I think that most critics of the budget now agree that the first impressions of it were wrong. After the first day, and particularly after the second and third days after the budget people wrongly interpreted it but now over the weekends that have elapsed since the budget it has become very clear to most sections of the community that in-built in the budget were a number of major priorities. The Government's first priority in framing the budget was to promote economic growth. The second priority that has emerged very strongly is the effort in the budget to increase employment. A further priority which perhaps was not as obvious as the other two was the commitment of the Government and the Minister for Finance to look after the interests of the weaker sections of the community. It is perhaps fair to say that these points did not emerge clearly at the beginning of the budget debate. Again, perhaps not as obvious because it has not been spoken about in detail, there was the Government's commitment to the farming community. It is on those points that I wish to comment before I deal with certain aspects of the Department for which I am responsible.
The Government set out what they intend to do in their 1981 investment plan under which £1,700 million will be spent on capital investment projects here this year. This will bring about an improvement in the country's basic services such as energy supply, roads, telecommunications, water supplies and harbours. I think I should in fairness comment on what the Minister of State at the Department of the Taoiseach, Deputy Moore, said. I should like to reiterate his statement that this was a golden opportunity for banking organisations and for the trade union movement to make an investment in the country. I am delighted that the Government have given them that opportunity in this plan. I am optimistic that the amount expected from the private sector under that plan will be of significance and will provide the first opportunity of changing times and finances so that the burdens of the development of the country will not rest solely on the taxpayers. This seems a sound and logical way to tackle our problems. A sum that is not enormous is being asked of the private sector. I think the money is available if we make the investment sufficiently attractive for them and there is no reason why it should not be attractive.
Apart from the substantial increase in employment which will result from it the plan itself will provide directly about 10,000 extra jobs most of which will be in the building and construction industry. From what I have said it will be seen that the Government are committed to ensuring an expanded programme of infrastructural services in order further to stimulate economic development. This is very important because that is Government business. The important role of the budget is to create the infrastructure for the continuing programme, for example, of the IDA, for people already in industry who want to expand, for the community at large, for the building of houses, for transport and farm work and for telecommunication services which play a most important part nowadays.
Housing has been spoken about today and on many other occasions in the House. Provision for housing capital expenditure in 1981 at £242 million represents an increase of 33 per cent on the original provision of £183 million for 1980. The 1981 provision shows an increase of 34 per cent in real terms compared with 1977. Expenditure between 1975 and 1977 dropped by 57 per cent in real terms. New house completions in 1980 reached an all-time record. Completions increased from 24,000 in 1976 to 24,500 in 1977, to 25,400 in 1978, to 26,500 in 1979. Private new house completions in 1980 are estimated at over 21,700 and are also a record. As regards my own county, Galway, in the case of housing loans and grants and SDA low-rise mortgages we have increased from 1977 from a figure of £800,000 made available to the county council and £53,000 made available to Galway Corporation to this year's figures of £2,815,000 to Galway County Council and £180,000 to Galway Corporation. Every Deputy here could break down the allocation for his own county, but it is important to recognise that there is almost £1 million of an increase in that figure alone. Last year's figure of £50,000 to Galway Corporation has been increased to £180,000, which in itself is an astronomical figure.
The building industry is, of course, a key industry, being the second largest employer in the country. The health of this industry is, therefore, vital to the well-being of the whole economy. Under our investment plan, building activity will increase on a wide front. Employment in the industry will be increased, as well as in related industries and services. This Government will not allow the building industry to sink into the doldrums, as the Coalition Government did when they were in office, allowing public capital investment, output and employment in the industry to fall.
At this point I would like to say that the one sector to realise the philosophy behind this budget was the building construction sector, which gave it a wholesome welcome following on the recognition of its real purpose. That was the turning point, after the first impressions of the budget, in getting people to realise just what the budget was achieving.
Other provisions aiding the building industry include £98.5 million for the house purchase and low rise mortgage scheme — an increase of 44 per cent on last year — and a proposal to introduce a new special allowance of 100 per cent which would be set against rental income in respect of expenditure incurred in the construction of moderate-cost rented residential accommodation. Here again, this is a proper philosophy. The Government is giving a welcome opportunity to private enterprise to move into the important area of giving relief to our growing population who urgently need housing. The times have changed very drastically from not alone ten years ago, but five years ago.
