Vol. 331 No. 12
I move: "That the Bill be now read a Second Time".
The purpose of this Bill is, first of all, to appropriate to the particular services the various sums which this House has voted, by way of original and Supplementary Estimates, over the past year. Secondly, the Bill provides a basis for calculation of the four-fifths issues which the Minister for Finance is authorised to make from the Exchequer towards meeting the cost of next year's services——
On a point of order, I detect that the Minister is reading from a prepared script but no copy has been distributed to this side of the House. I request that such a copy be distributed.
I am sorry that the copies were not ready for distribution immediately and I appreicate the fact that this was brought to my attention.
The purpose of this Bill is, first of all, to appropriate to the particular services the various sums which this House has voted, by way of original and Supplementary Estimates, over the past year. Secondly, the Bill provides a basis for calculation of the "four-fifths" issues which the Minister for Finance is authorised to make from the Exchequer towards meeting the cost of next year's services during the period before the Dáil gets a chance to consider and vote on the various services individually.
Over the years, when this House has come to deal with the annual Appropriation Bill, there have been complaints from both sides — and justifiably so — about the inadequacy of the time devoted to discussion of the various Estimates and Supplementary Estimates which form the basis for the Bill. In my financial statement in July, I indicated that the Government would be putting forward proposals for financial reforms which would, among other things, improve existing procedures in relation to the discussion of Estimates in the House and would in particular provide for a far more comprehensive examination in the House of all the Government's spending programmes.
I remember on many occasions in this House that there has been no discussion of the Appropriation Bill, and I am glad it has been possible this year to discuss it. It is being discussed this year at greater length than for many years, if ever. I am happy to say that the Government's proposals for reform have been advanced at unusual speed and, as Deputies are aware, there is now before the House a discussion paper entitled "A Better Way to Plan the Nation's Finances".
It was decided to publish the proposals in the form of a discussion paper because the Government are anxious to encourage the widest possible consideration of and comment on the proposals before proceeding with their detailed implementation. We are especially anxious to receive the views of Deputies on all sides of the House concerned with the procedures and practices used in the consideration of public finances. I would hope the Deputies will not be slow to make their views known in this area.
Initial reaction to the proposals for reform has been positive and constructive and I look forward to receiving detailed submissions from a broad spectrum of opinion in both the public and private sectors in the coming weeks. I have also placed a "take note" motion on the Order Paper of this House and time will be provided for the taking of this motion when Deputies have had an opportunity to consider the proposals in detail.
It is my sincere hope that these proposals will be considered, not just from the standpoint of party political advantage, but from the concern which I know is shared on all sides of the House to achieve better control of the public finances. My commitment to these reforms arises from my concern to preserve and improve on the procedures of this House. The improvements aimed at will serve all Members and I hope that this will be reflected in the quality of the response to the discussion paper.
The most important of all the measures contained in the document I have been describing is the proposal that the Estimates for any year be discussed and decided in this House before the year begins and before any of the money is spent. That will lead to a much more rational type of discussion. In failing to discuss Estimates before the money is spent, we in this House, who are concerned with the largest single expenditure of money in this State, the Government's own budget, are adopting procedures which no private business, co-operative or trade union would adopt. Clearly any of those bodies would decide in advance how much they were going to spend, whereas we decide how much to spend when most of the money has already been spent. This makes little sense and gives very bad example. As a result of this, in future years, it will be expected that a better appreciation of the need to match expenditure to tax possibilities would arise from the new timetable for discussing the various spending proposals that come before this House in the form of Estimates for the Public Service.
The continuing and growing crisis in the public finances, as reflected in the level of the Exchequer borrowing requirement and the current budget deficit, has been a matter of serious concern for a number of years now. We have had a budget deficit in every year since 1972 and the public debt has grown enormously. Successive Ministers for Finance have set themselves the objective of bringing stability back to the public finances. Performance, however, has fallen far short of objectives. Instead the problem has become greater, so great in fact that when this Government came into office immediate remedial action was necessary, within scarcely three weeks of the assumption of office.
The position we faced in framing the July budget is by now familiar to most, but the main facts bear repeating. In the January budget the overall Exchequer borrowing requirement was set at £1,296 million, or 13 per cent of GNP, of which £515 million, or 5¼ per cent of GNP, was to finance the current budget deficit. The position as we found it in July was that, in the absence of corrective action, the borrowing requirement would reach £1,973 million, or 20 per cent of GNP, as against 13 per cent, of which the current budget deficit represented nearly £950 million, equivalent to 9½ per cent of GNP. At that time, the likely position in 1982 looked even worse.
Decisive action was clearly called for and taken. The broad targets set in the July budget were to bring the current budget deficit down to 8 per cent of GNP and to reduce the overall Exchequer borrowing requirement to 16½ per cent. While the reductions achieved in 1981 represent considerable progress, the level of the budget deficit will still be the highest recorded for this country and will remain seriously out of line with those of our EEC partners.
One of the aspects of the public finances which particularly concerns me is the extent to which in recent years initial budget estimates of public expenditure and current deficits have been considerably below the eventual outturn. In 1979, the budget deficit was targeted at £289 million. The outturn, what actually happened, was a deficit of £522 million — an overshoot of £233 million, or 80 per cent.
The budget for 1980 set the budget deficit for the year at £353 million. In the event, the actual deficit was £547 million which was £194 million or 55 per cent above the original estimate.
Last January the forecast for the budget deficit this year was £515 million. Over the first half of the year, however, the deficit was £457 million, a bare £60 million or so less than the estimate for the full year. Moreover, as I have said, it was clear that, if trends had been allowed go unchecked, the deficit for the year as a whole would have been almost £950 million — £435 million or 84 per cent greater than the original estimate.
Over the last three years, therefore, the previous Government underestimated the difference between Government revenue and expenditure by more than 70 per cent, a record with testifies eloquently to their competence, or rather, their lack of it, in managing the nation's finances.
While one must accept that changing economic circumstances can affect patterns of expenditure and revenue during the course of the year, I pledge that there will be no deliberate underestimation in any Estimates or budget which I produce.
I will now make some brief comments on the employment situation since a very high proportion of the moneys provided for in the Bill which is now before the House is directly or indirectly designed to maintain and create employment, to retrain people who must change employment or to support those who are without employment.
In 1980, unemployment rose by almost 34,000 reflecting both a substantial decline in employment and a continued high rate of increase in the labour force. Available indicators suggest that this year total employment will remain unchanged and that unemployment will increase by about half as much as last year. In the past year or so, unemployment in the EEC has increased by double the rate here, indicating the widespread and severe nature of the problem now confronting the industrialised world as a whole.
A disturbing feature of the increase which has occurred in registered unemployment in Ireland during the past two years has been the growth in the numbers aged less than 25 years on the live register; when one recalls that very many first time job seekers do not appear on the live register, then clearly there is a serious problem of joblessness among today's young people. In deciding to establish a Youth Employment Agency, which will provide work experience and training for up to 20,000 young people, the Government have resolved to tackle the problem. In addition, the establishment of the proposed National Development Corporation, which will have as its objective the provision of productive, sustainable employment in the industrial and commercial public sector, should lead to an improvement in the labour market situation. I do not believe we can be in any way complacent even about the measures that have been announced so far by the Government in regard to combating unemployment. Having regard to the rate at which we are producing new jobs, even at our very best performance, in the very best years of industrial job creation — and there are many who would argue that those years are past because the amount of mobile international investment which we, through the IDA can attract has diminished worldwide and therefore, we are looking for a share of a much smaller available pool of international investment to create new jobs—at the best of times we would not be able to create new jobs on the scale that would be necessary to meet what we know will be the increase in the labour force over the next five years. At our best we reached a rate of net new job creation of around 8,000 whereas we know that the labour force will grow at a rate of about 15,000 over the next five years. We have fallen well short of what we must do to provide jobs for young people. I believe the key to success here lies certainly in measures such as the Youth Employment Agency and the National Development Corporation. We would welcome constructive suggestions from all sides of this House as to how these new instruments should be used to create employment. There is no monopoly of good ideas on this side of the House in matters of this sort.
