Financial Resolutions, 1980. - Financial Resolution No. 19: General (Resumed).

Debate resumed on the following motion:
That 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 shall resume where I left off before lunch, with the plight of what might be described as the underprivileged sections of our community. While the increases granted them in the budget are to be welcomed they are the minimum that could be offered by any Government in present circumstances. These people have had to endure almost inhuman hardship over the past year-and-a-half because of delays in payment of their benefits caused by the postal and telecommunications strike. Indeed the situation is still unsatisfactory. Obviously there is a very serious administrative problem in the Department of Social Welfare. I am sure every other Deputy in the House has had the same experience as I of constituents coming, week after week, complaining that they did not receive their payments on time. This is a very serious matter for a deserted wife with perhaps four or five children, for the family of an unemployed man, for the old age pensioner and the various other categories of social welfare recipients. The whole administrative system appears to have broken down. I ask the Government and the Minister concerned to do something to streamline these payments so that these people will at least get their entitlements on the due dates. I ask also that serious consideration be given to decentralisation of the Department of Social Welfare, with far greater autonomy being given to provincial social welfare officers.

A lot of commentary on the budget has been in relation to the taxation situation, in particular to the impact of the budget on industry, agriculture, tourism and so on. But we cannot forget that we have in our society a large section of people totally dependent on welfare of various kinds. I have just given an example of the manner in which this underprivileged section has been suffering because of the failure of the Department to adopt more efficient methods for examining claims and paying out benefits.

I am very concerned also about the problem of housing, particularly in large urban areas. I have represented a constituency for 19 years which includes our third largest city, Limerick, where we have 980 applicants for local authority housing. Yet in 1979 there were 34 houses built. One must remember the plight of these unfortunate people, young married couples in particular. It is quite a common occurrence that the husband may be living with his family, the wife with hers and the children perhaps somewhere else. There are young families in grossly overcrowded conditions. In one area of which I am aware, where there are almost 1,000 people on the local authority housing list, 34 houses were built last year. Obviously there is something radically wrong there. No matter what might be the arguments in favour of cutting public expenditure I would oppose vigorously any suggestion that there be a cut-back in expenditure on local authority housing.

There has been a lot of talk also about the impact of this budget on various sections of our economy. In my opinion the sector that will suffer most severely is that of tourism, particularly bearing in mind the savage increase in the price of petrol and ancillary commodities. The tourist industry took an enormous hammering in 1979 because the postal and telecommunications dispute had disastrous implications, when many of our principal tourist areas had neither postal nor telephone services for a considerable period. In addition there was the petrol crisis in May of last year, all of which had a very damaging effect on the many people whose livelihood is derived from tourism. I am thinking particularly of the traditional tourist centres, places such as Kilkee, Ballybunion, right around the coast from Tramore up to the northwest.

It was reasonable to expect some relief to be given in this budget to this hard-pressed industry. More recently there has been the savage increase in the price of petrol. There is now no doubt whatsoever that the cost-competitiveness of Irish tourism is very much on the wrong side of the coin, that we are pricing ourselves out of existence. Over the past 20 years the traditional pattern has been built up of mobile tourism here. This latest savage increase in the price of petrol will be absolutely detrimental to the tourist contemplating a motoring holiday. Obviously also it will have a very substantial effect on the car hire business, or self-drive business, something which gave tremendous employment and has been a source of considerable foreign earnings. The cost of hiring a car here has now gone beyond all reason.

Therefore I appeal to the Minister for Finance to take a very serious look at the impact of his budgetary measures, particularly that of the increased price of petrol, on our tourist industry. We have established a very successful tourist industry, built up over the past 20 years or more, with a national tourist board respected widely throughout the world as having pioneered many developments. We have also the many regional tourist organisations that have done a tremendous job. One only has to think of the Shannon Free Airport Development Company, probably the most imaginative tourist promotion body of them all. Our tourist industry has yielded a substantial amount of foreign earnings; it has been our greatest invisible export. I am gravely concerned—I say this in all honesty—not merely about the impact of these budgetary measures on the tourist industry but about its future. Other problems arise from accelerating fuel and access transport costs particularly as they affect aviation costs and air fares to this country, all of which have an impact on tourism. Indeed the craziest situation of all obtains in relation to access transport. Last week I bought an air ticket from Shannon to Strasbourg for £255 while a friend of mine who travelled to New York and back found his return fare to be cheaper. Access transport constitutes a vital element of tourism. I am not blaming the Government for the rise in the cost of aviation fuel but I am fearful of the future of our tourist industry.

There is need for a new approach, new thinking, new policies and a new strategy. The impact of the petrol price increases will have very adverse effects on an important aspect of our tourist industry, the mobile tourists who use self-drive cars and those who come from Britain and Europe by car ferries. The attractions for them are now much fewer than they were. That is why I say we need to look at this whole question very carefully. We need to consider the cost of access tourist transport, to see how we can utilise our national airline and shipping companies so that our tourist agencies can provide a competitive and therefore more attractive service.

Agriculture has been discussed throughly during the debate so far. It cannot be stressed too often that agriculture is the foundation of our economy. One of the tragedies of our economic history has been our failure to recognise its full potential. There has been controversy and "aggro" in recent years on the question of farming taxation. Most farmers do not object to paying a fair share of the national tax burden but it must be a fundamental principle that tax will always be based on ability to pay.

Farmers should be taxed on their profits, but the Government have introduced an entirely new concept. Last year they introduced the 2 per cent levy which could not possibly be defended on any criterion. Now the base has been broadened, the thresholds for liability have been brought down and a new dimension has been added to farmer tax, the resource tax introduced in this budget, This is indefensible by any criterion of fairness or equity. Whether a farmer can afford to pay or not, whether he makes a profit or a loss, this is another form of levy which will be a disincentive to investment. There has been a good deal of opposition to this tax not because many more farmers will come into the tax net; farmers recognise their obligation but they object to any system of taxation which is not based on ability to pay or on earnings or profits. Such a tax is bad. I completely reject this concept of a resource tax for much the same reasons as I opposed the 2 per cent levy last year.

I had an opportunity over the weekend to read the budget speech of the Minister for Agriculture. He dealt with many aspects and problems facing Irish agriculture. It must be remembered that 1979 was a very difficult year for our farmers. It has been estimated by independent assessors that farming income in 1979 was between 15 per cent and 20 per cent lower than the previous year. This is a serious situation and on top of it farmers now have to face an inflation rate 20 per cent worse than last year. Side by side with that comes the resource tax and as well there is the very serious situation referred to by the Minister, Deputy MacSharry, known as the Gundelach agricultural package which will come before the European Parliament shortly. That is causing particular concern here.

The Minister referred to this super levy idea and he will have the full support of our people, of all political parties in the Oireachtas and of those of us fortunate enough to be members of the European Parliament. The introduction of this super levy would be a disaster for Irish agriculture, having very serious adverse effects on employment and production in agriculture but particularly on exports. In the treaty of our EEC accession this country was recognised as comparatively under-developed, as a special region. Our milk production is only half that of Holland. I am glad that the Minister for Agriculture referred to this very unfair plan as far as Irish farmers are concerned and if it becomes necessary—it would be an extreme step—I would be behind the Minister in exercising his veto if it should come to that.

There is still fantastic scope for Irish agriculture. There is need for encouragement to increase production, to go ahead with further land reclamation, arterial drainage and other proposals, particularly the development of industries which we call added value—new production in the field of agriculture. Because of the difficult situation of some industries there is a great danger of unemployment increasing again. The Government should pay much more attention to the possibilities offered by the food processing industry and to the potential of Irish agriculture.

There are other aspects of the budget to which one might refer, particularly the matter of industrial policy. I recognise that there has been a substantial additional subvention to the IDA, SFADCo and Gaeltarra Éireann, but some of our traditional industries are in a serious situation, particularly the textile industry. A number of frightening developments have come to light in recent weeks, such as the troubles faced by the Seafield Gentex Group. Clover Meats, one of the oldest industries in Munster, are faced with the possibility of closure. There is a serious international situation in regard to the textile industry and all of us involved in EEC affairs must watch the situation carefully, though members of parliament have the least power and the least say of all.

I now refer to the increase in VAT at the upper level. Strong representations have been made to me that the carpet industry in particular could be adversely affected. I note that Deputy Fitzsimons expressed concern about the same industry and also mentioned the problems of the furniture industry. I am drawing the attention of the Minister for Fínance to the very strong representations made to me by those involved in the carpet industry which has been going through a very difficult period in recent times. The enterprise with which I am most familiar is Youghal Carpets and the increase in VAT gives grounds for concern. I would plead for exemption for the carpet and furniture industries and any other industry for which a valid case can be made.

