Dáil Éireann debate -
Wednesday, 17 Oct 1984

Vol. 352 No. 11

National Economic and Social Plan: Motion (Resumed).

The following motion was moved by the Tánaiste on 10 October 1984:

That Dáil Éireann approves the policies set out in the National Economic and Social Plan —Building on Reality.

Debate resumed on amendment No. 1:

(1) To delete all words after "Dáil Éireann" and substitute the following:

"deplores the failure of the Government's National Economic Plan to provide a strategy for reducing the overall level of unemployment; condemns the continued refusal of the Government to establish tax equity, and particularly its failure to ensure an adequate return from the business, farming and self employed sectors; expresses serious concern at the additional cutbacks proposed in the public service; regrets the failure of the Government to take into account the principles expressed in the recently published Irish Congress of Trade Unions document,Confronting the Jobs Crisis; and believed that the plan is basically a restatement of unsuccessful social and economic policies pursued by previous governments”.

—(Tomás Mac Giolla).

Mr. McCartin

Earlier I was pointing out that the pessimistic view most people have of the performance of the Irish economy in recent years is not entirely justified. It should be pointed out that our growth rate this year compares favourably with that of most countries in Western Europe, West Germany and Great Britain in particular. We are making greater progress at reducing our inflation rate than most countries in the world and our export performance is second to none. We export per capita two and a half times more than the people of Japan and we are rated in the top half of the performance league of 27 industrialised countries in the world. Those advancements, considering the world recession and our past history, are no mean achievement.

However, we have a problem which must be recognised. It arises from the fact that such a high proportion of our population are young. That has arisen because in general Irish people have big families. If we are to solve the problem by generating industrial economic growth to give those people employment and at the same time make progress in closing the gap in the standard of living which we enjoy by comparison with other countries, then we have an immense job of work before us as a nation. In the case of parents with a large family sacrifices have to be made if all members of the family are to be provided for. Ireland has a large family and the people must be prepared to carry the sacrifices necessary if we are to provide a future for all members of the family while at the same time provide ourselves with a standard of living comparable with that enjoyed in other countries in the EC and the Western world.

It is important for both sides of the House to give the people leadership in this respect rather than trotting out statistics which serve only to discourage. To point out all that is wrong with the plan, all the failures we have been guilty of in the past, without pointing to the successes achieved and explaining the difficulties encountered is wrong. It must be remembered that we have the highest proportion of people in the EC on the land. It was estimated by Fianna Fáil when in Government, and again in the plan, that 3,000 people per year will leave the land. Some politicans will make that statement quietly but will not admit it publicly to the people concerned. Just like the position in ship building, steel, textiles and other industries, we cannot afford to tell people that they can expect to live where their fathers lived before them if we know that because of the way the industry is structured they will not get the sort of living they expect. We will have to increase production rapidly if there is to be a living for them all or we will have to provide alternative employment, part-time employment or alternative activities such as farmhouse holidays. That is the other side of the problem that our competitors in Western Europe do not have to face. It is because of the structure of our population, and the number engaged in agriculture, that this generation of Irish people are required to make sacrifices and efforts that will not have to be made by our competitors in more industrialised countries. We must face up to that.

I agree with the sort of wage increase that in a logical sense we can support, the type of wage increase that Members of the Oireachtas gave themselves some time ago. Nevertheless we must recognise that in making that decision we lost an opportunity to give leadership and a certain amount of credibility in the eyes of the public. Members of the House will have to give the Irish people the type of leadership they need and deserve if we are to solve our problems.

I should now like to refer to the public sector, a topic that has been discussed very much. I agree with those who decry the amount of money spent financing the public sector. We all know that we have reached a serious position in that our public spending represents 60 per cent of our GDP. We have striven to give ourselves the type of social structures that more developed countries have, but we must remember that when those countries — Germany, Switzerland, Sweden and Great Britain — were at our stage of development they had our population structure. However, they were slower to give themselves the type of social structure and public service structure we have at a stage when our economy cannot afford them. If we are to have money to invest in the private sector, in all types of business, and if those concerns are to be allowed retain for themselves the profits they need for reinvestment in order to create emeployment, we must pare down the amount of money spent in the public sector. The economic plan produced in 1979 by Senator Martin O'Donoghue was based on the fact that public service wage increases would be below 5 per cent but they ended up at 29 per cent, and in some cases 30 per cent. It was because of that, more than anything else, that the plan collapsed. This plan will collapse also if the Government are not sufficiently strong to assert their authority in this area and ensure that our people get a better service for the £8 billion collected in all forms of taxation and borrowing and given to the public service to spend. The people are not convinced that they are getting value for this money. Most of us are convinced that at least 30 per cent of this money could be used for reinvestment and left in the private sector. This would go a long way towards creating the jobs and economic activity that we need.

It is hard to give a concise opinion as to how the unemployment problem can be solved. There are many ways it could be done. We must improve competitiveness. That is most important. The question of work sharing has been discussed in many countries. When speaking about America most people forget to mention that over a period of six years they had an economic growth rate of 25 per cent. They increased employment by 17 per cent. In the EC over the same period we had an average growth rate of 17 per cent but we lost jobs. In the US there was work sharing. Real wages dropped as a result of the depression while real wages in Ireland and western Europe increased. There is a lesson to be learned from that. Trade unions and the workforce must allow such work sharing. In America they were more concerned about their jobs than the level of pay they brought home. Without a reduction in working hours in the US there was a sharing of the rewards of labour. This led to stability and a contentment in the US which we have not succeeded in achieving here.

As regards farm taxation, this is another area where Governments have reacted rather than giving leadership. Instead of looking at various sectors and deciding on a fair share of taxation they have responded to the cries and shouts of interest groups. In calculating the tax that farmers pay, it is generally forgotten that there are 60,000 farm families which is a high proportion of the number of people engaged in farming. I do not think anyone can say precisely how many farmers we have. These people were already in the tax net and produced accounts for their farming activities as well as their other work. They paid tax on this and it is included with the PAYE sector. There is a miscalculation there and account should be taken of it. If the 90,000 cases for which profiles have been submitted were fully calculated we would be getting £30 million more. If all these things are taken together it is more likely that farmer taxation accounts for 10 per cent rather than the 5 per cent commonly estimated.

There are a number of details to be worked out about farm taxation. We cannot reasonably make the argument that this will lead to a better use of agricultural resources. What we need is a restructuring of the agricultural industry such as has been done in other European countries. Details about adjusted acres have to be worked out. Farmers who farm intensively and have borrowed extensively contribute to the economy. They may not have a sufficient income to maintain their families but they will be subjected to the rigours of the land tax although it cannot be argued that they have a family farm income.

It is very hard for the public to grasp the significance of everything that is said. We have statements and counter-statements. Statements are made by the Opposition and they are replied to by the Government. Figures are given which people do not understand. We need to create an awareness of what makes a national economy go. This could be done through the education system. There is an amazing ignorance among the people of how the Government acquire the money they spend and of how there is no service that can be given free. If there was such an awareness it would not be as easy for politicians to con the people.

I am not absolutely satisfied with the national plan but I recognise that is is an honest effort. The Financial Times in an editorial last Monday commented on this and stated that the Government were launching a modest but well directed plan to reduce unemployment which is almost the highest in Europe through accelerated spending on roads and construction and by higher spending to create wider educational opportunities. It stated that this demonstration of how to make an austere message more acceptable could be studied with advantage in many other countries. I agree with those sentiments. I support the plan and, in spite of my reservations I hope the Government will succeed in bringing about a better situation.

Dr. McCarthy

We are being asked to stand in judgment over this new economic plan. The Government would like to convince all of us that in this plan they have developed a new and somewhat unique receipe for the country's financial needs. We are being asked to believe that his plan will set Ireland on course over the next three years. They would almost wish us to believe that we will be entering into a new era of fiscal miracles as a result of the plan. We are being asked to believe that the plan will perform economic miracles and in some way save our economic ship from sinking into ruin and disaster. Sadly — it is sad for the country's sake — due to the Government's mishandling and fumbling of economic policies since they came to office in 1982, our economy has sunk to a lower level than even the greatest pessimist could have predicted. Unfortunately the economic tide continues to flow towards disaster and ruin. If it continues in that direction we are in for a sad and miserable time.

There may well be semi-efficient national handlers leading the Taoiseach around in case he should trip himself up and fall but the country's economic affairs are being run very inefficiently and inexpertly. They are being conducted in a fumbling and clumsy style by the national mishandlers, the Coalition.

This Government's so-called economic and social plan is now beginning to ring as hollow as an empty coffin. While I do not wish to be funereal in my analysis of this miserable patchwork plan, I would not be honest if I failed to submit that while it was introduced with such a fanfare of trumpets and in such a highly theatrical style by the Taoiseach, acting under the firm direction and control of the national handlers, it is not an economic plan in reality but is a political cobble designed specifically for one purpose, the purpose of keeping the Coalition partners in Government for a few weeks or a few months longer by effectively ensnaring any little mongrel fox in Garret's or Dick's den.

An Leas-Cheann Comhairle

I presume the Deputy is referring to the Taoiseach and the Tánaiste.

Dr. McCarthy

Yes. The plan is designed to ensnare any mongrel fox there may be in the unreal economic den of these two men. Having regard to the circumstances in which the plan came into being, circumstances of unreality and of motives that are not geared towards economics, it is no wonder that it fails in every respect to stand the test of critical analysis of what are supposed to be its main objectives, namely, a reduction in the massive unemployment figures and a readjustment of our cruel and unjust levels of taxation, both direct and indirect, which are crippling the economy and creating hardship for all our people.

The plan is little more than an uninspired document. It is lacking in terms of any specific economic directive. It is laced with generalities. It is based on assumptions and in some instances on figures which are incorrect, misleading and downright dishonest. For example, on page 25, in relation to unemployment, we read that,

Assuming labour force growth of 45,000 over the next three years, the employment projections outlined above and summarised in Table 1-2, imply that unemployment (on the more relevant Labour Force Survey definition) having increased from an estimated 209,000 at April 1984, to a peak of around 220,000 by the end of 1984, would fall back to 210,000 or near its April, 1984, level. This will mean that between the end of this year and April 1987, employment creation will have absorbed the whole of the labour force increase and achieved a start to the reduction of unemployment.

These assumptions are incorrect. The figures are misleading. The plan offers no solutions to the mounting problem of the unemployed, that group of people who are often referred to now as the unemployed army, an army which will increase in number in the next three years. The assumption that the labour force will increase by 45,000 or 15,000 per annum, in the next few years is erroneous.

Most commentators would put the figure of a labour force growth at 60,000 in the next three years but this misrepresentation of figures is another example of the flagrant attempts that are being made to confuse not only Members of this House but the public generally. It is reprehensible. One must have regard to what the two parties in Government expect us to believe now compared with what they expected us to believe before they came into office, before they got together to form this unholy alliance. In their document relating to jobs in the eighties, Fine Gael stated that if an economic plan is to be trusted, its assumptions must be checked and approved by an independent agency. Obviously, this has not been done by the Government. The politics of deception have become an established Government principle as evidenced by some serious disreputable economic deceptions practised by them during the past year. It is only right to remind the House that at the end of May last we were led to believe that the balance of payments deficit on current account had been reduced in two years from almost £1,400 million to £350 million, in other words, that it had been reduced by one-quarter but we then discovered that these figures were not correct, that the reduction was from £1,600 million to £863 million, not even half the balance of payments deficit. That represents a deliberate and harmful deception on the part of the Government.

In his budget speech of 25 January 1984, the Minister for Finance had the audacity not only to understate the balance of payments deficit for that year but to use the grossly understated deficit to proclaim that confidence had been considerably boosted by the reduction achieved in the Exchequer borrowing requirement and by the improvement in the balance of payments deficit in 1983. The balance of payments deficit was reduced from over 8½ per cent of GNP in 1982 to 2½ per cent in 1983.

That was what the Minister for Finance said in this House on 25 January 1984. Subsequent events have proved those figures to be wrong. We know that some months later the Central Statistics Office confirmed what had been evident before his Budget Statement, that there was an unrecorded outflow of £863 million, £513 million of which was due to the repatriation of profits. It was clear to everybody then that the now famous or infamous "black hole" in our economy had been clearly exposed to all and sundry. It is clear that the Minister for Finance and the Government had collective responsibility at that time for deceiving the Members of this House. Not alone did they do that but they also deceived our foreign creditors from whom we borrowed in the early months of this year an extra £677 million and with whom they renegotiated the terms of the then existing loans. These borrowings and renegotiations were conducted on the basis of a stated balance of payments deficit which was even then known to be at least £500 million greater than the figure stated by the Minister. This was a cruel deception practised on the members of this House and practised also on the foreign bankers who had loaned us money.

It is no harm to revert and analyse some of the other promises given in the past and which remain unfulfilled, that is, those remaining unfulfilled to date and which have no hope of fulfilment in the future. We must remember the document cobbled together at that time by the Fine Gael and Labour Parties entitled Programme for Government dated December 1982. If one looks at the section which dealt with unemployment it was there clearly stated that that was the most urgent problem facing the country. Fine Gael and Labour in that Programme for Government of December 1982 said that if they were to face that problem successfully it was necessary that our credit-rating be maintained at home and abroad so that the necessary funds would be available to the Government to finance both the reducing deficit and job creating investment. They said that required the adoption of policies that would rapidly enhance the competitiveness of the goods and services we produced, the decline in which in recent years was responsible for much avoidable unemployment, and the pursuit of the domestic budgetary policies that would phase out the current budget deficit between now and 1987.

I do not have to tell the House what has happened to the basis of that policy. The maintenance of our credit rating has been seriously eroded, again because of the peculiar, clumsy and inept way the Government have transferred borrowings, putting almost all of their eggs into the one basket. They have converted almost everything into dollar borrowings. As we are all aware, and as was clearly stated a short time ago in this House by Deputy Michael O'Kennedy, the exchange rate of our punt has deteriorated to such an extent against the strength of the American dollar that these clumsy borrowings and conversions on the part of this Government, who were supposed to be the masters in the art of financial management, are now costing the country in repayments alone an extra £500 million annually. I do not have to tell the House what has happened to their programme and plan to eliminate the budget deficit by 1987; even their present plan tells one that.

We might reflect also on what the Labour Party said prior to the November-December 1982 election. In their document entitled: "Where Labour Stand — Jobs Equality and Justice with Labour" the Labour Party clearly stated that they represented ordinary working people, not big businesses, large farmers or land speculators. They maintained that their policies were different. The Labour Party contended that the main parties proposed massive cuts in public spending especially on health and social services affecting the weakest sections of the community. They said that they objected utterly to any policy that made the poor, unemployed, sick, homeless and the young bear the brunt of corrective measures.

Under the heading of "Economy and Jobs" in that Labour Party document they contended again that the main parties offered drastic deflation of the economy leading to the loss of thousands of jobs. The problem, they said, was not merely to get the books straight. They said that over 165,000 were then officially registered as out of work, of whom 49,000 were under 25 years of age. They contended that 40,000 new jobs were required each year to reduce unemployment, that jobs and living standards for ordinary people were then the critical issues confronting the country. They continued to maintain that Fianna Fáil and Fine Gael offered a private sector approach to job creation which had patently failed. Labour, they said, was different.

Need I remind the House how hollow those promises now sound, or how misleading and deceptive they were? We know what the Labour Party have done in Government in collusion with Fine Gael. We know what the Minister opposite, the Minister for Health, has done to the health services, what a U-turn he has taken with regard to the health services since becoming Minister for Health. Yet the Labour Party policy document prior to that election emphasised that they would not touch any of the sensitive areas that would affect the weaker sections of the community, the poor and the sick. We had the crocodile tears and the hypocrisy perpetrated on and, unfortunately, believed by many sections of the public who voted this miserable Government into office. Many of those people have become enlightened over the last two years.

In regard to the creation of the 40,000 new jobs annually, how can the Labour Party reconcile that number then promised with the beautifully diminished figure contained in the present so-called plan in which they offer 15,000 jobs annually? The figure is 25,000 short there. That constituted an amazingly expensive political compromise to attain the position of being partners with Fine Gael in this continuing unholy alliance. These are classical examples of the policies of deception which have been the cornerstone of the present Government's policies since assuming office.

This Government are masters of the art of deception and presentation of broken promises. Any honest politician must clearly recognise now that one of our greatest problems is the massive taxation burden inflicted on our people. The Minister for Finance acknowledged in this House yesterday that we had the highest indirect taxation rate in Europe and the second highest personal taxation rate in Europe. Yet this plan promises nothing with regard to taxation. It contains merely a few pious platitudes with some little lip service paid to the question of tax reform. It is admitted that not much progress can be expected in that area. It is clear also that there will be no general reduction in taxation before 1987, although the Government contend taxation will rise in line with inflation only. If this miserable Government last — and very few people believe they will — then at the end of the next three years the taxpayer will find himself worse off, with no attempt being made to reduce his burden. Our overburdened taxpayer will still be paying enormously higher taxes compared with his European counterpart. This failure to do anything about reform of taxation clearly eliminated two absolutely essential ingredients of any viable economic policy for the future: that there must be an incentive to work and that we must be competitive.

An Leas-Cheann Comhairle

You have five minutes to conclude, Deputy.

Dr. McCarthy

Staggering tax charges will ensure that these ingredients will be missing from our economic plans during the reign of this Government.

