Before Question Time I was outlining some of the reasons why the Government have been and will continue to be faced with a difficult position. There is room for optimism because there are positive signs on the horizon, but there is no room for any complacency because there are difficult times ahead.
Our biggest problem will be providing our many young people with jobs and maintaining others in employment. There are many reasons for our growing unemployment: first, our general economic situation and recessionary times and, second, our growing labour force, young people who are leaving school. We are trying to find extra jobs in an ever-increasing market. Various factories and other places of employment have been able to expand production but have reduced the numbers in employment because of advances in technology. This has hampered progress in getting work for many people.
Up to now our education system has encouraged people into certain directions —sitting for the intermediate and leaving certificates, going on to university or being apprenticed to trades. We did not try to widen our horizons and look in other directions for jobs for our school leavers. If we are to provide jobs for these people we will have to look again at our educational and training systems and keep a record of how many young people get jobs in these areas. We have to look at our competitiveness and labour costs. The high cost of oil results in high power charges, travelling expenses, postage and telephone charges, VAT rates, PRSI rates and so on. These are the many aspects we must examine closely if we are to generate a competitive spirit resulting in our goods being produced at an economical rate, maintaining our exports and ensuring that we compete with foreign goods.
Recently we saw the Government programme and action plan for education over the next few years. Hopefully this policy, along with those in the Department of Labour, will ensure that young people leaving the educational system will be better informed. If they are not to go on to a third level institution or undergo training in a regional technical college we must examine alternative courses provided. This is the responsibility, or one of them, of the Minister of State at the Department of Labour present in the House in relation to the performance of AnCO, who have done a great job in very many cases but there remains room for improvement and certain changes. Many Deputies will have had people come to them wondering where they should seek a job. With many of such people the problem is that either they had no training, or no experience and therefore find it very difficult to be placed in any position. This is one aspect that must be examined in relation both to the Youth Employment Agency and AnCO, ensuring that there is a combination of effort so that whatever courses young people attend they will have an objective or recognised training at the end. Also when they have completed such courses the agencies should put the same effort into endeavouring to place them in jobs as they do in attracting them to the course in the first place. There is no point in attracting people to various courses if at the end of the day there is not some prospect of their getting a job.
We must also review the whole system in regard to both the intermediate and leaving certificate. Perhaps there is no point in continuing certain subjects beyond, say, the age of 15 or 16, when some people would be better off receiving some other type of training or practical education from which they would benefit at a later stage. Perhaps they could put such knowledge to good use in setting up an enterprise or being engaged on some other type of job. It is important that we scrutinise closely the operations of AnCO and the Youth Employment. Agency to ascertain where certain efforts are being duplicated and ascertain where the various moneys allocated to these bodies are being expended. All of us would be concerned if these bodies were merely engaging in empire-building, safeguarding their little bureaucracies with little or nothing being done for the many young people leaving the educational system.
We must also create an air of confidence so that individuals and businessmen will take risks in order to provide jobs. At present it is fair to say that at times we have looked partially on people who have either taken risks or made profits. There must be leadership shown from this House, encouraging people who are willing to put their money into certain risk-inherent enterprises, ensuring that young people are given a chance of a job and are taken off the streets. There must be an incentive given to people to invest their money. This can be done only by ensuring that while everybody pays his fair share of tax there is a benefit to be reaped at the end of the day. More important than some people making a profit is the object of getting our people back to work. By discouraging investment or rendering it so unattractive that people feel they would be better off investing their money in something that will maintain its value, we are not in any way encouraging the creation of employment.
We must also examine the position of people who have been made redundant in their thirties or forties. Some AnCO and other courses must be directed towards them. These are people who will find themselves in the unfortunate position of having many commitments, perhaps with morgtage difficulties, having a family to rear and a house to run. They must be facilitated either in changing direction slightly or some other type of retraining to get them back into the workplace. It must be remembered that the vast majority of our people want to work.
We should not tie ourselves too much to rules and regulations with regard to investors who may be prepared to take risks in relation to grants or assistance that the Government or some other State body can advance. Any small amount forthcoming will help somebody who is willing to put in a certain amount of their own money. We must remember that when people invest some of their money they will not take risks with it unless it yields some return. Therefore the IDA or any other body should not become too tied up in regulations with regard to grants for plant or machinery to such people. I heard of one case recently in which applications to the Department were met with all sorts of red tape and regulations which can only discourage an individual from proceeding. We must ensure that individuals or small businesses taking risks are given every assistance even if that means a couple of thousand pounds or a couple of hundreds of thousands of pounds. At times the IDA have paid out millions of pounds in order to create 100 or 200 jobs. They might well provide smaller amounts of money to small businesses which, if they subsequently run into difficulties, will not involve a couple of hundred people being out of a job.
