When speaking last Thursday I endeavoured to remind the House of the very welcome change since Fianna Fáil took responsibility——
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).
What am I to do?
——and I contrasted the change both in recognition and in budgetary provision for our youth services. I endeavoured to demonstrate my disappointment at the paper prepared by Deputy Collins on behalf of Fine Gael, which was acclaimed as a white paper on education.
It was a damn sight better than the Minister's.
It contained no reference to the fact that there were many young people who were entitled to some financial provision to help them in their leisure time and who were entitled to have a Minister of State to deal with this matter for them. I hope a Fine Gael speaker will tell us why this matter was not referred to in their document. I hope Deputy Collins, as his party's spokesman for education, will acknowledge that we have a growing institution, albeit a voluntary one, who with the co-operation of the Government are applying themselves to providing an opportunity for our young people to spend their leisure time in a gainful way.
If education is to have any relevance for the people there must be the necessary provision made for our young people. I hope Deputy Collins has briefed Deputy Kelly to tell us why there was this serious omission in the Fine Gael paper on education.
Deputy Desmond.
If I recollect correctly, the speaker before the Minister of State——
I followed Deputy Ryan.
I beg your pardon.
I should like to commence my contribution by congratulating the Minister for Finance, my constituency colleague, on his appointment. I wish him success and fulfilment in his new post. I should like to have more complimentary things to say about the budget but in this situation it is necessary to be critical without having any personal animosity or personal involvement.
The increasing sense of pointlessness, frustration and unreality with which Deputies have approached the budget debates in the past two or three years is most obvious. Many Deputies hear from their constituents comments that budgets mean nothing or very little and such comments must find an echo in this House as we attempt to assess the situation and debate the budget. We know that what appears in the Book of Estimates and what is said by the Minister on budget day no longer represents the whole picture or tells the whole story. The public also know that and in recent years it has become difficult for Deputies to debate realisticaly all the proposals of the Minister. As far as the public is concerned, many of the hefty increases that affect household budgets occur months before or after a budget.
There is also the problem that the budget estimates have tended to be wrong and that in the past two or three years the deficit has been understated. Last year the deficit was underestimated to the extent of £200 million and it is reasonable to assume that the amount this year will be of the same magnitude. At the moment inflation is between 15 per cent and 18 per cent but the estimates show an increase of only 14.5 per cent over last year. The figure for this year is £3,370 million as against £2,944 million in 1980. It is reliably estimated that simply to stand still another £100 million will be required in Supplementary Estimates. If account is taken of the £80 million allowed for pay increases in the public sector, it is reasonable to assume that at least another £100 million would be required to allow for an all-round increase of 20 per cent.
In 1980 pay in the public sector rose by 35 per cent and we are being conservative when we allow for 20 per cent in the current year. Indeed, it is probable that even an additional £200 million this year will be too low. Even though the deficit of £515 million is an all-time high record, in the view of many Deputies the amount will be in the region of £700 million. It is not an exaggeration nor is it unfair for us to say that the Estimates for the supply services were deliberately underestimated by £200 million this year, as was the case last year. In the light of our experience last year there can be no excuse for the way the Estimates were prepared this year.
The capital budget allows for an increase of 39 per cent, from £1,209 million to £1,820 million. The most alarming feature is that a sum of £670 million will have to be borrowed. I accept that there must be some borrowing in this area but this is an enormous sum. As a consequence of the budget estimates this year, the following is the total Exchequer borrowing requirement for 1981. There is the current budget deficit of £515 million and we are borrowing for the capital budget to the extent of £781 million. That makes a total of £1,296 million, a very high figure. However, we must remember that these figures are probably an underestimate. There is an assumption by the Government that £200 million will be subscribed by the private sector but I think there is a great element of wishful thinking in this. In the current economic situation many people have great difficulty in accepting that this figure will be realised.
We have a total borrowing requirement which will probably be nearer to £1,700 million than the £1,295 million which I mentioned because we have got to add the additional £200 million for the underestimation of the supply services and if we want to be cautious and realistic we will have to add the other £200 million that may not come from the private sector. There is the possibility of a total borrowing of £1,700 million. 17 per cent of our GNP. This appears to be a financial situation in utter chaos. Our borrowing rate of 14.5 per cent of GNP last year is 17 per cent this year. It is double the rate in Britain and it appears evident that as far as our finances are concerned the Government are heading the country towards total bankruptcy.
It is very difficult for the average Deputy who tries to assess the situation to grasp the enormity of that situation. An economist who tried to give us an idea of the enormity of the situation tried to assess what would happen if the present current deficit had to be wiped out overnight. He advanced, in an effort to depict what the situation would be, the following options which could be availed of but which would not be taken. In order to eliminate the current budget deficit overnight and to pay our way we would have, if we were to raise additional taxation to do so, to double all VAT, increase all excise duties by 50 per cent, increase all income tax rates by 50 per cent or, if we were to cut back in services to pay our way, we would have to do away with all social welfare payments, scrap the whole educational system and dismantle the greater part of our health services.
This is an unthinkable situation but this is the extent to which the country has gone into debt over the last four to five years. In 1976 the deficit was £201 million, it is now, on the Government's estimation, £515 million but I believe the more responsible estimation of the situation, judging by past experience, is that it is in fact £700 million. Between 1979 and 1981 over £1,500 million has been borrowed to meet the deficit in the current budget. This, by anybody's estimation of the situation, is alarming. It appears to be economic madness when we realise that interest payments on the public debt have jumped between 1976 and 1981 from £268 million to £881 million. This means, to put it in language which the ordinary layman understands, that 77p out of every £ of income tax collected in the State goes to pay interest charges.
I do not propose to keep harking back to the election manifesto. It is futile to do so now but it is forgivable because it held out such high hopes at the time. However, it is worth commenting that there was a firm commitment to restore stability to the Government's finances. There has been total failure in that area and the Government's finances have never been in worse shape. This total failure has brought about a situation where we have no manoeuvrability to deal with the enormous problem we are now facing with regard to unemployment. I do not believe there is a Deputy in the House who would argue that this is not the problem which the Government should be judged on. This is the very area on which the Government sought to be judged more than any other and it is the one on which they laid their own future on the line and sought to be tested at the end of their term of office. Now, because the Government finances are in such a bad state, we have no manoeuvrability to deal with the situation where we have between 130,000 and 175,000 on the unemployment register. One's mind boggles when one realises that there are between 200 and 300 job losses each day in a State, whose population is as sparse as ours is and which is still only developing. Between 200 and 300 homes in the State are affected every day by the worry of unemployment.
Everybody who speaks on the budget has experience of this in his or her constituency and of the misery of trying to keep up with enormous commitments which families have to meet in the case of unemployment. Very secure jobs have now become very insecure. In my constituency in Cork the once secure harbour industries, where jobs were at a premium, where one was very lucky to secure employment, are no longer secure. Lay-offs, short time and threats with regard to the future are daily occurrences in the lives of workers who once had secure jobs. We now have a situation where new industries, on which enormous sums of money were spent in Government grants and aids, industries which were presented to us as the bright hope for the future, are also closing down. A number of them in my area, as is the case with a number of other Deputies in the House, have already pulled out after only a few years, leaving unemployment figures overnight of 150, 200 or maybe 500. This is a very serious situation.
We also have the hopelessness for the future. There is a great element of worldwide recession in that area and the Government cannot be held responsible for all the problems there are with regard to industrial development at the moment. The fact that the Government have mismanaged the finances of the State so badly, they have so little manoeuvrability and they are so bankrupt at the moment gives us very little hope. There is great hopelessness even where land has been bought and land banks provided by the IDA with great hopes of attracting industry into specified areas in the country. In my constituency in the Ringaskiddy area of Cork a land bank of 1,400 acres has been acquired by the IDA over the years. The local authority invested heavily in the provision of water and, to some extent, in roads. In general the site has been well developed but an industrialist has not been attracted to it. It does not appear from indications we have received from the IDA and the local authority that there is any hope of attracting an industrialist in the future. Those who are losing employment in the traditionally strong industries, the heavy industries around the harbour which now have employees on short time, have little hope for the future.
There is a trend of hopelessness in the area at present as far as employment is concerned. Those who have lost their jobs do not see any prospect of securing alternative employment in the near future. If those people are 40 plus, the prospect of securing alternative employment in their lifetime is remote unless they have influence in certain areas. The majority of people do not have any contacts or influence and they are the people we must be concerned about. The only thing the budget has done is to increase the prospect of further unemployment. The increase in the price of petrol, coupled with the huge increases in the price of oil and petrol in the past, will lead to an increase in unemployment. The increases in the postal and ESB charges will also result in further job losses.
We must be all concerned about the question of youth employment. Our young people who come through our educational system, having endured a lot of stress within that system because it is a murder machine, have little prospect of gaining employment. Our educational system places a great deal of stress and strain on young people. They are aware that the job prospects are limited and that they must compete. The system is such that the future of boys and girls is assessed on performance on a number of days and there is a great scamper to gain points in examinations. They must undergo tremendous strain at an emotional time in their lives. That strain can be detrimental to their physical and mental health but in most cases they leave that system without any prospect of a job.
The Central Statistics Office issued a report to the effect that at April 1980 20,439 people under 24 years of age were registered as unemployed. To that figure must be added the school leavers of 1980 and 1981. A big percentage of our young people are seeking their first jobs and they must undergo the traumatic experience of not having any prospect of employment after years of preparation. I am aware that many young people who have undergone specific technical training which they were advised would lead to secure employment are on the unemployment register without any prospect of getting jobs. They were told many industries would require the skills for which they are being trained.
The situation in regard to young people is serious. There can be nothing more disheartening or soul destroying for them than to find that, having undergone a severe educational system, they must continue to depend on the resources of their parents, which are limited. All young people look forward to the day when they can make some contribution to the family income and be independent but they now find themselves without money and social contacts. They have been cut off from friends in the educational system and do not have any prospect of making new friends in employment. They are isolated and insecure. Those who come from an underprivileged background feel aggrieved that there is no job for them. Many of the problems we hear about in connection with our young people can be traced to the environment in which they were reared, the type of housing and the education they received but we must also bear in mind the difficulty the majority of our people have in obtaining employment. There is little provision for the desirable things such as the provision of a proper background in which young people can grow up, a more adequate educational system and the prospect of employment.
The budget does not offer much for youth employment. There was no increase in the amount made available under the employment experience programme. In fact, when inflation is taken into account this year's allocation represents a decrease on the 1980 figure. The grant in aid of youth employment has been increased by 10 per cent, from £500,000 to £550,000 this year. That does not keep in line with inflation. The employment incentive scheme allocation is down to £2 million this year while the grant for environmental works is down from £1.5 million to £1 million. That was a very successful scheme and provided a lot of employment for young people. The grant to AnCO has been increased by 11 per cent over last year's figure. That is false economy because that grant is backed pound for pound by the European Social Fund. It is common sense to avail of the money offered by the EEC so as to at least keep in line with inflation.
We are faced with a situation in regard to youth employment about which we must be very seriously concerned. With our fast rising young population it is crucial that we give that area priority. Any management of State finances which does not succeed in that area must be deemed to be a failure. This is regarded as a crucial area in the Government's assessment of the situation and indeed of all thinking Members on each side of the House. This is the area on which any government must be judged.
