National Economic and Social Plan: Motion (Resumed).

The following motion was moved by the Tánaiste on Wednesday, 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 believes that the plan is basically a restatement of unsuccessful social and economic policies pursued by previous governments”.

—(Tomás Mac Giolla).

Mr. H. Byrne

As I said last night, I welcome this opportunity to debate the much heralded plan entitled Building on Reality. Like any plan parts of it look well on paper. However, taking into account the circumstances in which this plan was conceived and born, it must be said that the sole objective of the plan is to keep Fine Gael and Labour united in Government for the foreseeable future. This aim is very evident on every page, but very little thought was given to the economy.

We remember the days before the plan was published when the food subsidies and land tax controversies were raging. Every Deputy and every citizen was getting ready for an election. There were wide divisions between Labour and Fine Gael. The partners wedded two years ago in what was described as the safest wedding were at loggerheads. Two weeks ago a political divorce was in the air. When poverty comes in the door love goes out the window. When there is a danger of my seat going I am not too anxious to be in Coalition.

Labour wanted food subsidies re-introduced and threatened to vote against any further tampering with them. Labour Deputies and supporters wanted a land tax imposed on farmers. Fine Gael Deputies melted under the heat applied by the IFA on the land tax issue, agreed to oppose it and signed their names to that effect on IFA paper. Neither the Minister of State Deputy D'Arcy, Deputy Avril Doyle, nor Deputy Ivan Yates would vote for a land tax under any circumstances. In a joint statement on official IFA paper all three of them told the farmers of Wexford and of Ireland that they would risk their political future in the farmers' interest and vote against any land tax proposal.

Food subsidies will be reduced still further according to the plan, a further kick in the teeth for Labour Party ideology. From my contacts with those who were former Labour Party supporters I understand that was the last straw. Will the 25 Fine Gael Deputies who are already committed to opposing a land tax vote against it? Will the three Wexford Deputies honour the commitment they gave to County Wexford? They must be aware that their credibility is at stake. If they vote with the Government today for a land tax that will be the most blatant example of white featherism ever witnessed in the political history of Wexford.

Those are two simple examples of the atmosphere that existed before the plan was presented. A sudden calm hit the water the minute the plan was launched. The plan was grasped as if it were a gift from heaven. Members of the Coalition who the day before were threatening fire and brimstone were on their knees thanking the knight in shining armour who had saved them from electrical devastation. All that glitters is not gold and to be honest, as somebody said recently, the best part of the plan is the quality of the paper it is written on.

Agriculture is the biggest single industry in this nation employing half of the nation's workforce. As such one would have expected that the plan would have dealt proportionately with the subject. The opening remarks on agriculture at page 138 remind us that the Land Commission have been abolished. The plan reads:

The Government's decision to abolish the Land Commission has already been announced. The precise arrangements to give effect to that decision are under consideration and it is intended that implementing legislation will be placed before the Oireachtas by the end of the year.

This was announced as if it were a desirable move. It is opposed by every farm organisation and every rural organisation. The Irish Land Commission had its shortcomings, but there is still an enormous demand for such an agency to ensure that small farmers can have viable units. About 100,000 farmers have units of 40 acres or less and it is evident that they have not got viable holdings. Their only possibility of becoming viable is with the help of the Irish Land Commission. They cannot compete with the bigger farmer or the speculator who can get money to purchase land far more easily than the small farmer can. Therefore the big farmer can get bigger, the speculator will have a field day and the small farmer will be eliminated. It gives an opportunity to the big farmer to become a rancher, and to the doctor, or the solicitor, or the architect, or any other professional person to take up farming as a hobby.

The numbers leaving agriculture each year are frightening. Those people will find themselves on the dole queue, increasing the already unacceptable figure. Surely it must make sense to have more viable holdings. One farm family can live on 400 acres, but so could four farm families, or five, quite comfortably with massive benefit to the State. There would be three fewer on the dole and three times more production. It is a scandalous decision to abolish an agency which is beneficial to the nation.

There are no fresh ideas for agriculture in the plan. One would have expected some initiative from the Government. I must admit TB and brucellosis eradication get attention and that is desirable. The plan suggests that moves will be made to provide increased compensation; but the farmers will pay for it through extra levies, so there are no gifts there to agriculture from the Government.

We have reached the era of quotas for our controlled production. Sugar beet production has been limited since the founding of the industry, but this year particularly growers may not supply over 17 tonnes per acre even though the yield is 23 tonnes per acre. What happens to the extra six tonnes per acre which in normal circumstances would represent the profit? I have heard farmers say that they will at their own risk feed sugar beet to cattle even though the feed situation is already overloaded with a lessening in demands for feed because of the super-levy and the bumper grain harvest.

The most undesirable milk levy has caused untold damage to confidence in the farming industry. Farmers are confused, not knowing the exact position in relation to milk production. The super-levy should have been vetoed in the first instance as promised in this House by the Taoiseach and subsequently by the Minister for Agriculture. The repercussions of this levy will be for years to come. Those who caused the butter mountain should be penalised — the British, the Germans and the Dutch. All three are allowed to import the butter mountain without a whisper from our own Government yet they agree to penalisation of our farmers. Many times in this House and throughout the country, the Minister for Agriculture promised us that he was going to take seriously the import of cereal substitutes and particularly the imports of 80,000 tons of butter from New Zealand to Britain. It is time that the Government stood up to their counterparts. Obviously they have taken their inferiority complex with them. The mistake made in the estimation of our milk output for 1983 is the greatest political cock-up in modern times.

Mr. Wilson

Hear, hear.

Mr. H. Byrne

The cost to this country cannot be quantified at this stage but we are told that it will be £12 million for this year.

Mr. Wilson

Then they try to blame Bailieborough.

Mr. H. Byrne

Yes, this is the point. In the first instance it was Bailieborough, then the officials. I think the Minister is trying to stick with the officials at this stage even though he must accept that it is his problem. Because of his cock-up the Minister for Agriculture can no longer be trusted in Europe. How could one trust a man who presents inaccurate figures at the negotiating table? Oddly and coincidentally enough, on return from one of his negotiating trips the Minister had the gall to tell us that the Italians were notorious for presenting inaccurate figures. His action has damaged our credibility and any attempt that this country would make in the future at negotiating will be looked upon with suspicion. Deputy Deasy, Minister for Agriculture, must now ease the burden he has placed on the shoulders of this nation and he must consider the future prospects of our country. He must do the honourable thing and resign. If he has not the decency to do this the Taoiseach must call for his resignation.

I am most disappointed that no effort is indicated in the plan to meet the new situation of limited production. I have said that sugar beet and milk are limited already. It seems now that beef and cereals will be affected by the quota on milk but they too will be subject to quotas if allowed in the not too distant future, according to eminent agriculturists.

There are many problems in the cattle industry at farm level. Many farms lack an identifiable system. Farmer have not set performance targets for themselves for this enterprise on their farms. There is a lack of quality in winter feed. County Wexford has about 25 per cent in silage and I believe that in the rest of the country it is far less than that. Very tight margins for borrowings are necessary for the systems, and it is well known that cattle income cannot support heavy investments. What then are the alternative farm enterprises? Why was this aspect not explored in the plan, which spans three years?

Sheep have not succeeded in even getting a mention in the plan, yet it seems that sheep hold out the best hope for farmers. In 1983 the EC was 73 per cent self-sufficient in sheepmeat and at present rates of expansion it can be fully self-sufficient by 1990. This gives us a golden opportunity to build up our sheep flocks to ensure that by 1990, when a quota will be imposed, we will be in a strong negotiating position. Great Britain have set the example in this field, having over the past ten years increased their sheep flocks by 34 per cent and last year they increased their exports to France by 39 per cent, whereas our exports to France dropped by 9 per cent and there is a substantial fall off in sheep numbers in this country. Encouragement must be given to this industry particularly under the heading of the disadvantaged areas scheme. The introduction of the off-farm income when accessing sheep farmers' means has had disastrous effects on the sheep industry——

Mr. Wilson

Hear, hear.

Mr. H. Byrne

——when flock owners plainly got out of sheep. That is typical of the tactics of this Government.

Mr. Wilson

A few little lambs on the side of a mountain. It is a disgrace.

Mr. H. Byrne

It is desperate, but it is typical of the tactics of this Government, killing golden geese by the minute. Because of our ineptness at the negotiating table we have failed to attract the many aids that are there for the sheep industry. Believe it or not, Britain takes 94 per cent of all European aid. Sheep slaughtering is one area where much is promised and nothing delivered.

The devastation of sheep flocks by uncontrolled dogs is absolutely scandalous. People who own dogs should keep them under control. The carelessness of those who live in towns and who do not care where their dogs are deserves the full rigour of the law. The law is not half strong enough in this matter. This question must be taken seriously. It represents a tremendous loss to the nation; yet the law is there to some degree to protect but it is not enforced. There are many caring, loving dog owners but there are also those who do not give a damn where their dogs are. Those people should be taken to a scene where marauding dogs have killed sheep. That is the most unpleasant sight that I have had the displeasure to witness.

There is no reason why this country should import in excess of £400 million worth of vegetables that we ourselves can grow. There is no indication of the Government's intention to do anything about this problem. They are too preoccupied with staying together whatever the cost. Not alone can we become self-sufficient in vegetables, we could become exporters of vegetables. The setting up of the potato co-operative was a start, but such enterprises must be funded to begin with to show support, to generate confidence and to lead the way. Such projects could become self-financing. On the other hand, 225,000 people are unemployed and the plan contains very little to suggest that this number will drop. Indeed, the plan suggests that when the plan period ends the number of unemployed will be greater than it is today. Many of the unemployed are anxious to work and they have sizeable gardens. Particularly in rural areas, surely some encouragement should be given to these people to rectify the imbalance.

Land tax was vehemently opposed by Mr. Joe Rea of the IFA. It has been included in the plan to ensure that Labour stay in Government. The Labour Party will claim a victory; indeed, Deputy Prendergast indicated last night that the Labour Party had many victories including this one. The figure mentioned in the plan is £10 per acre or such figure as will yield double the amount that the present system of taxation yields. Therefore, there is no guarantee that it will be £10. It may be £15 or £20. As I said, Mr. Joe Rea opposed this vehemently. Now that it has been included in the plan I have not heard a squeak out of him. Will the land tax ever be introduced? What base will be used? What base will guarantee its constitutionality? I put that question to Dr. Tom Walsh, a former director of ACOT and a most eminent agricultural scientist, and he told me that it was possible to find a base but it would take two years to train personnel in soil analysis and at least five years to carry out a national survey. Dr. Walsh was thinking in terms of seven years, and yet the Government mentioned 1986 in the plan.

It is possible that with this confidence trick the Government will make everybody happy. The Labour Party supporters are happy because the proposal is contained in the plan and Fine Gael farmers are happy because they know it will never be implemented. The plan is riddled with contradictions. It would take me a long time to deal with all the contradictions in it, but the most obvious one was where the Minister for Health had an input. He told us that he was going to insist on preventative medicine, particularly in regard to abuses of alcohol. On the other hand the plan proposes to lengthen the pub opening hours and reduce the price of spirits. With regard to tourism I must stress how dependent Rosslare is on that industry. However, we have been told that moneys for coastal erosion work will not be paid out for the duration of the plan. I have mentioned it often enough here for the Government to be aware that Rosslare needs money for coastal erosion work. If that money is not made available for such work Rosslare will cease to exist as a tourist resort.