We have not seen any yet.
The key is to make ourselves competitive. We must bring down the rate of growth in costs in our economy. When I refer to costs I do not solely mean labour costs in the firm itself. I mean costs in other firms which are providing services to that firm, costs in the public sector which is either levying taxes or levying charges on any business which is trying to export. All of these costs are growing faster here than they are growing in our competitor countries. In the great wide world in which we must export no one will buy our goods unless they are competitive in price and in quality. Sentimental attachment to the old sod, to the shamrock and to the grand country this is will not carry us any distance in the hard export markets of the world. In that context it is essential that we make ourselves more competitive, that we set aside current profits in order to invest in improved marketing and in advanced technology. The trouble at present is that many firms are only able to hold on to existing markets because of the tight cost structure at the expense of setting aside money for further technological investment and for investment in marketing. They are hanging on by the skin of their teeth at present but in four or five years' time in the absence of having done that market development, in the absence of having invested in the technological adaptation which is continually necessary in the industrial process, they will find themselves losing out. The committee of economists pointed out that every 1 per cent increase in real wages over a four-year period means the loss of 7,000 jobs. There is a direct connection there identified and quantified between increases in costs and actual jobs lost. That is a message from which we must all draw a lesson. If we do not, we will not be able to provide the jobs on the scale which we must do if we are to prevent the unemployment problem becoming really acute. We know the number of new jobs that will be required. This is our biggest challenge in the economic area and it is one that none of us can be complacent about. The more we think about it and discuss it the better. Without a united national will we will not get over that problem.
Important though the measures which I have mentioned are, it would be foolish to assert that these measures, or any other action open to the Government, will of themselves quickly reverse the rise in unemployment. Internationally, commentators remain pessimistic about the prospect for unemployment during 1982. The modest economic recovery forecast may at best stabilise the level of unemployment in the industrialised world next year. Against this background, Ireland, being highly dependent on increasing its level of exports, cannot reasonably expect to run against the tide. A considerable commitment of employment related public expenditure will continue to be required, therefore, for the foreseeable future.
Throughout the past decade, including the periods of the oil price induced recessions, a remarkable level of job creation was maintained in Ireland. Unfortunately however, there was at the same time a very high incidence of job loss; for instance, in the period 1972-80, more than 50,000 notified redundancies were recorded in manufacturing industry alone. When account is taken of the fact that notifed redundancies considerably understate the level of gross job loss, it is clear that job loss is a major obstacle to improving the employment situation.
Some job loss is a normal concomitant of economic development and, indeed, in post-industrial societies, a decrease in the share of total employment represented by manufacturing industry is quite normal. We in Ireland, however, are far from that stage of development and we cannot afford to have the industrialisation programme of the IDA continually offset by job loss in existing industries. The stark reality must be faced that a significant proportion of our job loss is attributable to the inability of firms to remain competitive on both domestic and export markets. For instance, increased import penetration is clearly illustrated by the growth in the share of competing imports in home consumption of manufactured goods from 26 per cent in 1977 to about 32 per cent in 1980. This overall increase masks much more marked increases in particular sectors of industry where redundancies were also proportionately more severe.
In particular we have been losing out to imports in the area of manufacturing activity where labour intensity is high. The exports we have been gaining have been almost exclusively in capital intensive industries where we have recently, at considerable cost, established new technological industries. They have an initial advantage on the foreign markets but as other countries set up similar industries our new industries will find that their initial technological headstart will be eaten away. Once that happens they will have to get back and compete on price with the other producers. If we have allowed our competitiveness to diminish we will not be able to do that.
The previous Government launched a "Buy Irish" campaign. The idea was that 3p in every £ over the period of four years in which the Government were in office would be transferred from imported products to domestically produced products. The campaign itself was a perfectly good and valid one and I make no criticism of it but what happened during that period was that 3p in every £ was transferred from home produced goods to imports, exactly the opposite to what is desirable. This reflects our declining competitiveness.
In relation to agriculture, may I say how encouraged I am to see that the decline in agricultural income has at last been halted. Farmers say, and rightly so, that remaining at the 1980 level of income is hardly satisfactory, but at least the downward spiral has been halted and real progress can now begin to be made.
The Government's strategy for helping agriculture operates on two levels. First, there is the series of special reliefs to help farmers over the crisis. The Government have already introduced some of these measures. They have provided an increased ewe subsidy in disadvantaged areas and a reduction to 3 per cent in the rate of VAT on certain agricultural contractors. They have finally abolished the resource tax for 1980-81 and arranged for the repayment of amounts already paid by farmers. They have increased the flat rate addition for VAT for unregistered farmers from 1 per cent to 1½ per cent. A 5 per cent interest subsidy for development farmers has been introduced and by carrying the exchange risk, the State has enabled ACC to provide cheap loans to farmers for capital expenditure arising from additions to the basic herd-flock of cows, sows, and ewes and to assist young farmers to develop farms taken over from their parents. It should also be remembered that since last year the ACC and the banks operate a productive investment scheme whereby foreign currency is onlent to farmers at current rates of 14¼ and 16½ per cent with the Exchequer bearing the residual exchange risk. The Exchequer also bears the exchange risk on EIB loans onlent by ACC to the small and medium-sized agri-business sector.
A second Supplementary Estimate for Agriculture, for £38 million, was provided recently. It is hoped to finalise arrangements shortly for a scheme, to be financed jointly with the banks, to help farmers with loan repayment difficulties. A special interest subsidy scheme to encourage the expansion of breeding stock is also in the pipeline.
In addition to these short-term measures, the Government's longer-term strategy to defeat inflation is specially important to farmers. The cost-price squeeze of the last few years has severely reduced their incomes. Prices have to be brought under control and the Government are determined to do this. This will be of benefit to farmers in slowing down the rate of increase in their costs. Also, in reassessing their farm input programmes, farmers will have every assistance from the State agencies, ACOT and AFT, in devising programmes which will maximise their returns.
In industry, the State has also become involved in a multiplicity of ways over the years, through public expenditure programmes and tax concessions, in attempting to stimulate investment and ensure maximum output and employment. This incidentally is something which some industrialists find it easy to forget when they criticise the level of public expenditure or budget deficits. Members will be aware that major aspects of current industrial support and development policies are under active review. In this process, one of my principal objectives will be to ensure that an adequate balance is struck between the perceived needs of industrialists both domestic and foreign, the state promotional bodies' assessment of what State investment is required to maximise privately generated investment and employment, and my responsibility as Minister for Finance to ensure that I get value for every pound of taxpayers' money and every pound borrowed on behalf of the taxpayers.
As Deputies will be aware, the Bill now before the House provides for the appropriation of moneys not only for current but also for Exchequer capital spending.
During the past decade expenditure on the entire Public Capital Programme increased from about 11½ per cent to nearly 18 per cent of GNP. This sharp increase reflects the importance attached to developing the economy and providing employment. My experience since coming to office has confirmed my belief that we must look afresh at the basis on which Government investment decisions are taken. Down through the years the tendency has been to emphasise the employment and general development content of capital spending and to be much less concerned about whether the investment was likely to generate an adequate financial return, either to the Exchequer or to other identifiable bodies. Now that scarcity of resources is a hard fact of life, we must place far greater emphasis on the financial return concept, wherever it is appropriate.