It is interesting that this so-called master plan has received such an unenthusiastic reception from most leading economists and businessmen. They have recognised that the plan, even if implemented, will allow this country to drift into continuing economic gloom. There were vigorous protestations made by the Government Press Secretary, the Captain of the Guard of the National Handlers, that there was no truth in the assertion that six or seven economists ran out of the Department of Finance during the year when they discovered that they could not stomach this plan, that economically it was not sound, that they could not justify its existence, that they were not going to stand over it. Despite the protestations that were made by the Captain of the National Handlers yesterday there is very little doubt in the minds of many people but that those economists left the Department of Finance because they did not want to have anything to do with this political cobble which has been presented as if it were the most masterly stroke of our time.

Minister for Health and Minister for Social Welfare (Mr. B. Desmond)

That is terrible nonsense.

An Leas-Cheann Comhairle

The Minister will have his opportunity.

Dr. McCarthy

We may as well address the Minister present since he seems to be anxious for action.

Mr. B. Desmond

They went to good jobs in the Central Bank.

Dr. McCarthy

Our health service had been developed to an extraordinarily high standard until the Minister got at it. He is tearing the health service apart. The Minister has stated that the pay costs of the health service will be reduced by £10 million in this year and up to a figure of £30 million in 1987. He has stated that this will entail the restructuring of jobs within the health service and that it will mean redundancies in certain places, that in fact something like 30,000 jobs may be lost this year. There may be an attempt made, in the case of some people who may be essential to provide proper health care for people, that when they are sick or on holiday locums will not be provided because of the fiscal rectitude being practised by the Minister in his Department. It is curious that the Medical Protection Society, which insures doctors against claims as a result of any malpractice or negligence, have issued a warning to members of the medical profession, that doctors must not acquiesce in any cutbacks in the health service, that they must protest loudly and strongly against them because their silence or acquiescence in the decisions made might implicate them in medico-legal claims and that if those arose it would be said that doctors had a collective responsibility because they did not protest at the time.

An Leas-Cheann Comhairle

The Deputy has one minute.

Dr. McCarthy

This Minister is trying to ensure that people's lives will be in danger. He is trying to put members of the medical profession in a compromised position whereby they might be accused of professional negligence because they would not have the services and the facilities and the personnel to help them. Their insurance company have taken it so seriously that they have had to warn them. May I tell the Minister for Health that our health costs are the second lowest in the EC and that everything he is doing will ensure that our health service will not be as good as it should be, that it will be a dangerous service? I hope the Minister will look at the point I have made and redirect his health policy.

Mr. B. Desmond

When the national plan was launched two weeks ago the Government said it was designed to be a turning point in the development of our nation. It was designed to be a turning point

—because it set out a realistic and specific programme of action to halt at long last the spiral of rising unemployment which has in the past seemed inexorable;

—because it incorporated decisions which would stop in its tracks the snowballing burden of national debt which has been bleeding resources and future growth potential out of the economy;

—because, for the first time ever, it contained a detailed budgetary framework for a three-year period within which public and private sector agencies will now be able to plan their strategies and activities in a rational way;

—because it demonstrated that the need to take a responsible approach to the public finances, which entails reducing the overall size of public expenditure as a percentage of GNP, need not rule out innovation on the part of the Government in promoting economic and social development.

Those key features of the plan are crucial, both directly and indirectly, for the particular departmental responsibilities which I discharge. They will enable me to pursue a wide-ranging rationalisation of services and to pursue long-term as well as short-term aims, including important new policy initiatives, during the next three years.

Since this Government took office almost two years ago one task has dominated all others for each member of the Government — to put right the finances of the nation. The alternative was Exchequer insolvency. Our overriding preoccupation has been to prevent our country's economic and social policies being wholly determined by domestic and international financial institutions. The people of Ireland will only in the decades ahead know and perhaps may never appreciate how close that tune came to be called. But the Labour office holders in particular did know. This national responsibility has sustained us in Government in the face of some most unpalatable options. We did not run away and leave our country to the mercy of market forces. As a consequence of that we are accused by the Opposition parties of a preoccupation with financial rectitude. It is as if the political profligacy of 1977-81, which largely gave rise to our present difficulties, could be washed away with no price to be paid. People who now advocate the spurious palliative of "selective reflation", rather than the inevitable course we have now undertaken, have not faced up to economic reality that 37 per cent of our tax receipts now go to service our Exchequer debt.

There is a great deal of nonsense talked about "monetarism" and "Thatcherism" and all sorts of alleged right wing policies perpetrated by the Government. During the past two years, in spite of the weary nights and days that we spent trying to bring it back into balance, we have still had to borrow a total of over £2 billion or the equivalent of over 7 per cent of GNP in each of the two years in order to finance current expenditure alone.

Dr. McCarthy

Why did you not borrow in the right currency?

Mr. B. Desmond

We did this to keep our economy on an even keel in a sea of economic recession. That elementary fact refutes the allegation that this Government are preoccupied with monetarism and policies of extreme hardship and rigidity. We have taken the unpopular but, in my view, the only responsible policy of gradually reducing our country's indebtedness to others. This approach has been forced on us by the irresponsible financial policies of recent Fianna Fáil administrations which simply pawned our children's future. It is certainly not any part of the political philosophy of any member of this Government that such measures as have been necessarily taken are desirable in themselves. These measures were adopted as policy decisions simply to save our country from much more dire consequences.

Some of the major criticisms of the plan have been that we have not reduced public expenditure sufficiently, although some think that reductions have been too severe; that we are not reducing the current deficit quickly enough, or we are deflating the economy much too severely. On taxation, it is also argued both that we should reduce taxation much more or that we should shift the burden in one way or another to increase the tax yield. This plethora of contradictory criticisms suggests that the plan has got the balance just right. We have rejected extremist solutions such as phasing out the budget deficit by 1987 and instead provided a balanced and realistic response to the crisis which the country has been facing. Now that we know the departmental Estimates for three years ahead, we can look forward to investment stability.

Amid the very wide range of different and mutually incompatible criticisms, there are still a few people, especially on the Opposition benches, who think it possible to urge for both an increase in Government expenditure and a reduction in taxation. The last two years, however, have seen a widespread appreciation of the fact that public expenditure increases and tax reductions equal disaster, with increased borrowing the only way to fill the gap. The new mood in the country is, I think, one of realism, not pessimism; it is the realisation that all public services and expenditure must be paid for in the end by the people of the country through taxation, and that when this obvious truth has been disregarded over the years, as it was from 1977 onwards, the path back to a better balance between Government income and expenditure is a long, slow and difficult one.

It is, indeed, facile for the Opposition to argue that the Government have done too little to reduce overall borrowing, especially foreign borrowing. Under their control, borrowing was increasingly used to finance current expenditure and also to support interest charges on earlier loans, so that an immediate cessation of borrowing would have resulted in many necessary Government services being stopped entirely.

The process of withdrawal from an untenable situation with much too high accumulated debts must, of necessity, take years to complete. Fortunately, as shown clearly in chapter 7 of the plan, much has already been achieved since we took office and the plan sets out clearly the continuing response of the Government to the problem of overall balance.

At the same time as the Opposition have been criticising the Government on the issue of borrowing, they have also been arguing for an increase in the public capital programme to create jobs. This stance is quite untenable because more State investment can only be financed by increased borrowing or increased taxation. Also, their own record in Government has shown that merely to increase public capital expenditure will not automatically create jobs — often the reverse has been true. This Government are keeping a tight hold on both capital and current public capital expenditure in order to ameliorate the financial imbalance left by the last administration, but also to direct public capital expenditure to areas such as road building where it will have considerable impact on employment and, above all, as spelled out clearly in chapter 3 of the plan, to revise radically the methods of investment appraisal and financial management used both in the State enterprise sector and in all Civil Service Departments to ensure that the funds available to the State — which are of necessity limited at present — will be used as efficiently and effectively as possible.

There have been some criticisms of the assumptions underlying the plan, in particular those about the future path of international interest rates and fluctuations in relative currency values — especially between the dollar and the punt. This line of criticism is a rather easy one, for the uncertainties of international finance are very great and no one can predict accurately what is likely to happen in the next six months, let alone the next three years. But for Ireland, which sells abroad 60 per cent of what it makes and buys abroad nearly 60 per cent of what it needs, external events cannot just be ignored. Thus, as stated in the introduction to the plan, careful judgments have been made utilising the best advice from within and outside the public sector and also from international sources about the most likely course of events. These judgments are not particularly optimistic — they are stated in the plan — but are as realistic as possible given the grave uncertainties involved. But for a small open economy like Ireland's, any planning exercise must allow for the possibility of change as external events develop. This is stated clearly in the plan in the introduction and chapter 7.

I come now to the question of social expenditure. Deputy McCarthy — and indeed quite a large number of commentators, including one notorious tax-free pundit in The Irish Times, if I may classify him as such — have been alleging that I am dismantling the health and social services. That is a lot of nonsense. We have here a very comprehensive national health service, well balanced throughout the country. By world standards it is an extremely good health service and I have every intention of maintaining that service. I know that there are many vested interests inside that service and that there are many politicians on the periphery of and within the service, but these health services will be and are being maintained.

For example, next year I shall have £1,016 million to spend on those services, which is a reasonable sum of money. It is a great deal more than was available in 1984, £966 million. The money will be well spent in the areas where it is especially needed and there will be in 1985 some 60,000 employed in the health services. There is a lot of shroud waving going on, of irrelevant comment, of special pleading and of pure political invention, one might say, if not downright efforts to stir up the population and give the impression nationwide that I am engaged in a whole range of cuts here, there and everywhere. That is a load of political codswallop. It is not true and I take a very jaundiced view of the statements which are developed carefully from many health and hospital boards and from medical organisations. I have had about two years of that now. I shred away all the special pleading and get down to the actual budgets of each hospital and how they are running the hospital boards and budgets.

I find that most hospitals and most health boards in 1984 are providing an excellent service. No patient has suffered, nobody has been declared redundant, nobody has lost a job, generally speaking, and our outstanding health service is being maintained. I regret very much that the Leader of the Opposition comes in here trying to foment a great deal of trouble in the House by alleging that be believes it to be inevitable that people will die as a result of these savage cutbacks. That is what I would call a do it yourself slogan, paste on panic, in which he is indulging. Nothing could be further from the truth in terms of the amount of money which will be available to us from 1985 to 1987 to run the health services.

I should like to draw the House's attention to the allegation that we are spending less as a percentage of GNP at the moment on the health services and give one statistical piece of information. In 1972-73 — and I was then a Member of this House — just ten years ago, the Exchequer provided about £66½ million in respect of the health services. In 1984 the figure is about £966 million, representing a 14-fold increase in actual expenditure. In the same period from 1972 to 1984 GNP has increased approximately five-fold. The statement that we have been spending much less of GNP on the health services in recent years simply does not stand up to examination. I reject those allegations.

During this period as Minister for Health and Social Welfare, I have had to face some extraordinarily difficult situations. As Minister responsible for over 40 per cent of total current expenditure, I have had to accept that there are most severe limitations to all the demands for all sorts of much needed improvements in our social welfare and health services. There has been a limitation in resources. For example, PRSI income, income from wage and salary earners under the tax net, has been extremely limited. In real terms, it has fallen in recent years because virtually we have not increased the rates of PRSI since we came into office and with fewer persons at work PRSI revenue has declined.

I want to see improvements in the payments to social welfare recipients. I also want to see further improvements, provided they are rational, in our health services provided throughout the country. But I also know that these improvements can only be financed by either increased Government revenue or a significant shift of spending priorities. Of course, taxpayers and different interest groups have not proved very receptive to either of these options.

While in the years ahead there will be a stringent control and a number of economies in both the health and social welfare areas, there will not be, by any stretch of imagination, any hardship imposed on the disabled, the sick or the poor in our community. By choosing a slower rate of reduction of public expenditure, as in this plan, the Government have proved wrong those who call it monetarist and have indicated time and again that we are concerned only with economic bookkeeping. I reject the allegations which have been made in that regard in respect of the plan.

In the case of social welfare, the plan builds on the significant progress which this Government have already made since coming into office. This Government have increased the real level of social welfare payments despite the very severe shortage of Exchequer resources. In 1983-84 ordinary social welfare rates were increased by 18 per cent, long-term rates for pensioners by 20 per cent and the long-term unemployment rates by 25 per cent. The general increases in social welfare payments from last July will, despite the effects of the changes in the food subsidies, generally protect the purchasing power of those payments. In addition, children's allowances have been increased from 1 August by 7 per cent.

The total annual costs of these increases alone amounted to £172 million in 1983 and £140 million in 1984. The Government must also find additional money to support the continuing high level of unemployment. In 1982 unemployment-related expenditure amounted to £345 million. In 1983 it was increased to £454 million and this year it will be £561 million, a massive increase. Total social welfare spending is now running at a massive £2.1 billion per annum and £1 out of every £4 which the Government spend on current services is spent on social welfare.

I reject the allegations which have been made about my role in the Department of Social Welfare. From talking to my colleagues in Europe and various Ministers for Social Security, I do not know of any European country which has provided increases of the magnitude we provided in 1983 and 1984. Many of these countries have cut back their rates, reduced public service pensions and reduced health expenditure drastically. We have not done so.

The new family income supplement scheme, which will be introduced shortly, will be the first social welfare income maintenance scheme designed to help people directly who are in jobs but who have low wages and heavy family commitments. The scheme is designed to provide cash support for employees whose earnings are low and who have a family to support.

I will be announcing details of the family income supplement in the coming days. I have made various administrative arrangements and the family income supplement will be paid weekly through an order book like a pension book which will be cashable at post offices. It will be payable to the family breadwinner. I look forward to the introduction of the scheme as a matter of urgency.

There is one area in the plan of which I am particularly proud, namely, the new child benefit scheme.

A key element in the Government's strategy for income maintenance will be to provide adequately for the welfare of children in needy families. At present the State provides a variety of financial support measures to families with children such as children's allowance, child tax allowances, child dependant allowances and the new family income supplement scheme. These measures, taken together, are not well targeted to families most in need. Deputies are well aware of my views, which I have expressed many times in this House, on the fact that children's allowances are paid at the same level to all families in the State, both rich and poor alike. Child tax allowances are only of benefit to those in the tax net and are of greatest value to those of us with higher incomes.

In the case of families with low incomes the level of State support is less than that obtained by both social welfare families and well-off families. While the new family income supplement scheme will significantly improve the position of low income families whose breadwinner is working, it adds further to the complexity of the whole system of child support. During the period of the plan the Government intend to rationalise this whole system. We will introduce a new child benefit scheme which will unify in a single payment support towards the cost of rearing children. This new scheme will channel resources to those most in need, reduce the poverty trap for those on low income and provide a more significant independent income for mothers in the home.

The new scheme will consist of a single taxable payment for each child per month to all families in the State. The child tax allowance and the family income supplement scheme will cease and there will be a reduction in the level of child dependant allowances under the various social welfare schemes. The resources available for the scheme will include the full yield from the abolition of the child tax allowances and the yield from the taxation of the new payment as well as the resources available for the family income supplement scheme. The new scheme will be introduced on a neutral cost basis; in other words, there will be no reduction in the amount of State resources devoted to the support of children.

In drawing up this scheme the Government were fully aware of the views expressed by the Commission on Taxation in its first report and NESC in its Report No. 47 that children's allowances should not be taxed because that would invoke a horizontal distribution of resources from people with families to people who have no children to rear. The fact that the yield from taxing the new child benefit will not accrue as a saving to the Exchequer but will be redeployed in the new scheme meets the case made by these bodies. This is a unique feature of the scheme of which I am particularly proud.

It is not possible at this stage for me to give the House details of the precise amount of the cash payments under the new child benefit scheme. Preliminary studies which have been carried out in my Department indicate that in 1985 terms a unified child benefit of at least £30 per child per month should be possible. I hope to bring in the legislation in the near future.

Dr. Ormonde

As a number of other speakers are anxious to contribute to this debate I will be as brief as possible. In referring to the national plan perhaps I should use a medical analogy and describe it as verbal diarrhoea. It flows out full of froth and bits and pieces with absolutely no substance whatsoever. It is full of pious aspirations with which one cannot but agree, but there are no pointers towards the implementation of those hopes. There is nothing to grasp. To quote somebody else in politics: "Where is the beef"? There is no meat in this plan.

The plan makes the questionable assumption that there will be no recession in the US in the next few years. For the past 100 years the US economy has suffered a downturn every four years on average. Their present expansion is approximately two years old. A survey conducted by the National Association of Business Economists in America showed that 95 per cent of its members expect a recession by 1986 at the latest, slap bang in the middle period of this national plan. When these business economists were asked what would be the cause, 79 per cent of them named the high interest rate. Yet the whole national plan is based on an expected downturn in interest rates. Even a six months recession would increase the American budget deficit to something like 300 billion dollars, thus pushing the interest rate up even higher.

How then can our Minister for Finance preach the gospel that a high budget deficit is damaging to our economy and, at the same time, predict a continued economic expansion and lowering of interest rates in the US which has had an unusually high budget deficit? The whole thing is a contradiction.

To quote Fortune magazine recently, never in history has so much of the US economy depended on borrowed money. The Minister cannot have it both ways. The only thing that will bring down the US interest rate at present is a win for Mondale or a radical change of heart on the part of Reagan if re-elected, and at present neither of these is likely. Of course the dollar must fall. It is highly overvalued, but no one can predict when it will fall. At present foreign money is flowing into the US at the rate of 100 billion dollars per year. This may be due to the very high interest rate secondary to the deficit. There is also a growing appreciation by foreigners that the US offers the most attractive and stable investment opportunities in the world. If this is so, then the dollar will remain high at least for the next three years of this famous national plan.

