Deputy White is in possession and has 28 minutes left.
Financial Resolutions, 1980. - Financial Resolution No. 19: General (Resumed).
Debate resumed on the following motion:
It is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.
—(Minister for Finance)
I was referring to what should be one of our fastest developing industries, the fishing industry. I am disappointed with the Book of Estimates. The total increase for fisheries is just around £750,000 and one-third of that increase is for wages alone. We have about a 3 per cent increase in the money made available to the Department of Fisheries last year.
There is potential for development of the fishing industry. An investment of something in the region of £3 million could provide anything up to 400 or 500 jobs in the fishing industry in the areas where jobs are most needed, in the west, and north west and the south west areas. According to the experts the area of fisheries to be developed relates to aquaculture. The experts maintain that if we develop the aquaculture side of fisheries over the next four or five years about one-third of our total exports totalling about £15 million could be had from that sector.
Aquaculture deals with the development of salmon, trout, mussels, lobsters, oysters, clams, scallops and shellfish generally. The experts and research laboratories all hold the view that if the Government made money available for this sector where there is unlimited potential we could develop the north west and the south west areas. In about a quarter of our bays and estuaries local people would be willing to form co-operatives in this sort of development if they were trained and given the right financial backing, If the local people were willing to form co-operatives small business people could develop this area which has been largely ignored up to now.
I was particularly disappointed that the new Minister for Fisheries did not mention one of the most improtant developments taking place here. We are encouraging foreign companies to come in. Yesterday there was talk about a thousand jobs coming from America and they are welcome but in this area of aquaculture we could provide jobs for about 500 people with an investment of not more than the cost of a new trawler. I appeal to the Minister of State to take note of this.
Will the Deputy relate it in some way to the Budget and make it easier for the Chair.
On the last day I finished by talking about the price of diesel oil. Because of this increase in price many fishermen find it difficult to make a living. I said that most of the boats will have to pay between £400 and £600 extra per week for oil and this will be an insoluble problem for a lot of skippers. Since I spoke last week it came to my notice that quite a number of fishermen are finding it difficult to meet the repayments on their boats. A total of 432 boats were grant-aided by BIM. Over half of these people are behind in their repayments and, more seriously, about quarter of them have an arrears situation. That is a barometer whereby we can point to the Department of Fisheries and to the Minister for Finance for putting this extra price on diesel. These fishermen should get special priority at present, otherwise we will not be talking about 432 fishermen this time next year because a lot of them will have gone to the wall. Our neighbours across the water in Britain suddenly have brought in a new subsidy for their fishing industry of £3 million. While Irish commercial fishermen are feeling the edge of the EEC conservation measures the British Government are bringing in this scheme whereby they are going to subsidise their industry by £3 million. The present Irish Government instead of subsidising the fishing industry are penalising the boat-owners who are already behind in their repayments. This is very serious indeed.
The other reason is that the price of white fish has fallen dramatically in the last 12 months. The reason that the price of fish has fallen is not that we have caught more fish but that more white fish are coming in from other countries outside the EEC. Some of these other countries who are able to send the white fish into our markets have no limits at all. They have 200 miles of free zoning for their country while in this country we have practically no exclusive zone for our fishermen.
The Deputy might have a better opportunity during the Estimates to speak on fisheries. The Financial Resolution is rather restricted in its scope.
I spoke at some length on fisheries before this under this resolution. Finally, I appeal to the Minister for Finance even at this late stage to give a rebate on the diesel oil for these fishermen the same as the British Government have given for their boats. It seems crazy that French boats are getting subsidies to fish in Irish waters while Irish boats are being penalised by the Irish Government. The theme song of fishermen for the next couple of weeks is that they should demand from the Minister for Fisheries a total rebate to compensate for this savage increase in their costs.
The increase of 20p per gallon which the Government have put on petrol will affect the tourist industry dramatically. We are not talking about a 20p increase; we are talking about a 32p increase and the reason is that we have had three different increases in the price of petrol in the last couple of weeks. When the Minister for Finance was talking about tourists in his speech he went so far as to state that he could not see how this savage increase in the price of petrol is going to affect the tourist trade. Maybe he is not as much involved in the tourist trade as are some of us who live along the western seaboard. I have worked out that any motoring tourist coming to this country will find that it is going to cost him about £25 per week extra just for the increase in the price of petrol alone, not taking into account the high cost in this country of restaurants and hotels or the price of drink and cigarettes. Let us be fair about this. Most tourists, particularly the English, Scots and Continentals, in the past came to Ireland because they got value for money. I am very concerned that we are starting to price ourselves out of the tourist market. Last week I had a drink in a hotel in this city, whiskey and soda, which cost £1.04 and in the same place a pint of drink cost nearly 90p. Even though the measures in England are smaller, and the same applies in Spain and other Continental countries, we must now be one of the dearest countries as far as the prices of petrol, drink and cigarettes are concerned and also a lot of our restaurants are becoming expensive. The reason is the high cost of living in this country.
I would have thought that when the Minister was introducing his Estimates, he would not penalise the tourist sector, who had a hard, tough time last year. A speaker on the other side of the House has stated that we reached nearly £400 million for our tourist industry last year. Sometimes I wonder where Bord Fáilte get these figures. I would like to see a breakdown of this £400 million. It is not easy to estimate the number of tourists coming from the North of Ireland, but I can say there are not large numbers of tourists visiting the west coast, whatever the number may be in the big hotels in the cities. Last year was disastrous for the tourist trade. One speaker from the far side of the House even blamed the weather. He said that was the main cause of the drop in the number of tourists.
One of the main reasons is that we are starting to price ourselves out of the tourist trade. Any tourist planning a motoring holiday is going to weigh up the cost of the petrol in a country before he decides to go there. I was disappointed that the Minister did not help the tourist trade by some kind of subsidy such as was suggested a couple of years ago which could be operated very easily because we have only a few ports where car ferries come in. There is no reason in the wide world why a few people, three or four perhaps, could not operate a petrol subsidy scheme which would encourage tourists to come to this country.
Regarding industry, and exports, every pound that we can attract to this country through the tourist trade is in itself an export which is forgotten about by a lot of people when they are talking about the balance of payments and so on. I cannot understand why the Minister for Finance did not have a look at the position regarding tourists who are leaving this country to go to America and to the Continent in particular. Surely these people are of no benefit to Ireland. The Minister should consider if it would be possible to put a tax on people going from here on foreign holidays. I go on as many foreign holidays as anyone else does, I suppose, and if I decide to go to the sun I will not object to paying that little bit extra towards the Irish economy. After all, I will not be spending my money then in this country, I will be spending it outside. Usually we have to change our money into sterling. The poor rate of exchange of the punt with the pound is very serious. On the one hand we must change our money into sterling and on the other, we spend our Irish currency in foreign countries. The Minister is dealing a harsh blow to the tourist trade. Last year we had the telephone and postal strikes and the severe shortage of petrol and then, at the end of August, we had the Mountbatten murder. All those factors, plus, to a slight degree, the weather, caused terrible problems, particularly in the large guest houses and small hotels, to the people who are relying entirely on the summer trade. I know, from talking to these people, that, unless they have a good couple of years' trade from now on, for many of the bed and breakfast establishments and small hotels the bells are being sounded, because the Government have no interest, particularly so far as the tourist trade in the west of Ireland is concerned, which is very serious.
Bord Fáilte are not making enough grants available. A hotel applying to them for a grant could be waiting two years before they know whether the grant will be available or not and Bord Fáilte's reason for not giving grants is that the Government have not made the necessary allocation of money. I should like confirmation on this point from some Minister. Is it a fact that many smaller hotels are not being passed for grants? My information is that Bord Fáilte have not received the necessary money from the Government. I know of some hoteliers who are waiting to do small extensions and are afraid to go ahead with the work for fear that they will get no grant.
I have dealt with the problem of giving value for money and of encouraging people from abroad to come here. The Minister for the Environment should have a look at the policy regarding the anti-litter campaign. When we go abroad, the one thing that strikes us on our return is that so much of our environment is polluted—and that is the correct word to use—with litter of different kinds. We are not, by nature, a tidy race and people should be encouraged to keep our beautiful country unpolluted.
Another, problem affecting the tourist trade concerns the troubles in our country over the last 11 years. Cardinal Ó Fiach, when speaking on 17 March, appealed for an end to the troubles, as we all do. One section of the community affected more than any other is the tourist section. Leaving aside high prices, certainly as far as the English tourist is concerned, many of these are still afraid to come here for holidays until the troubles cease. Let us make an appeal to all sides to try to get together. These troubles are not benefiting anybody and are sending people futher apart. We now have new church leaders on all sides; we have a new Cardinal in the Catholic Church a new Presbyterian Moderator, a new head of the Church of Ireland and of the Methodist Church. They should try to get together and appeal to those on both sides using violence to come together and stop these drastic things which are happening in the name of Irishmen.