One must also examine our labour costs and those of the services being provided. Small businessmen spend much time doing an unpaid job for the Revenue Commissioners in regard to VAT returns. We must render the task of those small business people easier. We must also examine our postal and telecommunications costs, ensuring that the two new boards set up work for the benefit of individuals and businesses alike. Like other Members I have received many representations about telephones being out of order, or mail lost, when orders are being affected. People in business cannot afford time to chase up individuals from An Post or An Bord Telecom in relation to the facilities for which they pay. They must be able to operate their businesses effectively in this regard so that foreign concerns and other intending business people can see that our systems are good. We must spend more money on and look more critically at the performance of some of these bodies. They have only recently been set up amid great publicity and have a lot to do. It would be unfair to expect miracles overnight. Sometimes phones may be out of order for four or five weeks when one cross check could ensure that the telephone or telex system in question is back in commission. If we can get the small things right, we have some chance of progressing and getting the bigger things right.
We must aim at creating the right climate, building confidence and encouraging investors to invest capital. We must make sure that the conditions are right and that investors are rewarded. That people have a certain initiative should not mean that they cannot be allowed to make a profit.
Unemployment will be the big scourge over the next number of years. This is partly due to past policies, partly to the recession and partly to factors outside our control. It is important that the factors within our control are tackled and the right decisions courageously made.
Small businesses must be encourged. The Enterprise Allowance Scheme has recently been set up and there must be added incentives in relation to tax concessions for companies which take on extra employees. The Government have maintained this aid at the previous level, but might have found it possible to increase this. I do not know how widespread the use of this money has been, but any incentive is to be welcomed.
We must look at job creation in relation to the use of our natural resources and such areas as food processing in substitution for exports. Processing food here as it has been done in the United Kingdom and in Europe will not be easy, but we must examine these areas if we are to provide the jobs which must be available over the coming years. Unemployment will grow in the immediate future, although its growth has been reduced. The position is not satisfactory and we all have a duty and responsibility to take the decisions which will halt this growth and which will place in jobs our young people who are leaving schools and colleges. Government policies must ensure that we maintain our competitiveness and that people are not made redundant. This calls for responsibility on all sides, and particularly on the part of those in secure employment who are not burdened with the fear of redundancy. These must realise that the public want as much of a return from them as is expected in other cases.
Regarding semi-State bodies and the Civil Service, I welcome the proposals of the Minister for the Public Service and the other Minister involved. The public, as taxpayers, will ultimately pay the bill and if they are not satisfied with the service they are getting they are entitled to ask the reason and to demand an improvement, as would any consumer. Vast sums of money are being spent on the semi-State bodies. In many areas this money has been well spent, but in some cases we must examine the return on the taxpayers' money. We cannot be happy with some decisions taken. I am a member of the Joint Committee on Commercial State-sponsored Bodies which have been looking at some of these and intend to examine others. Our aim is to improve the services and in some cases ask for the basis of decisions and why money was spent in a certain way. The workers in these areas must be asked if they would make that same decision if they were spending their own money.
We must look after our young people with regard to educational and sports facilities. The problem of drug abuse has been growing and none of us can take it too lightly. It demands the utmost caution, respect and a combination of effort from all concerned if it is to be controlled and — it is hoped — reduced. There are many reasons for the growth of this problem and it is hoped that the task force recently set up will come forward with legislation to ensure that people are educated and forewarned as to the dangers of drug abuse. People who push drugs must be dealt with as severely as possible by society, because so many are affected by their activities. Many robberies are committed to feed the drug habit. This is of prime importance with regard to the general situation on security, crime and vandalism and people must be made aware of the pitfalls, tragedies and possible loss of life involved which cannot be underestimated. We must draw attention constructively and intelligibly to this problem.
The budget includes a grant for Bord Fáilte for the promotion of tourism. We all hope that ever more visitors will come to the country and in this regard welcome the decision of the American President to visit us in June. The grants for the GAA, the Olympic Games and for the worthy cause of the Olympics for the Disabled are welcome.