We must consider then the plight of the unemployed, whether they be young persons or persons with families, particularly bearing in mind soaring prices. The situation obtaining is extremely serious in regard to prices. I might sum it up by saying that even the most experienced, careful and observant housewife going shopping no longer knows the price of anything. It has been impossible to keep abreast of the rising trend in prices over the past 12 months in particular. In that period there have been enormous price increases particularly on essential commodities every family need to keep a home going, to feed themselves and their children. It is estimated that the effect of this year's budgetary provisions will be to add 2 per cent to 3 per cent to the consumer price index, that as a direct result of budgetary action. It is an enormously difficult situation for those who must depend on unemployment benefit or aid of some kind. No wonder there is this current horror of losing one's job, this fear we encounter among the constituents we meet at our clinics, a despondency which is manifesting itself at a level I have not experienced so far in my time as a public representative.
Of course Government spokesmen will contend that we have had increases in social welfare catering specifically for people who are unfortunate enough to have to rely on social welfare as a means of income. We have had an increase of 20 per cent in the short term social welfare payments. But one must ask always: 20 per cent of what? At any rate the standard is a dual one when such increase is considered as a proportion of the average wage, especially the current male wage, because there is not any comparison between the current male wage and female wage in manufacturing industry. We have a long way to go before seeing the principles of equal pay in operation. Therefore when one talks about the underprivileged one is talking also about the average female worker who is underpaid for the job she does. I might compare the base upon which the 20 per cent increased social welfare benefit is estimated with the male industrial wage, but I would contend there is no comparison. Indeed, I am not contending that the male or any industrial wage is adequate to meet the spiralling cost of living and the many commitments of such people. There is no comparison between that and the base as far as social welfare is concerned. Therefore when we talk about 20 per cent of £20, £30 or £40, that still does not make the final figure one that will enable the person receiving it to maintain anything like a fair standard of living.
There is then the problem to which many Deputies must have referred, because it is one that concerns all of us at present. Given that social welfare payments have been increased to some extent, it is my estimation that they are still totally inadequate to meet the expenditure they are designed to cover, to meet the cost of living of the person whom they are designed to help, because of the enormous delays in payments. Though I was not in a position to listen, this problem must have been adverted to by many previous speakers. It is an experience that makes the life of a public representative, endeavouring to help these people and resolve their immediate problems most frustrating, leaving us with a feeling of total helplessness in our efforts to relieve the problems of our constituents.
In my experience there has never been a situation in which one could not help in some way, whether by way of telephone calls to the Department of Social Welfare, by way of a personal call, letter to the Minister's office, or by some means establishing contact with the Department in order to explain the problems of a constituent. Up to recently one could expect to meet with a certain amount of success. I suppose there have always been some delays — perhaps they are unavoidable — but now one finds that, when one brings a case to the notice of the appropriate official and explains the circumstances, perhaps certificates have been sent in, it may be contended by the Department that such was not the case, there are perhaps difficulties encountered with regard to insurance numbers, or whatever may need to be clarified, and one's efforts are not necessarily successful. One finds in the situation obtaining that the Department seem to be out of contact with the people and their public representatives.
I am one of very many Deputies who have found it virtually impossible to establish contact with the Department of Social Welfare in recent months, and particularly in recent weeks, on behalf of that section of the community who have been awaiting payment of benefit for perhaps three, seven, 12 weeks or whatever may be the period involved. As somebody who worked in the Department at one time, I am certainly prepared to accept that those who work in these Departments are doing their best within the scope of the facilities available to them. I have no doubt but that any public servant who is approached by a member of the public, or a representative of the public, and to whom the plight of a person who has had no income over a number of weeks is explained, will endeavour to do everything within his or her power to make the appropriate cheque available to the beneficiary concerned. I am equally sure that any such public servants would not like to think they were out of touch with the people but would want to help in this respect. But somewhere the system is wrong. Telephones may constitute the main problem, perhaps because of insufficient lines. Perhaps again the cause is insufficient staff. But the system is in chaos. One might well ask: whose fault is that? Ultimately it is the fault of the Ministers and Government concerned and they are the people who must be answerable to this House. In any case it is a totally unsatisfactory system, one that imposes incredible hardship on the people we seek to represent and whose problems we seek to alleviate in our capacity as public representatives.
Indeed, we have been in situations in which we have found it necessary to advise constituents to avail of the supplementary welfare allowance in the interim, however long or short that period may be — and we cannot tell people how long the delay may be — in order to sustain themselves and their families. The inadequacy of that allowance was brought home to me quite recently when a young couple with one child came into my "clinic" and talked to me about their problem. The husband had been a tradesman in secure employment; he had had a relatively good job. That job was now gone and in his estimation there were no prospects of that job being restored to him. He hoped fervently for alternative employment in any area in which his skill might be needed. His unemployment benefit had been held up for seven weeks. The baby was only six or seven weeks old. Because they were far removed from both their parents and their relatives, his wife was not available for employment if it was available — and it probably was not. Their loan repayments on their house were about £30 per week; it certainly was not under £30 per week. Yet all they were offered by way of supplementary welfare benefit was £25 a week. I would ask the Minister to try to imagine how that young couple managed in a situation such as this. Obviously they were not even able to meet their loan repayments and that presented enormous worry for them. With a great deal of confidence they have started out to look after themselves and provide their own house and here they are plunged into hardship by the loss of a job.
In regard to housing I want to talk about the situation that obtains. Housing is an area of primary importance because after food we need shelter. But there is no due regard given to the rights of people to adequate shelter by successive Governments. In my area the rate of local authority house completions has dropped considerably in the last three or four years. Back in 1977 we completed 280 houses in that area. That figure is now reduced to 58. We have extremely long waiting lists in country and urban areas, but obviously the urban areas are the ones most seriously hit because that is where the concentration of population is and there appears to be very little regard for the need for local authority housing in the Estimates presented to us this year. The increase provided for local authority housing is only 6.5 per cent over last year. That is an alarming situation. It is an indication of the Government's failure to recognise the problems of the people who are unemployed, people who cannot get jobs, people whose wages are low and people who have no other way of providing themselves with shelter than through the medium of local authority housing. Is it the intention to force people into providing their own houses? Obviously there are some people who cannot be forced because their means and prospects are such that they cannot ever envisage themselves being in a position to build a house of their own. Then there are others who have taken that task on, sometimes against very great odds. They have taken the plunge and acquired a site at inflated costs. Here is an area where I agree totally with Deputy Murphy who spoke about the high cost of building land, the need to bring it under control and to make this basic comodity available at a price that people can afford. It is an area where there should be no profiteering or speculating at the expense of those who have not got that primary need, a house in which to live. Many of those who have endeavoured to provide their own homes are in extremely dire straits at present. The local authority loan was increased from £7,000 to £9,000 and then recently from £9,000 to £12,000. That might seem like a reasonable figure but it only represents half the price of a house. If one has to get a site and build one's own house it works out at about the same. Yet one asks what is the point in increasing it beyond £12,000 when the rate of interest that applies and the financial system for financing houses that applies are such that repayments would be beyond the capacity of people to pay? Certainly the average wage coming into the average house today scarcely makes it possible to repay a loan of £12,000, much less a more realistic one of about £24,000.
Having said all that there is the current problem of the delays in paying house purchase loans and making payments available. Luckily I come from an area where there has been a great deal of development of private housing and many people have provided their own homes. But the delays in making loan payments represent a recurrent problem in my constituency. We have a situation where the local authority have sanctioned a loan and the title deeds are in order — and that is a feat in itself because that takes a long time as many young couples know when they have to wait month after month to get things that they thought were only a formality sorted out and are kept on bridging loans for such a long period of time that they experience a loss of money while paying for the bridging loan. Everything is in order and still the payment of the loan is held up because the Government have not released the finance to the local authority. That is a very serious situation. The money is coming in dribs and drabs this year. When the local authority get money a few people are paid and then there is a halt again and the backlog is piling up and this adds again to the level of frustration in society that is felt with regard to so many matters that seem to be completely out of hand.
We have had marginal increases in income tax relief in this budget. These increases were in the main, negotiated in the national wage agreement but there is some variation in the bands so far as some people are concerned. I think it will be found very shortly when the tax forms come out that as far as the wage earner is concerned they are irrelevant in relation to current day costs. They provide no real relief at all to compensate people for what they have lost in the many other areas. In this regard I would like to comment again on my own area.
There is another problem in regard to so many people who are unemployed and so many people losing their jobs. There is a tremendous delay in securing rebates of income tax. Once again we have another department which is not accessible to the public. We have an industrial dispute in the income tax office in Cork. One cannot telephone the offices, nor indeed can one call in. One can certainly write and get replies. What one generally gets is a series of forms. One then writes again and gets the same forms and the level of frustration with regard to those trying to get rebates of income tax and who have a faint hope of getting a couple of hundred pounds together at a time when their finances are extremely low, is enormous. They are in a situation where neither they themselves nor their public representative can be of very much help in relieving the tension of the situation. I would appeal to the Minister for Finance, in regard to the income tax office in Cork, when the position is causing hardship for the people, to endeavour to resolve the recurring situation or the cause of the dispute which has gone on for so long and which has detrimentally affected the interests of the people he and I represent at a time when they need the service to run smoothly and when many of them are having recourse to the service. That was the subject of a Dáil question of mine quite recently and I understood that it would be resolved by now but I am afraid resolution seems no nearer and the problem goes on, the hardship goes on and the frustration goes on in so far as the people we represent are concerned.
The area of health merits comment because, very alarmingly, in that area there is only a 2 per cent rise. Other areas can be classed as vital but health must have priority. If one has not one's health and if the health of a nation is not looked after properly all the other factors fade into insignificance. It is an area where there is an increase of only 2 per cent as against an inflation rate of 18 per cent, or even if it is less this year, down to 15 per cent, there must be a cutback in the health services. Of course the cutback cannot be in the administration of the health services because this has to be financed, and one wonders where the cutback will be and who the sufferers will be. It would appear that it will be at the end where the general public have services available that the pruning will take place. It is vital to mention one's concern and worry about a cutback in health services when we need to expand them, when there is so much to be done in the field of health, when there are long waiting lists for admission to hospitals especially in the area of geriatrics, and there is need for expansion and development in that service for our older citizens.
There is infant mortality. I do not want to be alarming about this, but it is well to refer to the need for improvement in the post-natal and ante-natal services available in the hospitals. I refer to a report of Comhairle na hOspidéal from which I am drawing on memory because I do not have it before me. However, I remember distinctly reading last year's report and reference was made in it, which impressed me considerably, to the fact that there was infant mortality in this country. There was injury at birth to children born in our hospitals. That could be avoided. The skill, know-how and technical knowledge to avoid it are there and all that are needed are the political will, the financial resources and the personnel. An awful indictment of successive Governments in this country is that we allow children to die or to be born with deformities and defects in their health which they carry through life when the present level of medical skill could prevent this if the service were financed properly. This calls for a big expansion of the health service. I know that there cannot be expansion everywhere. We are in a straitjacket, as I said at the outset of my remarks today.