Minister for Labour (Mr. Quinn)

I should like to start my contribution by outlining the background against which this document was prepared. I shall proceed then to describe, in some detail, the thinking behind chapter 4 which is the direct responsibility of my Department and conclude by addressing myself to some of the comments of Deputy Byrne. Deputy Byrne, and the other Fianna Fáil Members present, will recall that since 1977 with the publication of the first formal document during the time when Deputy Wilson, who is in the Chamber, was a member of the Fianna Fáil administration, the House has seen a succession of documents, attempts at introducing some form of planning or economic management within our economy. I challenge Deputy Byrne, who was not a Member at that time, to go back over the documents produced in the period of that Fianna Fáil administration and look at the basis on which assumptions were made, the basis on which projections were made and the reality that followed from them. Having looked at that exercise based on the Fianna Fáil manifesto of 1977——

Mr. Wilson

An excellent document, I must say.

Mr. Quinn

——he should then consider the reality of the figures we have put into our document. I do not particularly like the reality of many of the figures, but not liking the reality and pretending that it does not exist is exactly the type of cul de sac which, under Fianna Fáil leadership, in forcing through that document which everybody recognises was a dreadful mistake——

Mr. Wilson

The Minister should speak for himself. What he is saying is not true.

An Ceann Comhairle

I must appeal for order. Deputy Byrne spoke for 20 minutes without one interruption.

I should like to ask Deputies on the other side of the House to look at the basis of the figures on which this policy proposal for a three year plan was conducted and give us concrete examples of where they do not believe the assumptions and figures are realistic. We should attempt to begin to agree on what is the basis from which the country can now begin to make an economic recovery. I suggest that two things are clear. The first is that there is a critical and real need to get control over our overall financial and fiscal policies in terms of our economic requirements from a tax point of view and from the point of view of the borrowings the country has accumulated over a number of years and, indeed, through a number of administrations. I am sure all Members recognise that. If we do not do that international monetary agencies of one type or another will impose control upon our economy. Every responsible economist, from the Left and the Right in idealogical terms, have argued that some re-establishment of control in this area is essential. I wonder if Fianna Fáil share that view.

The second reality is that in social terms the biggest problem socially facing us is the scourge of unemployment and the absolute priority of taking measures to ensure that unemployment ceases to rise, as has been our experience in recent years, and then is turned round. We must have viable, sustainable and wealth producing jobs created in our society in a way that they in turn can support and generate other work. That second reality is implicit in the document, and I invite Fianna Fáil Members to participate in a real debate on those issues.

In his contribution Deputy Byrne described the plan as some type of patched-up document for political purposes between the two parties. The document represents two different political points of view. It is clearly the product of a Coalition Government, but I must point out to the Deputy that the differences that exist between the Labour Party and Fine Gael are not differences of personality but differences of policy approach.

It behoves all Members to concentrate on what are policy differences rather than personality differences, because the conflict of political personalities will not do anything to resolve the problems that have confronted our economy in the last five or six years.

The problems are not unique to our economy. If one looks at any of the economies of other member states, such as Greece or Spain, which is due to become a member in the next year or so, or countries like Belgium and the Netherlands which have different economic histories, one will see that there are similarities in the nature of the problems that confront them. It is essential for political debate, and for democratic politicians with a responsible mandate, to base whatever political difference, dialogue and debate there should be here on a perception on what are facts and realities.

The document contains a number of specific proposals which have been costed. The are set out in some detail in a manner that is unique from previous documents. In the making of those decisions choices were clearly involved, and the costs attached to those decisions are accumulated in the final chapter of the document. I suggest that this is a far more honest and explicit approach to the difficult task of economic planning and development than that of any other Government. I invite the Opposition to respond on the basis that it is such an approach.

The Department of Labour will effectively be responsible for implementing chapter 4 of the document. The thinking behind it is as follows: all the economic projections for this and other European economies suggest that even if we were to have a dramatic relaunch of the European economy and a dramatic reduction in the level of unemployment within the EEC as a whole and even if we were to reduce unemployment by 50 per cent in the EEC over the next three years, there would still be 7,000,000 European citizens out of a job at the end of that period. I do not believe individual countries can attempt to solve the problem on their own, certainly not economies like ours which are totally open economies. Unemployment as a phenomenon has exploded in all the member states and everyone is aware of that. We must pursue vigorous, positive economic policies to create sustainable, economically viable jobs.

In the pursuit of such an objective we are not entitled to turn to the unemployed and particularly certain categories of them and say that until such time as we are 100 per cent successful in that pursuit there is nothing we can do for them. The social employment scheme is not a substitute for the creation of viable and economically based employment. It is a parallel action designed to harness the clear desire of the vast majority of those who are on unemployment assistance to obtain work. It is an attempt to ensure that such people maintain an active role in our society and are not forced into the ghetto of unemployment which has become a reality for so many people.

I have said before in the House that our society is very much centred around work and the work ethic, so much so that the formal fundamental preliminary social exchange we have with each other is to ask somebody what is their name, where do they live and what do they do. If a person cannot answer the third question they are in some respects cast into the position of nearly being a non-person.

This country is the twenty-fifth richest one in the world. It must be possible to find an answer to that last question. It might not be a perfect or complete answer but it would be in excess of the one which is currently the fate of 214,000 people, 84,000 of whom have been answering "nothing" to that last question for over 15 months and in some cases for longer.

This scheme is not a substitute for the formal and orthodox economic activity which the Government must pursue in the commercial State sector and the private sector. It is a form of parallel action and solidarity with those who are the long term unemployed. The details of the scheme are such that the principle of part-time work which could consist of a week on and a week off or a variation of whatever rota would be best suited for the work in question will apply. That flexibility will be in the regulations which will be available to the voluntary organisations and the public authorities who care to utilise it. The wages and contribution towards the cost of supervision materials will be paid for by the Exchequer. The projects will be submitted for consideration to the Department of Labour by the public sector and voluntary organisations. The important point I want to underline on the record of the House is that these projects must fulfil the following criteria: they must be non-profit orientated, respond to clearly identified community needs and they must not be in substitution for existing employment. These conditions will be vigorously applied by me so that existing employees will not lose their jobs or have their hours of work reduced because employers avail themselves of this scheme.

I have had extensive consultation with the local authorities and trade union movement on this point. There are fears within the trade union movement about the potential displacement effect this scheme, if badly implemented, could have on certain areas of employment. I underline the assurance which is explicit in paragraph 4.12 in this regard. It is my earnest hope that the take-up in the scheme will be fast, immediate and successful and that it will not be, to quote the phrase attributed to Deputy O'Malley, "schemes of make work" involving topping nettles in a graveyard. Nettles have a habit of growing again and the futility of that exercise is apparent to all. They will be schemes which will enhance the overall wealth of the community in whatever shape or form the voluntary organisations or public sector bodies propose.

We have, running through five counties, two of which Deputy O'Rourke represents, a facility which is now approximately 250 years old. It had a commercial life in economic terms of approximately 30 years before the railways displaced it. I refer to the Royal Canal. It has been closed for a long time but, if reopened and restored, it would provide a net addition to the tourism infrastructure of that part of Ireland with direct benefit for all the towns along the route and with a multiplier effect on the Shannon and Grand Canal in the southern part of Leinster. There is no reason why it should remain closed other than that the community does not have the resources or that the political decision is not made to reopen it. I offer this as an example which could be taken on board by five counties in question in conjunction with the Board of Works into whose legal ownership the canals will be transferred on foot of legislation to come before the House in the next few months.

If and when the Royal Canal is reopened — it is only one of many similar type examples — it will provide additional wealth in terms of resources for the community. It will provide opportunities for continuous economically based employment in this tourism area for many people. Deputy O'Rourke will recognise that if we utilise this scheme to achieve that objective over whatever length of time it may take, it will provide positive employment for those who participate in it and, at the end of the day, there will be an additional asset restored to the life of the economy. That is just one example of the way the scheme could be utilised. I am confident that my proposal will be taken up by the local authorities involved.

I should like to refer to some points made by Deputy Byrne particularly in relation to the growing of vegetables. In chapter 4 we deal with the enterprise allowance scheme. This scheme was designed to enable those who are unemployed and who wish to go into business on their own to do so. There is nothing to prevent the people Deputy Byrne referred to, who are living in rural areas and are unemployed, from converting their present position under the social welfare code into the enterprise allowance scheme and come forward with proposals, utilising the long gardens he referred to, to develop a market garden industry in consultation with the National Manpower Service, ACOT and the other State agencies. So the facilities are there as outlined in chapter 4 to assist precisely the kinds of ventures the Deputy was referring to. He referred also to a number of other matters but time prevents me from replying to them.

The two parties in Government with their two political traditions, their separate political ideologies based on policy rather than personality differences, have got together and produced a plan based on reality, on facts and figures, and have attempted honestly to bring forward a series of proposals that will enable all of our people to move forward in the next three years. As could be said of any document this one, too, could be better but we are talking of a document produced by 15 human beings and their assistants, people with all the limitations to which we are all subjected. I would not go so far as to describe the document in the way in which Deputy Flynn, as a backbencher on this side of the House, described the Fianna Fáil manifesto when he said it was the most important document to be published in Ireland since the publication of the Bible. I would go so far as to say that the assumptions on the part of the Government and on the part of those who assisted them are printed clearly. The decisions we have taken are there for people to study and to respond to. I call on Members of the House to recognise the constraints and the realities and to realise that the plan offers the best possible prospect the country has for moving out of the crisis which everybody knows exists but which can be, in the first place, ameliorated and, secondly, turned around if the overall proposals in the document, Building On Reality, are implemented with the support of all Members of this House.

Mrs. O'Rourke

I welcome the opportunity of contributing to this debate and I intend making education the main thrust of my contribution. However, while the Minister for Labour is still in the House I should like to take up a couple of points he made and which are of great relevance to me. One relates to the Royal Canal. I welcome the positive commitment from the Department of the Environment to funding two amenity schemes on the canal. These have been commenced and there is an input from Westmeath County Council of which I am a member, but I am taking this opportunity of making a case for further funding for the scheme. The council will be putting forward another scheme so as to bring about more improvements in this area. I will respond to the spirit of generosity indicated by the Minister and say that we welcome this scheme very much and hope it will fit into the overall framework of the social fabric of employment as mentioned by the Minister in the context of paragraph 4. I will convey to the county council the Minister's expression of goodwill for the scheme but we will be looking for more money in that respect.