There are two other points I wish to make in the short time remaining to me.

The Deputy has over ten minutes left.

The presence here of the Minister for Energy, Deputy Colley, brings to mind his important responsibility in an area which is causing grave concern throughout the western world. As a member of the European Parliament, I am a member of the transport committee as well as the regional policy committee and scarcely a day passes without the raising of the question of energy, fuel supplies and the allocation of substantial funds for research into alternative forms of energy. The Minister is probably as much aware of this as I am, but it is important to emphasise the vital dimension of the energy question. We are concerned about inflation, which is the mother of unemployment, and there are seven million unemployed in the EEC. Transcending all these considerations is the fear of a serious world energy shortage.

Some EEC countries are proceeding with the extension of nuclear power and this is a highly controversial subject. I have been examining this subject very carefully during recent months and I have discovered that none of the 15 Irish members of the European Parliament is on the energy committee. However, I hope that will be rectified in the future. We are probably the most vulnerable country in the EEC in this respect. It is a great tragedy that throughout the years we sat back and assumed that oil would flow forever at a low price. This applies not only to us but to the other countries of the western world. We had not allocated money for research into alternative forms of energy and there was a panic rush into nuclear power. In various statements he has made the new Minister appears to have adopted a realistic approach to the nuclear debate. There are imense possibilities in the development of solar technology and the harnessing of wind and tidal energy. I have seen in France the generating of electricity by harnessing the tides. Our Government and the entire EEC must allocate much greater resources in money, personnel and expertise to accelerate research into solar, tidal, wind and biomass types of energy. The occasion might never arise when we will be faced with nuclear energy as a last resort.

I wish the Minister well in his new post. In so far as any of his responsibilities impinge on the EEC or have EEC implications, I assure him of my personal co-operation and my desire to be of help in any way. I am sure the same can be said for my colleagues in the European Parliament.

I am disappointed that this budget contains no indication of any new thinking in relation to economic development and the promotion of social justice in our society. Sooner or later the taxation problem must be tackled in an objective manner. I welcome the idea of setting up a commission to examine the whole question of national taxation. An equitable taxation system is necessary if we are to provide the necessary social services and create a just society. The correct approach is to have an in-depth examination of the whole question of taxation and this can best be done by a commission.

Cuirim fáilte roimh an méid a dúirt an tAire Airgeadais in a ráiteas ar an 27 Feabhra—an tagairt a rinne sé don teanga Ghaeilge agus don chultúr náisiúnta. Cé go bhfuil deacrachtaí móra ag brú isteach orainn, deacrachtaí eacnamaíochta agus deacrachtaí sóisialacha, tá tábhacht ar leith ag baint le forbairt cultúrtha agus baineann an fhorbairt sin leis an teanga ar dtús agus baineann forbairt na teanga le forbairt na Gaeltachta. Bhí an Ghaeltacht faoi mo chúram agus faoi chúram an Aire Ó Colla ar feadh tréimhse agus tá súil agam go leanfaidh an Rialtas seo ar aghaidh chun forbairt na Gaeltachta a chur chun cinn ar gach uile bhealach. Is í an Ghaeltacht tobar agus foinse ár dteanga agus ár gcultúr. Is é an rud is tábhachtaí ó thaobh na Gaeltachta de ná go mbeidh sé mar phriomh aidhm ag an Rialtas nó ag aon rialtas a thiocfaidh sa todhchaí go mbeidh deiseanna fostaíochta agus caighdeán maith maireachtála ag muintir na Gaeltachta. Muna bhfuil na háiseanna sin ar fáil ní fhanfaidh na daoine óga. Gan daoine ní bheidh aon Ghaeltacht ann agus gan Gaeltacht ní mairfidh an teanga beo.

I dtosach báire ba mhaith liom mo buíochas a chur i íul don Teacha O'Donnell as ucht an dea-mhéin a chur sé in iúl dom ins an oifig nua atá agam agus as ucht na tairsceana a rinne sé, a chuid cabhrach féin agus cabhair comhguaillithe san Pharliamint Eorpach i gcás cursaí fuinnimh a bheith dá bplé ansin. Tá mé buíoch dó as ucht na tairsceana sin.

In considering any annual budget it is necessary, if one is to form a balanced judgment, to assess it in the context of what has happened in the past and, in particular, what has happened in the year previous to bringing in the annual budget. I propose, for that reason, to commence what I have to say by looking at some of the features of 1979 because I believe it is necessary to do so if one is to assess the budget for 1980 in any balanced way.

When we look at the position arising in 1979, and speaking in an economic sense, we find that there were a number of satisfactory features and there were also some features which gave cause for concern. I shall start with the good things and mention some of them. First, the fact that the growth in the economy was well maintained is something which was satisfactory. That growth was maintained despite external difficulties and self-inflicted wounds. There were very serious self-inflicted wounds suffered by our economy in 1979. Of course, by self-inflicted I mean internally, something for which we cannot blame anybody abroad or external conditions. I am referring in particular, to the industrial relations scene and, above all, to the postal dispute and the damage which that caused to our economy. I will be referring to certain aspects and results of that later on. In the context of growth it certainly reduced the growth which would otherwise have been available. As a consequence—I do not think we should be under any illusion about this—failure to achieve the growth which was otherwise available meant, among other things, fewer jobs for our people, less revenue for the State and, therefore, greater resort to borrowing in the short term and a consequential resort to higher taxation this year and in subsequent years. The level of growth despite all that was well maintained.

Next, I shall refer to the position of industrial exports, which continued to per form very well. In fact, they rose by almost 25 per cent in value as compared with 1978. Agricultural exports were particularly disappointing. The disappointing performance in that area contributed in no small way to the problem of the balance of payments front, which arose later and to which I shall be referring. We should not in our concern at the poor performance on the agricultural exports front lose sight of the very satisfactory performance on the industrial exports front, a performance which has been consistently good over the years and away above world performance. It is true that this is due to a very great extent to the success that has attended our efforts and the efforts of the IDA, in particular, to attract industry here from abroad which is geared to the export market. This is undoubtedly the main cause of the sparkling performance of industrial exports over the years but that is not to take from the value of the performance. One of the prime purposes of attracting these industries is precisely to get that type of performance.

Another area which could only be termed satisfactory is the area of investment. For the second year in succession investment was very substantial. I regard this particular economic indicator as a very important one and a very heartening one because the substantial level of investment means, among other things, money put into various projects which will in due course produce more jobs for our people. There would be no hope of expansion in employment without investment. In addition, the level of investment reflects a considerable confidence in the future of our economy and not the kind of confidence which all politicians tend to engage in, particularly if we are on this side of the House, but the kind of confidence that is measured by people putting their money into the economy. That is the real test of confidence. It means people invest not just short term but long term confidence in our economy. For those reasons I attach considerable importance to the rate of investment as an economic indicator.

There was another area of satisfaction and that related to interest rates, particularly mortgage interest rates. It is quite true that we started off at a high rate but during the course of 1979 there has been a constant and dramatic increase in interest rates around the world. I may be wrong in what I am about to say, because I am just speaking from recollection and I have not checked it, but in my lifetime I do not recall interest rates around the world rising at anything like the rate they have been rising during the past year. Despite that our interest rates did not increase in line with this worldwide movement and our mortgage interest rates from the building societies stayed steady. That is something that was also a very satisfactory feature of our economy's performance in 1979.

However, the outstanding feature of the performance of our economy last year was of course in the area of employment. The increase in employment and the drop in unemployment continued to be spectacular. This trend was contrary to the trend obtaining in almost every other industrialised country in the world, which proves, if it needs to be proved, that it was not an accident but the result of deliberate Government policy, of it being the priority in economic policy of the Government. Also—it is worth making the point again because so often the point is wrongly made and it is repeated so often that many people believe it—the fact is that, if one examines the performance of the economy, one finds that the major portion of the new employment created was created in the private sector and not the public sector. This was precisely in line with what we had planned and with what we put before the people in our election manifesto. We said we would have to prime the pump and that we would have to make that effort in the first instance in the public sector but that in due course that was aimed to produce a response in the private sector. The fact is that it did produce it and the majority of the jobs created were created in the private sector.

The position is that in the two-and-a-half years approximately which elapsed between the time the Government took office and the end of last year there was a net increase in the numbers at work of about 38,000, having allowed for redundancies, people coming off the land and so on. I do not think we realise just how spectacular this performance was. Between April 1973 and April 1977 the numbers at work fell by about 20,000. During the decade of the sixties, which was the previous most successful period of our economic development, there was no increase in the numbers at work but in the two-and-a-half years I am talking about, from the middle of 1977 to the end of 1979, there was a net increase of about 38,000. I hope that fact will tend to put the achievements of the Government in relation to jobs into true perspective. It has been the Government's priority in the economic field.