The increased allocation for roads has almost shocked the Opposition, who do not believe the increases that the Government have allocated. The question to the Minister produced a figure which they have not yet got over. During the weeks previous to the budget most Opposition speakers spent most of their time at council meetings and other fora alleging that this Government did not have — and this was alleged in my county council — the price of a single bag of cement — the old phrase, "You have not got a shovel and you have not got a man to carry a shovel". While they were old catchphrases they were true in this instance, and the allocation of this grant-in-aid to the roads section was certainly most welcome. My own county in 1981 received £3,140,000 and Galway Corporation received £753,000, to be exact, a total of £3,900,000, practically £4 million, compared with last year's figure of £2.3 million. This alleviates any problems concerning roadworkers and those employed under this service can rest easy in the knowledge that an abundance of money is being given to them, an abundance of money to develop an infrastructure not alone in my county but throughout the country. This service is of the highest importance and the needs of the community can be met. One can say, with optimism, that not in one or two years, but certainly in three, with this type of expenditure, our road networks programme should be exemplary.
Sanitary services I need not go into. Again here, the Government have not been lacking and have given freely. This service has been highlighted in recent years and, particularly, in recent months. By giving adequate water and sewerage facilities, we attract industry and in this connection this increase is most welcome. Water supplies are also important to our agricultural businesses which will benefit from the increased expenditure.
I come now to my earlier point regarding social welfare allowances. I do not have to deal with this subject in depth but the Government are committed to weaker sections of the community — the old age pensioners and numerous people who rely on payments from the health boards and the DPMA scheme. The increase allocated to the disabled by the Minister for Finance was most creditable and shows to our people and to all that the commitment of this Government to the weaker sections of the community has not been forgotten. We need only look at the records of this year, last year and the other years since we took up office, by comparison with the performance of the Coalition Government.
A previous speaker mentioned the income tax bands. Here again, the Government were very realistic in giving almost £90 million in one full financial year. That is no mean figure, particularly when we take into account the financial constraints on the economy due to the enormous pressures brought about from outside, especially the recession in world trade, high price increases and numerous other causes. While this increase was praiseworthy, one cannot forget that, in addition, the Government negotiated and paid last autumn a 14 per cent wage increase to our workers and taxpayers. The commentators on the budget outside this House and, to be fair, to a lesser extent within this House, never acknowledged this at all. The workers have a national wage agreement under their belt and were free movers. This point was not mentioned when they gave their deliberations on television, radio or in the national press.
This weekend, I noticed a categorical statement made by Deputy Keating of the Fine Gael party in Mayo, I think — and indeed, I have heard it mentioned in the secret tunnels and the different places around my constituency and in this city — that there was too much Government expenditure this year. It is appropriate that we should ask the Leader and the members of the front bench of the Fine Gael Party to sit down this week and explain, not particularly to me but to the rest of the community, that statement of their front bench spokesman. What exactly did they mean by this statement? Did they mean, for example, that we should cut the teachers' pay, or the Garda pay or the social welfare allowances? Did it mean that we should cut the allocation to the building industry and the telephones programme, that we should cut the allocation to the county councils, as regards roads, water, sewerage, that we should cut the allocation of money to the IDA? How do they believe that the, in their own words, excessive expenditure by the Government should be cut back? They should tell the Irish people precisely what they mean by that statement. Perhaps they mean what Deputy Kelly said here last week. It is a special matter and I will deal with it later.
Perhaps Fine Gael are telling us we should go back to the old days of embargoes on recruitment to the Public Service, on wage increases so that wages would stay in line with inflation, on conciliation and arbitration procedures. I should like them to explain to the nation precisely what they mean by what they are saying. For instance, I should like Deputy Keating to explain the precise meaning of what he is alleged to have been saying through the media in recent days. I am amazed that Deputy Garret FitzGerald has not rushed into the House to explain the difference between what he said and what one of his spokesmen said, and what they meant to say to the decent people of Mayo at the weekend. I am sure the people of Mayo were as confused as I was at the reports of the two speeches. I beg of him to come in and explain that point.