Another matter which relates to the Department of the Environment but which has a bearing on education arises out of paragraph 4.10 of the document. This is in relation to employment schemes, whether of a social development nature, of long term employment or of the COMTEC principle or whatever. The paragraph reads:

A feature of the future arrangements will be the use by the manpower authorities, whenever possible, of existing facilities especially those of the educational system. The operational aspect of ensuring the full use of eduational resources are being actively considered by the manpower agencies and will shortly be approved by the Ministers for Labour and Education...

The point I wish to make is that in this context there will be a need for much increased guidance counselling within the second level system. I am not making this point in any sense of acrimony but having regard to reality. The document which was prepared by the Youth Employment Agency and which embodied the features of the social contract for the unemployed, stresses that every school leaver who had been unemployed for a certain length of time after leaving school would be entitled to employment of a certain kind. In that document also great stress was laid on the need for constant liaison between the Department of Labour and the manpower guidance counselling agencies within second level schools. Therefore, there is obviously a need for increased guidance counselling within second level schools. There is no such provision in the document in the chapter devoted to education. There is recognition that there should be increased guidance counselling in disadvantaged areas but there is such a need overall. If the imaginative proposals are to have success, there will have to be appropriate corresponding resources in the educational establishments in order to match the reaching out from one area of life, employment, to the other area, education. I thank the Minister for remaining to listen to me on those two points.

I come now to the main thrust of my contribution as spokesperson for my party. The Minister for Labour has urged us all to face up to reality. However, we are hindered by one very strong factor, that is that the whole plan has been presented by the national handlers of the Government as being a panacea for all ills. We are told the good parts while the bad parts are in the small print. The good parts are in the main document. The patching job will suffice for this week or next but the matter will be entirely different when there is a realisation of what is meant by cutbacks, by the various decreases in expenditure. I would be prepared to swallow the unpalatable and to accept the plan as a document for debate but that is not the way it is put forward. I wish particularly to explode the myth that there has not been or will not be cutbacks in the education sector. That myth was planted and is now being fostered and cultivated to a great extent. There is an enormous financial credibility gap between the Minister's rhetoric and the reality of the classroom.

I have a plethora of figures which have been carefully costed and since the previous Minister expressed the desire that we speak about figures when debating this plan, I shall do so. However, the figures I have here are not spelled out in the main document, the one with the grey cover. Perhaps grey is an appropriate colour for its cover. The plan envisages only a 1 per cent increase in educational expenditure in 1985. This is at a time when inflation will be of the order of 7 per cent to 8 per cent. The reality will be higher third level fees in excess of the rate of inflation, higher school transport charges, higher fees for trainee teachers, the retention of prefabricated classrooms, and complete lack of provision for an increase in any category of teacher in the year 1985. I am not making this up; this is contained in this booklet but one must delve deep to find it. It must be remembered that all of this is taking place at a time when the number of young people entering classrooms will be constantly rising.

It is said also that the planned increase in capital investment in all education sectors for 1983 to 1987 is just under 28 per cent whereas the expected inflation rate over the same period — if we accept the authors' estimates — will be approximately 35 per cent. Therefore, in real terms, capital investment in education, and I stress capital investment, will decrease by 7 per cent between the years 1983 and 1987. We are told in the booklet that the volume increase in capital investment in third-level education will be of the order of 44 per cent. If we are to accept the overall decline in capital investment in all sectors of education of 7 per cent, it follows that there will be a very real capital cutbacks at primary and secondary levels. We are already aware that capital expenditure on the modernisation of national schools, particularly the phasing out of late nineteenth century schools, is running 50 per cent behind the 1981 level.

Yet the Minister for Education told this House on 24 May last that 80,000 more places would be needed at second level by 1990. Is she now saying that none of those will be provided until 1987? Even if the proposed increase in the volume of capital investment in third-level education were to take place I believe it would be totally inadequate. We are told in chapter 5 that details of these capital projects can be found in chapter 7. But, when one turns to chapter 7 one sees the full list of the desired, proposed third-level building programme. If one reads on one is told that all of these desirable projects such as the colleges at Kevin Street, Blanchardstown and Tallaght are to be subject to further examination of the need for each project and the availability of finance. That is contained in paragraph 7.85 under the heading of education in chapter 7. The Government cannot have it both ways. They cannot ask us to look at it, cost it, talk about it while at the same time maintaining that it is a realistic document if they then continue to say: yes, those projects are within the 44 per cent total increase but they might not happen. Quite clearly the Minister has stated that they might not happen. If they do not take place that makes nonsense of the 44 per cent. I might quote directly from that paragraph, 7.85 under Education as follows:

Among the major projects which have been proposed are new accommodation for the Dublin Institute of Technology, the Engineering School for UCD, the TCD Clinical Sciences facilities in conjunction with the new Dental Hospital at St. James's, the second phase of the building programme for NIHE Dublin and phase three of the National Colleges of Art and Design. New Regional Technical Colleges in Tallaght, Dun Laoghaire and Blanchardstown, and the commencement of planning of new colleges in Thurles and Castlebar have also been proposed.

It is proposed that they will be built, but they will not be built. They have been costed but it is said that they will be considered at a later date, or that they might be withdrawn. That is not building on reality. It is very foolish talk. If we are to be expected to take the plan seriously it would have been better had the Government said: we wish we could build those but we will be unable to do so; perhaps we will build them one at a time, or we will make plans for their building perhaps one each year. But they should not put in writing that they will be built and then continue to say that that will be dependent on further finance, the manpower needs or needs of the area. Of course they will be so dependent, but why not say that in the first instance? Why say that as an addendum?

I received a copy of the speech of the Minister for Education to the House last evening, the penultimate sentence of which read:

It is this Government's firm intention, in the Taoiseach's words, to dust off the JCBs to help them do just that.

I find it difficult to express what I felt on reading those remarks — puerile, silly, trite remarks. If we are to be dependent on the capital investment, given by one hand and taken away by the other, in this booklet, then the JCBs will remain inoperative.

On 24 May last the Minister for Education told this House that the number of students entering third-level education was likely to increase from 47,000 in 1982/83 to 67,000 by the year 1990. She said that even if all the projects subject to further examinations were completed it would still fall far short of accommodating the extra 20,000 students. That is the capital programme proposed, with its tied-up JCBs and figures which do not constitute or represent figures on investigation on turning to a separate chapter of the plan.

I want now to talk about current spending in the classroom world of today. I want to make reference to two matters which have been brought to my attention, amongst others, but which it will be seen give the lie to the rhetoric I want to explode and which is doing real harm to the integrity of the educational system. At primary school level the Minister has often repeated her statement about priority funding, which I have welcomed on many occasions. But when one scrutinises the figures contained in this plan one sees that the Government's commitment does not stand up to such scrutiny.

I have had a letter sent to me by the principal of an average Dublin city national school which maintains that from 1 July 1983 to 30 June 1984 the difference between the actual grant, plus a handsome parish contribution leaves the real cost per pupil at £18.02. This is in a school of 652 pupils, which amounts to a shortfall of nearly £12,000 per annum, that is having taken into account the Government grant and the parish commitment. This means that the board of management of that school must raise £1,000 a month to run that school, and that in a community very hard-pressed, experiencing great difficulty with increased service and transport charges, food subsidies having been removed, increased clothing costs and so on. The principal of that school ends with this plea:

Please give priority to primary school education; it deserves it. Lobby the Minister for Education and any others who may be in a position to remedy this neglect.

That letter was accompanied by a full statement of account showing the amount of grant per pupil, the expenditure per pupil, a very straightforward balance sheet. It illustrates that they are carrying a deficit for the year 1982/83, another hang-up from a previous Coalition budget. It shows a modest expenditure on heat and lighting, insurance, cleaning, teaching aids, maintenance, miscellaneous items and miscellaneous damages. Yet that board of management find themselves £12,000 in debt annually. I am not blaming the Minister for that, but why is she pretending that all is well and rosy in the world of education? Why not come clean and say: yes, there are enormous difficulties, primary schools are under-financed. I just cannot take the spreading of this smokescreen of tranquillity that all is well when it is not.

With regard to second-level education I have had another letter sent to me by the principal of a prominent boys' school in the midlands. I do not want to give the names of either of those two principals, but both letters are available to any Deputy who may wish to scrutinise them. I would fear retribution, because I have noticed that the Minister is terribly touchy when anybody writes to the Press or the Department when there will be then perhaps ten letters back to the newspapers explaining through apologias to beat the band. I do not want any school in respect of which I put forward a case to be harmed. This latest letter to which I am referring is one which was sent to the parents of all the pupils attending that school in the midlands, which school lost a teacher last year through natural wastage. They have now been informed by the Department of Education — despite pleadings, visits, journeys backwards and forwards — that any new teacher must be ex-quota, that the Department will not pay the salary. The school cannot pay the salary, which means that subject choice must be curtailed immediately. The principal contends that this is a direct result of and here I quote:

...the recent cutbacks in education by the Government in the person of Mrs. Gemma Hussey, the Minister for Education.

This is a practical example of what is at present happening in many second-level schools throughout the country. Teachers may leave, through marriage, moving residence, leaving the country or perhaps, unfortunately, through death. For some reason or other these teachers are not being replaced. There was meant to be a quota committee established to investigate cases like these which I know has broken down. I heard Brother Declan Duffy, of fame, sent a telegram last Christmas along with the ASTI representative on that committee saying that they would not participate in that committee any longer, that it was a sham. I contend that pretty words and deft publicity handling can create these types of educational mirages. But it is my job to illustrate that they are untrue, which will be clearly seen when related to the practical running of any classrooms. I have costed my earlier figures on capital and current expenditure and I have tangible proof to show that what I am saying about the underfunding of first and second level is a harsh reality.

Miss M. Barry

Where did the Deputy get the figures?

Mrs. O'Rourke

I did not interrupt anybody in the House today and I do not expect Deputy Barry to interrupt me, especially as she is a teacher. I welcome the commitment in the plan to raise third level funding from 1984-85. However the maintenance grant and the income eligibility levels have not risen since 1981 and the £1,000 maintenance cost of third level operating since then should be raised to £1,800 if real income levels are taken into account. Any financial improvements promised at third level would need to be enormous because of the Government's clear neglect of third level needs over the past two years.

I wish to refer to the European Social Fund financing to second and third level colleges. I welcome it, any expansion in funding to education at any level should be welcomed, but it has not been accompanied by funding for administrative purposes of these schemes. Hence we have the current difficulties in the RTCs around the country, including Sligo, Athlone and Tralee. The number of students in the Regional College, Athlone, has risen from 150 to 850. That is a welcome participation in the scheme and has given the kiss of life to the regional colleges in the area. However, the scheme has ground to a halt because the administrative officers are meant to cope with the disbursing of funds to 850 pupils, and with the documentation that involves, in the same way as they did earlier for 150 pupils. They cannot possibly do so and I urge the Minister to sort out this mess. There are pupils in college areas who have commitments to landladies and commitments to study because the Government told them that they were getting a grant. Because of the embargo on the public service those grants are not now being paid. I am not saying this in any acrimonious manner, but it must be dealt with urgently. A plan must be clear, it must be costed and realistic, but this plan does not measure up to that criteria.