I again appeal to the Minister to have a further look at how the tourist trade can be developed properly. I am not satisfied that Bord Fáilte are doing everything they should be doing. I am not satisfied that the Government are giving Bord Fáilte enough money to do what they intend to do. In this industry, as in the fishing industry, there is plenty of room for development.
Last week, a speech was made on the other side of the House blaming the banks for the credit squeeze taking place in Ireland at present. Fianna Fáil blame everybody but themselves for this tightening of bank credit. It is only right to point out that if the Central Bank have issued their guidelines and if the public sector, the Government sector, use up more than their fair share of capital, the Central Bank must put a limit on the private sector, which is what has happened. Anyone in banking and anyone looking for loans realises that the banks put an increased guideline of 18 per cent on lending money last year. What was not taken into consideration was that, at the same time, there was a 16 per cent inflation rate. This meant that the ordinary sector—the business people looking for loans, hoteliers looking for loans, people looking for loans to build houses, even people looking for loans for a couple of months to tide them over until the county council passed money into their hands—could not get loans and have not been getting loans over the last 6 or 8 months. We now have a critical situation here. No matter how good one's credit standing with the banks, the banks cannot lend money because they have none to lend in the private sector. I understand that the banks guidelines this year are being cut from 18 per cent to 13 per cent. It is also, even now, estimated—and even those on the Government side of the House are beginning to realise—that the inflation rate in 1980 will be something in excess of, or around about, 20 per cent. With the cut-back to 13 per cent, the banks will have to cut back on 7 per cent of their loans this year and we have seen nothing yet as far as the credit squeeze is concerned. It must be said loud and clear, that there is no point in Fianna Fáil putting the blame on the banks. We must blame the Government for overspending in the last couple of years. Everybody is now being asked to pay for his mistakes.
The Deputy has four minute.
People living in rural areas are very worried indeed with the punt's falling value, particularly in the last week. It is very nearly at an all-time low today—89p against the £ sterling. It was stated by an economist recently that the English economy is anything but sound. That being the case, it gives great cause for concern for our economy.
As regards social welfare, we all welcome the increase of 20 to 25 per cent. We are now concerned that the inflation rate will be over 20 per cent and that those getting massive increases will be worse off at the end of the year than they are at present.
As far as the small farmers' assistance scheme is concerned it is not publicly known that no increase has been given to farmers living in the west of Ireland. In the past farmers with ten or 12 acres who were married and had a family were entitled to sign on at their local office and get assistance—that is the word because they could not live otherwise—to their income. They will have no increase in 1980. Under the assessment scheme their stock, sheep, hens or pigs will be taken into consideration and revalued. This is wrong. The assistance scheme encouraged small farmers to produce more but this scheme will encourage them to produce and keep less because the less they have the more the Government will give them. There used to be a slogan "To hell or to Connaught" but the slogan as far as the assistance scheme is concerned is to hell with the west of Ireland.
There is very little money available for sewerage schemes. The Government have not made them one of their priorities even though there are villages and small towns with no such facilities. Our friends from the EEC would not believe that there are still no such facilities in some villages and towns in modern Ireland.
We are not talking about one budget but about a budget a day since 1980 began. The Government did away with re-construction grants, central heating grants, increased the price of practically everything since the beginning of the year—ESB charges by 20 per cent, gas and food. As regards bridging loans, there is no money for anybody wanting to build a house because of the credit squeeze, because of the way Fianna Fáil spent money in the past few years. This budget is not a good one, especially for people living away from Dublin. It is penal on them. It is only as weeks go by that it will sink in how hard the budget affects the ordinary person in the country.
There is one paragraph in the Minister for Finance's speech on the budget which sums it up and that is:
This is a realistic budget, which recognises that a significant start has to be made on resolving the problems we face. I believe it will help to point the direction which all of us can follow—benefits for the needy, opportunity for the able and a conscientious dedication at work for all.
That sums up the budget which has been very well received. Even the Opposition have failed to put forward any serious criticism of it. We know that substantial progress has been made in a number of areas particularly in that of income tax. The concessions given there are greatly appreciated by the general body of workers, so too are the increases in social welfare. We have seen increases of 20 per cent and 25 per cent across the board. This is the biggest increase ever given by any Government to recipients of social welfare. I am happy to see this happen because we know that these people are relying on the Government for help. They do not have pressure groups to fight their case. They have no unions or associations as other have. It is only right that the Government help these people to give them a reasonable standard of living in their later years.
The budget will not satisfy all the conflicting demands but the Minister has tried to strike a realistic balance between them. In the area of job creation the Government are determined to strive ahead and achieve their target of 30,000 new jobs in 1980. The State's investment in industrial promotion has been increased by £30 million this year and the bulk of this money is being made available to the IDA for the purpose of creating new jobs. We know that since we have such a very young population it is the duty of the Government to make every possible effort to provide jobs for them at home. I am very proud of the record of the Government in that regard. The hope and confidence given to young people over the past few years is evident. Job opportunities are there and hopefully the Government will continue to try to find the jobs so necessary to give our young population an opportunity to work in their own country.
I should like to congratulate the Minister for Industry, Commerce and Tourism on the efforts he made in the United States to get industrialists to invest here. I was happy to hear his announcement of the number of new jobs that are coming here over the next year or two. This is the type of work the Government must be involved in and I am glad that they are achieving considerable success in that area.
Tourism has been mentioned many times during the course of the debate. We all know that it is a very important industry. I do not think the increases imposed on petrol will seriously affect the industry. Nobody planning to spend a holiday here will be put off by the increase in the price of petrol. It will only mean a few pounds extra in the cost of the holiday. Prices here compare very favourably with other countries. Anybody who travels abroad knows that this is the case. The increase in petrol and oil prices may also encourage people to conserve energy. We are all aware that there is a lot of unnecessary waste in this area, waste of a commodity that has become very expensive and difficult to find. Because of our industrial developments in the last few years we are using more and more of this commodity which has become the soul of the earth and so difficult to find. We are aware also that the demands will increase and that, unfortunately, our Government have very little say on the prices being charged. Therefore it might be a good thing were we to devote more of our time to endeavouring to conserve that energy and make as much use of it as we possibly can.
This budget rightly places emphasis on bringing more order into the State's finances. The level of external borrowing had become a matter of serious concern and immediate action was required. Any budget has to deal with conflicting objectives and interests. The Minister for Finance has managed to maintain the correct balance between competing objectives. There was urgent need to bring a greater degree of fairness into the taxation system. We had to deal with the problem of foreign borrowing. At the same time there is the overriding necessity to preserve the right atmosphere for economic growth. This budget deals comprehensively with these requirements.
My concern relates to agriculture and I should like to confine my remarks to that area, particularly in so far as it relates to the western counties. It has been claimed that the level of expenditure on agriculture has been curtailed and indeed, that this sector has been victimised. Nothing could be farther from the truth. The combined Estimates for Agriculture and Lands have been increased from £197 million in 1979 to £205 million in 1980. The position is that, when account is taken of receipts from FEOGA, more money than ever is being poured into the agricultural industry.
The aim of this Government is to ensure the right environment for development. The Minister for Agriculture has already indicated his determination to negotiate the best deal possible in Brussels. Nobody can be in any doubt about his position on the anti-surplus proposals and especially on the super levy. We regard the role of the individual farmer as crucial to the future development of agriculture. Our policy is to give every possible encouragement to improvements at farm level. The farm modernisation scheme provides generous grants for farmers wishing to improve their holdings. I was amazed to hear allegations that grants under this scheme will be curtailed during 1980. There is no basis whatsoever for these allegations. We are providing £36,500,000 under the farm modernisation and western drainage schemes. Any farmer who embarks on farm improvement works, with the normal prior approval, can be sure that he will receive the appropriate grant assistance. Any suggestions to the contrary are mischievous and misleading and, I regret to say, show a total disregard for the best interests of agriculture. Progress under the farm modernisation scheme has been satisfactory. There are now over 90,000 farmers participating and, since its introduction, over £93 million have been paid out in grant aid. The farm improvements involved represent an investment of £280 million. These figures speak for themselves and show confidence on the part of farmers in the future of agriculture. There are, of course, certain areas that could be improved and the appropriate directive is currently under review at EEC level. We are seeking greater flexibility in the scheme to make it more suitable for Irish conditions. In particular, we are anxious to have the development category extended and I hope the eventual outcome will be a better scheme for Irish farmers.