Now I will turn to farming, about which there has been much controversy. I acknowledge, as every Member of the House does, the severe difficulties farmers have been going through. However, it is not good enough for Deputies to offer only sympathy to them, because sympathy will not help them to rear their children or to settle their bills or to finance their development programmes. There was acknowledgement of that in the budget and it will cost the Exchequer £35 million in 1981. The suspension of the disease levies will mean an increase of ½p per gallon on milk and £3 per head on cattle going to slaughter. These changes will put £10 million directly into farmers' pockets. There will be full tax relief in respect of increase in stock value, and the two payments dates arrangement for income tax will be continued for a further year.
These reliefs will reach out directly to most of the farming community and this is most welcome because of the direct aid it gives to farmers. In view of the difficult income position of farmers, the Government have decided to introduce reliefs on agricultural rates liable this year. This will involve full relief from rates in the case of farmers with land valuations of less than £50, and 50 per cent relief for farmers with valuations of between £50 and £70. This will reduce farmers' rates bills by about £19.6 million.
For a moment I will look at the position this creates for County Galway farmers specifically. We are now giving total rates remission to 16,751 farmers in County Galway and 50 per cent relief to a further 384 farmers, leaving a balance of 316 farmers in that county who will have to pay full rates. I have not seen any of the Galway Deputies rising here to compliment the Minister for this tremendous benefit, again directly affecting the pockets of farmers in the county. I suggest that individual Deputies should look at these figures in the context of the counties they represent so that the reality of the benefits will be appreciated.
Of course one would have liked to have done more for the farmers, but one is optimistic of the outcome of the negotiations which the Minister for Agriculture is at present engaged in. These are all direct aids to farmers unlike the Coalition days when any aids to farmers were indirect, coming through middlemen who scooped most of the cream before the benefits reached the farmers. I admit there was a recession partly outside the control of the then Government, but what is the difference between that recession and the one we are now enduring?
There were other benefits given to farmers throughout last year's difficult period, like the £1 per kilo for lamb and the £1.7 per kilo for mutton. The Minister for Agriculture at all times has said that the income of farmers would be maintained and not dropped if at all possible. We enter a new year with high hopes that when the Brussels deal has been finalised it will be of direct benefit to the farming community, especially the small farmers, those in need of further help particularly.
The land reform programme announced by the Minister for Agriculture is most welcome, bringing land structures right up to modern times from the point of view of sale and distribution of our greatest national asset. It is our hope that the White Paper will bear fruit before the end of this year.
I should like to add a few comments on fisheries, a subject that will interest Deputy White particularly. The Minister for Fisheries and Forestry is available to speak to the fishermen about their problems but the archaic laws of many years ago are not adequate for present conditions. A valuable scientific input has been made by the universities and others interested in marine aquaculture and the law needs to be updated in order to enable the development of, for instance, oyster beds and other shellfish-based industries. The Minister is aware of this need and I am sure he will take steps to deal with it.
A significant move made by the Government last year was the arrangement by them of reduced interest loans for agriculture to the amount of £100 million. This fact seems to have been forgotten by many people. This Government have faced up to their responsibilities and we are lucky to have a man of the calibre, intelligence and understanding of the present Minister for Agriculture, Deputy MacSharry.
In so far as my own Department are concerned, I can say that since our appointment both the Minister and myself have devoted ourselves to improving the services provided by the Department. I have never denied that there is room for improvement in the service, nor have I ever tried to mislead the public as to what is required to improve the service. We have set ourselves the objective of bringing the standard of our telephone service up to EEC levels and in order to do this we have embarked on an ambitious five-year programme, the first year of which has just recently been completed.
Firstly, the Government are determined to implement the five-year programme, which as we all know will cost millions of pounds over the five years. The Government are committed to this programme and will make the necessary capital available. Evidence of the Government's commitment can be seen in the fact that last year we spent £123.4 million on developing the service and this year £220 million have been allocated for this purpose. Of this £220 million, £100 million will be raised from private sources. This will further ensure the availability of capital for our programme.
