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Dáil Éireann debate -
Wednesday, 4 Feb 1981

Vol. 326 No. 5

Financial Resolutions, 1981. - Financial Resolution No. 9: 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.
— (The Taoiseach).

Before lunch I had begun my speech by surprising the Minister for Education and a couple of his colleagues on those benches by saying that in a way — but that is a very important qualification — I had been surprised by the hostile reception this budget had encountered. I said it was perfectly true that the budget had done nothing for industry except intensify the burdens resting on it; that it had done next to nothing for agriculture; that it had failed to provide any kind of radical solution, or the prospect of a radical approach, to the very serious problems obtaining, the two most serious our economy faces, namely, the state of industrial relations on the one hand and, on the other, the appalling millstone represented on the State by public service pay. None of those items had benefited or shown any improvement as a result of the budget, and that has to be said. Leaving that aside, the average punter, the the average unreflecting, perhaps not very well instructed citizen who has never been trained or invited to consider the long-term economic implications of the budget, I would have said, might have thought this budget was not too bad.

As I say, he would not be trained to look underneath it, to see what it had failed to do, or he would not be trained to assess its negative impact on the areas I have mentioned. At any rate, so far as the ostensible shape of the budget is concerned, taking it at its face value, I would have said the ordinary punter — had I seen the Minister's speech before he came in to deliver it — might have been expected to grumble at the excise impositions, but they are very much part of every budget. Very seldom do we have a budget when there are not several pence on the items which were hit again this time. Otherwise, seeing the year that is in it, I would have said he might have been reasonably pleased. Nobody could deny that the social welfare increases are generous. Nobody could deny that there are positive elements, in the sense of the promised tax relief for investment in private sector residential accommodation. There are positive things. I would have said that by the time the impact of the excise increases had worn off and the social welfare increases were coming through, the average, unreflecting, unthinking voter might have felt he had got a reasonably good deal out of a Government in a difficult year. That is all on the assumption that the budget is an honest one and not phoney. But of course the unreflecting citizen is not really in a position to probe the question to what extent the budget is phoney or not. That is left to the Opposition in here and to economic commentators outside. I want to contribute my own views on that in a few moments.

Why is the average voter dissatisfied? Why, with what have to be admitted are generous increases on the social welfare side, is there such general hostility to and dissatisfaction with the budget? That is something which is very new, interesting and indeed sinister for all of us and not just for the party temporarily in occupation over there. I think The Irish Press— by the way just in case it is thought that this is as bogus as the budget, this pink slip is simply because we happen to have had pink paper in our copying machine upstairs when I inserted the sacred script under the glass — in its editorial of 30 January 1981 put its finger on it. In its editorial of the previous day it had been commenting in a way which might have been expected of The Irish Press— patting the Minister on the back, saying all the nice things to him and so on. But 24 hours rolled past and The Irish Press were obviously astonished by the hostile reaction they were getting. In an editorial which was incoherent, published the following day, the 30th, they tried to explore the reason for the hostile reaction. I am afraid I gave a wry smile when I saw this:

The trouble is

——said the Burgh Quay thunderer——

that we live in and have been conditioned to live in, a society of rising expectations, and to be fair——

——this is a collector's item and I suspect that copies of this issue are even now being eagerly snapped up —

the Government must now privately, ruefully acknowledge that part of these expectations were raised by the architects of the Fianna Fáil manifesto for the last General Election.

I did not write editorial, nor did any of my pals. That editorial was produced by The Irish Press, and that is their explanation for the extraordinary fact that, at least obstensibly, a relatively easy budget from the punter's point of view has encountered a hostile reaction. The punters want the earth. Why do they want the earth? Because they were skilfully told by the genius of Senator Eoin Ryan and his team that they could have the earth if they voted for Fianna Fáil, that nothing except the malice and the incompetents of the National Coalition stood between them and the earth; that all they needed to do was to roll out in their hundreds of thousands and put out those grasping, incompetents, Liam Cosgrave, Richie Ryan, Michael O'Leary, Jim Tully and all the rest of them, that the sun would come up over the horizon with a jump and it would be sunshine all the way.

What is the result now? The result is — as I have often said before when perhaps it was not as evident to all as it is now — that people are demoralised. They are not willing to carry any burden. They are willing only that their neighbours should carry burdens. That characteristic which is always there to some extent in a free people, is far more visible and stronger now than when we were in office. When we were there the people grumbled. Certainly we made mistakes. If I had those years all over again I think I would have advised, and I am sure many of us would have advised one another to avoid doing this or that, or to do something we omitted to do. I do not make any secret about that. But there was a kind of an attempt, and it was a persistent attempt, to behave with the economy as though the next election was irrelevant. There was a kind of an attempt to behave as though the people ought not to be fooled and codded, that the budgetary mechanism, in so far as it influences the economy, should be responsibly deployed. That has not been done since then. There was grumbling then, the people were dissatisfied, but I am coming to the belief — I hope this will not be used as a stick to beat myself with — that you cannot have a people who are not grumbling and a healthy economy at the same time. Perhaps you can for a short period in a time of economic boom which is fuelled along by an externally generated tail wind; perhaps you can have it then. But at other times, when a country has to generate its own lift, particularly starting from a low base as we are, if the economy is being properly run the people are going to grumble. I am afraid that is a kind of axiom — you can call it my law if you like — it does not hold true all the time, but it is a fair guess, that, if the people are grumbling, some attempt is being made to run the economy properly. It is a very curious and worrying phenomenon that a budget which is going to give the entire social welfare category a 25 per cent increase in a couple of months' time should have encountered such huge resentment. Admittedly the taxation reliefs are insignificant and they are going to be eaten away anyway by the cost of living rise which the taxation provisions and the excise provisions imply.

Nonetheless in a hard year I would have said it was not a bad budget and that is how it has been received. I say it is not a bad budget but I want to remind the Minister that I began with a pretty big hypothesis that the figures on both sides of the line are correct figures, are true figures, that we can believe and trust these figures. One economic commentator, the following morning, did not put a tooth in it, that is the political commentator in The Irish Times, Paul Tansey. I have never seen him at a political meeting; I have never seen him at a Fine Gael meeting and I do not know the gentleman, good, bad or indifferent. I read his stuff with interest and have always regarded him as a perfectly independent commentator. He said hard things about the Coalition in the past and no doubt some of them were justified.

Within hours of reading the budget statement he was able to file copy in his paper the first sentence of which was "The sums in this year's budget do not add up". They do not add up. There are people over there and they may not be near to the joystick or the cockpit on the economic front but they must know themselves that these figures do not add up. I will explain why I am saying that. First of all there are allowances in the Minister's budget speech which he is giving himself off the expenditure side, sums which he is identifying as ones for which he does not now have to find the money. I have to describe these allowances which he is making himself as unhatched chickens and he is making himself generous allowances on the strength of them.

The first one is referred to on page 27 of the budget speech and it is an allowance of £25 million. I have had to complain about this speech so often. If he was trying to give me a laugh he could not have pitched this more accurately into the middle of the court I happen to occupy. He says that the sheer size of the public sector and the amount of finance required to sustain it suggest that there is considerable opportunity for savings by rationalising its programmes, administrative machinery and structures, staffing and systems. He says that an inter-Departmental task force is being established. Did anyone ever hear the like of it? An inter-Departmental task force is being established to make a critical appraisal of the scope for such action and to draw up proposals as a matter of urgency. I can imagine that in the first draft whoever wrote this rubbish out forgot to put in that magic phrase "as a matter of urgency" and someone else came over to him and said "Pat, you forgot the matter of urgency bit" so in went the matter of urgency. This is to achieve savings each year of £25 million. The Minister says that on the basis of these savings which will be identified and implemented he is making a deduction of £25 million from the budget expenditure. He does that just like that. I have to pay my housekeeping bills at home the same as any married man or woman in the House. I know the reception I would get if I simply said that I was going to set up a committee consisting of two or three of my children and my wife and we were going to identify ways of rationalising expenditure and on the basis that we are going to successfully identify these rationalisations as a matter of urgency I was going to make a deduction of £10 in my next week's housekeeping money. No one conducts their business like that, no one dealing with other people, and who is dealing with more other people than the Minister for Finance at budget time? How could he expect to be taken seriously with a projection of that kind?

Let me remind the House that this is a Government which came to office in 1977 with an acceptance speech from Deputy Lynch, just elected Taoiseach, in which he put reform of the public service at the forefront of his programme. He was absolutely right in doing so. But unfortunately there was no follow through. There was a minister for the Public Service, a special Minister for the Public Service for a couple of years — the very man, oddly enough, who is now sitting in the Department of Finance. If it is easy to save £25 million by setting up an inter-Departmental task force as a matter of urgency, why did he not do it two or three years ago? This is simply a sum of money picked out of the sky. The main problem with the public service — and I have said this and been misunderstood for saying it — has nothing to do with any of the individuals in it. Nobody in the public service can be blamed for being in it or can be blamed for expecting and building on their monthly salary. Nobody can be blamed for joining it and everybody knows, and we are killed saying this, that it is model of incorruptibility and, I must frankly say in my own experience, of courtesy and helpfulness and I cannot speak highly enough about it from that point of view. There are simply too many of them, and when Mr. John Costello was Taoiseach here towards the end of the first Coalition Government there were 29,000 people in the non-industrial civil service. We are now within spitting distance of having twice that number. I will give the exact figures in a moment.

In other words, in an era which has seen computerisation, office aids, the micro-chip and the devil knows what things which we are told would decimate employment in the private sector, things which we are told are going to be the big problem for us in the future because insurance companies and banks will be able to get through their paper work with the touch of a button instead of armies of clerks, in that very same period we have succeeded in almost doubling the number of people on the public payroll. We have not only done that but we are paying them relatively better — and I have to admit that every Deputy in this House has had the benefit because of a certain parity, including myself — and improving their conditions far faster and without any risk to themselves. I know that Deputies have a risk because they can lose their seats. But the rest have not got the same risk to themselves as people in the private sector have to endure all their working lives, and they have inflation —geared pensions at the end of it.

We cannot carry this burden. I believe there is no reason why it should have grown to this level. It runs away now with over half the budget, over half the enormous sums of money — over £3.5 billion — that the Minister for Finance was in here getting the Dáil to vote and seeking budget approval for; half of that goes on public service pay. In January 1977 — there is a July 1977 figure and I am sorry I have not got it but I can tell the House it is not very different from the January 1977 figure because we had an embargo on public service recruitment — there were 48,670 public servants in the non-industrial civil service, in other words not counting the Garda Síochána, the Army or teachers. In January 1980, three years later, that figure had risen to 53,822 and in the last 12 months, since Deputy Haughey took over as Taoiseach it has gone up by another 1,000.

Where is the justification for that? What are they all doing? We have now got an army corps of civil servants. What are they all doing that could not be done with half the number? I quite realise that the volume of the public service has expanded in 30 years. I am not trying to say we can run the country as we ran it in 1950. But I am saying that when one takes account of the fact that this is an age of mechanical, electronic rationalisation the increase should have have been nothing like as steep. It seems to be inexorable; it seems to be self-generating; it seems to be uncontrollable. Even in the last 12 months, between January 1980 and January 1981, the numbers in that non-industrial civil service rose from 53,822 to 54,738. The implications of even another 1,000 civil servants from the point of view of paying them, of making provisions ultimately for their inflation-proof pensions, for housing them, for heating them, for paying their travel and incidental expenses, are crushing and there is absolutely no trace of rationalisation. The only move ever to rationalise the thing — and I admit it was a crude one but it was effective — was the embargo placed on recruitment by us in which, no doubt, some ends of the service found themselves temporarily short-handed but at least it had the effect of preventing this apparently endless ballooning of the public service.

I do not want anyone to misunderstand the importance of this but anything which runs away with even 10 per cent, let alone over 50 per cent, of the national budget is a very serious matter. When one adds to that that 27p in every revenue £ is paid out in interest on the public debt, one can see that the amount of money left for things like infrastructure, building schools, investing in industry and so on, is very small.

This is a deadly serious matter. There has been no rationalisation except the very crude measure we introduced. I do not believe for one second that the numbers in the public service will fall this year. All this task force means is that half a dozen highly qualified and well paid people will be taken from the jobs they are doing at present and put on to a job they know is futile because there is not the political will to make cuts. Naturally, I do not mean to make anyone redundant, but we must allow for natural wastage to be absorbed in some kind of reorganisation within the service. That figure of £25 million was plucked out of the air and ought not to have been introduced in a budget statement. If he had been able to do this quietly, without making it a part of a budget promise, well and good and he could have come back here and boasted about it next year, but that is a bogus figure.

The Minister in his speech told us he was in favour of involving the private sector in public investment. It is not today or yesterday that that was first talked about. When was the first time we heard it said a private interest was going to build another Liffey bridge on the east side of the Custom House? Is it two years or three years? Where is the bridge? Where are the plans? Where are the tenders? A year ago we passed an Act in regard to toll roads. Where is the first toll road plan? Are there tenders out? In his speech the Minister said:

The Government have decided to strengthen this relationship by inviting a more active participation from the private sector in capital development. The Government believe that this policy will be to the maximum benefit of the economy and will advance the pace of national development.

Discussions have already been held with a range of private sector interests in order to explore the extent to which their support might be forthcoming, particularly for investment in infrastructure. These preliminary soundings have been encouraging——

like a man dousing for a well

——and, as a result, the Government have adopted a target of £200 million——

Why did he not say £300 million? Or what would be wrong with £500 million, a nice round figure? Surely there is that much money disposable in the private sector? I am not in this area of the private sector and I do not claim to have first-hand knowledge of it, but I noticed that Mr. Tansey in the articles I mentioned earlier said — and I made one inquiry from a different quarter which bore out his assessment — that the greybeards in the little complex of Dame Street — Foster Place — Anglesey Street — Crow Street — Trinity Street — St. Andrew Street, the nearest we have to a financial quarter in Dublin, suggested £40 million to £50 million as the maximum figure on any likely investment by the private sector in the public capital programme. How long will it take for that to come on stream? What plans are there for that, let alone for projects which have been mooted two or three years ago, let alone for projects envisaged in legislation passed over a year ago? Where does this figure come from?

I put down a question to the Minister — I suppose it will be reached some time next week — in which I am asking him to explain how he arrived at this figure and on what evidence it was based. In the context of the budget debate all I am saying is that this figure enables the Minister to present his sums as if he had that £200 million in his pocket. Its impact on the budget arithmetic is the very same as if he had £200 million in his pocket. The impact of this laughable proposal to rationalise the public service, when all he has done since he became Minister for the Public Service is to expand it, is the same as if he had £25 million in his pocket.

I will allow him the maximum the Crow Street greybeards are allowing for private sector involvement this year and call it an unhatched egg to the extent of £150 million, adding £25 million for rationalisation, giving £175 million. That sum far exceeds the cost of social welfare improvements this year, which are in the region of £144 million. If these figures, which are suspect in the highest degree, were not in the budget speech the Minister would be left with a further deficit of £175 million. With that deficit he would have had either to forego his social welfare improvements or he would have had to find that money by borrowing. That, of course, is what he will have to do in the end.

Those are two items which are easily identified and made fun of, but I want to point to something more serious in the budget situation. This is something which does not come to light in the budget speech itself but which invites doubt in the Book of Estimates. Several Departments when preparing Estimates are producing figures which are not credible, first, having regard to the records of those Departments and, second, having regard to the current rate of inflation. There are many Estimates which genuinely show substantial increases. For example, the Department of Energy had a budget of less than £10 million last year but this year that figure has been increased to over £15 million. I very much approve of that if this money is devoted to trying to achieve energy conservation. That Department have a realistic increase of about 58 per cent. The Department of Industry, Commerce and Tourism have an increase of 20 per cent; the Department of Education have a very good increase of 25 per cent. These are what I call realistic increases but there is a different picture with other Departments.