It is worth drawing the attention of the House to the fact that in relation to capital expenditure by the State in general there has been a dramatic increase in volume terms but the number of jobs created as a result of this increased volume has been no greater than the number created ten years ago. That is a matter of concern in the context of considering whether we are getting value for money in terms of capital expenditure.
The way in which we allocate our capital resources must be guided by good judgement and discrimination between what are palliatives for our problems and what provides a lasting basis for prosperity. It is essential that we ensure that money borrowed for investment is spent effectively enough to generate sufficient increase in output to service directly or indirectly and to repay the borrowing involved. Otherwise the long-term effects of the spending are negative rather than positive. Where the benefit accrues directly to identifiable individuals — or bodies as does a substantial proportion of capital spending on industrial development and arterial drainage, for instance — we must also consider to what extent they should be asked to make a direct contribution to its cost. I have said before and I stress again that I do not intend to cut back on capital expenditure that generates adequate income to remunerate it. This concept is particularly relevant in the case of State companies. In a number of cases their capital investment programmes have been undertaken at a level which did not have sufficient regard to their capacity to remunerate the borrowing involved, with the result that when this Government came to office there was a long queue of State bodies knocking at my door for Exchequer finance to restore order to their balance sheets. This is a matter of great concern to me and I have asked my Department to see whether the rates of return on investment by State bodies can be improved and how generally their consciousness of their commercial responsibilities can be enhanced and maintained at a heightened level.
I do not believe that injection of equity capital by the State should be seen by any State company as the answer to any problems they may have got into in the matter of borrowing or because they are not simply making enough money to pay the interest on their borrowings. No company in the private sector are in a position to go to their shareholders seeking cash injections and using new equity, which is intended to be a permanent injection of capital, by way of overcoming current and immediate difficulties in the borrowing field. State companies must apply commercial criteria in their approach to this sort of matter.
This brings me to the more general issue of public finance planning. The Government are committed to drawing up and presenting to the House as early as practicable in 1982 a comprehensive economic and social plan. An important objective of this document will be to provide a medium-term framework for the Government's spending programmes. It will also cover economic growth, overall budgetary policy in the medium-term, incomes, prices, employment, taxation and social expenditure.
Is there any indication of when we may have that plan?
No.
I thought that.
In putting policy elements under these heads into a coherent and consistent overall strategy, one of the main concerns of the plan will be to set the scene for a regime of ordered management of the public sector and of the public finances in pursuit of higher employment, greater economic efficiency, greater social equity, and, ultimately, higher living standards.
On the question of economic planning generally we need, as a community, to ask ourselves what we are trying to achieve. It is not good enough simply to produce plans every so often simply in order to be able to have a press conference and for the Government to be able to issue a document and say that they have a plan. Such plans are usually ignored by the Government in the drawing up of their budgetary strategy.
This has been the experience to a great extent with economic planning in recent times. Indeed, it was institutionalised when economic planning was put into a separate Department from the Department of Finance. This was a cloud cuckoo-land approach to planning. That situation continued for a few years. It is my intention to avail of the fact that the planning section is now in the Department of Finance and to bring much closer together planning generally in the economy and the financial decisions being taken by the Government in the context of the budget. One must be totally interlocked with the other because it is only in that way that planning can play its proper role of being a real discipline and not simply a cosmetic exercise.
The second important concern of planning is that of providing some medium-term perspective for our people, telling them frankly what are the choices they must make, not merely that the Government must make but that the people generally must make. We need to put very stark and honest choices before the people in the matter of employment because, unless we radically alter the whole structure of our economy, we will not be able to provide the jobs for the young people which will be needed in the next five to ten years. People in Government and outside should address this problem honestly. We must frame the economic planning documents against that background, which I am anxious to see produced as early as possible. There are elements of logic and reason which have, for too long, been absent from public finance decisions. If this year's Appropriation Bil sums up the results of the Government's emergency attempt to rein in the runaway public finances, it is my firm intention that all subsequent such Bills for which I am responsible will be explicable in terms of the measured and planned approach to public expenditure which will set this Government apart from its predecessor.
Nothing that has been said tonight on the Appropriation Bill differs from much of what we have heard from the Taoiseach, the Minister for Finance and other members of the Government over recent months.
The Minister's speech tonight contains probably more pious platitudes, hopes and dreams than any other Minister for Finance expounded in this House. He expressed some of those dreams back in mid-summer, in the early days of this new regime, and set aims and targets at that time which were not achieved. We had a speech which concluded by discussing the position of State companies and State boards. I agree with some of the points made by the Minister. But, on one hand, he talked about a National Development Corporation pledged to create and provide jobs for our young people and, on the other hand, he said we must take a hard look at all our State boards.
Does that mean that, when companies run into difficulties and jobs are threatened, the cold hand of the Bruton-FitzGerald regime will descend and close them down? Will this Government take into consideration that transport companies find it extremely difficult, even in countries which are far more highly developed and thickly populated than ours, to run on a commercial basis? These are the facts of life that no amount of lecturing, either in the House or outside it, will change. I am glad that the Minister is at least aware that there are many young people unemployed, that our population is growing fast and that the percentage of young people in the total workforce is so high that it bears no relationship to that of our EEC partners. He now realises how important the whole issue of employment is.
We are told about costs and competitiveness and why the "Buy Irish" campaign did not make the progress it should have made. I suggest it was a tremendously successful campaign, although I do not deny that competitiveness is extremely important. It is also very important to continue to develop our exports. Apart from prices, there are other factors which contribute and the Minister must be aware of this. The import of foodstuffs at present is to a large extent unwarranted and unnecessary, yet their presentation on supermarket shelves or display counters is inclined, in an affluent society, to make them that little bit more attractive to people and thus place some of our own workers' jobs in jeopardy. The campaign may not have been as successful as one would have liked——
It was a good idea which just did not work.
I was amazed to hear the Tánaiste, the leader of a once proud Labour Party, say that he had ideas about scrapping the "Buy Irish" campaign. There was a commitment to it by the people involved who made tremendous progress and the Government who gave them support enjoyed tremendous success.
With regard to inflation, we remember the heady days of May and June when a package was presented to the people which, as the days turned to November and December, proved not to have been researched in any significant way. I am sure everyone had sympathy with the Minister for Finance last Sunday when he spoke on radio and admitted that the researchers of that document had made a grave mistake. The Minister for Finance was saying that all we had said during the election campaign was correct and that he and his colleagues and supporters over-sold — I am afraid at times somewhat dishonestly — this tax package which has now blown up in their faces.
I want to emphasise that we are talking about an Appropriation Bill which devotes so much money to employment in the public sector. Inflation is extremely important, yet the Minister at no stage referred to a pay settlement or to why inflation is so high. Last July we forecast, at the time when inflation — at an annual rate of 17.1 per cent — was under control, that the direct impact of the budget would mean an increase in inflation of at least 5 per cent. We were scoffed at then, but in mid-December we are told that the annual rate of inflation to mid-November was 23.3 per cent, or 5.8 per cent for the quarter.
That leads me to the pay settlement. How much easier it would have been, how much cheaper it would have been, to have got a pay settlement with inflation running at 17.1 per cent rather than 23.3 per cent. That is the position. We have heard why that budget was necessary but this month Magill magazine, a paper I do not often read from——
Only when it suits the Deputy.
——had an article contributed by none other than Dr. Brendan Dowling, the economist and reputed architect of the Fine Gael tax package, which has succeeded in disrobing the Government of all credibility. In that article Dr. Dowling said that the budget was the financial component of the Fine Gael tax policy. That tax packet added 5 per cent or 6 per cent to our inflation rate.