I turn now to the issue of the lack of commitment towards health in this document. It is lovely to say that we should be healthier. We would all like to be healthier except for the neurotic few, but how can we accomplish this? Stricter controls on smoking and nutritional surveillance programmes, laudable in themselves, will hardly make an enormous impact in the short term. It will be many years before money is saved due to this. However, I congratulate the Minister on his emphasis on preventive medicine. Of course, he is only following in the steps of Fianna Fáil. In 1978 our Minister for Health gave up smoking and alcohol and initiated jogging among doctors long before it became a fashionable fad. He was ridiculed for giving toothbrushes to the Irish public. There is no doubt that Irish teeth are a national disgrace and a start had to be made somewhere. There is no mention of the enormous problem in relation to tooth decay in our national plan. Still referring to our previous Minister for Health, how many elderly people have been saved from severe depression through the free transport scheme which enables them to visit their families whenever they wish to do so? These are the guts of disease prevention, not pious hopes that people will eat properly and stop drinking when in the next breath we are going to extend the opening hours until some God-forsaken hour. We all know the number of Irish people who will continue to drink until the pubs close and as far as people like me are concerned it will merely defer the casualty hours when we have to patch up these drunken drivers from 11 o'clock or midnight until 1 or 2 o'clock in the morning. Probably it will also increase the significant number of admissions to psychiatric hospitals. At present one-quarter of such admissions are from alcohol abuse. That is another benefit that we can accept from this famous national plan.

The national plan expresses a wish to improve the quality of air in urban areas. That sounds lovely, but how is it planned to do this? Again there is no substance. Does the Minister intend to close down Whitegate? The levels of lead being inhaled by our children in the inner city areas is a most worrying feature of air pollution at the moment. Other countries have introduced lead-free petrol etc., but we have made no effort to come to grips with this problem.

An improved vaccination service per se is no use without a political will and money made available to implement it. The World Health Organisation say that immunisation is one of the most powerful and cost-effective weapons in modern medicine but is totally under-utilised. Immunisation policies are incompletely implemented. For example, Northern Ireland has had an active measles immunisation programme for about the last ten years but the uptake has been only 11 per cent, whereas in the US the uptake has been in the region of 100 per cent. Measles immunisation is not to be introduced in this country until 1985. It should be brought in right now. Measles kills approximately one child in every 10,000. In all deaths of children from immunisable diseases measles is by far and away at the top of the causes. This complication rate is about one in five and the neurological complication rate is about four per 1,000. Between now and the end of 1984 there will be a significant number of cases of mental handicap, chest problems and bronchiectasis and perhaps even a death or two as a direct result of measles. Again we express pious hopes and aspirations and talk about introducing immunisation in 1985 or 1986, away forward in the distance. In the US measles has been totally eradicated due to an active vaccination programme reinforced by the fact that a child may not start school in the US without a vaccination certificate unless there is some reason in relation to health for not vaccinating him. Measles was announced as being totally eradicated in the US in 1978 — six years ago. It is estimated that since then 48 million or 49 million measles illnesses have been prevented there. As the complication rate is about one in five that means ten million complications fewer and possibly 5,000 lives saved by this programme which we are to introduce in the far distant future.

As far as I can judge from the national plan, which I find difficult to interpret, we will introduce only a measles vaccination programme. That is not enough. What would be the cost? Where is the money to come from? More important, how are the population to be enticed to avail of it? Will we have a situation similar to that in the North where ten years after the introduction of the programme the uptake is 11 per cent and still many children die or suffer from the complications of measles? Have the Government the political will to loosen the purse strings to enable a vigorous implementation of a comprehensive vaccination policy incorporating community care services, GPs and, if necessary, vaccination certificates as a prelude to school registration? Will it be another Mickey Mouse programme involving the availability of vaccine in the community care refrigerator and nothing more?

There has been a decline of almost one-third in the number of resident patients in psychiatric hospitals in Ireland in the last 20 years, but the number of patients resident in these hospitals relative to the population is still disturbingly high. For instance, the hospitalisation rate in England is 171 per 100,000 population and in Ireland it is 415 per 100,000 population. Also the decline in Ireland has been no greater than in England despite our much higher starting point. Thus, we can take no pride in this reduction.

In this long-term plan these disturbing statistics are no more than a passing reference. Our claim to be a caring society is difficult to sustain in the light of these numbers. Have we two and a half times the rate of mentally ill patients that other European countries have or are we as a nation putting more people in institutions than these other countries do? It is time for us to take a good look at ourselves and our mental hospitals. I welcome the Minister's plan to provide community based services for these patients as a step in the right direction towards improving the quality, but again I wonder where the money is coming from. There is no indication as to how he intends to fund this. Again we have pious aspirations.

I had hoped that the Minister for Health would have remained following his intervention because I had a number of questions to ask him in relation to the health aspect of this plan. As the Minister of State present is also a member of the Labour Party he may be able to help later. My first question is what input the Labour Party have to this infamous document especially in the area of health. Our Labour colleagues now in Government were probably the most outspoken people in the term of the last Government in relation to the so-called health cuts of our Minister for Health. What solace can our Labour Minister for Health offer us now when our health services are slowly grinding to a halt due to the fact that there are insufficient funds to keep them going?

I am a member of the South-Eastern Health Board and I will deal with that area specifically. That board, because of inadequate funding for 1984, will have a shortfall in excess of £2 million and that will occur in spite of the most stringent efforts on our part to make economies. At our last meeting on Thursday a suggestion was made by the administration that in an effort to achieve further savings all locum cover in our hospitals should cease. A few moments ago the Minister told us that there would not be any cutback or deterioration in services and that nobody would suffer, but how can any hospital possibly function if a locum service is not provided?

I should like to give an example of the difficulty that will arise. In our health board region there are four county hospitals — one in Wexford, one in Waterford, one in Kilkenny and one in south Tipperary. The latter hospital is, in fact, divided into two, a medical and a surgical hospital. In those four hospitals we have two county surgeons, the normal staffing rate for a county hospital. The suggestion by our health board in their effort to achieve economies is that if one of those surgeons goes on holidays there will not be a replacement. How can any hospital function under such circumstances? The person on duty will have to cover the hospital 24 hours per day, seven days a week. That is a physical impossibility. Yet, the Minister told us today that there will be no deterioration in services.

Let us deal with the case of the anaesthetist, the person who puts a patient to sleep so that a surgeon can operate. If that person goes on holidays and is not replaced not only will the work performed by the doctor not be carried out but the surgeon who depends on an anaesthetist will not be able to operate. That amounts to a marked deterioration in services and the Minister is living in cloud cuckoo land if he does not accept that. The waiting lists which are already very long will get longer and patients will suffer. I do not wish to be dramatic and suggest that people will die but there is no doubt that patients will suffer. Those who require an operation may have to be deferred for months and will suffer as a result. That fact must be recognised by the Minister.

There will be a serious danger to the community at large as a result of this policy. We have been told there will be a cutback in the number of staff in the different health board regions and that will result in a further deterioration in the health services. In my health board region we built a new 14-bed maternity unit for Saint Luke's Hospital in Kilkenny. It was badly needed because we were being told frequently that Kilkenny County Hospital was overcrowded and could not accommodate any more. That unit was completed more than two years ago but it has not been opened yet because the Minister has consistently refused to staff it. As recently as three weeks ago he refused again to staff it. That unit lies idle while patients are accommodated in corridors and four and five of them are put into accommodation designed for one patient.

In this famous plan we are told that it is the Government's intention to make provision for the needs of the increasing number of elderly people. We are told that in many of the institutions which provide for geriatric patients there will be improvements. They are lovely sentiments and I am sure that no Member would quibble with them. They are the pious hopes in the plan, but in reality the position is different. In Ardkeen hospital in my region we built a geriatric assessment unit — it appears according to the plan that caring for the aged is very dear to the heart of the Minister and the Government — for 25 patients approximately 12 months ago but I regret to report that it still lies idle because the Minister for Health will not provide the staff for it. I understand that 19 nurses will be required to run that unit on a full-time basis but the Minister has refused to provide the staff. The unit was erected at enormous expense and it is wrong that it should be left idle.

The plan states, in regard to health, that in an effort to raise additional revenue it is proposed to increase the fees for private and semi-private accommodation by 15 per cent. I should like to deal with the effect this will have on the health services. We are all aware that many people who avail of private or semi-private accommodation are those who are called the "entitled category", those earning less than £12,500 per year but being anxious to avail of private or semi-private accommodation opt to take out VHI cover. Unfortunately, the decision to raise the fees for private and semi-private accommodation by 15 per cent will mean that VHI cover will be priced out of reach of such people with the result that those patients will revert back to an already overburdened public hospital service. We cannot cope at present because the services and facilities are inadequate and the Minister intends to load them further. This is a catch 22 situation, a crazy one.

I should like to draw the attention of the House to the fact that there is no reference to the drug problem in this document. When 13 per cent of our females aged between 15 and 19 years in Dublin North-Central are using heroin it seems to me incomprehensible that the national plan does not have any mention of drug abuse at all. Is no money to be allocated for a lost generation of Dubliners? There is not one hospital ward in Dublin free of the drug problem. Concerned parents, in their frustration at Government inactivity, have set up groups to try to deal with pushers in their areas. However, the best way to deal with this problem is to prevent the importation and availability of drugs. That requires a big amount of money but the plan does not mention the allocation of such money.

Addicts need treatment and a lot of money must be allocated to provide facilities for detoxification and so on. Such facilities cannot wait. We should not talk about 1986 and 1987 in regard to those facilities. Money spent in this area is an investment in the future of our youth. The problem of amphetamine abuse disappeared overnight when our Minister for Health, the late Erskine Childers, banned it on prescription. There is no doubt that the availability of drugs is a major factor in drug abuse. I have called in other debates for a restriction of prescriptions of diconal and paraffin to designated specially trained doctors, those who are aware of the problems and can correct them. There has been a great increase in the use of synthetic opiates since 1979 due to abuse of prescriptions by a small number of rogue — I use that word advisedly — doctors. Some action has been taken by the Minister in relation to the doctors concerned. There are only a small number of them involved.

I welcome the Bill relating to the care and protection of children. As regards protecting children against pornography, is it an old Irish attitude of sex being the one and only sin? Children need to be protected from the glamorisation of violence on our television stations. Very often extremely violent programmes are shown around tea time, which is peak viewing time for children. They project drugs as being "in" and something to be partaken of. There are many other problems apart from sex which we should take into account. Recently an English newspaper published the headline: "25p for a High". Underneath it was a picture of glue, cleaning fluids and other things which could be sniffed to get a "high". I am not an advocate of censorship. However, our children must be protected from this kind of thing. I do not know how we can do it but it must be done.

This document will not do anything for the country. It has achieved the one aim it set out to achieve: keeping the Coalition Government together. From that point of view it has been a success but as a saviour for the country I regret to say, forget it.

Mrs. A. Doyle

There is a great need to create public attitudes more conducive to wealth creation and business enterprise generally. This will be a major factor in solving the unemployment problem we now face. With the current high levels of taxation runing at 36.5 per cent of national output, it is difficult for both employers and employees to see hard work and initiative being rewarded. Part of changing public attitude will be in dealing with the begrudger mentality that exists towards material success; the "who does he think he is?" syndrome availing of every opportunity to knock the hard worker and risk taker, the feeling that there has to be something shady about the successful entrepreneur — that he must be "at it" as it were. Our school curriculum must be examined for its failure in this regard. Career guidance teachers are only beginning to see beyond the safe pensionable job in the public service. At last third level institutions and the business world are putting their respective expertise into joint ventures.

This three year plan will contribute significantly to establishing confidence in our manufacturing and service sectors — the sectors where sustainable employment for the future lies. In the time allotted to me it is impossible to do justice to the talent that this Government have invested in Building on Reality.

The potential growth in areas such as tourism and agriculture have been well documented. The agricultural sector looks more to Europe each year for pricing policy but with an increase in prices unlikely to be forthcoming this Government's contribution over the next three years in establishing the macroeconomic climate for farmers will have a major effect on farm incomes. Inflation, interest rates and exchange rates together with controlled input costs will be the determining factors. The innovative farm tax introduced in this plan has been accepted by the farming community as necessary to ensure a more equitable contribution to the total tax take. It will double the farmers' contributions but it will also rationalise the present inefficient and confused arrangements and encourage increased output from the land. It is in all our interests that we get on top of the appalling scandal of bovine TB. It verges on the scandalous that with the money which has been spent over the years the situation is now worse if anything. More effort should be directed into research particularly into the specifics of the tests used. I urge the Minister for Agriculture to introduce a scheme of scholarships so that we will have the best young brains in the veterinary and scientific fields directed to this area.

Concern for the crippling burden of the PAYE sector and the unemployed are the overriding concerns of the plan. These concerns must have the unanimous support of the House. The scheme of social employment is reviewed with particular interest. For many years those of us involved in local authorities, for example, have seen the need for a system which would allow interdepartmental transfer of funds during a financial year. Now a more flexible system will allow money destined, for example, for social welfare payments to be put to productive use for all concerned. I wish this scheme well and I hope it works as well in practice as we all feel it should.

We have awaited for some time the publication of a national ports policy. It is imminent. The announcement of a new statutory port authority for Rosslare was greeted with great cheer in the south-east, particularly in Wexford. I commend this decision and in it the recognition of Rosslare Harbour's strategic potential from the tourist as well as the economic point of view to the region. I trust this new authority will have a developmental role and not just concern itself with sea traffic. I trust the Government will follow through their investment of scarce public funds by maximising the potential and creating a free zone around this new authority. Wexford, the south-east region and our long dole queues await the answer. There can only be one.

CIE's role in the harbour has been well documented. They have struggled to keep abreast of the need of the port under severe financial constraint. They have been let down in their endeavours by successive Governments. The £300,000 grant provided in this year's Estimates have yet to be spent. It will be shortly. The plan promises the expedition of further port improvement works. The penny has dropped at last. White elephants are no longer tolerated. We can afford public investment only in areas where we will get a real rate of return. This will be the case in Rosslare Habour. It is a national asset which has always paid its way.

In recent times great interest has been generated by the activities of oil companies off our shore. Three off-shore wells are now being drilled. It is too soon to speculate on whether Ireland will become an oil province despite what the stock market punters might lead us to believe. The thrust of Government policy in this area is outlined in the plan. The Minister for Energy, Deputy Spring, commented on this aspect at length when he spoke in the House last Wednesday. There is now an urgent need for the Government to spell out exactly where they stand in relation to the discretionary powers on taxation as defined in the 1975 off-shore licensing terms. The use of such phrases as "uneconomic fields" and "reasonable return" are not defined. Major oil companies tend to assume the worst. Our third licensing round is in direct competition with the ninth round in the UK.

The UK is an established oil province and has the advantage of clear-cut and moderate tax terms. As a result we are in grave danger of losing out. The Government must know that if they do not allow a rate of return adequate to compensate for all risk factors, exploration will grind to a halt. There are many different ways of taxing profits from oil exploration. The present situation is a major disincentive to exploration. When we talk of this area we talk of acting in the best interests of the Irish nation. There would be nothing more in the interest of this nation at the moment than the discovery of commercial oil fields. One or two small oil fields will not transform the nation's economy overnight. A country with sudden oil wealth has many opportunities to go wrong, particularly if it has budgetary problems such as ours. That is why we need our policy in this area to be spelt out explicitly now.

It has been said that this country has two vulnerable frontiers — the Border and the trade unions. While the vast majority of those in the trade union movement have a real understanding of the economic realities, there are those who, for whatever reason, fail to appreciate that the long-term good for those at work and for the unemployed is the first consideration of this Government.

In a country with punitive rates of both direct and indirect taxation, where we have been living beyond our means for many years and where taxation acts as a major disincentive to the very sections we now look to for help with our unemployment crisis, it is for all sections to accept the sound logic and plain commonsense of not doing anything that would hinder this Government in reducing the appalling level of 36.5 per cent of national output that is now necessary to run our small country. If living standards must remain static for a short few years that will be a small price to pay to avoid mortgaging our children's future. It will be a small price to ask of the better off and of those in secure and pensionable employment.

The problem of illicit cross-Border trading is probably far greater than we realise. Our penal VAT and excise duty rates have ensured an ever-increasing movement of goods and smuggling, involving not only personal shoppers taking full advantage of allowances but large-scale movements of spirits, electrical goods, meat, animals and agricultural produce, with the latest being surplus Ulster milk being sent south to share the advantages obtained for Irish farmers in relation to milk quotas. The distortions of this trade may well total more than 2 per cent of GDP. This is a major headache for the Government and for the legitimate commercial interests involved.

Extended opening hours and cheaper spirits will not solve the problems of the tourist industry. As a non-sun destination, Ireland's tourist sector could be our leading industry in the near future. However, it is no longer sufficient to rely on the vagaries of exchange rates that are totally outside our control to keep up the flow of visitors. The industry itself knows what needs to be done. Value for money is the first prerogative of any visitor whether he is staying in bed and breakfast accommodation, in a luxury hotel or is camping. Inflation and VAT rates have contributed to the pricing of Ireland beyond the pockets of many would-be visitors. The average VAT rate on this sector in our competitor countries is only 10 per cent. This Government continue to do everything possible to improve the situation. They recognise the problems but also the potential. Our record, even if undramatic in this area, is consistent and supportive given budgetary restrictions. But we need to go much further and we need to move fast.

At the end of this decade Europe will have 200 million visitors annually. We will need to have an industry that is in a position to capitalise fully on that. We can succeed given the support necessary for this well-directed plan which will increase competitiveness by decreasing deflation, which will decrease unemployment and so control and reduce the taxation spiral and lessen current public spending in this area.