Last year the Department of Agriculture needed their Estimate to be topped up by 28 per cent. With that experience behind them, I would have thought a credible Estimate for that Department would show a hefty increase over last year's final figure, but not at all. They show a decrease in pound notes — I am not talking about real terms because they are different — of 12 per cent. The Department of Transport required an extra 27 per cent last year; this year they show a decrease of 15 per cent. Last year the Department of Health had to be topped up by 23 per cent but this year in money terms they show an increase of only 3 per cent and, in real terms, this will mean a decrease of 12 per cent. The decreases in real terms in the case of the other two Departments will be much worse.

I do not believe those Estimates. I do not believe the Ministers or the officials responsible for them believe them either. The officials have to do what they are told and I am sure it was with heavy hearts that the officials in the Departments of Transport, Agriculture and Health allowed these figures to go forward. I will not speculate about what they may have said to one another but I can imagine it.

I hope you will not think it a low punch if I draw some political conclusions from those comparisons. The Minister for Energy, the Minister for Industry, Commerce and Tourism and the Minister for Education, if I might delicately so put it, are on one side of an intangible but very important line inside the Government. Deputy Colley and Deputy O'Malley simply would not allow doctored Estimates to be put forward on behalf of their Departments — perhaps "doctored" is too strong — they would not allow unrealistic Estimates to be put forward. The other three Ministers, Deputy Mac-Sharry, Deputy Reynolds and Deputy Woods are all Haughey promotions. They were evidently willing to allow unrealistic Estimates to be put forward. I cannot speculate to what extent, in money terms, these Estimates are unrealistic. There are other unrealistic things in the Estimates, for example, the idea that we are going to spend only one-third in recouping local authorities for malicious injuries this year compared to what we spent last year. I do not know how the Government have become convinced that vandalism is suddenly running out of steam.

There are plenty of other weak spots in the Estimates. Some Departments have wildly slashed their estimates for travel expenses, postal expenses, telephone expenses and so forth. Just sticking to these three Departments, you will see we are talking about huge sums of money, with virtual certainty — I am not alone in saying this because all commentators have pointed out the same thing though not perhaps with the same political bile which I have brought into it — the unreality of these Estimates. If you add a nominal sum — the Minister, Deputy Fitzgerald, can pick it out of the air, let me do the same — the Supplementary Estimates last year for these three Departments totalled about £187 million. That is the total of the Supplementary Estimates, which in these three Departments alone, had to be produced.

Let me take a flying guess and say that with a bit of belt pinching these three Departments will be responsible in the coming year for a further £100 million by way of Supplementary Estimates. Add that sum to the £175 million which I see short fallen in those two suspect projections in regard to rationalisation of the public service and private sector involvement, and we are getting into very big money, over the quarter billion mark. Relate that then to the Minister's boast in regard to what he has done to the borrowing requirements, because this is really what the whole thing is about. What are we doing in regard to our borrowing? The Minister boasted in his budget speech that he has succeeded in making considerable progress. This must rank among the least candid statements ever contained in a Budget Statement. He says it represents substantial progress, that this year's borrowings, as a result of the budget, will be reduced from last year's figure of 14½ per cent of GNP to 13 per cent this year. It is quite true that the figures, as he presents them, show a borrowing figure of 13 per cent. It is quite true that 13 per cent is better than the 14½ per cent of GNP which the Government found themselves borrowing last year. What the Minister did not say was that 14½ per cent was not the targeted figure last year but exceeded the target figure by 4 percentage points. The targeted figure, which the former Minister for Finance, Deputy O'Kennedy, produced in the budget speech of February, 1980, was 10½ per cent and it was overshot by 4 percentage points.

It is small credit to the present Minister for Finance if he says 13 per cent is an improvement on 14½ per cent. Thirteen per cent is a targeted figure, not the end figure, just as 14½ per cent was not the targeted figure but was the end figure. Comparable things should be compared with one another and incomparable things should not. This is not an improvement if this borrowing requirement is going to be over-shot. At 13 per cent it is already miles above what the Fianna Fáil Party told us we were going to have to borrow this year back in 1977. Add now to it the extra likely borrowing on the experience of last year and on the bogus figures in the Budget Statement and we are within spitting distance of 20 per cent of GNP. That is an absolutely appalling situation. It might be 17 per cent or 18 per cent, something like that, within a very short distance of 20 per cent. It will be no trouble to the Government to pretend the following year, if the same Government are still there that they were not really doing much worse than the previous year at borrowing one-fifth of the gross national product to sustain expenditure, most of which is current day to day expenditure. That is a record of absolute disaster.

I have often protested about budget debates, this ritual ding-dong which becomes progressively less interesting to the public. As I once said, it is like Japanese ritual fencers with their padded staves beating one another — predictable speeches coming from both sides. I have a recollection of budget debates in the last Dáil and Deputy Richie Ryan meant the stuff in his budget speech and I suppose he enraged people by apparently not only meaning it but feeling it. I have no doubt that Deputy Colley and Deputy O'Malley meant their stuff but there is an unreality about what is happening now because the Estimates are, to a very important extent, bogus Estimates. The budget speech, because of the features I have mentioned, (a) relying on the bogus Estimates and (b) gratuitously making allowances from the expenditure side in respect of sums pulled out of the air, is an unreal budget speech. What is the exercise all about?

I am not really sure that there is much point in this budget mystique, the big occasion of the year with everyone trying to get more than his fair share of tickets from the unfortunate Superintendent, the ladies coming in and having their dresses described in the papers the next day. All that mystique is, naturally, borrowed from the British, Paddies that we are: the battered dispatch box which even a republican Minister for Finance does not distain, holding it up in ridiculous foreshortening — I suppose he is the one who is foreshortened — to the camera as he sets out from Government Buildings.

I object to all that reach-me-down British mystique, not just for that reason but also because it builds up this false occasion and that false occasion puts a Government and a Minister under a strong subconscious pressure to produce some kind of nosegay or little bouquet of measures which will be cosmetically acceptable. He should not have to do that. He should not have to go through this rigmarole. He should be able to fine tune the economy. I do not mean monthly budgets in the sense of a monthly imposition of taxation but the economy and the fiscal mechanism which operates should be at the Minister's command all the year around. It was in our time when we put 15p on a gallon of petrol in a single measure. This Government have done equivalent things and, no doubt, will again. It should be accepted that that is the way to run an economy which can suffer shipwreck from some single event happening in the middle of the year in which no budget is in sight. There is something really meaningless about debating what we are debating today. Everybody knows, inside and outside the House, that these Estimates are going to be miles overshot by the end of 1981.

Everyone knows that the allowances which the Minister is making are unreal. Another unreal feature is the Minister's allowance for special pay awards in the public service. In the last two budget years, those special pay awards have cost — I am taking the two years together — £260 million. In 1980, although an allowance for them of £100 million was made, in the end they cost £190 million. The Minister is doing his sums now on the basis that they are going to cost £80 million which is less than one-third of what they cost in the year gone by. What kind of sums are these? How real is any budget which is put together on the basis of sums like that?

Those references in the Minister's speech to the public service were not only taken up with the provision he was making for special increases. In one part of his speech he made an astonishing statement in which he more or less begged the public service to go easy on him. Imagine that kind of thing coming from a Government. What is a government for? They are elected to govern and not to go along pleading to people, sucking up to them or licking their boots. The Minister stated:

The Government fully appreciate the contribution that public servants are making to national development——

And so do I, and I mean that sincerely.

——but, in the present critical situation, they would hope that public servants would have regard to the greater degree of security attaching to their employment and be prepared to moderate, or not to press, claims which they otherwise would consider justified. I would earnestly ask all concerned to consider the matter seriously in the national interest. Failure to respond to this appeal will regrettably mean the imposition of further taxation and reduction of services.

That is a statement of cause and effect. There should be such a thing as a political will which interposes between that supposed cause and that supposed effect. Did the Minister ever hear of saying "no"? Does the Minister know what it is to say "no" or does his party? Governments are elected to do such things and if they are not tough enough to do so they should leave and make room for those who will say it. I am not pleading for a wage stop or anything like that; I am not pleading for any sort of unreasonable conduct but if a Government feel that a wage claim advanced on behalf of the public sector is not reasonable they should not concede it. For a Minister for Finance to say in his speech that if his appeal is not responded to the result will be further taxation is to abandon and abdicate his own job and position. He must say "No" and take the political consequences.

There is an element in between the will of people who want something outside the House, in other words the public sector or something else, and what has to be done here, and that will is the Government's will. There can be no plainer statement than that lamentable sentence I quoted from the Minister's script to the effect that that will is not there. The Minister, Deputy Fitzgerald is not willing to mobilise it and the man who appointed him has not got the will. I have known that always. It comes as no surprise to me because I know he is a man with no fixed standards in matters of this kind. However, I have never seen it stated so baldly and lamentably before.

Those things occur to me in regard to the nature of the budget, the figures which underlie it, the way it was presented and the unreality of the debate surrounding it. One more year has gone by; one more year's major economic statement by the Government has passed and the opportunity has gone, although all eyes were upon it — I believe public opinion would have been with them to some extent — to make some effort to address ourselves to the things which are holding our economy back. We live in the middle of a prosperous sea with the prosperity of the United States on the west and prosperity to the east in continental Europe and I have no doubt that as time goes on we will progress. Recessions will pass and things will get better but we are being unnecessarily held back by lamentable industrial relations because of lack of courage in dealing with them. We are also held back by the unfettered growth in the burden the State must carry in the shape of a swollen public service.

The rationalisation talk comes interestingly from a Government who do not know what they are doing in regard to the public service. I am glad the Minister responsible for transport is present because I should like to mention something which appeared in a newspaper last week and got little attention compared to what it deserved. The Irish Times on 26 January reported that the Irish Congress of Trade Unions had secured a commitment from Deputy Haughey that there would be no hiving off of any parts of the public sector to private enterprise. That arose in the context of the McKinsey report on CIE but the Minister in the previous days was killed assuring the ICTU that a decision has not been made in the matter good, bad or indifferent. I should like to ask the Minister which of the statements is true? Has a decision been reached?

I will inform the Deputy when I get the opportunity to speak.

The Minister should not have to wait that long. It should be a simple answer of "Yes" or "No". I admit it is disorderly of me to ask that question but if the Minister wishes to answer it I will give way.

I will answer it when my time comes.

The Minister will be contributing next and, if he wishes, he may deal with those matters.

The report I quoted was not contradicted. It is preposterous if such matters are not dealt with. I made a speech the following day which was briefly reported but it was not contradicted. It is preposterous that on a major question like the future of the national transport industry it is possible for the Minister directly responsible to say that a decision had not been made on the McKinsey report while the man who appointed him could tell the ICTU that on no condition at all would any part of the public sector be hived off to private enterprise. Why did we go to the expense of having the McKinsey report prepared if one of the likely recommendations was going to be foreclosed before the Government even discussed it? I am not expert enough to know whether it would make sense or not to hive any or all of CIE off to the private sector and I am not expressing a view about it but there must be an expert view about it in the McKinsey report. Otherwise, I presume that even this lamentable Government would not have incurred the expenditure of commissioning it. Why commission such a thing when one knows well that one of its likely recommendations will be such a measure? Why have such an investigation if one is going to foreclose that option before the Government have debated it because one does not wish to offend the ICTU?

That kind of foostering on the public sector which is costing the country so much is exactly the kind of thing we must watch out for. It calls into question what will happen about those euphonious twins, An Bord Poist agus an Bord Telecom. What will their future be? I thought the whole point about them was that they would be channels by which sections of the Department of Posts and Telegraphs would be put into the hands of private enterprise. What implications are there for those new boards after Deputy Haughey has told the ICTU that under no condition would any of the public sector be hived into private enterprise? Needless to say those boards will not be wound up. That only happens in the private sector. It is only the Smurfits and the Quinns that must close down unprofitable lines. Those new boards having shiny new headquarters, shiny new annual reports and shiny new in-house magazines — presumably also in the course of recruiting a battalion of further public servants to serve them — will not be wound up. There will always be some reason for keeping them going. They will be asked to report and investigate this and that as a matter of urgency from now until the State closes down. Towards that close down, if it ever comes, the existence of such bodies will not have contributed much unless they are given something useful to do and unless people like the Taoiseach, Deputy Haughey, cease to foreclose options of the kind which the McKinsey Report certainly contained merely to flatter the ICTU. What are we to make of this Government and their approach to the public sector and the public service? If the Minister opposite is proposing to speak, let me apologise now. I do not mean discourtesy to him but I am afraid that I will have to go, but certainly I will be listening or checking the report very closely to see what answer he makes on that point.

I want to say one other thing which has nothing to do with the main strand of the budget. It relates to the tax avoidance about which the Minister for Finance was so eloquent last week. Not far away from the context in which he was speaking about prison sentences for tax evasion he said and I quote from column 425 of volume 326 of the Official Report of 21 January 1981:

A major problem in relation to tax avoidance schemes is that, traditionally, the corrective legislation applies only from a current date, so that the tax avoider will already have secured the benefit of his avoidance devices for an extended period. I am concerned that greater control should be exercised to ensure that our taxation system is not subjected to this abuse. I would advise tax planners and tax avoiders that they should not assume that future anti-avoidance legislation will invariably apply from a current date.

If such legislation is merely going to render certain transactions liable to taxation I could let it go, but I warn the Minister that what he is thinking of and the context in which he said this may lead us to suspect him of penalising people for tax avoidance which has taken place in the past. If that is so, constitutionally it cannot be done because Article 15 prohibits the enactment of retro-active penal legislation. He will have to think of some other way of doing it.

I have spoken for my full hour in a debate which I characterise as fairly meaningless for the reasons I have given. I cannot sit down without making a comment — I do not want to be hurtful — about the demeanour of the Minister of Finance when he was reading the budget speech here last week. He seemed to me to be a man with his back to the wall. I do not know how it struck other Deputies or other people who were watching him. He looked like a man absolutely with his back to the wall, and I do not mean merely exhaustion at having to read through 60 pages of typescript. He knew that he was presenting a document which did not even rest on sand. It was resting in the air in so far as it reposed on figures plucked out of the air. I think that I have never seen a weaker or more lamentable budget performance in either the statement itself or the way in which it was delivered.

Forgive me, Sir, for ending on a trivial note. I do not want to make a meal of it but it intensifies the weary feeling I get on listening to contributions on occasions like that. He could not make a budget speech without saying cúpla focal as Gaeilge at the end. Listening to those words in Irish that he used at the end, I can say honestly that I never heard that Deputy use a word of Irish in this House before. Now he has to thrust in, or get some unfortunate public servant to sit down and spend 20 minutes writing out, a paragraph of Irish for him. I am not going to go into this in detail, but I do not think that he even looked at what was being put into his hand. He said:

Ba mhaith liom focal scoir a rá as Gaeilge.

He followed with four or five sentences of platitudes, and then he said:

Ní gá ach earraí déanta i nÉirinn a lorg go dúthrachtach sna siopaí....