The European Investment Bank has provided loan finance for investment in telecommunications development on seven occasions since 1973. Loan finance approved totals almost £175 million, including £75 million for the seventh telecommunications loan project. Agreements were signed yesterday for the transfer of the latest instalment — some £25 million — of the seventh loan to the Exchequer. The loans received from the European Investment Bank emphasise the Government's priority commitment to extending and modernising Ireland's productive infrastructural base, as set out clearly in the recently published investment plan for 1981.
The work to be financed by the European Investment Bank loan includes the connection of 86,000 new telephone subscribers and 2,200 new telex subscribers, provision of new electronic and electro-mechanical exchange equipment, expansion of the trunk system by provision of micro-wave radio and cable links and the provision of new buildings at about 50 locations. These works form part of the Government's programme to expand and improve the telecommunications system throughout the country.
In recent times there has been criticism in this House and in the media generally of the fact that we installed over 62,000 telephones last year, without ensuring a corresponding improvement in the telephone network which has to cater for all of these additional subscribers. Wild allegations and statements have been made by Opposition Deputies and Senators. Early last year they said it was lunacy to think that we could install 62,000 new telephones but when at the end of the year they realised that this goal was being achieved they changed their tactic and said that while new telephones were being installed the service was deteriorating. Of course that was not the case. In their original criticism they thought that we had not made provision for 2,500 circuits, a complete new building programme and the transfer from manual exchanges to automatic working.
It must be remembered that at the beginning of last year the morale of staff within the Department was at a very low ebb, yet not once throughout the year did any member of the Opposition utter any word of praise of the work done by them in such difficult circumstances. I felt this more than anyone because I was dealing with staff throughout the year and I saw their morale rise day by day. In January last year 300 new telephones were installed in Dublin city but by December the figure was in excess of 5,000. That point was missed by the Opposition and by the commentators. The staff of the Department have the willingness and the ability to meet the targets set for them and they look forward to the challenge during the coming year. In the first half of last year they needed guidance and a clear indication of where we are going and it behoves the Opposition to congratulate them on their achievements. Instead wild allegations were made as if nothing were being done and I knew that such allegations would ricochet off the staff at the end of the day. However, they stood firm and met their targets and I offer them my sincere congratulations.
Just to give an idea of what the programme was: for a start over 100 buildings have been completed, construction is in progress on 142 others, and it is expected work will begin on 184 more in the course of this year. Some £27.5 million was spent last year on sites and buildings and the amount this year is expected to be of the order of £60 million. The provision of buildings is of course a first essential towards improving the service.
Twenty manual telephone exchanges were converted to automatic working last year and 61 new exchanges were opened or existing ones extended at many centres. This year we plan to convert 60 exchanges to automatic working. That is about one exchange per week.
A major new trunk exchange was brought into use at Adelaide Road in Dublin and will be brought fully into use over the next six months or so. In addition to its capacity to switch trunk call traffic, this exchange will enable substantial quantities of additional trunk circuits to be brought into use in and out of Dublin, and will ease the congestion experienced on numbers of the new routes out of and into Dublin. Further relief of congestion will occur when a second exchange being installed at present is brought into service later this year and when a third exchange, which is on order, is installed next year. This year will see many new trunk exchanges being installed at several key centres throughout the country. These, when in use, will have a major impact on the trunk service.
The national network has been further improved by the provision of some 2,500 additional trunk circuits on a number of routes, between some of the bigger exchanges in Dublin and on routes such as Cork-Midleton, Carlow-Kilkenny, Sligo-Manorhamilton and Achill-Castle-bar. This year about 5,000 new trunk circuits will be brought into use. Major routes to benefit include the Cross Channel one, Dublin-Sligo and Dublin-Ark-low, which are being brought into service at the present moment. These will be followed during the year by substantial additional numbers of circuits on a number of major routes as well as on a host of somewhat smaller but nevertheless quite important routes.
As a result of the provision of the new exchanges and trunk circuits that I have referred to, a welcome improvement in the quality of the trunk service is becoming evident now and should become much more pronounced in the second half of the year. The public are becoming aware of this and it puts a stay on the allegations of the Opposition.