The Fianna Fáil election manifesto in 1977 will come to be seen as a document which marked a major change in Irish economic and political history. It represented a new and radical departure because it laid down as a central principle that unemployment would no longer be politically acceptable. The achievement of full employment became the Government's major economic aim and the steady drop in the numbers out of work since we came into office, and which I have just referred to, shows that we were not indulging in idle promises. In clearly defining full employment as our priority and in implementing policies directed to that end, Fianna Fáil since coming into office charted a course that no future Government can reverse. Fianna Fáil had made a commitment to our young people and I believe that this is a commitment which the young people will insist on from any future administration from any side of the House.

I would suggest that Deputies opposite should think well about this matter because their approach to the question of full employment over the past two-and-a-half years has been timid, to say the least. Indeed some people would say, strangely enough, that it is the Leader of the Labour Party who has been most vocal in telling us on these benches that we were too ambitious. We identified unemployment as a chronic social scourge and we resolved to tackle it on an unprecedented scale. We saw it as the most urgent of all social requirements, apart from its economic aspects. I wonder will the parties on the other side of the House try to tell the public that we were wrong to do that. I wonder will they try to tell our young people that. Let us suppose that we had listened to the timid advice we were getting from the other side of the House. Let us suppose we had watered down our policies in this regard. If we had done so the result would have been that many thousands of those who left our schools and colleges in 1978 and last year would now be on the dole. The fact is of course that were it not for the priority we gave to employment since we came into office we would now be facing a major and, I believe, dangerous crisis, not just economically but socially.

I do not believe that the present generation of young people would put up with a situation in which they would have no hope of a job or a future in their own country, and they would be right not to put up with it. The great significance of the Fianna Fáil election manifesto and the performance based on that in regard to employment is that we have established a situation under which no Government from any side of the House in future will be able to disregard the claims of our young people to a job in their own country.

I have been talking about aspects of the performance of the economy last year which gave satisfaction but, as I said, there are other aspects which were a cause of concern, and I should like to refer to some of them. First, our borrowing was too high. It is true that, if one compares our level of borrowing over a number of years with that of all our partners in the EEC for instance, one finds that the level of borrowing in this country as a percentage of GNP is away above that of our partners. Traditionally it has been so as long as I can remember. The reason is that we are starting from a much lower base and are engaged in a process of development in which our partners are not. If we are to develop we have to engage in a level of borrowing which would be unthinkable in an economy which was much more highly developed than ours is or has been in the past. Allowing for all that, our borrowing was still too high last year and exceeded the target I set out in the 1979 budget. It is necessary to have a look at why that target was exceeded. It would be totally unrealistic in any review of our economic performance not to examine why that target was exceeded because it is an important aspect of our economic performance.

The first item that occurs in the reasons why we exceeded our target is one which is unusual in the sense that, I hope is non-recurring. I refer to the loss of revenue arising out of the postal dispute. As I said, I hope this is non-recurring. This year we get in the revenue that was not collected last year and in that sense it is unusual. I am subject to correction on this because the figures have changed on a few occasions, but as accurately as I can make it out the amount of revenue we should have collected in 1979 and which did not come in because of the postal dispute amounts to £88 million, being £44 million in tax revenue and £44 million in non-tax revenue. This is an unusual item in that it did not come in last year but it should come in this year, in addition to the same sum coming in in the ordinary way.

There were other items which do not come into that category—over-spending for one reason or another which we will not recover. The first item relates to public sector pay. It will be recalled that when the 1979 budget was introduced the national understanding had not been negotiated and we were therefore in the position where we had to make some kind of estimate of what would emerge. I do not think it is revealing any secret if I say that we could not disclose publicly whatever estimate we arrived at, because if we spelled it out in advance of the negotiations one could be sure that that would not be the result of the negotiations. Neither am I revealing any secret when I say our estimate in that regard was an under-estimate.

When the national understanding was finally concluded statements were made on behalf of the Government to the effect that we regarded the level of pay settlement agreed as being at the outer limits of what was tolerable and at a limit that would not have been tolerable but for the fact that it was accompanied by other aspects of the agreement which held out hope of, among other things, a greater degree of industrial relations stability. Although I do not think it is accepted generally that it has resulted in that, I understand the statistics available in regard to man hours lost in industrial disputes since the national understanding was entered into bear out the fact that there was a considerable improvement, presumably as a result of the national understanding. In the context in which I am speaking, that is, excess borrowing over what was estimated, the fact is that the cost of the national understanding to public sector pay was considerably more than we were in a position to estimate when the 1979 budget was being prepared.

As the House will recall, there were special PAYE concessions provided for in the national understanding, the bulk of which were paid in late November last year. They, of course, were not provided for in the budget. It is true there were moneys coming in from the EMS subsidies which were not allowed for in the budget. They were kept in hand last year but the items I am mentioning far exceeded the amount of the subsidies coming in in that way.

The deficit in the operation of CIE cost about £21 million more than was estimated. There was over-spending on social welfare, partly due to the postal strike, which amounted to £35 million, and there was over-spending on health which amounted to £16 million. These items are in a different category from the first one because once you are overspent on things like this, the money is gone and can be met at the end of the year only by borrowing.

Something that arises out of the nature of the first item I mentioned, the £88 million in revenue not collected last year because of the postal dispute which should be collected this year, is the current deficit which, as it turned out in 1979, was about £520 million. If you allow for the £88 million coming in twice this year—which is in effect what happens because it comes in this year in respect of last year and this year—it is fair to say that a comparable current deficit between last year and this year would be obtained by deducting £176 million—twice the £88 million—from £520 million, giving a current deficit of about £345 million.

The current deficit budgeted for by the Minister for Finance in this year's budget is £340 million. Some people have said that the deficit is too high having regard to the factor I mentioned, that is, that the figure compared with last year would be approximately £345 million. Anybody looking at the overall situation and the circumstances obtaining this year will recognise that the effort involved in keeping the current deficit to that level is considerable and has involved substantial retrenchment in certain areas on the Estimates. A possible response to the situation which faced the Minister for Finance and the Government in preparing this budget, a response which was urged on us from various quarters, is one that would be disastrous and it has been resisted.

Another item that gave cause for concern is the performance of the economy in 1979 related to the balance of payments, specifically the adverse trade balance from which we suffered. It is not enough just to take the overall figure and ignore the underlying realities. The underlying realities show that broadly speaking there are four categories with which we have to deal. One is the producers' capital goods which have shown the highest rate of growth in imports. That is a good thing as this consists of equipment and plant going into the creation of more jobs and the more efficient production of goods for sale at home and on the export market. This is something to be encouraged, something without which we could not have any hope for the future. The next category is semi-finished goods brought in here for final processing and in most cases for export. A lot of jobs depend on those imports and it is one of the features of our economy that whatever we do we still have to have those substantial imports unless thousands of people are to lose their jobs, and they increased substantially as well. Consumer goods, which also increased substantially, increased at the lowest rate of increase. The underlying features of imports show that the highest increase was in producers' capital goods, next in semi-finished products and then in consumer goods, which is the right proportion if we must have increases in our imports. No matter how important it is that we must have imports of semi-finished goods or producers' capital goods there is of course an absolute limit on how much we can pay for those goods and that is pretty important particularly in relation to the last category, which is oil.

In 1979 we paid about £140 million more for oil imports than we had paid in the previous year. I described this on occasions as a hand coming into the Irish economy and taking away £140 million. We are all £140 million poorer as a result. We cannot make it up by taking it from each other; it has gone out of our economy. The only way we can catch up upon that is by producing more goods more efficiently and selling them abroad.

This whole question of the price of oil is looming very much over our economy and those of the rest of the industrialised world. That is what it did to us last year and it will cause more damage this year. Nobody can say with any degree of certainty what the damage will be, but we can be sure that it will cost a great deal more money and possibly the increase in the price of oil this year will be greater than it was last year. We have to accept the fact that, bad and all as the increase in oil price is, there is also no certainty of supply, which is another factor that has to be considered. This has operated very much to the detriment of our balance of payments situation and it has also affected our other EEC partners, with the exception of Britain which has its own oil, and all of them have gone into deficit as a result. It is nice to know that we have companions in distress but it does not get us over our difficulty and we have to do what we can to remedy it.