He said that all we had to do was look for goods made in Ireland in the shops. Not one word of his speech in English up to them had been devoted to the question of the "Buy Irish" programme which was supposed to produce 10,000 jobs. This is only one aspect of economic and financial management and it is put in here in a throw-away sentence that you might use in closing down a feis or opening a flea ceoil. It has as much relevance to the main thrust of the budget debate as if he was to sing the National Anthem and throw in a few bars of "Hello Patsy Fagan" when he had finished. It is pitiable. It is very often in these trivial touches that you see the spirit of the whole thing. It is pathetic. That is not parting words in Irish. Those types of parting words are parting words to Irish.

The Deputy should conclude now in either Irish or English.

He is treating the language with contempt. If he wants to make a speech in Irish let him do so, but to put in a thing which he drags in by the scruff of the neck, a topic which he has not even mentioned, important as it was in his budget speech, is the final insult.

I listened with interest to some of the comments Deputy Kelly had to make on the budget and the doubts he tried to cast on the figures presented and various aspects of how the figures were made up. On the one hand he says that here we have a public service — I am sorry that he is going because if he wants to wait I have a few replies which I am sure will interest him. First of all let me put on the record that he compliments our public service for the record of incorruptibility and at the same time says, and tries to convince me and this House and the public at large that they all produced phoney figures.

He was a member of a Government. He knows full well, the same as anybody else, the high calibre of civil servants employed at the level at which Estimates are prepared and that there is no question of them producing phoney figues for anybody. I regret that he did not get down when he mentioned the Department of Transport Estimates, for instance, to talk about a decrease of 15 per cent. Of course, he looks quite conveniently at the net figure. If he looks at the gross figure in the Book of Estimates he will find, before taking account of the large increase in appropriations-in-aid that last year's outturn of £96 million odd compares with an estimate of £90 million odd for this year. Of course, he will try to mislead. I do not think he does. I was surprised to hear him at it because he is the most logical and practical man that I have listened to on that side of the House.

In relation to the Department of Agriculture, I am not able to answer the question he raised but I will speak on it from memory. If I remember rightly in the budget statement it was made abundantly clear that the demands for the farm modernisation scheme last year were such that, on the basis of the information available at the start of the year, provision was made for it, but it far exceeded what the expectations were and a Supplementary Estimate had to be brought in.

That happens to all Departments each year.

The provision made this year is on the basis of applications then. The Deputy knows as well as I do that in estimating figures for the budget you can only go on the best information available on the day. That is the way the public service works, and for anybody to come in here and try to convince me or anybody else that they produce phoney figures is absolute nonsense. To try to convince the people that the Department of Transport Estimate is down 15 per cent is utter nonsense as well.

What about CIE?

Deputy Kelly has finished speaking.

I will come to CIE. Will Deputy Kelly or anybody else who calls for prudent management at this particularly difficult time in our economic circumstances blame me for saying to CIE, especially when one considers that last year the Irish taxpayer paid £70 million to CIE: "There is a figure the Government have decided you are going to get. Reappraise your whole operation and look at where economies can be made"? Is not that what good national management is all about? That is precisely the message the Minister for Finance was delivering in this House, to every Minister around the Cabinet table and to the public service as well. The time has come for prudent management. "Look at every area, see where savings can be made". Of course, if you want to smile it away, that is fine.

Deputy Kelly raised another question here at the end and I presume he will have time to listen to the answer before he goes. It concerns what The Irish Times said the ICTU heard from the Taoiseach at a meeting recently. I am amazed to here Deputy Kelly stand up in this House and question that. On the Order Paper today his own leader raised the question with the Taoiseach and the Taoiseach made it clear to this House what he was talking about in the context of the investment plan. He was talking about the investment plan and saying that the question of public involvement was for private sector capital to become involved in the investment plan. He was not talking about hiving off any parts of the public sector to private enterprise. Deputy Kelly's own leader and other Members raised this and yet he spent 10 minutes here asking me if I am in conflict with my Taoiseach or vice versa in relation to this. I cannot comment on what The Irish Times or anybody else says about dúirt bean liom go ndúirt bean léi. I deal with the facts only. On the question of McKinsey the report is being published tomorrow morning. There will be a public debate and there is no question of the Taoiseach, me, or anybody else trying to impose a particular line of action or thought on this House, on the public or on the people involved whether at management or worker level in CIE. The report will be out tomorrow. A full debate on it will follow and there is no question of the Taoiseach or anybody else trying to undermine that situation before it happens. Is this another example of what happens over there, that one fellow does not seem to know what the other fellow is doing? There are plenty of examples of it recently. I read in the papers only the other day that the Lord Mayor of Dublin said that there was an onus, as he saw it, on the Fine Gael party and on the Opposition parties to put a pact together before the general election. His own leader comes out later and said: “No way”.

I give Deputy Kelly credit where credit is due. When this budget was introduced, all hell broke loose. The Deputy talked about the great hostility that built up to this budget, but in saying that this was not a bad budget he is a better judge of public opinion than most over there.

The message is now beginning to come back that, as Deputies went around the country and, as I got it not only in my own constituency but in others, there is not the great hostility which it is attempted to orchestrate in this House and outside it in regard to the budget. A different picture is emerging, as Deputy Kelly knows because, as he said, it is not a bad budget——

If you could believe it.

He knows it is not a bad budget and he knows of its wide acceptance in the community, but he rightly points out that everybody in Ireland today looks for a larger slice of the cake but nobody is prepared to pay for the flour to bake a larger one. That is basically what the Deputy is saying. Deputy Kelly claims that the manifesto rushed us into power. Will we ever get away from the situation of talking about the manifesto getting us into power? I went for election in 1977 for the first time and I did not have to use a single line of the manifesto with the electors of Longford-Westmeath to convince them that they should vote for Fianna Fáil and for me. I read the manifesto in detail after the election. I was clear in my own mind and so were the people that the time had come when the whole population had lost faith in the competence of the Coalition Government to manage our affairs and it needed no manifesto to put them out of office. The people had lost confidence in them and would change the Government anyway. The election of any Government depends on confidence in who can manage the country's affairs best at the time of the election.

I shall have to go now unless the Minister is going to say anything more about the public sector.

The answer to the question on today's Order Paper will give all the information the Deputy sought. I shall not waste my time in this debate reading it out. I am sure the Deputy will have an opportunity of reading it later. It flatly contradicts the inferences and allegations the Deputy tried to build into the two statements of the Taoiseach and myself in relation to the private sector and the public sector. In dealing with my two Departments I shall come to other matters raised by the Deputy.

Basically the budget charts the course for the economy in the year ahead. That is precisely what the present Minister for Finance did in a very difficult economic situation. We know that the borrowing on the current side of the budget is too high but we are not taking any right-wing approach to this by attempting to cut it down overnight. We are taking a planned approach to it over a period of years because we know the consequences of doing otherwise. Speakers on the opposite side should spell out the consequences of cutting down overnight, if that is what they are suggesting — I am not too sure what they are suggesting. If that is what they want it would mean a massive cut in public services overnight. That is the reality. We have looked at our economic situation. We recognise the problems of world recession, the worst since 1930. We have looked at the requirements of our economy and we have considered what we can do to insulate ourselves with our young and growing population from the worst effects of this recession.

We did not chose the road to monetarism, as did one of our neighbours, because of the social deprivation that would ensue. We have only to look across the water to see unemployment rising to 2.5 million in Britain or to the North of Ireland where the unemployment figure is rising to 100,000. We did not chose that road because we have full confidence in our ability to manage our own affairs. That is why we were elected in 1977 and I have little doubt that the people will again elect us when the opportunity arises. They know, as Irish people have always known, the realities of life: they know our circumstances.

We directed our attention towards putting all the resources of the State into the area of capital investment and building up our infrastructure to provide more jobs because we know that inevitably there must be a fall-out in traditional jobs here due to the worst effects of recession. We know the situation caused by the strength of sterling in Britain where we are one of the largest customers. They are one of our best customers also. Inevitably that disrupts trade. Until the British economy gets out of its present situation we must expect a difficult time ahead. As the strength of sterling grows it naturally increases our inflation because we import it when we buy so much from Britain.

We also import another inflationary factor with oil imports. I do not have to spell out the enormous rise that took place recently in oil prices. The Irish people know these facts well. They look for leadership in this recession so that we can cushion ourselves against it and protect the living standards of the people. That is exactly what we are doing. As best we can, we try to look after the less well-off and provide jobs where possible by putting the full resources of the State into building up our infrastructure and doing the job that has to be done by making the massive investment at present and have the infrastructures available so that our economy can take advantage of growth when it comes in the latter half of this year. That is not my forecast but one agreed on by all commentators.

That is the philosophy behind the budget and the message is now coming through that it is a good budget. The less well off sections of our society had to be protected. Let anybody tell me when were they better protected not only in this budget but in the previous one. I do not think there are any people in the country who are well-off and who begrudge the less well-off sections a decent bit of the national cake. When we consider that some old age pensioners and pensioners only get meat twice or three times a week at present, are there well off people who begrudge them a better deal? I do not think so. The greatest praise I have heard has been in respect of how well we have looked after the less well-off sections of our society.

We recognise the difficulties of agriculture and the Government have made a significant contribution in that area. We are quite confident that when the results of the Brussels price package and the special prices for Ireland emerge, the farming community will be more than satisfied. Indeed, many of them are well satisfied at present. It depends on what area of farming you are talking about when you say they are disgruntled. Great numbers of farmers in Longford are not expressing the view that I hear expressed here.

That is the philosophy behind the budget and I shall go on to deal with it as it affects the two Departments for which I have responsibility. Let nobody doubt that his was an honest approach in a difficult situation. The people recognise that. They know that our investment and our energies are being directed into the right areas to produce jobs for our young and growing population. They know that we look after the less well-off sections and that we are approaching the current budget deficit over a period rather than adopting a right-wing fascist approach. That is not our approach, although it might be the approach of some people opposite. The time has come for them to stop talking in riddles and tell the House and the people what they would do, in the present situation. Let them not look back but forward and tell us where they are going and let the people decide whether there is any reason to believe that the Opposition would do any better or that they can hold out hope of any better future for the country.

As Minister for Transport I am particularly aware of our dependence as a nation on trade. The proportion of our wealth which derives from trade is extraordinarily high by international standards — about half of what we make is sold abroad while over half of what we consume is made abroad. The great increase in the nation's wealth parallels the growth in our trade with the rest of the world and it is to world markets that we must look to advance our standards further — to increase the numbers of jobs in the economy and the standard of living of our growing population.

The Government's approach as outlined in the Investment Plan 1981, the public capital programme and, most importantly, in last Wednesday's financial statement by the Minister for Finance, is one of faith in the future. Our faith in the potential for growth and development in the Irish economy convinces us of the need for massive investment to create the right conditions for continued growth. Many of the investments for which I, as Minister for Transport, am responsible serve directly to encourage the growth of trade, investment in ports, harbours and airports and in the shipping and the air companies provides the basic infrastructure without which trade cannot develop, let alone flourish. In tandem with this, I also seek, through adequate investment and by developing the correct policies and structures, to provide a dynamic and efficient internal transport system to facilitate economic growth and enhance the competitiveness of our industry. In my contribution to this debate, and against this background, I think it would be useful to outline in more detail the investments and changes envisaged in the year ahead in so far as my transport portfolio is concerned. Later I will deal with my Posts and Telegraphs portfolio.

Expansion and development of Ireland's ports infrastructure is essential if we are to meet the demands of our seaborne import and export trades. The investment in harbours in the public capital programme for 1981 is designed to meet these demands by providing extended harbour facilities at some of our major ports and by enabling minor capital works or essential repairs to be carried out at other ports.

The total provision for 1981 in respect of harbour works is £15.1 million compared with an outturn of approximately £12.5 million in 1980. State grants of £3.67 million will be provided; most of this amount is in respect of the completion of the new roll-on/roll-off ferry terminal at Ringaskiddy in Cork harbour, with the balance going towards quay reconstruction work at Drogheda. Local loans fund assistance of approximately £3 million is divided between the Cork ro-ro terminal and extension of the deepwater jetty at Foynes harbour which will enable the port to cater for increased trade and to handle larger vessels. Of the balance of £8.4 million which the harbour authorities are meeting out of internal sources or by commercial borrowings, most is for continuing work under the Dublin Port and Docks Board's five-year development plan. The Board's major expenditure in 1981 is on a new deepwater quay designed to accommodate the largest roll-on/roll-off vessel expected to be used in the cross-Channel trade and on completion of the Board's new headquarters at East Wall Road. Of additional importance in present circumstances, capital expenditure on harbours in 1981 is expected to result in the creation of approximately 660 extra jobs.

Also in the context of the vital importance to the economy of our sea routes, it is the policy of this government to ensure that sea transport services are efficient and competitive in the interest of trade and tourism. In furtherance of this policy, the State has provided £10 million in equity towards the building of a car ferry at Verolme Cork Dockyard for the B & I Company which should be in service for this year's tourist season. Irish Shipping Ltd., will shortly be signing a contract for a bulk carrier also to be built at Verolme Cork Dockyard. The two orders constitute a major contribution to the maintenance of employment for the dockyard.

Turning to the aviation area, the national investment plan indicates expenditure of £19 million by Aer Lingus. It is a particular feature of Aer Lingus, as it is of Irish Shipping Ltd., that virtually their entire operation is international and they have to fight for every pound of revenue with other carriers, most of whom are much greater in size and are supported by domestic markets several times the size of the Aer Lingus home market. This poses a particular challenge for Aer Lingus during periods of difficulty in the international air transport scene.

In this connection, Deputies will be aware that the airline industry as a whole is going through very difficult times. Deputies will have have heard of the £100 million loss which British Airways expect to suffer in the current year. It is not an isolated case. The Belgian airline, Sabena, are reporting losses of £40 million; another small country airline, El Al of Israel, are losing £50 million per annum. Even in the US the major airlines operating in the most developed and prosperous market in the world are, with few exceptions, also losing money.

The causes of this airline crisis are well known. Fuel costs have rocketed so that in 1980 they are three times the 1978 level. Meanwhile the worldwide recession has caused a fall-off in traffic in most markets, particularly in North America and locally in Europe. Despite the rocketing costs, airlines have been slow to seek compensating fare increases because of the depressed market. Indeed, with airlines struggling for increased shares of the sometimes contracting market, the atmosphere is one of price war which has compounded the financial problems of the industry.

Our own airline has not been insulated from this situation. The confluence of the problems I have mentioned as regards fuel and other costs, general recession and stagnation in traffic is causing trading problems for Aer Lingus this year. The success of their ancillary activities which have kept the airline in profit overall will not be sufficient to offset their current losses in air transportation.

I am glad to say, however, that Aer Lingus are facing up to these problems in a business-minded, resilient manner. I am sure they will be fortified in this approach by their record of success over the years, both in air transport itself and in ancillary activities.

In the air transport field, Aer Lingus have shown themselves well able to survive and flourish in a highly competitive market. It is not generally realised that there are up to 40 airlines operating into Ireland — on the Atlantic, cross-Channel, from the continent and in the sun-charter business. Aer Lingus have consistently outsold their competitors and in only four of the past 20 years have the company failed to return a net profit. The direct Exchequer investment in the airline to date stands at £43.6 million but the current net worth of that relatively modest investment stands well in excess of £100 million. Over 70 per cent of the airline's revenue is earned in overseas markets, a fact which makes Aer Lingus one of the biggest single earners of foreign currency and a significant contributor to Ireland's balance of payments. Aer Lingus also figure among the top companies in the State in terms of turnover and number of employees. In addition Aer Lingus have maintained a major programme of ancillary activities, strongly supported by this and previous governments. As a result of this programme Aer Lingus have been able to maintain and expand employment, while generating substantial profits which have helped to cushion the adverse trends in their air transportation activities. In the field of aircraft maintenance, Aer Lingus are now one of the major contractors in the airline field with customers from many European and African countries. On the hotels side, Aer Lingus successfully operate in competition with major international chains in London, New York, Boston, Paris and many other premier cities. These achievements are an indication of the airline's ability to operate in the tough environment which constitutes the international air transport industry. I am sure that with board management and staff working together, the airline will combine to demonstrate these outstanding qualities.