The tourist industry must look to itself, too. Hygiene standards in general are at best questionable. In many instances the presentation of food leaves much to be desired. One constant criticism is the production of sodden overcooked vegetables. We have the best of raw materials. They deserve better treatment.

When we are discussing industrial potential there is much to be considered. Extremely important is the whole area of import substitution. It is wrong that we are not yet self sufficient in terms of vegetables during the growing season. The Potato Marketing Board represents a step in the right direction. Our environment is suited particularly to the growing of timber, yet we have the lowest percentage tree cover in Europe. The industry remains disorganised and is operating far below its potential. However, it is poised for major expansion. The soft wood industry could substitute for imports making timber a most valuable resource.

The potential for our economy of a properly financed and managed fishing fleet off our coasts is enormous. I do not have time to deal in detail with that point but we must recognise the industry's importance.

The White Paper on industrial policy and the proposals for a national development corporation show the priority the Government accord to the development of the food industry, particularly in the areas of import substitution and value added. No mention of industrial policy can avoid the related problem of very high energy costs, particularly the cost of electricity to this sector. This factor is a major contributor to our lack of competitiveness. It is an issue that will have to be redressed without increasing the load on the domestic consumer.

I welcome particularly the general rationalisation of the long overdue State support structures. The one-stop shop and COMTEC principles have been indicated for many years as the ideal. They will affect State support structures generally in the areas of industry, unemployment and youth services.

This is an economic and social plan. Major initiatives are being introduced in the area of social policy. A new child benefit scheme paid directly to mothers will be of particular assistance to families on low incomes. The decision to give grants of £5,000 to local authority tenants buying private houses will, together with the existing grant schemes and mortgage subsidies, increase the mobility rate of local authority housing stock.

The sustained support for education, despite pruning of budgets in other Votes, is a recognition of the importance of our large population of young people. This is a major and necessary investment in our future.

I am disappointed personally that there has been little room for environmental measures in this plan. If we fail to protect our surroundings from the less favourable aspects of agricultural and industrial progress, future generations will condemn us. We need jobs desperately, but not at any cost. We must look immediately at legislation in this area, particularly in the context of chemical industries. The powers under the Factories (Inspectorate) Act are pitifully weak and inadequate. We must be on our guard not to become the dumping ground for industries that are unwelcome in other countries.

While welcoming the commitment to increase aid to the Third World, I should like to make a plea on moral grounds, if such a plea cannot be sustained on commercial grounds, that we do all in our power during our six-month presidency of the EEC to ensure that the surplus food lakes and mountains in the Community are directed to those most in need. The problems of our country pale to insignificance when we have regard to the suffering experienced in the African States. We must look after our own in need but we must no longer close our eyes to the global situation. A formula must be found outside the arena of commerce and somehow ignoring the economic forces of supply and demand which dictate prices.

The first objective of this plan was to increase employment. The second objective was to halt the rise in taxation. I commend the contents of the plan and the Government's efforts in these two most important regards. It may be a cautious plan particularly in view of our great success in the technically advanced sector of industrial production in recent years but it is, above all, a realistic and attainable plan. We must remind ourselves that failure is not measured by one falling down, that it is not measured by one falling down once, twice or three times. It is counted only in one's failure to get up again. I commend the plan to the House.

Mr. Connolly

I welcome the opportunity this debate affords to discuss this long awaited economic plan which took so many months to be formulated and about which there had been so many great expectations on the part of so many people in our community. I must first point out the direction I see this plan taking. It is my view that under this plan taxes will rise by £1,400 million and total Government revenue by £1,600 million between 1984 and 1987, that taxes will rise by some 5 percentage points faster than the rate of inflation over the plan's lifespan. Therefore it will be seen that there is no joy in this plan for the taxpayer. This Government, so committed to reformist ideas on assuming office, have thrown in the towel in regard to tax reform and dismissed all of the good work of the Commission on Taxation. I would contend that they have done so in a cavalier fashion.

The main prerequisite to the creation of jobs in this country today must be tax incentives. In regard to taxation there is no plan I can envisage for the reformation of the tax code under this Government. There are no incentives being given to employers to engage personnel because they are being crippled by the taxation burdens on them. There is at present a rising black economy. I regret to say also that there is now what I might describe as a change in emphasis amongst many employers in the many trades today who have switched to three hours a day employment, or 15 hours a week. We all know the reasons for that — the documentation sought to be completed when an employer engages somebody today is unbelievable. There are reams of paper emanating from the tax offices, from the Revenue Commissioners and so on, to the extent that employers are becoming browned off with all of this bureaucracy. Indeed, in some offices today employers have two or three girls engaged solely on revenue matters, tax returns and so on. There is no incentive being given to employers to create an environment conducive to the creation of employment.

There is not much hope held out to the unemployed in this plan either. There is now something significant happening which has not been contradicted or denied so far, that is that there are 1,500 persons emigrating monthly, some of whom are our best qualified young people. In the last week, constituents of mine left for a foreign land because they could not foresee much hope here.

I estimate that export-orientated manufacturing employment will rise by approximately 2 per cent per annum or that 4,000 jobs a year will be created. Industrial colleagues of mine have agreed with those figures. I estimate that job losses in agricultural employment will amount to approximately 3,000 per annum, as people move away from the land and so on. Therefore I hold out no hope for a reduction in the unemployment figures. I envisage that the numbers of people out of work will show no change in the three year lifespan of this plan. Compared with 1984 it is my view that unemployment will remain very close to 16 per cent of our labour force. It is obvious to everybody now that that will be the continuing trend. With emigration now running at approximately 1,500 persons a month there is the strong indication that our young people hold out no hope. The many young people I have met in my constituency have told me they can foresee very little hope under this plan.

Nobody can deny that there was a wonderful public relations exercise carried out in relation to the presentation of this plan. I do not want to be rude or sarcastic but I believe that in our many embassies throughout the world there were conferences held in regard to it. In an article written by one journalist he contended that the plan contained nothing but "ifs" and "ands" and "buts." He said that perhaps it should have been drawn up by a turf accountant and we all know what they do. Sometimes one wins and sometimes one loses, but generally the punter loses more times than he wins. That is how the plan was summed up abroad.

When this Government assumed office they stated that the then unemployment figure of 170,000 would be halted and reversed while the current budget deficit would be phased out over their five year period in office. Those were positive commitments, given to the electorate during their election campaign, which have now been thrown out the window, sacrificed, gone.

On the expenditure side, the implied cuts amount to over £400 million in 1987 terms, of which some £300 million will have been contributed through public service pay moderation combined with 5,000 job losses in the public service. A quick analysis of the Government's three year economic plan shows that, in the absence of any further policy changes, the current budget deficit will rise from 7.5 per cent to 7.7 per cent of GNP next year. It would appear that the Exchequer borrowing requirements will rise from 12.8 per cent to 12.9 per cent of GNP in the next year unless some additional action is taken which appears now to be most unlikely.

There is another matter to which I want to refer. It would seem to me that An Bord Telecom have to repay approximately £170 million to the Exchequer over the period. They can only do that in two ways — by redundancy by agreement or by substantially increased charges. Does this mean that this new body will have to increase their charges? There is no doubt in my mind that this will mean an increase in charges of between 10 per cent and 15 per cent. I doubt if it will be much less. What effect will this have on the business community? The money they borrow or collect from the public is wanted for very urgent development work throughout the country. A lot of work needs to be done to provide a modern and effective communication system. In view of the fact that these substantial repayments have to be made to the Exchequer I want to warn the public that substantial increases will take place in charges for telephone installation, calls, rental and any other equipment that a subscriber may require. This will hit the hard pressed industrial sector. It will bring about price increases and it will make it more difficult to export.

There are other factors in this plan, this gambler's choice. You are depending on the dollar, the interest that will be charged, and whatever the situation may be. I cannot understand why this Government have borrowed in the dollar which is very expensive. Earlier on I could not understand the Minister for Finance devaluing our currency. That was a major blunder also. It is my opinion and the opinion of a number of financial experts that that should not have taken place. It was a grave blunder to devalue our currency and, above all, to borrow in recent times in the dollar when we should have been borrowing in European currencies which are more stable in relation to our currency. If that had been done our interest charges would not be so high.

At the holiday weekend in August the Government in their slippery way informed the public — but the public are very intelligent and we thank the Lord for that — that food subsidies were being halved, that in view of the interest rates that were now being charged they had to make up the shortfall. Of course, it was the underprivileged, the poor, the old age pensioners and the disabled who had to pay the piper. That comes back to bad financial management. It was clear from the statement made by the spokesperson at the time that this was because of changes in the interest rates. This is what I would call bumbling by the Minister for Finance and by the Government.

This year housing development and the construction industry in general are on the decline. Many people have been asking Members of the Oireachtas about the gift of £5,000 that is to be given to people who leave local authority houses. This has yet to be explained. I was trying to ascertain the details from the Department of the Environment and I was told that they had no plans so far and they were unable to tell me the details of the scheme. This looks like a hurried announcement with little backup information. I think people now, even people who are not in local authority houses, who are going to build houses for the first time are of the opinion that they will qualify for this £5,000, that they will get the £1,000 grant and also qualify for the mortgage relief of £3,000 which would be a total of £9,000. It is very vague in the plan but it would seem to me that you would have to be a tenant of a local authority house for three years and that you would have to give up that house in order to qualify for this £5,000. That scheme has many pitfalls because you pay three years rent for nothing. Will it mean that persons who are going to get new houses will not do so? Will it mean that they will put themselves on a housing list and expect the local authority or corporation to house them?

It will be interesting to see if there will be an increase in the numbers looking for local authority houses and if the list becomes more congested? I am afraid it may mean a shift in emphasis and that more people will stay on the housing list in order to qualify. The short term advantage, if any, will not be very attractive. It will be also very interesting to note where the money will come from, because the funds of the Housing Finance Agency are exhausted. My county council are sending out very carefully worded letters to applicants saying that a Housing Finance Agency loan has been approved subject to all legal documents being in order. Then, in bold type and underlined, it says that money is not available at present but that if money is available in January 1985 it will be paid. Note the word "if". What bank or financial institutions would give loans in such cases? People came to me and said they could raise £25,000 by way of a bridging loan. I was honest with them and told them that under the law, if the money is not repaid within three months the bank have the right to raise the interest rates from 15½ per cent to 18½ per cent. A banker asked me recently how long it would take for a person to get this loan. I could not answer his question and no Member of the House could answer it either. "Ifs", "ands" and "buts" will not pay interest rates of 15½ per cent rising to 18½ per cent. If this £5,000 is to be paid, where will these loans come from?

I know there has also been a change in regard to the rules governing the Housing Finance Agency. One of the rules relates to 25 per cent of your income. When I had to administer that rule in the Department I was not happy about it but I did not have time to alter the conditions of the scheme. However, I intended to do so because the interest rate will strangle buyers. Looking at the guidelines, the repayments on a loan of £25,000 over 20 years, allowing for inflation at 10 per cent, will amount, between the principal and the interest, to £140,000. That has not been denied. If you want to dispose of your house in five years' time there will be so much interest due that the proceeds of the sale of the house will not be enough to pay the agency. In a telephone conversation to the housing department I discovered that nothing had been decided in regard to the loans and that it was prepared in great haste and without much work being put into it.

I should like to deal with other matters but time does not allow it. When the Taoiseach came to office he said that overspending in all Departments would be kept on a tight rein. He said we would keep within the guidelines; but that all went out like the child with the bath water. Nobody has denied that the Government will borrow and borrow as long as they remain in office. When they came to office unemployment was in the region of 170,000 and they said that trend would be reversed. That was another promise which has not been kept. The people have no faith in the Government and in the by-election in Laois-Offaly I was not surprised at the overwhelming mandate that Fianna Fáil got. When I was canvassing in the area everyone seemed to want the Government to fall because they did not keep any of their promises.

The media said that the Taoiseach would be our saviour. From recent remarks in leading articles I think they now realise their mistake. The chickens have come home to to roost. They now see that he has made U-turns of every description.

An Leas-Cheann Comhairle

You have 30 seconds left.

Mr. Connolly

I will soon be in injury time.

Mr. O'Toole

The Deputy has some neck.

Mr. Connolly

The Minister has some neck himself and he must digest the facts. The truth hurts. However, I should like to deal with the matter in greater detail and I hope to get an opportunity to do so in due course. I am grateful to the House for affording me this opportunity.

An Leas-Cheann Comhairle

The Minister has 30 minutes.

Minister for Fisheries and Forestry

andMinister for the Gaeltacht (Mr. O'Toole): Before I speak on my own Department, I shall concern myself briefly with some of Deputy Connolly's remarks. I was sorely tempted to interrupt him when he was speaking in relation to different areas of criticism of this plan. We have had from him something which has been forthcoming from that side of the House for the past week, vague generalities. The reason for my mentioning that the Deputy had neck was that any Fianna Fáil Deputy who can stand up and accuse us in regard to our borrowing is guilty of either of two things — gross ignorance or a neck as thick as one finds on this side of the Iron Curtain.

Mr. Connolly

The Minister's Government borrowed more money last year than any Fianna Fáil Government did.

Mr. O'Toole

I was sorely tempted to interrupt the Deputy but I did not. On the unemployment issue, does the Deputy know what his Government's solution was? Put 13,000 into the public service which was already swollen with employees. That was his Government's solution to our unemployment problem, trying to con and cod the people, but they were found out. As the Deputy said, he had such a short time in the Department of the Environment that he had not time to do anything while he was in there. It will be a long day before his party are in office in that Department again.

Mr. Kitt

The Minister will be surprised.

Mr. O'Toole

The Deputy's colleague, Deputy O'Kennedy, also raised the hare about the borrowing in dollars some weeks ago and he should have known better. With all due respect to the Deputy opposite, he should also know better. That issue has been adequately dealt with by my colleague, the Minister for Finance. The matter has been put in perspective and it has been shown that there is nothing wrong with the borrowing policy of the Government. This is being done in the national interest and on the basis of what is right for this country. That has been stated.

Mr. Connolly

Ask Minister Bruton.

An Leas-Cheann Comhairle

Deputy Connolly, please. You have had your time.

Mr. Connolly

I wanted to put the Minister right.

An Leas-Cheann Comhairle

I want to put Deputy Connolly right.

Mr. O'Toole

In relation to the £5,000 loan, the jealousy emanating on that subject is because it was beyond the imagination of Fianna Fáil to do this. I would not even call it imaginative, it is just common sense. The Deputy asked where the money was coming from. He can leave that to us. We will find the money and I will tell him before he thinks I am misleading him in any way. Has the Deputy any idea of the level of subsidy per house that he and I and the taxpayers are involved in in relation to local authority housing? If he has, he would know that the £5,000 grant for vacating a local authority house is very worthwhile, both financially and for the people who wish to get out of local authority housing and build their own houses and there are many thousands such people. Whoever the Deputy was speaking to in the Department I can tell him did not give him the full story in saying that no details have been worked out. This morning the Taoiseach stated that all details of this scheme will be announced in the next fortnight.

Mr. Kitt

The Minister should tell the Department that.

Mr. Connolly

The Minister will want to check up on them over there.

Mr. O'Toole

Deputy Connolly will get all his answers in a fortnight's time from my colleague, the Minister for the Environment, in relation to that proposal. In relation to the debate on the plan, this plan is of vital importance for the economy and for the whole future development of this country. It is, I think, rightly being described as the single most important and comprehensive blueprint for recovery and development that has ever been compiled by any Government since the foundation of the State. Consequently, it is a document that deserves to be studied seriously by all sectors of our society in order to ensure that practical effect is given to the many recommendations in the plan. I stress the word "practical" because this whole plan is based, not on a pipe-dream but on realism and the achievement of targets that are well within our grasp. In the time available I will confine my remarks to those sectors of the economy which fall within my area of responsibility namely the Department of Fisheries and Forestry and the Department of the Gaeltacht.

As regards fisheries, the opportunities that exist in the industry and the difficulties being experienced by it at present are fully recognised by the Government. The time, we believe, is now ripe for a rethink of our policy in the fishery sector taking account of the Common Fisheries Policy of the European Community and the present state of development of the industry in Ireland. The sectoral development committee have been examining the industry and have recently presented their report. As indicated in the national plan, the future development of the industry is being examined in the context of that report and a policy White Paper will be issued at a later date. My Department will be working in close collaboration with An Bord Iascaigh Mhara in the preparation of that policy paper and, of course, full regard will also be had to the exhaustive study and recommendations of the sectoral development committee on the fisheries and aquaculture industries.

Despite the problems which have beset the fishing industry in recent years, progress continues to be made particularly in the export field. The total value of exports reached £84 million in 1983, an increase of 15 per cent over the previous year. The value of fish exports for the first six months of 1984 at £35 million represents a further increase of 15 per cent compared with the corresponding period for last year. This rise in exports has been achieved despite difficulties outside our control in places like Nigeria, the main market for Irish mackerel and which represents over half of our total catch. I am glad to say that the Nigerian market has now re-opened and exports from Ireland to there have been resumed. BIM have been active, too, in expanding exports to East European and African markets as well as Western Europe. I myself visited Japan earlier in the year with officials from the board in order to carry out an examination of the market potential there. As a result of the visit, which was very encouraging, representatives of a number of Japanese firms have visited this country for discussions with Irish exporters. I am confident that Irish fish exporters can secure a satisfactory share of the improved markets likely to be available in Japan.

The Minister of State, Deputy D'Arcy, visited Poland very recently accompanied by BIM executives. As a result of his visit a Polish delegation is visiting Ireland this week for detailed discussions with BIM and potential exporters, with a view to entering into contracts for the purchase of Irish herring and mackerel. A group of Irish exporters led by BIM were also very successful recently in negotiating a contract for a supply of a sizeable quantity of frozen mackerel to Egypt, worth in the region of £8 million.