However, we should not go overboard in this regard. We can take steps in regard to energy. The whole field of energy is one of major debate around the world, and one important aspect of the debate is the element of energy conservation whereby people can save energy and money at the same time by being aware of what energy they are using and making conscious efforts to use energy efficiently. The Government are acutely aware of this and increased importance is being given to conservation in the overall energy scene. An aggressive energy policy is being developed and many important elements of such a policy already exist, such as the comprehensive programme in the industrial sector being carried out by the IIRS, the energy savings tips for motorists which have been the subject of publicity campaigns, the availability of advice on insulation in the home, a project using reject heat from an electricity generating station for horticultural purposes and the sponsorship by the Department of Energy of a schools competition for energy conservation being organised by the Junior Chamber of Ireland. Further conservation measures are being evolved and decisions will be made in the near future. Relating conservation to economic development in most western democracies, we find that a policy of energy conservation is an essential part of policies for long term economic growth. Ireland is no exception and this is one of the main reasons why conservation is being given such a high priority by the Government. I referred earlier to the effect that certain advice was coming from certain quarters which if it had been accepted would have been disastrous. I am referring to the aspects of the economy which gave cause for concern. I have mentioned most of them. Perhaps the one I have not mentioned which is of great importance is inflation. The rising rate of inflation was, of course a cause of concern. There was the combination of the current deficit being substantially in excess of target set for the reasons that I have mentioned with, and as a consequence, the borrowing requirement as a percentage of GNP being substantially in excess of the target set—although substantially less than it was some years ago—and the increased rate of inflation. If one viewed all of these together solely as the aspect of the economy with which one had to be concerned; if one ignored the aspects of the performance of the economy to which I have referred earlier which were a cause of satisfaction and concentrated on the items which were unsatisfactory, one could arrive at the situation in which one would say that we had to take drastic action to deal with this.

Having regard to our membership of the EMS, the fact that we have an independent currency and the necessity to maintain the value of our currency, when one considers all these things there is a great temptation, particularly for the orthodox, conservative, outdated approach to take over and to say that these are the things to concentrate on and to remedy, no matter what the consequences. People tend to forget that we have had experience in the past of that approach being adopted because of concern about the level of our reserves or the excess of imbalance in our trade deficit. We have had experience of these kinds of what I can only call panic actions being taken and, all right, they have had the effect in due course of bringing down the excessive deficit in our balance of payments. They have also had the effect of throwing thousands and thousands of people out of work and many more thousands on to the emigrant boat. They have shown at the end of a year or two a better figure for balance of payments and a better figure in terms of the measurements applied by the Central Bank to some aspects of the economy, but they have shown a tremendous drop in growth in the economy together with a tremendous drop in employment and increase in unemployment and emigration. This is what the record shows.

There was a grave danger that the Government might be stampeded into that approach in preparing this budget because the manner of viewing the performance of the economy in 1979 was unbalanced in the sense that I have mentioned, with the good aspects of its performance being ignored and the bad aspects of its performance being exaggerated. The realities underlying those bad aspects were ignored or overlooked. I am referring particularly to the burden of the excess in the current deficit, how that occurred, the one-off nature of it and how it is being remedied this year. With no special effort by the Government, that is being remedied. I am referring also to the nature of the balance of payments, particularly the balance of trade and the nature of the burden there. I do not want to be misunderstood in what I say.

I want to make it quite clear that I believe that the economic indicators to which I have referred as giving cause for concern were doing so and it was not open to the Government blindly to ignore these indicators. I hope I would be the last person to urge such a course. It is essential that the Government take note of these indicators, but it is even more important that in taking notice of these indicators the Government should not panic and that the measures being taken should be designed to remedy these difficulties, taking account of the surrounding circumstances, external and internal, and assuring that we do not sacrifice any of our people's jobs on the altar of financial orthodoxy.

I do not wish to be offensive to anybody, but I have noticed that those who are most vocal in their condemnation of the excessive borrowing—and it was excessive—and of the excessive balance of payments deficit—and it was excessive—and in their urging what I regard as unthinking measures to remedy this, tend to be people who are well off and in very secure jobs. They do not tend to be the kind of people who personally are going to be affected by these measures. If you are one of those people who is or would be affected personally by these measures, then you have a more than academic interest in it and you want a Government who will tackle the problems that will arise but who will tackle them not in a blind way which produces a result on a balance sheet while thousands of people are out of work. That is the old-fashioned way. That is why I was talking about the out-dated approach to this problem. "A conservative, orthodox, out-dated approach" is what I said. That is the approach that we had in the fifties and we know what it did. We do not want to repeat those mistakes.

I wish to refer, in this regard, to another piece of propaganda myth repeated so often that many people now believe it, which is that we, in our election manifesto, went out to buy votes and now find that we cannot pay for them. That is the way, in shorthand, that it is put. Of course, the reality is, if one looks at the performance of our economy last year, and even at the areas where it fell down, or fell short of the performance we should have liked—and I have been referring to some of them— and analyse the causes, it will be found that the cause of our difficulty does not relate to the Government promising so much that it could not pay for it. In fact, broadly speaking, the main causes of our problems last year were the increase in the price of oil and the damage we inflicted on ourselves by our inability to settle industrial disputes.

Neither of these causes can be attributed to promises made and the Government being unable to pay for them. That is a myth and, apart from my understandable objection to that myth from a purely political and, also, a personal point of view, it is very bad for the future of politics and economics in this country if we are to reach a stage where we are going to be told no Government ever again can put before the people an economic programme with targets and say to the people "If we work together and if we exercise discipline, we can achieve certain targets but, of course, there are things that we cannot control, and if things externally, like the price of oil, go haywire, then we cannot achieve those targets. If we go mad in the form of strikes and go-slows and what have you, then we cannot achieve those targets." Are we to be told now that no Government can ever again put that kind of programme before the people? Are we to take it that that kind of programme, which for the first time asked the people, by treating them as intelligent adults, to exercise their judgment, cannot be put forward in future because this myth is being spread around that to do so means that you are just fooling the people and that, in fact, you are making promises which you cannot keep and cannot pay for? Whatever else may be said, by way of criticism of the Fianna Fáil election manifesto, that argument should not be made because it is not true.

I want to refer briefly to the provisions in this year's budget relating to social welfare, not to go into them in detail because that has been done by quite a number of speakers, but to point out, once more, the fact—and it is a fact—that although speakers on behalf of the Coalition parties regularly tried to put forward the idea that, whatever their other faults, they always had a greater degree of concern for the weaker sections of the community than we have had, that kind of statement is unfounded, if you look at the facts. Each budget introduced by this Government since the election, including the budget we are now discussing, bears out the fact that, in real terms, the people who are dependent on social welfare are better treated and better off under this Government than they ever have been under any Coalition Government.

Furthermore, I want to refer to the income tax provisions in the budget which take so many people out of the tax net that it should be a very considerable ease to those people and, indeed, let us be honest, to the Revenue Commissioners as well. Also, for every married couple, whether the wife is earning or not, the effect of this budget must be very substantially to increase the take-home pay. Again, that has been gone into in detail and I do not want to go into any more detail, but I do want to say that, some time ago, I pointed out that I believed that income splitting was the only practical way of dealing with the problem of giving equity to the married couple under the income tax system when we were trying to deal with a situation where, in some cases, both were earning and in other cases only one was earning.

I want to repeat, for the record, that income splitting is not the ideal answer. There is no ideal answer. There are snags about income splitting, but of all the possible solutions, that is the one with the fewest snags. It was part of the Fianna Fáil policy and was held out as such and, indeed, you find it referred to in the national understanding specifically as part of the Government undertaking that it would work towards income splitting. Income splitting has been introduced fully in this budget. We have gone only part of the way up to this. I want to point out to some people who either did not understand or did not want to understand that, when the Supreme Court made its decision in the Murphy case, a lot of people then understood, for the first time, what the consequences would be if that decision were to be implemented and that if we did not have the provisions announced in this budget there would be clear and gross discrimination in such circumstances against the great majority of married couples where there is only one partner earning. I tried to point this out on a number of occasions. Perhaps some people did not like the phrase I used in pointing it out, but a lot did not understand it. I hope they understand it now and know that the Government has taken steps to ensure that no such discrimination will arise in future.

My final point refers to the increase in oil prices. There have been substantial increases in taxes on tobacco and alcohol announced in this budget and these increases on tobacco, alcohol and, also, oil all affect the consumer price index. If people in this country think they can make a wage claim which will, for instance, transfer, to them compensation for the increase in the price of oil, all they can succeed in doing is taking it out of the pockets of other members of the Irish public. They are not taking it from the Arabs or from the people who are producing the oil, similarly in regard to tobacco and alcohol. There is general agreement that the load of direct taxation is too high and there were great cries for the Government to reduce the level of direct taxation. How is any Government to do so if they cannot increase indirect taxation on luxuries without having those increases claimed for and multiplied enormously in every wage claim that is made subsequently?