Mr. Cluskey

It is quite obvious that the plan has been received with very mixed feelings. There are optimists and pessimists, but there are also realists. I do not share the enthusiasm with which this plan has been welcomed by some of my colleagues. I have very grave reservations about the plan and what it will achieve. I was amused to hear Fianna Fáil Deputies levelling the charge that the plan was cobbled together for political purposes to keep the Coalition in office as if an attempt to keep a Government going was a serious crime. It is also difficult to accept that charge coming from the Fianna Fáil benches when we have seen them in the past making all sorts of deals with The Workers' Party, with Deputy Gregory and with anyone else who was prepared to enter into a deal.

During the weeks immediately preceding publication of the plan there was considerable speculation about a general election. I do not think anyone in the House would have welcomed an election; the electorate would not have welcomed it either because we had three over a period of 18 months. That type of instability, particularly set against the background of Northern Ireland, is extremely dangerous. Indeed, the Members of Fianna Fáil were pleased that this plan had taken the pressures off the need for a general election. One half of Fianna Fáil were afraid that in a general election Deputy Haughey would win and the other half were afraid he would lose. Therefore, I find it very difficult to accept the sort of nonsense that has emanated from those benches.

I said I had grave reservations about the plan which are based on a number of matters. The plan is based on two assumptions, one external and one internal. The external one is that the dollar will behave more favourably against the Irish pound and that there will be an upsurge in the American economy. I am not an economist but I read articles on the subject and I try to keep myself informed of what is happening. To many people who are better qualified to know it appears to be a very optimistic assumption, because while we have our difficulties here regarding the budget deficit, the American economy undoubtedly have difficulties also in regard to budget deficits. As we know, the presidential election in America is coming to an end. I read yesterday that the national economy in America is slowing down. Most people assume that the present incumbent will be re-elected. I believe that most people regard him as being favourably disposed towards big business and that big businesses are favourably disposed towards him. I do not think there is any reason to suppose that there was a deliberate pull back by big business in America to try to slow down the growth in the economy to damage the President in the campaign. I believe as soon as the campaign is over that one of the first things the incoming President will do is to face up to the reality of the American budget deficit. That will not fall into line with the assumption in the plan. That is an external matter over which this or any European Government would have very little influence. If it happens we will not be the only country to suffer.

However, there is also an assumption in the plan which is purely internal. The only way that I see the Government seeking to finance whatever money is required is by a rigid clampdown on the public service. There seems to be an assumption that this can be easily done. A very successful orchestrated campaign has been carried out, not least by members of the Government, against the public service and there is a general view abroad that public servants are fellows in pinstriped suits, carrying rolled umbrellas, sauntering into the office for coffee at 10.30 every morning and earning £30,000 or £35,000 per year. It is unfortunate that this view has been fostered in the minds of the people because it is totally untrue. The public service is comprised of a very large number of people who by any standards are not well paid and whose conditions of employment leave much to be desired. Under the assumptions of this plan there will have to be a very rigid approach towards the whole public service in order to make the plan work.

I spoke a little while ago about the atmosphere around the House, in the country as a whole and in the media immediately preceding the publication of the plan. It was one of speculation about a general election, crisis in the Coalition, major splits — the usual stuff the media engage in to describe political realities at times. That eased very considerably on the publication of the plan; but I wonder if there is not in between the pages of this plan, particularly in regard to the last assumption I described, a delayed action bomb as far as the Coalition are concerned.

I will pose one scenario and I should be glad if the Government when replying would dispel any fears I and others might have regarding this possible scenario. A claim by a section of the public service may go to arbitration. As we know, the arbitrator was re-appointed only after a delay of two months and this gave rise to speculation that perhaps the Government were considering abandoning the scheme or setting it aside. There was some speculation in trade union circles during the long delay. The independent arbitrator operates under a scheme which has been functioning successfully since 1924, with some updating. Let us suppose that a claim goes to the arbitrator and he makes an award which the Government decide is outside their interpretation of what should be paid to any section of the public service and which would in their opinion breach the assumptions on which the plan exists. What happens at that point? I understand that the only way an award by an arbitrator can be set aside is by a resolution of Dáil Éireann. Could we possibly be facing some time in the new year a situation where a claim is served, the arbitrator views it independently and objectively, makes an award which the Government will not honour and a resolution is placed before this House which all Members of the Government parties at least would be expected to support in order to dismantle the whole arbitration machinery for the public service which has been operating successfully for so many years? That would cause grave difficulties for a Coalition Government with Labour Party participation. During the reply to the debate or earlier perhaps some member of the Government would ease my mind on that point and in so doing ease the minds of tens of thousands of people employed in the public service.

On the question of employment, it is regrettable, to say the least, that the public service sector and the potential for employment creation by that sector were not utilised by this Government plan. I am not speaking on ideological grounds but on the basis of our experience over the years. We can rely on the public sector to provide employment but the private sector, irrespective of the assistance they get, have not provided and will not provide employment. Following the defeat of the Coalition Government in 1977 Jack Lynch was returned as Taoiseach with a majority of 20. The first budget he brought in gave massive grant support to the private sector and he said to them "Now go out and create jobs". Having put the money in their back pockets, the leading spokesmen for the private sector said it was not their business to create jobs but rather to create profit. That is a matter of public record. The ladies and gentlemen of the press reported it in their newspapers. It was said officially on behalf of the private sector. Is there any reason to believe that they have changed their position? None.

The question of farmer taxation has become a rather confusing area because I am getting different figures. Paragraph 6.17 of the plan states:

The new arrangements will be designed to increase the yield from farm taxation in 1986 to about twice the level produced by the present system.

It is estimated that farmers will pay approximately £32 million this year in income tax. If the tax is going to be twice that, that would amount to £64 million, based on the current year. Professor Brendan Walsh, who has never been a wild man as far as economics are concerned, has stated that the farmers would not pay any increase under this scheme, but possibly less. There might be some confusion which it is essential to clear up. The Taoiseach mentioned a double figure and £60 million to £65 million. Others have mentioned the same figure. If the estimate is right—and it need not necessarily be—farmers will pay more than £32 million. We do not know yet. In the natural progression of tax, it is reasonable to assume that they would be paying £60 million to £65 million in the year 1985-87. I read again the statement in the explanatory document:

...and to yield double the amount paid by farmers under the present income tax system.

I would like the matter clarified, so would the farmers and certainly the PAYE workers. Does that mean that farmers in the year 1986-87 will be paying approximately £130 million between land tax and income tax? Or does it mean that they will be paying double what they are paying now and that it all remains static as far as their contribution is concerned between now and the introduction of the land tax in 1986? The answers to these questions could influence the approach of many people to the plan, and I sincerely hope that the Government will avail of the opportunity this evening to answer these questions.

As I have said, I have grave reservations with regard to the plan. I do not believe that it should be necessary for any of us to wait three years to know whether our fears are justified. Some of the fears which I have mentioned, particularly regarding public service pay and its possible repercussions, will have to be countered within the middle of next year. Some of the other aspects of the plan which have not been upfronted up to now will become clear. I shall wait and see how the plan develops, and I am sure many of my colleagues will do the same.

Dr. Woods

I am opposed to this plan. It is a continuation of the Coalition's approach to previous economic and budgetary issues. It is vague, it is based on unquantified and sometimes unquantifiable assumptions of future trends. It generally puts forward as solid, attainable targets, figures or scenarios which are subject to international pressures, both economic and political, which are totally outside the capacity of the Government to influence. When you take any individual part of the plan, Government members are prepared to admit that that is true. However, these assumptions are fundamental to the plan as put forward. If these targets are not attained and the strictures which are otherwise in the plan are maintained, the plan will fall even more heavily on the middle income and the poorer sections of the community and will create even greater unemployment. That is why these elements which have been debated over the last few days here are so important.

The plan is based on shaky foundations. These are the volatile dollar and sterling exchange rates. It is subject to the dry rot of expected public service union resistance to an income freeze. I do not think anybody believes the Government will be able to implement the income freeze which it has in mind for the public service. However, if those figures drift then, of course, that affects the rest of the plan.

This Building on Reality is subject to the corrosion of increasing unemployment and the ineffectiveness of the measures being proposed to counter that. It is subject to the rising damp of callous, cynical and indiscriminate public spending cuts in essential and needy service sectors. These are beginning to become very clear to all those involved, and over the next few months they will become still clearer. It is also subject to the shifting sands of uncertainty, the investment disincentive, the entrepreneurial suffocation and the leaky cauldron of much needed capital fleeing the State, while Fine Gael contribute to this uncertainty by making damaging but relatively meaningless concessions in an effort to paper over the cracks in the Coalition and appease the highly vocal left of the Labour Party.

This is not a national plan. It is not even a plan for a national plan. The Coalition clearly have a target or objective and they have set this out in detail. I think that this is all they have — a target towards which they hope to meander by some miracle, and through the subjugation of dreams, aspirations and lives of the plain people of Ireland. There are within the framework of this so-called plan many unrealistic components. But for me the principal problem is the totally unacceptable unemployment targets in this plan. It is really only a plan to hoodwink the Labour Party into docile acquiescence. It is a Coalition compromise designed to avoid an early election. On the basis of its unemployment targets, from the outset it is unacceptable to me.

Only those who are over 40 years of age have experienced the growth, the self-reliance, the confidence, the hopes and the achievements that were associated with a sustained period of growth under Fianna Fáil. It is a sobering thought that only those over 40 years of age have seen such a sustained period of growth. The sixties was the decade of economic and social planning under Fianna Fáil. It was the era of Seán Lemass. Fianna Fáil gave the leadership, took the calculated risks, invested in the people and in the country and brought Ireland to the level of a modern European State. It was good for the businessman and the entrepreneur. It was good for the poor. It was good for those seeking employment and it brought about the end of massive emigration. Few commentators at that time had a good word to say for Seán Lemass. It was only in retrospect that the achievements of that era were recognised. It was a period of hope and national self-confidence which resulted in new initiatives for economic development. Our industries, although protected, began to flourish. New exports were created and agriculture developed more than it had done in the previous 50 years. We began to look outwards towards the European Community for new opportunities for development.

Since 1973 the country has been subjected to three Fine Gael led Coalition Governments. Each of these has been characterised by compromise and uncertainty, by a lack of confidence and an over-emphasis on stultifying "reality". As a direct result they have been accompanied by falling investment and rising unemployment. Few seem to realise that for six-and-a-half of the last 11 years we have been governed by Fine Gael led Coalitions. They have sapped the energy of our economy, humiliated and depressed the forces of enterprise, destroyed the vision of a future for our youth and shattered the confidence of the ordinary working people.

The Coalition's new plan, characteristically entitled Building on Reality once again follows the mindless policies of puritanical rectitude pursued by the financial controllers of the present Coalition in imitation of their economic idols across the water. This is not the stuff of James Connolly or Jim Larkin. It is not the stuff of a Seán Lemass, a Jack Lynch, or a Charlie Haughey. This plan embodies the right wing conservative reality that is today's Coalition of Garret FitzGerald and Dick Spring. It is a forthright recipe for emigration, unemployment, poverty and reduced living standards. It is a clear shift to the right by the Government. Let those who support this catastrophic Coalition be clear that this plan would subject the country to three further years of Coalition misery and uncertainty.