The future development of the industry will largely depend on intensive market research and promotion. BIM have already expanded their activities in this area and the fisheries allocation for the period 1985 to 1987 as outlined in the national plan includes an increased provision for BIM for market development with a view to enhancing fishermen's returns from their catches.

Investment levels in our fishing industry in 1983 were noteworthy. Eleven fish processing projects were approved for ECFEOGA aid amounting to £2.6 million. The total capital investment in these 11 projects come to £5.8 million including grants made available by the IDA and Udarás na Gaeltachta. Over 70 firms are engaged in fish processing and they employ 1,700 persons. Future development in fish processing will be in secondary processing which will give added value to the product to the benefit of the industry itself and the economy generally.

With regard to the fishing fleet, the continuing high level of arrears — which stood at £6.6 million at the end of 1983 — in boat repayments is a matter for serious concern. The situation is serious, but it is noteworthy that there are many boat owners who are up-to-date with their repayments, indeed, some in the same ports as defaulters. Every effort is being made by BIM to reduce the level of arrears. I am examining ways and means of how my Department could help and what assistance I can provide. I hope to make an announcement in the very near future.

I am also very conscious of the worries and fears of our fishermen, fish processors and exporters at present about the forthcoming entry of Spain into the EC. I met representatives of these various groups recently and again yesterday to hear their views and I will be meeting them again as negotiations progress. The Government share their concern, as indeed do our EC partners, about Spain's entry. I have told them — and I repeat it — that no effort will be spared during the negotiations to ensure the best deal possible for our fishermen. An allegation from the far side of the House that our fishermen have been sold down the river is completely false, as negotiations are still at a very early stage. It must be borne in mind also that there can be a positive side to Spain's accession. Spain is not self-sufficient in fish. In 1983 it imported 257,000 tonnes of fish. This is in excesss of our total fish catch. The opening of the Spanish market could be a valuable opportunity for us and we should be gearing ourselves to get the maximum advantage from it.

There is, I believe, considerable scope for the development of acquaculture and mariculture in this country and I am examining ways and means by which that development can be accelerated. We enjoy many advantages here for mariculture development. These include a long coastline and relatively unspoiled waters, but careful planning and research is essential to ensure success.

My Department have been holding public inquiries around the coast prior to considering designation of areas for aquaculture development in accordance with the Fisheries Act, 1980. When the designation process is completed, individuals will then be licensed to operate in specified areas. There appears to be some misunderstanding, I believe, particularly among some local authorities, about the possible effects of designation of areas for mariculture purposes on other activities in these areas.

I would be less than honest if I did not express my disappointment at the reaction of some local authorities to the projected development in the mariculture and aquaculture areas. It is regrettable that some of them have taken the stance they have taken. I would like to assure them that their fears are unfounded and to stress that aquaculture development and other activities such as the establishment of industry and recreation can co-exist in the same general area. Indeed aquaculture development can provide raw material for industry in areas where potential for industrial development is limited. In assessing any area for designation I will, of course, have full regard to all representations made by the various interests concerned in the course of the public inquiries before making the relevant orders.

BIM operate a useful mariculture grants scheme for both pilot and commercial fish farming projects and this scheme, coupled with the FEOGA grants available for such projects, will continue to play a crucial role in the development of this sector of the industry. The proposed White Paper will, of course, also deal with this important sector of fisheries.

Turning now to afforestation, the State forestry programme will be maintained and, as far as possible intensified, during the period of the plan. Deputies will have noted, in particular, that additional funds are being provided for land acquisition in each year of the three year period. It goes without saying that land is the life blood of the afforestation programme.

I have on more than one occasion referred here to the inadequacy and uneven distribution of the existing land reserve for forestry and I have assured the House that I would continue my efforts to press for a greater allocation of funds for land purchase. I am glad to be able to say — particularly at a time of great competition for available resources — that my efforts in this respect have been successful.

Moreover, I regard the substantially increased allocation as ample evidence of the Government's continuing commitment to the State afforestation programme and I have no doubt that the land intake which will flow from the higher level of funding will make a valuable contribution towards redressing the existing unsatisfactory situation.

The Government will, of course, also continue to support private forestry, in the form of grant aid and technical advice, to the utmost extent practicable. Indeed, my Department have been giving considerable publicity to this sector in recent times and, if I may single out one particular aspect, it would be the very attractive and informative booklet entitled Investing in Forestry which was produced earlier this year in connection with a private forestry workshop and which I had circulated to all Deputies.

I would, however, be less than honest if I were to pretend to be satisfied with the level of funding provided for private afforestation but, inevitably, during a period of acute financial stringency it is simply not possible to provide the level of financial support which this activity undoubtedly merits. The Government are also looking into a number of possible joint forestry ventures involving the State and private landowners but on this front also progress will depend, among other considerations, on the availability of funds.

The procedures for the disposal of timber from the State forests have evoked much comment during the past year or so, particularly in relation to the sale of sawlog, the production of which for use by the construction sector is, of course, the primary objective of State forestry. Sawlog has traditionally been sold by the Forest and Wildlife Service under the sealed tender system. The system has been modified in recent years by way of a quota arrangement whereby certain sawmills are assured of a proportion of their sawlog supplies without having to tender for it.

While by and large the system has worked well, the Government are anxious to bring a greater degree of flexibility to bear on the marketing of State-owned timber with a view to easing existing constraints and enabling the Forest and Wildlife Service to operate with more freedom in this sphere.

In this connection I may say that I have very recently received the report of an interdepartmental committee which was established to examine certain aspects of the tender and quota systems for the sale of sawlog. I will shortly be presenting this comprehensive report to the Government for consideration and I have no doubt that its contents will be of considerable interest to them. It would be ungracious of me if I failed to pay tribute to the committee for their dedication and hard work and I gladly avail myself of this opportunity to thank them sincerely for their time and effort. In so far as pulpwood is concerned we now have two major outlets, the Medite Plant at Clonmel producing medium density fibre-board and the revitalised chipboard factory under Spanish ownership at Scarriff, County Clare. Between them, these two enterprises have the potential to use a very considerable volume of current pulpwood availability from State forests, as well as a substantial quantity of wood and residues from the private sector.

I suppose it is only to be expected that newly-established firms like these would encounter many teething troubles in the initial stages of their operations and that this would temporarily inhibit their in take of raw material. However, I am confident that any such problems will be sorted out so that the precise requirements of these firms can be firmly established. This is vital from my Department's viewpoint, not only in the interests of thinning the forests but also to permit alternative arrangements for disposal of any surplus pulpwood that may arise, either on a temporary or longer term basis.

In recent times there have been suggestions from many quarters — including some from within this House — to the effect that forestry, or at any rate certain aspects of it, should be handed over to a semi-State body. I doubt very much if all the people who advocate such a course have fully assessed the implications of that proposition. For my own part, while I am prepared to keep an open mind in the matter, I am quite satisfied that it would be most unwise to rush into a hasty decision and the Government share that approach.

It may be no harm to remind the House that for many decades the former Forest Service — and more recently the Forest and Wildlife Service — of my Department, operating within the Civil Service structure and frequently confronted with various constraints and handicaps, has brought Irish forestry a very long way. Indeed, I am proud to say and we should all be proud to say that forestry has now reached the stage where it can truly claim to be one of our most impressive national achievements since the foundation of this State.

Having said that, however, I think it is generally accepted that Irish forestry could be said to have now reached a crossroads. The considerable investment of several decades in terms of money and manpower has resulted in the creation of a major national resource which will rapidly expand in the years ahead. In the circumstances it behoves us to take an objective look at the situation to see if any changes in the structures which have served us so well in the past are desirable or necessary.

It is against that background that the national plan provides for the establishment of a review group to examine the existing organisation and structures of the Forest and Wildlife Service to see what changes, if any, are needed in order to exploit the enormous potential of forestry to the best national advantage. I shall shortly be appointing this group and directing them to report quickly so that the Government can decide on the most appropriate organisation and structures for the development of Irish forestry in the years ahead.

Ba mhaith liom cúpla focal a rá maidir leis an plean chun leasa don Ghaeltacht. Is é an chéad chuspóir atá leis an bplean ná fostaíocht bhreise a chur ar fáil agus tá beartais áirithe le cur i bhfeidhm ag an Rialtas chun an cuspóir sin a bhaint amach: ar ndóigh, ní beag an tionchar a bheidh acu ar fhostaíocht sa Ghaeltacht chomh maith le fostaíocht sa chuid eile den tír. Bhí 4,261 dhuine fostaithe i ndeireadh 1983 sna tionscail a fuair cúnamh ó Ghaeltarra Éireann agus ó Údarás na Gaeltachta i gcomparáid le 4,144 dhuine i ndeireadh 1982 — glanmhéadú 117 bpost tar éis poist a cailleadh i rith na bliana a fhágáil as an áireamh. Táimse ag súil le borradh breise sa Ghaeltacht ó thaobh fostaíochta de sna blianta atá romhainn.

Is gné an-tábhachtach den phlean go mbeimid don chéad uair sa riocht ina mbeidh ar chumas gach duine — lucht tionscail, lucht gnó, feirmeoirí — pleanáil ar aghaidh go ceann trí bliana agus a fhios acu conas a sheasann siad maidir le beartais an Rialtais, clár caipitil poiblí agus cúrsaí cánach. Táim cinnte go mbeidh an dea-thoradh dá bharr sin le haithint ar ghníomhaíochtaí tionsclaíochta sa Ghaeltacht.

Leanfar ar aghaidh leis an gcúnamh atá ar fáil ó mo Roinnse faoi Achtanna na dTithe (Gaeltacht) chun tithe cónaithe a thógáil agus a fheabhsú, chun seomraí breise a chur leo do chuairteoirí agus chun córas uisce agus séarachais a chur ar fáil aon áit nach bhfuil a leithéid ann cheana. Tá an-obair déanta faoi na hAchtanna sin leis na blianta agus tá a rian le feiceáil go forleathan ar fud na Gaeltachta áit a bhfuil an caighdeán tithíochta chomh hard ar a laghad agus atá sé i gcearn ar bith eile den tír.

Cabhraíonn na scéimeanna feabhsúcháin, atá á reachtáil ag mo Roinnse freisin sa Ghaeltacht, le feabhas a chur ar bhunstruchtúr na Gaeltachta tríd an gcúnamh a thugtar le scéimeanna uisce agus séarachais a chur i gcrích, saoráidí calaíochta a fheabhsú, hallaí pobail a thógáil, a mhéadú agus a fheabhsú agus áiseanna caitheamh aimsire ar nós páirceanna imeartha, pinniúir liathróid láimhe, cúirteanna leadóige agus cispheile a sholáthar.

Tá áthas orm go bhféadfar an soláthar airgid do na scéimeanna sin a mhéadú de réir a chéile idir seo agus an bhliain 1987. Chomh maith le leas sóisialach na Gaeltachta a fheabhsú cuirfidh na hoibreacha sin uile a bheag nó a mhór leis an bhfostaíocht sa Ghaeltacht. Leanfar freisin de chabhair a thabhairt do chomharchumainn Ghaeltachta agus do scéimeanna eile mo Roinne ar mhaithe le leas cultúrtha, sóisialach agus eacnamaíoch na Gaeltachta — go háirithe an scéim faoina n-íoctar deontais le mná tí a chuireann cóiríocht ar fáil d'fhoghlaimeoirí Gaeilge.

Aithníonn an plean an tábhacht a bhaineann le cúrsaí talmhaíochta i saol na tíre. Tá cuid mhaith feirmeoirí sa Ghaeltacht agus, cé nach bhfuil an talamh féin thar moladh beirte in áiteanna, tá ag éirí leo le cúnamh ón Stát agus ón gComhphobal Eorpach ioncam réasúnta a thuilleamh. Tá sé leagtha amach sa phlean go méadófar an deontas a íoctar i leith beithíoch mairteola, nó na "headage payments" mar a ghlaotar orthu, ó £32 go £70 sa bhliaín 1986 agus beidh a bhuntáiste leis an scéal seo. Cuirfear tús arís leis an gClár Draenála don Iarthar sa bhliain 1986 agus ba chóir go gcabhródh sé sin go mór le feirmeoirí na Gaeltachta. Bhain comharchumainn Ghaeltachta agus conraitheoirí príobháideacha talmhaíochta an-tairbhe as an scéim sin le blianta beaga anuas gan trácht ar na feirmeoirí fhéin a fuair cúnamh fial chun a gcuid talún a dhraenáil.

Faoi mar is eol dúinn go léir, tá feabhas le cur ar phríomhbhóithre na Gaeltachta: déanfaidh mise mo dhícheall lena chinntiú gur ar na bóithre sin a chaithfear sciar réasúnta den airgead breise a bheidh ar fáil.

De réir mar a bheidh cúrsaí ag dul i bhfeabhas ar fud na tíre i gcoitinne tá dóchas agamsa go mbeidh ar ár gcumas dul chun cinn níos mó fós a dhéanamh sna ceantair Ghaeltachta.

Mar fhocal scoir, ba mhaith liom a rá go gcuireann an Freasúra díomá orm in amanna maidir leis an gearán agus an clamhsán a dhéanann siad gan aon rud substaintiúil á rá acu. I leith an scéil seo, tá an plean ansin. Tá an Rialtas seo ag súil len é a chur i bhfeidhm. Sin é an job atá acu agus déanfaidh siad a ndícheall toradh fónta a fháil as.

Mr. Kitt

Ba mhaith liom cúpla focal a rá mar gheall ar an bplean seo. Ta súil agam nach gcuirfidh mé an iomarca díomá ar an Aire san méid atá le rá agam. I welcome the opportunity of speaking on this national plan. If I were to look at this plan at the political level perhaps I could say that if has fared very well. On that level it is trying to succeed in holding the Coalition Government together. The stage management of the delivery of this document is superb, but I am afraid that on the economic side I am very disappointed that the plan is very negative in stating its objective. It refers in the very first paragraph to the serious problem of unemployment, particularly unemployment of the young, but when we go through the plan we find very little concrete evidence that the Government are going to tackle the serious unemployment problem. I was hopeful that the plan would have a positive commitment to developing our agricultural industry in particular and, considering our food imports, that there would be a positive development of the food industry. Similarly, in the Minister's Department of Fisheries and Forestry there is a sad lack of development. Other areas, such as tourism, have not been fully supported and the question of energy has not been dealt with adequately. For those reasons the plan is very disappointing.

Many of the assumptions made in the plan have been questioned by economists. The Government are assuming a fall in interest rates, a fall in the value of the dollar and that public service pay can be kept down. There are a lot of "ifs" about Building on Reality. All sides hoped that priority would be given in the plan to the creation of jobs but the net effect of the plan's proposal to tackle unemployment is to absorb the increase in the labour force up to 1987 and reduce unemployment by an estimated 10,000 below the 1984 level. If that is all the Government can offer it is a great disappointment to many people. Are the Government expecting emigration to accelerate when they talk about unemployment? I am sure most Members read in the newspapers during the summer a story to the effect that approximately 70 young Irish people arrived in London each week seeking work in the summer months. The Government should be meeting that challenge.

I should now like to deal with the proposals for agriculture. I should like to point out that the west of Ireland is the only area in the country where drainage works are not being carried out. Applications have not been processed since September 1981 under the western drainage scheme and since February this year no applications have been accepted. The Government must do something about that problem. We were told that £3 million would be allotted for the western drainage scheme but that money will not be available until 1986. Minister of State Connaughton told the House that with that amount of money 3,000 applications could be dealt with; but I should like to remind him that, according to the Minister for Agriculture at the end of last year, there were 8,500 applications in the Department of Agriculture for drainage grants. According to the Estimate for the Department of Agriculture there has been a reduction from £10.3 million to £9 million for 1984 for drainage work. Less money is being spent on drainage work in the west and machinery worth millions of pounds is lying idle. I call on the Government to think seriously about drainage works in the west. They should provide money immediately for those schemes.

On the question of farmer taxation, we have heard repeatedly from the Government that they intend to double the tax take from farmers. A figure of £10 per adjusted acre as a farm or land tax was mentioned for farmers with between 20 and 80 adjusted acres. What is the position in regard to part-time farmers? What is the position in the case of a farmer who has 50 adjusted acres? Does he pay on the 50 adjusted acres or is he allowed an exemption on the first 20 adjusted acres? Those matters should be clarified. If the Government intend to double the tax take from farmers will we have a position that when we exempt certain people it will work out at more than £10 per adjusted acre? Such questions are worrying farmers.

The plan does not mention any incentive concerning land leasing. We had hoped that such a scheme would be introduced in the budget earlier this year but money was not provided for it and it was not dealt with in the plan. One body that would have played a vital role in a land leasing scheme, the Land Commission, is to be abolished. There will have to be an agency to acquire land to help farmers obtain economic holdings. We should all be concerned — I do not think the Government are — that land is being purchased by non-farmers and, in some cases, by companies. It is imperative that the Minister for Agriculture outlines his proposals in regard to land leasing. I suggest that the White Paper on Land Policy produced by Fianna Fáil in 1980 is a good starting point. If the Minister intends to carry through the proposal to abolish the Land Commission he should establish an agency to purchase land so that small farmers are not placed at a disadvantage when land goes on the market.

