Deputy Kirk is in possession. He has 20 minutes left.
Financial Resolutions, 1984. - Financial Resolution No. 11: General (Resumed).
Debate resumed on the following motion:
That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.
(Minister for Finance.)
Before Question Time I had the opportunity to speak about the different aspects of the budget and I was making a few very relevant points with regard to industrial development and employment creation generally. I said that the incentive for the entrepreneurs who are prepared to set up their own small industries is simply not adequate or sufficiently generous to induce them to commit the investment, knowledge, expertise or risk capital necessary to get them off the ground, and proper production research facilities on a much wider scale should be made available. Unfortunately, in the budget PRSI received yet another hike with the result that more than 20 per cent of income is being paid in the form of PRSI contributions, income tax and other levies. The PAYE taxation system is penal. It must be seen as a positive disincentive to those considering taking on additional employees or starting a new industry.
There is a great opportunity to create employment in the food processing industry. Many people hold the view that if we are to make an appreciable dent in the appalling unemployment figures it is essential for the Government to address themselves immediately to that matter. There is a need for considerable State involvement either through grant aids or direct cash input to develop processing facilities here. I accept that enormous sums would be involved which are too great for any private individual or group to consider raising. However, information in regard to food imports given recently in the House indicates that a commitment of Exchequer capital to this area would be justified. The budget does not hold out any hope for improvement in that industry. There is no provision in it to help that sector. It appears that the Government are not prepared to give attention to this industry. Development in the food production and processing areas should be done on a co-ordinated basis involving those engaged in production, processing and marketing. There is little point in increasing production or having better processing facilities if we do not have a proper marketing technique. There is an obvious need for co-ordination. We have a long way to go before we come to grips with the tight discipline and organisation essential to get the three sections working effectively together. I venture to say that without the involvement of the three sections mentioned in a co-ordinated way our food processing industry will eventually fail.
I understand that last year meat factories were working at half of their capacity. There are obvious implications in that for the meat trade. Last year's fall serves to emphasise the need to improve the type of stock being reared on our farms. We must build up a proper relationship between the meat plants and the farming community. To date they have been working on a supply and demand basis. I accept that there are adequate outlets for the finished product but it would be serious if we found ourselves in years to come with too much stock. That would have serious consequences for the farming community who have been reeling under increased costs and a cost-price squeeze for too long. Those involved in the meat industry believe that there are opportunities for new markets outside the Community and they should be pursued. We have many people here who possess the necessary expertise in this area. There is a great need to perfect this side of the business.
I should like to deal with the single greatest threat to our economy in recent years, the threat of the imposition of the super-levy. Since we joined the EEC milk production has become relatively well organised. The particular type of farming structure we have has, to a degree, militated against the rate of expansion in that area. That has posed problems for many dairy co-ops and plants involved in the liquid milk trade. Obviously, the provision of facilities in the farmyard to cater for dairy herds and calf rearing has meant considerable investment and it is doubtful if such investment on small holdings is justified. Many small farmers carried out improvements at considerable expense but are now in serious financial difficulties because of the high cost of borrowing. It is an unfortunate fact of life that the return on that investment has not been anything like what was expected. With regard to milk production we are at a serious disadvantage compared to the factory type dairy farming that takes place in other countries, such as the Netherlands and Germany. Milk production there depends very much on the import of substitute cereals. The Community may find that these have been allowed to become established and that they have gained a foothold.
Though the danger signs have been there for a period, we never felt it would endanger our industry to any great extent. Now we know that it has and it will take considerable political strength, commitment and will power to safeguard our dairying industry. If those qualities are not forthcoming from our representatives in Brussels our economy will be certainly on the down trail.
In addition to factory type milk production units on the European mainland, we still note that 35 per cent of the British market is being catered for by New Zealand, and while the British have succeeded in convincing their European partners that a special deal should be given to New Zealand, the fact is that the New Zealanders have a stranglehold on markets that should be the first right of Community member states. Obviously, with our proximity to the British market we should be able to avail of it, yet farmers and those in the co-op movement, the integral part of our dairying industry, find they cannot plan with any certainity for the future simply because we do not seem to possess the necessary clout at the Brussels negotiating table.