The western drainage scheme is an excellent example of the Government's concern for the west. Our target is to drain over 100,000 acres and so far the response to this scheme has been overwhelming. Over 26,000 applications have been received and these are being processed with the utmost haste. I have no doubt that we will reach the target within the specified time limit of five years. I am confident also that this scheme will have a dramatic effect on the standard of farming in the west, that it will generate more productive land, a basic requirement for improvement in output and efficiency.
Farmers in western counties also receive direct assistance through the disadvantaged areas scheme. I consider that this scheme is of considerable benefit to areas with structural problems and helps supplement the incomes of smallholders. One of the questions which I know concerns some Deputies on both sides of the House is the revision of the boundaries for this scheme. Shortly after assuming office this Government instituted a detailed and thorough-going review of these boundaries. This review was completed over a year ago and a submission was made to the EEC Commission in February 1979 setting out certain proposals for changes in the boundaries in Ireland. Since then detailed discussions have been held on a number of occasions between officials of the Department of Agriculture and of the Commission.
A substantial volume of supplementary information on the submission has been supplied at the request of the Commission. While the matter is still being discussed with the Commission I do not wish to prejudice the outcome by referring to any particular areas but it would be no harm to attempt to clarify the present position. The EEC Commission has recently proposed that, as part of the present structures package, member states be allowed to extend the limits of their disadvantaged areas subject to certain conditions. In the first place, extensions will be allowed, when the amendment goes through, by up to 1½ per cent of the total agricultural area of the state rather than by ½ per cent as at present. In the second place they will still have to meet the criteria laid down in the directive. Any change would have to be agreed by the Commission and by the permanent committee on agricultural structures before coming into operation. We understand that there is a considerable amount of support for this amendment to the basic directive, 268 of 1975. However, the amendment is dependent now on the structures package itself being finally resolved. The Minister for Agriculture has been pressing very strongly for this matter to be treated as one of urgency and I am hopeful that the Council will be able to reach agreement in the matter in the very near future.
I have mentioned these schemes because, regardless of what the Opposition may say, the Government are providing extensive and valuable aid to farmers. The schemes I have mentioned and the response to them are evidence of what the Government are doing in this area. There has been an allegation that there is a crisis of confidence in agriculture but this allegation is based more on rumour than on fact.
A facet of the work of the Land Commission on which particular emphasis has been placed in recent years is the division of commonages. As Deputies are aware, the bulk of the lands held in common are in counties that are adjacent to the western seaboard where, generally, holdings are below viable standards and off-farm employment is scarce. While there are not available precise figures for land so held it has been estimated that commonages account for something of the order of 500,000 hectares of which possibly 30 per cent would have potential for substantial agricultural development but this potential cannot be realised fully while the land is held in undivided shares. On the other hand, if the commonages are divided into individual plots and each farmers co-owner given his own portion, the extra area could in many cases be a valuable adjunct to the smallholder.
Obviously, not all commonages are suitable for division. Agricultural potential, high development costs and difficulty in regard to lay-out are factors which often militate against division but there are many commonages which are very suitable for division and where such division would result in doubling the carrying capacity of the holdings concerned. Since 1971 the Land Commission have divided 191 commonages comprising 15,000 hectares approximately. This is an undoubted contribution to agricultural production and is indicative of what can be achieved if commonage owners are prepared to co-operate with each other and with the Land Commission. It is the intention of the Land Commission to accelerate commonage division. Towards this end, additional Land Commission inspectors are being recruited for those areas in which the commonage problems are most acute. I need hardly remind western Deputies in particular that co-operation is the name of the game and that without the goodwill of commonage shareholders this new initiative by the Land Commission cannot be expected to produce a worth-while result.
The Government are providing incentives to western farmers by way of various schemes, to develop their holdings and to improve their incomes. Such benefits should be taken into account when considering the decision of the Government to maintain the rates of unemployment assistance to small holders who opt for the notional system of assessment of income at their October 1979 level. This means that the small-holders concerned will retain the value of the temporary increase in grants in accordance with the national understanding. It cannot be denied that farmers' incomes, including the incomes of western farmers, have increased greatly in the past few years. I am aware that there was a temporary setback in incomes last year but I am confident that with the incentives available and having regard to the conditions created as a result of Government policies, farm incomes will increase again.
It is obvious that, generally speaking, assessment on the notional system does not reflect true incomes. For example, under the notional system and with the present multiplier, a farmer with a £5 rateable valuation is assessed as having an income of less tha £3 a week. Of the 21,000 smallholders approximately who are drawing the unemployment assistance, 18,000 are assessed on the notional system. It will be open to those people to decide to have their incomes assessed on a factual basis if they so wish. I should point out also that the multiplier in respect of valuations of £10 or less has been increased only once since 1966, that was from £20 to £30 for each £1 of land valuation.
The most important point in this matter relates to the income supplements paid to farmers in the disadvantaged areas. These supplements are paid under the various headage schemes. By way of an amendment made to these schemes we are trying to ensure that the benefits from them will accrue to those farmers who need them most.
Another development which is most welcome to all in the west is the development by Bord na Móna of Doire Fadda bog. There are about 12,000 acres of bog involved and the proposal of the board to erect a briquette factory near Ballyforan is a logical development. This will provide employment for 660 people when in full production. The location of the factory in that area will create badly needed employment and will give to many an opportunity to acquire new skills. It will provide an opportunity also for the establishment of allied industries and services in this area which for so many years in the past suffered from the haemorrhage of emigration. It gives new hope to young people who at last see an opportunity of employment in their own locality.
I am glad to note that a subcommittee of the central development committee have been investigating the prospects for increasing turf production in the western still at about 13 per cent of GNP—how ted the report of the subcommittee. Shortly, the report will be submitted to the Minister for Energy.
I have touched briefly on some of those areas in which I consider the Government's policies to be geared towards the creation of conditions for the development and future progress of agriculture in the western regions. Farmers can be assured that both the Minister and I appreciate the difficulties confronting farmers in the area. However, I am sure they will appreciate that by way of the schemes geared especially to the needs of farmers in the west and by way of general Government policy, every opportunity possible is being given to the progressive farmer to develop his holding, to improve his income and, consequently, to benefit both the region and the country generally.
This budget is a major contribution towards the economic development of the country. Opportunities for new jobs, for the advancement of the health services, for the building of additional houses for our young people and for additional facilities for them are provided for in this budget, and it will go down in history as a major breakthrough, one of the best budgets ever introduced.
I should like to try, if it is possible, to dispel the image that regrettfully has been created that somehow or other this is the first budget of this administration. That is not the case. This is the third budget of this administration, of which Deputy Hussey has been a continuous member since 1977. To look at it in the pretence that it heralds the advent of a new administration is to give substance to the cleverly promulgated misconception that has been foisted on the community since the change of leaders in the Fianna Fáil Party before Christmas.
I was not here when the Minister for Finance delivered the budget speech last month, but I read and perhaps saw more clearly the contents of his speech. The first phrase in that speech would be comical if it were not tragic:
Prudent management of the public finances and improving the climate for economic development are normal priorities for a Minister for Finance....
It is a pity that prudent management of public finances has not been a normal priority for major political parties when drawing up manifestos, because there is no relationship between the kind of sanctimonious micawber economics that permeate this budget speech and the manifesto that unfortunately was bought by the people, or perhaps they were bought by it, in June 1977. The speech is full of assertions which do not stand the test of any critical analysis. For example, on page 8 of the published version, dealing with the economy in 1979, the Minister said:
Obviously there has been a complete change of circumstances compared with the situation as it appeared this time last year. Nobody foresaw then the massive oil price increases that were to come later in the year, with their attendant problems.
Since 1973 every serious economic specialist has been stating continuously in any journal one cares to read that energy prices would undoubtedly be increased. But this Government which published, and repudiated on 11 January 1980, the fourth instalment in a series of White Papers, made specific reference to energy and again told the community who went through the 1973 recession because of the then unprecedented energy price increases:
Since the White Paper was finalised, the international outlook and the domestic situation have worsened, particularly in relation to the price and availability of energy. These will have an adverse effect on the prospects for the Irish economy and the various assumptions and expectations outlined in the White Paper, and will need to be reassessed in the light of these developments. This will be one of the main tasks of the Government in the coming months.
Embodied in that statement, which was contained in the preface to the White Paper, is the stamp of the new Taoiseach. The opening statement in the budget speech is a callous attempt to hide behind the previous two years of Fianna Fáil attempts to make capitalism work in this country by throwing money at it.