The reduction of VAT on theatre tickets recognises the difficulties besetting our theatres. It is to be hoped that this will bring greater attendances and give an added boost to that industry.
The question of VAT on newspapers should be reconsidered because they play a very important part in our lives. They have all suffered by this imposition, especially provincial newspapers.
Much was said prior to the budget in relation to capital taxation. I mentioned earlier that each and every section should pay their fair share of tax but that we should not stifle or impose burdens on people who are willing to invest their money and take risks. We have heard in the past that there are vast sums of wealth which could be taxed. However, I think this is a myth because the figures speak for themselves in relation to previous capital taxation. The property tax introduced last year, about which I had some reservations, yielded only a sum of slightly over £1 million and it cost nearly a quarter of a million to collect it. That highlights the fact that the estimated figure was far short of the mark. I think it would be a disturbing trend if house owners were to be unduly burdened because they put their money in a house. Some elements of the property tax are unfair. A person who owns a house worth £100,000 is far better off than someone owning a similar house but paying off a very large mortgage. This tax should be looked at again in relation to rates and taxes on houses and how local authorities are going to be funded.
In relation to the capital gains tax on private dwelling houses, where an extra profit or income is received as a result of selling, I think the return in this area will be minimal because when you allow for inflation and so on the net gain is not that much. I question the wisdom of this tax and perhaps the Minister would allow tapering reliefs in future. I do not think people should be penalised for selling their private residences even if they make a profit.
I am glad that the rate of VAT on cement was reduced. It will give a badly needed boost to the building industry. Decisions by An Bord Pleanála are still taking far too long. I do not know why this is. Perhaps it is in relation to inspectors' reports. But it is clear that people are sometimes awaiting decisions, often because of frivolous objections, for a very long time and delays can cost more money. There should be a certain minimum period in which decisions must be reached, as happens in local authorities where a decision has to be made within two months from the date of the application. An Bord Pleanála can take ten or 12 months or more to make a decision. We must remedy this.
I hope more money can be made available for a housing programme even if it means that houses must be built to a more economic design. With regard to the Housing Finance Agency, one aspect which has been brought to my attention is in relation to estimates by the local authority who have put the value of houses at a fairly high level. That means there is a big gap between the buyers' deposit and what they will get from the local authority. This gap is difficult to breach and if people are in a position to make repayments, perhaps they could be helped with the deposit.
On the whole this has been a realistic budget considering the vast sums of money which are spent on health, education, social welfare and on maintaining a stable level of security. It is clear that public expenditure is growing at a fair rate and we must look at areas where money can perhaps be saved without cutting down in areas of social welfare. There were small steps taken in relation to reducing the level of personal taxation. We must ensure that we improve on that during the next few years. We must critically examine the report by the Commission on Taxation which, so far, has not received much attention. We must try to ensure that our tax system is equitable and simplified. Our tax system should give an incentive to people and we must make sure that working is more profitable than resorting to the black economy.
I know this is a difficult time in which to implement changes but some of the changes advocated in the report would not cost too much money. They stress a more simplified approach to taxation. No one should have to ensure a running battle with the Revenue Commissioners in relation to queries. Of course a complete overhaul of the system will take some time but I hope the Government will reaffirm their commitment in that area and that budgets in the years ahead will go further down the road making the tax system more equitable. It will not be an easy task given our economic difficulties, but we must make a start. We have made a little progress in the recent budget. More can be done. We all recognise that. We have to look at that report. Here when you have £10,000 you are up to the 65 per cent rate, whereas in Britain you have to earn over £30,000 to reach the 60 per cent rate. We have to ask why is there such a difference. We have to look at the level of tax being paid by the PAYE worker and the amount of that tax which goes to service foreign debt.
Overall the country is coming through the recession. There are many difficulties ahead. The Government were given a mandate for the next three to four years. Obviously while the Opposition should point out our faults, they must be constructive at all times and not gloat over the Government's difficulties, particularly since many of them are inherited. They were created by decisions and lack of decisions, by a lack of credibility, by a lack of guts to face up to making difficult decisions. As a Government backbencher I accept my share of the responsibility for the problems we have inherited. I hope the decisions taken will be the right ones. Criticism of those decisions should be constructive. There are difficulties ahead. The Government will last. They have a comfortable majority. When we look at what is on the Opposition benches the country can be thankful that the Government will last.