The £19 million to be invested by the company under the 1981 investment plan will be an important element in maintaining the airline's position and in laying the ground for future progress. Almost £7 million is related to the acquisition of an additional Boeing 737 aircraft, and to modernisation and modification of existing B737 and 747 aircraft. Additional expenditure of approximately £4 million arises from computerisation and increases in spares holdings. The largest other item is £6 million for expansion of their profitable maintenance and aircraft handling activities for other airlines, which help to maintain employment and cross-subsidise air transport activities. This includes a final £2 million investment in the airmotive development at Rathcoole, County Dublin, which is a courageous new £20 million project by the airline based on their great success in this area in the past. This new plant is already in operation and is to be formally opened next April. When fully commissioned it will provide new employment for 600 people and is in itself one of the most important developments in the State-sponsored sector in terms of the provision of new, viable employment.

Also in the aviation sphere, the national investment plan provides for expenditure of £3 million on constructional works at Dublin, Shannon and Cork airports. While 1980 was not a good year for passenger traffic through Irish airports, the Government's increased investment in the current year is indicative of the Government's earnest desire to cater for future needs and to take advantage of the envisaged improvement in passenger traffic. I am confident that with the improvement in the value of the US dollar and the continuing strength of sterling, tourism traffic should improve by the latter half of 1981. Transit traffic through Shannon Airport will also show some improvement over 1980, as traffic from the Soviet Union to the west builds up to to take full advantage of the Soviet oil storage facility built at the airport last year.

Lest anyone has any doubts about the future of Shannon, I would like to repeat the assurance which I have already given on a number of occasions reaffirming the Government's commitment to Shannon. Aer Rianta, with my encouragement, are making every effort, in co-operation with the other agencies involved, to attract more traffic to Shannon, Cork and Dublin airports and the company is promoting Irish airports to airlines in the United States, the Middle East and Britain. The duty-free shop at Shannon Airport is being redesigned and refurbished to improve duty free sales and to take full advantage of the short available time for shoppers in transit through the airport. A major proposal, which would involve the establishment of facilities at Shannon to enable travellers to the United States to complete pre-entry customs and immigration requirements at Shannon rather than in the US, is under very active consideration by my Department, in association with Aer Rianta, Aer Lingus and other parties in the US. I am anxious that this evaluation be completed quickly, and as soon as possible.

Before leaving the aviation scene I might mention that moneys are also being provided for local airport developments. As indicated in the national investment plan, the Government see local airports as forming an important part of the infrastructure required for the fuller development of relatively remote areas. Considerable interest is being shown in this development and in the related question of internal air services and I think that the time has, in fact, come for a thorough review of policy in the matter. I am arranging to have such a review undertaken, so as to provide the basis for a co-ordinated approach to the development of local airports throughout the country.

Work on Waterford Airport, which started last September, is well advanced and is scheduled for completion by mid-April. Work on the new airport in Sligo began last November and will take about a year-and-a-half to complete. A site for the Donegal Airport has been chosen and Donegal County Council are actively engaged in the process of acquiring the necessary lands. I might also mention that funds are already earmarked at EEC level for the development of Donegal Airport. A detailed study on the Mayo Airport project has been under way for some time and the results, which are expected shortly, will help us in deciding on the facilities to be provided and the scale of operations that should be appropriate in that case.

Turning now to CIE, I think that the question in most peoples minds is the McKinsey Report and the impact that it may have on the future of public transport in this country. The report is to be published tomorrow morning and this will provide an opportunity for a full public discussion on the findings and recommendations in the report. I will welcome the views of all interested parties so that the Government may be in a position to reach decisions in the overall public interest.

Reviews of public transport policy are essential from time to time in response to changing circumstances and demands. Notwithstanding the impression that has been created, there has been no study of this particular kind of CIE operations and finances carried out on behalf of my Department for just ten years. The recent McKinsey study was commissioned because of the serious deterioration which occurred in CIE's finances in 1979 and which, indeed, has worsened further in 1980. At the same time there has been increasing dissatisfaction with some aspects of the public transport services, particularly in urban areas. CIE are, of course, faced with many problems, some of which are outside their control and for which they are unfairly criticised. The McKinsey Report, as an objective study of CIE, will provide an opportunity for an informed public debate over the next few months and will assist the Government in taking decisions on public transport policy for the years ahead.

While the present focus of attention is undoubtedly on the McKinsey Report, it tends to be overlooked that the Government have already given very positive commitments to public transport. One of the principal indications of the Government's commitment to public transport can be found in the public capital programme in which provision is made for capital expenditure of £49 million by CIE in the present year. This is the highest capital provision that has ever been made for CIE in any particular year.

I think that few will disagree with me when I say that the problems in public transport are particularly evident in the Dublin area. The Government recognises this and are ensuring that CIE have the necessary capital to deal with these problems. As Deputies are aware, the Government approved in May 1979 of the electrification of the Dublin suburban rail service linking Howth and Bray. This is a major project which, when completed in early 1983, will vastly improve conditions for suburban commuters and will be capable of carrying a far higher number of passengers than at present. Those Deputies who are familiar with the line will be aware of the delays which are at present being experienced by commuters due to the work being carried out in preparation for electrification. These delays are, of course, much regretted but unfortunately cannot be avoided in the circumstances.

Improvements in the suburban rail services must, of course, be accompanied by improvements in the bus services. Substantial provision, amounting to £18½ million, has been included in CIE's capital allocation in 1981 for the acquisition of new buses. This will enable the board to proceed as quickly as possible with the renewal of its bus fleet, now that the new bus factory at Shannon is firmly established. CIE expect to take delivery of some 200 buses in 1981. Most of these are for Dublin city and I am confident that the delivery of new buses, together with the measures being taken under the auspices of the Dublin Transportation Task Force, will bring about a very perceptible improvement in the reliability of Dublin bus services. This year's deliveries will also include inter-city buses for use on CIE's expressway routes and tour coaches which will be available in time for the 1981 tourist season.

A significant development in the transport sphere last year was the decision by the Government to establish a Dublin Transportation Authority. The Authority will have overall responsibility for the integrated planning and operation of transportation in the Dublin area. A task force, comprising senior representatives of the Government Departments directly concerned, the City and County Manager and the Commissioner of the Garda Síochána, is preparing the necessary legislation on the formation of the new Authority. It is my intention to introduce this legislation in the Oireachtas in the next session. In the meantime the task force has been given general responsibility for traffic management in the Dublin area.

In the area of traffic management the task force is aiming at a reduction in peak-hour congestion by encouraging commuters to switch from cars to buses. As part of an overall programme geared towards improving the bus service, CIE will be injecting some 500 new buses into their Dublin fleet over the next three years. As I have said, nearly 200 of these will be put into service during 1981. A programme of re-engining existing buses is also well under way.

However, even with new and re-engined buses, a fully effective and reliable service cannot be provided unless buses are afforded some priority over other traffic. In the course of the year bus priority measures will be introduced on sections of the main arterial routes between the city centre and the suburbs of Whitehall, Artane, Blackrock, Rathgar and Rathfarnham. A firm of engineering consultants is assisting the task force in designing the bus priority measures and this work is now at a very advanced stage. Apart from a small section of the Blackrock route which will be the responsibility of Dún Laoghaire Borough Corporation, implementing the bus priority measures on the various other routes will be a matter for Dublin Corporation. Implementation involves purchasing and erecting road signs, putting down the necessary road markings and relocating bus stops. In some cases road-widening and diversion of services such as water, sewage, telephone and gas may be required. The 1981 allocation for my Department includes a capital provision of £925,000 for grants to road authorities in respect of the cost of implementing the 1981 bus priority programme.

The development of bus lanes and the associated traffic management measures are designed to relieve the congestion affecting the arteries of our city and to ease traffic flows in the interests of commuters and the general business life of the city. The potential benefits from the success of these measures can be very significant — shorter travel times, better utilisation of the bus fleet, less frustration for travellers, better conditions for bus workers and easier movement into and around the city. These benefits will not, however, be achieved without the tolerance and co-operation of all concerned, including the motoring public which will be urged to moderate its demand on our streets and parking spaces and, indeed, to shift some of its preferences in the direction of public transport when it can show itself to operate effectively and efficiently. I am sure I can rely on the support of all public representatives when I come to introduce these measures in the coming months.

I now turn to my responsibility in the Department of Posts and Telegraphs and to give this House full details of what the investment plan means to the Department of Posts and Telegraphs and, indeed, to the economy as a whole.

This year and the next two to three years will be particularly difficult years for the telephone service from a financial viewpoint. As Deputies know, a major investment programme is being undertaken to raise the quality of the service to existing subscribers and to make service available quickly to applicants. To achieve the programme objectives involves building up, in the first instance, the infrastructure of the service itself in terms of buildings, telephone exchanges, trunk circuits and local cabling. In attending to these, provision has, of course, to be made not only for the immediate needs but also for longer term ones, particularly for buildings. It is the position, too, that time must necessarily elapse before any financial return can be obtained from much of this investment and the full benefit will be obtained only over a period of years. There is, for example, no return on the investment in buildings until the exchanges and trunk circuits have been installed and brought into service.

As I have already said, the cost of servicing the capital invested in the telephone service has been growing steadily and will continue to grow steeply in view of the substantial sums now being invested. Obviously, increased expenditure on interest and depreciation could be contained by cutting back substantially on investment this year and in the years ahead, but if this were done the service could not be improved and the waiting list would continue to grow. Indeed, the probability is that the service would deteriorate further as the use made of the telephone increases. There is understandable pressure to improve the standard of service and to do so in the shortest possible time. That improvement cannot be secured without investing heavily in the service over a short period, as is being done, and the consequences of that for the finances of the service must be faced.

I propose to deal now with what is being done to improve the telephone service and what improvements may be expected. As Deputies will be aware from the investment plan published recently, £220 million is being allocated this year for development of the telephone service in addition to the £123.4 million which was allocated last year. This reflects the Government's determination to implement the five-year programme for development of the telephone service. It forms also, of course, part of the Government's overall investment plan for 1981 designed to improve the country's infrastructure, thus equipping the country to take maximum advantage of the upturn in the economy expected later this year as well as easing the current unemployment problems resulting from the world-wide recession.

Though only one of the five years of the telephone development programme has been completed, much has nevertheless been achieved. It might be of interest if I were to give briefly some of the achievements in 1980.

They included:

Work was started on 142 buildings and work on a number of others completed.

Sixty one new telephone exchanges were opened or existing ones extended, including a major new trunk exchange in Dublin opened at the end of the year.

Two thousand five hundred more trunk circuits were added to the trunk network.

Twenty manual exchanges were converted to automatic working.

Sixty two thousand new telephones were installed.

International subscriber dialling was introduced at Athlone, Drogheda, Dundalk and Sligo.

New operator switch rooms were opened in Athlone, Cork, Galway, Limerick and Mullingar.

Seven hundred and seventy applications for telex service and 200 for data lines were met.

Much of the time last year necessarily had to be spent in planning and laying the groundwork for development of the telephone service over the next few years, and the fruits of that work will begin to become evident in the second half of this year. Among the improvement schemes this year will be:

Work continuing on 142 buildings in progress and work to begin on 184 others.

New trunk exchanges to be opened at Dublin, Cork, Galway, Sligo, Athlone, Mullingar, Tralee, Naas, Longford, Ennis, Ceanannus Mór, Bantry, Kilkenny, Tuam, Ballinasloe, Navan and Castleblaney.

Five thousand additional trunk circuits to be brought into use on the cross-Channel route, Dublin-Sligo, Dublin-Arklow, Dublin-Cork, Dublin-Limerick, Sligo-Letterkenny, Dublin-Waterford, Dublin-Galway, Dublin-Athlone, Galway-Athlone, Limerick-Tralee, Galway-Tuam, Dublin-Navan and Navan-Mullingar routes, as well as on several other smaller but nevertheless important routes.

Conversion of 60 manual exchanges to automatic working.

Eighty thousand telephones to be installed.

International subscriber dialling to be extended to Bantry, Castleblaney, Ceanannus Mór, Kilkenny, Longford, Mullingar, Naas and Tralee.

Opening of a new operator switch-room in Dublin.

Two thousand applications for telex and 500 for data lines to be met.

These are but some of the improvements in the pipeline.

The opening of the first of three new trunk exchanges in Dublin recently and the bringing of it fully into service over the next few months will enable some thousands of extra trunk circuits to be brought into service on numbers of the main routes to and from Dublin that are severely congested at present. These measures should ease congestion in the Dublin trunk exchanges and on the main trunk routes to and from Dublin, and with that should come an improvement in the STD service. When the further trunk exchanges and additional trunk circuits that I have mentioned are brought into service in the second half of the year, there should be a noticeable improvement in the system. All the other schemes that I have mentioned will, of course, bring improvements too.

I do not want to be misinterpreted, however. While these schemes, as I have said, should bring noticeable improvements in the standard of service, they will not cure all the problems. Improvements will be noticeable on a continuing basis throughout the five years of our development programme. This year is only the second year of our programme. Over the next three years, some £460 million of the £800 million that it is estimated the programme will cost will still have to be spent to enable us to meet our objective of providing a quality of service equal to that in our EEC partner countries.

However, users of the service and those waiting for service can take heart from what has been achieved and from what is in the pipeline this year, confident in the knowledge that the money already invested is beginning to produce results, that the commitment to future substantial investment is there, and that we are on target with what we have set out to achieve.

I might say at this point that when it became clear that the target of 60,000 new telephone connections we had set ourselves last year would be met, some Opposition speakers, understandably, may be, made allegations that the system was being overloaded. I want to scotch that allegation. New telephones were installed only where there was spare capacity in the system and the numbers installed in particular areas were restricted because the installation of more could have given rise to congestion in the trunk network. Those spokesmen apparently hold that we should not have taken advantage of the spare capacity in the network that we should have left investment idle and not bring it on stream.

I am confident that this new opportunity for the private sector to become involved in developing the telephone service will prove an attractive one for investors. This is clearly borne out by the number of inquiries which have been generated by this proposal.

Deputy Kelly said that the Minister for Finance should have been talking about a sum of £300 million or £500 million. This is not anything to be joked about. It would be clear to any reasonable person that a figure of that type is not available without private sector investment. Clearly the private sector is interested in financial involvement to help to meet needs because they realise the importance of an up-to-date telecommunications service in future years from the point of view of industry, commerce and trade, and I have no doubt that £100 million will be forthcoming.

As Deputies know, the intention is that the telecommunications service should be established as a semi-State body, and the aim is to have the necessary legislation passed so that it can be formally established in this way next year. Raising some of the telephone capital requirements otherwise than through the Exchequer is desirable also in this context, as the new body will be expected to raise directly the funds they require for capital purposes.

Deputies will be aware from the Government's investment plan for 1981 and from the Financial Statement of the Minister for Finance on 28 January that discussions have taken place with a range of private sector interests to explore the extent to which their support might be forthcoming for investment in infrastructural services and that as a result of this, the Government have set a target figure of £200 million to be raised in this way. Of this £200 million, £100 million will be for telephone development purposes. Arrangements for the establishment of an investment company to raise the £100 million proposed for telephone development purposes are being worked out.