If our case is not put forward adequately with the necessary documentation, and properly presented, and if we are not able to convince our fellow member states of the importance of our case, we will be in serious trouble. We must appreciate that our beef and dairying industries are very much interlinked and that any curtailment or reduction in our dairy herd will have immediate consequences in regard to the supply of raw materials for the beef industry. We must get this into the right perspective. Our meat processing plants have been working at only 50 per cent of their capacity. Therefore, the prospects for that sector are obviously gloomy.
I submit that what has been happening in the Community unfortunately is not being catered for by the CAP, the section which should be exercising effective control on cereal substitutes and therefore this is a very sad day for us.
Let us consider for a moment the implications for us of the imposition of the milk super-levy as originally proposed. We must consider the great social problems that would be created for so many small farmers whose only possibility of survival is increased production. Effectively, the super-levy would put them and their families out of business and they are people who have no other skills besides farming. Without the means of supporting themselves and their families they automatically would become the responsibility of the State, and when we consider them in the context of the numbers already unemployed we can determine the implications that lie ahead for us. We can detect a mood of desperation already among our smallholders. I sincerely hope we will succeed in staving off the implications of the super-levy. Support for this stance has been forthcoming from both sides of the House and it is important that our partners in the Community become aware of what is involved for us.
Many people have been disappointed that the budget does not contain any provision for land-leasing. The need to restructure our land is obvious if we are to maximise essential output.
Last year there was much regret at the suspension of the Farm Modernisation Scheme. The Government's action effectively set back agricultural development by many years. Their move was shortsighted and unfortunate and its reintroduction in a restricted form will not get to the nub of the problem in agriculture. That is unfortunate because if we are to give agriculture its place as the primary producer in the economy it is essential we should have a generous grant scheme in operation.
I will deal briefly with education. I am sorry I have not got more time: to deal with the many aspects of the budget one would need much more time. Yesterday I had a parliamentary question for written reply and I discovered that in Louth there are 16,000 primary school-going children and 7,500 secondary school-going children. Where will they get employment when they leave school? I asked about the type of courses they are being provided with and if we have a problem co-ordinating the courses with the IDA and our industrial development arm generally. The courses in the regional technical colleges are not in keeping with proper industrial development and therefore the time and the expense of the students are being wasted.
Ar an gcéad dul síos ba mhaith liom comhgháirdeas a dhéanamh leis an Aire Airgeadais agus leis an Rialtas as ucht an dul chun cinn atá déanta ag an Rialtas ar feadh bliana chun ord a chur arís ar chúrsai airgeadais na tíre seo. Caithfimid a admháil ar gach taobh den Teach, cé go bhfuil deacrachtaí ann fós, go bhfuil dul chun cinn anmhaith déanta ag an Aire Airgeadais agus an Rialtas. Tá an chuid is mó de na fadhbanna airgid a bhí ann bliain ó shin réitithe. Sa Stát seo, nó in aon stát eile, muna bhfuil cúrsai airgeadais in ord, ní bheidh dul chun cinn i gcúrsaí eachnamíochta nó ní féidir postanna nó fostaíocht a chur ar fáil. Tá mise sásta le format na cáinfhaisnéise seo. Is féidir cuid de na téarmaí a cháineadh, ach tarlaíonn sé sin i gcónaí maidir le haon cháinfhaisnéis.
I have spoken on 24 Budget Statements since I became a Member of the House in 1961. Budgets tend to follow a distinct and definite pattern. I recall various Ministers for Finance and various budget speeches. I regret that the Irish language is not heard frequently in the House. The language and the Gaeltacht always seem to be a source of controversy, rows and arguments. I would much prefer to hear our language spoken from time to time in a friendly fashion in the House.