In their document Building on Reality the Government ask the people to face what they consider to be the “realities”. The Coalition programme for the next three years involves:— higher unemployment; a lower standard of living for everyone and especially for widows, old age pensioners and the unemployed; a continuation of the Coalition's penal taxes both direct and indirect; a whole series of new impositions on families such as taxing children's allowances, the removal of remaining food subsidies, and taxing social welfare benefits; and major cut backs in health and social welfare, and the denial of third level education to the average middle income family through considerably increased fees and other costs.

How can any concerned Member of the House vote in favour of a so-called plan which so blatantly accepts the status quo of high unemployment, high taxation and falling living standards? These are the three principal areas to be tackled by any plan that is put before the House. The plan should be judged by how it sets out to deal with these three major problems. Can we offer hope to the unemployed and the job seeker? Can we raise the economy from the doldrums? How do we go about this task? Could we not have been offered a framework and a programme to face and overcome our difficulties and set new targets?

This is where the Coalition's plan fails. It aims to go nowhere. Like a car in neutral gear it can only go downhill. If everything is smooth and there are no cross winds perhaps the car can roll along for a while, but that is not what we need in these economic times. We have to fight to go forward, and sometimes we have to fight to stand still. This document is not fighting to go forward.

There is no point in just sitting there and waiting for things to improve. You have got to go out and make them happen. This Government are suffering from a severe case of inertia. This inertia is quite obviously due to this desire to hold on to Government at all costs, to cover over the cracks and keep the Coalition partners together. But look at the cost to Ireland's manhood and the development of our potential.

This plan proposes the most right wing and defeatist policies ever put forward by any Government in the history of the State. Our whole reason for being an independent State was to be able to provide for our children as Britain never did for us. Our criticism of the administration in Northern Ireland was that emigration and the dole queue were used to suppress the Nationalist population. This unimaginative plan will have a similar effect here. It even spells it out in case we miss the message — more unemployment, rising emigration and lower standards of living. If we pass this plan we will have massive unemployment and depression on both sides of the Border. We utterly reject these timid and defeatist proposals. We believe that the electorate would also reject them if given an opportunity to do so.

There is an alternative to the Coalition's approach. We could produce a plan based on courage and vision and tempered with reality. We could examine our resources, build on our strengths and aim to achieve more of our potential. The greatest problem with the Coalition is that because of their siege mentality they are failing to grasp the enormity of their failure. Recovery can only come from rapid investment and the employment of people in the utilisation of our resources. There are more than sufficient national resources in Ireland to provide a programme of sustained growth for the 5,000,000 people who inhabit the island, but we need a capital programme of productive investment to create worthwhile employment which will use the resources and give a reasonable return on the capital invested.

There is no shortage of work to be done and there is sufficient unused capital available to stimulate a recovery. Banks are ringing people and asking them to invest. They cannot afford to invest because the Government will not stand behind them and will give them no encouragement to invest.

Many of the unemployed are from the construction industry — tradesmen, craftsmen, architects, engineers, technicians, salesmen, furniture manufacturers and many others. There is no doubt in the mind of anyone who travels through Dublin city and its environs, or through our other cities, that there is much building and construction work to be done. Furthermore, there is money in the banks and other lending institutions, which is not being borrowed and cannot be borrowed for this purpose because the Coalition Government's policies have undermined the building industry and prevented it from being used as a vehicle for investment.

The resources are available but are not being utilised. The cost of these mistakes is evident at the labour exchanges and in the suffering experienced in the homes of decent people. It was Fianna Fáil's roads and building programme in 1980 which saved the construction industry from being entirely wiped out. There are still enough viable projects which could be started in Dublin city and county to provide full time employment for most of the workers in the construction industry. But it needs the will of the Government to support such development, and that will is not there.

It is well known that every £1 spent in the construction industry has a seven fold multiplier effect in the economy with consequent job creation. What stimulus has been given to the public and private sectors of this industry? There is little here to encourage this sector. We have seen the emigration of the major companies, Cement Roadstone, Smurfits, the Rohan Group and McInerneys. These are native Irish industries who have transferred their interests in growth overseas because they find the climate more hospitable, and their labours more rewarding. They have voted with their feet, with their assets and abilities against this Coalition Government. These are investment led companies who could not hope to expand using only their cash flow, and they found the tax regime here too onerous for investment. It is all about resource development and we have the resources.

The Government's plan is to hold back the economic investment that is much needed, to reduce foreign borrowing and when it is paid off to gradually allow the economy to develop. Note the repeated stressing of the prospect of jobs in the nineties by the Ministers, Deputy Boland and Deputy Bruton. It is a bit like a housewife deciding not to feed the children until the house mortgage is cleared. I want to point out to those two Ministers and their fellow Cabinet members that this is only 1984 and we are not prepared to wait until the nineties for jobs for our young people. We provided them with an education.

We do not accept emigration and the increasing brain drain as a solution for the eighties. They cannot wait around until the 1990s for employment. Economic commentators and Coalition Ministers say little that is good about 1979, but it was the first year since the Famine when emigration was reversed. This Coalition plan proposes a return to massive emigration during the remainder of this decade. That is not an acceptable solution to us. We must look beyond these sad realities to find new horizons. That is the challenge of our age.

There is no time in this debate to deal in detail with all the proposals and illusions in this document. One proposal to which I must refer is the plan to tax children's allowances. Deputy Desmond, Minister for Social Welfare, said in his contribution yesterday that he will introduce the new child benefit system on a neutral cost basis. There will be no extra cost to the State. He will just take the money required from the middle income group by removing entirely the £100 tax allowance per child and by taxing the children's allowance. At the same time the plan will exclude over 80 per cent of farming families from income tax. When you put the pieces of the plan together you will see what the impact will be. As a result the middle income families will not only see their children's allowance taxed but the increased child benefit will not compensate for this loss, and cannot compensate under the Minister's proposals, and they will be much worse off. This is so because in this country there are too few rich people, and when the Minister talks about taking from the rich he means clawing back children's allowances from middle income families excluding farming families. I do not know if Members realise what he is talking about. The Minister is out of touch with reality and so is his plan in this respect.

There is nothing but disappointment in this plan for justice. The Minister has accepted a reduction of 600 in the approved Garda strength of 12,000 and a limitation on Garda overtime. There are no plans or resources to tackle drugs or to provide a budget for community policing. The capital programme to provide for jails and detention centres remains severely cut back for the next three years. The Minister for Justice has failed to get support at the Cabinet for the obvious emergency in crime, lawlessness and vandalism. This is the reality. He did not even get an agreed priority for resources to tackle this urgent problem area.

This plan must be rejected. For the unemployed it offers no hope until the nineties, and we have plenty of emphasis on that from our Ministers. They are putting it on even now. I thought they might wait until next week or the week after until they get all the Deputies to come in here to vote for the plan. Then when they have voted for it they will say to them: "That is what you voted for. Is it not written down in the plan? How can you vote against that when it comes to a vote in the House on different issues? How can you vote against food subsidy cutbacks when the cutback on food subsidies is here in the plan? You voted for the plan". When you say that there will be no employment for young people until the nineties, what about the panic that sets in at that stage? For the unemployed this plan offers no hope until the nineties. For our bright and educated young people it proposes emigration. That is what is between the lines in this plan. For the poor it proposes even greater poverty, and that is clear in this plan. For middle income families it proposes reduced living standards. For investors it offers no incentives to invest.

This plan does not deserve discussion in this House. It were better that this plan were never born, because there must be a better way. This plan should have been aborted before it came to the House because of its proposal to allow unemployment to rise and to leave the young people of Ireland without hope and without any prospect for the future.

Miss M. Barry

I welcome the plan before the House. Deputy O'Rourke in her contribution suggested that we are presenting and selling this plan as a panacea for all our ills. That is not the reality. We on the Government benches realise that this plan has its good points and its hard points. It is based on reality, the reality of a Fianna Fáil administration who created those ills which we must try to cure, but it is hard to cure ills when Deputy O'Rourke has to agree that this is an imaginative plan and Deputy Woods a few minutes later suggests clearly and unequivocally that this is an unimaginative plan. He goes on further to say that it does not deserve discussion. I began to wonder at that point why he was discussing it himself. There is not much credibility in that. However, in my contribution I would like to deal with the reality we are facing, and I agree that this plan is very well founded on reality.

Before the end of this decade it will be apparent that the period 1981-84 was a crucial time in the reassessment and reformulation of Irish industrial policy. By then we will see clearly how as an emerging industrial nation we had reached the end of the first stage of development, and how it had become urgent that we should seek new directions, new policies and a new dynamic which should set us on the path for economic prosperity into the nineties and beyond.

In retrospect now we can see how industrial and taxation policy formulated in the fifties had such a profound effect on the decades that followed. A small agricultural nation without any known natural resources except its land, which was and continues to be under-developed, opened its doors to international industry by providing generous grant aid and generous taxation incentives. There is no question but that it was the right policy for a small nation which did not have the resources or the skilled personnel to undertake on its own the task of industrialisation which would improve the living standards of its people.

We should not underestimate the achievements of what might loosely be called our first phase of industrial development. Over the past 20 years gross national product per capita of population has trebled. During the seventies we had an increase in population for the first time this century. Also in the seventies Ireland opened its trade to the industrial nations of western Europe while at the same time increasing manufacturing employment.

It has not been a total success story, however, and by the late seventies it was apparent that as the world economy headed into recession for the second time we would have to look again at our strategy for industrial and social development. In spite of the gains there were serious causes for concern. The income per capita gap between Ireland and the industrial nations of the West had seriously widened. The economy had become increasingly dependent on foreign-owned corporations for industrial jobs. The prospect of prolonged world recession left Ireland in a vulnerable position. Ireland's net trade balance had deteriorated rather than improved. While acting as a successful factory floor for foreign-owned industry we had failed to supply our own industrial requirements and we had not made use of the opportunities for Irish suppliers created by foreign-owned manufacturing companies. The cost of State aid to industry had risen rapidly to the point where a most urgent assessment of cost benefit analysis was needed.

The momentum for change began with the publication of the Telesis report sponsored by the National Economic and Social Council. While confirming the value of previous achievements, it had harsh things to say about Irish indigenous industry, the value of certain forms of incentives in the overall strategy for Industrial development and in some respects, the role played by some of our State agencies. The real value of the report lies in the fact that it stimulated renewed debate on industrial strategy. Its publication coincided with the coming to office of this Government — a Government who have consistently shown their enthusiasm and determination to bring forward new policies suitable for the times in which we live and the will to follow through towards full implementation of those policies.

In 1984 alone we have seen the publication of the report of the national planning board, the Government's White Paper on Industrial Policy and now the national plan. There is no question but that the course ahead has been radically revised and it is a tribute to the Government that such a significant change of direction could be comprehensively expressed and planned in such a short time. It is not change for its own sake; nor is the national plan simply a response to the immediate problems of recession and unemployment. It is a considered and reasoned response to the achievements and failures of the past 30 years; It is an endorsement of the best advice obtainable, but more than anything it is a recognition of the combined effects of the technological revolution and the demographic structure of our population.