Far from confining ourselves to 2 per cent in the Estimate for Health in the coming 12 months we ought to be expanding that area to a very great extent. I do not know if there are areas within the Health Estimate where a saving could be made but in regard to child-birth care and geriatrics expansion is needed very urgently and this should form a priority in any Government's scheme of operation.
The overall figure of rates for local authorities is up by only 13 per cent this year and this obviously has a crippling effect on local authorities generally. Many of us in this House are members of local authorities and we have the frustrating experience of feeling that as members we have decreasingly less influence in any of the areas over which we are purported to have jurisdiction. This does not need a great deal of emphasis in the House because it has been emphasised by many Deputies who serve on local authorities. All the local services are experiencing cutbacks. The money being made available to local authorities is not sufficient even to maintain the services that we have and certainly not sufficient to expand those services.
Many of us come from areas where the expansion of the services is being cried out for. Cities are expanding and some of us living in areas adjacent to cities set out hopefully only a short time ago to provide industries where people make their homes, the very people I was referring to a while ago, many of whom now find themselves in such dire straits attempting to maintain those homes or to pay their loans for those homes. There have been enormous demands for expansion of local authority services in these areas. Those demands cannot be met and we have the spectacle of managers and administrators of local authorities trying to keep the cash flow going by various devices from day to day. My experience is that all the little charges that make life more difficult for people at present have been increased. We have long debates about increases in water charges and we are trying to do small schemes of water supply out of water charges which were never intended for this but which were intended only to maintain the existing supplies. We have increased charges for connection also for new or existing housebuilders who want to connect to a water supply. Year by year enormous increases are imposed at least on local authority houses——
The Deputy has five minutes left.
——not indeed with the approval of us who sit on local authorities. There are all sorts of devices and the ingenuity of the managers is taxed to the limit trying to keep their cash flow going. Young people who are trying to build their houses or to do any of the current important things in their lives are not likely to be concerned about buying their burial plots, but there is the effort to sell burial plots to young couples and to those who, it is hoped, will not need those plots for very many years. There are increased charges for fire brigade call-out. All these little charges are being increased, and efforts are being made to overcome the straitjacket situation in which local authorities find themselves which impose extreme hardship on people who are at their wits' end anyway trying to make ends meet, to keep a roof over their heads, to provide for their children, to cope with unemployment and so on.
I say to the Minister for Finance that I am disappointed this year that the pleas to the Government of one-parent families, although made pretty cogently and with as much clout as people of that category could muster for a better deal in the budget were not heeded. In the calculation of income tax allowances the one-parent families have lost out badly. When the previous Government were in office the allowance for widows, deserted wives and single people generally who have to cater for children was improved relative to that which applied to single people. That has remained stagnant since this Government took office. The income tax allowances for children generally have been eroded in recent years. There is no doubt that, on any assessment of the situation, the one-parent families in this State have not got a fair deal either under this budget or in many other aspects over which the Government have kept control in the payment of benefits including child allowances, the provision of proper housing, proper child care facilities and all these special needs which such families have. All they are asking for is a fair deal to meet their commitments. Their position has been considerably worsened by the actions of the Government.
I want to make a special plea for parity in pensions for the pre-1968 civil service widows. The Minister for Finance in the last Government made some headway in meeting their case and he bridged the gap towards providing parity for them and he promised he would grant parity in a subsequent budget. No move has been made in that area yet. It must represent a very small sum in proportion to the total budget and it would mean a great deal to these people. Their numbers are getting fewer, some have passed to their eternal reward, but the widows who are left have made repeated pleas for this small concession. I am very disappointed that nothing has been done for them in the budget.
There has been no move yet towards providing pay-related pensions for workers. There has been no move towards providing social security for the self-employed. There was a Green Paper published in 1976. They represent about 30 per cent of the population, small farmers, business people who have tried to provide for themselves throughout their lives and who find it increasingly difficult to do so when faced with competition from monopolies, multinationals and other wealthy businesses. At the end of their working lives, they have no financial reserves and need the security of a pension. Most of them have given a lifetime of very dedicated work in one area or another and they have no social security whatsoever. It is vitally important that a special security scheme should be provided for them.
The Deputy is now into a second hour.
I am very disappointed that pilot schemes to combat poverty have been abandoned. The Government have asked to be judged on unemployment figures. The last Taoiseach said we would be justified in changing the Government if there were more than 100,000 unemployed. The people will have that opportunity very shortly. I hope they will heed his advice.
Listening to Opposition speakers, one might be pardoned for thinking we are living in Utopia where there were enough funds available to extend the range of services in every single Department and that there would be no need to borrow any extra money or to impose extra taxation to achieve this. Obviously this is not facing up to reality. I want to put on the record — it has been done previously but it appears to be necessary to do so again because of the tenor of the contributions from Opposition benches — the stringent economic difficulties which present themselves, not just to us but to the western world as a whole.
Unemployment in America is heading for eight million and they are reeling under the impact of inflation. The United Kingdom has the highest unemployment figures since the 1930s — heading for two and a half million. Gross national product is dropping in all the OECD countries. There is a deficit of almost £8 million in the German budget this year. One realises the problems which face a small open economy like ours in a time of such deep recession, which is having disastrous effects on the ability of governments to maintain standards of living for all the communities. We have paid in the past year almost as much for oil imports as the National Coalition Government paid in their four and a half years in office. In spite of these problems, we have succeeded in expanding our exports and getting the highest level of job approvals ever achieved, levels which are two and a half times greater than the best the National Coalition Government could do, even taking their best year in office.
One of the main criticisms which has been levelled against the budget and the Government is the level of foreign borrowing. I see nothing wrong in foreign borrowing if the money is got at the right terms and if it is used to create productive and remunerative projects. New housing development, industrial development and other very essential projects for our economic development are impeded by the absence of the proper kind of infrastructure — water, sewerage, telecommunications, road networks and so on. It must make sense to any government, preparing the base of the economy for development and expansion when the recession ends, bearing in mind the number of people trained, skilled and qualified coming on the labour market, to expand our-infrastructural services as quickly as possible and to be geared to increase industrial activity wherever it is possible and to increase employment as a result.
We cannot afford to be at a competitive disadvantage. Therefore, the first plank in the budget has been to invest sums, which are without parallel in previous efforts, into a plan to eradicate these infrastructural deficiencies which exist at present. The kind of sums which are being provided will obviously make a big impact in that area, will provide many necessary jobs and prepare the ground-work and the base for future housing, industrial and other major activities in the economy as the years go by.
Regarding the provision of employment and the necessity both to buy Irish and to promote to the greatest extent possible our own produce. I wish to pay tribute to the Irish Goods Council for the manner in which they have identified the products which in the first instance we are producing but which are being imported from outside also. In the past couple of years the council have succeeded in directing these companies who were importing goods that we could produce towards the Irish manufacturers and have succeeded in up to £50 million worth of goods being transferred from imports to native produce. In every area possible we must give the maximum encouragement to those Irish manufacturers who are producing top quality goods. We must ensure that no State agency or private manufacturer is importing products which can be produced at home.
The IDA, by way of their enterprise scheme and the preparation of information in respect of imports of goods of a kind not being produced at home, are making a big contribution. As consumers we all see items in the shops that have been imported but which could easily be made at home with a little initiative and imagination. In that context the amount of encouragement being given by the State to private entrepreneurs is without parallel. These people can avail of elaborate forms of assistance, both financial and otherwise, in the setting up of small indigenous industries. In the mid-west region, for instance, the number of job approvals in the small industrial sphere has been quite spectacular in the past couple of years. I should like to pay tribute to the IDA, to SFADCo and to the county development teams for the manner in which they have promoted this very worthwhile and successful scheme. However, their best efforts would be of no avail if we did not have young people who are prepared to set up small industries. Sometimes such people serve the large manufacturers by whom they were employed previously.
All this sort of development must be given every encouragement because it is in a situation in which the small type of industry is serving the larger manufacturers that Irish-owned interests can be developed further and provide a sound base for our industrial arm for the future. Obviously there will be a need to attract in large measure investment from foreign interests also but there is no reason for us not to be able to emulate that entrepreneurial ability of those foreign industries and, having seen what is happening on the ground, to develop further each year our own skills and enterprise. The promotion of such activity should be encouraged at every level throughout the country in order that we provide ourselves with at least one safe measure of ensuring the sound structure of our industrial base and of the greatest possible use of native resources.
The second objective of the budget was to help those people in our society who are most in need of help — those in receipt of social welfare benefits, the old, the disabled, large families and so on. As was the case last year we have more than compensated the weaker sections for the increases in the cost of living. But that has been always part of Fianna Fáil policy down through the years. Our main concern has been always for those who are not in a position to go on strike in support of their demands or who do not have others to shout loudly for them.
The next objective of the budget is to improve the structure of public finances. I do not think there is disagreement on any side about the necessity to correct the public finances. Continuing efforts are being made to ensure that this objective is achieved. In the context of some of the measures that have been taken by the Government in this sphere, what is extraordinary is that in recent weeks there has emerged at Question Time a disbelief on the part of the Opposition that economies can be made in the administration of Government Departments. The Government have asked each Department to be more cost conscious in their day-to-day activities. I know from having spoken with many of the people involved that continuing efforts are being made in each section of the Departments to ensure that there is no wastage and that there is no over-lapping of costs. I shall not try to pretend that the amount of money saved in this way is likely to be as great as most of us would wish it to be but the step taken is in the rights direction and we must continue our efforts in this regard. Economies should be made wherever possible. But as we shall have criticisms regarding expenditure in the public service we shall have also from the Opposition a litany of ideas about extending the range of services in the various Departments. So far there has not been any contribution, though perhaps Deputy Collins will change this tradition, by Opposition speakers which did not call for more financial provision in public Departments for one service or another and at the same time call for correction of the public finances. You cannot have it both ways. I hope the efforts being made will have the necessary effect. We shall have to ensure that they are more effective in future. The measures taken in the budget in relation to agriculture are effective and worthwhile. They concentrate on real issues which have been raised by the farm organisations in discussion with the Government. This applies to every single measure. They deal with an area that has been the subject of concern for the farming community, the Government and the country as a whole. Our economy is uniquely dependent on agriculture, and when agriculture prospers the whole country prospers.
The benefits provided in the budget cover a wide range of farmers. Rates relief measures will directly benefit 49,000 farmers who will not have to face a rates bill this year. Another 10,000 farmers will get 50 per cent rates relief, an immense benefit to many farmers and the value of it cannot be cynically brushed aside. The stock relief measures for income tax are designed to help farmers who wish to expand stock numbers and, at a time when the national herd is in decline, this is of fundamental importance. The tendency towards destocking has been a major matter of concern. Incentives are provided through various schemes and subsidies to help any farmer who wants to increase stock numbers. The suspension of the levy will mean a halfpenny per gallon on milk and £3 per head on cattle for individual farmers. It is a fallacy to say that the budget is of no use to farmers. The reality is that it directly benefits the vast majority of farmers, and individual farmers throughout the country appreciate and realise that fact.