This budget represents considerable progress. It honours the commitments given by the Government in November 1982. At that time we gave solemn undertaking that our top priority would be to restore some semblance of order to the nation's finances which, due to the squandermania and mismanagement of the administration from 1977 to 1981, left us in a dire financial mess.
This Government took office a little over a year ago dedicated and committed to restoring order to the nation's finances. It was a necessary prerequisite to the restoration of economic progress and the creation of jobs. It is clear from the budget that the Government have come to grips with the apalling mess they inherited. I congratulate the Minister for Finance on the superb job he did in difficult circumstances.
This budget represents a well balanced formula which not merely will put the nation on the right road but will prove a basis for generating new economic activity which will lead to considerable job creation. One can approach a budget debate from different angles. I regard the budget as the major Government instrument of economic strategy, economic development and social progress. I shall try to analyse the budget and look at it against the background of the very severe economic and social problems we have. We must look at it against the growing, frightening spectre of unemployment.
Before long, one-quarter of a million people will be unemployed. That is frightening. It is unprecedented in the history of the State. Now that the State's finances have been put into reasonable shape the preoccupation of the Government in the next few months must be job creation. It will not be easy to solve our unemployment problems. Those who think there are over-night solutions to it are living in cloud-cuckoo land. I listened to the debates in the European Parliament and in the various economic committees on the question of unemployment. Various suggestions were put forward but the end result was that there was no magic formula which will solve the growing unemployment problem. Nevertheless we cannot sit back and be complacent. We cannot adopt a laissez faire attitude. I hope the financial and fiscal strategies in the budget will assist if not accelerate economic development and job creation.
I would be less than honest if I said I was satisfied with our present job creation policies. The job creation strategies we are now pursuing are basically the same as they were when I came to the House 23 years ago. The IDA are orientated towards attracted foreign industry and they have been very successful. However, we must face the harsh reality that we can no longer depend on attracting foreign industry or investment to generate job creation at a rate which will make some impact on our high unemployment figure. It is virtually impossible to attract foreign industry now. All countries have serious economic problems and are suffering from the recession. Deputy McCartin and I know from the European Parliament that in West Germany and Holland there have been factory closures and redundancies. We can no longer depend on attracting foreign investment to the same degree as we succeeded in doing during the past 20 years.
What is the alternative? How will we tackle the problem of unemployment? The Taoiseach referred to creating employment and said it was a top priority. I want to be as constructive and objective as possible. The unemployment problem transcends party politics. Petty bickering in the House will not solve the problem. If we are to tackle this frightening spectre of massive and growing unemployment it will require a radical review of national thinking, policies and strategies. We must have a general consensus from all parties.
If we are to find the formula to tackle this problem we will need greater assistance and understanding from the EEC. Let us face facts. If we cannot attract foreign investment we will have to rely on our natural resources. Our only hope is to develop and exploit them. What have we? We have agriculture, fisheries, forestry and tourism. It is unfortunate at this time of world recession that attracting foreign investment has become so difficult and that our agricultural industry is in a difficult situation. One could go so far as to say that the agricultural industry is so bad that thousands of farmers are on the verge of bankruptcy. Morale among the farming community is very low and there is a lack of confidence in the future. That is a very serious situation and one that must be tackled urgently by the Government. Let us face the blunt truth. Agriculture is our main resource with immense potential for development in its various facets, food processing and so on. It is a very sad reflection on the policies, particularly the industrialisation policy, that have been pursued since the foundation of the State that we have failed to recognise the tremendous natural advantages we have in terms of our land and in the fact that we are an island country.
If we are to tackle the unemployment problem we must become specialists in food technology and in the processing of the raw materials of the land and of the sea around us. I am very concerned, despondent and dissatisfied with the general approach to economic development and job creation. Massive documentation has been produced by various experts, institutes and so on in relation to agriculture. There is a task force considering the various aspects of the economy and there is a committee, of which I have the honour to be a member, advising the Minister for Industry, Trade, Commerce and Tourism on the formulation of industrial development strategy but we are now in a situation in regard to unemployment in which people, even those with third level education, have no prospects of obtaining jobs. In the course of my work as a Dáil Deputy I meet many young people every week in Limerick. Some of these people are graduates of the universities or have completed courses at the NIHE and it is demoralising to think that there is no prospect of jobs for them.