In this sense the national plan is far more than a three-year programme. It outlines the social and economic philosophies which will chart the course of this country's economic and social development for a long time to come.

There are two over-riding factors which dominate this new thinking and philosophy. First our capacity and self-confidence has grown immeasurably in the past 30 years. We must now build on the reality of that self-confidence. Second the national plan recognised that the primary motivating forces from now on must derive from our own people, our own resources, our own creativity and determination to succeed. There is a clear perception of the need to translate this new national self-confidence into motivation at individual level.

The common element is a new emphasis on our ability to achieve things for ourselves whether at national, regional, community and individual level. While never refusing or hindering external investment which will help us to achieve our national economic aims, we have to displace the old notion that all we can do is provide a convenient and cheap factory floor for the foreign owned industry that will provide a modest pay roll and little else.

A new outlook and new ideas are not enough, however to bring about immediate change. We must look at the realities we face. We are not selling the plan as a panacea for all our ills. We recognise our ills. In 1984 we simply do not have the resources to finance the kind of changes which we know are necessary. Fully one-third of our income taxes are used to service our national debt. The appalling neglect and mismanagement of previous administrations are now being felt throughout the country. Falling employment, cutbacks in services, declines in real incomes, unacceptable levels of taxation are the stark realities of 1984, and that is why the Government deserve the support of every Member of this House in rectifying the financial affairs of the nation; a necessary precondition to freeing the resources of our people to generate adequate standards of living in the next and future generations.

Far from being despondent at our present situation, the national plan recognises the medium and long term potential for unprecedented development of this country's resources.

Our priority now is to create a vigorous industrial sector which is controlled, managed and developed by our own people. A statement of intention, however, is not enough. The reality on which we must build is an economy where Irish owned industry has not in the past 20 years created the same level of sustainable employment as foreign owned industries.

Our industrial policy recognises the weaknesses of such an approach and is guided by a realistic approach to the situation. We must face up to the problem of restructuring our traditional industrial base. Old obsolete industries must be gradually phased out so as to make way for new industries, new technology and new methods of production. We must develop our natural resources with a determination and single-mindness which has not previously been evident. We must make greater efforts toward import substitution.

As a small nation with an open economy we must increase our foreign currency earnings in a way that will enable us to retain the benefits of foreign companies. Our present apparently high level of exports disguises the continual outlfow of profits and highlights the inadequacy of reliance on foreign industry.

Our overall goal is not, however, simply the provision of any jobs, but rather the creation of sustainable and high earning jobs, with an emphasis on the quality of employment in terms of overall contribution to wealth creation and a concentration on achieving and maintaining a competitive advantage in the goods and services we produce.

The reality is that the Government cannot do people's business for them. The State can, however, do a great deal to enable companies and individuals to better manage their affairs. The State can create the infrastructural change for industrial development, and the increased provisions in the plan for road building and the development of Dublin Airport are to be welcomed. The Government, and the State, can exercise control over the public sector and public services to ensure that the costs of public utilities are not a disincentive to industry.

The Government's resolve in this crucial area is now acknowledged by all sectors and the plan reaffirms this principle. The State can create the fiscal conditions for enterprise to flourish and, again, the plan recognises the advantages of reducing taxation and sets out to do so wherever possible in spite of severe financial constraints. The State can provide real assistance through its agencies, in product and market evaluation and, again, the plan recognises the compelling advantages of a centralised and concerted effort to sell our produce.

The State can, through tax based and other direct financial measures, create the conditions whereby creativity and product development are encouraged. The plan builds on existing realities which favour manufacturing enterprise.

The Government can by selective taxation and financial measures ensure that finance will be available to young entrepreneurs with sound business ideas. Such people exist here. We can build on that reality by fostering and encouraging their creative talents. The financial incentives in the 1984 Finance Act, and further measures to be introduced including the National Development Corporation, will go a long way towards achieving these objectives.

In agriculture, the realities upon which this Government are building point to difficult decisions in the years ahead. The dairying sector, regarded as the flagship of Irish agriculture, is in reality uncompetitive. It suffers from several problems. The general problem in Irish agriculture is low land mobility. Only 3 per cent of agricultural land changes hands each year, and most of that by inheritance. We have failed to establish consistency of production or to establish specialist premium brand products on world markets. We are the lowest spenders in the EC on animal foodstuffs and housing, yet our unit costs of production are higher than those of our trading partners and our profits, consequently, are lower. Production is seasonal and incapable of taking advantage of our advanced processing facilities.

The beef industry presents even greater difficulties. It is cyclical and seasonal and incomes have not been cushioned to the same extent as in the dairy industry by intervention. In the dairying sector the Dutch and the Danes produce three times more per labour unit than we do. Our milk yields and fat content are the lowest in Europe and the number of cows per labour unit is almost half that of Denmark, the Netherlands and UK.

These are the realities. Almost 45 per cent of our net exports are based on agricultural produce and profitability in this sector is essential to the overall economic health of the nation.

Nowhere is the Government's commitment to self-help more apparent than in the area of housing. The introduction of non-repayable grants of £5,000 for local authority tenants, the proposals for joint venture housing, the retention of existing grants and mortgage subsidies, the extension of the incentives for the provision of rented accommodation, the Government's proposals in relation to bridging finance and conveyancing costs, are all evidence of the Government's commitment not just to construction generally but to motivating people to build their own financial security.

The national plan opens up ways in which people can become involved directly in areas of economic activity and productive enterprise, whether it be through home ownership, greater industrial democracy, the expansion of the scheme encouraging people to set up their own business, or the increased taxation incentives for people to invest in Irish industry.

The plan recognises the reality of our growing young population but it recognises also that with the correct structural changes in education, training, taxation and financial measures, this young population can create the wealth which will transform this country into a modern industrial nation. The plan has a vision of a population which is engaged in highly skilled rewarding enterprise which in turn will support the level of services which are necessary to lead a decent dignified life.

It is a vision of a society based on pluralist principles which does not pursue material gains for its own sake. It is a society which has the capacity to care adequately for the sick, the aged and the disadvantaged and which views the elimination of poverty and deprivation as essential to establishing a just and stable society.

In the face of the enormity of our problems the dismissive attitude of the Opposition is regrettable. Surely they can see that politics and democracy is severely discredited by the way in which the front bench opposite operate. We have enough problems such as poverty, unemployment and the dangerous cynicism that continues to threaten democracy. It is our duty to protect democracy and show it is capable of bringing about change.

This is a plan which deals with reality in all areas of our economic and social life. It is a plan which will succeed.

Mr. Leyden

The debate over the last week has exposed this document as an unrealistic plan. Building on Reality as a plan has been exposed as a fraud. It is not building on reality but on lunacy. People are very disappointed at the contents of the document. We now have a document after two years of Coalition Government. We wonder how the country was governed for the last two years without any form of planning or any long term projects.

Two years ago we brought out a document The Way Forward. It was a well worked out document with realistic figures and options for the future. The Coalition partners were so eagerly anxious to bring us down that they voted against that document and precipitated a general election.

For the last two years the level of unemployment has increased dramatically. When we left office in 1982, 168,000 people were unemployed. Of that 31,000 were under the age of 25 years. This was unacceptable. We produced The Way Forward to counteract the increase in unemployment levels and bring foward policies which would create long term employment. At the end of September, over 211,528 people were unemployed; 66,154 of those were under 25 years of age. That is a monument to the inaction of the Government over this period.

Where in the document do the Government put forward a solution to this major problem? In 1982 during a debate on a motion of no confidence in our Government the Minister for Health and Social Welfare, Deputy Desmond, was concerned about the level of unemployment. In Volume 338 (No. 4) of the Official Report of 3 November 1982 at column 674 the Deputy said:

I stress that youth unemployment now constitutes a major fact of Irish life. Indeed it may well constitute our greatest single political challenge. At least 31,000 persons under the age of 25 are now out of work.

Two years later that level has increased to 66,154 people. That Deputy is now responsible for health and social welfare, and I presume he made some contribution to this document. No concern has been expressed for the unemployed or for those who left school this year or will leave school next year. The Minister and the Government have decided that employment may be available in 1990, according to Deputy Bruton, who is now advocating "live horse and you will get grass." What is to happen in the intervening years? The unemployment level is bound to increase because investment is discouraged due to lack of Government involvement.

Many important areas have been omitted from the document. No mention has been made of the decentralisation of Government Departments, a policy instituted under Fianna Fáil which we will continue on our return to office. There is a strong case to be made for transferring staff to rural areas. The same applies to semi-state organisations.

There is no proposal in the plan to take on the food processing industry as a major area of growth which would create much needed employment. There is no plan for an import substitution programme which we were strongly involved in while in Government. I as Minister of State at the Departments of Posts and Telegraphs and Transport instituted an important import substitution programme in those Departments. That has been terminated by the Government. I doubt if they have any interest in bringing forward such a programme, a programme which could provide much-needed employment in that area.

Neither is there any scheme for voluntary early retirement, a scheme that would create employment in the public service and local authorities. There are people who would be anxious to retire early provided the retirement was voluntary and that there was an incentive for them to leave their jobs at that stage.

We regard as inequitable the proposals in relation to land tax. They do not represent a sound scientific method of assessment of adjusted acreage. In the words of one Labour Senator, it is a question of the tap being turned on. The £10 per acre for each adjusted acre on holdings of between 20 and 80 acres will be only the thin edge of the wedge for the farming community. I trust that the IFA will continue to oppose the implementation of this form of taxation. It is a direct return to the rating system, and that was totally unacceptable. The present position in regard to taxation is that everyone who has a taxable income should be taxed. That is a fair system, but there are a number of anomalies in so far as the proposed land tax system is concerned. First, there will be the question of determining the adjusted acreage, a task for which we understand now the Land Commission who were abolished a short while ago are to be reconstituted to undertake.

There is no encouragement for farmers to improve their land in the next two years, because any improvement brought about by way of drainage or farm modernisation would mean that their acreage would be adjusted accordingly for the purpose of taxation. The initial tax of £10 per adjusted acre seems relatively small but we are all aware that, as with the rates question, there is no guarantee that that levy will not be increased on a yearly basis. The tax will create very serious problems because, for instance, a man with 60 adjusted acres and who is unmarried will be liable for £600 land tax in 1986 whereas a farmer on an adjoining holding of similar acreage but with a large family will be liable for a similar amount of taxation.

The tax that is proposed will not take account of debts a farmer may have in respect of borrowing over the years. I appeal to the Government to drop this proposal. In particular I appeal to those Fine Gael TDs who, prior to the publication of the plan, were so quick to oppose the tax, to vote against the plan this evening. In that way they will be backing up the statements they made in opposition to the proposal. But if they vote for the plan their integrity will be in question.

The so-called plan spells disaster for our telecommunications service. There is a requirement outlined on page 148 of the document which spells the death knell for progress in Telecom Eireann, who were established on 1 January last. They are now expected to become a tax-collecting agency for the Government. If the contribution from the board of £50 million is the pillar of this plan, we can be confident that the plan will collapse, and the Government too.