Despite what Dr. Dowling stated in that article, the Minister for Finance now realises the lunacy of that package. If ever a Government was ridiculed by newspaper after newspaper it is this one. The Irish Times last Friday referred to it. The Cork Examiner on 10 December gave us the heading “No Joy in this Package”, the Sunday Tribune:“Where are all the Promises to Women Gone?” I could go on and on with newspaper after newspaper. Little or no reference was made in the Minister's speech tonight to inflation, but it was the central theme of Fine Gael's manifesto package: “We will control inflation” they told us. That package now looks like a non-runner with inflation running at 23.3 per cent. Unemployment is growing and there is an embargo on recruitment in the public service. School leavers are without hope of employment.
Not long ago in the House we passed the Youth Employment Agency Bill in which there was not a single new idea. The Government said they hoped the agency would create new employment opportunities, but up to now the agency has been only co-ordinating and extending and developing existing schemes. Let us not run away with the idea that this empty agency will solve all our problems. It may have helped to train some people but it has not gone any distance towards solving unemployment among our young people.
I specifically said I did not think it would solve unemployment.
As I have said, headings are ten a penny in the newspapers. Another example of the dishonesty of the Government was given when Deputy Wilson and Deputy Haughey tried to push for the holding of the Cavan-Monaghan by-election. On that occasion, 21 October, on the motion for the issuing of the writ, the Taoiseach said:
This programme includes, first of all, Finance Bill No. 2 implementing the provisions of the budget and which has to include, I am advised, Finance Bill No. 3 to implement the major tax reforms which the Government are introducing. This is because of the radical nature of this tax reform, changing over, as it does, from the old system of tax allowances to tax credits, a very important reform indeed. The tax allowance system, of course, gives a special advantage to people in higher tax brackets who may receive up to 60 per cent remission in respect of any allowance, whereas the tax credit system operates equitably.
In other words, the Taoiseach made a big play about why the by-election should not be held but of course the real reason was that the message from the ground to the Government was that they could not have won that by-election. When interrupted on that occasion the Taoiseach said:
I was asked to give my reasons and I would like to give them. The changeover to tax credits instead of tax allowances for the personal allowance aspect of the income tax code is very fundamental. Accordingly the implementation of that and of the associated payment of £9.60p to non-working housewives I am advised by the Revenue Commissioners could only be undertaken if legislation goes through in this Session.
That legislation was circulated this morning in the form of the Finance (No. 3) Bill. We cannot accept from day-to-day what we are being told by the Government. We think we have a pay settlement but we do not know because all we are told is through the media. This is the best Government in modern times to slant stories to their own advantage. Never have so many people been employed by a Government to do that. The cost in a year of the special advisers, the press officers and information people, the clerical assistants, is somewhere in the region of half-a-million pounds, but when I asked a question I elicited the information that another £40,000 will be added. What is it all leading to? The Taoiseach told us that information on page 8 of The Irish Times today was as a result of a leak. In an ungentlemanly way the Taoiseach tried to step aside from the blame, tried to put it on a secretarial assistant, of which rank I do not know. His or her rank is neither here nor there — the responsibility lies with the Taoiseach, the Minister concerned. In other governments resignations have taken place for lesser breaches than that.
This is another reason for lack of credibility in the Government. I am sorry to have to talk in that vein. As a community we have many problems to face. I hope that in our short time in opposition we will assist the Government in a constructive way to introduce the measures necessary to deal above all with the greatest problem which exists, the problem of providing employment.
We had pessimistic forecasts by the Tánaiste when the responsibility is his now. He is running away from it. The reason is that he wants to say to his right-wing colleagues and friends when the time comes: "I told you so. It was the fault of the Conservative Party that our unemployment figures grew. It was because of a hard-line Minister for Finance and a hard-line Taoiseach that the Labour Party failed to deliver the jobs." Today we saw the appointment by the Labour Party of watchdogs in Departments where only Fine Gael Ministers operate.
There are only bones left.
These are watchdogs to preserve a separate identity for a party who know the serious problems they are facing. With his usual aplomb the Tánaiste announces the setting up of a group of people to act as watchdogs over the Fine Gael Ministers in case any measures are taken of which the Labour Party are not aware. Their performance in the House today was disappointing. People realise now that the object of this Government is publicity, such as a leaked public capital programme for whatever purpose. I do not blame any official in any Government Department. They are all aware of the desire of every Minister for maximum beneficial publicity in order to project an image which is not a true one.
Budget time is coming close to us. The Minister promised the House in July that we would have Estimate debates during this term. He did not achieve that.
It was not a promise. I said I hoped to have them.
It was a pious hope.
An unfulfilled hope.
I do not blame him because at the time we pointed out that we must be realistic. His position is consistent in that area with his position when he was in opposition. There is no consistency in anything else. He produced a discussion document which he said is of great urgency. It is meaningless unless some of the better features can be implemented to the advantage of all of us. I look forward to an opportunity to discuss this document and to consider seriously and favourably the better recommendations in it. I warn him that many of the recommendations will lead to serious pitfalls and could be as harmful when introduced as they may appear helpful when made.
During the week I said that in extremely difficult conditions the Minister for Labour and the Public Service worked hard to achieve agreement in the public sector. I accept the point that it has not yet been finalised. My understanding is that it has not yet been ratified. He worked hard to negotiate it, despite very serious difficulties. The Taoiseach conveyed to me that I was a fine fellow to pay a compliment to the Minister for Labour. I would compliment any man who was doing his best, and particularly in the type of situation in which the Minister found himself.
The Minister for Finance knows, and he knows that I know, the difficulty the Minister for Labour had to face, not from the group of people with whom he had discussions, but among his colleagues, and particularly his Fine Gael friends at the Government table. That is why I paid him a compliment. The Taoiseach need not think the compliment was meant for himself or his Government. It was paid to a man who had succeeded in resisting the efforts and the unrealistic dreamland ideals and objectives of some of the right-wing Ministers including the Taoiseach.
In those circumstances the Minister for Labour and the Public Service succeeded. The question must be asked: how far could he have gone towards achieving a national wage agreement some weeks ago? I tried to get an opinion from the Government yesterday but I was refused. The Government have a duty to tell us. It seems that every original intention of the Government has been changed. We had as the central theme of the Fine Gael election manifesto a downturn in inflation, and control of inflation. Tonight inflation is at 23.3 per cent, the highest since the winter of 1975 when we also had a Coalition Government.
We were told that middle-income groups would be restrained in their wage demands. We were almost led to believe a wage reduction rather than a wage increase was coming. When the committee on costs and competitiveness failed to get across a realistic figure, realism prevailed through the efforts of the Minister for Labour and the Public Service.
I could go on and on. The tax package was probably the greatest trick ever perpetrated on the Irish people. It has already been seen to be that. I was not surprised when I heard there were only 18,700 applicants for the £9.60 payment, despite intensive Fine Gael canvassing in many constituencies in the intervening weeks.
It is up to 30,000.
Thirty thousand, and the first deadline has passed.
The Deputy should keep talking about it; he is doing great work for us.
And if the estimate of 350,000 who would qualify was there obviously there would be many more than 350,000 who would apply. Therefore if there are 30,000 applicants after almost six weeks, beyond the first deadline set, that demonstrates how those reluctant housewives have now seen through the promises of June as being empty and insincere and they have thrown them back in the Government's face. That is the position with regard to that tax package — it can be forgotten; it was a joke from the beginning, as the Minister himself was forced to admit. Indeed I felt sorry for him on radio on Sunday last, as would anybody listening to him, because basically he is a decent man. It is terrible that there were architects of that package for whom he had to take the responsibility and the stick on Sunday last, people who did not do their homework or necessary research. I remember the present Taoiseach on the radio news at 1.30 p.m. on the day that package was launched when he conveyed that there was no cost to the Exchequer at all. He was being asked about the entire tax package but he was trying to divert his reply and say that in regard to the housewives £9.60, there was no cost involved, that there was merely a question of tax credit from one spouse to the other. Of course, he was not being honest, if for no other reason than that there is a substantial administrative cost factor involved. However, these are details we shall have an opportunity of discussing in great depth after the recess. I do not wish to delay the House further because there are other Members wishing to contribute.