Having referred to the items in the budget which are of direct assistance to farmers, it is no harm to record once more what has happened in the past five or six months arising from negotiations between the Government and the farming organisations. Last autumn, because of difficulties in relation to fodder supplies for winter feed, a new fodder scheme was introduced which provided a subsidy for first-time silage-makers, and up to 17,000 farmers availed of the scheme. The elements of this winter scheme were of considerable benefit in the provision of winter supplies, but the success of the scheme and the number of farmers who moved into silage for the first time, and who obviously should be encouraged to remain in silage for the future, was a sure way of providing sufficient fodder for our winters. Perhaps this is an area where we need more success in the future than has been the pattern in the past. Statistics indicate that we are about 14 per cent deficient in winter fodder fairly consistently over the years. This has to mean a drop in milk yields, a drop in body weight of cattle, and is a most expensive pattern to include in winter provision. It is far cheaper and more in the interests of farmers and their incomes to ensure that by proper fertilisation of the soil and better management we shall have adequate winter supplies of top quality silage in order to increase yields for the future. The 1980 Fodder Scheme contributed in no small way towards ensuring that we came safely through this winter. I trust that a similar scheme can be incorporated in future policies for the provision of winter feed.
An extra £23 million was provided under the farm modernisation scheme for unprecedented demands in 1980 for farm development services. Since that service was introduced in 1974 £462 million has been spent between State and farming investment. In the past four years £325 million have been spent and 485,000 acres have been reclaimed under that scheme. It is clear that this investment is preparing the base for future expansion. The extra provision by the Government last year clearly shows the support which the Government want to give and the importance attached by the Department of Agriculture to farm development. We now have 50 per cent of our cattle indoors for winter and, while this leaves much to be desired for the future, it is still a major improvement on seven years ago when up to 80 per cent of our cattle were out-wintered. Particularly as regards small farmers where the numbers of acres available to them are limited, the cutting up of the land in the wet months of the year caused by out-wintering cattle reduces their output, especially in the early part of the year, and the necessity for unelaborate building facilities has to be emphasised. As far as the Department are concerned, funds will be readily available for such necessary developments in future. As was proved in last year's situation, whenever the Estimate is not adequate the Government are ready to increase it to ensure that grants are made available when proven schemes under the ACOT services are developed and passed subsequently by the farm development service.
In autumn 1980 the obligation to pay the second moiety of rates on £40 to £60 rateable valuation was removed and farmers in temporary financial difficulties were not pressed for their rates. Following on Government discussions with the four associated banks regarding farmers' debts the banks indicated that they would take a constructive and positive approach to the restructuring of existing loans on a case to case basis. While a considerable amount of restructuring has been done by the banks there is, perhaps, room for more improvement in this area. Some loans were restructured and the interest rates increased, which is not the way out of the dilemma. Obviously, the banks and lending institutions must accept — particularly in the area of land purchase — some responsibility for the madness, if I might call it that, of the 1976-79 period when, on the basis of the best information available from An Foras Talúntais on gross output per acre we were paying twice the estimated value of land — higher than most of our near partners in Europe.
It is extraordinary that we respond too readily to confidence by paying too much on the agricultural front and, on the other hand, in a recession, react too dramatically and perhaps cut back on the fundamental and essential inputs such as fertilisers. This has happened in recent times. There are lessons to be learned from both of those situations that in a time of rising costs and high prices we must have a strategy which not only takes into account the existing situation but future development. Down through history, patterns of up and down situations have emerged. The strategy is to have a consistent style which caters not only for the time when things are very good but which gets us through the difficult times as well.
Excessive borrowing for land purchase, on the prices which have obtained in the past, must be ruled out for the future. It can form no part of agricultural strategy, being totally uneconomic. At the same time there is no point in asking the taxpayer to, as it were, bail out. Decisions were taken, particularly by very large holders of land, to purchase more land. Statistics show that a very significant proportion of the land purchased during this time was purchased by farmers owning in excess of 120 acres.
Farmers borrowing for farm development is a totally separate problem. The continuation of genuine farm development, despite rising interest rates which could not be forseen, is the responsibility of the lending institutions who should restructure loans. Every possible consideration will be given by the Government to making certain that people in that position do not find themselves unable to continue in farming. The numbers given by ACOT show that figure to be around 2,300 farmers, although there are many variables. This matter is at present being actively pursued among the farming organisations, the lending institutions and the Government in an effort to find a reasonable solution which is fair to all interests in the matter.
The beef suckler scheme, funded by the EEC, was introduced and an extra £6 million will be provided for about 60,000 farmers, with a top-up grant for additional beef cows which is also of some significance. This is not an elaborate incentive, but it is a step in the right direction. Any more funds which can be will be made available for increasing our stock numbers or re-establishing the beef herd, which has never recovered from the haemorrhage of the 1974-75 period when 590,000 cows were slaughtered in an eight month period. This was unmatched by previous experience, not even by the figure for 1980 which was, for the second time in ten years, very high — about 490,000. Of these, 16.1 per cent were diseased animals, which was the highest percentage in the history of the State. It is to be hoped that this will not be repeated in the future.
The inroads into brucellosis eradication this year, particularly in the south, have been quite spectacular. We look forward to a significant decline in the number of slaughterings arising from this scheme. More important still, there has been a significant increase in live calves from our national cow herd. Over the years we have lost an estimated 80,000 calves to brucellosis. It must be clear to anyone that calves must be safeguarded in the future. This contagious disease, which has eaten into farm incomes and is a threat to the health of the country, must be eradicated as expeditiously as possible.
My next point has nothing to do with brucellosis but has to do with the percentage of live calf births and subsequent mortality rate. This mortality is quite significant, in national terms, and the veterinary profession, ACOT services, farm organisations and individual farmers must pay increasing attention, particularly at a time of declining stock numbers, to the very best technical and managerial procedures which will ensure that we do not lose these calves unnecessarily because of neglect of know-how. I place the highest priority, as a farmer myself, on ensuring a reduction in the significant mortality rate of calves. This drain can be arrested and many farmers are doing a great job in this regard. Hopefully, more progress will be made.
Assistance was given by the Government towards the cost of the warble fly eradication scheme, keeping the cost down lower than the previous level. The annual grant to Macra na Feirme was increased to £20,000 per annum for five years to enable that body to organise and co-ordinate the establishment of local farm relief services on a group basis.
I have dealt, in some detail, with the range of provisions afforded by the Government since the autumn of 1980, all of which total £75 million. These are to help the farmers and the agricultural industry in general, at a time of serious decline in incomes, which the Government and my Department have not denied at any stage. In consultation with the farming organisations we have continued to make progress and made provision from our national resources virtually to the limit of their capacity. Our future strategy concerns farm prices for 1981 and the special package which is being negotiated.
In relation to farm prices, the overall level of the price increase is not sufficient from our point of view. It would need to be some percentage points higher to make any significant contribution to meeting the cost and income problems being experienced by farmers. The price increases in the beef and milk sectors, which are by far the most important from our point of view, should operate in total from the beginning of the 1981-82 marketing year, as most of our annual milk production takes place between March and September. The proposed super levy on increased milk production, although at a lower level than was proposed last year, is still totally unacceptable to us. In the longer term it would operate to prevent this country from achieving its milk production potential, and this in a situation where our average milk yields are still substantially below the Community average.
The inclusion of the 1980 year, when our production fell, as the basis for calculating the increase would make our position worse than if 1979 were the base. We would not object to a moderately increased co-responsibility levy on all Community milk production, which would bear more heavily on the largest milk producers. The Commission's concept of heavier levies on producers with more than 1,250 gallons per acre go somewhat in that direction, although we would prefer if it was aimed more at what we call the "factory cow" situation, where milk yields are increased quite dramatically, but imports of concentrates from outside the Community are used to get this increase. This kind of "factory cow" situation is the one to which we would apply the greatest penalty. With our natural environment for milk production and capacity for growth, we oppose completely any inhibiting factor on the lines of the super levy proposed and we will do all we can to ensure that it is not implemented.
As regards beef intervention, the Commission's intention of continuing seasonal suspensions of particular beef items, such as hindquarters and forequarters, from intervention buying is not to our advantage. However, it would not be for the Council to make a formal decision on that procedure which is within the Commission's competence. The implications of individual suspension proposals will have to be assessed as the Commission put them forward in the course of the 1981-82 marketing year. We would support the Commission's proposals to reduce positive MCAs in the United Kingdom, Germany and the Benelux countries. These would have the effect of making our agricultural exports to these member states more competitive.
We hope that the Council decision on the price package will be taken as quickly as possible in view of the serious income difficulties in the Irish farm sector. It is clear from the efforts being made by the Minister for Agriculture. Deputy MacSharry, that he is determined to ensure that the negotiation of this price package will be completed as quickly as possible.
I want to come now to the western package, which we expect will be in force by 1 April 1981. We have given instructions to the various Departments involved in the implementation of this £300 million package to be prepared and ready to proceed from 1 April. This scheme involves an expenditure of £300 million for land improvements, electricity, roads, division of commonages, bog development and matters of this kind. It is important that we are ready to avail of these funds as they become available. As far as my Department are concerned, every effort will be made to ensure that this scheme will get off to a good start and that it will provide the infrastructure for future expansion and development in the west.
Some complaints have been made about the western drainage scheme and the fact that there have been some delays in processing applications. Some of this has been inevitable, because it must be admitted that western drainage has been more successful than anybody anticipated. The scheme was originally aimed at catering for the drainage of 100,000 hectares. At present 78,000 hectares have been approved and 31,000 applications have been received. It would appear that, although the scheme has been in existence for only two-and-a-half years, the 100,000 hectares figure will be exceeded and the Department will have to consider renegotiating so that an additional area can be included in the scheme. The drainage activity and the speed with which farmers availed of the 70 per cent grants shows that the scheme has been phenomenally successful. Every effort is being made in the Department, through the farm development scheme and ACOT services, to speed up the processing of these applications. Extra staff has been provided in many areas and anything necessary to ensure the success and advancement of this programme will be undertaken.
In the processing sector considerable investment is taking place with the help of the IDA and FEOGA grants. We need an efficient and modern processing sector if we are to cope with the challenges of the future. In the area of marketing, which is vitally important, significant changes have been made. CBF have now a meaningful role and we are making inroads into markets for value-added products. The pigmeat sector has recently come together on arrangements to improve the marketing of pigmeat. Bord Bainne continue to expand new markets for dairy products. I had the opportunity recently in Saudi Arabia of seeing the professional manner in which that board pursue this progressive policy.
All this shows that agriculture is gearing itself for the challenges and opportunities in the years ahead. I am satisfied we have no reason to be despondent and that we will be able to meet those challenges. In the long-term the important and emotive problem of land reform is being tackled in an efficient and intelligent manner. So far the number of submissions made to the Government arising from the introduction of the new land policy has not come up to general expectations. The broad aims of this new land policy is to influence the land market in such a way as to enable progressive small to medium sized farmers to obtain the additional land they need to make their holdings viable and to help suitably qualified young persons who are anxious to set themselves up in farming.