Last year I was interested to read Minister of State Connaughton's view of the role of the Land Commission in the future, but now they have been abolished by his Government. We must be concerned also at the way the Minister handled our negotiations at EC level. The negotiations in regard to the super-levy were protracted and the Minister succeeded in getting a 4.64 per cent increase in milk production but we now find that there will be a loss in the region of £12 million to Irish dairy farmers because of, according to the Minister, mistakes made by his officials. The Minister is not accepting any responsibility for the mistakes and blames officials in his Department and in the Central Statistics Office. On the question of the extension of the severely handicapped areas for headage payments farmers are wondering, now that the surveys have been carried out, if the headage grants will be paid. When will decisions be made on the submissions made in regard to that scheme to the EC?

I should like to refer to the ewe premium scheme. Sheep farmers are wondering why inspections under that scheme were not carried out this year and why the first part of that premium has not been paid. The Minister for Agriculture, in the course of a reply to me on 16 October, stated that because of the delay at EC level in determing the arrangements for the ewe premium for the marketing year 1984-85 inspections would now be carried out from April to June 1985 and that it was envisaged that payment of the full premium would be made before the end of July 1985. This is the first year that the first instalment will not be paid before the end of the year, as is usual. I take it that the full payment will be made next July. It is an indictment of the Minister that for the last six or seven months he could not sort out the problems with the EC and have inspections carried out earlier this year and have the first part of the premium paid in 1984. I am told the delay of seven months in the EC was caused by the fact that they could not decide on eligibility for the ewe premium. Any farmer who hears that kind of excuse could have very little confidence in the Minister for Agriculture.

The first paragraph of the section dealing with energy states:

The role of the energy sector is important in providing employment directly in production, transmission and distribution, on account of its significance to the productive sectors of the economy, and as an important item in consumer expenditure.

I agree with the sentiments expressed in that paragraph. Page 65 of Building on Reality states at 3.54:

...Bord na Móna has under current review its proposals in regard to the briquette factory at Ballyforan.

The Minister of State has heard me talking before about this project and I do not intend going over it all again. At Derryfadda 100 people have been laid off. Only 55 workers have been kept on until the review next May. Does that not prejudice the review? Would it not be better to keep the workers in employment until the review takes place? About 40 machines will be idle at Derryfadda and only a few will be used to develop the bog.

The £20 million which has been committed for that area is indicative of the investment made by various Governments to that part of the west. We had hoped that employment would be provided on the construction of the factory and when the factory was in full production. It was hoped there would be other jobs there when the development programme got under way. There was a delay which cost money and jobs. The cost of the delay is £3.7 million for a two year delay and £5.2 million if it is a three year delay. Given that the factory was sanctioned in 1979 I am concerned that we are still at the stage of reviewing the project.

A briquette factory is the most effective means of utilising bog land in the Galway-Roscommon area. The bogs are almost fully developed. Orders have been placed and tenders sought for the work. What we want from the Government is a commitment that they will give authorisation for a loan which is common to the other briquette factories. Unless adequate supplies of peat briquettes are available for the home market it will be exploited by the importation of lignite briquettes from Germany. This must not be allowed to happen.

We are aware of our huge range of imports. Why should we not develop our natural resources? I understand there is a provision in EC regulations which allows for substantial aid for the development of peat resources, solid fuel deposits and the processing of peat for briquettes. I should like the Government to indicate if they sought an EC grant in addition to the IDA grant already sanctioned for the project. It is no wonder that the people in Galway and Roscommon are very concerned that there appears to be discrimination against that area when so much money is paid on other projects — promoting Ireland as a country for investment and so on — yet when we have a national resource in the form of acres of bog, the Government will not allow Bord na Móna to build a factory.

Electricity costs are mentioned under the section dealing with energy. They are a cause for concern. I understand a committee were set up to review electricity prices and that their report will be considered by the Government. I was concerned to hear proposals made by the consultants to the ESB that Galway district was to lose its district management status. The workers in Galway are entitled to an explanation from the ESB as to the savings involved in such proposals. If Galway is to be served from Limerick or Sligo can the Minister explain where the savings will be? We are told that up to 60 ESB positions will be transferred from Galway to Limerick and that Galway will be the only city to lose management status within ESB operations.

There is a western package in existence which gives aid to people developing the agricultural sector. It has been of great benefit to farmers who needed extra electricity supply. Now it appears that the engineering headquarters in Tuam will not be able to deal with applications for grants or any kind of application whether for supply to a new house, for milking machines and so on. It would be ridiculous if, for example, north Galway was served from Sligo, south Galway from Limerick and east Galway from Dundalk.

The health services were mentioned by many speakers on this side of the House. We are aware of the major problems in this area. We are told in the plan that there will be cuts of 5 per cent in real terms on the current side and a larger cut on the capital side. The Minister for Health announced within 24 hours of the plan being published that 3,000 jobs would be axed in the health service. This came after the announcement that 10,000 new jobs would be created under the national plan. The number of hospital beds are to be reduced. Many hospital wards in Galway are to be closed while the waiting list for specialist type operations is increasing. What concerns people most in Galway in this respect is that, while there is a new maternity unit at the regional hospital, funds have not been allocated for staffing that unit. I have heard many speakers on this side of the House speak of similar problems in their areas.

It was expected that the national plan would indicate some attempt to deal with the PAYE question to ease the income tax burden, but this whole area has been totally fudged by the Government.

In his budget speech this year the Minister for Finance told us that, as a result of the abolition of the 25 per cent income tax band, 15,000 people would be taken out of the income tax net but later we were informed that 56,000 people would be paying at the higher rates.

Similarly, in the whole area of social welfare the plan is very vague. For the second year in succession payments of increases in social welfare benefits have been delayed by some months. They used to be paid in April. This year, for example, increases in children allowances were not paid until August.

I am glad that at least the family income supplement is to be backdated to 1 September. This is very necessary following the halving of the food subsidies and other rising costs, factors that have worsened the situation of people in that category who will be qualifying for the income supplement.

Local authorities have been experiencing difficulty since the reduction in the rates support grant to 0.8 per cent, but the plan envisages the total withdrawal of that support grant. This is at a time when local government reform is supposed to be in progress. To withdraw a subsidy of this kind without discussing the whole issue first is not the right way to proceed.

There is the question also of lay-offs of local authority workers in most areas. There is no attempt on the part of the Government regarding the transferring of social welfare funds to local authorities to enable them to keep the men in employment.

In the area of housing finance, local authorities do not know what to tell applicants seeking loans from the Housing Finance Agency. People are being approved for loans but are being told that the money cannot be paid until 1985. I urge the Government to consider the whole matter of this scheme. Local authorities in Galway are experiencing much difficulty in this regard. They need the money to meet those applications that have been approved.

Local authorities are experiencing difficulty also in respect of water and sewerage schemes. In many cases such schemes have come to a standstill because of lack of money. There are other areas, too, that should be looked at in the context of local government reform. One such area that comes to mind immediately is that of VAT, whereby after payment of the initial grant so much money goes back to the Government in VAT.

I welcome the fact that priority is being given to road structure. This is an area in which there is a need for the expenditure of a lot of money. I hope that in future years block grants will be realistic so that money can be spent on roads throughout a county instead of concentrating on primary and secondary routes.

I am interested, too, in that section of the plan which deals with education. The primary sector is mentioned in particular. On the re-opening of the schools each year in September local representatives receive many representations about school transport problems. We find that the charges in this respect are to be increased from next year. The problems that arise in September in regard to school transport are not sorted out in some instances until October. Indeed, there are still some such problems in rural Ireland. When the Minister refers to the availability in schools of pre-employment courses she should have regard in the first instance to the question of school transport, because unless there are sufficient funds to provide transport there is not much point in making such courses available.

We must spend more money on school buildings. Prefab classrooms are bad value for money and we still have too many of them. In many instances teachers and students are condemned to these buildings for years because of the failure of Government to provide the money for a decent building programme.

Like other people on this side of the House, I am concerned about the whole question of the creation of employment. During the year many factories have closed but there has not been a positive effort on the part of the Government either to create jobs or to create an environment that is conducive to job creation. At least that is the overall impression I get from the plan.

Mr. Allen

Deputy Kitt expressed concern about delays being experienced by applicants for grants from the Housing Finance Agency. He may not be aware that last week the Minister decided on a further allocation for the agency. This will eliminate the kind of delays the Deputy talks about.

We must question the cost of providing such services as school transport. We have reached the ridiculous situation whereby, if the State were to decide to provide with a bicycle every child who qualifies under the school transport scheme, it would be cheaper for us to set up a bicycle manufacturing company here than to provide for them the transport we are providing now. When a service reaches that height of expenditure it must be examined.

I welcome this plan for a number of reasons. First, it constitutes the first coherent attempt in recent years to set out long term Government strategy. Second, it will allow the business sector of the community to move forward, knowing the Government's taxation strategy and plans for the country's future economic development. Third, it reassures the PAYE sector that they will not have additional taxation imposed on them in the next three years. In addition it has occasioned an economic debate bringing issues warranting clarification to the fore, which can do nothing but good for the country. I believe the plan must be given general public support so that the Government can reach their objectives of getting the country into a stable, economic state by 1987. However, for the Government to succeed, they must resist the enormous pressures which will be placed on them in the next few months by a large number of powerful sectional interests.

I am sure there can be faults found in the plan if looked for. I cannot say I am completely happy with all of its aspects but there are good reasons it should be supported by everybody. It creates incentives for the industrial sector. It sets about tackling the problems of unemployment and deficit budgeting. It commences the long, hard task of reaching tax equity, a problem never faced by previous administrations. It also points the way to important reform in the areas of education, social welfare and health and helps our agricultural and tourist industries enormously, for reasons which I shall explain later.

In the area of taxation the plan gives a commitment to the PAYE sector that their burden of taxation will not be increased during the term for which the plan has been formulated. At long last it introduces a form of farming taxation on which the Opposition cannot make up their minds; one day they appear to be in favour of farmer taxation and the next day they are not. They have never made their views known on this in a clearcut manner.

I welcome the imagination that went into the decision to allow people living in local authority houses a £5,000 grant, which decision alone will enormously help the construction industry. It was an imaginative decision, one which will not only relieve the pressure on housing waiting lists of local authorities but will act also as a boost to the construction industry.

While the plan's proposals offer much, it also tackles the problem of the nonproductive public expenditure while at the same time giving much needed investment in infrastructure, vital to the country's economic wellbeing. By the year 1987 we will have reduced unemployment and our foreign debt. At that stage we should have also a more efficient public service.

However, I must suggest that the plan's underlying assumptions be reviewed constantly to ensure that they remain valid. One such assumption is that the exchange rate of the púnt remains stable which is entirely dependent on our foreign borrowing level and the level of our exports. Also, in the event of a commercial oil find off our coast, the púnt would inevitably strengthen. This could have an effect on our exports on world markets and also affect the anticipated growth of 4½ per cent envisaged in the plan.

One other area that warrants close monitoring is that of international interest rates. In this connection I shall be most interested in the outcome of the United States Presidential Election which will have a definite bearing on American policy and consequently on our policies here. In the past I believe American administrations to have been most unsympathetic to developing countries like ours, putting their own interests uppermost, forgetting the problems of countries like ours.

The plan points out that if Ireland is to remain cost competitive in the international market it must achieve domestic wage stability. While the plan recognises that free collective bargaining is the most democratic means of settling wage disputes it also notes that public service pay must take express account of the capacity of public finances. Therefore, in order to achieve wage stability, the Government must ensure that the public service unions abide by the Government guidelines concerning wage increases. The public service must realise that they are a sheltered section of the community and, as such, must abide by the constraints placed on the income of what is a benevolent employer. The Government must remain firm against any threats of action by the public service unions. At the same time the State must not presume that because a person is employed in the public sector he or she is well paid. There must be sensitivity shown to the lower paid categories in the public sector. That must be remembered at all times.

The rate of inflation which has fallen from 21 per cent in 1982 to approximately 8 per cent this year must continue to be held in check. One is aware that budgetary decisions in recent years have been the major cause of inflation. This plan, which does not appear to envisage major budget increases, will remove that source of inflation. The PAYE sector, which has constantly seen its income dwindle in real terms, now has the comfort of knowing that the levels of direct and indirect taxation will be low over the next three years.

According to the plan the Government expect GNP to grow by 10 per cent in the three year period and the net growth in employment approximately 33,000. The fall in employment over the past four years, according to the plan, has been due to the international recession and increased costs, particularly labour costs. A point not made in the plan and which contributed to the level of unemployment in the past five years and, more importantly, to the increase in the black economy has been the high level of PRSI payments. The present rate of 12 per cent payable by an employer up to a certain ceiling amounts to a payroll tax which affects the willingness of an employer to increase his staff. I welcome the proposal of a 1 per cent reduction in levy in the period to which the plan relates. As a matter of priority the Government must continue to examine methods of lowering the PRSI rates because the willingness of employers to engage additional personnel would lead also to a drain of persons from the black economy, having a doubly beneficial effect.

The increase in exports over the last few years has been brought about by increased productivity rather than by an increase in the numbers employed. This is particularly noticeable in my area of Cork where a number of high technology industries employ small numbers of people and export virtually all of their products. These are highly skilled people but there is also a high level of automation. One of the negative features of high technology industry is that it encompasses an ongoing process of modernisation which means that instead of increasing employment industries will daily decrease their manning levels.

In the area of job creation import substitution must be a priority of this Government. I was attracted by a recent report that 8,000 jobs could be created in the electronics and computer industry if more of those industries purchased their raw materials or basic components here. I was amazed to learn that such components are available but are not being purchased here. Therefore the Government should encourage such high technology industries to purchase their components here, having a benefical effect on the overall jobs situation.

The drop in employment in the building and construction industry has been dramatic in recent years. It should be noted that, despite the additional expenditure on construction envisaged under the plan, the fall in demand for private house construction has been directly related in recent times to the level of employment, which meant that demand has dropped as unemployment increased. I am hopeful that the £5,000 grant will have some beneficial effect in that area.

On that same area of investment in infrastructure any public expenditure on the capital side of the plan, such as expenditure on roads, should be done in the most cost effective, cost conscious manner to ensure that proper value is obtained for the money expended. We must insist on normal construction commercial costs control management procedures being followed in relation to such expenditure. Unfortunately there have been many examples of public money having been wasted in recent times. Such examples have surfaced at meetings of the Committee on Public Expenditure. I could give numerous examples in my region where money has been wasted in a scandalous fashion but I shall keep such examples for another occasion. The greatest errors are being made because we, public representatives, have been conned in the past by outdated budgetary procedures and methods of presentation of costs. The overrun in the IIRS and the overrun in the Howth Harbour project are typical examples. I believe that when serious mistakes like this take place heads should roll somewhere. It is just not good enough to point out the examples where money is being wasted. I believe that people who make wrong decisions must be held accountable for them and must suffer for their mistakes. Otherwise these kinds of mistakes will continue to happen. I believe that at present we are only lifting the outer layer of a major scandal involving hundreds of millions of pounds of misspent taxpayers' money and as public representatives we must bring these examples to the surface and ensure that these mistakes and these reckless, irresponsible decisions are not repeated. The only way to ensure that these mistakes are not repeated is to make the people who made these decisions accountable and to make them pay for their mistakes. The public I believe, will not tolerate lack of action on this any longer especially in these times of cutbacks in areas such as health and social welfare and in these times of high taxation.

In the south the health board in our region was asked to make cutbacks in their budget recently. They took the obvious and easy way out by making politically sensitive decisions. They made no administrative savings but instead cut services to the public. I have been critical of the workings of some of the health boards in the past and I am critical of the workings of the Southern Health Board because I am conscious and aware of the situation prevailing there at the present time. I have detected an uncaring attitude at managerial level from time to time. I feel that the administrative structures are out of touch with the problems in the areas of highest expenditure, that is, within the hospitals themselves. All health boards were asked to achieve savings and these savings have been achieved in a number of regions by cutting back on costs. However, in the southern region facilities to the public have seen a cutback and this gives the impression of a major cash shortage. I believe that, if the management of the health board were seen to draw their experiences and abilities rather than providing a short term solution, the hospital services would be more efficiently administered. In areas of community health the board are again giving the impression that there are massive cuts. They must not give the impression that we are cutting a week's wages from a porter or a cleaner or a member of the kitchen staff and I believe they have no right to do so. They have no instruction from the Department to do so. They have been told to work within their budgets and to be more efficient but the easy way out has been taken and politically sensitive decisions are being taken to create a crisis situation with central Government.

I have proof of overspending, particularly in the Southern Health Board region, in the administration of the hospitals. I have evidence of unnecessary spending. I have evidence of sloppy and inefficient administration. I challenge any administrator to prove otherwise and I will publicly apologise to him. I believe that hospitals under the health board should operate in a situation similar to other hospital groups such as the voluntary hospital groups. There is a huge difference in the cost of a patient and bed for a week as between the health board hospitals and the voluntary hospitals. I am aware of the facts and the management of the health boards are also aware of them. The question must be asked why the health board costs are greater. To rectify this situation we must immediately make a decision to administer the major hospitals under a system similar to that of the voluntary hospital groups. I would advocate to the Minister a health agency board with the local hospitals under its jurisdiction and each of these hospitals having its own board of management, which does not operate at present. I am convinced that it would be cheaper to operate these hospitals with public representatives on the boards as public watchdogs. This can be proved because the hospitals under the voluntary hospitals system are cheaper to the general public and give as good a service. If the health boards do not put their house in order at a very early date the Minister should administer the hospitals under their jurisdiction independently of the health boards.