I am trying to indicate that it is vitally important, in future wage claims following the expiration of the national understanding, that it be recognised that if compensation is claimed for this kind of increase, then we will simply be setting off a spiral of inflation, with prices following wages and wages following prices and that we will all end up poorer. Whereas if people are prepared to be realistic about this and recognise that this kind of increase, particularly in luxuries, should not be compensated for in wage claims then those who need assistance will get it under this budget and those who do not can choose whether or not they wish to pay the increased tax. If they do not agree to that and say it must be compensated for in their wage packet we are all in for a very rough ride.

Probably the most significant statement in the Tánaiste's lengthy contribution to the debate has been his own sentence "Work together and exercise discipline to achieve targets". I hope he and the considerable following he has within Fianna Fáil bear that in mind over the next 18 months. I should like to wish him well in his onerous ministry which will become increasingly important in times to come.

In his contribution to the budget the Taoiseach stated at column 1321 of the Official Report of 5 March 1980:

We have set a clear course for the economic ship. We have prudently trimmed her sails. We intend to keep her head into the wind and sail safely and steadily through these troubled seas, until calmer and better times arrive.

That is the kind of speech one makes in the throes of an election to set the electorate at one another's throats, to stir up emotions with one's own party and to leave one in no doubt but that one is capable of producing the goods when necessary.

I have no doubt that the economic ship is on course but I am not sure of its destination. The Taoiseach would do well to remember the seanfhocal, is minic a báthadh long lámh le cuan—many a ship foundered close to shore. Probably what he did not write into his speech was that somewhere in the depths of his ship he was shouting to his first mate: "are you right there, Michael, are you right?" or could it have been "Michael, row the boat ashore"? Who else is on the economic ship? How many more members of the Government who have brought the country to its present position are on board? I have no doubt that the man to whom I unquestionably offer my oscar for 1979, the Minister for Foreign Affairs, who produced some eyebrow-raising performances during the last 12 months, is on board that ship. If that is the case, coupled with the other incumbents in the different Departments, it leaves the destination of our economic ship in grave doubt.

Much of the budget debate probably took place in Barretstown Castle and the question posed to the Cabinet was probably quite simply: what do we have to do to alleviate the pressure from the PAYE sector? Having set about drafting the budget in that context the Taoiseach probably followed with a definite question: who must pay for the concessions to these people?

To say something about the budget that has not already been said requires very close scrutiny of it. I do not propose to go into detail in relation to the different benefits and concessions offered. When the adjustments have been taken into account the budget does nothing to put right our severe financial difficulties. Rather it leaves it quite plain that in times of fiscal stringency there is a definite go-ahead from the top to cut back in as many services as possible, We might do well to ask ourselves how we arrive in a situation where the volume of public expenditure exceeds our willingness to pay for it. The NESC report gives as its first answer to that:

Whether in opposition or in Government the business of politics is to sell policies for votes. In normal conditions policies which confer benefits on voters as a whole or on significant groups tend to succeed in attracting votes. Such policies inevitably involve increases in public expenditure.

There is no need to go into great detail on that and its relevance for the past two and a half years since the Government took office.

The selling of policies and buying of votes is aided by the necessary expansion within the different Departments. Ministers or aspiring Ministers who wish to hold their positions must see that the Department they rule expands in order to attract public opinion. Competition within different Departments to attract money to implement further policies also aids this. When one considers that we have 13 spending Ministers with just one tax-collecting Minister it is put clearly in perspective. A very significant factor is that there has not been, in my memory, enough public discussion about the effectiveness of public expenditure. Perhaps this is something that could be borne in mind. It is relevant to the document produced for reform of this House by our party.

The national debt in 1977 was £4,229 million; in 1978 £5,236 million and the estimated figure this year is £6,500 million. That leaves one in no doubt that the money in the country does not belong to us and the interest on it will have to be paid for by every man, woman and child over the next half century. All that would lead one to believe that there is need for economic planning and development. When that Department was set up it was welcomed by this party but the person who occupied that office probably did not descend to the level of the people often enough and has since become the scapegoat of the party for the figures and documents he produced with extreme regularity. He was very perceptive in one aspect of his employment schemes when he said that if it was necessary to dig holes in the roads of Ireland to create employment that would be done. That has happened without their being dug and it does not seem as if collective responsibility is there to fill them in.

Revenue from income tax will still be up by one-third even after all the concessions have been implemented and the change in farmer taxation has taken place. The Minister for Finance should give a clear explanation as to how this situation has come about. The tax burden on the agricultural sector is rising rapidly. Their real income is falling at a rate which the PAYE sector will never experience. There has not been any great encouragement given to young people to save for their futures, to go it alone, as it were, rather than waiting to be placed on a local authority housing list. It is a sobering thought to realise that the SDA loan limit, at present amounting to £12,000, entails repayments £30 per week over a 30 year period for a young couple, along with ever increasing prices, rising inflation and other items to be accounted for out of their salaries. All of those combined create a difficult situation for them. It might very well happen that we would have a supplementary budget before the end of this year, with indirect taxation penalising the less well off sections of our community, with, more than likely, increased demands for higher wages, plus increased demands for further price increases adding further to the spirial of inflation and creating even more difficulties on the economic scene. At this point in time the PAYE sector may be somewhat relieved. But I wonder what will be their feelings when the next budget is introduced, when the effect of a 20 per cent inflation has eaten into the tax concessions now granted. I think it was Goldsmith who said that the laws grind the poor and rich men rule the law. I wonder does that philosophy still hold.

The social welfare increases granted in the budget have been dealt with in detail by numerous speakers. It would be foolhardy of any politician not to welcome social welfare increases whatever their level. However, a report published—I think about ten years ago—by the European Commission entitled The Perception of poverty in the Member States of the EEC came to the conclusion that there was high evidence of poverty in this country but that the rate of personal satisfaction and confidence in society was relatively high among our people. I often wonder if there is any real conception within the Cabinet of what is exactly the level of poverty here. Is there any conception of how people living alone may be suffering various degrees of illness along with extreme loneliness, people who must manage and look after themselves in often-times unhealthy and unhygienic conditions while the price of the basic essentials of life rise constantly? The effectiveness of local authorities in catering for the housing of such people will be limited further by the cost increases in almost every aspect of the building trade, which in turn will drive more young people to seeking housing allocations from local authorities.

The Taoiseach has said on several occasions that people in this country were living beyond their means. That may well be because price increases right across the board, indirect taxation and so on, hit the less well off sections of our community, they being the people who must spend a greater proportion of their incomes on the basic essentials of life. But if we do live beyond our means why go to the unecessary expense of providing more State cars, along with additional secretaries, when we have not even got sufficient accommodation in this House for the Deputies at present occupying it? Indeed this situation will be worsened after the next general election bearing in mind the findings of the commission who have reported on the increased population and the necessity for more Deputies to occupy this House. When it is borne in mind that the price of the executive jet, at approximately £2,250,000, would tar a distance of some 400 miles of road in a rural constituency, it is difficult for rural people to accept the sense of that kind of unnecessary expenditure particularly when they have not even decent access to their towns or villages. A question being asked increasingly of Government representatives in rural constituencies is: why, if as the Taoiseach says we are living beyond our means, should he force an unnecessary expense on people for something they never wanted?

The abolition of reconstruction grants also hits rural areas. One must remember that 50,000 applications, between reconstruction and home conversion heating grants, arrived on the Minister's desk a fortnight after his announcement that these would be withdrawn. On the assumption that each of those grants would be worth £600, that adds up to £30 million. Some of the applicants may have had the appropriate work completed already and may not receive the grant allocated to them for possibly several years.

There is also the withdrawal of lime subsidies which has had an effect already on agriculture, particularly in western areas. Many small limestone quarries doing a decent job are now in danger of having to close down. There are tens of thousands of tons of ground limestone awaiting purchase by farmers, farmers who do not seem likely to do so, who are probably unable to do so because of the effect of the withdrawal of the subsidy in addition to having to pay the full transport costs beyond a certain distance.

The announcement by the Taoiseach that the resource tax is purely a temporary measure seems to indicate that he realises that the farming vote still holds quite a punch even though he probably accepts more than anybody else that it is very difficult to change that vote from its traditional acceptance.

On 28 January last CIE increased their fares by approximately 20 per cent. An ordinary loaf of bread went up by 5p, milk to 13p. The ESB increased their costs by 20 per cent, following on an increase of 10 per cent last October and an increase of 20 per cent in June last. The cost increase on a ton of coal was over £2. On 18 February last petrol went up by 10p a gallon, heating oil by 9p a gallon. These increases do not in any way correspond to the stated forecast in the Fianna Fáil plan for national reconstruction published in 1977, with which everybody is familiar and which stated that in 1977 prices would decrease by 1 per cent, by 2 per cent in 1978, by a further 2 per cent in 1979, and the wonder of it all was that 1980 was left blank. It appears to me that our people have now become price drunk, so much so that if the Taoiseach or Minister for Finance decided to increas the price of the basic essentials of life to an even more alarming degree tomorrow it would still be accepted, because people have not realised that we are heading for economic crucifixion.