It should be clear from what I have said that we are providing for expansion of the network side by side with the installation of additional telephones. The 62,000 additional subscribers brought into the network last year were catered for at centres where there was spare capacity available in the system.
Other ways of improving service to our customers are in hands, such as the pressurising of large subscriber cables to prevent damage by flooding, and the re-organisation of our fault handling systems. A computerised directory inquiry service will commence in Dublin soon and will be extended to many parts of the country during the year.
Within the next few months, too, a new telex exchange at present being installed in Dublin will be opened. This, with sub-exchanges being opened in a number of centres throughout the country, will provide the necessary exchange capacity to meet telex applications for several years ahead. The business community will clearly benefit from this. The Department will be helped in achieving more telex connections by the use of new carrier systems to be delivered later this year. One of the problems in providing telex services has been that the necessary cable had not been available. The new carrier systems will allow for the installation of telex machines by superimposing a telex line on an existing telephone line without interfering with telephone service. When delivered in the second half of this year these systems will enable telex service to be provided to applicants who cannot get service at present because of lack of cabling. This is a very welcome innovation.
As Deputies know, trunk calls from public telephone kiosks in automatic areas have to be obtained at present via an operator. This is not altogether satisfactory from the callers' viewpoint as well as being costly in the time of the operators handling these calls. It is proposed to introduce later this month new telephone systems in public kiosks from which it will be possible to dial trunk calls. One thousand of the new coinbox telephones will be installed intially in the more heavily used kiosks but will be extended over the next two years to all public telephone installations. These will be available too for renting to users where they opt for this type. The use of these new payphones, as they are described, will help to raise efficiency and reduce costs in course of time.
We have been conscious, too, of the difficulties that, with rising costs, some of the less well-off telephone subscribers have in paying their quarterly telephone accounts. To ease their problems it is proposed to introduce shortly a telephone account stamp system which will enable them to save-as-they-go towards the cost of meeting their telephone accounts. I would hope that this would be helpful to numbers of subscribers and ease a social problem. I would appeal to all subscribers who find difficulty in paying their quarterly bills, to old age pensioners and to housewives to include this new stamp on their weekly shopping list and use this new facility which will shortly be available at all post offices. I look forward to seeing this facility being used to its full potential.
The effectiveness of any large nationwide organisation like the telecommunications service is clearly influenced by the structure of the organisation and, in particular, on how close decision-making is to the user of the service. A review of the organisation of the telecommunications service has been undertaken and the conclusion has been reached that it would be beneficial to make substantial changes in the existing structure involving transfer of work and responsibility from headquarters in Dublin to a number of provincial centres and a re-organisation of the local staffing structure designed to give a better co-ordinated service to customers in meeting their needs. Discussions have begun with the staff interests on the changes proposed. It will take time to implement some of what is proposed as it will, for example, involve substantial extension of computer operation to deal with telephone account inquiries, but it should be possible to make worthwhile progress in at least some aspects even in advance of the establishment of the State-sponsored body that will take over the operation of the service.
I have mentioned here only the more important aspects of our achievements to date and our plans for the future. A lot of work remains to be done — we are only now entering the second year of a five year programme — but I can assure this House and the general public that no aspect of the service and no area of the country is being neglected.
The telecommunications service is big business. I welcome this aspect of it. In the budget we were asked, as a Department with a broad base and the ability to do the job, to pay our way. It is only right that those who have the service should be asked to pay their way and not be dependent, as they were in the past, on the taxpayers who had not this facility but who paid for it. It was significant to me in the budget that the Minister for Finance asked those who can pay to pay their way. I am sure the public at large realise that the Department are giving a service. A large amount of money is being ploughed into the department to give as efficient a service as possible. I believe the Department could pay their way. One could imagine in some years' time the Department being a big profit earner. It should be the number one company in the country as an earner for the State and for those who have invested money in the Department. I believe this will happen provided the necessary finance is provided to carry out this five year programme. Perhaps the programme will be completed in less than five years.