Deputy Haughey never believed that the budget strategy of Deputy O'Donoghue or Deputy Colley would actually work. In reply to a criticism I made of the 1978 budget—a budget that was supposed to transform the face of the Irish economy, that would put thousands of young people to work in a way the Coalition Government had manifestly failed to do, provided the economy would respond to the exhortations to it—the Minister for Health and Social Welfare at that time said of my contribution:
His contribution was entirely constructive. I do not agree with his general approach to the budget, but I recognise that Deputy Quinn has attacked head-on the budget and the thinking behind the budget. The Deputy has set out to make what is probably the only valid argument that can be made against the budget, that is, that it is over-reliant on private enterprise. The Deputy's arguments in that regard are worthy of consideration.
I had criticised the budget on the basis that it was naive to expect the private sector to produce the jobs expected of it, and I quoted the chairman of a major private company who had refused to accept responsibility for producing the jobs the Government thought the private sector would produce.
It does not give me any great pleasure now to be able to say that the private sector has not produced the jobs expected of it. In a desperate attempt to make the employment figures promised in the manifesto stand up—we do not hear so much about them these days—the then Minister for Economic Planning and Development, we presume with the support of the entire Cabinet, transferred a lot of resources into the public sector in service jobs in order to maintain employment levels at something approaching the targets in the manifesto.
Three years afterwards, in this third budget, we had a speech which abandoned all of the optimism of the first budget, all of the implicit promises in the manifesto, and now frankly and clearly the budget recognises that the best we can do in 1980 is to try to take some of the sting from the irrationalities of capital. This budget speech makes interesting reading if it is compared with what was said on the hustings in 1977. For instance, at page 12 of his published speech the Minister said:
We cannot ask the taxpayer of tomorrow to pay for the services we require today. This would be socially unfair and economically irresponsible.
If we look at the national debt—it is still at about 13 per cent of GNP—how can they justify the abolition of car tax in a country where half the population are not old enough to drive? Is that not asking the taxpayer of tomorrow to pay for the services of today? A little later in his speech on the third Fianna Fáil budget the Minister said:
Government subventions should be paid only to those who need them and should be designed to achieve the maximum economic and social benefits.
How do you reconcile that phrase with the Fianna Fáil cheers that followed the announcement of the abolition of wealth tax three years ago? This budget is not a new departure for an alleged new Fianna Fáil administration. It is a recognition of the implicit failure of the first three years of Fianna Fáil's economic strategy and a confirmation of the correctness, as perceived by the now Taoiseach, in abolishing the Department of Economic Planning and Development and despatching with it the Minister who held that post.
To a generation of Irish people who had come through a particularly difficult recession which had stopped the continuous growth of western economies which had continued more or less unimpeded since 1945, a generation who from 1973 to 1977 had to live with a particularly difficult and expensive security problem on both sides of the Border, the Fianna Fáil Government, when they came into office attempted to say that, in implementing this manifesto, somehow they could make capitalism work for the benefit of all, that somehow because of their experience and expertise gained over many years they could provide the full employment that no other capitalist economy has ever provided, that somehow because they had the doctrines of economic expertise they could reduce inflation in an open economy irrespective of what happened to commodity prices in the world; that somehow they could produce jobs from the private sector despite the fact that the private sector itself repeatedly disclaimed responsibility for the provision of those jobs; that somehow by throwing money up into the air—borrowed taxpayers' money— some or most of it would land in such a way as to produce secure employment for the children of this nation and their children's children.
Labour Party members are frequently described as dogmatic idealists who insist on pursuing a particular philosophy which is out of date and old-fashioned, as rigid in their thinking and hung up on fixed ideas, but I should like Deputy Hussey, Minister of State who has acquitted himself well in his own Department, to go into any school in his east Galway constituency and explain to the pupils in terms of 1980—20 years from the end of the twentieth century—how it is that he and his party support an economic system that has hundreds of people without homes and thousands of construction workers without jobs; how his party support this system that has many acres of land either unutilised or under-utilised and many young farmers without land to farm; how many old people or children of poor families are either under-nourished or suffer from serious forms of malnutrition—yet, the EEC proposes to tax farmers for producing too much milk—how it is that the road system of the country is totally inadequate to carry the traffic on it despite the fact that we have the materials and the labour to make roads.
It is not for the Labour Party to defend its philosophical approach to solving human problems; it is for people like Deputy Hussey, Minister of State and his colleagues on the Government benches to explain to the present generation of Irish children why it is that Fianna Fáil continues to support such an irrational system and why it continues to spend, even in advance of it being earned, the tax of the young people to pay for the profligate policies of the past two years of this Government.
There are numerous examples of a party which would pride itself in being a reasonably good capitalist party distorting and over-heating the capitalist market itself with taxpayers' money to the disadvantage of those people which it purported to help. The most drastic example—and it runs right through the system—was the announcement on 20 May 1977 in the Fianna Fáil manifesto of the £1,000 house grant which was confirmed on 6 July and the procedures for its delivery simplified so that it would not become payable until the house was actually completed.
In reply to questions here from myself and others the Minister for the Environment conceded that by the time the first £1,000 house grant had been paid the price of housing in that quarter from July to October had risen by £1,004. The continual increases in income limits and sums that can be borrowed have simply chased, in many cases, the prices of land and housing. The Minister can correct me and statistically stand on the Government side of the House and point out the amount of money spent by this administration, but in order to balance the books properly he must also talk about the doubling of inflation in the same period and the incredible increases in the cost of certain basic commodities. Rather than being a budget which redistributes in any serious way the wealth of the nation, this budget marginally compensates sections of the community who have been victims of the Government's economic policy over the past two or three years.
Throughout the entire budget speech of the Minister for Finance there is an explicit rejection of the expansionist, naive belief which Deputy Dr. O'Donoghue expressed and which Deputy Colley as Minister for Finance implemented and which all the 83 Fianna Fáil Deputies applauded from the Government benches in 1977. There was massive borrowing, a massive injection of capital in 1977 into an economy which every commentator recognised at that time had come through the worst and was already in a very healthy state. Three years later the same party that delivered endless goodies in the form of tax concessions and confetti money tells the nation in the Minister's budget speech:
I am sure that our people now accept that we cannot continue to live beyond our means, nor to award ourselves increases in incomes which are not accompanied by an increased margin of productivity to guarantee the competitiveness of output at home and abroad.
I do not recall that particular expression being attached to the abolition of the wealth tax or stitched into the manifesto beneath the section promising the abolition of car tax and the abolition of rates. Who are living beyond their means and not paying their way? Where is the productivity implicit in this budget? The Government have made a number of concessions to different sections of the community which appear on the surface to be attractive and to show the generosity within Fianna Fáil.
There has been no serious critical analysis by the Government of the impact of the budget concessions in relation to personal income tax and the real purchasing power of social welfare recipients. Such an analysis has been done by Paul Tansey and others in the national press and I am sure this has already been put on the record of the House. It is clearly indicated that to a large extent the budget provisions are a matter of robbing Peter to pay Paul and the real level of income tax take-out from the economy will be marginally increased having regard to the rate of inflation which will occur this year.
The Fianna Fáil Party draw their support from across the nation from many different sectors of the community in a tradition that goes back over the best part of 40 years. Their twin aims are the unification of Ireland and the restoration of the Irish language, aims in which they have been manifestly unsuccessful. Their third aim has been the development of the economy and they have used virtually every kind of economic policy and device ranging from simplistic Sinn Féin isolationist development to the open-market Keynesian approach of Deputy O'Donoghue. By any objective standard of measurement, either in terms of employment or social justice, they have failed. This budget recognises the specific failure of the past two years of Government policy and the determination to replace the Government of an expansionist economist with the Government of a cautious accountant. That is what we have in this budget.
There is another way to develop our economy which does not rely on the hope that somebody in the private sector will be a bit more encouraged than last year and will provide a few extra jobs this year. There is another way where we do not have to rely on anonymous private house builders hopefully responding to market forces and perhaps producing houses cheap enough for people to buy with the aid of building society or SDA loans. We do not have to hope that this time the combination of corporation tax and the credit guidelines issued by the Central Bank will bring the banks to recognise their responsibilities and channel the savings of the nation into those areas that would be most productive either in terms of employment or wealth creation.
