; NET had a loss of £4.3 million; they were the two major components.
These are major factors in our economy, and the manufacturing sector seem to give some cause for concern. The financial companies are operating in the area in which we seem to be making most money.
Looking at the figures in relation to strikes and the number of man days lost, Aer Lingus lost 89,700 man days, NET lost 60,000, CIE 6,000, RTE 5,820 and the Department of Posts and Telegraphs 5,305. One might think that some of these bodies would have a somewhat different record and the number of man days lost might not be as high as one would expect.
Obviously energy is of great importance, and the scope of operations and the development strategy of Bord na Móna are most important. There is an opportunity for much greater development within Bord na Móna not only in regard to energy consumption but in regard to the diversification of products. I know that the Act has put a stay on the hands of the Bord from time to time. Under the Act they are in the raw materials producing business, and this stifles the initiative to some extent in diversifying into consumer-type products.
We need to decide quite clearly the role and function of semi-State bodies. I appreciate that they are limited by Act and that is one of the reasons why the responsibility falls back on this House. Many of the Acts are now out of date, for instance, the Turf Development Act of 1946, and there is an onus on the Oireachtas to review and bring up to date such Acts. I welcome the work currently being done by the joint committee.
We should consider the appointment of professional teams to review semi-State bodies and make recommendations on areas of potential development for which Acts may need to be altered. Such teams could report to select committees of the Oireachtas. I should like to see these teams comprising people with wide experience in industry. I will not mention particular industries, but we all know the companies in the manufacturing sector which score very high in practical commercial terms. It is in the practical, commercial, profit-making areas that semi-State bodies have their greatest difficulties. I should like to see mixed teams of people drawn from a wide area, including the accounting organisations, not purely accountants, but commercially-orientated business people who could sit in with top management of the semi-State bodies and review their strategies and potential for development. On this basis one could work out various practical propositions for development which could then be given the backing of any necessary changes in legislation.
While we develop our private sector, industry and agriculture, and put a great deal of our interest in investment in them, we must recognise that the semi-State bodies have a major part to play and afford them the opportunity of so doing. As I see them, the semi-State bodies are very strong on control and accountability. For instance, the Comptroller and Auditor General will keep us right on the financial side and, in the case of those semi-State bodies coming under the Companies Act, the independent audits carried out keep us right also. In that sense we are quite clear; we know that the money is there; we know on what it is being or has been spent. Of course accountability generally is becoming increasingly directed at the relevant Ministers and their Departments. That is a very desirable change. But there is little accounting for performance in the commercial sense. This has led to the establishment of the select committee of the Oireachtas to investigate the overall situation of semi-State bodies. In summary I would say that the cash has been accounted for but the commercial performance has not been evaluated in any real sense. The direction in which these semi-State bodies are headed is not clear; their potential for development has not been defined. That potential constitutes the big question mark at present. I am quite certain that people within these semi-State bodies would be very glad to indicate the potential they see and in respect of which they may feel there are some limitations on their operations. The loss potential has not been identified and there is an urgent need to give impetus to semi-State bodies in this respect. I should like to see them afforded an opportunity to explore their undeveloped potential.
In regard to the question of industrial relations the main objectives of the budget have been the ultimate creation of full employment and the immediate creation of an additional 25,000 jobs. We know that 50 per cent of our population is under 25. We know that 43 per cent of our young people are unemployed. We know also that over the next ten years we will have massive numbers of young people leaving school, looking for jobs. Thinking about that I looked up the figures to ascertain just how many children are at school in this country at present when I found the figure to be close to 900,000. This is a very significant and sobering figure for anybody wanting to run away in a selfish way, saying they are not really interested in the people coming on after them or whether or not they will have jobs. The Government are right to aim for such an ambitious target as 25,000 jobs per annum. Bearing in mind that there are almost 900,000 children at school, assuming that there will be approximately 300,000 coming on to the labour market over the next five years, that is something of the order of 60,000 coming on per annum in each of those years, we ascertain an idea of the size of the problem. It is very important that people get the whole debate on wages, industrial relations, self, country and future—and children particularly—into proper perspective. It is when one sees it in that perspective only that one realises firstly that the Government have to go for a target of 25,000 new jobs per annum. Not alone must they go for that target but they must achieve it if we are to have stability and sanity within our society in the future.
In that sense commentators like to regard the Government's job target as ambitious at 25,000 per annum. As can be seen from the figures I have quoted, even this achievement will be barely adequate compared with the needs confronting us. For the sake of these children we cannot afford to follow the British example of a self-destructive policy in industrial relations; we must work out solutions to our own industrial problems. In that respect I welcome particularly the statements by the craft unions towards the end of last week and the recent statements by the main unions in relation to future wage negotiations. These people are taking a very sensible and realistic approach. Their suggestion of a national understanding on wages constitutes a realistic approach to the problem. Within that broad consensus I hope people will have a common interest in seeking reasonable solutions to our problems.
Certainly the budget has provided the basis for such an approach. It provides stability in the £. Inflation is under control and can remain under control if we decide to keep it that way. In itself it is providing a 4 per cent real increase in incomes for a person with an average industrial wage of some £80 per week. For people on a lower wage scale it provides something more than that.
I welcome particularly the assistance being given in the social welfare category; here I am referring to the 16 per cent increase. I recognise also the benefits given to families. If these are considered in the context of the period since Fianna Fáil assumed office this time one will realise they are quite substantial. I welcome also the funds provided for job creation, growth and further wealth. If we adopt a sensible approach to industrial relations in this sense—with the lead given by the Government—then we should achieve something more like the future for which we would all hope and which is there for us in terms of wealth, growth and well-being within a just society. This calls for a response in the way of moderate and realistic wage increases. It calls also for real increases in incomes, wealth and improved productivity. Further it calls for a fairer spread of taxes of all kinds. Ultimately it will lead to a better life for all our people which we must be capable of achieving if we set our minds to it on both sides of this House.
I should like to congratulate the Minister for Finance and his colleagues on what I regard as a balanced budget, one which affords an opportunity to develop our country within another valuable and useful phase. It constitutes a good basis for growth and provides a framework for job creation and for the attainment of full employment by 1983.