The powers of the Land Commission will be strengthened by two additional mechanisms, separate but complementary. One will consist of fiscal measures, comprising a surcharge and premium arrangements, and the other will be the direct control of the right to purchase land. We are anxious that farming organisations and other interested groups would make their submissions as quickly as possible to enable the Bill to be prepared and a new policy introduced. We do not want to put a deadline on the length of time we will wait, but I suggest that all interested parties should make their submissions on or before 1 April, at which time I intend to proceed with the preparation of the final stages of the Bill to implement our new land policy.
There was limited time available for the Adjournment Debate last night on the problems caused in the Cork and Waterford areas by the dumping of vegetables. I now wish to make some general remarks on this topic, which time did not allow last night. The value of imported fruit and vegetables is about £90 million and that is a figure which all of us would like to see significantly reduced. Potato imports last year accounted for £4 million of that figure. It is impossible to redress part of this situation because we do not have facilities for the manufacture or processing of potato chips. However, hopefully within the next 12 months a plant in Donegal will be in operation which will enable us to be self-sufficient in the production of frozen chips.
The import of early potatoes from Cyprus had a very detrimental effect on the market last year. The Minister for Agriculture will shortly introduce an order to control these imports and this will have the effect of ensuring that our potato industry is not detrimentally affected by imports from Cyprus and elsewhere. It is no harm to put on record that we need to be much more market conscious and need to prepare our produce in a much more sophisticated way to cater for a changing market. It is true that at times these imports sold at two and a half times what the Irish housewife was prepared to pay for Irish produce. I am certain that our traditional varieties are much better potatoes than those imported from Cyprus, but we were not competing effectively due to a lack of progressive marketing, packaging and grading. I am happy to say that a number of potato marketing groups are now marketing a top-quality product and if we continue on these lines it will not be necessary to control imports by regulation because we will control them by the production of a top-quality product which will sell in preference to imported produce. However, because of the difficulties experienced last year this control mechanism is now being introduced.
Claims have been made that we import cabbage and this is not the case. We have a variety called "Dutch" which sometimes leads people to believe that it is imported. This is not so. We have never been self-sufficient in onions and we import around 10,000 tons, which is about the same amount as we produce ourselves. There is now specialised growing and marketing of apples. We produce about 12,000 tons—one third of our requirements—and we import about 40,000 tons. The horticultural group within the Department of Agriculture has been specifically assigned the job of finding out what can be done to help our growers who have run into current difficulties. A producer group called "Paradise" has been formed in the Waterford-South Kilkenny area and another group. "Green Aces" has also been established to try to protect as far as possible the interests of growers. My Department will be giving all possible assistance but there are difficulties because of our climatic conditions. Last year in particular the produce did not have the normal lasting quality and this made the situation somewhat worse than it might have been. I have every sympathy for these growers and for those who have invested in storage facilities and so on and I am aware of the financial losses which can be caused in such a situation. Every effort is being made to help and the ACOT services in Waterford and Cork have been examining the position to see how matters can be ordered in the future. They will have our full support in the measures they introduce.
Because of the demands of the Food Processing Division, investment by the Sugar Company in their sugar factories has been limited over the years and urgent action is now needed if plants are to be adapted to present-day needs. A five-year capital programme was initiated by the Sugar Company in 1978-79 aimed at modernising and re-equipping sugar plants. The funding of this programme is now a serious problem since the company's current borrowings are about £50 million, while losses for 1979-80 are about £9 million with similar losses anticipated.
The Minister has succeeded during negotiations in protecting the A quota and the B quota for beet production. Unfortunately in the past couple of years we have been unable to reach our A quota, but hopefully the conclusion of the negotiations this year will enable farmers to get ahead with the production of beet somewhat earlier than in previous years. An Foras Talúntais have established that every week lost after the end of March in the putting in of that crop can mean a loss of a ton per acre.
The Minister has five minutes left.
The extracting of beet too late in the season means a further loss. Our price negotiations must be completed so that farmers know where they stand and so that the crop can be taken in in time. Our plans need to be modernised so that the crops can be taken in faster and so that the return to the farmer in income and the return to the factory in sugar content can be increased and is not jeopardised by the onslaught of winter and other problems. The proposed levy can hopefully be offset by increasing the price level for the product this year and by the anticipated success of general price rises over the Commission proposals and the success of the package of proposals designed to help Irish agriculture.
In the final analysis no matter what is done in Brussels in relation to price negotiations and no matter what comes through the special package from national aids, the real thrust for agricultural expansion will come from the potential in the land as a natural resource and from the boosting of the national herd, the boosting of farm incomes, better output from tillage and from grass and more use of lime and fertilisers. The Government and my Department will give encouragement but the answer lies in better and more efficient management of the farms. I am satisfied that the structure and the back-up facilities are there and we should get rid of the doom and gloom so that farmers can and will respond and will increase their efficiency, their management skills and ultimately their incomes. We will do everything possible but it must be matched by the efforts of the farmers.
This will probably be the last budget the general election. I will therefore review what has happened over the last three years in Parliament and in the country. This Government were elected with an extraordinary majority, an unprecedented majority in 1977 and they were expected to give us strong, decisive Government leadership. The people placed their confidence in the Government in the belief that the policies which Fianna Fáil had expounded in the General Election campaign could be implemented so that the nation could get going again. In the past three and a half years we have witnessed a Government divided, weak, wasteful and lacking in leadership. Our economy has gone from bad to worse. Unemployment is increasing at a frightening rate and prices are going up and up. This is not what was promised; it is not what we expected. However, the most significant development in political terms over these three and a half years was the manner in which the former Taoiseach, Deputy Jack Lynch, was displaced by the present Taoiseach. It was a brutal, ruthless take-over which has seriously damaged the Government. Because of the great division within Fianna Fáil there is no unity, there is nothing but rancour and bitterness among the members of Fianna Fáil in the House. The country cannot be governed in that manner.
Central to the nation's lifeblood is the budgetary policy of the Government. In the past few years we have been involved in deficit financing at an alarming rate which we cannot afford in the medium and long-term and we are being criticised for this by independent experts within the country and outside. In 1978 the budget deficit amounted to £810 million or 12.9 per cent of GNP. Of that £397 million was the current deficit. The 1979 budget intention as stated in the budget speech of the then Minister for Finance was to have an overall deficit of £779 million which represented 10.5 per cent of GNP, the components of which were £289 million deficit on current account and £490 million on capital account. A commitment was given in the budget speech to redeem the instability of the public finances. However, the outcome of the 1979 budget was that there was £1,009 million of a deficit or 13.7 per cent of GNP. We had a current deficit of £522 million versus a projected deficit of £289 million. That was an extraordinary performance by a Government with 20 seats of a majority. They pretended to come into this House forecasting a budget deficit, and incapable of coming within £200 million of what was projected. In 1979 there was nearly double the deficit that was projected. That is not the way to run a country's finances. It is bad husbandry. For a supposedly strong Government such inefficiency is an insult to the people.
In the 1980 budget a commitment was given in relation to public finances. It was stated that the initial progress made towards bringing our finances into balance would clearly have to be built upon in coming years. The commitment in the 1980 budget was to have an overall deficit of £896 million or 10.4 per cent of GNP, comprising a current deficit of £353 million and a capital deficit of £543 million. What was the outcome? The current deficit for 1980 was £547 million against an expected £353 million. The capital deficit was £670 million. The total deficit was £1,217 million which is 14.5 per cent of GNP, 25 per cent in excess of what was budgeted for.
There is nothing only wilful financial negligence on the part of Fianna Fáil, a supposedly strong Government. They were elected to govern but did not do so as far as the country's finances are concerned and the charade is still going on and is presented to the House. In the 1981 budget the Minister said that the Government were concerned that borrowing for current purposes must be reduced. Monstrous. Those three financial years show a financial imcompetency and inefficiency of a frightening magnitude. Irresponsible government has now landed us with a national debt of £7,900 million which compares with £4,229 million at the end of December. It can be confidently expected that by the time this damnable Government go out of office the national debt will have doubled. The borrowing for repayment of that national debt is becoming so obvious to all that the percentage of the current budget which will have to be used merely to pay the interest——
The word "damnable" should not be used in the House in respect of any Member.
I did not say it in respect of any Member. I am making a political charge.
The Deputy used the phrase "damnable Government". That should not be used and should be withdrawn.
It is a political charge.
It should be withdrawn.
It is a political charge which I am entitled to make.
The phrase should not be used and the Deputy should withdraw it.
I will withdraw it but I will say in its place that Fianna Fáil policies in relation to financing the nation's affairs are damnable.
That is all right.
That is clear and will be understood. In the fine document known as the Fianna Fáil manifesto it is interesting to note that borrowing as a percentage of GNP was due to go to 8 per cent in 1980. The financial wizards achieved in 1980 a borrowing percentage of 14.5 of GNP. Wonderful incompetency and inefficiency and the fragmenting of a charade with which Fianna Fáil tried to dupe the people — a borrowing percentage of 14.5 of GNP compared with 8 per cent promised in the manifesto, and in 1979, 13.2 per cent of a deficit requirement versus a promised 10.5 per cent in that famous document. What wonderful strong government the country has seen in the past year.
As regards unemployment, the promised situation according to the manifesto was that there would be a reduction in unemployment in the course of the life of this Dáil under the present Government. In 1977 the reduction was to be 5,000; in 1978, 20,000; in 1979, 25,000 and in 1980, lo and behold, it was to be 30,000. The former Taoiseach, Deputy Lynch, said that if unemployment ever reached 100,000 he would resign. As everyone knows, the number of unemployed is over 120,000 thanks to the bad management which we have suffered at the hands of a pirate Government. The unemployment figures have become so serious as to be a social problem for many people. There is a lack of confidence in the ability of the Government to control the nation's affairs. The Government will have to answer for the number of unemployed at the end of this Dáil term. An inherent part of the unemployment figure is a high percentage of young people. More than 25 per cent of those unemployed are less than 25 years of age. That is an extremely high level of youth unemployment and it is causing strain to many young people. It is causing a lack of confidence in the nation's institutions and in this Parliament.
The unemployment figures are a reflection of a number of things. There has been an international recession, but the surveys carried out on a consistent basis by the Confederation of Irish Industry indicate time and again that the investment plans for firms are at a very much reduced level. The confidence of many industrialists in future growth rate has been eroded. They have had a tough time. In 1978 there was an increase of 7.6 per cent in the consumer price index. In 1979 it went up to 13.2 per cent, and in 1980 to 18.5 per cent. The rate of inflation is higher than it is in the countries of most of our European partners. Our export industries are becoming less competitive each year because of that rate of inflation.
That reflects the Government's incompetence and lack of management of our economic climate and has led to our growth rate falling rapidly over the period. When the last Government left office, the rate of increase in our gross national production was in excess of 7 per cent, three times higher than that of our European partners. Each year since this Government took office, the rate of increase in our economy has declined until in 1980 we had an almost zero rate of growth in our gross national production. The economy has come to a standstill.
Taking into account increases in productivity, even to maintain employment a 4 per cent growth rate is needed. We are at a zero level and for 1981 it is envisaged that the growth rate will not be significantly different. The Government have led us into that situation. A combination of inflation and a drop in our growth rate has given us the highest unemployment rate of all the members of the EEC. That is the record of the Government. It is a disgraceful record of Government mismanagement.