The Minister's contribution this evening was significant for its omissions of references, of worthwhile references, to some of the most serious problems facing us. Yes, he referred to unemployment in a somewhat cavalier way. On youth employment, let us say, he is at last realising that it constitutes a very serious problem for us. Then there is the Government-fuelled inflation which, if there is to be a swing from direct to indirect taxation in the forthcoming budget, will only fuel it further. I remember the words of a former Member of this House, a former General Secretary of the Labour Party, Mr. Brendan Halligan, who on election night said his only regret was that, during the election campaign, he had not said what he believed would be the effect of the Fine Gael tax package, that he did not give his honest opinion on television; in other words, a Government have come to power on a dishonest package. Either they knew it could never be implemented, or they were misled by so called experts, one or the other; that was the explanation. That is how they govern this country at present and our people are suffering in consequence.
This evening the Minister mentioned agriculture. We have heard of the impact of inflation on farmers' incomes. There is no doubt that inflation has had a very severe impact on agriculture. May I mention very quickly that this week's Farmers Journal carries a story about Government Ministers being prevented, because of pairs not being available to them, from going to Brussels and other places in Europe to fight for our farming community. Who sold that story? Of course it was the people on the far side of the House. You, sir, and everybody here knows that that is absolutely untrue, that if it is a question of Government business, Ireland's interest, of course they get pairs. But such a story is sold deliberately to convey that the Government's problems are caused by Fianna Fáil.
I should like to dwell for some time on the expenditure on education, remark on some aspects of it and aspects of the attitude of the Minister for Education to his various Votes and to the expenditure in his Department. The Minister is anxious to tell the House and the country that we are spending too much money and expects to be lauded when he says that. The next speech tells us that Fianna Fáil did not spend enough money and he expects to be lauded for that. He brought in Supplementary Estimates for expenditure on education and he decried Supplementary Estimates out of the other corner of his mouth, incidentally, Supplementary Estimates over the whole range of expenditure on education which amounted to less than 5 per cent of the total expenditure on education. This lack of logic has not drawn comment from anybody, which surprised me. The Fianna Fáil Government, in office, regarded expenditure on education as the prime, social expenditure. It needed no apology; it was the only vehicle for social mobility for the disadvantaged; it was to be the life-blood of our economy. We were convinced that, without a solid foundation and a solid super-structure, this country would not have the skilled personnel available for the future development of our economy.
There is a good deal of confusion in the thinking of the present Government. I believe there are aspects of monetarism detectable in the statements of the Minister for Finance. I know that this philosophy drove a Minister of Education, as he is called there, out of office in Britain when he fought it. I would hope that the Government would take into account the very important, social aspects of education when deciding on expenditure for these Votes.
The Minister for Finance, when speaking about industrial expansion — I was not in the House when he commenced his speech — indicated that he was worried that expenditure on industrial development was not as productive of jobs as he would have liked. Indeed, he mentioned that though much more money was being spent on industrial development——
That was the capital programme as a whole, not just the industrial part of it.
Well, then, the capital programme as a whole — of course industrial development would constitute a substantial part of that — was not producing a commensurate increase in charges. This is quite logical in the industrial field. It is no longer a question of a few cheap sewing machines and lasts, as there used to be, say, in a shoe factory. We are now in a position in which very sophisticated equipment must be bought for most industries in which we have made great progress in the last ten years, particularly in the chemical and electronics branch.
Therefore, I do not see why we should be applying criteria to a modern type of industry like that, criteria which obtained when we were dealing with labour-intensive industries in our industrial development in the past. Put simply, the outgoing Government decided that, in view of the international recession, it was necessary to have a substantial capital programme, to have substantial capital expenditure so that we could not spend our way out of the recession but rather emerge with the least possible damage to our economy. I do not think we should apologise to anybody for that because it means that our philosophy was to put people before book-keeping. I know that one must keep an eye on expenditure and on inputs but if it comes to making a decision as between people and tidy, neatly balanced books, then the Government who come down on the side of people are the Government who in the end will command the respect of the community.
I remember attending a meeting in the Royal Marine Hotel in Dun Laoghaire at a time when savage financial remedies were being applied to our economy by a predecessor of Deputy Bruton. Coming from a part of the country which was bled by emigration from the middle of the last century I could not but have a feeling of helplessness as I saw the queues collecting and shuffling forward to the mail boat. In saying this I am not being sentimental. Thanks to increased sophistication and better education, we have moved into a position where people expect development here and expect to live in this country enjoying a decent standard of living. I know that our whole strategy has received some very sarcastic criticism from the Minister for Finance but in the end it will be seen that we followed the right strategy. From straws in the wind, I think that the Minister for Finance and his colleagues are coming to the conclusion that some of their original schemes cannot be put into effect.
The Minister for Education believes that if you tell something which is at variance with the facts often enough some one will believe it. He mentioned that he had made provision for 300 extra teachers in the 1981-82 academic year. Every year during the period of office of the Fianna Fáil Government we had extra teachers to improve the teacher-pupil ration and to provide remedial teachers. This was the first point in our programme for the general election of 1977 and we saw to it that we recruited enough teachers, trained here or in Britain or brought back into the teaching force, to have 300 extra teachers when all those who retired or decided to give up teaching had been replaced.
A matter which has been the subject of questions in this House is expenditure on primary education. Both the Fine Gael and Labour election documents indicated that they regarded this area as very important and social scientists had been saying for some time that if any extra money were to be allocated it should be to the primary sector. From a reply I have received from the Minister for Finance, I find that as of November this year £17,324,000 was spent on primary school building. If the Minister for Finance looks in the Book of Estimates he will see that £30 million was allocated by the previous Government for primary school building. This was a very substantial budget allocation which was seen to be needed for the provision of new schools in developing urban areas, to replace 19th century schools in various parts of the country and for the repair and extension of existing schools. In many of the former cases we built the schools ahead of actual requirements and I opened a number of schools on the outskirts of Dublin city which had 16 classrooms but only enough pupils to fill three. We were dealing with the situation before a crisis developed.
We knew in January 1981 that this budget would require very careful monitoring if we were to achieve what we set out to do and I asked my officers to put forward principles which would enable us to get the maximum benefit from this expenditure and to see that there would not be any unnecessary delay. The first principle was the avoidance of all possible administrative delay. There is a problem there because both the Department of Education and the Department of Finance have an input to primary school building. I requested that pressure be brought on the Office of Public Works to handle cases faster and to communicate a sense of urgency to architects employed not by the OPW but by school managers. I also asked them to find a way of expediting cases at an early stage of planning. At that time there were 52 cases in the hands of the OPW. Working drawings were in course of preparation for 24 of those and sketch plans for 28. Today in the House the Minister for Education pretended that at that time we were somehow or other slowing the process but I do not think he has very much credibility because the man would say anything that came into his head. I am simply indicating the steps we took to utilise fully the £30 million allocated for primary school building.
It was also suggested in January this year that the assistant secretary in the Department should handle tenders and supply notes to me on each case. I would have already approved the invitation of these tenders and it was arranged that the list of approved tenders would come to me without delay. Approval of projects at working drawing stage was also to be speeded up and it was decided to ask the OPW to keep an eye on costs of small projects so that there would be no unnecessary delay.