In 1984 Telecom Eireann are to contribute £44 million to Government by way of loan capital repayments. They are expected also, according to the budget, to contribute £50 million in order to balance the books of the Department of Finance. This level of contribution places an impossible burden on this young company who, according to their chairman, Mr. Smurfit, will lose between £30 million and £50 million this year. It is stated in the plan that Telecom Éireann will be required to pay their way on a commercial basis, including remuneration on both debt and equity capital, and that in the short term this will involve the company being required to make the following contributions to the Exchequer: £50 million in 1985, £60 million in 1986 and £70 million in 1987. To achieve this performance, Telecom Eireann would have to increase charges by 25 per cent, a step that would mean diminishing returns, which would place an impossible burden on the consumer, both commercial and domestic and which would bring about a reduced demand for services. Our telephone charges are among the highest in Europe. The burden that the Government propose to place on the company would damage our industrial progress and development and would decrease the demand for new telephone installations. Would increased external borrowing by the company to finance State expenditure be acceptable to the Government who allegedly are against foreign borrowing? In 1984 Telecom Eireann must borrow £160 million above and beyond Government requirements for their capital programme. The board will require £120 million in 1985 in respect of capital requirements, a further £120 million in 1986 and £100 million in 1987. The Government proposals would increase the board's borrowings to an impossible level and would place the company in bankruptcy. Is that what the Government require of Telecom Eireann, a company who have only begun and who will make progress if they are not stifled at this stage?

We are told that another option would be that of involuntary redundancies. What about the guarantees enshrined in the Postal and Telecommunications Act, 1982? With our present high level of unemployment and the need for completion of our telecommunications programme, this is not an acceptable option, and this party will oppose any measure which puts in jeopardy the security of the employees of Telecom Éireann.

In the interest of clarification for the Government and in particular the Minister for Communications, Telecom Éireann are not subsidised by the State and will not require a subsidy in the future provided the Government do not proceed with the demands as outlined in this document. I wish to clarify also that in the likely event of Telecom Éireann making a healthy profit by 1987, then and not until then can the State expect a return on its investment. I agree with the principle that when any State body are in a profit-making situation and when their funds are not required for re-investment, the State should receive direct support from them. That is a reasonable approach and one that has been followed in other State companies, but at this stage the demands by the State on Telecom Éireann are totally premature and would place the board in a very serious financial position. They would jeopardise the whole future of the company.

In a recent RTE interview the Minister stated that I was misinformed regarding Government proposals and that provision for what is being proposed was made in the Postal and Telecommunications Act, 1982. That is not so, and I challenge the Minister to state where exactly in the Act the amounts oulined in the plan are provided for. If the Minister has in mind subsection (5) of section 110, the provision is that the Minister may stipulate, in consultation with either company and with the consent of the Minister for Finance, financial targets including payments of dividends in respect of shares of the company to be achieved by the company. There has been no consultation with Telecom Éireann in relation to their possible charges as outlined in this document. I appeal to the Minister for Communications and the Minister of State at the Department of the Taoiseach, Deputy Nealon, to allow the company to succeed, to remove this charge from them, because I have no doubt but that it would place Telecom Éireann in such a situation that it would have a detrimental effect on its staff and services. There has been no consultation with the company. I appeal to the Government to initiate discussions with the board of Telecom Éireann in order to arrive at a solution of the difficult situation that has arisen. If this Government are to be dependent on Telecom Éireann to balance their books then building on reality amounts to building on quicksands, because that body is not in a position to assist in that way.

In the Act there is no mention whatever of the establishment of an independent local broadcasting authority to legalise the present total unsatisfactory situation. There have been regular statements emanating from the Minister for Communications and the Minister of State at the Department of the Taoiseach, Deputy Nealon, for the past two years accompanied by total inaction in this area. As a matter of urgency I appeal to them both to bring this House a Bill to establish an independent local broadcasting authority to provide licences for legitimate applicants and a full service. Viewed from the point of view of job creation alone it is essential that there be provision for independent local radio.

The proposal to broadcast excerpts of speeches from this House is to be welcomed. It should highlight for the general public the manner in which the Dáil has been misled on many occasions by both the Taoiseach and his Ministers. Indeed I might say that in March 1984 the present Taoiseach gave a commitment that a Bill to license independent local radio would be brought before the House before the summer recess. That did not happen. It has been promised for this current session. It is unlikely that the Government will honour that commitment since they have broken others given in the past.

The proposal of RTE to the Committee on Procedure and Privileges to broadcast live excerpts of Dáil debates is a welcome one. We believe they will expose this Government for what they are, render the Dáil more relevant to the electorate, when they will be given an opportunity of hearing such live excerpts of debates in special programmes. That is an essential development at this juncture. There is no proposal at present to televise Dáil debates because I believe it would be very difficult technically to adapt this Chamber for the purposes of television. But there is no doubt that it will be forthcoming some time in the future even if it means that there be a new Chamber built here. I hope these proposals will be implemented by the Committee on Procedure and Privileges in the near future.

This plan has been a major disappointment to the country, certainly to my constituents for whom there is no hope held out under this plan. The only hope under this plan is of massive emigration, which is already taking place throughout the country when, for the first time since the fifties, young people are leaving the country seeking jobs in London, New York and elsewhere. Yet this Government, who have the capacity to provide the jobs here, are standing idly by.

I say: Let us have a vote on this issue this evening, let us bring this Government down, let us go to the country, have a general election, let the people decide, when a new Government will have the ideas, the capacity and ability to bring forward policies for job creation here.

Mr. Yates

I welcome this plan. I would welcome any long-term strategy that would remove the guesswork from budgets, giving people the confidence to invest whether that be in a house, by way of mortgage, in a business or whatever. It is very important that we have the broad parameters of macro-economic Government policy laid down so that our people have the confidence and stability to enable them to operate effectively, meaning that people can see some light at the end of the tunnel, in terms of the drop in living standards over the last four years, thus raising national morale.

I wish to make a number of points in regard to the plan, and should like my comments viewed in the context of this plan being seen — while I support it — as a minimum framework for action. I support everything in the plan, but more can and should be done in terms of specific details and in some policy areas.

What is needed in any such plan is not an economic versus a social consensus vehicle. Nor do we need something giving signposts over the next three years as to what will be international and domestic growth and inflation rates. What is needed is the foot being put down on the accelerator of the vehicle in regard to the developmental engine of the economy. We must state that the likely projections for growth over the next three years will be, say, give or take, X per cent or 2 per cent. We intend in the plan to raise it to 3 per cent or 4 per cent. It is most important that there be a definite section devoted to development areas. If I were to express any subdued criticism of the plan it would be that such is absent therefrom. I do understand that this is dealt with in some little way in the jobs section, but there is taking place a dangerous development, not alone in the mind of the public but in the political mind as well, which is the separation of two concepts, one being jobs and the other business. The attitude seems to be that these are totally separate. It is being said to business people: "It does not matter what profit you make, rather what is important is how many people you employ." Such dialogue, rhetoric, policies or action are unsoundly based. Businesses without profit at the bottom line constitute white elephants. I contend that businesses with safe jobs begin to stagnate. We must balance our thinking and policies in terms of business development as well as job creation. It is most important that that separation in the public and political minds does not go much further.

Unlike many economic commentators who have spoken about the plan, who have said what is wrong with it and so on and its assumptions, I should like to say what I feel should have been included therein. It must be viewed in a non-ideological way in the sense of seeing the country as "Ireland Incorporated", that we are a boat in a large ocean, that instead of being vulnerable, exposed to recessionary winds and every storm that blows — in terms of an oil crisis or whatever — we must realise that we are operating in a game in respect of which the ground rules are free trade and beat them at their own game. If we view the plan in terms of the country being "Ireland Incorporated", using that vehicle for development, that will constitute the best premise for this or any future plan.

One might go one step further, look at "Ireland Incorporated" as a business and how one would run it as a business. First of all one would assess its market potential. There was carried out recently an interesting survey in terms of our trade statistics for the year 1983, when instead of talking about millions of pounds, figures and percentages, one talked in simple terms. If one examines what Ireland sells to the United Kingdom, or to any of our neighbours, per head of population, it will be seen that, in 1983, we sold to the United Kingdom £46 per head of population in exports, to the Dutch £29 per head of population in exports and to the West Germans £11 per head of population in exports. To give the House an example of what I am talking about I might say that one extra £1 sold to the West Germans per capita would be the equivalent of £62 million in exports. If we sold to West Germany, in terms of exports, as we do to the Dutch, then we would sell £1,116 million more, which would completely eliminate our balance of trade deficit. That must be our goal. That is where the potential lies. What is wrong that we are not doing so?

If one is to examine a recent report on international industrial competitiveness for 1984 undertaken by the European Management Forum, based on 284 criteria — inflation, industrial efficiency, after-sales service, punctuality, everything — it will be seen that we rate sixteenth out of 22. That is a weakness for which there are many reasons. Certainly one weakness is management in this country. I have said so before and shall repeat: an improvement of management capacity and efficiency here would do more for the country than would a major oil discovery. What was outlined in the first report of the Committee on Public Expenditure, which I chair, was that what we need is a three-year "in-company" plan for small and large companies under which management efficiency would be scrutinised, with a market plan being drawn up, being brought to fruition, pooling the State agencies of the IMI, the IPA and AnCO, in a "hands-on" approach.

In the marketing area we need to establish a sales agency service in our markets, have those who will sell the toothpaste, the cigarettes and everything else we produce, paid by the State, perhaps receiving a 5 per cent commission, rendering the exercise self-financing, thereby putting a marketing presence on the ground which cannot be afforded by small manufacturing firms. There is needed also a network of warehousing facilities, the necessary marketing information and analyses in the areas of product development in order to establish what people will be buying in say, 18 months time. The difference between sales and marketing is selling what you have and what people want. This is an area that needs vast improvement.

The plan specifies that 20,000 to 25,000 jobs will be created in the service sector. Today the Joint Committee on Small Businesses launched a report on the largest private sector which is the retail and distribution sector. We will not create these jobs unless we bring in certain stimuli. A job tax credit system needs to be introduced, not tax relief for its own sake but employment related tax relief. For every extra employee taken on the business should get a credit against its VAT net bill, against employers' PRSI contribution or its corporation tax bill. Stock relief or 10 per cent capital allowances for doing up premises would give the cash flow and profitability to take on extra people.

We also need to deal effectively with the black economy, smugglers and casual traders who are undermining legitimate business and jobs. To give an example in the area of tourism, I know the owner of a riding school who put an advertisement in a German equestrian magazine and, for the last two years, he has been fully booked out with German tourists. That is the type of agressive marketing I am talking about, to extract the maximum, and you can do the same with selling other Irish good and services. We must build on the minimum framework of the plan and there must be a positive attitude. We all should realise that we have a role to play. It does not mean we should make some people wealthier, we must remember that we live or die by exports. What we earn abroad will pay for our social welfare service and give us all higher incomes. Wealth should be distributed properly.