The economic policy and budget strategy of the Government are akin to a person like me, who knows little about agriculture, going into a field, throwing down seeds, getting down on my knees and saying "Please let the grass grow". The Minister of State at the Department of Agriculture, Deputy Hussey, would approach the matter rationally. He would analyse the soil, buy the best seed, know the cycle of climate and apply fertiliser when required. He would have a plan of production for that field and we would not see him on his knees praying to the skies and hoping that this year would be a little better than last year and the soil would be a bit more productive. Yet that is the level of the logic of economic development implicit in the policy of this Government; give money to the IDA in the hope that they will get jobs since they got so many jobs last year. Where we are going to put them or what sort of jobs they are to be we are not quite sure. They give money to this or that sector in the hope that something will come out of it.
There is no underlying plan of production or approach which recognises that a particular section of the economy has the capacity to grow and will require an input of capital or expertise. If there are dogmatists or ideologues represented in this Parliament, they sit on the Government benches. They have never adequately defended intellectually the system of capitalism which they prop up and support with taxpayers' money, yet there is constant defence for the repeated failures of capitalism.
Writing in The Irish Times on 14 February 1980, Paul Tansey stated:
While the PAYE taxpayer finds himself lumbered with an ever-increasing tax burden, Ireland's major banks and financial institutions enjoyed a dramatic decline in their effective tax rates in 1979.
In the financial year ended March, 1979, the country's biggest bank, the Bank of Ireland, paid only £3.3 million in current tax on a pre-tax profit of almost £47 million. Trying harder, the country's second-biggest bank, Allied Irish, managed to reduce its current tax liability to a mere £600,000 on pre-tax profits of £41 million in the same financial year. These represent effective current tax rates of 7 per cent and 1½ per cent respectively.
Does the Minister of State reckon that the banks are responsible institutions responding to the needs and wishes of the democratically elected Government and the desires and aspirations of the Irish people? If they do not pay tax then it must be paid by the Minister and by me and also by the farmers and the self-employed. Who gets these profits? To whom do they belong? With whose money are they made? They are made with the community's money and they are not being channelled back into the community on terms or in directions which the community can control. Money which is lodged with any of the major banks is manipulated with considerable managerial and administrative skill to evade or reduce tax liability where possible. For whose benefit? Certainly not for my benefit or that of any other current account holder in this Chamber.
Yet we are denounced as dogmatists if we suggest that the banks might be taken over or that the control of their credit policy could be more directly taken into account in national economic planning and development. We are accused of attacking the interests of private property if we suggest that the banks should be owned by the people who bank their money with them. The people who accuse us are good, solid Deputies on the other side of the House who say we are attacking the interests of the people. Whose interests are served by that kind of evasion? Any Deputy who participated in or saw the taxpayers' marches during the past year recognised quite clearly the growing cleavage between those who own and control wealth and those who produce it. The running contradiction in this budget which continues the contradiction in the two previous budgets is that somehow or other a mythical group of people, a minority of entrepreneurs, given the right incentives and encouragement and unshackled from unnecessary social considerations, will produce the necessary wealth, provided the rest of us accept wage restraint and do not ask for so much.
What kind of republican philosophy is it that after 50 years of independence and getting rid of the minority of people who control the majority, they can suddenly turn around and say to an elite minority: "Our entire destiny is in your hands. How much incentive do you need from the taxpayers in order to produce?" That is the level of rationality implicit in the economic development of Fianna Fáil. There is not one iota of republican sentiment in it that would suggest that only the companies which involve the workers in their enterprise and in participation in investment decisions would benefit from the 10 per cent tax levels in 1980. There is no suggestion that the workers who are expected to exercise wage restraint—we will now be looking for another year of industrial peace and wage restraint—in either the speech of the Minister of State today or in the budget speech that those people who are the wealth producers, who are expected to agree to a reduction in their standard of living, might be entitled to see the accounts of those enterprises in which they work and to have any say in the investment decisions that will be made with their profits. If they postpone or reduce the wages taken out from those companies the profits will be that much larger. If that is republicanism according to Fianna Fáil it is a long way from Wolfe Tone, Fintan Lalor and John Mitchel. It is much more republicanism according to Richard Nixon and much closer to republicanism according to John Connally in the United States.
Why is it that the Government who are now asking for wage restraint and industrial peace have offered absolutely nothing in terms of participation or involvement to the industrial work force or the agricultural work force? There is no mention of this in the budget speech. There is a hope that somehow or other things will be kept together, that people will be well behaved and that we will have a year of industrial peace in 1980. The year 1980 could not be as bad as the year 1979. In fact, no year could be as bad as 1979. In relation to the Lemass tactics and the First Programme for Economic Expansion early in the sixties, if you set your targets extremely low so that they will inevitably be reached in the first place, as was the case in relation to that plan, you can at the end of the year congratulate yourself on having reached your targets. The only way we will get industrial peace this year is if the Government as an employer do not repeat the outrageous performance they carried on last year in the Department of Posts and Telegraphs and if the Government as an employer in the State sector pursue the policy of participation and consultation that was initiated by the previous Minister for Labour, Deputy O'Leary. Fianna Fáil were not opposed to the measures for worker participation which were a very initial, tentative step initiated by the previous Government yet the Minister for Labour and the Fianna Fáil Government have been remarkably quiet in relation to labour relations in terms of actually involving people in the process of wealth production and wealth management, which is what our economy should be about.
The budget represents a stalling of the Government's economic strategy and the hope that somehow or other things will be kept reasonably quiet for the next year, that the economy will not get worse. It certainly holds out no prospect of the economy getting significantly better. The great optimism of the manifesto has disappeared. The phraseology, the figures and the assertions about employment have disappeared. The commitments which were given so eagerly by every Fianna Fáil Deputy from every platform in every town and village have disappeared. Many of the things which were promised are not even mentioned now despite this being a researched plan from the think-tank.
Fianna Fáil said in the manifesto that a lot of money would be spent to help to boost production and employment. They also proposed a campaign to "Buy Irish" which would switch 2p in the pound from imports to home products. They said this would be made work, that Fianna Fáil knew how to do it and they would call on the natural patriotism in the country. Our natural patriotism could not wait to buy Japanese imports. Our natural patriotism, fuelled by the inflation of Fianna Fáil, probably created more jobs in Korea and Taiwan than it did here. Fianna Fáil were told at that time that that would be the case. In opposing Senator Justin Keating, who was Minister for Industry and Commerce in the previous Government, Fianna Fáil promised the devil and all in terms of natural resources. They stated in their manifesto that the State should retain control of the conversion processes of minerals, oil, gas and so forth to ensure that they are used here to the maximum benefit. They also said that a State owned smelter could be established here for £40 million and that £10 million of this could further the equity capital.
We would not disagree with this. Some of the capital which has been thrown away and some of the capital which has been given back to the owners of wealth in the country could be used for that purpose. What has been the most significant investment decision the Government have made with my money, your money and the money of every Deputy in the House? They have bought into a private exploration company whose most significant characteristic is the political allegiance of the directors of that company. That is a long cry from developing the natural resources of our economy in a planned and comprehensive way.
Fianna Fáil promised us that the public sector of our economy, which is an enormous component of the economy, would benefit from a national industrial consortium, which would coordinate the productive capacity of the public sector. We have not heard anything about that. We are, instead, using millions of pounds of the taxpayers money to attract more and more foreign-owned and foreign-controlled industry into the country which will provide us with jobs.
There was another generation of people who came to this country, some of them invited and some of them not invited, who provided Irish people with jobs. We built walls around country estates for sixpence a day. We were provided with jobs and if we reduce ourselves again to the level of begging anyone to come and provide employment without any rational plan behind it, without any control of the way in which we want these jobs to develop and without any recognition of the potential spin off that such employment might create, we will be reducing ourselves once again to the level of wall builders and road builders which was the status to which we were reduced by another group of entrepreneurs in 1841.
The Labour Party are quite happy to see the IDA attract foreign industry provided the percentage of employment so created relates to an overall economic plan. We do not have such a plan. The Labour Party do not see the logic of, on the one hand, giving enormous capital inducements to these companies to come here to exploit our technologically trained labour force and, at the same time, financing the education of engineers to emigrate to work in the head offices in Pittsburg, London or France. Because whilst we are seeing the assembly plants of the multi-national corporations being established in this country, we are not seeing the research and development units of these companies being established here and we are not getting an opportunity to control or own a part of the technology information and expertise that these companies have. It is only the State sector here, properly invested and capitalised from within our own resources, some of which could come from the banks who are so shy about paying corporation tax, that would enable us to develop technological expertise suited to our own economic development requirements and which we will own. Let us have no doubt about it. If we continue to opt out of controlling a proportion or a significant part of the technological expertise that belong to the western world we will reduce ourselves to a totally dependent status in relation to those other economies.