On 20 February last cuts were announced in education, health, agriculture and in public spending. I find it very difficult to accept what the Taoiseach has been saying about the bright young, well-educated, intelligent population we have. He must remember that they also are members of the electorate who will determine the political future of a Taoiseach who has announced cuts in education spending.

To my mind, there is an imbalance in the allocation of money to primary as against third-level education. If there is a fault in the system at its base it continues right to the top, and the effect of it is often seen in the vastly increased numbers of graduates who leave our third-level institutions with no hope of suitable employment, whereas if proper training and career guidance had been given to them at a lower level they would have a much greater idea of what they want to do before they go into a higher education institution in the first place.

Reference to VAT reminds me that this tax on sports goods, exclusive of clothing, has been increased by 5 per cent. This is hypocrisy on the part of a Government who rightly advocate the use of leisure time through healthy activities but who now increase the cost of sports goods by increasing VAT on them by 5 per cent. It means that many voluntary organisations, sporting organisations and individuals who participate in healthy exercise will have to pay increased costs for the basic essentials of the sports they engage in.

This VAT increase also affects bicycles to whose use we may all have to return shortly. There has been a definite increase in the numbers using bicycles both for exercise and for travel in urban areas in recent years. I suggest that the Minister for Finance should have excluded sporting goods from the list of commodities attracting this increase in VAT. They are no longer luxuries. The Minister himself has said that the proper use of leisure time is to be encouraged.

In a report in Management Magazine for February it was stated that the effect of the micro-chip on white collar employment will be devastating. It was stated that increased production in some offices where the most modern electronic equipment has been installed will be about 400 per cent. This does not augur well for an increase in employment for white collar workers. It means that more people will have more leisure time in which to follow healthy pursuits but they will find themselves taxed to a greater degree than heretofore.

The Minister's announcement that he will spend £100,000 on the promotion of hurling is welcome to me as a person interested in the sport. Since he made that announcement I asked whether that is the value he places on the all-Ireland medals held by the former Taoiseach, Deputy Lynch. If that is so I did not know that the price of gold had risen so high. I tabled a Parliamentary Question concerning the expenditure of that £100,000 but the Ceann Comhairle ruled out the question. I hope the Minister will clear the matter up and tell me what expansion he proposes for that scheme in the next few years, assuming he still occupies that office.

The question referred to was ruled out at the time but the Deputy may now probe for the information he wants.

I understand that. I should now like to turn to a number of matters affecting the west of Ireland, in particular County Mayo. Western farmers face crisis this year. The cutback by the European Parliament in the agricultural budget does not augur well for the immediate expansion of agriculture in the west. Early implementation of improved expansion proposals in agriculture cannot occur without increased financial allocations. This should be given a priority rating because western farmers have had a nail driven into their coffin by the effects of this budget. In recent years increased labour and transport costs and rising inflation have meant that many small western farmers are facing bankruptcy. Many of them may have borrowed to the level of their potential and they now find themselves unable to move forward or backward because of the certainty that interest rates on their borrowings will be increased daily.

If we are to increase agricultural potential in that part of the country it seems ludicrous that the ratio of agricultural instructors to farmers in County Mayo is 484 to 1, which means that one agricultural instructor can spend less than a half day with each of the farmers who need him. With all the paper work these people have to go through it is virtually impossible for them to carry on the work they can do, have been trained to do and are paid to do to the degree that is necessary.

Recently in the House the Minister of State at the Department of Agriculture told me that this is now the responsibility of An Chomhairle Oiliúna Talmhaíochta. I hope he will make the necessary drive, in conjunction with An-COT, to see that the ratio of farmers to agricultural instructors will be decreased and not made any worse than at present. It seems to be a waste of time and valuable money for professional people to have to spend so much time doing clerical work when the work they have been trained to do remains undone.

The Minister for the Environment bears a heavy responsibility. The limiting of local authorities to an increase of 10 per cent on what they raised last year on the rates is scandalous. There is no way in which a western county with the valuations they have can hope to achieve their stated aims in regard to progress with a 10 per cent increase in rates. It is simply not possible and many of the county managers in statements when presenting their books of estimates have indicated this quite clearly. It is obvious that many local authorities will not be able to retain their existing work forces throughout this year, taking into account that some of these estimates have not made provision for the continuation of the national understanding. The rates in County Mayo will not be allowed to exceed £17.4603 in the £. The net valuation increase is £9,684 and that, plus the 10 per cent ceiling, gives an increase of £795,750 leviable expenditure.

This is the only area in which there is flexibility within the Estimates. In a county such as mine this means that the county council are faced with the prospect of possibly having to let go many of their work force and emergency situations which arise in every local authority area are unlikely to be dealt with. The provision of the rates plus 10 per cent does not take into account the continuation of the national understanding. The cut-backs in such essential services as domestic scavenging collections, the carrying out of housing repairs, the provision of adequate fire services and remedying the appalling conditions of the roads leads one to believe that the needs of the west are being put off.

I expect that the Minister for the Environment should by now have received a request for a meeting from Mayo County Council so that they may explain to him the hopeless situation facing the county engineer in relation to the implementation of very necessary works.

Would the Mayo County Manager have struck a rate higher than 10 per cent and would the council have backed him?

Mayo County Council have requested a meeting with the Minister for the Environment to explain to him the hopeless situation facing the county manager and the county engineer.

I would not agree with that.

The county manager, who produced the book of estimates, has laid it on the line that there is definite doubt about the retention of the present work force.

Would Mayo County Council have struck a rate higher than 10 per cent?

The Deputy should be allowed to continue without interruption.

Mayo County Council have not yet struck a complete rate.

Would they strike a rate providing for an increase in excess of 10 per cent?

They may decide on that. However, we are limited to 10 per cent and we usually obey the regulations. The road structure in many western counties will simply collapse unless emergency funds are granted. Essential work will be drastically hit and seriously curtailed by the effect of the budget and I refer to water and sewerage schemes and environmental works, such as the removal of dangerous buildings and the provision of community centres.

The seventies was a period of exceptional expansion but the spectre of unemployment which has haunted Europe for some years has begun to raise its head again and I hope it can be kept down. The 10 per cent ceiling placed by the Minister for the Environment does not give rural counties the necessary buoyancy to generate sufficient income to carry out necessary works.

I remind the Minister for Energy that his Department proposed to set up an experimental biomass station in the Erris region and the rate of planting essential for the setting up of such a station would not be in keeping with the needs of the proposed station. Six hundred acres of planting would be the equivalent of only 125 acres of milled peat and with a five-or seven-year period of rotation much more intensive planting would be needed immediately if the experimental station, which we would all welcome, is to go ahead.

The report on the place of the arts in Irish education recommends the setting up in the west of Ireland of a school of music, either as part of the university or as a separate entity, so that students with a practical leaning towards music could follow the subject to its conclusion. This could be done through the co-operation of the vocational education committees and the regional colleges or the university. The Taoiseach should have an interest in this matter, being a person who has expressly stated his interest in culture and the arts. I would add that there does not appear to be anybody on the Arts Council who comes from the west. If this long-term aim of setting up a school of music is ever to have government assistance, it must be followed up.

The case has been made for a third-level college of education for County Mayo. Figures have been compiled which are in the possession of the Department. A further case will be made in the near future regarding the provision of this facility for Mayo.

The effect of the ending of the employment maintenance scheme has been most serious in Westport where the board of Seafield Gentex decided to close the textile factory which had for many years operated there on a profitable basis. This, to my untrained eye, would appear to be asset stripping and unless the board come up with some logical economic reasons for deciding to close the factory I could not accept their explanation. The fact that 208 male jobs are now on the line means that 50 per cent of the total male work force of Westport and the surrounding area now face unemployment. The Minister for Industry, Commerce and Tourism has met several deputations in relation to this problem and he has made announcements about increased employment in the Westport area through the good offices of the IDA and their promotional activities. However, this will not relieve the situation to the necessary extent and this extra employment would have been coming to Westport anyway.

The Seafield Gentex factory is about to close, even though approximately 38 per cent of their output is for the public service sector. Industrial relations within the factory have been good throughout the years and the machinery is of the most modern type. The Minister for Industry, Commerce and Tourism should see to it that the IDA move in and purchase the building, saving at least that proportion of the output which is for the public service sector.