The budget represents a major step forward in relation to our finances but much more radical thinking and a much more dynamic approach are needed if we are to tackle the unemployment problem. I do not apologise for emphasising again the need to concentrate on industries based on our natural resources in the context of tackling the unemployment problem. Every week I find myself pleading with banks or other lending institutions on behalf of farmers who are in great difficulty in regard to repayments but of course any latitude granted only prolongs the evil day because the interest continues to pile up. It is not possible to have either the necessary level of generation of economic activity nor a dynamic agricultural policy while the present serious situation in farming obtains.
The same applies to the fishing industry. It is a shame that a country with vast resources around its shores in terms of fish should allow this industry to be in such a state of chaos. There is the situation, too, of the closure recently of the Scarriff chipboard factory. Together with Deputy Taylor-Quinn and Deputy Carey I have been involved for the past six weeks or more in trying to find a formula that would allow that factory to reopen but I have been astonished, dumbfounded and appalled at what I have found in relation to our national afforestation programme. Our conditions are very suitable for an indigenous timber industry but I can only describe as shameful the state of that industry in terms of the organisation and supply of timber and of other aspects also. I might add that the negotiations in respect of Scarriff are well advanced and that I am optimistic that in the not too distant future there will be a new package with overseas participation which will enable the factory to reopen. One can only hope the Government will give serious consideration to the whole question of our natural resources and realise the vast potential that exists in this area for development and for the creation of jobs.
The tourist industry is another important area of our economic activity. While appreciating that there are factors, external and otherwise affecting that industry, there is an urgent need in this area for dynamic development, marketing and promotional strategies. There is need for a complete review and reassessment of the role of tourism in our economy, especially in terms of potential markets.
Apart from the question of the development of our natural resources, I am very concerned, too, in considering this major instrument of economic development, with the lack of State machinery and of a properly organised structure which would encourage community development and which would enable us to tap the enormous amount of talent that is available among local communities and development associations. The Cork region has been very much in the news of late. Various suggestions have been put forward as to how the problems of that region might be solved. Down through the years I have been saying here that the only solution for a problem region is a SFADCo-type formula. That is why I urge the Government to realise the desirability of giving to the South-West Regional Development Organisation, in which the counties of Cork and Kerry are included, the same type of statutory authority as applies to Shannon so that the local authorities and local enterprise can come together, formulate and implement appropriate development strategies for the region. Surveys are a waste of time if we do not have implementing agencies also.
The idea of setting up statutory regional development agencies is now accepted throughout Europe. The new guidelines for the European Regional Development Fund which were approved by Parliament in 1981 emphasised the need for the full involvement of local people and local representatives in the formulation of plans for their own areas. I suggest that the Government go a step further and turn the South-West Regional Development Organisation into a SFADCo-type organisation. In that way it would be possible to formulate plans for Cork and, what is more important, to implement them. Regardless of where the money might come from, I urge the Government to accept this recommendation.
In south-west Kerry there is the most outstanding example of community effort I have ever witnessed in my time in politics. As Minister for the Gaeltacht I had the privilege of encouraging and assisting the development of community co-operatives. In the south-west Kerry area, an area that was declining rapidly, a committee were formed three years ago and they have formulated a magnificent development programme. That programme which covered agriculture, tourism, horticulture, fisheries and so on was submitted to the commissioner in Brussels dealing with regional development. The people concerned were told this plan was ideal and that it complied with the guidelines of regional development policy. For the past few years they have knocked at the door of three different Governments but they cannot get the green light to go ahead with implementing the plan. I wish to avail of this opportunity to ask the Minister for Finance, who has direct responsibility in this matter, to give the green light to the South-West Kerry Development Organisation to enable them to implement the impressive outline development programme that has been lying in the Department of Finance for the past two or three years. Generous EEC aid can be forthcoming for the project.