There is no suggestion in this budget, although it was implied in the manifesto, that after three years of being in office, after three years of managing the economy—initially in a period of boom and latterly in a period of energy price instability—this republican Government has the slightest intention of doing anything like this. One cannot help but observe that the energies of this Government have, for the last nine months, gone into a leadership struggle to the detriment, first and foremost, of our presidency of the EEC and secondly the development of a long-term economic strategy for the country.
The various budget provisions, which seen on their own can be presented in a favourable light provided one leaves out of account the rate of inflation, must be looked at in the context of overall economic policy for the next year and for the next three or four years. If taken on that basis—and any budget must be taken on that basis—this budget marks the end of Fianna Fáil's naive belief that they alone can make capitalism work in an open western economy. There is no such rash assertion contained in the pages of the Minister's speech in anything like the way his predecessor, the Tánaiste, Deputy Colley, so confidently asserted in the first and second budgets of this Government.
In conclusion I would ask incoming Fianna Fáil TDs whose speeches have not yet been completed and who rise from the Government benches as the pragmatic politicians that they frequently pride themselves on being, to explain to me and to this House why it is that they defend a system of economic development that rests so much more on hope than on reality and depends so much more on faith than on reason. They are the real dogmatic idealists of this House, the people who are hooked on the idea of capitalism as a natural course of economic development, the people who have claimed consistently that they can make it work. If they would look and read through the manifesto that they so eloquently and professionally carried around the country in May 1977 and read the very explicit promises in it and the follow up of the various programmes for national development published by their Government, and compare that with the reality now, the two simply cannot be matched. It is not for us to defend what we purport as an alternative way because that at least has never been tried and could, when tried, be found wanting in many respects. But they are defending a way of economic development that is under-pinned by this budget. It is for them to reconcile the reality with the claims implicit in the budget speech and in the manifesto.
This budget holds out no hope for a serious development and creation of wealth in our economy on behalf of all the people. It says nothing to those people who produce wealth in the home in the form of a secure and emotionally satisfying environment, to those people who produce it from the sea or from the land or from the factory. It does not indicate that somehow or other these people have a right to see how the wealth which they produce can be consumed and can be redistributed. This budget says nothing to the children of the nation who, along with the elderly, constitute a much higher dependency in our population than in any other EEC country. It says nothing to them in terms that this generation of Irish people, 20 years off the end of the 20th century, propose to attack, in a scientific and rational way which would somehow or other reflect the progress of humanity, the problems of transforming the basic raw materials and natural wealth of this country into a substance that would eliminate poverty, that would eliminate homelessness and that would eliminate the other forms of material misery that still exist here. It is a miserable, unoptimistic and pathetic budget speech which, in the words of Shakespeare, "curses the darkness when the candle goes out" rather than seeking rational, intelligent and modern ways of developing the resources which, after hundreds of years of colonial ownership, we now at least own.
I was interested in listening to Deputy Quinn. I had hoped that he would have some constructive criticism to offer. Most of it was very negative. Deputy Quinn said that Fianna Fáil are capitalist and I take exception to that. In saying that Fianna Fáil could not produce the jobs he ignored the fact that Fianna Fáil, who are a republican party and proud to be so, have in the last two years made history by the number of new jobs that have been created, 30,000 new jobs in 1979. These jobs mainly went to young people. Deputy Quinn rightly referred to our young population because 50 per cent of our population are under 30 years. Our job creation success was the highest in six years in the EEC. Especially in my locality, mid-Cork, many people who had emigrated some time ago have been encouraged to come home by a scheme set up by the Minister for Labour to attract skilled workers. Many of these people are now living and working in my home town, Carrigaline, a fast-expanding Cork harbour industrial area.
The budget was received very favourably by the majority of right-thinking people. It was another step towards implementing many of the items mentioned in our 1977 manifesto. The majority of these items have been implemented but some, due to circumstances outside our control, will have to be altered and rightly so, because it is the job of the Government of the day to take the right decisions at the right time.
By comparison with former years, the recent taxation changes especially for the PAYE sector can be termed as radical. It must be pointed out that over the last two years this Government gave other tax concessions to that sector. This year the Minister took major steps to create an equitable tax system. Hopefully in the very near future we will see a tax system where all sectional interests are equally catered for.
We should aim more towards indirect rather than direct taxation. This gives a person a choice, whether to spend or to save. When I was going to school it was the norm to save. We all had money boxes and post office saving books, but the present generation—and this goes back a number of years—do not know what saving is. This is probably due to the economic way of life over the past few years because the whole concept of saving has been undermined. Some people might ask why save when inflation absorbs interest and eats capital? The present attitude of the youth is to borrow as much as possible because in the long run it is cheaper, and anyone who saves is a sucker. We have to change this attitude.
We must start a promotional savings campaign showing people the desirability and the advantages to themselves and to the nation of saving. We must encourage our children to save, to put something in a savings book every week. This simple philosophy could lay the foundation in later years for a sound economic outlook. Many people drink and smoke to excess because they have too much money readily available. They were not trained to save for the rainy day, to provide for their future, to have money to buy a site or build a house.
We should encourage the expansion of company savings schemes. The Minister might consider using the proposed tax advisory office to double as a savings advisory office. I agree with other speakers who said that in 1980 the £70 tax free income limit was outdated. It should be substantially increased.
I firmly believe everybody should own his or her own house. Present day trends of spiralling land prices, speculation, artificially inflated house prices, costly mortgage financing and what I term the penal bridging loan system grossly militate against the achievement of this aspiration. We should question the whole concept of bridging loans. The interest rate on bridging loans at present stands at 19 per cent and can last between 6 months to three years, and even longer. I know an unfortunate person who had a bridging loan for seven years. He paid in interest the price of his house but he still had capital to repay. In my opinion the bridging loan system is totally unjust and is a penal system.
Most prospective house purchasers, especially newlyweds hoping to raise families, are forced into this system. They have no option but to hand over a substantial amount of their hard earned and much needed money to pay this interest. This system must be changed. The banks say they do not want it, that it is not their type of business. Yet, £100 million or so is tied up in such loans. Building societies and local authorities should be able to get more involved in the organisation of loans for house builders and house purchasers. Building societies should be able to clear a couple for X amount, whether it be £10,000, £12,000, £15,000 or £20,000. Such couples could then purchase a house because they would know what money was readily available to them. Before they buy a house they should have their loan organised. It should be sanctioned before they even look at a house. Houses should not be advertised for sale until the title is in order. I do not know whether a change in legislation would be needed. Perhaps it could be done by a direction or by a ministerial order, but the whole thing needs to be streamlined. This would involve solicitors and the Land Registry. I want to compliment the Land Registry. In any dealings I had with them, everything was in order and cases were dealt with promptly and efficiently.
I urge building societies and local authorities—and we had a motion before Cork County Council yesterday—to generate schemes whereby it would be possible to advance money stage by stage in line with the construction of houses. When the title is in order I do not see any reason why building societies and local authorities cannot accept a letter of guarantee from a solicitor that, when the deeds are ready, they will be placed at their disposal. I cannot see any reason why building societies and local authorities should not become involved in the financing of a house at the foundation stage.
With regard to the social aspects of the budget, one of the main aims was to reduce Government borrowing and improve our balance of payments. More basic was the aim to improve the conditions of people on lower incomes and also of the young, the old and the infirm. I am very pleased with the substantial increases in social welfare benefits: 25 per cent for long term recipients and 20 per cent for short term recipients. This is very welcome and I have been advocating it. We should look after these sections of our society. I should like to see something done about people who are fully fit and able for employment and who do not take the jobs offered to them. It would be interesting to know how many job opportunities are available. Statistics confuse us at times, but I should like to know the number of job opportunities available. We should encourage people to make an effort to do something for themselves and for our country.
It must always be our aim to maintain a just and dignified standard of living for all our people. Many private groups and individuals are playing a very important role in Ireland today in filling gaps which Government resources cannot reach. These groups and individuals must be encouraged and listened to when it comes to formulating Government policy. It would be impossible for any Government to deal with this problem successfully on their own. The Government and all the people of Ireland have a social responsibility to each other. You might be well off today, but who knows what the future may bring. No man is an island, and we are all dependent on each other.
We must be willing to contribute our share to the social services. I should like the Government to publish figures showing the working people—and the majority of us are working people—exactly what percentage they are contributing to help the less well-off people in our society. If we saw these figures in their proper perspective, we might ask ourselves whether we are doing enough, or whether we could do more and contribute more. In this budget the Government have made fantastic advances in social sharing. It is up to ourselves to develop our social conscience and awareness. Until we do this, to a large extent the Government are limited in what they can offer.