In relation to the IDA and the new Údarás na Gaeltachta, which took over the functions of Gaeltarra Eireann, those people have done a great job over the years in attracting industry to rural Ireland. The commitment and ability of the IDA and of Gaeltarra Eireann, which is now Údarás na Gaeltachta is not matched by the allocation of the Minister for the Environment and the allocations of other Departments to rural constituencies. It is very difficult to attract an international employer to an area which has a labour force but which may not have sufficient water, decent access roads which may have very limited telephone and telex communications, and which may or may not be served by public transport. It is very difficult to say to an international employer: "If you come to this part of the country we guarantee you a good, hard working labour force and we will provide you with all the necessary facilities". Many of the smaller factories in the West of Ireland have great difficulty in keeping lines open to their international bodies because of the telephone and telex communications they have at present. I am sure the Minister of State responsible for those matters has had many instances of this in his constituency and that he will give a priority rating to this.

In relation to the attitude of the Department of Education towards to VECs and the regulations which the Department introduced about the number of teachers which the VECs can employ, there is no conception whatsoever of the physical extent of many of the counties that some VECs cover. According to Department regulations each VEC committee are entitled to employ a specific number of permanent full-time teachers in relation to the number of pupils attending schools within the VEC area. It is ludicrous to suggest that if a teacher has some spare time in a school he or she should be asked to teach in another VEC school which may well be 80 and possibly 100 miles away from it. The Department of Education should not see a VEC area as a single unit and not introduce regulations which deter teachers from teaching in some schools and make it almost impossible for them to do so in others.

When the Minister for Energy spoke in relation to his energy programme he mentioned on several occasions the spectacular progress that has been made by his party since taking office in 1977. We have all placed our hopes in the Porcupine Bank. We all hope, no matter what political affiliations we have, that there is oil there which may come to our economic rescue. The Minister for Energy should ensure through one of the Departments here or through connections he might have in Brussels in relation to infrastructural development, that our bogs are open to the people who have the ability to use them. We could obtain from our bogs a very real source of energy which would mean a real cut back on the amount of heating oil bought and consumed at the moment. There does not appear to be any realisation of the actual extent of our boglands. There was a song which spoke about "Francis Farrelly from the bogs below Belmullet in the County of Mayo". Much of that pensinsula and other large areas in that county are composed of either deep or relatively shallow bog which could be opened up if proper infrastructural facilities were given to people from surrounding areas. Something should be done about this in co-operation with the Land Commission, the Department of Agriculture and the Department of the Environment. This will become more essential as time goes on.

The Minister for the Environment does not seem to realise that areas directly outside Gaeltacht areas which have not had sufficient finance because of Gaeltacht policies over the years are simply neglected from the infrastructural point of view. There appears to be a great number of applicants for electricity supply in County Mayo. I have raised this with the Department of Energy on several occasions and they have been very good in giving me lengthy replies. It appears that the county is taken in two halves and the waiting period has now gone up to anything from nine to 12 months. There are cases of people living in fully completed houses waiting for the new housing grant for at least six months and no power connections from the ESB. I have not been made aware of this in other parts of the country.

I have asked the Minister on several occasions to look seriously at the actual number of labourers employed in those areas by the ESB, because there is no realisation that a complete overhaul of existing line work is necessary and that line deviations are necessary. There is no provision for damage resulting from storms which can be quite serious. There is no appreciation of the large number of new house applicants who apply for planning permission each week. An application for planning permission in rural Ireland usually means that a new house will be built at some stage. The ESB should review the labour content, skilled or unskilled in their proposals over a period of years when they draw up their budgets. It seems that the number of people employed by them is not sufficient to provide proper supply at an early date.

The Programme for National Development, 1978-1981, laid special emphasis on the very high number of young people who are unemployed. It did say that special arrangements would be very necessary to meet those. The youth employment action team which was set up has since disappeared. It produced many proposals some of which were acted upon and some of which were not. The real fact is now that allocation for the youth employment action team, the work experience programme and the employment maintenance allowance has been reduced from £12.3 million last year to approximately £5.8 million this year. Someone said the youth of a nation are the guard of its posterity. One can read two things into that. It does not appear as if the commitment given to the youth of Ireland by the Government over the past two-and-a-half years is being carried out to effect in the allocations given to the youth employment area.

The Tánaiste referred to the right of young people to a job in their own country. I want to remind him that young people are sensitive and responsive and can be very critical when necessary. They will demand not alone a continuing commitment from whatever Government is in power but an actual creation of real jobs. It is not realistic for any Government to give a commitment to young people in the very serious terms that this Government have done and then to deny them the opportunity to have decent employment in their own country. The right to work is a basic right all over the world. I would not want to see our young people denied this right. The Taoiseach has stressed his appreciation and awareness of the number of young people here. I would ask him to bear that in mind because frustration is growing among young people. It would appear that some of them have been left in a limbo of no hope, no courage, no confidence and no jobs. New problems demand new solutions. The old ways will no longer do. A new approach and a new vision is needed if jobs are to be provided and the commitment given by the Government to our young people has to be seen to its proper conclusion. If a new vision is necessary I trust that whoever sits in the crow's nest on the ship of state, the economic ship that is now sailing through stormy waters, can see beyond the threat of the very real economic trouble that stares this country in the face at this time.

When Members of this House are speaking on the budget it is only natural to speak about current matters; I am referring to the current budget. Generally speaking, the current budget has an immediate effect of hitting a person's pocket whether by way of increasing the amount of money in it through income tax reliefs or by way of taking money out of it. But the most important part of the budget is the capital budget because it is on the amount of money provided in the capital budget that the growth in the economy in the next year depends. In the capital budget this year we find that a substantial proportion of the programme affects the building industry. It is estimated that the amount involved in 1980 is £722 million, an increase of some £110 million or 18 per cent on the 1979 out-turn of £612 million. Irrespective of what has been said this means that there is an increase of £110 million in the 1980 budget. If we look down through the Public Capital Programme we see the figures for housing, and for water and sewerage are up by £4 million; the allocation for hospitals is up from £25 million to £28 million. I am sure the Minister of State at the Department of Posts and Telegraphs who is sitting here will be delighted that his Department's allocation has gone up from £70 million to £100 million. I have no doubt that in the next couple of years many people waiting for telephones will have them. There is also an increase of £3 million for roads.

I can recall hearing demands at meetings mainly from Opposition members wanting to know what road grants they were getting because they were all expecting a cut-back in these due to forecasts that had been made. But the amount of money in the capital programme, particularly for road grants and for housing have been increased. I cannot speak for every county council and I am not a member of my own county council now through no fault of my own but I know that in Carlow there has been an increase of 10 per cent in the amount of money for road development. When one thinks of world recession which affects us so much as a trading country it is indeed a great credit to the Government that this extra money is available in the capital budget for what we refer to as the social end of things, roads, houses, hospitals and so on. This year in the capital budget, as last year and in the last few years since we joined the Community we got money from the regional fund. This amounted to £41 million this year.

As a former member of the European Parliament for six-and-a-half years I am pleased that our colleagues in the European Parliament on the Government side of the House are in the group of European Progressive Democrats who have pursued a policy so helpful to Ireland not alone in relation to the regional fund and the social fund but also in relation to the common agricultural policy. I recall as a candidate during the European elections last June we were attacked at length by the leader of the Opposition because of our association with our French and Danish colleagues in the European Progressive Democrats. Let me put it on record that I am very proud that we in Fianna Fail are associated with the French and with the Danes because the two countries, like ourselves, support the CAP and fully support the development and expansion of the regional fund and the social fund. Since the European elections two groupings within the European Parliament have not come up for as much discussion in the press or in the media as they did previously because the elections have been over for five years. At the same time considering the group that Fine Gael are associated with, the European People's Party, and the party that Labour are associated with, the Socialists who are against and are trying to knock the CAP, I wonder if the leaders of the Fine Gael and Labour Parties are beginning to eat the words they spoke during the European elections.

Today the Taoiseach made a statement on his very successful visit to France and on his meetings with the French President and Prime Minister which helped so much to strengthen the ties that exist between Ireland and France, two countries in the EEC who have the same policies, plans and ideals for the Europe they would like to see, a Europe where the richer countries would help the poorer, where a sound regional fund would be adopted and where the common agricultural policy would be protected. I was pleased to hear the leader of the Opposition say he was glad this meeting had taken place but it was a pity that during the election campaign he attacked a party which is part of the present French Government. We are all human and I am sure those politicians took note of what the Irish people said about them.

I want to put on the record Fianna Fail's happy relationship with the French and with the Danes who are pursuing in Europe a policy that will be financially beneficial to everybody, particularly the agricultural community. One of the principal reasons we joined the EEC was the aid we get from Europe through the common agricultural policy.