It is a pity Deputy Kelly is not around now to listen to what I am saying. He would not be making jokes about people like Michael Smurfit and Fergal Quinn. It ill becomes any man in politics here to joke about people like them, who did not have to get involved in helping to develop services in this country. They have given of their leisure time to steer two sections of the Department of Posts and Telegraphs into a commercial area. This is to be commended, not to be joked at. There is no question of the Government falling down on this. The White Paper and the legislation will be seen a lot sooner than Deputy Kelly and his kind expect. They will be published in a matter of three or four weeks. This sort of snide remark ill becomes any Deputy.

I should like to make a point in regard to the investment plan vis-à-vis the telecommunications service. It is that in addition to the benefits the investment plan will bring to the community in the form of improved telecommunications, substantial extra employment will also be generated. About 2,000 more may be recruited to the Department of Posts and Telegraphs and 2,400 jobs will be created in industry, mostly in building. I want to say again to Deputy Kelly, who made a big song and dance about increasing public service personnel, that I do not make any apologies to him or anybody else for recruitment to my Department to help to develop the telecommunications service. If he looks at the figure I recruited last year and the results achieved he will see that that recruitment into the ranks of the civil service has been highly productive.

I make no apology for recruiting people to my Department to enable the development of the telecommunication service. As I say, if he looks at the number recruited last year he will see that money spent on recruitment to the productive areas of the civil service is money well spent. He tries to take credit for the ban on recruitment during the term of the National Coalition, but they should have been more selective and enabled the productive areas to get badly needed recruits. If this had been done, development in the telecommunication service could have progressed much further because it takes time to train people. There is a differentiation between recruiting in different areas of the public service which he glibly ignores. I make no apology for recruiting staff who are needed to do a job and when it is considered that we are doubling the size of the network it will be appreciated that these recruits are needed and that there are opportunities available to young people to provide themselves with worthwhile employment for the future. In this way, the investment meets both of the objectives of the Government's £1,700 million national investment plan in improving the infrastructure and in alleviating the worst effects on employment of the world-wide recession.

In these difficult times, we all have a duty to help the economy in every way possible, one of the more important ways in which this can be done is by supporting home industry. My Department are helping in this way by encouraging the manufacture of the equipment and stores needed for the telephone development programme to the maximum extent possible. For example, it was a condition of the award of contracts last year for the supply of digital equipment that the equipment would be manufactured to an increasing extent in this country and the award of these contracts will result in employment here being increased by well over 1,000. In addition, my Department, in association with the Irish Goods Council, have displayed at four centres throughout the country the range of telephone stores that have to be imported at present. This display aroused considerable interest among manufacturers and I am confident that it will result in at least some of the £20 million worth of stores imported annually for telephone development purposes being manufactured in this country.

Recently, too, my Department cooperated with the National Board for Science and Technology in establishing a new telecommunications council, on which there are representatives of industry, the higher education authority the board and the Department. The role of the council will be to improve relationships between Government and industry in the telecommunications area so that each will have a better understanding of the needs of the other, that action can be taken to meet their joint needs and that the country will be geared from educational and other aspects to take maximum advantage of the employment opportunities created by developments in the telecommunications and electronics area. I would expect the council to make a useful contribution in this area.

In his financial statement on the budget on 28 January the Minister for Finance said that postal and telecommunications charges would be increased by an amount sufficient to produce a cash yield of £35 million during 1981 and that the Minister for Posts and Telegraphs would announce details later.

Before I announce details of the new charges, I would like to say that the revised estimate of Post Office revenue for 1981 is now £319 million. It compares with actual receipts of about £202.5 million in 1980. About £42 million of the extra revenue expected in 1981 represents a carryover of telephone and telex revenue from 1980. The balance is due to the effects of last year's and this year's increases in charges and to growth in traffic, particularly on the telecommunications side. Telecommunications traffic will, of course, benefit from the record number of 62,000 telephone connections last year and the expected 80,000 connections this year, as well as from the boost to the economy resulting from the Government's investment programme of £1,700 million.

The principal new charges will be as follows:—

Inland letters 18p instead of 15p; printed paper postage rate 15p instead of 12p; postcards 15p instead of 12p; air mail letters 30p instead of 25p; business telephone rental in automatic area £21.17 instead of £18.41 per quarter (an increase of £2.76 per quarter); residential telephone rental in automatic area £19.55 instead of £17.00 per quarter (an increase of £2.55 per quarter); unit charge for telephone calls on automatic system 6.75p instead of 5.85p (an increase of 0.90p per unit); connection charge for ordinary telephone exchange line £140 instead of £100; minimum charge for internal telegram 138p instead of 120p.

When it is considered that the international cost of installing a telephone is over $2,000 the Government's approach to this matter will be understood and it will be realised that people must pay some share of the necessary investment. If one looks at the size of the investment one will see how much of the cost is being carried by the Government and will be passed on to future consumers of the service, but we must be realistic. Let not anyone suggest that an increase of 0.9p per telephone call or an increase of £2.55 per quarter in the rental charge is exorbitant.

Other telecommunications charges will be increased by an average of 15 per cent. There will be no increase in the rental charge for primary subscriber lines in manual areas. Nor will the 10p charge for local calls from coinboxes be increased. The connection charge for telex lines will be £150. Other postal charges will be increased by an average of 20 per cent. The increases will take effect from 1 April 1981. Full details of the new charges will be published in the national press.

I should now like to say a few words on the reasons for the higher charges. Money for the current expenditure of my Department is voted by the Dáil in the same way as for other Government Departments and Post Office revenue is paid into the Exchequer. The principal has, however, been accepted by successive Governments that Post Office services should pay their way on a commercial account basis, taking one year with another. During recent years, however, because of the effects of high rates of inflation on the Department's costs, expenditure has exceeded income and there have been substantial deficits in the Department's commercial accounts. Any deficits that are incurred have to be made good by the taxpayers through general taxation. The overall deficit for 1980 is expected to be about £27 million, made up of £11 million on telecommunications and about £16 million on postal.

The Department's costs have, of course, continued to rise also. The two major factors are pay increases and higher interest and depreciation charges associated with the increasingly heavy capital expenditure on telephone development. Increases in pay are a particular problem in the postal service where staff costs account for almost 80 per cent of total expenditure. So far as the telephone service is concerned, interest and depreciation charges will continue to grow as the accelerated telephone development programme gains momentum. It is estimated that between 1979 and 1980 these charges grew by about £18.5 million and that the corresponding figures for 1981 will show a further increase of about £26 million.

For each telephone installed the Department must make an investment of over £1,000. When looked at in this light the increased connection charge of £140 is not unreasonable and in fact represents only a fraction of the cost of providing service. The same position holds true for telex, except that for telex the cost of providing service is somewhat higher than for a telephone, and this is reflected in the £150 connection charge proposed for telex.

The increased charges are necessary to ensure the continued servicing of our development programme and to ensure a continued improvement in the quality of the service.

Already I have heard of criticism by Opposition Deputies of these increases, so I would like to take a look now at the record of the Coalition Government in this area.

Let us take postal charges first. Under the Coalition Government postal charges were increased by

20 per cent from 1 July 1973

35 per cent from 1 October 1974

30 per cent from 1 January 1976; and 13 per cent from 1 April 1977

or a total of 138 per cent.

Since then increases in postal charges including those to take effect from 1 April next amount to a total increase of 80 per cent.

In regard to telephones, the following increases were made by the previous Government:

18 per cent from 1 October 1973,

18 per cent from 1 January 1975,

35 per cent from 1 January

1976—more than double the present increase—and

25 per cent from 1 April 1977, giving a total of 134 per cent.

Under the present Government telephone increases come to a total of 66 per cent.

It is clear from the figures I have given that members of the Fine Gael and Labour Parties are in no position to criticise the size of the present increases in Post Office charges. Neither are they in a position to criticise the great improvements and developments that have taken place in the Department of Posts and Telegraphs when we compare these to the meagre improvements that took place during their term. Everybody recognises that these services are not borne by general taxation.

The Government are very much alive to the importance of a good postal service to the business sector and to the community generally. Following the lengthy postal strike in 1979 the standard of service was admittedly unsatisfactory and the main concern has been to get it back to its former high level of performance. It is reasonable to claim that a fair measure of success has been achieved. In the last nine months of 1980 regular monitoring showed that over 85 per cent of first-class letters were delivered on the day following posting. However, letter and parcel volumes both showed a decline during the year as compared with levels achieved in recent years. While the reasons for this reduction are not altogether clear it may be attributed, at least in part, to the slowing down of economic activity as a result of world-wide recession and some lack of confidence by the general public following the postal strike. I expect that, as the Government's investment plan begins to produce a quickening of business activity, there will be a pickup in the volume of mail and allowance for this has been made in the revised estimate of revenue for 1981.

Last year's decline in postal traffic has aggravated the severe worsening of the financial position of the service which resulted from the wage increases awarded to staff in the negotiations following the 1979 strike and from higher fuel costs because we run a very elaborate fleet of motor transport delivering letters and parcels to every part of the country. The increases in charges will help to improve this position, but a substantial gap between income and expenditure will still remain. All who work in the postal service must in this situation be alert to the need to improve efficiency and productivity and to cut out all unnecessary expenditure so that the public can be assured of a continuing first class postal service without cost to the taxpayers. When people say that these increases should not be made, will they please spell out, remembering that 80 per cent of Post Office costs relate to labour, what should be done? Do they say that we should not meet our requirements under the national understanding? Do they say that postmen should not be paid the same as every other man in the street?

The Minister has five minutes left.

Do they really believe what they say? Let us be realistic in our approach to our economic circumstances and let us be honest and reasonable and let the Opposition give us an alternative if they have one.

A number of possibilities for developing more postal business with the object of improving the financial position of the postal service while providing a comprehensive range of services for the public, are being examined. Among the specialised areas where there may be scope for expansion is the area of high speed conveyance and delivery services. The developing telecommunications sector and the increasing value of time in business and economic transactions are creating a demand for quicker mail services. Ways of meeting this demand are being looked at and I hope that it will be possible to make an announcement on the matter in the near future.

Other specialised areas under examination are the Post Office Savings Bank, other financial services and agency business from State and semi-State bodies. There is undoubtedly an international trend towards an economy in which cash does not physically change hands. More and more transactions are being paid for by credit transfers of one form or another. All of the existing financial institutions are seeking to benefit from this trend. The Post Office is no exception. The form of the financial services which should be provided to meet these needs over the next decade is still evolving.

However it is clear that the Post Office is in a strong position because of its countrywide network of offices and skilled staff to meet any needs which arise.

Irish stamps have in recent times won high praise for the high quality of their design and production and this has contributed greatly to the appeal which they have for stamp collectors throughout the world. Considerable strides have been made in the marketing of Irish stamps. Last year revenue from philately came to £1 million and over 75 per cent of this amount came from overseas sales. Marketing efforts are being strengthened to increase this revenue further. For instance, this year the Post Office will be represented at over 20 important philatelic exhibitions in Europe and North America, and there are now agents working to promote and sell Irish stamps in Britain, Europe and North America. Increasing efforts are also being devoted to the development of the home market especially among schoolchildren.

I would mention now an interesting development in philately. The Minister of State at a recent meeting in Washington reached agreement in principle with the US Postmaster General on a joint Irish-American stamp issue. The decision has been taken in principle and negotiations are going on to work out the final details. This joint issue will fittingly mark the historical and cultural links between our two nations and peoples. This unique development will be of great interest to collectors worldwide and will result in the creation of new marketing possibilities for our philatelic services and bring a welcome increase in philatelic revenue.

There will be an extensive programme of special stamps this year on a wide variety of themes. The first special stamps are due out next month featuring Irish science and technology. Later in the year there will be stamps commemorating the founding of An Óige, of the Royal Dublin Society, the birth of Jeremiah O'Donovan Rossa, the passing of the Land Law (Ireland) Act, 1881, and on the themes of Irish folklore, Irish art and Christmas.

Philatelic sales should also benefit from the setting up of a postal museum in the centre of Dublin. A suitable premises has been selected and I expect that the museum will be open to the public before the end of the year. At present the layout of the museum is being planned and suitable facilities for the display of material are being designed. The museum will house a permanent exhibition which will be of interest to a wide variety of people. I hope that it will encourage a pride on the part of postal staff in the tradition of service in the Post Office and an awareness among the public generally of that tradition. The philatelic section of the museum will be a point of reference for the keen philatelist who will be able to consult a comprehensive display of Irish stamps and other philatelic material. Moreover, the displays of philately should excite interest in stamp collecting among schoolchildren and other members of the public.

These are some of the effects that will flow from the Government's investment plan for the Departments of Posts and Telegraphs and Transport. It is clear that when the public realise and appreciate what this programme is about and what this budget is about, it will give the lie to the notion that has been floated around here that this was a bad budget. It was a good budget, as recognised by Deputy Kelly, and it is time that the rest of the people realised it. The message is getting home loud and clear.

It is interesting to listen to the Minister going through his script about the great work he is doing in the development of the postal services. There is a fair share of investment and a fair share of success; but the Department, like other semi-State organisations, have failed to curb the cost of this service. The Minister quoted a figure of a 15 per cent increase in the services between 1980 and 1981 and a deficit of £27 million. The Minister also quoted the costs of the Coalition Government during their term, but he did not quote the deficit in those years. If the Minister is being fair he should give a complete picture and not a half picture.

I compared like with like.

The Minister did not give us that figure.

(Interruptions.)

The Deputy without interruption, please.

Where would one get the like of the former Deputy Conor Cruise-O'Brien to compare with?

I have no intention of getting into this field. Deputy Reynolds mentioned that the budget had made a significant contribution to agriculture but this Government have not made any contribution in the budget to agriculture. This budget is a mixture of nothing, a blow to the economy and a disaster to the productive worker. A budget should aim to improve a nation's performance in underpinning its economy. The areas that can provide growth should be identified and expanded and the necessary policies should be adopted in a budget to ensure that people engaged in these areas have sufficient capital and a reasonable profit margin to guarantee further investment which should be encouraged by tax incentives to those who are prepared to invest.

There are two arms to our economy, agriculture and industry. The provision in this budget will further aggravate the agriculture crisis, it will raise the cost of inputs, create further uncertainty and crack what little confidence is left in those who work on the land. It will result in a reduction in inputs, a drop in production, further job losses on the land, in agri-business and in the services area, which in the short-term will have a drastic effect on the entire economy.

On the industrial front we find that unemployment is steadily increasing. It is easy to assume, with the prevailing conditions, that there is a crisis in industry generally. The budget creates a further 2 per cent to 3 per cent inflation. The increase of 15p on a gallon of petrol will increase production costs. The damage to our competitiveness on foreign markets will cause absolute chaos. We are now more like an importing country rather than an exporting one. We have, by escalating prices, priced ourselves out of the great markets in the EEC. The budget does nothing to rectify that situation.

In my contribution I want to deal mainly with agriculture. The Government speakers so far have refrained from mentioning that subject. I want to bring to the notice of the Government the six point plan which our Party announced. I have in front of me about 45,000 names, which include some of the executive members of the Fianna Fáil party as well as names of people from every city and town in the country. We did the groundwork for the Government. We told them what is needed for agriculture in the short-term but they ignored this. The Government, under Deputy Haughey and previously under Deputy Jack Lynch, refused to listen to commonsense when they were told that agricultural production would decrease in 1980. They are prepared to accept that this year it will increase by a further 4 per cent when they know the reverse is likely to be the case.