We remember the posturing of the Government in relation to our entry into the EMS. We were going into another promised land. We were to have low interest rates. Our interest rates would not be tied to the UK interest rates. We were to have the same levels of interest rates as those prevailing in Germany and the western European developed economies. What has happened? Early in 1980 our interest rates were the highest or the second highest in the EEC, despite the fact that we are a member of the EMS. That has damaged the fabric of our industry because we have not been able to have the cheap investment money which is so needed in an expanding economy such as ours. Instead of having a reduced level of unemployment, as promised, we have an unacceptable level of unemployment.
In June 1980 the total number on the live register exceeded the total number on the live register in June 1936 in the depths of the great depression of the thirties. Fianna Fáil have the proud record of having more people unemployed in the middle of June 1980 than were unemployed in the depths of the great depression of the thirties. They exceeded the 1930 figure by a handsome margin of nearly 20,000. That is the net position. It does not matter: "Fianna Fáil are in power and the country be damned. We are all right Jack. We have our Mercedes and if they cannot eat bread they can eat cake."
In that context let us look at some price increases over the past three years. On 27 January 1981 the Taoiseach was asked the actual percentage change in each item included in the consumer price index from mid-May 1977 to the latest available date, and the date was mid-November 1980. The price of bread has increased by 71 per cent. The price of fresh milk has increased by 91 per cent. It has almost doubled. These are two basic items which are purchased in each household. They are not the only increases. The price of cocoa increased by 95.8 per cent, sugar by 61.3 per cent, beer by 61.6 per cent and spirits by 62.5 per cent.
The price of coal, probably the most generally used source of heating in ordinary houses, has been increased by 72 per cent. Piped gas is used more than any other source of energy in old houses in towns, in the homes of less well off working families and in the houses of retired persons. You succeeded in increasing the price of piped gas by 138.4 per cent since you took office. Wonderful. It was all right for you to take rates off mansions and to make sure the wealthy got wealthier; you increased mortgage interests by 73.4 per cent, motor car insurance by 80.6 per cent and you even got to the child. You increased the price of comics by 102.5 per cent.
The Chair did not do any of those things. The Deputy will use the third person.
The Government did these things.
By how much did we increase wages?
Deputy Collins, in the third person, without interruption.
It is no harm to help the Deputy.
That is what happened. What was promised?
It is not the promises but what actually took place that counts.
The Government got into power on the basis of the promises in the manifesto. In paragraph 2 they promised a reduction in prices of 1 per cent in 1977. 2 per cent in 1978, 2 per cent in 1979, and they did not give a target for 1980 — the planners must have been flummoxed. The performance has been: 1977, an increase of 13.6 per cent; 1978, 7.8 per cent; 1979, 13.2; and in 1980 they hit the top with 18.5 per cent. That is performance versus undertaking in their programme of national reconstruction, the plan to get the country moving again. They did two things.
We got rid of the Coalition.
You got emigration moving again and you got thousands out of work.
The Chair again asks the Deputy to use the third person, for the record.
The Government were successful in those two areas, and they can keep that success all for themselves. In my constituency I have seen unemployment growing at an alarming rate. It is extremely serious to note the number of factory closures and firms on short time. Munster Chipboard and the National Corrugated Product factory were giving employment to about 700 people. Both could have been kept open. The former Minister for Fisheries and Forestry, Deputy Lenihan, gave a solemn undertaking to a deputation that Munster Chipboard would not have to close, that the Government would stand by it, that he had powers under the Forestry Acts. It was allowed to shut down despite two consultants' reports to the effect that though the short-term outlook was bleak there was an excellent long-term prospect.
The National Corrugated Product factory was closed although it had been obvious that the schemer who had bought it did so simply to transfer the business to a plant in Northern Ireland, and it is sad to think that the IDA in the first instance gave grant aid to that plant.
At the moment there are many factories and firms on short time. Some of them have to let people go as redundant. The Clover Meat plant has been in financial trouble during the past few years and they have let off most of their work force, the others being on short time. I hope the Government will be brave enough to save Clover Meats by giving it support, as Deputy Clinton did when he under-wrote the necessary guarantees in the mid-seventies. Waterford Iron Foundries have let off men unexpectedly and many more firms in the industrial estate there and elsewhere throughout the county are on short time. This is symptomatic of the situation facing industrialists and businessmen throughout the country, most of it due to direct action by this insipid Government.
I will go on by referring to the plight of the farming community whose income has dropped by 50 per cent in the past few years. The acknowledged figure is something between 40 per cent and 50 per cent. At the moment the Minister for Agriculture is arguing in Brussels on the basis of the serious drop in farming. The CBF annual report for 1980 gives some alarming figures in regard to cattle numbers. It states that total cattle numbers had fallen by 243,000 and that the breeding herd had fallen by 73,000 from the levels of a year earlier. The report went on:
the breeding herd is now back to the 1972 level, whereas the beef cow component of the herd is back to the December 1971 level.
They are the words of a State-sponsored body. Is it not disgraceful, a reflection of lack of confidence in the Government by the farmers? Is it not a sign of the incompetence of the Government? Discussing cattle slaughtering, which has been very high since 1980, the report states:
Prime cattle slaughterings increased by over 130,000 to a record of 905,000. Most of this increase was higher sales of steer cattle, although there was also a noticeable increase in the number of heifers slaughtered at meat plants, reflecting a lack of producer confidence in the beef sector particularly. The lack of confidence at farm level was reflected to a greater degree in the level of cow slaughterings, which increased by 70,000 to 475,000 head, a volume well above normal annual disposal rates.
With regard to cattle disposals there is the following comment:
The most significant development in the cattle and beef sector in 1980, reflecting a lack of confidence at producer level, was the level of de-stocking. It represented over 20 per cent of disposals....
That is the performance of the Government with regard to the livestock sector. It reflects not only a lack of confidence in the beef sector but also a lack of confidence in the dairying sector. The milk producers have no confidence in the Government.
I wish to deal now with our position vis-à-vis the EEC. It is obvious that the performance of successive Fianna Fáil Minister in relation to increased prices for farmers is suspect. I should like to quote from a document published by the Agricultural Information Service of the Directorate-General for Agriculture of the European Community Commission. The document was published in December 1980, reference No. E.13. The heading of this document is “A new start for the common agricultural policy”. It sets out clearly the question of adjustments to the common agricultural market organisations. In this document there is the following comment:
The adjustments to be made to the market organisations must be based on the principle that in the present stage of agricultural technology it is neither economically sound nor financially feasible to guarantee price or aid levels for unlimited quantities.
Two further factors justify this principle:
(a) when the Community was created the level of self-supply was more than 100% only for certain vegetables and for butter but it is now more than 100% for major crops except maize, rice, oil seeds and sheepmeat.
(b) the increase in food consumption in the Community is now practically nil, owing to demographic stagnation (the population increase was nearly 1% per annum at the beginning of the Sixties and is now 0.2%) and the high level of consumption already attained. Consumption may even fall for economic or dietetic reasons or reasons connected with the population structure.
Contrast for example with this fact the increase in the yield of common wheat per hectare which has risen from an average of 25 quintals at the beginning of the Sixties to 40 quinquals now and the increase in average milk yield from dairy cows from 3,000 kg to 4,000 kg.
It is necessary, then, without questionning the objectives defined above, in particular protection of farmers' incomes and the agricultural sector's contribution to the trade balance, to adopt the principle that any production above a certain volume to be fixed, taking into account the internal consumption of the Community and its external trade, must be charged fully or partially to the producers.
This would maintain all the present features of the CAP, with one addition, producer co-responsibility over a certain level of production, i.e., there would be two stages of financial responsibility, a first stage in which Community responsibility would be total and a second in which it would be shared in proportions to be defined within the Community and producers. This new principle must be introduced into the common agricultural policy as a permanent feature and not just for a given marketing year. In present circumstances the application of this principle will also enable the Community to adjust better to existing budgetary constraints. The system could be varied according to product, but it would have to be generally applied whether the market organisation was based on price systems in the strict sense or on aid systems.
It is clearly spelled out. The Community has budget problems. The position is that the Community is nearly self-sufficient with regard to all agricultural products. Food consumption may even decrease in the coming years and this will be to the detriment of Irish farmers. I deplore the situation where the Community has continued to import agricultural products from outside the EEC while, at the same time, forcing a co-responsibility levy on Irish farmers. We went into the EEC primarily because of the advantages to our agricultural sector. It appears that the Government are incapable of sustaining the drive on behalf of agriculture. The protests and marches of the farming community are a reflection of dissatisfaction with the Government. It is obvious that the Government are incapable of ensuring prosperous markets for our farmers in the EEC. That is in stark contrast to the performance of the National Coalition Government. In the period 1973 to 1977 the farming community experienced prosperity and progress but after three and a half years of Fianna Fáil rule cattle levels are back to the stage they were at in 1971 and 1972. That is the record of this Government and farmers are well aware of it. That is the record over which the Government will have to stand at the next general election.
The Deputy did not mention the year 1974. That was an important year for Irish agriculture.
The position is as I have stated it. By and large from 1973 to 1977 the prosperity of the farming sector was assured under the National Coalition Government.
Not in 1974.
I accept that 1974 was a bad year but in the winter of that year the position was reversed. That is not the position now. The level of destocking in 1980 will continue in 1981, according to independent sources. After four years of gross mismanagement by Fianna Fáil our breeding stocks are actually back to 1971 and 1972 levels. Is that not something the Government should be perturbed about? I do not believe they are. Unless an emergency package is agreed between the Government and the EEC the agricultural community in 1981 are facing a bleak year. If the Government allow the introduction of co-responsibility levies, as they apparently have in relation to the sugar beet industry, to be established in other areas, such as beef and milk, the farming community will be faced with a bleak year.
The same applies to our fishing industry. There has been a lot of talk about it but very little has been done. There is serious recession in that industry. The position in the Celtic Sea is such that not even small Irish trawlermen are allowed to fish for herring outside their back doors. The situation for the past few years in relation to other member states has been allowed to get out of hand. The other member states are laughing at our incompetence in regard to our fisheries policy. Where is our promised 50 mile limit about which there was so much shouting before the last election? As far as I know we have even failed to get 12 miles. The Government should be ashamed of the fishing industry since they came into power.
With regard to our industrial relations we have seen a spate of unofficial strikes under this Government. Our vital State controlled industries, CIE, the ESB and the postal and telephone services, which are vital to the industrial lifeline of the nation, have been allowed to hold the nation to ransom through unofficial strikes. I support the trade union movement as being a responsible organised movement on behalf of the social partners. I believe the unofficial strikes are a reflection of the Government's incompetence in having a sound and progressive management structure in their State bodies and Departments. A commission was established to inquire into industrial relations but it is obvious that the Government have decided that that commission will sit and sit until after the next general election. I hope the Government will be gone out of office by then.