A number of Government opponents said we had weakened in our commitment to education. I am glad to report that only last week in my own town. Carrigaline, the foundations were started for a new community school costing £1.7 million. This is very welcome. The advances being made in education are also very welcome. The concept of community schools is very exciting to me. They are becoming the centre of local communities. Previously the resources within schools were under-utilised to a large extent. They were available to pupils only during school hours. Nowadays whole communities can benefit from the use of halls, meeting rooms, sports facilities and library facilities. All such facilities throughout the country, in which there is heavy capital investment whether it be in land, in buildings, in equipment, or in personnel, should be utilised to the full and with maximum efficiency. I admire Newman's concept of education for education's sake, but I recognise that, in this present breakneck technological age, in Ireland we cannot really afford such a luxury.
We must gear our education system to take advantage of technological developments. Much has been said about the mighty electronic chip and this is where much of the world's development lies. Thanks to the foresight and expertise of the IDA we got in at the beginning and this is one of our fastest growth industries. I compliment the Taoiseach and the Minister for Posts and Telegraphs on the signing of the contract in Paris for the new digital switching gear for the telephone system. We will have some of the most modern equipment available and this will encourage our research and development teams of which Deputy Quinn was unaware, in their work. We will also have the prospect of thousands of new highly technological jobs. This year about £650 million is to be spent on the telecommunications system. With the right combination of staff, money and advanced technology we will have the best phone system in the world. I compliment the IDA on their achievements to date. It is heartening to note that they got an increase of something like £30 million in their budget this year.
In relation to education I hope that the restrictive and out-dated curriculum operating in some schools will be revised and that secondary school subjects will be expanded to cater for modern skills. Specialised subjects such as computer studies, programming and electronics should be introduced as examination subjects. We should also look at the present intermediate and leaving certificate examinations to see if we could introduce alternative examinations supplemented by continuous assessment and field work. We should also coordinate education at national level and involve State bodies, such as the IDA, so that talents will be matched with job opportunities. There is much room for improvement in career guidance and we should educate people for the jobs that will be available in the years ahead.
I am saddened to see a lack of national patriotism in our youth and we should do something about it. The practice followed in France and America of assembling the pupils at the start and the end of the day for the raising and lowering of the national flag should be encouraged in our schools. This along with the teaching and singing of the national anthem might inspire our young people with patriotism.
The Government have rightly cut back on public spending in certain areas. The time has come to take stock of structures in the public sector. For years in public and private sectors we have been subsidising gross inefficiency. We must get back to the idea of maximum utilisation of skills and resources. The present cutback will give the impetus to achieving this aim.
I suggest the use of a lottery as a method of gaining finance for local authorities to supplement their allocations. This is very popular in England, on the Continent and in the USA and Canada. There is nothing wrong with this method of raising funds and I have urged Cork County Council and Cork Corporation to get together to approve a lottery for the county. I understand that a change in legislation would be needed for this, and I hope it will be made.
Much criticism has been made about the large increase in the tax on petrol. However, the total percentage of tax in the price of petrol is less than it was in previous years. During the Coalition term of office 58 per cent of the price was tax and in 1980 it is only 50 per cent. We have to cut down on our dependence on petrol and imported oil products. The Taoiseach suggested that we encourage the formation of car pools. Successfully operated, these are a great saving for the individual and for the country as a whole. As we drive to work we see many cars driving in the same direction and covering the same distance with just one person in them. This very simple, practical measure should be promoted and encouraged. Energy is the real key to our balance of payments and the prosperity of our country. We must strive towards the ideal of self-sufficiency but this will require meticulous planning and foresight. We must extract from our natural resources the maximum energy potential possible. I know how conscious the Government are of these factors. The Minister for Energy has special responsibility for that and I urge him to make further studies of hydro schemes and to see that our experts are kept abreast of wind, wave, solar, nuclear and biomass technology so that as they evolve, as they will, to a practical stage we can take full advantage of them.
At present we are not taking advantage of our natural gas supply. A policy should be laid on the line as soon as possible to decide how we will use the gas, whether we will have a national grid, whether it will be used in the precincts of the gas find in the greater Cork area to encourage gas-based factories, or whether it will be used in other towns and cities. If the latter is the case provision should be made in housing estates at the building stage to see that all the necessary infrastructure is laid on. Now is the time to do that. Whether in Cork city, in Dublin or any other city it does not matter, if they will be receiving gas two or three years from now the necessary piping and ducting should be laid at this stage.
The IDA, whom I compliment again for the work they are doing, should encourage more industries where the highest possible potential of gas will be exploited. In this the use of gas for the generation of electricity is wasteful to some extent and does not avail of the optimum energy potential of the gas being so used. Much of the energy of the gas is lost in the generation of electricity. In other countries this waste heat is spread around the districts and used for heating water and so on. In Denmark especially something like 25,000 homes are heated by district heating from the generating plants there. The Danes have reduced their dependency on domestic heating oil by over 90 per cent. This would also reduce greatly the cost of heating for the family house. We should consider when we are building generating stations in the future whether it might be right to build them in or near areas of population where the waste heat could and should be used to its full potential.
The Minister of State at the Department of Agriculture dealt at length this morning with agriculture, and rightly so, because it is our basic industry and most important to our national economy. Of the total workforce of the country 23.1 per cent are working directly on the land and another 49.2 per cent are in the supply and services area. That is a total of 72.3 per cent and as many as 90 per cent are dependent on the success or failure of agriculture. The percentage of our GNP in relation to our agriculture is 18.2 and this is more than 7.5 times the percentage of Great Britain pro rata and approximately 4.5 times that of the EEC average. These figures prove beyond any shadow of doubt the importance of agriculture to our national economy. We were made very much aware of this in recent times when we had the coming together of the Government, the farm organisations and the trade unions to oppose the levy proposed by the EEC of 57p per gallon on milk. This to our nation could cause a loss of many thousands of jobs. I am confident that when our Minister goes to Europe he will not accept this levy. It is unacceptable in the context that agriculture has for the welfare of our economy.
I suggest that the Government examine two areas. The first is the importation of food from third countries. I am thinking mainly of New Zealand, the Argentine and, to a lesser extent, Australia. Secondly, our share of the EEC market is of the order of only 4 per cent and we are not creating surpluses. In fact we are producing approximately 45 per cent of our total capacity while our European partners are producing at over 90 per cent of their capacity. How can we increase our agricultural production? We can do so by education. We need to have at least one more agricultural college or to expand the agricultural colleges we have. Every boy and girl going into agriculture should spend at least one year in an agricultural college. The necessary buildings for these colleges are available, if they can be acquired and utilised. Further forms of education are day and night classes through the county committees of agriculture. These committees are doing great work, no doubt, but are tied up, to an extent, with the agricultural advisers who are being kept in their offices because of non-availability of clerical staff.
I urge the Minister for Finance, since he is the man who controls the purse strings, to give clearance for the provision of clerical staff to these committees, so that agricultural instructors who are educated and qualified to instruct on the land can walk with and work with the farmers and do the job for which they are specifically trained and qualified. We need more instructors, double the amount. However, this cannot be done in a year. It could take four or five years. With that in mind, we should start now in 1980—the decade of endeavour. Why should we do so? We might ask ourselves why must it be done. The following are why and how it should be done. We have the ingredients to make it happen, the land and the young people—over 50 per cent of our population are less than 30 years of age. Our two greatest assets are our land and our young people. There are not the risks involved at with drilling for oil or gas, but that is not to say that we should not drill for these commodities. A good agricultural policy is the cheapest and quickest way for us to increase our total exports, thus helping greatly to reduce our balance of payments deficit. We need co-ordinating bodies to tie these proposals together, using the full potential of land and people, thus increasing production, job creation, processing and marketing.
This budget went a certain way towards straightening out the principle of farmer taxation. We cannot afford a confrontation between the PAYE and the farming sectors and this budget has gone a long way towards defusing that type of situation. I refer now to the outmoded rateable valuation system as against the taxation system. It is 100 years since the land of Ireland was valued and there are, to my knowledge, areas valued at a differential between 12½p and about £2 per acre. In 1980, with an amount of land reclamation, modern transport systems and centralisation, there is land valued at perhaps 25p or 50p—10 shillings as it was at that time—of equal value to the land over the ditch or across the river, valued at £.50 or £2. The valuation is tied up, as the Minister knows, with the taxation system and the discrepancy or anomaly is not so much between the PAYE workers and the farmers as between the valuation of one farmer and another. We do not want to pit the agricultural sector against any other sector. Agriculture is an industry which is very peculiar to itself and very vital to all of us because of all the spin-offs, the industries affected by it, with so many people involved, and it needs special attention. I hope that in the budgets ahead an equitable system will be found to satisfy the farming section of our community.