In addition to the heavy capital investment involved the telecommunications service employs about 17,000 staff directly as well as supporting some thousands more in the building industry and in firms supplying equipment, goods and services to the Department. The investment to be made in the service this year alone will enable some 2,000 more to be given employment in the Department. While it is hard to quantify reliably the extra employment that will be generated in industry by the programme it is believed it will be of the order of 2,000 in the construction industry and a further 400 in industries supplying goods and services to the Department this year. That is our outlook for 1981. This is a substantial further benefit to the economy, additional to that which will result from improving the quality and the availability of the telephone service.
The Department have been concerned to increase employment opportunity at home to the maximum extent practicable and to create an environment in which manufacturers of electronics and other high technology-based products are encouraged to set up. For example, the two agreements for the supply of digital telephone exchanges provide for their manufacture in this country giving rise not only to employment directly in these industries but also encouraging the manufacture here of other high technology equipment. The Department buy substantial quantities of stores for use in the telephone development programme almost half of which are imported. In an effort to stimulate the home manufacture of at least some of these stores the Department displayed this range of stores in Dublin, Cork, Limerick, Donegal, Longford and other centres throughout the country. We are very hopeful that this will lead to at least some of that money being kept at home and thus provide good employment.
I believe our idea is the correct one. I want to take this opportunity to encourage those who wish to know what they can do or what contribution they can make towards that programme to contact the Department. We will let them know specifically what they can do. We will show them in our stores the quality and type of article which we need and have to import. The programme has been very successful to date with significant contracts being given at home but there is still a long way to go. I want to encourage industrialists to have another look at what we have on offer. Every £ we can keep at home and give to them is money well spent.
The postal service has sometimes been seen as a stagnant service but this is not the case. Traffic has grown progressively over the years. The volume of mails has doubled over the past 40 years. The number of agency transactions at post office centre counters has doubled in the last 20 years. Further growth of business must be expected, particularly as a major postal development is now planned. This programme will comprise the introduction of new services and a greater marketing effort of the existing services. The nationwide post office network offers a ready made base for the transaction of business throughout the country. Financial services operating in conjunction with the post office savings bank, are particularly suitable for handling in this way. The giro services are operated profitably by post offices in many other countries throughout the world. Economic development over the past 20 years has greatly increased the number and variety of payments of goods and services by the average household. Many of those payments, particularly by persons who have not got bank accounts, are still made in cash. However, more and more transactions are being paid for by credit transfers of one form or another.
The development of telecommunications is strengthening this trend. All of the existing financial institutions are conscious of this trend and are seeking to benefit from it. The post office is no exception. Giro is one system which can take advantage of this trend. It is an efficient means of getting bills paid, sending money and receiving pay. It also provides an alternative service to the commercial banks and helps to reduce the amount of cash in circulation. The examination of the feasibility of giro shows it can be profitably provided here. The post office could readily meet the challenge of introducing it.
Then we have the other aspect, high speed delivery. Mail services are to be developed by catering for the special needs of large scale users such as mail order firms and direct mail advertisements and by the development of specialised services related to the needs of different users. Expansion in these areas will lead to a greater rate of return from the mail's infrastructure and from the staff resources employed. Among the specialised areas there may be scope for expansion in the area of high speed conveyance and delivery services. This is the area in which the great challenge to the traditional mail service arises. The developing telecommunications sector and the increasing value of time in all businesses and economic transactions creates a pressure within a relatively small part of the mail market for a quicker service. We are looking at ways of meeting this need. We expect to be able to make an announcement of our findings in the very near future.
There is an urgent need to undertake postal building works in a number of centres throughout the country. The need arises primarily from the inadequacy of existing postal buildings in these centres. They lack the space and facilities necessary for an efficient postal operation. The buildings also are not capable of meeting the increased demand on them resulting from a postal development programme. Arrangements are being made to provide new or extended buildings in the most urgent of these cases.
This budget faces up to our problems and points the way forward out of our present difficulties. It gives assistance where assistance is needed, but not as much as we would have liked. It is an indication that the Government are committed to giving assistance where it is needed. The message has come through to the public at large that there were four major priorities in the budget. Day by day we see the turnabout in the original comments made on the budget. It provides the right formula for the needs and the circumstances of our young and growing population.