In the context of Cork the whole question of regional development is crucial. If an organisation on the lines of Shannon development were established for the Cork-Kerry region and if they were to formulate a five-year development programme, 50 per cent of the cost of implementing the programme could be got from the EEC Regional Fund and it would be paid direct to the local regional agency.
Part of the budget is composed of EEC money. Money from the Regional Fund is coming in every year. It is a con-job. There is no semblance of order in the whole operation. Money is being recouped from the Regional Fund in Brussels in respect of projects already established. The EEC has come round to realising that the way to generate regional development is through the establishment of a regional development agency; secondly, through the formulation of a multi-annual plan covering four or five years; and, thirdly, through granting the regional development agency the necessary finance. That is the only way to encourage regional development.
I ask the Government to state if they would consider setting up a SFADCo-type organisation for Cork-Kerry and I ask them to give the green light to the South-West Kerry Development Organisation to enable them to put their plan into action. Here we have an example of a local community who got tired waiting for the State to solve their problem. They were appalled at the population decline and they saw no hope for the future of their region. They did something about the matter. They carried out their own surveys, they did their homework and they have waited three years for the State to give them the green light to go ahead. I hope the Minister of State, Deputy O'Brien, will do me a special favour and bring those matters to the attention of the Minister for Finance.
I promised Deputy Michael Barrett that I would conclude my contribution in a half-hour. I was not sure how long my contribution would take. I have just spent two weeks in hospital and I was not sure I had the stamina to make a long speech. I ask Deputy Barrett to forgive me if I have taken longer to make my speech. I know he will have an opportunity to speak later.
I am very worried about the situation with regard to arterial drainage and I know the Leas-Cheann Comhairle is also aware of the problem. Before I became ill a few weeks ago I received a document from the Minister for Finance stating that there was a review taking place with regard to the wisdom of proceeding with arterial drainage. We have a serious problem with regard to the drainage of the Mulcair catchment area in Limerick. If the Government are reconsidering their position with regard to arterial drainage work I say to them it is madness. There is no better way of spending money than draining flooded land and making it productive. What has happened that there should be any need for a rethink about arterial drainage?
In the Maigue catchment area in Limerick where land was once flooded the area is now fertile and the land is productive. In that catchment area 400 men are employed on arterial drainage and Deputies in the constituency want to ensure that when work on the Maigue is completed work should commence on the Mulcair. That will give continuity of employment.
Agriculture is basic to our economy and it is the area that provides the best scope for creating employment. If that industry is to become more productive the land must become more productive. All of us know that, if the necessary drainage works are carried out in the area from Annacotty to Newport through to the Leas-Cheann Comhairle's constituency, the stock-carrying capacity and the output of the land will be improved enormously.
I ask the Minister of State to convey to the Minister for Finance my serious concern regarding arterial drainage. I am very upset at what the Government are proposing with regard to this matter. I admit I have a constituency problem because 400 men will be unemployed in five or six months time when work on the Maigue is finished. Much more work has to be done with regard to drainage. In respect of the River Suir, we are talking about ten years gainful employment for 400 men in a fertile agriculture region. Commonsense must show that expenditure on arterial drainage is justified. I got the worst possible news during the past weeks when I discovered the Government were reconsidering the whole matter of arterial drainage.
(Dublin North-West): I have no objection to Deputy O'Donnell taking a little extra time. I am sorry to hear he was ill and I hope he will be better by next week. For the past week since the budget I have listened to many contributions from the other side of the House. Deputies opposite remind me of a barrister who has to defend his client on a charge of committing a serious crime. Even though he knows the crime was committed he has to defend his client and he has to score points where possible. He has to get around technicalities in an effort to clear his client.
Debate adjourned.
The Dáil adjourned at 5 p.m. until 2.30 p.m. on Tuesday, 7 February 1984.