There is a serious drop in the number of council houses completed especially in the last two years. I want to refer to the number of council houses built in Waterford city since the Government came into office. In 1977 there were 131 council houses built by Waterford Corporation, which would have been started during the period of the National Coalition Government. How many were built in 1978? These were no houses built that year. In 1979 there were 47 council houses built for a city with a population of over 30,000 people and in 1980 the number was 102. The Government's achievement in relation to council houses built is an insult to their efficiency as a Government. In 1977 there were 459 approved applicants for housing in Waterford city and by late 1980 that number had increased to 616. This is a reflection on the inability of the Government to provide houses for the working people.
In Waterford County Council 111 houses were built in 1976, in 1977 there were 33, in 1978 there were 50, in 1979 there were 59 and in 1980, because of the Government's policy, 21 houses were built in Waterford county. I wish to refer to the number of council houses built by local authorities on a national basis. In 1976 there were 7,263 council houses completed by local authorities. That number progressively dropped until in 1979 there were 6,214 council houses completed. That figure had dropped by the end of 1980 to a figure of less than 6,000. The Government are not catering for the needs of people who cannot afford to buy houses for themselves and who depend on the supply of houses built by local councils to ensure that they and their families can be rehoused properly.
The Government are failing in their duty to the people by not providing an adequate building programme of council houses. The Government clearly discriminate in favour of the private house builder and against the working man. There is nothing, apart from the general overall quotation that we have built in excess of 25,000 houses, which can give encouragement to local authorities by the allocations which are made each year, of new starts in 1981. The method of allocating funds to councils and corporations in general is open to criticism because the allocations come spasmodically and too late for proper planning. It is better for a council to have house completions of an even rate at, for instance, 50 per year. It is better to have 50 houses per year than 100 one year and none the next because that causes chaos in the housing list. The investment in roads and super structure such as sewerage and water has declined in real terms in the past four years to such an extent that many local authorities do not know where to turn to get finance to provide the basic services.
I had intended devoting some time to education and to mention the White Paper on education produced by the Government but I will refrain from doing so because the Taoiseach has promised a separate debate in Government time on that topic. The budgetary provisions for education are inadequate in many respects. I will deal with that later.
The money provided for the school transport service has been reduced. In 1980 that figure was reduced from £16.5 million to £16 million and it was only after great pressure from this side of the House that the Government accepted their responsibility in this regard. It was only after we had made statements that the services would be curtailed that parents expressed their concern and a petition was signed by Members on the Government side to remove the Minister for Education from office. Following that, and a lot of public pressure, the necessary money was provided for the school transport service. However, that service is again threatened because of a reduction in the allocation this year. I should like to draw attention to the fact that the number of holders of higher education grants has fallen in recent years. In 1975-76 6,168 third-level students held higher education grants but that number has dropped and stood at 5,219 for 1979-80. That reflects a lack of commitment by the Government to increase the eligibility limit and the amount of the grant. I have made a serious indictment of a Government who are divided, incompetent and uncommitted to the real social needs of the nation. When the election comes our people will make it clear that they are not satisfied with the incompetence they had to endure since 1977.
I should like to congratulate the Minister for Finance on his first budget and, belatedly, to congratulate him on his appointment to this important position. The Minister has been generous in his treatment of those in receipt of social welfare benefits, and rightly so. He has fulfilled the pledge made by the Government that they would see to it that the weakest section of the community, especially the old, the sick, the disabled and the unemployed, would be fully protected from the effects of the economic recession and the high rate of inflation. We would all like to see substantial reductions in direct taxation but reasonable people looking at the situation objectively will agree that the Minister this year had little room to manoeuvre and that an increase in the personal tax allowance and the changes in the tax bands were as much as could be expected. The budget, coupled with the recently announced plan by the Government, clearly indicates that their economic strategy is to achieve the rate of industrial growth we need to reduce unemployment and provide jobs for our young and growing population. That strategy is based on good common sense and there is no real alternative to it.
Opposition Deputies are advocating lower taxation, greater Government expenditure and less foreign borrowing all at the same time but those three demands are clearly irreconciable. That type of approach to the financial, economic and social problems facing the country is nothing short of hypocritical. Through their investment plan the Government this year will be undertaking capital investment on the largest scale ever undertaken in the history of the State. That is welcome news especially for areas like Donegal. It is most welcome news also for the people of Donegal that the Government are placing such emphasis on capital development and telecommunications, road works, sewerage schemes, harbour developments and housing. There can be no doubt but that a defective infrastructure is a serious handicap to industrial development and to the tourist industry in places like Donegal and the entire north west.
To remove such defects quickly will not only provide employment but open up a whole new range of opportunities for further industrial development. The task is not an easy one or one that can be resolved this year or in the immediate future. The problems of Donegal are many and I should deal with some of them in detail. Although Donegal is one of the most scenic regions in the world with much to offer tourists, it is perhaps the poorest county in Ireland. Physically the county is one of enormous landscape variety with almost 70 per cent of its total acreage of 1.19 million acres consisting of rough pasture and open moorland above the 600 ft. contour line. The county's primary economic base, agriculture, has always been in a highly disadvantaged position. Allied to this has been its extreme peripheral location with the remotest coastline from the centre of the European economic activity and the fact that its natural hinterland has been cut off by the Border.
The low level of industrialisation and the continuous decline in employment in the agricultural sector renders Donegal a severe unemployment problem. Those problems will now become greater due to the fact that the population of the county has increased after a century of severe population decline. The last Census showed an increase from 108,344 in 1971 to 121,599 in 1979, an increase of 12.2 per cent. By 1996 the population of Donegal could reach 145,000. That shows the extent of the task ahead in the area of employment creation. The Government will have to cater for an increase in the work force of more than 12,000 people.
County Donegal has few natural resources. However, the few we have must be fully exploited. I am referring to the tourist and fishing industries. The county will be happily dependent in the future for job creation on manufacturing industry, tourism and fishing. At this stage it is sufficient for me to say that while we have many persons of drive and initiative in the county the efforts they are making are often thwarted because they operate from a grossly disadvantaged position. The infrastructural facilities necessary to enable them to compete on an equal footing with those of the more advantaged parts of the country do not exist. Donegal has much to offer and quite often its many assets are underrated.
Industrial relations is a subject which has been hitting the front pages of our national papers daily. Yet in County Donegal industrial relations are excellent. Any industrialist who has located in the county in the past will be only too glad to verify this. There is a good labour pool in the county of approximately 6,000 to 8,000, of which a large proportion is male. This work force is replenished annually from approximately 1,500 school leavers. There is also a steady outflow of approximately 100 workers from agriculture each year. This type of worker has always proved responsible, hard working and capable of being trained quickly in modern industrial techniques.
AnCO have their training centre in Bunbeg and there are proposals for a further training centre in Letterkenny. I should like to see work on that training centre commenced without delay. There are nine vocational schools in the county where metal work, woodwork, engineering and other basic skills are taught. These schools cater also for day release and block release courses for apprentices to the various trades. There are six community and comprehensive schools and the regional technical college in Letterkenny provides further extensive training opportunities. Students from County Donegal also have access to the College of Technology and Magee College in Derry and the New University of Ulster in Coleraine. A large new extension to the general hospital in Letterkenny will be completed shortly at a cost of £12 million.
Donegal is in a position to take advantage of the facilities available in Northern Ireland. An excellent road network to the port of Larne and to Aldergrove airport exist outside Belfast. Rail and air services are available in Derry. In addition, a scheduled air service between Derry and Glasgow is currently in existence. The port of Derry is only 22 miles from Letterkenny, and Rathmullen is an excellent deep water port where, at the jetty, there are 30 feet of water at low tide. There are also many ports, such as those at Buncrana, Moville, Killybegs, Burtonport, Letterkenny and Bunbeg.
Finally, and perhaps most important of all, Donegal is a county of great scenic beauty. Its indented coastline contains some of the finest beaches in Ireland— inland waterways, rivers, lakes, mountains, forests and an endless variety of beauty. There are many areas available to those with specific interests such as geology, botany, ecology, archaeology, wildlife and so on. All the sporting interests are catered for — shooting game, fishing, deep sea angling, pony trekking, boating, water sports and golf. I felt I must highlight these advantages because too often we speak of Donegal in a negative way. The county has much to offer but I contend it has not been sufficiently exploited in order to put Donegal on a par with the better off parts of the country. Had Donegal even the basic infrastructural facilities necessary to exploit its potential I am convinced it would compete with any region not alone in Ireland but in the whole of the EEC.
I shall deal now with these needs in order to emphasise the enormity of the task facing this and future Governments. I shall examine some of the county's needs in greater detail. In order to set the scene it is important to examine some road statistics in relation to the county. Donegal has 82 miles of national primary roads, 107 miles of national secondary roads, 408 miles of main roads and 3,373 miles of county roads, giving a total mileage of 3,970. Only County Cork, which has 7,398 miles, and County Galway, with 4,085 miles, have greater road mileage than County Donegal. County Cork only, with 6,278 miles, has a greater mileage of county roads than Donegal. If the state of the roads in the county at present are examined and viewed in the context of the extremely large mileage involved, it can easily be seen that a massive investment is required. The Government have given a commitment to improving some of the more important parts of the national primary and secondary road networks within the next five years. For example, in the Government's Road Development Plan for the 80s the projected time scale for the complete realignment and improvement of the Ballyshannon to Donegal town stretch is 1984. Progress to date on this particular stretch has been excellent. In addition there have been substantial allocations for the Letterkenny-Derry network. Such improvements are very heartening. Nevertheless they refer only to a very small proportion of the overall road network, as can be seen from the figures I have given. Millions more are needed to be spent on the national primary and secondary routes to bring them up to the standard classified as national standard.
A more worrying problem is the state of disrepair into which many of our main and county roads have fallen. The greater part of the County of Donegal is covered by these roads. It is not possible to exploit the potential of the county unless a major improvement programme for those roads is undertaken. In the current year the Government allocated an overall sum of £4.475 million in road grants for County Donegal. This increase is very welcome and I must congratulate the Minister responsible. Nevertheless I am extremely concerned that the greater part of this allocation is for national, primary and secondary routes which, as I have said, form a small fraction only of the overall network in County Donegal. The block grant, as it is called which covers main road maintenance and improvement, and county road improvement, amounts to £1.17 million. I am convinced that a greater allocation of funds for our main roads, and particularly our county roads, is necessary. The amount which the local authority can raise to supplement the grant is severely limited. Although I am expressing a personal view I would urge that more thought be given to this aspect of the matter in the future. Indeed I would urge that the whole question of financing the services of local authorities be looked at afresh so that they will not find themselves placed in a situation in the future in which some of their services may simply draw to a halt. If the current trend continues I envisage a situation in which these local authorities will be unable to undertake any new works apart from those being financed with the aid of road grants and capital allocation from central government funds.
In 1978 Donegal Regional Development Organisation presented a report on the infrastructural investment needed for County Donegal which showed in great detail, and with accurate costing, that a £64 million investment programme was necessary for the improvement of the more important road networks in the county. This covered the important routes only. Therefore how can we improve or indeed maintain our county roads unless the grants for such roads are radically increased. As I have said already, no grant is made available from central government funds for county road maintenance and the amount of money which local authorities can raise for this purpose is constantly reducing. The total allocation of money for the surface dressing of county roads, of which Donegal has approximately 3,400 miles, comes from the funds of the local authority and is decided entirely by them. I have established from investigation that Kerry County Council surface dress their roads every nine years. But because of the very small amount of money available in County Donegal, it is possible to carry out such surface dressing only on average every 16 years. Thus it will be seen that there is a very serious deficiency here.