We had planned to spend the £30 million this year and we were asking the OPW to investigate the possibility of placing the completion of the work with external agencies if necessary in order to complete our programme. I enlarge on that slightly because the Minister had the effrontery to come into the House today and to say at the end of 1980 my Department were far from interested in the provision of primary schools but were slowing things down. The figures of expenditure for November were £1.9 million, for October £1.9 million, September £1.6 million and August, which is not a good month for building, £1.04 million. I am interested to know how the Minister will spend approximately £13 million in the month of December. He did not address himself to this at all. He simply started blaming his predecessor who had, with a sense of urgency, set about the programme of primary school building for 1981 last January — the right time to start.
I do not know about the leaked document. I do not know what status it has and consequently the best thing for me to do is to ignore it. If I am to believe the figures that will be made available to the Minister for Education for capital purposes, they will fall very far short, when 23.6 per cent inflation is taken into account, of the amount allocated for building purposes over all the range of services for 1981. Perhaps the most scandalous, the most shameful act of the Minister for Education was to accept the proposal to forbid the primary schools to children at four years of age. It was cleverly done in the sense that the new regulations did not come into effect until 1 October so that the children who were brought to the schools at the beginning of the academic year in September were not affected and the full effect of what was done would not be apparent to their parents and to the nation as a whole.
In fact, at the Government table the Minister has let down the primary school sector. He has weakened the foundations of the whole educational edifice by his act. Of course, the political consideration, the pay-off for the votes of two Independents, was to promise the provision of pre-school education. In fact, it was "Minister" Kemmy and "Minister" Browne who announced the expenditure of £1 million on pre-schools, not the Minister for Education, the Minister for Finance, the spokesman for the Government, and not even the person who gave out the leaked document to The Irish Times. Deputy Kemmy and Deputy Browne mentioned this.
The people who are interested in pre-school education reckon that it will take £4.5 million to provide the service for the four year olds which had been provided already in buildings built under supervision and with teachers who were trained professionally and trained with a view to teaching the first two-year module in primary schools. I believe the Government will find that this was a false economy, that it was educationally harmful, socially harmful and that it will damage, in particular, the children from what are called the disadvantaged areas. I would like to mention here that most of the talk is about disadvantaged areas in urban Ireland. They exist. In any instance I was asked, when Minister for Education, to allow teachers to remain in those schools because of the particular problems in them — I was asked this by many Deputies — I did so, fully conscious that the lessons from the Van Leer research indicated that this would benefit the children in those areas.
We have had that debate in the House. The points were made that where the area was disadvantaged the extra stimulus is needed early on. The research showed that the response to that stimulus was good: it improved the awareness and improved the quality of the education for the children involved. There are also areas of disadvantage in rural Ireland. If the transport system is damaged, as it will be, unless the rules are changed by 24/81, then there will be a need for pre-schools in rural Ireland. I do not have to tell the House how difficult that will be. I have not been able to get out of the Minister for Education or out of anybody else any straight statement whether such schools will be provided for rural Ireland and if they will be provided with school transport. If the schools are provided and school transport is not available, then they are no good and the system will not work.
Reference was made in the House to the problems of parents when both have to go out to work. It was generally agreed that there were more of these for one reason or another, whether it was ideological — most of the people who can afford ideology will be able to look after themselves economically — whether it was of necessity or because of deliberate Government action in increasing the cost of living by 5.6 per cent in the budget of last July, the withdrawal of subsidies to mortagages or the general increase in the cost of living since the Coalition Government took over.
I mentioned in some detail the Vote for capital expenditure on primary education. Will the Minister for Finance tell me what is the position with regard to the overall capital allocation for 1981 in all the Votes? I have a reply from the Minster for Finance which indicates that, when the Fianna Fáil Government left office on 30 June last, of the £79.3 million allocated for capital purposes £35,267,140 had been spent. Since then only about £27 million has been spent and the total spent at the end of November is £62,592,190. I would like to know from the Minister for Finance, because the Office of Public Works covers part of this expenditure, if in fact there is a saving, and was it by his direction, in the capital budget.
I would like to refer to some of my pet projects, which I hope to see sustained. The Minister decided to continue my scheme for the provision of micro-computers for second level schools. He will provide in his budget figures money for summer courses in 1982 to enable teachers to get the best use of these micro-computers, which were provided in accordance with the decision made by me as Minister and with the backing of the Government.
There is a natural tendency for a Minister who takes over in the middle of the year to try to arrogate to himself all the credit for schemes already under way. I am not in the childish games of claiming credit, but I think I have a right to set myself up as a monitor of the progress to be made in this area. The Minister for Finance should look kindly on the Minister for Education when he comes looking for micro-computers for schools, seeing to it that the teachers are trained to use them and that they will be able to teach computer science at various levels. In primitive societies it is said that fear is the initial reaction to all significant change. If our young people are familiar with computers and their uses early enough, they will have nothing to fear, even though we know socio-economic problems will arise from their use in the future. We have had that at all stages in development since the Industrial Revolution.
I am a little perturbed about the adult education programme. The House will know I was responsible for a considerable advance in this area by providing 50 adult education organisers throughout the country. Their job was to develop adult education, mainly through the agency of the vocational education committees.
Three of those people had special responsibility for the development of the Arts in Ireland. I am basically suspicious about setting up committees to examine what is needed. I regard that as a ploy. Enough research about the need for adult education in Ireland has been done. We know what has to be done and we are calling for action now. The Minister set up a commission under the chairmanship of Mr. Ivor Kenny, a very competent man, but I have the suspicion that the Minister is long-fingering adult education.
I would like to mention the project for distance learning. I had been in consultation with the National Institute for Higher Education, Dublin, RTE and the Open University in Northern Ireland to develop a foundation course in computer science to be followed, using the foundation course as a qualification, by a properly certified two-year course, ending in the award of a national certificate by the National Council for Educational Awards. If it is a question of finance — and it is not a large expenditure — I urge the Minister for Finance to look kindly on proposals from the Minister for Education in this regard.
The development of regional technical colleges was also a favourite project of mine. Each one had been extended while I was Minister for Education. I had made some purchases for the development of Kevin Street before I left office and had finally made a deal for Carriglea Park in order to provide a regional technical college on the east side of the city. Tallaght, Blanchardstown and an area north of the river were on the stocks and negotiations were going on. I trust the money will be available for this development, too.
The School of Engineering at UCD also took up a great deal of time. We seldom pause to realise that our universities produce technologists, unlike some continental universities where there are specific technological universities and some old universities do not allow technologists inside their doors. That is their loss. Our universities have been supplying technologists and the School of Engineering at UCD will be an engineering showpiece in western Europe. I am convinced that no Minister for Finance would neglect funding this. I intended to talk about the development of the National Institute for Higher Education and other third level organisations, but my colleagues want to contribute to this debate and I do not want to take up their time.
The Minister for Finance mentioned agriculture. I want to make a plea for what is known as the west — the 12 western counties. We are not given to the béal bocht. We have every right to ask that all those areas should be included under the severely disadvantaged areas scheme for the benefit of EEC grants. We know farm development schemes have been cut, the special western package negotiated by Deputy MacSharry when he was Minister for Agriculture has been slowed down since the change of Government and, for the purpose of reckoning grants, there has been a change in the counting of sheep and cattle to the disadvantage people in that area.
We know the disadvantages from which we suffer. We have a poorish soil which needs warming with lime and stimulation by artificial fertiliser. We believe we have a very strong case for being included in the severely disadvantaged areas. So far as the Minister for Finance is responsible, to back up what will be coming from the EEC, I would make a plea to him to push our case in the Council of Ministers as well. I am afraid that some of the people in Government who talk about farming are thinking of points further east where the land is better and the farms are larger. It is more difficult to see the smaller farms and the land of poorer quality.
There is much more I would like to say on the Appropriation Bill but several other people wish to speak.