Despite criticism in recent times I believe the private sector is the backbone of Irish industry and its performance in these times of extreme recession has been remarkable. However, the ability of the sector to continue as a collection agent for the Government through the VAT process and to act as a source of large amounts of revenue in income tax, corporation tax and PRSI should be examined. The ability of the private sector to expand employment and to continue investment must be given every chance by Government policy. I believe that in our efforts to attain a healthy economy we must be careful that we do not structurally damage this section of our economy. I read the Irish Congress of Trade Unions' document recently with interest and I would support their section on the development of our national resources. I am personally disappointed to see that the number of people expected to be employed in agriculture will fall from 1½ per cent to 2 per cent per annum over the next three years especially at a time when the importation of food items both in their raw and processed state continues to be a major national scandal. One realises that the investment required in the food industry is extraordinarily high. Consequently I believe it goes beyond the ability of our indigenous private sector to make this massive investment. However, taking this into account and the comments outlined in sections 2-52 to 2-54 of the plan, the ministerial working group should as a matter of urgency decide methods of developing, financing and promoting a meaningful food processing industry in Ireland especially in these times of high unemployment because it is not acceptable that a hard core level of unemployment is allowed to continue. While the concept of full employment might be a thing of the past the projected levels of unemployment are unacceptable to our young people. We have to do better than allow the present situation to continue and I believe the proper utilisation of our natural resources could go a long way towards bringing down unemployment considerably.

The Government's comments concerning the allocation of grants to industry are to be welcomed and a change of emphasis to the production of advanced technology products, import substitution products and higher exports will ensure greater value to the economy for the grants given. However, in this area care must be taken that indigenous Irish entrepreneurs are given every chance. I must suggest that the proliferation of bodies dealing with grants and the promotion of Irish goods and services must be rationalised. I believe it is wasteful to have bodies such as the IDA, Údarás na Gaeltachta, SFADCo, CTT and other such bodies all involved in the same basic area and undertaking much the same exercise. The degree of competition between these bodies and duplication of staff and effort is unseemly and unwise and should be examined. I need only quote the experience of a group in which I was included in New York last year where we saw various State groups dealing with the same matters abroad.

It is disappointing to note that employment in agriculture will continue to decrease. The plan points out the degree of underusage of farm land and that it is a major problem. I welcome the Government policy with regard to land leasing in the Bill before the Houses of the Oireachtas. I note that the section of the economy which is best taken care of by investment grants and disease eradication schemes is also perhaps the least productive. As the plan envisages, farmers who cannot afford to pay for an advisory service tailored to their individual needs should be required to make an appropriate payment for that service. Therefore, I welcome the comments that the massive costs of the bovine TB scheme are being reviewed. The continued failure of this scheme has been an affront to the PAYE sector and the small business man.

As with food processing, a coherent and comprehensive fishing policy must be developed and fish caught in Irish boats must be processed in this country. I also welcome the proposals to help the tourist industry but, being parochial, the tourist industry in the south-west region will be severely affected if an agreement is not reached shortly about the provision of a car ferry from Cork.

The proposals to reduce the excise duties on spirits will also help the industry but it also creates major problems for the brewing industry. I appeal to the Minister for Finance to consider their special problems and, in doing so, I am not being contradictory because I believe that any drop in excise duty on stout and beer will be more than compensated for by greater demand.

The undertaking by the Government to prevent any further rise in the share of national output being absorbed by taxation is welcome. The indexation of income tax bands and allowances each year so that the income tax burden on taxpayers will not rise is of the utmost importance in making the heavy burden of taxation more palatable. The question of taxation of farmers has been a major issue for many years and, while the imposition of the land tax is welcome, especially in the light of the inefficiency in the agricultural system, the removal of approximately 60,000 farmers from the tax net is a source of worry to people paying their full taxes and living on far less. To suggest that a well run farm of 80 adjusted acres cannot make a sizeable profit is flying in the face of the experience of many farmers. To many people, a minimum rate of £8,000 per annum is inadequate.

I also welcome the decision in the plan to reduce VAT on newspapers from 23 per cent to 18 per cent because the newspaper industry is experiencing difficulties at present for a variety of reasons. One factor which must be looked at urgently, although not in the context of the economic plan is the question of dumping of British newspapers. There are other factors such as VAT at the point of entry and the high PRSI rate in a labour intensive industry. A reduction of 5 per cent may be small but the important thing is that the case of the newspaper industry has at long last been recognised and the graph of VAT on prices has gone down as against a frightening upward spiralling over the last few years. However, a case must continue to be made for a further reduction of VAT on newspapers and cover charges should be equitable with other countries in the EEC. I intended to deal with the competition from British newspapers and how it has increased in recent times but, unfortunately, I do not have time. The Irish newspaper industry has been crucified for years because of taxation levels. Now, at least, the industry has been taken down from the cross but not yet saved.

During the run up to the publication of the plan some Government Deputies experienced difficulties which have become more common at present in carrying out their duties as public representatives and legislators. At times it is not always understood that TDs have a duty to represent all the people all the time. In the course of any day we naturally expect to hear the demands and pleas of various sectional interests and it is right that we should listen and take note of what each has to say. Nevertheless, we must also declare that whatever decisions are made are made for the common good and in a democratic way. When the final touches were being put to the Government plan, some Deputies were threatened that if a land tax was introduced, the Government would find themselves on a collision course with farmers and we were warned of the political consequences if we supported such a concept. Lobbying and threats by sectional interests in this manner, particularly in a recession when there is high unemployment and high taxation, serves only to divide further the urban dweller from his rural counterpart and undermines the sense of community so badly needed in these difficult times. It is vital that we get our lines of communication straight and keep everything in perspective. The Government have a duty to keep the ship of state afloat regardless of the political consequences. It is the duty of the Government to ensure equity in the taxation system and to protect those least able to protect themsleves. Without the support and understanding of the people, no Government can achieve these and other basic aims. We must insist that where any sectional interest is not in the public interest as a whole, it must be resisted without equivocation. It is with regret that I say, even after the lessons of the last five to seven years, we are pandering to short term political gains which created many of the difficulties we are experiencing today. We can still be subjected to threats from special interest groups. We must confront the difficult issues and, while the proposed solutions may prove unpalatable at times, we must remember that we are here to serve the common good.

The plan has been criticised by Opposition spokespersons. The Leader of the Opposition seems to be in favour of spending money hand over fist. He has promised a whole package for Cork, including keeping Verolme open. At the same time, he is in favour of reducing taxes. These are totally contradictory policies. He cannot hope to cut public expenditure, spend at the same time and to reduce taxation. The magic wand politics which we have experienced in recent years have brought the country to its present position. I heard a colleague from Cork yesterday referring to the plan as a super-glue job. He said Fianna Fáil would keep Verolme open, reduce VAT on newspapers to 5 per cent and reduce taxation. However, when it comes to a question of spreading the tax net, they are against a land tax and other harsh measures. They will do anything which is popular in an opportunistic way. These policies are unacceptable to the majority of the people, because they are not fools.

Mr. Hyland

Having listened to Deputy Allen I wonder if we have read the same document. I suppose that beauty is in the eye of the beholder and Deputy Allen is a very good PRO for his own party.

I welcome the opportunity of speaking in this debate. I preface my remarks by saying that I am a supporter of the view that middle and long term planning is essential in working out the economic destiny of a nation. I will go even further and say that any long term economic plan — and by that I mean for a period of up to ten years— once decided on, should not be subject to disruption by weaknesses in the political structures or, indeed, changes of Government. Any change which it is believed should take place should do so in the overall framework of the original long term projections. It should be possible for us clearly to define long term economic objectives and also the financial means by which they are to be attained. For example, the political and consequently the economic insecurity of the past three years has added considerably to the seriousness of the situation in which we now find ourselves. It certainly has contributed to the very low ebb in public morale so evident at present and to the level of cynicism for political institutions and for politicians in general.

It is a great pity that this air of desperation and insecurity has been generated in this House, to which the people are entitled to look for leadership and guidance. With good leadership and proper motivation there is no need for the gloom which is about. We as a nation have the capacity to survive. We have our natural resources which after 50 years largely remain undeveloped. As an added bonus we have the benefit of a highly qualified and young labour force, ready and willing to assist in the work of national development, if given a chance. We can also benefit from the mistakes of the past. While I am not an advocate of looking back, if objectively done this could be a help in relation to future planning.

We are entitled to and can take some encouragement from past performances and to say that for a relatively young nation we have made considerable progress. It is still not too late to muster our resources for the purpose of motivating our people in the old Sinn Féin tradition of de Valera and Lemass.

Apart from the economic action taken by Government there must also be a voluntary commitment on the part of our people to make any plan work. I say that in particular in the context of our membership of the larger European Community which on our entry created such opportunities for us. Unless we as a nation accept the challenge as well as the benefits of our membership of the EC and decide to place ourselves in a competitive position of exporting into that larger European market, there is a little real hope for our long term economic survival. I say that particularly with regard to the area of job creation. This is a task which the Government alone cannot complete. I am, however, encouraged by the fact that there appears to be a growing acceptance of this principle, particularly with young people and this is a trend which is at this time very much to be welcomed.

It is the hallmark of good leadership to stimulate and motivate people. I do not know how one can measure or monitor the cost of psychological depression in a nation. The loss in this country is immense, in terms of the loss of initiative and confidence, in people who could and would invest in our future if a suitable economic climate were created. I am sure that this House understands what I mean because the examples are painfully obvious all around us at the moment.

It is against this background that I wish to look at the plan. I regret having to say that it does nothing for the morale of the nation and very little to solve its problems. The plan is politically motivated rather than economically viable or credible. It has a short term effect of uniting the Coalition partners and to some extent stabilising the Government. When one considers the rift which had developed, that is something for which one should be grateful in the short term. What a pity that we do not see the same display of skill in the preparation of the plan itself. As a politician I understand the need for political survival — there is nothing wrong with that if the motivation is right and the cost to the nation not too great. I am afraid in this instance the motivation is certainly survival first and the nation second.

I realise that it is not always possible, for various reasons, for Governments to achieve economic targets, although this Government when in Opposition refused to recognise that fact. In that light I must say that the performance of the Government over the past two years falls far short of their own targets and promises, disappointing the nation and many of those who in the last election fell for those promises and were prepared to give that Government a chance. What a costly political experiment that has been for our country.

The Taoiseach at the Ard-Fheis over the weekend said that the task of running the country had never been tougher and that the weeks spent preparing the plan were the most difficult since he became Taoiseach. I am sure that both statements are correct, but he should go a stage further and ask himself the reason why. Is it not because the people have become disillusioned and disappointed with his leadership and the performance of his Government? Is it not because the image and credibility which he succeeded in selling to the people have now been unveiled by his Government's failure to honour election promises and their failure in reaching their own set economic targets?

I admire determination. It is a quality to be admired in any leader. However, I must remind the Taoiseach that his term in Government, putting it at its best, is now half spent. There is very little time left for him to implement the policies which this country so badly needs. It is hard to blame people for their lack of confidence in this plan and their lack of hope for the future when the Government's objectives over the past two and a half years have failed completely.

I have always accepted the economic theory of caution in borrowing. It is the duty of the Government to ensure that money borrowed in the name of the nation is productively spent. The Government's crutch over the past two years of blaming Fianna Fáil has now fallen from under them as they watch the folly and the collapse of the monetarist policies which, on the admission of the Taoiseach at the Ard-Fheis, he will now have to change. In his Ard-Fheis speech the Taoiseach said he is more determined than ever to succeed. I hope for the sake of the nation that for whatever length of time he remains head of the Government he will make more progress than was made in the earlier part of the administration over which he presided.

In relation to borrowing I do not agree that under-developed and potentially productive areas of the economy should not be boosted by additional capital investment even if the money has to be borrowed. I agree with the need for balance between the public sector and those employed in the so-called productive sectors. I acknowledge the need for control over public expenditure generally. To tackle those areas without at the same time ensuring the fullest exploitation of the productive resources of the nation, as is happening in this document, is to take the easy way out.

It is very easy to talk about cutting back in certain areas of public sector employment and other areas, but it is more courageous and more beneficial to the nation to look at the areas which can be developed productively. I regret that this plan does not do that. I am very disappointed that this document does very little, if anything, to restore the financial base of the local authorities. Over the past two years they have been floundering and they are now left in suspense until the proposed new land tax comes on stream, if it ever does.

I want to ask the Minister for the Environment to come to the assistance of local authorities before the estimates meetings in January 1985. I warn him that, unless he does, many local authorities will, by their own actions, disband themselves. For the past two years they have had no role as they watched the services for which they have responsibility crumble and collapse all around them. Where, I ask, is the economy in retaining the expensive administrative structure of the local authorities if they are to be deprived of the capital needed for positive development?

It seems to me that the Government are paying lip service only to the need for caution in the area of public expenditure. Every Member of this House who is also a member of a local authority — and there are many of them — realises only too well that what I am saying is true. Road workers have had to be laid off or put on short time. At the same time the county road structures have virtually collapsed. It is now an embarrassment to be a member of a local authority. It is impossible to defend the operations of local authorities as they exist at present. This is not the fault of the excellent personnel who administer the services in local authority areas.

Whatever one's view is on the proposed land tax as a source of revenue for local authorities it will not go anywhere close to providing the amount of money needed to restore the road network and the other services which have become almost obsolete in many counties. The Government are now prepared to use the local authorities to continue to raise finances from the farming community. The proposed £10 per acre will be only the beginning once that base for taxation has been established. This is a totally unsatisfactory means of providing the finances necessary to keep our local authorities working.

The proposal in the plan to impose further increases in service charges is not on and the Minister must surely realise that. People have always been prepared to pay reasonable water charges and will continue to do so. An attempt to use this service as a base for the financing of local authorities will be a total failure. As a member of a local authority I will not support that action.

I welcome some of the proposals in the plan to amend the present regulations with regard to the marketing of timber from State forests. I have been agitating for this change for some time. If regulations are introduced without delay in relation to the purchasing of State timber by the saw-milling industry from State forests, the industry will benefit. Having said that, I regret to say there is no positive overall proposal in the plan to develop forestry as a productive national resource. In almost every forest area productive jobs could be created and many other jobs could be created in the down-stream processing industries if the proper finance, the proper commitment and the proper policies were introduced. Forestry must be developed in conjunction with agriculture if we are to exploit and fully develop our national resources.

Productive Government Departments like the Department of Forestry and the Department of the Environment could employ additional workers if they had the resources to do so. At the same time, the Department of Social Welfare continue to pay almost the equivalent of those men's wages in social welfare payments. I am pleased to say that some of those weaknesses were exposed recently at meetings of the Committee on Public Expenditure. I hope now that they have been exposed people will look at the position seriously and the Government will decide to channel the money which seems to be available in an endless stream to other productive Departments where productive employment could be created.

Unemployment is and continues to be our greatest social and economic problem. I acknowledge the fact that there is no short term solution to this problem. Even if there were it could not be sustained unless it was based on productive enterprise for the home or the export market. There is nothing in this plan which encourages private enterprise. VAT and other tax disincentives remain unchanged largely and will neutralise any benefit from the additional grant aid promised in the plan to industry.

I agree that if farmers have sufficiently high incomes they should pay tax on the same basis as every other section of the community. The tax system now being introduced is in no way related to income and will militate against small farmers and by that I mean those who have the lowest incomes. It is a pity the plan does not deal with the positive advantage to the nation of helping agriculture and the food industry. It looks at the easy option of collecting additional tax, but ignores the economic reality and loss to the nation because of policy blunders like the milk super-levy.

As a nation we have not got the benefit of our EC membership and particularly our entitlement under the Treaty of Rome to enable us to develop our agricultural industry and our dairying industry to the level of our EC partners. Apart from that, how can one stand over the blundering and loss to the nation of the under-calculation of the 1983 milk production which affects seriously our European quota and will do so in the future? How can one stand over statements emanating from Brussels which indicate clearly that our application for an extension of the disadvantaged areas in this country is falling down because of the failure of the Government and the Minister, as Brussels sources put it, to present a convincing case? This is a disgrace which this House should not condone. The entire nation even outside agriculture will suffer as a result. The farmers in the areas affected, although they will know it soon enough, should be made fully aware of the Government's total disregard for their plight. This careless attitude to the poorer regions and the less well off in society has been a hallmark of this administration since they took over two and a half years ago.

A further serious symptom of the failure of the Government's social and economic policies is the tragically increased volume of crime and vandalism and the frightening exposure of our young people to the drug scene. In this plan before us tonight about five lines deal with this urgent, important and serious area of our economy. I referred in my opening comments to the cost of the psychological depression in the nation where initiative is killed and lack of enterprise reflects itself in job losses and massive unemployment. Early victims of that malaise are the young, particularly in densely populated areas where they fall victims in their desperation and helplessness to the real godfathers of crime and misery, the drug pushers and their associates. It is not the fault of young people that the jobs are not there or that the social pressures of living in homes where sometimes full families are unemployed force them to a way of life which for many of them is alien and unwanted. This plan admits that it can do nothing for them and, consequently, continues to place them at risk. Spare a thought for the mothers and fathers of such families, themselves under pressure from unemployment and other social problems, lying awake at night wondering what the future holds for families whom they have reared and for whom they had great plans. If by our failure as legislators we have created that kind of society then we must face up to our responsibility of protecting society against its worst effects.

I pay tribute to the dedication of our Garda in the area of crime prevention and control. In particular I compliment the members of the Drugs Squad. We must ensure that every support is provided for them in their fight to protect our society from the worst ravages of drug addiction. It is a pity that in the preparation of such a lengthy document, vague as it is, no reference is made under any heading to any of the social problems to which I am referring. As the professionalism and expertise of those involved in organised crime increases so must our commitment to the security forces increase. We must ensure that all the most advanced technological aids to crime detection and surveillance are available to them. We must ensure that the training facilities available to them are continually updated and that members of the force are given the opportunity of advancing their education in the area of crime detection and prevention. Our Garda have a proud tradition to uphold and there is a very serious obligation on each and every member of the force to uphold that tradition. They have a responsibility to our people to discharge their duty with dignity and justice. Recent tragic events have caused public unease, and that is understandable. As legislators we must ensure that the legislation under which our Garda operate provides the maximum degree of protection for each and every citizen, particularly in the area of interrogation.