County roads are the crux of the matter and they should be surface dressed every nine years but because this is not done potholes develop. Fixing these is proving very expensive mainly because of the increase in the price of bitumen. Over the last few years this has been a very worrying problem. However, if our entire allocation of money is spent on surface dressing no potholes could be repaired so we would have what might be described as a "catch 22" situation. This problem relates only to county roads.
I should like to deal briefly with the situation pertaining to sanitary services in County Donegal. A fairly good network of water mains exists over the denser area of population in the country. In recent times, however, inadequate allocations have meant a significant lessening of progress. Of the 45 systems operating from several sources in County Donegal few now have any reserve remaining. This is a dangerous situation, to say the least of it. Without a special allocation of funds the possibility of County Donegal completing its large programme of new workings anywhere in the near future is very remote.
The lack of sewerage systems as a hazard to health has diminished in County Donegal. However, in certain areas which completely lack a proper sewerage system the problem is looming once more. The Bunbeg-Derrybeg area which has no public sewer and where new housing development is urgently needed is an example of this. In certain parts of the county the lack of adequate sewerage systems has lead to a reduction in amenity and to a serious decline of tourist areas and indeed to river pollution. The coming into force of the Water Pollution Act of 1977 makes the provision of proper public sewers and sewerage systems all the more urgent. It is important therefore that the county council should be in a position to set an example to private industry by ensuring that their own sewerage works are treated to an acceptable standard. It is not possible for Donegal to do this. A report prepared in 1978 by the regional development organisation to which I have already referred showed that at least £13 million was required urgently for the county's large water supply systems. It also showed that £5 million was required for the more important sewerage systems. These figures of course are not accurate by today's standards.
I appreciate the seeming enormity of my demands. However, I am realistic in accepting that there is a time factor involved but my responsibility to my people is to represent their case. In 1977 the allocation for sanitary services was £394,000. In 1978 it amounted to £700,000. In 1979 it was £1 million. In 1980 it amounted to £1.2 million. The council have asked the Department of the Environment to make a special allocation of £3 million to County Donegal in addition to the normal allocation each year so that certain urgent and necessary schemes can be undertaken without delay. A positive response is needed now to overcome the problems which currently exist and which can only be aggravated if something is not done.
In County Donegal, approximately 2,000 families are in need of rehousing. These figures can be verified from the council's housing reports. If any impact is to be made on the housing problems which exist in the county the capital allocation from central Government will require large increase. The facts speak for themselves and I have established that over the past five years Donegal County Council have been providing an average of 280 dwellings each year. A previous speaker criticised Fianna Fáil in relation to another town and criticism which is backed up by figures is worth hearing. I can state and put it on record that during the term of office of the Coalition Government the town of Letterkenny which has a population of 6,800 did not have one local authority house built. So, if the shoe fits let it be worn.
I mentioned the figure of 280 dwellings each year. These consist of rural cottages, scheme houses and demountable dwellings. When one compares this with the housing needs of the county it shows the extent and magnitude of the housing problem in Donegal. The council's housing programme has, to put it very mildly, fallen behind. The demand for rural dwellings in a county which is rural in nature continues to increase. It has reached a stage where far more rural cottages are now being built than scheme houses. The provision of all housing, whether it is rural or in towns, is taken from the same overall allocation of money. Perhaps we have now reached the stage where not alone must the overall allocation be increased but separate allocations must be given for rural and town housing in the local authority sector.
I have already referred to the increase of 13,255 in Donegal's population between 1971 and 1979. As much as 50 per cent of this increase is accounted for by the large number of emigrants who have returned to Donegal mostly from Great Britain. The consequence of this is that a greater demand for housing is generated in Donegal than in other counties which by and large only have to cater for a natural increase in population, and in some cases none at all. The vast majority of those coming back to Donegal do not have ready accommodation and therefore they increase our housing lists and our needs greatly. Many of the recent applicants for housing in Donegal are mainly young families living in caravans, mobile homes and other temporary accommodation. They simply are not in a position to provide housing for themselves because the mortgage repayments would place a burden on them which they could not afford and lack of permanent and guaranteed employment renders them unacceptable for house loans either from the local authority or from other sources.
I should like to deal briefly with the question of the telecommunications problem which is only too well known in County Donegal. I realise that the Government are committed to the programme of change over to automatic dialling. But still there is no room for complacency. The system as it stands at present is far from adequate. In the past the lack of proper automatic dialling facilities deterred industrial projects from being located in the county and indeed hindered the development of the existing industries through loss of orders because of communications problems. The programme of conversion to automatic working will be finalised in the very near future and for this I must compliment the Minister and his Department.
The crash programme now being undertaken is the result of many years of neglect. It is important that the programme should cover the entire county. It is not too much to ask that in an age of high technological development a particularly isolated region such as Donegal which suffers from many other inherent disadvantages should have the basic facility of an automatic telephone service.
I should like now to deal briefly with the industrial development plan for Donegal. The IDA have recognised the special case of County Donegal. To assist the IDA in their task of selling County Donegal to potential industrialists and to assist in the expansion of existing industry in the county, the basic infrastructural facilities which I have already referred to are absolutely essential. In many towns in County Donegal the existing supply of water and sewerage facilities are not sufficient to meet the demands of the new domestic development. The poor quality of their roads results in the transportation of goods taking longer and costing more. The lack of a proper telephone service is undoubtedly a deterring factor from the point of view of locating industries in Donegal. The availability of air transport facilities is important from the point of view of bringing to Donegal visiting industrialists who may be considering the location of industries in the county. I take this opportunity of complimenting the Government on their commitment to the provision of a new airport at the Big Isle near Letterkenny. The Government are to be commended for their foresight in this regard and I am hopeful that we will see this facility in operation in 1982.
Apart from the back-up in infrastructure which industrial promotion agencies such as the IDA and Údarás na Gaeltachta require there is much they can do themselves. Recent successes by the IDA are the Abbott factory in Donegal town and the IMED Corporation factory in Letterkenny. However, in view of the projected increase in the labour force to which I have referred and the existing high level of unemployment, there can be no room for complacency. The record in the past has not been good. The IDA achieved only a very small percentage of their job creation target between 1973 and 1977. Greater emphasis should be placed on providing incentives for Irish industrialists. While overseas projects are extremely important at the same time they must be complemented by indigenous industry. I am particularly anxious that small industries should be promoted vigorously. Industrial sites and advance factories have been provided in the larger towns. These facilities must be extended to the relatively smaller towns so that they can be made available for prospective and existing local industrialists. It is significant that some excellent yet small industries in County Donegal have sustained the economic pressures of the last decade. Generally speaking these are identified with smaller towns and with particular families. I believe that ensuring their continuation by way of the incentives made available to prospective overseas industrialists is sound practice. Some of the skills identified with Donegal must be nurtured and maintained as part of our identity.
The question of attracting overseas industries to County Donegal is largely dependent on the number of prospective industrialists whom the head office of the IDA here in Dublin refer to County Donegal. These are known as industrial itineraries and over the past ten years the number brought to County Donegal by the IDA has been much too small. This will have to be increased dramatically if the future employment needs of the county are to be tackled effectively.
I welcome sincerely the provision in the investment plan for the development of the fishing industry. As I stated earlier, fishing is one of the few natural resources that County Donegal has available to it. There are three main fishing ports, Killybegs, Greencastle and Burtonport. I should like to draw particular attention to the need for a new water supply system in Killybegs. The lack of a proper water supply in the town is hindering the future development of the fishing industry there. Killybegs is the country's leading fishing port with fish landings in 1979 valued at £5.7 million. This year new boats added to the fleet have doubled the catching capacity of the fleet. Yet the town faces a severe water shortage with a public water supply which has coped in the past simply because of a fortuitous combination of seasonally peak demand and a plentiful supply of rain. I have always been of the opinion that the potential for fish processing has not been exploited to its full capacity. The lack of water supply in Killybegs at present is not alone hindering the expansion of the existing processing plants but is preventing the establishment of new ones. Killybegs is the major fishing port in the entire country and nothing should stand in the way of its expansion. Greencastle is another important fishing port in the county. The cross-Border communications study for the Derry-Donegal area recommended improvement works for the port. To date the works have not commenced.
Burtonport is also an extremely important fishing port particularly for the west of County Donegal. Every facility possible for its expansion and development should be provided. Údarás na Gaeltachta should endeavour to acquire more land for industry in the Burtonport area so that the development of on-shore fish related industries could be established. I should like to take this opportunity of complimenting the Government on sanctioning the extension to the pier at Burtonport and the finances made available for the dredging of the harbour particularly in view of the fact that the most recently purchased vessels in Donegal may on occasion have to come ashore at Burtonport. They cannot do so at present except at high tide.
In addition, many small fishing ports around the coast of Donegal require improvement. I appreciate that the amount of finance available for pier and harbour improvement is limited. Nevertheless, the contribution which the smaller ports make should not be over-looked. The improvement necessary in these small ports would cost relatively little. The return from a small investment in providing improved facilities would be significant in terms of Donegal's economy. As I have stated in dealing with industrial development, the smaller, more easily managed unit is very often the longest lasting. Security in the fishing industry as in all other spheres of employment should be our goal.
Tourism is of profound importance in County Donegal. It generates millions of pounds of income and keeps a large number of our people in employment. Once again this industry is hampered because of the lack of proper infrastructure. In particular poor telecommunications have rendered fatal blows. In certain resorts water and sewerage facilities are not adequate and this has done little to enhance the reputation of Donegal as a tourist county. One need only mention Rossnowlagh which attracts many thousands of visitors each year particularly from Northern Ireland. This beautiful resort does not have a sewerage system or proper basic water supply. In recent years Bord Fáilte have been diverting a large proportion of their finances towards marketing which is, of course, extremely important. However, when the visitor arrives in the country we must try to ensure that the necessary facilities and amenities exist, otherwise he will not return.
In this regard I have noticed as a member of Donegal County Council that there has been a marked decrease in the grants made available by Bord Fáilte to County Donegal through the county council for amenity schemes and projects. As far as I can recollect, grant aid from Bord Fáilte was made available for only one scheme in 1980 and this amounted to a mere few thousand pounds. Surely in one of the most important tourist counties in the country a greater input in terms of grants for community schemes could be made. The responsibility of providing tourist amenities should not rest with the local authority alone. We must have proper car parks in our tourist resorts. We must have proper access to our rivers, lakes and beaches. We must have public toilets and recreational amenities in the many areas of natural beauty in the county to which the tourist invariably is attracted. Many of the scenic tourist roads, particularly the coast roads, are in urgent need of repair. This is an area where the Government should take full advantage of the assistance available from the EEC. A £20 million scheme for tourism and artisan developments in Border counties has been established. No effort should be spared in diverting as much of this money as possible into County Donegal.
There can be no doubt that Donegal has not been favoured over the years. At last, however, positive interest is being taken in the region and in recent years this has been reflected in the increased allocation of funds by central government to the county.
Debate adjourned.