I heard Deputy Wilson speak about shortcomings in this Department and in that. It is well known that Fianna Fáil put the country on a course where £740 million was needed to fund commitments made in their January budget. It is a pity the former Minister for Finance did not take his commitments into consideration when drawing up his budget. It is amazing that he could be £740 million off target. Perhaps, with the new electronic computer that is now installed in their headquarters, if they ever get a chance of drawing up another budget, they will not make the same mistake.
The Department of Social Welfare were short £77 million to meet their commitments up to 31 December this year. Other Departments were short as follows: Department of Health, £47 million; the Department of Justice, £16 million; the Department of Defence, £11 million; the Department of the Environment, £35 million; the Department of Industry, Commerce and Energy, £14 million; the Department of Agriculture, £45 million; the Department of Transport and Energy, £87 million; the Department of Education, £10 million; the Department of Posts and Telegraphs, £19 million. That is a total shortfall of £740 million.
The 1979 budget showed a deficit of £522 million which was over-shot by £233 million. The 1980 budget showed a deficit of £547 million which was over-shot by £194 million. The 1981 budget showed a deficit of £515 million which was almost completely absorbed in the first six months of this year.
It is amazing that any Government who had a majority of 20 Members and were in a position to take unpopular measures allowed the country to drift to the verge of bankruptcy and to the verge of losing its financial credibility in the world. In the last three years there has been no money for roads. In Cork County Council we were working on a hairshirt budget. We could not even get enough money to keep pace with inflation. At the second last general election Fianna Fáil said that if they could not get work for Irish labourers on the county council roads they would dig holes in the roads and fill them again.
The holes are there.
The holes are there but we cannot fill them because the money is not available. The money for housing was severely curtailed.
We have had tenders lying for the last two and a half years in the Office of the Minister for Health for an additional ten bedrooms to Castletownbere Hospital and ten bedrooms to Bantry Hospital. The problem of geriatric patients is a major one throughout the country and it will have to be tackled. In many cases old people would be adequately cared for at home if there was some contribution made towards their maintenance instead of admitting them to county or district hospitals. The amount it takes to maintain geriatric patients in hospitals is outlandish and it would be much better if people could be compensated for looking after them at home.
The Minister for Health and Social Welfare has given a generous increase in the fuel allowance this year. It is now £120 which is a one hundred per cent increase.
Deputy Wilson spoke about the previous Government's policy on education. It is not so long since a Fianna Fáil Government adopted a policy of closing every one-teacher school in the country. Indeed some of the two-teacher schools were threatened with closure. The children were conveyed to larger schools in buses and mini-buses. Some of those buses are now a menace on the road and are not fit to be on the road. There was a lot to be said for the small local schools. They produced good scholars and good people. That Fianna Fáil policy was a very bad one. However the Coalition Government reversed that decision and the one and two-teacher schools have now been saved. Some of those school buses are now ten, 11 and 12 years old and no provision has been made for their replacement. This is something that will now have to be tackled.
Some years ago the county health boards were abolished and regional boards established. It is accepted widely now that that was not a wise move. I oppose regionalisation strongly because it is a move away from the human element and in addition regionalisation results in a situation that is unwieldly and unworkable. We must ask ourselves whether we are getting value from the colossal sums of money being spent by the health boards. Are the boards providing for the people the service that should be provided? The cost of being transported to hospital by ambulance is now extremely high. If, say, someone from Schull or Berehaven had to be taken to hospital in Cork, a return distance of 100 miles, his bill at 55p per mile would be more than £100. This is a very severe imposition on anyone but that is the sort of bill that such a person would have to meet if he were not the holder of a medical card. In such circumstances can we be said to have streamlined the service or that we are providing a better service for the people? This situation needs to be reviewed.
It was interesting to hear previous speakers say that the farm schemes suffered some cuts. We all know why there had to be cuts. There was a shortfall of £45 million last June in the Department of Agriculture and this money had to come from somewhere. The position was so bad that had it not been for the change of Government there would have been a collapse of the TB eradication scheme and of the many other schemes operated by the Department while An Foras Talúntais would probably have been forced to close. However, the new Minister for Finance launched a rescue mission on his coming into office. At long last we have a Government who are prepared to face up to their responsibilities and who are putting the country back on its feet. Our economy at that stage could have been likened to a ship listing but it was rescued by the Minister who restored it to safety. We all know that everything cannot be put right overnight. In this case the patient, being the national economy, is very sick. It is still in the intensive care unit. Some time will be needed to get it out of that danger and in that context we must have foresight and proper planning in addition to what I would regard as genuine leadership. Those of us who live on the south western seaboard know only too well how difficult it is to attract industry to the area.
The Deputy's time has expired. I am sorry that I forgot to give him a few minutes' notice.
He should be punished for using mixed metaphors.
I should like just one minute in which to finish. The benefit to our part of the country and to the western seaboard in general would be tremendous if we could succeed in attracting industry to be set up there. We cannot live on fresh air and cold water in west Cork. The previous Government reneged on that part of the country. They closed the co-operative in Skibbereen, a viable establishment that was a life-line in that area. We need action and more money but less talk and fewer promises.
I wish to raise some of the social aspects of the policy of this Government as expressed recently by them and which are included in some of the measures they have taken. I was very interested in what Deputy Sheehan had to say about the ship listing during the term of office of the previous Government. My way of conceiving what has happened now is that the ship has been taken out into deep water and scuttled and is about to sink without trace. Anything I have witnessed so far has indicated that to be the situation.
Deputy Sheehan referred, too, to capital investment but I would remind him that in this year alone capital investment was increased by 36½ per cent to £1,700 million principally for productive purposes.
Regarding his remarks about the health board that operate in his area, I would remind him of Tralee where the hospital has been completed but is awaiting equipment in order to be able to go into operation.
The Deputy made no provision for that.
Regarding the fuel scheme, the increase on this occasion was 33? per cent compared with 100 per cent last year plus a widening of the scheme.
Deputy G. Mitchell also helped me considerably today. The Minister for Finance talked about deliberate under-estimation. Since I am referring here to social welfare I will give the reply that the Minister for Social Welfare gave to Deputy G. Mitchell today. That was that the January 1981 Estimates for the Department did not under-provide for charges known to have existed at the time of the approval of the Estimates by the then Government. On the question of the social policies of the Government, we are talking of Scrooge-like policies. We know that the Government were reluctant to give to social welfare beneficiaries the double week's pay which is provided for in this Bill.
The Deputy made no provision for that, either.
The Tánaiste said here that these people had got an increase in October to offset inflation and he asked was that not sufficient. We did not interrupt the Minister while he was speaking so perhaps he would continue reading his book. He is bound to find these remarks unpalatable.
They also gave no extension and no improvement in the autumn double week. Those who are on unemployment assistance for over a year deserve consideration. There is a genuine problem here which should be faced and tackled. I appreciate different groups might have to be segregated, but it should have been tackled this year.
The evidence of this is also in the breakdown in the Eastern Health Board of the footwear scheme. It is the first Christmas for generations that children will go barefoot in Dublin. I checked today on the emergency measures taken since we raised this matter last week and, despite them, there will still be children who will go barefoot. I thought we might have to see a re-introduction of the Herald Boot Fund.
The Government are not to blame for that. The vouchers were there.
It is under the administration of the Government. They have the power and the money. It does not matter where the slip-up is. There are 4,000 applications which were affected by the embargo, there was an administrative mix-up and the scheme just did not work. There was a great effort made to try to get some shoes out before Christmas — and I appreciate that effort — but the Government should not have allowed this situation to develop. There is a 50 per cent increase in demand this year and a 50 per cent increase in eligibility. Let that sink in. It means that there are more people below the poverty line. It is reminiscent of the old days when the shilling was taken from the old age pensioners. The Minister should read Paddy Crosbie's book. He would find it very interesting in relation to the poverty which existed here previously. We face another terrible problem of an increase in unemployment to 134,000, and that figure is growing. The Tánaiste says he has no optimism in that regard.