Our six point plan was for the abolition of resource tax, the abolition of the bovine disease levy, the abolition of agricultural rates, an interest subsidy for farm borrowers, which is probably the most important point in the plan, a new tax allowance for breeding stock and stamp duty relief for land transfers to young farmers. We even costed this programme for the Government. We did everything possible to help them to realise the difficult situation the agricultural industry was in. As a result of the depression in agriculture every town and village will be affected if the decline continues. In this city the IMP factory has closed with a loss of approximately 400 jobs; Saville's have closed down with the loss of a few hundred jobs and Bamfords have also closed with a loss of a further few hundred jobs. Practically every machinery yard in the State has laid off about 50 per cent of staff.

The Minister in the House at the moment, who comes from Kildare, will find that in every town in that county shopkeepers with six or seven people employed have to lay off 25 per cent of their staff. We have the same situation in Dublin, Cork and every town in the country. The Government have turned a blind eye to the situation in agriculture during the past two-and-a-half years. I will tell the House what has happened and who is responsible for the decline. If proper encouragement was given to the agricultural industry it would have more potential for job creation in the agri-business and on the land than any other sector of our economy. When we are in a difficult situation the proper action to take is to encourage increased production so that we increase our exports, help our balance of payments and help processing areas which will not alone benefit agriculture but our economy generally.

There is a clear indication of the course we are on when we look at the inputs to agriculture. The reduction in the application of lime is a very serious development. In 1975 the amount of lime spread by our farmers was approximately 1.6 million tons, in 1976 it was 1.8 million tons, in 1977 1.9 million tons, in 1978, 2 million tons. In 1979 it should have been quite clear to the Government that things were turning in the wrong direction as far as inputs were concerned because the amount of lime spread that year was 1.5 million tons. In 1980 there were 900,000 tons spread. Every farmer and everybody engaged in the agricultural industry knows that it is absolutely essential that the lime content in the soil is kept at a very high level if we want to get the benefits from the application of fertilisers. I want to bring to the Minister's notice a booklet entitled "Memorandum on the Ground Limestone Industry" produced by the Ground Limestone Producers Association in October 1980. There is a clear message in that booklet to the Minister on what the farmers think of the policies pursued by the Fianna Fáil Party.

I was unable to get the figures of what the reductions in the application offertilisers were for the last five years but I have the figures given by the Minister yesterday of what they were for 1980. There was a further reduction in that year of 15 per cent. Those reductions will be reflected in the 1981 production season. There has been a 3 per cent decrease in agricultural production. The increased cost of inputs to agriculture for 1981 is in the region of 20 to 25 per cent which will result in a further reduction as far as inputs are concerned. Why have we such uncertainty and lack of confidence in agriculture? It is because the Government are responsible for the crisis in agriculture. They have had very little regard for our farmers and very little respect for their contribution to the economy.

In the 1979 budget the Government introduced the levy system. The bad thing about that was the uncertainty created as a result of its introduction. It was on today, off tomorrow, further negotiations with the farming organisations, further uncertainty of what was in the Minister's mind or the Government's mind. This created in farmers minds the uncertainty which we have had since Februry 1979 when the Government chose to extract from agriculture money which that industry needed and which did not relate to either income or profit. In 1979 they also reduced the rates from £75 to £60 valuation to qualify for relief from income tax, knowing perfectly well that, even at that time, agricultural profits were decreasing and would continue to decrease.

Further damage was done in the 1980 budget with the introduction of the resource tax, another measure which did not relate either to profit or income. I understand that it has not been paid. In 1980 the majority of farmers, whether their valuations were over or under £70, borrowed the money to pay the resource tax, and they also borrowed money to pay the rates.

In the 1981 budget we have a great claim by the Fianna Fáil Party that they contributed significantly to agriculture. When we examine closely the figure of £35 million claimed by the Minister, we find these levies of £9.5 million. That figure should never be there. The eradication of any disease, whether human or bovine, is the responsibility of the State and should be funded by the State. Fianna Fáil chose to make the farmers fund this very expensive and not very successful disease eradication programme.

Bovine TB is a most serious disease, and it is very hard to eradicate. Progress is very slow. The figures are .25 in 1978, .19 in 1979, and .17 in 1980 for the incidence of TB in the herd. Fianna Fáil introduced the 30-day test which was to achieve wonders over a short period. I am not sure exactly how long it has been in operation. This 30-day test has done an immense amount of damage to the cattle industry and to the sale of cattle. I am prepared to accept that it has identified certain herds, but I have claimed before and I will claim again that the source of TB is not in the young cattle but in the cow herd. That is where we should be imposing restrictions.

We saw hundreds of farmers exporting young cattle to Libya at a very bad price through Rosslare and Waterford harbours. They refused to have them tested by the Department. The cattle went to a country where there was no need for testing. They were afraid to have them tested in case there were reactors which would tie up their herds for two to three years. I criticise the Minister and his Department for failing to come to grips with the situation. The 30-day test has not had the results claimed for it. He did not introduce it. It was introduced by his predecessor. I think it has been in operation for two-and-a-half years and still we came down only from .19 to .17 in a full year. This must be described as not achieving the desired results.

It is high time the Minister and his Department got to the source of TB in animals and tried to sort it out, not only in the interests of farmers but also in the interests of the economy. It is scandalous to see exports of very light cattle to Libya. We need those cattle. They are being sold for 30 per cent to 40 per cent less than they should be making. This has gone on from 1 May last. The Minister knows it is going on. He knows the numbers involved and he has done nothing about it.

There is an allocation of £250,000 in the budget to help the seed potato growers. During the Donegal by-election the Minister and other members of the Government were told by the potato growers of Donegal about the importation of Cyprus potatoes through Britain, and the damage this was doing to our potato growers. The Minister for Agriculture was irresponsible in answering questions in the Dáil yesterday. I asked him a specific question: what action he was prepared to take to protect the potato growers from imports from outside the EEC. He said he was taking action. He would not tell us when, or what action he proposed to take.

Does he realise that our potato growers are now preparing for the 1981 potato crop? Does he realise that in Donegal, Wexford and right around the coast, these people want to know will they be getting any protection in 1981 against these imports which damaged the market seriously last year? This should be stopped. The Minister's attitude yesterday was objectionable. He treated our potato growers with utter contempt. I told him that yesterday and I tell it to him again today. There should be no need for this £250,000. If he protected the potato growers there would be no need for that subsidy.

There is a provision of £500,000 for stock relief. Fianna Fáil realise that since 1977 they have done serious damage to one area of the economy. Now when the maximum damage is done they introduce stock relief. In the 1979 and the 1980 budgets they insisted that appreciating stock would qualify for income tax, with the result that people reduced their stock instead of increasing it. Now they come along with stock relief in the 1981 budget, but it is too late. The figures are there and there has been a huge amount of de-stocking of cow herds.

It was decided to allow farmers to pay tax on 1 October and 1 January. The Minister claims this as a saving of £5 million to the agricultural community. I find it very hard to understand where that saving is. Surely it is a question of the amount of income tax paid or to be paid. Where does the Minister get this figure? Where is the saving of £5 million? He does not know what the income tax will be for 1981. Taking the 1980 income and assuming there will be no improvement in 1981 — and it is reasonable to assume that — there will be less income in 1981, so I do not see any saving of £5 million for the agricultural community. The only real relief the Minister gave to agriculture in the 1981 budget was the £19.6 million rates relief. The other figures do not relate to income or profit.

I should like to mention the financing of agriculture. We have proposed an interest subsidy. This is a very important item to the agricultural community. We all know the amount of development which took place on our farms over the past five or six years. We all know that the staff of the county committees of agriculture advised people to draw up plans, to invest and to borrow. Unfortunately, neither the staff nor the farmers realised that by 1980 farmers income would be halved and, in certain cases, their repayments would be doubled. We saw an escalation of interest rates from 11 per cent to 20 per cent, and incomes were halved in the same period. Could any other sector of the community withstand a blow like that — repayments practically doubled and incomes halved?

It is essential at this stage that the government try to persuade the EEC to help us out. Fianna Fáil should try to get between £35 million and £40 million to subsidise interest rates for farmers for at least three years to allow them to adjust to this very difficult situation which has seriously aggravated the much needed development in agriculture.

Farmers have borrowed approximately £1,000 million. At present interest rates the interest on that is £165 million. Some banks have engaged in sharp practices and have pressurised farmers over the past six months. I accept there has been a change in policy because they have begun to realise that things are more serious than they thought they were. I appeal to the commercial banks to be patient and careful. It is a terrible situation that land has to be offered for sale in order to pay debts for which in certain cases the banks have a responsibility. Banks refused to keep to the guidelines set out in 1979 by the Central Bank and shovelled out money to farmers. They want to shovel it in now. They are imposing penalties, in some cases up to 6 per cent, on overdrawn accounts. Penal interest rates are already in operation without any further increases. It is high time that the Ministers for Agriculture and Finance took an interest in this and pointed out the difficulties to the standing committee of the banks. The Minister for Agriculture said that anyone who was in trouble or was pressurised by the banks should contact him. That is not good enough. It is his job to contact the banks and protect the agricultural community. If he has not approached the banks it is high time he did so and the Minister for Finance should go with him.

There has been a tremendous destocking of our cow herds. Official data shows that Friesian AI up to end September 1980 accounted for only 46.3 per cent of total AI. This is the lowest figure recorded since 1971. In 1971 the total dairy herd was estimated at 1.3 million, creamery plus liquid. The total dairy cow herd in 1980 is estimated at 1.5 million. The pattern of AI usage in 1980 shows a clear, collective decision on the part of farmers to put more emphasis on beef production and less on milk. If we allow that those who use beef bulls rather than AI actually use more Friesian semen and if we estimate that half the dairy herd for 1980 was inseminated with Friesian, the following would emerge: 750,000 cows inseminated with Friesian. After allowing for deaths and so on we can expect approximately 640,000 calves at one year old, not more than 320,000 female out of that number. When we allow for those not suitable for breeding the most we can expect to have as down calvers from the 1980 calf crop of Friesians would be approximately 265,000. That number would replace 17.5 per cent of the present herd. It is far too low, especially when disease levels are taken into account. It leaves no room for strict selection and culling to improve the standard of the national dairy herd.

This situation raises two basic questions. As a nation we made a policy decision that the dairy industry should not expand during a certain period. If we desire to expand it the Friesians will be the limiting factor in 1983. The Minister for Agriculture knows well what the position is. As regards licenced bulls for the same period, Friesian for 1979, 4,741; Friesian for 1980, 4,303 bulls, a decrease of 9 per cent. At the same time we had a decrease of 18 per cent in the amount of inseminations as far as Friesians are concerned. In 1983 and 1984 heifers will not be there for culling or expansion of the herd. If we go across the Border to buy there will be a 30 per cent premium to be paid as a result of the weakness of our £. That is the position as far as dairy herds and development in them is concerned.

To their eternal shame the Government have done nothing to help our largest industry. It will serve them right when the anger of the farming community falls upon them. They fiddled away on a public relations exercise when farmers' incomes were allowed to decline for three successive years in a row. There have been some famous three-in-a-row achievements in Ireland in the past few decades but Fianna Fáil have achieved an unique one for decline in farmers' incomes. What an achievement for an industry which has a Minister directly responsible for it. The Government are treating farmers with contempt. They are only interested in their votes. Justice will be done when farmers return to the Government the contempt that was shown to them, and I hope they do so with interest. At a time when inflation is the biggest enemy of the farming sector the Government added to it by a budget which everyone agrees will leave things considerably worse. The most damaging thing of all is the way the budget abandons the whole farming sector.

We are told that it is up to Brussels to throw farmers here a lifeline. If Brussels do not feel like throwing them a lifeline the Government say the farmers can all sink. If the French are successful in negotiating a good price increase we can expect to get it too. If the Dutch or Danes put up a good case — they would want to do better than we are — we will come in on their coat tails. This reminds one of a person on an old bicycle holding on to the back of a moving truck. If all goes well he gets there without much effort on his part. What happens if there are no trucks going where we want to go? What happens if the truck one hangs on to is going some place one does not want to go?

Agriculture has its own special problems. It is the duty of the Government to seek solutions within their own area of responsibility in the first place for those problems. If they do not do this they are offering no future to farmers young or old. They should do the honourable thing by getting out before they destroy our greatest and most dependable industry beyond redemption. Last year when the Minister for Agriculture came into Dublin Airport with his great news for agriculture he said we would have a plus 5 per cent in farm prices. The truth is that in 1980 we had a minus 2½ per cent as far as prices were concerned. His figures were out 7½ per cent. The Taoiseach ran out to greet him because of the great work he had done. Let us succeed in getting a 10 per cent increase in Brussels and a suckler grant of £50 per head. There will still be a shortfall, comparing incomes in agriculture from 1978 to 1981, of £400 million. Assuming the Minister is successful in getting the £50 grant and a 10 per cent increase he will tell us all he brought home for agriculture but will fail to make it clear that between 1978 and 1981 agriculture lost £400 million.

It is absolutely essential that our agricultural industry be stabilised in the interests of our economy, by removing present uncertainty and endeavouring to create confidence. We must not have the sort of shilly-shallying we saw in this House yesterday as far as potato growers are concerned. There is no use telling potato growers or anybody else in the month of May, when their crops are sown, what the Government intend doing. They must be told before they make their sowing preparations. We have had this type of shilly-shallying practically since this Government took office. Then there is the same hyprocisy as far as the budget is concerned. In his budget speech the Minister had this to say:

The Government view the decline in farm incomes with the deepest concern. This concern extends not only to the situation of the individual farmer and his family but also to the impact of a weakened agricultural sector on the rest of the economy. The importance of agriculture to the economy is illustrated by the fact that in 1980 agricultural output represented 17 per cent of national output compared with an estimated average of about 4 per cent for all the EEC countries. For the farm family the substantial fall in income which has occured over the last two years had involved a reduction in living standards and has reduced their ability to finance the development of the farm and increase production.

I never read such hyprocrisy in any statement. What is creating the uncertainty one might well ask?

In another part of the Minister's speech we find that the suspension of the levy in regard to bovine disease eradication is a temporary measure only. This is the type of thing which is creating uncertainty, the same type of shilly-shallying that obtained in the 1979 and 1980 budgets. That is why farmers are not prepared to develop or to invest in agriculture. Indeed, in the Public Capital Programme there is a reduction shown under the headings for farm development. The Minister is right in this respect because he knows perfectly well that farmers are not developing and will not develop.

It is a serious situation and certainly a reflection on the Government that in the year 1980 there was a 3 per cent reduction in agricultural output and there will be an estimated reduction of 4 per cent in 1981. I believe there is room for an expansion of agricultural output of between 4 and 5 per cent per annum and we must remember the benefits to be derived therefrom. Rather than talking about reductions, that is what we should be contemplating because anything over and above the present level of production will be for export. We must remember that we are an agricultural exporting country. It is up to us to feed that industry, to create confidence in it and remove the present uncertainty. That cannot be stressed sufficiently. This Government must feel ashamed of their conduct, their policies and programmes as far as agriculture is concerned.

In this budget the Government succeeded in giving a 20 to 25 per cent increase to social welfare beneficaries so badly hit by inflation. This increase is very welcome. But the real effect of this budget will be an increased cost of living and rising unemployment. No real attempt has been made to reduce our dependance on foreign borrowing. No efforts have been made at maintaining, never mind expanding, outputs in the private, industrial and agricultural sectors already over burdened by inflationary interest rates. No incentives have been given in this budget to encourage the productive sector to expand or increase employment.