An indication of the seriousness which this House has adopted in relation to this area of administration is reflected in the sensitivity and tediousness with which the Criminal Justice Bill was treated in this House. It is a credit to this House that it was treated as responsibly and sensitively as it was. I pay a tribute to our spokesman on Justice, Deputy Woods, who excelled himself in this area. The Garda owe it to themselves and to us to ensure that their operations in this area are above reproach. Having said that, let us recognise the fact that the Garda, like other institutions, are a human institution and among them there may be the odd individual, as there is even in this House, who does not discharge his responsibility in the way the vast majority of people do. In such cases serious disciplinary action must be taken and be seen to be taken.

An Leas-Cheann Comhairle

Deputy, you are going a little aside from the plan.

Mr. Hyland

I am concluding now.

An Leas-Cheann Comhairle

The Deputy should stay with the plan.

Mr. Hyland

I am staying with the plan from the point of view that I am criticising the Government——

An Leas-Cheann Comhairle

That is done normally on an Estimate.

Mr. Hyland

I am criticising the Government because of their failure to make any worthwhile reference to this very important area of interest. It would be a great pity if the reputation of the force was in any way tarnished in the public perception as a result of such incidents. We all would be losers in such cases.

Perhaps I have exceeded my time slightly. In conclusion, I urge the House to reject this plan on the grounds that it contains no positive proposal, it does nothing to solve our social or economic problems and it will leave this country in two years time, if the present administration continue, in a far worse state than we find ourselves at present.

An Leas-Cheann Comhairle

Deputy Prendergast, and he has 30 minutes.

Mr. Prendergast

It was interesting and amusing at times to listen to some of the comments from the opposite side of the House. I have heard more real, analytical, honest criticism of the plan from the Government side of the House than in the predictable, counterfeit, spurious argument of the Opposition, and I give every concession to the fact that it is the duty of Opposition to oppose. Let me say by way of a start that I welcome the concept of a planned economy. No modern country or democracy can hope to make progress without it, and this plan is a start in that direction. Everybody has his own response to the plan. On the day that I was driving home after the launch of the plan I heard the BBC Radio 4 comment on it and I was terribly disappointed, because that is a favourite programme of mine, that the best that they could attribute to the intention of the Irish Government to do something for the economy was that (a) they were going to reduce the price of liquor and (b) they were going to extend the drinking hours. I am surprised at our Irish correspondent putting that slant on it. Everybody will pick their own fair points from the plan but, by and large, it is accepted by most reasonable people that the plan represents a serious and honest attempt to move some way forward in the midst of the economic difficulties we have.

I am reminded of the story about Professor Myles Dillon when there were visitors here from Spanish universities. They were talking about the concept of manana, of putting things on the long finger. The Spanish professor asked Professor Dillon if there was any Irish equivalent. There was a long pause after which the Spanish professor asked Professor Dillon, "Well, do you have it?" Professor Dillon is alleged to have said, "Yes, we have it all right, but I am trying to count the different variations of the concept of mañana. I have counted about 37 so far". The reason I mentioned that is because I believe it is about time that as a nation we learned that economics is the most ruthless of all arguments. No other argument will stand up to economics in the long run. If we do not settle our own problems in a fair manner nobody else will do it for us.

I welcome and support the plan because I recognise the positive aspects of it. Certainly, I welcome the very definite and identifiable imprint of my party in that plan. I have no doubt that, given the political realities and the tyranny of democracy — that is an equal reality in this context — the Labour Party have done the best they could. The concept of democracy was originally opposed on the grounds, for example, that if ten people in a room were asked the total of two and two and six said "five" then, democratically, they were correct although mathematically they were wrong. Often when decisions are made based on a democratic basis they may be wrong inherently. The point I am making is that the reality of the situation in political life here is that only 9 per cent of the population vote for the Labour Party. We have had to throw ourselves across, like a wing forward across a pack, to stop even more severe cuts which would have become obvious were we not there to tone down that.

There are some aspects of the plan I hope to address myself to in a constructive and helpful manner. I should like to address myself to that part of the plan which refers to the public service and the question of pay restraint. The Government are making a very bad mistake if they hope to make the public sector the whipping boy for our present misfortunes and expects it to carry a disproportionate burden of the sacrifices needed to get the country back on the road again. By and large we have an excellent and efficient public service. Of course, as in most organisations, there are areas where waste and inefficiency can be eliminated; but this can best be done through consultation and agreement with the unions involved who should, in my view, be invited to suggest such areas where improvements can be achieved. I have no doubt that this would be by far the most sensible approach by the Government. Down any other way lies madness. I accept that the Government have inherited very serious problems in relation to public sector pay and the consequent impact of the burden on taxpayers, especially the PAYE sector, because whereas wage increases in the private sector can be passed on in prices to the customer it is the taxpayer who picks up the tab for any public sector expenditure. It is one of our characteristics as a people that while we all clamour and scream for more and more services — some of them very badly needed — nobody want to pay for them. This is human nature.

The problem has arisen largely due to the principle of percentage increases in salaries and wages. I have said that before and I believe that that principle is a major contributory factor to the difficulties in which we find ourselves. That system has unquestionably widened the gap between the higher and lower paid workers to a disproportionate degree. The three areas for which differentials are normally paid in employment, public or private, are skill, responsibility and inconvenience. This must always be reflected in a fair salary structure but there must be balance involved. It is because of the system whereby wages have been increased on a percentage basis that out of a given amount available for public sector pay an undue proportion is going to the higher paid in a vertical direction. The system should ensure that those moneys are far better used in a horizontal direction to create more jobs for young people in areas of demonstrated need for such jobs. For example, in Limerick city we do not have sufficient people to clean the streets.

Almost 60 general operatives in that area left and were not replaced. I was amused at the comment of the previous speaker who said he was embarrassed as a local authority representative. I recall with the utmost pain that while the former Government were in power the fact that Limerick Corporation in a period of three months could only put in one pane of glass into houses in the north side of the city of Limerick which is twice the size of Tralee or the equivalent of Dundalk with 25,000 people. That occurred under the last Government because of what they had done following the 1977 election.

It is particularly important that we ensure that whatever moneys are available go out to bring in young people and create jobs because while the recipients of the higher increases are highly efficient — there is no question about that — and fully productive within the meaning of that word in the science of economics in that they fulfil a need they do not, however, for the most part create any extra disposable income which can be used by a Government to run their business. We must remember that money is used to run the country and we must generate the money from ourselves. I should like to give some examples. On 1 January 1973 a departmental secretary earned £6,265 per annum. As of 1 January this year his salary is £33,646 per annum, an increase of £27,381 over 11 years. An assistant secretary on 1 January 1973 had £5,080 while today he has £26,054, an improvement of £20,974. A principal officer in 1973 had £4,474 while today he has £20,742, an improvement of £16,268. A cleaner in 1973 had £1,170 or £22.50 per week while today he has £5,512 an improvement of £4,342. In 1973 a messenger had £1,196 or £23 per week while today he has £6,731, an improvement of £5,535. Just 11 years ago the departmental secretary had 5.35 times the pay of a cleaner and now the secretary has 6.1 times a cleaner's pay. The gap is widening in relative and absolute terms. So much, God help us, for the fond hopes of the national wage agreements to help the lower paid who are falling behind all the time vis-à-vis the consumer price index. Those who are highly paid have gone way ahead. That applies equally to the private sector. Let there be no mistake about that. But they can pass the cost of that on to their customers without it having a direct effect on taxpayers whereas wage increases in the public sector are borne by a very reluctant taxpayer. This dilemma of squaring the circle will have to be met no matter what Government are in power. One solution may be to express increases in the consumer price index in money terms. It is measured four times a year reasonably scientifically. For example, if the cost of living has increased by £5.60 what is wrong with calling it that and giving a low percentage figure or a flat sum payment across the board? We must preserve status and that has to be recognised.

I am strongly in favour of an expanded public service. The emphasis on job contraction is wrong. There are children in my city who have to wait for over a year to see a dentist under the public health system. The unions in the public sector are a reasonable decent group of people. I am satisfied they would be prepared to sit down with the Government and look at this if it meant the protection of their jobs and the expansion of the sector. I ask the Government to do something about that and treat what I am saying very seriously as proposal to try to deal with this problem.

It is not good for the Opposition to engage in a Dutch auction. There is no such thing as free lunch. The taxpayer must pick up the tab. It does not matter who is in power. The Opposition are not fooling the electorate any longer. Sense bought is sense taught and they know we must pay for everything ourselves.

I welcome the emphasis of the plan on the retention of our heavy investment in the educational system. A high percentage of primary school children leave the primary sector functionally illiterate. I made that point recently and was misquoted on it. I am speaking about functional illiteracy. In contrast to most western democracies who use recessions to hit education because it is the soft belly of the political system, this Government have wisely decided to produce and cater for the best educated young population this country ever had. I have seen graduates of the NIHE Limerick getting first place throughout Europe in competitions with graduates from 39 colleges. I do not want to indulge in platitudes or be sycophantic in talking about our wonderful youth. I am saying it coldly and objectively. They will be able to take on the best in Europe at a time when some parts of Europe are geriatric. I am talking about Berlin, Belgium and other places. There is a vociferous body of students who are handsomely funded and whose parents can recoup their costs from schemes they have with insurance companies.

It is one of the tragedies of the system that it is far easier for a doctor's son to become a doctor than it is for a doctor's son to become a member of the medical profession. I throw out a proposal: everyone who has the ability to become a member of any profession should be entitled to do so if they have the academic qualifications. They should not be debarred by virtue of financial constraints. To that end I propose that the State draw up a scheme whereby every student would have access to third level education on one condition. That is that a provision would be built into the system whereby graduates be they doctors, dentists or whatever who got money from the State would be obliged to repay it in kind to their brothers and sisters by working for the public authorities or the State and helping children, for example, to have their teeth saved before they reach the stage where they are beyond repair. The Government should level out the system by giving everyone equal access to it. I should like to hear the comments of the students' union about that. Fair is fair and one does not get anything for nothing be it in Borrisokane or elsewhere.

I listended to the spurious criticisms made by Fianna Fáil in relation to taxation. The taxation system will flush them out. They lost Dublin and Cork because of what they did to Jack Lynch.

An Leas-Cheann Comhairle

That is not in the plan.

Mr. Prendergast

They lost Limerick because of what they did to Deputy O'Malley.

Mr. H. Byrne

We will take the Deputy on.

Mrs. O'Rourke

The Deputy might lose his own seat.

Mr. Prendergast

I will not cry many salty tears. I am a democrat and will accept the verdict of the electorate. Fianna Fáil will be flushed out on this. They will be brought into the arena like any other party. I am in favour of making taxation the central issue in the next general election be it held in five minutes or three years.

I am an optimist by nature but unless something is done about the inequity of the present system this country faces a revolution. I use the word advisedly. We have spokesmen shouting for the farmer's organisation and firing from the hip. They are not doing the farming sector any good. Doctor Miriam Hederman O'Brien, Chairman of the Commission on Taxation warned recently at a seminar in London that if something is not done to remove inequity we are facing revolt. I believe that. There are discerning voices even among the farming community who are shrewd enough to read the signs and are aware that unless everyone carries their fair share of the burden this country faces trouble.

I welcome the principle of a land tax. It does not go far enough to remove the inequity but it is a step in the right direction. The principle is established and, as in the case of all other taxes, I have no doubt but that this one will be built on as time goes on.

I welcome the decision of the Government to index the tax bands. This is a slight beginning but something positive must be done to help the PAYE workers. I attended a meeting in Limerick recently at the invitation of a worthy, reputable and responsible farmers' organisation. The comments uttered by some of the people at that meeting were frightening. This was because of their misreading of the looming gap between the rural and urban populations. The whole population profile of this country is changing. When we got our freedom 62 years ago, 80 per cent of the people lived on the land. In another 16 years those figures will be reversed. By then four out of five of our people will be living in towns and cities and they will not tolerate a situation in which there is flagrant abuse of the PAYE system. The cry of, "talamh gan chíos an bhliain seo amach againn" was perfectly acceptable in the last century when there was an alien Government in power. Now we are taking about our own children whom we are trying to educate, house and find jobs for. The PAYE sector cannot be expected to pay all the time. The plan proposes to double the level of farm taxation but my figures show that total income tax returns to the Exchequer for the year ending December 1983 were £1,660 million. Of this the PAYE sector contributed £1,423 million or nearly 86 pence in every £ while the self-employed, doctors and other professional people, paid £2.5 million or 12½ pence out of every £ and the farmers paid £32 million or less than 2 pence in every £. If my figures are wrong I should be pleased to have them corrected.

Mr. H. Byrne

This is a time for having figures wrong.

Mr. Prendergast

It is the policy of the Labour Party that there be as many family farms as the land can sustain. We are against the idea of the big ranch-type farms. We believe equally that Irish agriculture is the most under-capitalised sector of agriculture in Europe. It must be given every support possible so as to build it up and make it efficient. In turn the families who make a living on those farms must be prepared to contribute their fair share by way of taxes. There is mention of farmers not having to pay double taxation but the PAYE sector pay four different taxes. In addition to direct tax on gross income they are subjected to PRSI and to the payment of two levies. What remains is subject to spending tax such as VAT and excise duty. Services must be paid for.

I understand that prior to the successfully contested case brought by the five Wexford farmers regarding the PLV system, the situation in relation to the payment of rates was that 94 out of every 100 farmers paid no rates, that 3 per cent paid half what they were entitled to pay and that only 3 per cent paid the full amount.

Mr. H. Byrne

This is a scandalous indictment.

An Leas-Cheann Comhairle

Deputy Byrne will have the opportunity of making his own speech.

Mr. Prendergast

I got my figures from the Department of Agriculture and, again, should I be wrong, I should be glad to be corrected. Regarding the proposals in respect of CIE, workers in that body are very disturbed that the final details of the changes there have not been disclosed yet. However, it appears that the proposals are really the McKinsey Plan in form if not in name. There is to be no new substantial investment in the railways. Does this mean that the rail service is to be allowed die? There is a clear bias against public transport. The CIE rail sundries and road traffic freight are being put into an impossible position. They cannot compete against the unfair competition of the hackers who are breaking the law on all fronts. I have heard an account of a hacker in one place who, when obliged to present his lorries for a general check-up, takes off the bad wheels and puts on good ones but reverses the procedure as soon as the inspection is over. In addition, these people are not contributing anything by way of PRSI while CIE must uphold the law in all respects. I suggest that the Government enter into consultations with the CIE unions with an effort to bringing about a just and fair situation. In particular something should be done about the CIE pension scheme, an area in which you, a Leas-Cheann Comhairle, as a former employee of the company, will have an interest. It is a scandal that after 40 years' service, employees are given pensions of £16.75. This must be the worst pension scheme in the entire public service.

I wish to refer, too, to the estimated £30 million for Dublin Airport. What is happening here? We will object very strongly in the event of anything being done by the tourist interests on the eastern side of the country, notably some of the bigger hoteliers, out of jealousy of Shannon Airport and its related interests.

Mr. H. Byrne

Will the Deputy be voting against the plan?

Mr. Prendergast

Shannon Airport has just had the most outstandingly successful year since its foundation in 1946. The tourism pattern for Ireland is different from that of other European countries where tourists tend to go to such places as Paris or Vienna and to spend their holidays there, whereas in Ireland they go to the west of the country because of its being the most beautiful part of Europe. Even when TWA, with the co-operation of the Civil Aeronautics Board, in 1973 forced the hand of the then Irish Government and got flying rights into Dublin, 80 per cent of all American tourists landed at Shannon and spent their time here in the west of the country. To be fair to Deputy Lenihan, he fought hard against that move on the part of TWA. I am saying loud and clear to the big hoteliers, hands off Shannon or otherwise there will be a revolt on a level never witnessed before. No attempt must be made to interfere with the situation in regard to Shannon. We know who the people in the big hotel interests are.

Regarding the proposed national income-related pension scheme, there are tens of thousands of workers who are not covered by formal pension schemes. I recall the case of a worker in Limerick who died after more than 28 years' service but 16 months short of the 30 years' service. His wife got nothing by way of pension. I hope that all such workers will be covered under the proposed new scheme. The idea is excellent and I welcome it as a definite Labour Party imprint on the whole national plan.

In the area of industrial relations, let no Government be under any illusion about imposing a system on our workforce. The culture of this country would not stand up to that. It can be looked at in a benign situation where there is room for it.

There is a need for reforming the Employment Appeals Tribunal so that the impact of the legal profession in that regard would be only minimal with the impetus being returned to the social partners. The tribunal has been taken over by the legal profession. Either workers should be given access to free legal aid or the tribunal should be the cut-off point, except on a point of law, by way of reference to a higher court.

There is one other vast area in which industrial relations law needs to be improved. I refer to the area of statutory limitations in respect of industrial diseases. In this country there can be a situation where an employee, for example, someone in this building could contract a disease like asbestosis but could only claim from the date the disease was discovered, whereas the disease can be contracted seven years before it is discovered. I welcome the intention of the Minister for Labour to introduce the necessary reforms in this area.

An Ceann Comhairle

I was going to call on Deputy Hugh Byrne to move the adjournment.

Mr. H. Byrne

I welcome this opportunity to debate this much heralded national plan even though I must now move the adjournment.

Debate adjourned.