I heard an ordinary housewife say that there was always a catch with the Coalition Government. It is a very interesting phrase. One must read the fine print when dealing with the Coalition, and read it very carefully. The advertisement said that nine out of ten housewifes would benefit from the payment of the £9.60. The catch in this case is that the husband pays for its administration. There are very few housewives applying for this benefit. The latest figure is 16,000 to 19,000.
Thirty thousand people have applied.
It is 30,000 out of 350,000. The Minister is making great efforts to get applications in, and I am sure the party has whipped up its supporters to do this.
I want to speak about children's allowances. This is one of the most scandalous steps taken by this Government. In the last two years, and it is included in this Appropriation Bill, Fianna Fáil increased children's allowance by 30 per cent, the same was promised for 1982 and the £195 child tax allowance is there. Fine Gael and various people who are associated with them promised an augmented child benefit scheme of £3 per child per week. We now know very clearly that those families will lose the children's allowance and the child tax allowance. This will be a disaster for middle income families. It was foretold by the Taoiseach; he did not try to hide that fact.
If we compare the 30 per cent for next year, which Fianna Fáil would have given, with the Coalition promise for 1 July next, which will be included in the coming budget, it is clear that all, except those on either minimal tax or those with one child on 25 per cent tax, will lose. This means that the middle income group will lose very substantially. The bigger the family, the more you lose. That can be clearly seen in many instances. There are approximately 40,000 children over 18 years of age in respect of whom the child tax allowance will be lost. The bulk of these are in third level education. The figure of 40,000 was given to me in reply to Question No. 684 by the Minister for Finance on 16 December 1981. That is a very interesting figure, and not many people realise the extent of the problem. The parents of children over 18 will lose the £195 while they are in full-time education. Taking all children into account, the total clawback on the £195 will be about £50 million, which is a very useful figure for the Exchequer. I hope Deputy Sherlock recognises what is going on subtly under the surface. This is a shameful attack on families, and I ask the Minister for Finance to leave the £195 allowance for those in third level education. The Exchequer will gain from this development.
Question No. 745 was answered on 15 December. This told us that, assuming you get an increase in children's allowances from 1 July, the first six months of next year would be the same under the Fianna Fáil scheme or the augmented child benefit scheme. The second six months would differ because Fianna Fáil would have allowed £73 million for the second six months and the augmented child benefit scheme would cost £94 million. Under the Fianna Fáil arrangement the tax allowance would be there for those working and that would be £50 million. There would be £12 million of that left, because presumably it would not go until after July. That means the total cost to the Minister for Finance for children's allowances would be £179 million under the Fianna Fáil schemes and £162 million under the Fine Gael scheme — a direct Exchequer gain of £17 million. That is in a year when some of the tax allowance is still there for half the year. In a full year that tax allowance would be gone and there would be a bigger gain to the Exchequer.
I am concerned whether, in view of recent statements by the Taoiseach and some of his Ministers, the pattern established by Fianna Fáil of real improvements in social welfare benefits will be maintained. It has become clear that a 25 per cent increase in social welfare benefits will be necessary in the coming budget. I have read that the ICTU have said that in the circumstances at least that percentage increase will be necessary with inflation running at slightly more than 23 per cent.
The cost of that kind of increase from 1 April next — I have the information from a written reply given to Question No. 677 would be £203 million, and if we take an additional £17 million for the same increase in children's allowances, we get a total of £220 million. Without an increase in unemployment, which would throw more on social welfare benefits, the Minister must find £220 million extra next year, without including about an additional £50 million to cater for more unemployment.
Where will this money come from? Will it be from general taxation, direct or indirect? We have been told that the direct taxes are to be reduced, by how much remains to be seen. Indirect taxes already have been increased substantially and we assume they will be increased further. Let us look at the PRSI. The PRSI contribution currently is 4.75 per cent up to a maximum of £8,500, without a charge above that income. If we put together the different proposals of the Minister, we find that for next year the contribution will be 7.25 per cent on all incomes. This is getting through to the workers now. If we add the probable increase of 25 per cent in social welfare benefits, the extra contributions from workers which would be required to meet the cost — the information was given in a written reply to Question No. 743 on 15 December — it would mean a 3 per cent increase in PRSI, presumably to be divided between the employer and employee. That brings us to a position in which already we have a contribution of 7.25 per cent and we are talking in terms of another 1 per cent for all employees, making the contribution 8.25 of all incomes. Therefore, the Minister for Finance will have a considerable headache because of the problems which to a great extent he has created for himself.
A book has been published called One Million Poor. It indicates that early in 1981 that was the situation in Ireland, and there is not much doubt that there will be as many as 1½ million poor before this Government complete their policy. The Taoiseach agrees with this, because recently he said the middle income group must bear the burden of the increases. The Fine Gael policy is one based on levies and indirect taxes like VAT. The sufferer will be the single breadwinner with a family. Such families are the heaviest consumers. They have to pay transport costs and to buy food and clothes and all the other things. That is the kind of economy the Government have created and it will bear particularly heavily on single income families.
Today we have seen that the CPI has gone up considerably. I know the Government do not like to be told these things. They have lost their way in the maze of their policies. They are not sure of where they are going. They miscalculated the effects of their policy, and the middle income group are their sacrificial lamb. The poor also will be poorer. Fianna Fáil protected the social welfare section and the poorer families during the recession. Now those people are exposed to the full impact of right-wing Fine Gael policy. We will oppose vigorously all these policies. It was a mistake on the part of the Government not to have allowed for a proper Adjournment Debate. It has deprived backbenchers of an opportunity to speak. It is a bad precedent.
In conclusion I wish all the Members of both Houses and the staff a happy and enjoyable Christmas. Although I said such things about the Minister, I hope he will enjoy his Christmas and relax over the break.
I will make three points only. Number one relates to pensions. Though I am aware some change has been made in the system of pension payments to CIE workers, I want to point to the injustice of paying £14 a week to a person who had given 40 years' service. That must be changed radically.
My number two point refers to health. Is it right that when hospitals are understaffed, institutions catering for the sick and the aged, doctors under the GMS can appropriate for themselves incomes of between £35,000 and £40,000? The fact that fewer than 40 per cent of the people have full eligibility means that there is widespread abuse of the scheme.
My third point relates to agriculture. People are beginning to talk very loudly about the massive capital injections in agriculture in all forms, subsidies and grants-in-aid. It is a shocking indictment of our whole agricultural policy that in a country which is supposed to be agricultural we spend £638 million annually on food imports, all of which could be produced at home. It is not being produced because the land is not being worked. This trend needs to be changed. From discussions with the farming community I know that farmers have been badly advised by our agricultural advisers. We must have a proper agricultural policy. With the large number of people unemployed a situation will arise whereby farmers working up to 40 acres must be grant-aided. It is the producer who should be subsidised and not the product.
I thank Deputies who contributed and I join Deputy Woods, on my own part and on behalf of the Government side, in wishing you, Sir, a happy Christmas. I wish to thank you for the manner in which you carried out your duties. I thank the staff for being with us so late. They have helped us to complete the business. This has involved no little strain for the staff and I should like to convey our thanks to them.
I am putting the question: "That the Bill be now read a Second Time; that the Committee Stage is hereby agreed to and is reported to the House, that the Fourth Stage is hereby completed, and that the Bill is hereby passed."
This Bill is certified a money Bill in accordance with Article 22 of the Constitution.
Bill to be sent to Seanad Éireann.