This continuous budgetary policy of Fianna Fáil — which has failed so miserably in the past three years — has resulted in unemployment figures of 125,000 rather than a reduction of over 30,000 as promised in their famous manifesto. The Government have not the ability, courage or conviction to acknowledge that their declared economic strategy has failed miserably. The Government are being less than honest in pursuing Robin Hood budgeting, offering no possibility of reducing inflation, increasing output or reducing unemployment. By repeating the errors of last year's budget and relying on increased indirect taxation, avoiding any short- or long-term constructive development plan, the problem of unemployment will be even greater at the end of 1981. Recent Central Statistics Office figures show that manufacturing employment increased by a mere 19,000 between 1975 and 1980 while agricultural employment fell by 18,000. Employment in manufacturing industry, at 243,000, now exceeds that in agriculture by approximately 23,000. With unemployment rising by 33 per cent in agri-business, as compared with 13 per cent in other sectors, the future looks bleak indeed.

Over the past two years agricultural incomes have fallen by 50 per cent while costs have risen by the same amount, faster than anywhere else in Europe. Reduced productivity and even higher inflation can result only in further job losses. If the Government are serious about tackling increased job losses they must take remedial action immediately. They must consider subsidising interest rates on borrowings for productive investment for job creation purposes. In 1977 our economy was growing at the rate of 5 per cent but, in 1980, it showed no growth at all. Unless the Government abandon their unsuccessful policies there will be little or no hope of finding any cure for the devastating ills now prevailing.

This budget offers little encouragement to the already over-burdened taxpayer. The Government have failed to index-link tax bands and tax-free allowances. A single person whose gross earnings in 1981 amount to £7,000 will pay 6.3 per cent less income tax this year while a married couple with two children, with the same earnings, will save 5.9 per cent in income tax. These figures are misleading and the Government are being dishonest in hiding behind realities. When the terms of the national understanding have been fulfilled the PAYE sector, on average, will pay 25 per cent more income tax in 1981 and any gains through wage increases under the national understanding will be eroded quickly by the price increases announced in the budget, which will mean that the taxpayer will be less well-off at the end of this year. As Deputy FitzGerald said in this Chamber last Thursday, the PAYE sector claim to greater equity has been set aside with contempt. A tax saving of £70 for married taxpayers, with children, in the £4,500 to £10,000 a year bracket is an insult to the PAYE worker who already contributes more than 80 per cent of the total income tax collected by this Government.

Bearing in mind present inflation figures and increasing living costs it is horrific to realise that married couples, with no children, in the most common income range of between £3,000 and £6,000, make no saving at all in income tax under the provisions of this budget. The truth is that as far as the productive side of our economy is concerned, this budget will do absolutely nothing.

I should like now to refer to the subject of local authorities. The Minister sitting opposite is very familiar with local authorities and their operations. Over the past three years the policies of the Government have placed these local authorities in a very serious financial position. For the last two years their expenditure has been restricted to an increase in rates of 10 per cent, damaging the very base of their finances. This year they are being restricted to 12½ per cent and this is with an expected inflation rate of approximately 16 per cent. There is less money for roads and fewer houses will be built. There is more money but, as costs will increase by somewhere in the region of 18 per cent that will mean fewer houses. Our roads have been deteriorating seriously over the last three years. The policies followed by this Government as far as local authorities are concerned have been disastrous.

I find in Wexford County Council that our credit balances have been eroded to the tune of approximately £1 million in any one year. This is a serious situation for we have a growing population and the demands for houses are increasing. In 1977 Wexford County Council had approximately 800 people seeking houses. In 1981, we have 1,400. In 1977 we were building approximately 1,600 houses per annum. In 1980 we built 130 and in 1981 we are expecting to build, according to the present figures, approximately 116 houses. This is as a result of policies followed by this Government in relation to county councils. They have seriously damaged the entire financial structure of every county council here and at the same time there is serious deterioration in our road network.

The previous Minister spoke about infrastructural development. Certainly it is essential that we have infrastructural development. But our roads are the worst roads in Europe and, with the rate of progress on our road network, we have a programme for the next 50 years at the present level of investment. We have seen the increasing traffic on bad roads.

The articulated trucks in particular are potential killers. We have seen them turn over on top of cars on bad roads. We have seen them kill, even in the last year, 14 or 16 people. These trucks are being driven at high speeds on bad roads that are not designed to carry them. The Government have done little or nothing about our road network and it is far more important that we have a good road network than good telecommunications. We are an exporting country and infrastructural development is important.

But the present Government have persisted in building up the civil service. More luck to the civil service. Let us build away on it. But we should not build it up at the expense of the producing side of the economy. There should be a balance and they should both be brought along together. This is the area in which for the past three years the Government have fallen down. They have neglected the producing side of the economy, agriculture and industry. This budget is in the same vein as those of 1979 and 1980. It will do nothing for infrastructural development except for the telephone service, and I accept that good progress has been made in telecommunications. But it is not going to cure all our ills.

Let me conclude by reminding the Minister present of the proposals that were put forward by our party in relation to the crisis in agriculture. Two of the proposals were taken up in the budget but the Government chose to ignore the rest. They are just as important today as they were when we proposed them. I ask that the Government even at this late stage give serious consideration, if money is made available, to chanelling it in this direction. I ask the Government not to reintroduce the bovine disease levy. The term used by the Minister in relation to it was "for the time being". That is what is in farmers' minds. The 2 per cent was put on for the time being. The resource tax was put on for the time being. Farmers are asking what is next for the time being. The shilly-shallying that has gone on for the last three-and-a-half years is creating uncertainty. What is needed is the abolition of agricultural rates and the introduction of a subsidy for farm borrowers. Above all, if we are to get the expansion in the cow herds we must have special tax allowances for breeding stock and, most important, stamp duty relief on transfers of land to young farmers. So far as the producing side of the economy is concerned nothing has been done to improve the already difficult situation we find ourselves in.

I am pleased to have this opportunity to speak on the budget debate and I share with other speakers, particularly Deputy Kelly, surprise at the budget receiving such a violent reaction. Deputy Kelly indicated that at first glance it appeared an honest budget and I agree with him wholeheartedly that his initial analysis of the budget was correct and the violent reaction, as far as I can see, has come more from newspaper reporters, who see themselves in the role of moulders of public opinion. It must be a source of great satisfaction to some of them. Whoever coined the phrase "a Robin Hood budget," Deputy d'Arcy was quite prepared to borrow it, explain it and use it to describe the budget today. Robin Hood was the man who took from the rich and gave to the poor, so it might not be a bad description for a budget. At any rate, I would much prefer to be on the side of Robin Hood than on the side of the Sheriff of Nottingham.

I remember sometime before the budget great space was taken up in the papers with pre-budget forecasts. The newspaper columnists assured us all that, once we saw the budget, they would all be in a position to let us have the result of their expertise and tell us the date of the next election. This was of course based on the assumption that all politicians are rogues and twisters whose only concern is to remain in power. I really believe that politicians have less need to resort to dirty tricks to get elected than writers have to sell newspapers.

However, now that they all know the facts of the budget, none of them is really sure when the election will be, and they differ a little bit too on how to assess the budget. Some said it was a con-man's budget. I do not see it as that. But, of course, if one has some pre-chosen phrases ready to use before the budget comes out, it would be a pity to waste them and one has to use them. I look upon this budget as an honest, straightforward budget, well presented, as clear as any one could expect a budget to be and I see nothing sinister in it. One tries to pay one's way from day to day and from year to year and one curbs current expenditure as best one can when times are not the best; one tries to strike a balance between the assistance one can give and the taxation one can take. One borrows for capital expenditure, and we have borrowed quite a lot. One borrows wisely and spends it well. In the investment plan there was a good example of that policy in action. We have a huge investment in infrastructure mainly directed at our roads. Deputy d' Arcy did not mention that. It is invested also in other community and sanitary services. I see a great welcome for that. It is welcome too that Kildare got the lion's share of this expenditure on roads and it is badly needed. We will see the fruits of it this year. Last year £.5 million was provided for the Naas by-pass and this year £3 million is being provided. The long promised road from Newbridge to Kildare across the Curragh will become a reality and also the road that will help to by-pass and relieve the bottleneck on the western road with Lucan and Leixlip and Maynooth.

That is an example of proper budgeting. A year ago, when our present leader took office, the very big problem he identified was the search for industrial peace and he made that a priority. We have succeeded very well in dealing with that problem and we have cut dramatically the number of days lost through strikes. This should be a source of satisfaction to us all. It is a reason for complimenting the workers and the employers and the Minister for Finance who was then Minister for Labour and who worked tremendously in bringing about this peace. The Government deserve praise for not shirking their responsibility when the chips were down in dealing with unofficial strikes. We have shown a sense of responsibility all round and I give the opposite side of the House credit for that too. I hope we will build on this and improve our record.

But there are already rumblings from sections of the community who have very little cause for complaint. They are secure and they are cushioned and still they are anxious for more. It is high time everybody, Government and Opposition, workers and employers, industry and labour, all Irish people, realised that if we want to make a go of this little country we will have to work together. As Tennyson put it:

Some sense of duty — something of a faith

Some reverence for the laws ourselves have made

Some patient force to change them, when we will

Some civic manhood firm against the crowd.

That might not be a bad motto to hang in Leinster House, in Liberty Hall or in the two headquarters in Mount Street.

Deputy D'Arcy referred to county councils and how they were feeling the pinch from a financial point of view. He complained that in 1980 the Minister for the Environment decided to restrict them to a 10 per cent increase and in 1981 they are restricted to a 12 per cent increase. He said this was not enough. I will tell him why: because the Government are taking up the tab. When the Wexford and Kildare County Councils struck the rate themselves they were directly answerable to the people who elected them and they settled for a lot less than 10 per cent and 12 per cent. I told the Kildare county manager that no matter how much money the Government give the council he would be prepared to say it was not enough. I repeat that the people who are prepared to do with bacon and cabbage when the are paying for it would like to have caviar when someone else is paying for it.

I want to say a few words about social welfare. The budget illustrated that the most needy people in our land, old age pensioners, widows and long-term social welfare recipients, were well looked after in this budget. We looked after them better than most people expected. Those who needed help got it and we proved we had our priorities right. A married couple, both drawing the contributory old age pension, will be very glad of the increase of £10.75 per week. The 20 per cent increase for short-term social welfare recipients has been brushed aside by many people who like to highlight abuses of the system. In my view the vast majority of social welfare recipients are decent people who would prefer to work and they definitely deserve that extra 20 per cent. I am very encouraged that the Minister referred to the parasites who abuse the system and I share with him and others the hope that these abuses will be stamped out.

I am glad the new Minister for Labour has reinforced that opinion. Even today there is some evidence that tax evasion and abuse of the social welfare system are socially acceptable crimes. It is the duty of politicians to state clearly that these crimes are not acceptable, that they are unpatriotic and that these bloodsuckers are undermining the finances of the State and are prepared to batten on the work of others; they do not pay any tax but take unlawful handouts from those who do. I am in agreement that these abuses could be stamped out.

Previous speakers spent a lot of time on agriculture, but I would like to make a passing reference to it. I do not believe any other Minister for Finance in today's climate could have done as much for the farming community or the agricultural industry as the present Minister did in this budget. Newspaper reporters and farming leaders have not seen it that way, but they have a job to do. I know farmers have fallen on lean times but if one grumbles when times are good people are less sensitive to one's complaints even when times are hard. When the helping hand is extended, as far as the Minister for Finance could extend it, and when that gesture is dismissed as being less than helpful, the result is not encouraging. Today Deputy D'Arcy three times referred to this as nothing. This is very hard to accept.

The Minister for Agriculture is making tremendous efforts at EEC level to highlight the need for assistance for agriculture and I am very hopeful a good package will emerge. There is every indication that in framing this year's European parliamentary budget a realistic price increase for agricultural produce will be obtained. That has not always been the case. Efforts were made to keep increases at zero during my time in the European Parliament. I must give credit to our members of the European Parliament, from all sides, for putting the needs of Ireland first. I was always aware that when the question of the common agricultural policy and proper prices for farmers were being discussed, the Fianna Fáil group, represented by the European Progressive Democrats, were completely committed to that objective. There was no clash of interests within that particular grouping. I believe this time EEC attitudes will be helpful and I have every confidence that our present Minister, Deputy MacSharry, will get a good deal.

Last year because of the extremely bad weather and the difficulty of saving many crops, particularly hay, the difficulties of the farming community have been compounded and the tendency is to look for a scapegoat, someone to blame for the weather, the decline in the cow herd, the burden of interest on big loans and so on. The Government of the day are the handiest scapegoat available.

I heard a remark at one of the mass meetings reported on the radio that the farmers warned the Coalition and put them out of power and that they were now warning Fianna Fáil and that they will put us out of power. When they do all that who will they put in? It is not enough to be always negative, one should be a little positive as well. I am positive about one thing: if the future of Irish farming depends on how much a pressure group can wring from the Government of the day, that future is based on a very shaky foundation.

We all want to see farming and its allied industries thrive and prosper and we are all committed to helping them to expand and increase their output. What I am saying is not hypocrisy. Those who know me well and who know the Minister for Finance would not refer to this as hypocrisy either. We want a secure future for all our people on the land, a future that will ensure increased prosperity and a decent standard of living for all who get a living from the land. That cannot be based on stop gap solutions. It must be long-term, systematic, forward thinking and well planned. That is what this budget is about. That is what Fianna Fáil are about. I am confident that at the end of the coming year when we appraise our progress in the farming sector, my prediction will be proved correct.

The Minister's action should help to give a boost to the confidence of the agricultural sector. I firmly believe the coming year will see an improvement in agricultural output and an increase in farming incomes under a Fianna Fáil Government. That situation will continue to improve in the future.

Deputy D'Arcy spoke of farm taxation and the 15p increase on the gallon of petrol. I am very pleased the leader of Fine Gael, even at this rather late hour, recalled Deputy Richie Ryan to the front bench. For a long time he was warming up on the sidelines, but the captain was not sure if he would be released from his European club. I am very glad he is back because the enforced absence of Mr. Conor Cruise-O'Brien, Senator Justin Keating and Senator Cooney makes it hard for people to remember what the last Government were really like. Deputy R. Ryan will be a living reminder of what that Government were like. If Deputy D'Arcy wants first hand information from someone he can trust about a 15p increase in the price of a gallon of petrol, or about farmers taxation, he can go to no better man than the person who occupies the front bench with him now.

During the course of his remarks, Deputy D'Arcy referred to the last three years under a Fianna Fáil Government as three years of neglect of farming. He referred to some famous three in a row sporting activities which people can be proud of. Can he explain how it is that in three different Coalition parties — the last one was the National Coalition, I am not sure what names they coined for the other two — who had such a galaxy of talent and brains on which to draw never succeeded in even making it two in a row? Any time they faced the electorate, when their term of office was complete, the answer was always the same — restore Fianna Fáil.

The ordinary fishermen all around our coast will recognise a commitment by the Government, particularly by the Taoiseach, to the fishing industry. We have shown that consistently during our term of office and in a time of world recession we have made available a greater amount of money than ever before to improve and assist the industry. I know there are some leaders of the various fishing organisations and mouthpieces of certain sectoral interests in the industry who had their minds made up to condemn the budget before they even knew its contents. Phrases like "at a time when Irish fishermen are experiencing unprecedented crises of enormous proportions" are very hard to reconcile with the fact that 1980 was a record year for the amount and value of fish landed in Ireland. The fishermen deserve every credit for their good work in their industry. To illustrate that this good work is matched by a constant, steady and continuous commitment by the Government, I will tell the House about the plans we have for the fishing industry, for both sea and inland fishing, for 1981.