In conclusion, I look forward with confidence to the year ahead for the economy to ride out the storm and for the production of the necessary jobs for our young people, which will help to build for the future and make this nation of ours a better nation. I compliment the Minister, Deputy O'Kennedy, on his budget and the research that went into it. As I said it has been received very favourably by the vast majority of right-thinking people.
Ag an bpointe seo san diospóireacht cháinaisnéis bliantiúil tá sé an-deacair ar fad rud nua a chur isteach san díospóireacht ach mar sin fhéin tá sé an-tábhachtach ar fad go leabarfadh an chuid is mó de na Teachtí Dála ar an díospóireacht bliantiúil seo. This is the twenty-first budget debate I have had the privilege of participating in since I became a Member of the House in 1961. This is the nineteenth annual budget and there were two supplementary budgets in that time. Budget debates—this one is no exception—have followed the pattern of Deputies on one side trying to praise the budget and present it in the best possible light while the Opposition Deputies fulfil their role of analysing, assessing and criticising it where necessary.
There was a lot of speculation and expectation in the run up to the budget because it was produced in extraordinary and exceptional circumstances unprecedented in my time in the House in that there was a change of leadership and a major Government reshuffle shortly before the budget was due. People were waiting to see in what way the new leadership and newly reshaped Government would be reflected in the budget and more particularly in the speech of the Minister for Finance.
Immediately after the Minister delivered his speech on 27 February I was invited to participate in a discussion on Radio na Gaeltachta. My first reaction to the budget speech was that the 1980 budget was merely a cosmetic exercise. It represented slick financial juggling and, at the same time, a deliberate effort to present the picture in the best possible light. The annual budget in a democratic system of Government is the major instrument of the economic and social policy of the Government. It is not just an exercise in arithmetic, financial juggling, balancing books or giving a few pounds here and taking them away there. The budget should and always did, until this one, reflect clearly the thinking and attitude of the Government to the major economic and social problems of the day.
In their general election manifesto and in the last two budget speeches and various other speeches Fianna Fáil claimed that the major and most urgent priority was the creation of employment. We had continued emphasis on the vital importance of job creation. Job creation is of paramount importance and is the major problem facing the country and the Government. A major challenge facing any government is the generation of more jobs and this is particularly important in our position where the population is increasing. There is absolutely nothing in the budget or in the Minister's speech to indicate any new approach or new dynamic in relation to generating the necessary economic activity which will create the jobs adequate to absorb the growing labour force coming on the market. The jobs should be of a range and variety which will satisfy the aspirations and expectations of young people who are well-educated as a result of better opportunities for post primary and third-level education.
The Minister had to be preoccupied and take note of the appalling mess in which the finances of the country had descended following the squandermania of the last two years. To talk about balancing the budget and straightening out the country's finances without taking into account the economic and social problems facing us is crazy policy. It does not speak well for the new Taoiseach and Government that such an important area as job creation and employment has been relegated to irrelevancy in the Minister's speech. There is nothing in the budget to indicate that there will be any new momentum in job creation other than the allocation to the IDA who, since their foundation by the then Inter-Party Government, have been a credit to the country irrespective of what Government were in power.
I hope the Minister will allay the fears expressed by many people, trade union spokesmen, business men and young people who are in their final year in the various educational institutions who will be trying to find employment suitable to their qualifications and talents. I challenge the Minister for Finance to state what the Government's policy is in relation to the creation of full employment. Is it a major objective of Government policy? Is it a top priority in Government policy under Deputy Charles J. Haughey, the new Taoiseach? If it is, the Minister should spell out clearly what economic strategies will be applied in the light of the difficult international situation that exists with spiralling costs of fuel and so on.
This is the first opportunity I have had of speaking in the presence of he Minister of State, Deputy McEllistrim, and I should like to congratulate him on his recent promotion. I wish him well in his onerous task. It is ironic that the Minister of State present—a man for whom I have very great respect, as I had also for his father, with whom I had the privilege of being a fellow Member of this House from 1961 to 1965—who is in charge of the Office of Public Works, an important area of national activity, an important source of employment and so on, should be placed in the situation in which, as I understand it, the subvention for arterial drainage is being reduced. Certainly that subvention has not been increased to the extent that would enable the accelerated arterial drainage programme to be implemented, about which there was so much publicity 12 months ago, particularly in the context of the sums that would be forthcoming from the EEC. This type of cut-back on public expenditure does not make sense. In certain circumstances I can understand—and indeed my colleague, Deputy John Kelly, has often referred to this—the creation of purely civil service desk jobs, as such. But arterial drainage is an entirely different ball game. It entails the type of work that not alone provides tremendous employment but adds also to greater productivity in relation to our greatest natural resource, that of land.
We as a party are very conscious of the effects of arterial drainage. In my constituency the drainage of the river Maigue is well under way. I should say that the work done to date is very satisfactory and is a credit to the Office of Public Works and all involved. There has been agitation for years by people in the Mulcaire catchment area—half of which is in my constituency and the other in that of the Minister for Finance —about the delay in getting to grips with the drainage of that river. I hope the necessary finance will be made available to the Minister to enable him have the preparatory work done so that when the Maigue scheme is completed in a couple of years time we will be able to start with the Mulcaire scheme. I realise that there are problems with regard to engineering and so on.
I am sure the Deputy is well aware that we are starting the drainage of two new rivers this year under the arterial drainage scheme, so things are not as bad as the Deputy is portraying.
I am a great believer in arterial drainage. I have seen its results in the western part of County Limerick as a result of the Feale Drainage Scheme initiated by the late Donagh O'Malley. We are very concerned to ensure that funds be made available, particularly, for the drainage of the Mulcaire, so that the machinery can be moved in once the Maigue scheme has been completed. That would appear to be a very logical development. I sincerely hope the Minister will keep a close watch on it.
I want now to speak in a very special way about an aspect of national life which gravely concerns me—social welfare. While I welcome the increases granted to social welfare recipients in this budget they are minimal only, the minimum with which any Government could get away. However, in the light of the continuous increases in foodstuffs they are gestures only, because, as many others have said, we have had budgets week after week over the past four or five months with food subsidies being knocked over the past two years. I am gravely concerned—and I say this in a totally non-party political sense—about the hardship and the amount of poverty existing in our society at present. I am very conscious of this because I represent a largely urban constituency, including the city of Limerick. It is inevitable that in any large urban area, whether it be Dublin, Cork, Waterford or Galway, there will be the poor, underprivileged, unemployed and aged. I want to condemn this Government, this type of society, for having these unfortunate people daily and monthly fighting a losing battle against inflation, many of them existing on the minimum subsistence level, totally dependent on their pensions, finding basic food commodities going up in price continuously. Also I want publicly to deplore the additional hardship imposed on those unfortunate people in the past 12 months by the prolonged postal strike that left many of them for months without their social welfare payments or pensions as the case may be.
While welcoming the increases to the social welfare categories in this budget it would appear that the whole administration of the Department of Social Welfare is breaking down and unable to cope with the situation. In my constituency office in Limerick I have been listening to the cases of people—and other Deputies have referred to this matter in the course of the debate over the past couple of weeks—unfortunate people who are entitled as of right to their pension or social welfare cheque but which does not arrive on the specified date, thus imposing enormous hardship on them and their families—for instance, on the family of an unemployed man, a sick man, the family of a deserted wife who when Friday comes along is left without any means of buying foodstuffs. Then one has to endeavour to telephone the Department of Social Welfare. I should say that the officials both at local level in Limerick and in Dublin are most courteous and helpful, but they are fighting an impossible battle.
If the Government have any social conscience at all they must take a hard look at the administration of the Department of Social Welfare, which will have to be re-vamped, re-organised and, most important of all, decentralised to a greater extent, because the present situation in which applications, appeals and so on are passed from Limerick to Dublin and back can no longer obtain. Greater autonomy will have to be given to the provincial offices of the Department of Social Welfare. I make a special appeal in this respect. I feel very strongly about it because I have seen such hardship, misery and disappointment. It is a situation which would make one's heart bleed. One can readily see the position of a deserted wife in any large urban area at present of being left with no money to buy food for her children because the postal services are not operating efficiently or because her cheque is not sent out from the Department of Social Welfare. In our preoccupation with the economic situation, with the grave energy crisis and so on, I appeal to the Government and the Minister for Finance not to forget our poor, our underprivileged sections of the community, those sections being hit more and more by the impact of inflation and for whom this budget has done a little but nothing like sufficient.
Debate adjourned.
Business suspended at 1.30 p.m. and resumed at 2.30 p.m.