Recently Commissioner Gundelach said there may be a reduction in the sugar quota for Ireland. It was gratifying to see industrialists, farmers, and trade unionists meet in Nenagh, on the same platform, united in an attempt to ensure that our quota for sugar beet is protected in the European Community. This is something we should appreciate. The Taoiseach's message of let the eighties be the decade of endeavour was personified by those people who stood together on that platform working for the benefit of all the people, irrespective of what class, union or association they belong to.

I mentioned to the Minister for Agriculture a recent development within the Community that could affect our sugar quota, that is, an iso-glucose manufactured from corn or maize which can be used as a substitute for sugar in industrial sugar. If this is used as a substitute for industrial sugar it will affect the amount of sugar from the manufacture of sugar beet or refined sugar cane that would be needed. Recent figures given to me by the Minister were that last year 165,000 tons of this type of sugar were manufactured. I hope the Minister will continue with determination in his dealings with the European Commission and the Council of Ministers to ensure that this type of sugar will not be part of the European policy.

The current budget is the one most people talk about. Let us briefly look back at the speculation prior to the budget. Most people were talking about a terrible budget with taxation of unbelieveable amounts and so on. We had a budget which was welcomed by sections of the community which in the past had never even commented on a budget. It was a fair budget which showed for the first time in real terms that the Government were changing from direct to indirect taxation. I fully support that idea because it means we are switching to pay as you spend, in other words, optional spending.

No matter what tax is introduced, it will hit somebody. A Minister for Finance who can bring in a form of taxation acceptable to everybody will be a magician. We all know that will never happen. I was glad to hear that a commission to review our taxation system was being set up and that any inequities that exist in the present system will be examined. When the commission is set up all sections of the community will be invited to submit their proposals, not expecting that all of them will be accepted by the commission or by the Government.

The Taoiseach mentioned in this House, and the Minister for Finance gave an interview to a Sunday newspaper saying, that the resource tax on land would be reviewed. Everybody in this House was pleased to hear that. The member of the Labour Party who spoke immediately afterwards said the Government were backing off the resource tax as they had backed off the 2 per cent tax. As far as I am concerned the resource tax is part of the financial resolutions, is part of the budget and will be part of the Finance Bill to be circulated. If, due to pressure, we start changing financial resolutions we will run into trouble and could end up discussing and amending the budget for months after it has been passed. I believe the present system, where the Government have discussions with all interested sections of the community prior to the budget to try and work out and include in the budget suggestions made, is the best one.

Deputy Kenny referred to the youth. I am surprised a young Deputy should refer to the youth as being disillusioned, disappointed, inactive, and he used a number of adjectives I did not write down. Our youth are dedicated, energetic and willing—they take a far deeper interest in current affairs and in the economy than many young people of previous generations—and we should not try to make out that they are not.

The Deputy also referred to the amenity schemes for the provision of sporting centres put forward by the Minister of State at the Department of Education. This was part of the Fianna Fáil election manifesto. In 1977 Fianna Fáil provided almost £1 million for the development of amenities for young people. This was acclaimed not only because it provided amenities but because young people were employed in the spending of grants made available by the Government. The fact that in a time of tight credit this amount of money was increased from less than £1 million to £4½ million in 1979 and is now part and parcel of our educational policy has been acclaimed by the people. Because of our increasing young population and because of shorter working hours it is most important that amenities for playing and for pleasure should be available. If these amenities are not provided the energy of the young people not used up in manly sport will be diverted to other areas, to the pub and other places.

Nothing is more welcome than the youth employment schemes and the extra money made available for them. To quote the Taoiseach, the eighties should be a time of endeavour. Every Deputy and every member of every organisation and association should make the eighties a decade of endeavour. We are all part of the one island and we all have to earn a living. There is only one cake and it must be divided equitably among the people. If one section gets too much some other section gets too little. The more unity, the more meetings we have among the unions, associations and various sections, the better for the development of the country.

Because of the increase in the tax free allowances the PAYE people get more into their pockets. So do the people in the poorer sections, specifically the social welfare recipients. Never before in the history of the State did an increase equal the increases given in this budget either in real terms or in cash terms. In October 1979 the across the board increase represented about 31 per cent. The increase in old age pension for a man and his wife was as much as their total pension in 1970.

I compliment the Taoiseach, the Minister for Finance and the Government on the excellent budget presented to the House, a budget people did not believe was possible, bearing in mind the international situation, the world recession, the cost of energy and our balance of payments situation. No one could have believed that the Minister and the Government could introduce a budget as fair and equitable as the one introduced this year.

I must take the Tánaiste to task for some of his comments this evening. The Tánaiste spent some time complimenting himself and the Government on increase in employment opportunities in the public sector and pointed out that the Government deliberately set about widening the scope of the public sector to create jobs in all areas of it. Having made that decision the Tánaiste has no right to moan and weep in the next breath about the excessive cost of that extra employment. As former Minister for Finance the Tánaiste must have known that if the public sector were numerically increased the cost would also increase. The Tánaiste also made the point that our balance of payments deficit, over £500 million, was due largely to the postal dispute and that the loss of revenue involved showed up very clearly at the end of the year. The solution was quite simple: the Government could have moved in and settled the dispute. It was the obvious thing to do especially when dealing with a section of the service whose pay and conditions badly needed reassessment in any case.

This budget will do nothing to help our balance of payments in spite of some of the hardships of the budget. My most serious criticism of the budget is that at the end of the day our position will be no better. The increase in the price of petrol, drink, cigarettes and all the rest of it would be acceptable if it led to an improvement in our balance of payments without having, as we have at the moment, the vast majority of income tax from the PAYE sector paying the interest on our national debt. This aspect has been completely avoided by the Taoiseach and by the last speaker. We are running the country down the greasy slope of debts and more debts with a grim prospect of lack of buoyancy in those areas which would be likely to help and relieve and solve the problems that they have created.

The Minister this evening in this House denied that the Fianna Fáil manifesto in any way contributed to the present situation. I contradict him flatly on this because of the squandermania type of manifesto which handed out fresh strawberries in December to what proved to be a very gullible electorate and gave away over £100 million in car tax and rates and, more serious still, raised the expectations of people in the PAYE and other sectors far above what we could afford to sustain. That was most serious of all. We had been telling the people that there was no bonanza around the corner. We have no oil wells and no hidden resources. All we have is what we can produce by the sweat of our brow from our limited amount of farmland. There is no point in saying we are going to create more jobs; the first priority of any Government is to create jobs, but creating jobs, especially in productive employment, is going to cost a lot of money. We can see for ourselves what the job cost is with the IDA, running into thousands of pounds per job. This has to be done and it is very laudable, but it costs money. There is no point in saying to anybody at election time or any other time, "Vote for us and we will deliver the goods. We can afford to give all these things". This is not the case, has not been and will not be the case.

In the year that we are now facing, a gloom has set in in agriculture. This gloomy uncertainty has been created by the Government in the areas of taxation and production. When we were in Government with Deputy Clinton as Minister for Agriculture there was no doubt about farm production and expansion. Expansion was the operative word right across the board. We expanded our sugar-beet factories, our co-operative societies and our meat factories and we were on the go. Now we are being told to put on the brakes. How in God's name does the Minister for Finance expect farmers to pay a £95 million tax bill and at the same time tell them that they have got to cut back in production? Is he serious about this suicidal course? It will be very interesting to hear what the new farm leader will have to say when he takes over. I am convinced that unless credit facilities are readily made available to farmers, unless they are told to go out and produce sugar-beet in the proper quantities as they have always done since we joined the EEC, unless the Minister for Agriculture will ensure that no super levies will be imposed on them, we cannot hope to restore farm confidence which has been shaken badly since this Government took office.

Deputy O'Donnell mentioned the effects of the budget on tourism. As the Fine Gael spokesman on tourism all I can do is endorse what he has said. With petrol prices as they are at the moment compared with petrol prices in the North of Ireland and Britain, who is going to bring a car from Britain over here? People who like a quiet holiday driving around our country roads have been deliberately discouraged by this budget. There are also the general costs of running hotels and heating oil costs, all of which lend themselves to increases in prices. One of the most attractive features in Irish holiday-making down the years, especially in relation to our farm guesthouses and seaside resorts, was that we could offer good value for money. Now our energy costs and budgetary charges have put up these costs and people naturally tend to go elsewhere. Tourism is our largest industry and we should be encouraging people to come here and doing everything possible to develop and expand our tourist industry. Instead of that we are putting on the brakes deliberately and telling people to go elsewhere by jacking up inordinately the petrol costs and also, in the capital budget mentioned by the previous speaker, by our whole approach to our expenditure on roads.

Debate adjourned.