In inland fishing, the Fisheries Act, 1980, emphasises the importance which the Government places on the conservation and development of every aspect of our valuable fresh water resources. This is further reflected by the sum of £3½ million which has been provided in the 1981 budget for administration, development, research and other matters with regard to inland fisheries. Last year we devoted £3½ million to fishery harbour development. In 1981 we decided to spend £4¼ million. About half that money will be spent on harbour development in Howth, Killybegs, Caherciveen and a small number of other projects. Provision has also been made for new works at Castletownbere, Killybegs, Rossaveel, Portevlin, County Donegal, and for some small schemes. Department of Finance approval has been obtained for works at Burtonport, Schull, Killala, Kilcummin, County Mayo, and Cromane, County Kerry. The commencement and execution of these works is dependent on the progress by the Office of Public Works in completing their preliminary arrangements for contracts, recruitment of labour and so on.

The Eiranova fish processing plant on Dinish Island, Castletownbere, is expected to be operational in the next few weeks. This is a joint venture between ourselves and Spain and I have great hopes for it. The new auction hall at Killybegs will, hopefully, be completed this year.

I would like to refer now to the welcome decision by the Minister to give a repayment on hydrocarbon excise duty to sea fishermen. As well as being exempt from the budget increase of 15p per gallon in the duty on petrol and diesel oil, fishermen are being granted a rebate of 2p per gallon in the excise duty payable by them on diesel oil used in fishing operations. The fishermen will pay duty at the full rate and repayments of 2p per gallon will be made in arrears two or three times a year. Claims for repayment will be based on accounts, which must be available for inspection by Revenue staff. The provision to implement this concession will be included in the Finance Bill this year but will not come into operation until some time around 1 June at the earliest. I would have liked this 2p rebate to be more but it is all we can afford in a very belt-tightening year.

I believe the ordinary hard working fisherman, who is more concerned with doing a good job than talking a lot, will not consider the rebate — as one of the leaders of the fishing organisations described it —"an indication of a marked lack of consideration on the part of the Government", or as another spokesman, who is always good for an instant comment, described it, "nothing short of an insult". Oscar Wilde once said that nowadays we are all so hard up that the only pleasant things we can pay are compliments. Apparently some people are not hard up enough to pay compliments. Having visited Killybegs during the course of the year, particularly when the mackerel season was in full swing, "hard up" are not the words I would use to describe Killybegs port.

With regard to the case that we should give special consideration to Irish fishermen in regard to oil, we must remember that we have a built in advantage already in being near the fishing grounds, when other foreign vessels have to steam a long way to get to where we are. I know it was pointed out that this could be offset by the two sea journeys our processed fish have to make across the Irish sea and the Channel before they get to the Continent of Europe. If we land our fish here and have an advantage there and process it sufficiently and add on all the value possible, before we send it away, we should more than offset any disadvantages.

In the Book of Estimates, under subhead C.1 — Sea Fisheries Development — £198,000 is being allocated for a programme of fisheries research and development and a substantial part of that will be spent on the hireage of boats for marine fish stock and pollution surveys.

Under subhead C.6, we made a down payment of £700,000 on the new fisheries research vessel to Verolme Dockyard in Cork in December last. It will be built in that yard. Construction of the vessel will start within the next few months and it is hoped to have it delivered early in 1982.

Under subhead D.1, there is a grant-in-aid to BIM for administration and current development and apart from pay, expenses and so on, the 1981 estimate of £3,340,000 provides principally for expenditure on interest subvention of £940,000. That is the subsidy given to close the gap between the interest payable by the board on advances from the Central Fund and the interest charged by the board on loans to skippers under the board's marine credit plan. In addition, there is £332,000 marked for development. That covers the areas of marketing, fisheries and investment development, including the cost of running the national fisheries training school at Greencastle. The most significant cost borne also under this subhead is £180,000 for the operational cost of the Decca navigation stations around our coasts.

Subhead D2 is a grant-in-aid to BIM for capital development purposes. Additional funds are available to BIM by way of repayable advances from the Central Fund, a line of credit from financial institutions and the board's own resources. It is hoped to bring in legislation in the current year to increase the board's limit of Central Fund advances from £15 million to £30 million. The estimate of £6,000,000 for 1981 is broken up under three headings. We have a marine credit plan which will get £5,200,000. This provision is for the payment of capital grants to fishermen for the purchase of new vessels and for the modernisation of older vessels. There is capital expenditure of £450,000 for capital costs of building new plants, purchasing experimental fishing gear and paying small investment grants to fishermen's co-operatives and small businessmen to set up cold storage, freezing and fish handling facilities at fishing ports.

An amount of £350,000 has been earmarked for mariculture and it is estimated that that amount is sufficient to cover the cost of the scheme for fish farming grants. With regard to FEOGA grants, grant approvals in respect of Irish investment projects, such as boat purchase or aquaculture projects, in 1980 amounted to £2.66 million. That was paid to us from the guidance section of the FEOGA scheme. A decision for 1981 is held up pending agreement on a common fisheries policy. Unfortunately, the regretted death of Mr. Gundelach did not help us in reaching agreement but it is hoped that we can do so within the near future. We have also made allowance for £200,000 for the repayment of advances. That amount is to cover losses and write-offs mainly due to account holders failing to meet their commitments. Those examples of Government expenditure disprove the allegation that we do not have any care for the Irish fishing industry or its future.

With regard to BIM, I should like to state that they adopt a very understanding approach in their attitude to loan repayments. They cast and re-cast their loans up to three times and every individual case in examined on its merits. Personal considerations or unusual circumstances are taken into account. There are approximately 450 accounts on the books of the board at present and the amount involved is about £20 million. About one-quarter of those are fully paid up and more than three-quarters are less than six months in arrears and so are not in any difficulty. The number of boats repossessed is quite small. At a level of 1 per cent or 2 per cent the figure is probably in line with the failure rate in any other industry.

I should like to deal with forestry and our planting programme. In recent years, due to difficulties in the acquisition of land and also because of an imbalance in the distribution pattern of the land reserve, there has been a shortfall in the area planted and it has proved quite impossible to maintain the 10,000 hectare annual target. That is a matter for concern. Happily, there is now evidence that land acquisition difficulties are easing somewhat. That is mainly due to the fact that the price levels which the Forest and Wildlife Service can pay for land has been increased substantially. As a result land owners are now more amenable to selling their land for forestry. I am confident that this will lead to a much better land intake and the creation of a more satisfactory land reserve situation.

In this context I am glad to say that, notwithstanding the current financial constraints, the Government in allocating their resources for capital development projects this year made available a sum of £3.3 million for land acquisition for forestry and for wildlife conservation in 1981. That is the highest level of funds ever made available in one year for this purpose and is the best indicator possible of the seriousness of the Government's approach to this important sector of national development. Incidentally, I should like to mention that the capital allocation for 1981 in respect of the development and management of the existing forest estate amounts to £11.7 million. In this connection the construction of forest roads and investment in mechanical equipment are primary objectives in the context of timber extraction requirements. It is anticipated that there will be a substantial increase in industrial processing of the produce of the State forests in the years immediately ahead.

The Government's intention, as expressed in the recently announced investment plan for 1981, is to encourage greater participation by the private sector in public investment projects. Some possibilities in so far as the State afforestation programme is concerned are being examined. The issues involved are quite complex and it is still too early to say what the outcome of the exercise will be. I am hopeful that something worthwhile in terms of the national afforestation programme will eventually emerge. There are Members who look on the private sector and the profit motive as something to be shunned. I do no agree with that. I am not a capitalist but a pragmatist. If the budget encourages private investment in forestry, flat building or the building of advance factories, so much the better. In a society that openly encourages workers to look for all they can get it would be foolish of us to expect capital to be invested unless there was a reward to be gained at the end of the day.

Unfortunately, it must be said that the history of private forestry in Ireland has not been good so far. Despite grants and the free technical advisory service for decades the response has been unsatisfactory. We must admit that. It is a cause for concern and every effort will be made to change it. Last year grants were substantially increased and the basic grant per acre now stands at £125, which represents a significant contribution to the cost of the work. There are now some positive indications that private sector involvement is changing for the better. Hopefully, this will lead to a substantial improvement in terms of private planting.

Apart from the existing grant scheme it is expected that private planting in western areas will be given a major boost under the EEC western package. The forestry element of the package envisages the afforestation of upwards of 20,000 hectares of 50,000 acres in the less favoured areas of the western region spread out over the next ten years. The total expenditure will be £18 million and that amount will be shared equally between the Government and the FEOGA fund. The detailed aspects of the package, including the forestry proposals, are currently the subject of discussion with the EEC Commission. When approved the forestry scheme will be launched and suitably publicised. I am hopeful that the scheme will be in operation for next year's planting programme.

That section of my Department also has responsibility for wildlife. I should like to say a few words about nature reserves. In general it can be said that steady progress is being made towards the identification of scientifically important ecosystems and habitats with a view to eventually establishing a network of nature reserves representative of all the important ecosystems and habitats throughout the State. We made a start in this direction when we established six old woodland nature reserves last year. Two other areas are receiving special attention at present. The first is Pollardstown Fen in County Kildare. We are about to open negotiations with the landowners for the purchase of Pollardstown Fen so that it can be established as a nature reserve. Last year the area to be acquired was surveyed and indentified and, hopefully, the acquisition will be well under way before the year is out.

The second area is Lough Ine in Cork. It is hoped that Lough Ine will become our first marine nature reserve within a few months. Substantial provision, £.5 million, has been made under subhead C.I. of the Forestry Vote for the purchase of land for conservation purposes. I mention these matters concerning my own Department of Fisheries and Forestry as a proof that, despite the stringencies of the times and the need to economise, no worthwhile development or project has been left aside and the good work goes ahead. This Government and this generation are prepared to work towards and pay for the protection of our national heritage.

The Minister in his budget speech made reference to the national awards for youth and he provided money to the tune of £100,000 and the Minister of State, Deputy Tunney, provided the idea. Much good work has been done for our young people by Minister of State, Deputy Tunney, and they have responded to this. The idealism and the youthful innocence, zeal and genuine charity of our numerous young people will be recognised under this new scheme. In my own area I have seen many projects in community halls, sports complexes and amenity schemes undertaken with assistance from the youth employment schemes that will be permanent monuments to the channelling of young endeavour in the correct way. Gura fada go leanfar leis an deagh obair seo agus go raibh an tAire Ó Tonnaí i réim le fada an lá. Tá súil agam go mbeidh sparán aige cosúil leis an sparán a bhí ag Séadhna agus gach uair go mbíonn scilling ag teastáil uaidh nach mbeidh le déanamh aige ach a lámh a chur isteach sa sparán agus go mbeidh an scilling le fáil aige ann.

I would like also to compliment the Minister on his attitude towards the disabled. I have a special interest for many years in the disabled, particularly those in wheelchairs and I must thank the Minister for making a very worth while contribution to their cause in this the Year of the Disabled. Ireland will now be in a position to stand proudly before the UN happy in the knowledge that we have made a very significant stance in marking 1981 a memorable year so far as Ireland is concerned. The increase of 25 per cent in the disabled persons' maintenance allowance, and increases for the blind and incapacitated are welcome. The removal of VAT from wheelchairs and other appliances, the increase from £25 to £45 a month for domiciliary care, the mobile allowance which the Minister has increased for motor cars and the phone service are all very welcome indeed. These are meaningful improvements, well thought out and very well received. I remember mentioning to the Minister during the year two wheelchair people in my area who married and, unfortunately because of some archaic type of regulation, their joint income was less when they married than they had singly. That has been rectified since and I would like to thank the Minister for Finance and Deputy Woods, Minister for Health and Minister for Social Welfare for their interest in this case.

I would like too to make reference to the great strides that have been made to provide job placement for handicapped people in our Government Departments. I know that the previous Minister for Labour, now Minister for Finance, is very interested in it and I would like to compliment personally also the Minister for Labour, Deputy Nolan, for his confirmation recently that he is as interested in it and as hopeful that our 3 per cent quota for the handicapped will be achieved during the year. I am delighted that the Minister has shown such concern.

In conclusion, I am firmly convinced that this has been a very good budget. I do not believe that so many people are disenchanted with this budget as the leading article in the Irish Independent of Friday, 30 January, would have us believe when it referred to a torrent of adverse comment that rolled in from every side. I go home every night and meet with people who know me well enough to tell me their feelings and, to be quite honest, while I may have a trickle of criticism, this mythical torrent that was so evident in Middle Abbey Street was not to be seen at all in the upper reaches of the Liffey, in Clara or Newbridge or even along the Canal in Naas. It must be something of a metropolitan phenomenon brought about perhaps by certain hot air issuing from a certain building there that caused currents to rush in from every side to fill the vacuum.

I believe that this is the kind of budget that allows us to go to the country now or to wait for a further year and produce another budget which, as the result of the solid foundations laid in 1981, could enable the Minister for Finance to produce an even better budget in 1982. Our options are open, but one thing is certain. We will never allow it to be said, as can be said of the third Coalition, that we clung to office as long as we possibly could before we faced the electorate, there to get the greatest rejection that ever a Government got and at that stage the Irish people only wanted to know when they were going to leave. To the Minister for Finance I can only say with regard to this budget what the old age pensioner will say in April when he draws his £30.65p. and turns to his brother over 80 and sees him drawing £32.80: go mbeirimíd beo ar an am seo arís.

I take a different view from that of the Minister for Fisheries and Forestry. I think this budget lacks imagination. It lacks the appreciation that a concerned Government would have for the needs of the underprivileged in our society. All of the talk of the goodness in the budget is centred around the benefits which have been given to the social welfare recipients, to the disabled and the handicapped and, as Deputy Power, the Minister just concluded, has said, he has a particular interest in these people. He has a particular interest, and his Government have been guilty of charging VAT on the basic needs of these people up to the time of this budget. Now with chest expanded he announces the Christian charity which this Government have as if they have now seen the wrongs of their ways and have removed VAT from such things as wheelchairs. If the only credit the Minister and the present Government can take is to boast that he is concerned about the underprivileged of this State, then it is time that certain people in high places began to examine their consciences.

I do not see anything great in this budget for the underprivileged. I do not see anything good in this budget that will help people who are living in homes unfit for human beings to live in, who go to bed at night cold and hungry. I do not see any greatness in this budget and I see no reason why a Government or a Taoiseach should crow loudly about what they have done for the poor of this country. I have personal knowledge of old people who go to bed early in the evening because they cannot afford a fire, who stay longer in bed because they are hungry and hunger pains do not annoy them so much when they are lying in bed. That is happening in this Christian society that we live in, yet we have the Government boasting that they have given a 25 per cent increase to these people. It is not a 25 per cent increase because the 25 per cent, which is the maximum increase the Government talk about, is not coming into effect until April. In other words, the people whom the Government now believe are entitled to a 25 per cent increase must stand against the inflation which this budget has caused for the next two months. Must they remain hungry for another two months until this 25 per cent increase is given to them? What do they do for the next two months waiting for the increase in the budget? If we take the ten months that are left, excluding the two months when they do not have the increases, then a round estimated figure for the increase is 21 per cent and with inflation running at 19-21 per cent they have not received anything.

Debate adjourned.
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