This is not a budget but the Government should not neglect the whole area of tax reform. The time is now opportune to do this based on simplicity, equity and incentive. The commission have produced their report and the plan has laid out the maximum tax levels required. I should like to see some internal rearrangements to remove anomalies, not to bring in less tax but to make the position simpler and more incentive based. I should like to see the VAT structure revised and to see retailers exempted. The rate should be raised at the wholesale level. This would exempt everybody from paperwork and this is carried out very successfully in Belgium.

There is a particular anomaly in this year's Finance Act. If a farmer dies intestate there is a major problem because the proceeds of the estate go to his wife and sons. When that has to be signed over to a son there is a huge tax bill to be met. That area should be reviewed. In the area of the self-employed, there are 97,000 certificates with county registrars and county sheriffs at present for tax collection. There could have been more. We questioned Revenue Commissioners' staff at a meeting of our committee and I am afraid the tax enforcement system is breaking down. We need to look to a form of self assessment. People should be able to compute their own tax returns and submit a check with them. They do this in Canada and in America and, if they are wrong, woe betide them. Some 5 per cent or 10 per cent of returns are checked every year which releases staff to look after people who are outside the tax net.

A land tax is acceptable in so far as it is not double taxation. However, there is an anomaly. It is a notional system and there are people who own over 80 acres owing £100,000. They do not have a taxable income. I also know a widow who sets her land, 50 acres, for which she receives £2,000 per annum. Under any tax free allowance system she would not have to pay the amount which she will be forced to pay under the land tax. I hope the system will be maintained although there should be a hardship clause for a small percentage of cases.

The PAYE burden is crippling and intolerable. You may get £50 million from farmers but, in relation to the £2½ billion which is received from the PAYE workers, it is a drop in the ocean. The Government should introduce tax credits instead of tax-free allowances because they are progressive and there should also be provision for people travelling to work whose net income is yet again affected. They should be allowed travelling expenses as part of their tax-free allowance.

I welcome the reduction of excise duties on whiskey but I should like to see it applied to television sets and hi-fi equipment. It is alleged that 30,000 sets are smuggled into this country and, if excise duties were reduced by 25 per cent, it would stop the trade overnight. The loss to the Exchequer is enormous. In relation to employers' PRSI it is a tax on employment. I am not saying it should be passed on to the employee but the proposals of the Commission on Taxation for a 5 per cent social security tax should be taken up. It would stop the unregistered employment system. I am suggesting a package of tax reforms, not less tax, but removing the anomalies and making it more equitable.

The Labour Party, The Workers' Party and Fianna Fáil are the first to criticise Fine Gael for being Thatcherite, monetarist, savage and uncaring. We have had to stand over harsh medicine but we can also take credit for introducing social reform. The inter-linking of social welfare and a minimum increase of 25 per cent are to be welcomed. We also need equalisation of treatment for women in social welfare benefits. It is very unfair that women making the same PRSI contributions are not entitled to the same benefits. It is now intended to resolve this but there are still anomalies. The rate of unemployment assistance is too low relative to the overall social welfare system and there is real hardship. I also cannot understand why people on pensions get free fuel but those on unemployment assistance do not. I urge the Minister to reconsider this. Widows under 66 years of age are as deserving as widows over 66 for fringe benefits and they should get free fuel.

I welcome the new £5,000 grant in the area of housing. It makes good economic sense. I also welcome the commitment to build 9,000 local authority houses. However, we should not lose sight of the standard of accommodation in which some elderly people are housed. Many people invested in county council cottages and they have no water or sanitary services. If our housing policy is to be progressive we need to take into account standards of accommodation of people in private houses who cannot afford to repair them.

In the area of education, I welcome the 10 per cent increase in student grants which comes into force next year and will be indexed thereafter. I also welcome the 5 per cent extra on construction in the educational sector and remedial guidance. However, there needs to be a fundamental review in the education curriculum system. In most other countries they have a 50 per cent continual assessment versus 100 per cent examinations. This needs to be reviewed. There is a particular problem with regard to very small farmers in relation to higher education grants because these people have never been assessed for tax and cannot get a grant.

I welcome the new harbour authority for County Wexford and the infrastructural expenditure commitment. I hope we will now get the development to make this, which is already the third largest and fastest growing port, into the most effective. Shipping operators want to use it and we should encourage them to do so. I also welcome hospital development for County Wexford in the overall national plan for hospitals to the tune of £177 million. I should like to see the question of an RTC for County Wexford being reviewed. I welcome the plan although I am not complacent about it. It is not sufficient just to implement it, worthy though that may be. We must see it as a minimum framework on which we can build so that we can have the type of social and economic progress we so badly need.

Mr. N. Treacy

I am pleased to have an opportunity to speak on this debate. It is hard to understand how the title Building on Reality was arrived at. The one clear observation available from the document is that the Government have failed to grasp the reality of the economic chaos. We have the highest unemployment figures in our history and an escalating national debt. The plan has failed to illustrate this and to create opportunities so that these difficulties can be tackled.

This so-called plan acknowledges that there is persistent imbalance in the public finances, and it states that "this has made a major contribution to imbalance in the economy as a whole". This is patently obvious to every citizen and is mainly due to the Government's failure to grapple with the economic situation.

There are cutbacks in every sector, and this has led to the virtual stagnation of our economy. Every citizen has been affected in some way or other by these horrible cutbacks. In August we had the £56 million mini-budget which axed food subsidies by 50 per cent. This callous, cold, impassive announcement was made after a Cabinet meeting by a civil servant. The Taoiseach, Deputy Garret FitzGerald, the Leader of the Government and the elected leader of the country, decided to turn his back on the people and flew out of this island into the oblivion of a sunny holiday in France. He ran from the wrath of the people and left the Labour Party, the real tail of this Coalition dog, to carry the empty can of heartless impositions on an innocent people who expected the big stage-managed Taoiseach at least to show human leadership. Instead he showed a complete lack of political leadership which necessitated the sudden exit of desperation.

There are now two distinct groups of poor people in this country. Firstly, there are the people at the bottom of the ladder who are unemployed and in a hopeless situation. There are the people on disability, on old age pensions or on widows' pensions. There are the people living in the council houses with big families who see no light at the end of the tunnel. All these people have been the innocent victims of these savage food cuts. But now there are the "New Poor". These are the people in the middle income group, the people who pay for everything. The father is working in a permanent job if his company can sustain the economic pressure and the high taxation being imposed by this Government. This man is paying abnormally high levels of direct taxation in PAYE and PRSI. He has a house mortgage and may have other financial commitments also. He believes in making a contribution to the country through being self-sufficient and providing facilities for himself and his family, thus releasing the State from its duties to him and his family. He has a wife and school-going family and must pay for absolutely everything. He is also a high contributor through indirect taxation and gets absolutely nothing by way of assistance from the State. He pays school transport charges and school fees in regional technical colleges or university as his family members cannot qualify for any grant or aid, due to his income stratum. This family situation is one of total frustration and is typical of many families right across the country. For this family their only joy from life is survival in all its aspects, and they live from day to day.

Right down at the bottom of these two groups of people are a third group, people who are on the breadline as a result of the discontinuation of social welfare, unemployment assistance, the discontinuation or reduction of old age pension or the total discontinuation of disability by heartless, uncompassionate officers aided and abetted by a heartless. inhuman Minister for Health. The Minister seems to have given a directive that anybody on disability should be called before a medical examiner and rejected instantly. There is no account taken of the person or the dependence of his or her family on their income, whether it be assistance, disability or whatever.

There is total chaos in the health services and hospitals are completely overcrowded, wards are being shut down and in some instances entire hospital units are being closed. There is a shortage of qualified nurses to look after patients and old and infirm people who are in constant need of care and attention are being shunted home as if they were goods in a railway station. We have the crazy situation in the Galway Regional Hospital where a new maternity wing has been built and fully equipped and the Minister will not sanction the necessary finance to staff this vitally needed medical asset in the western region.

What hope has the plan for all these people and what opportunity does it create for them? Absolutely none. This Coalition Government, the supposed Government of all the talents, put nothing on the table prior to the last general election but promised that they would create the economic recovery that was needed to stimulate growth and industrial development. The record of this Government is a dismal plethora of silly mistakes since they first entered office. Earlier this year we had the discovery of the £500 million "black hole" in our economy. This was as a direct result of the Government's underestimating our balance of payments to the tune of £500 million. The reaction of the Taoiseach on that occasion was that he was delighted at this discovery, which was an admission of total mismanagement of our nation's affairs. The Government totally failed to read accurately the financial affairs of the nation.

Of course this could be expected of the Taoiseach who, as a member of another Coalition Cabinet from 1973 to 1977, forced that Government into a position that our current budget deficit escalated out of all proportion, from £5 million under Fianna Fáil in 1972 to over £200 million under the Coalition in 1976-77. Further our accumulated foreign debt ballooned from £126 million in 1972 to over £1,000 million pounds in 1976-77, and today with the same common economic depressor involved, namely the Taoiseach, our accumulated foreign debt is in the region of £2 billion.

Recently we were made an international laughing stock by the failure of the Minister for Agriculture to have proper information and figures during his negotiations on the milk super-levy last spring. Just as a civil servant announced the food subsidy cuts in August, again the Department of Agriculture officials are being blamed by the Minister. The fact remains that these figures were confirmed accurately on the fifteenth day of the month on which the negotiations took place and the Minister failed to avail of the confirmed figure and negotiated on figures which were spurious and dubious, similar to the projections and figures in this plan. Irish agriculture and our national economy will be £60 million less well off as a result of the inefficient, ineffective negotiations by our so-called Minister for Agriculture. Where were the handlers on these occasions? Probably arranging an overseas trip for someone who could be relied on to project an image of blue whiteness, which is being eroded daily by inept performance from this Coalition Cabinet.

It is sad that such blatant errors should be repeated by this Government and by key personnel within the Government. Of course the Minister for Finance cannot be exempt from blame either and, particularly in view of his European experience, he should have been in a position to ensure the finality and the accuracy of the figures available to the Minister for Agriculture. He is further to blame as the person responsible for the financial affairs of our country and his failure to ensure that the Comptroller and Auditor General's office has sufficient staff, despite the fact that there have been several requests for same, shows the Minister for Finance's total disregard for public expenditure. It is very serious that a very senior Government officer has been curtailed in his appraisal of State expenditure and that the taxpayer is being denied the necessary confirmation that value for money is being given for every pound of hard earned taxpayers' money which is being spent by this Government. This is totally unjust, unfair, and discriminatory and needs an immediate remedy through the provision of adequate staff for one of our most efficient and respected officers.

We welcome the capital investment in roads and transport services contained in this plan. We have been pioneering this in the past and we are delighted this Government have picked up some of our ideas.

The Government again have failed to create any move in our economy. Last night the Minister for Finance stated:

The Government's plan has two central objectives — first, to increase employment, and especially sustainable employment, and second to halt the rise in taxation, both direct and indirect.

Our national job creating agency, the Industrial Development Authority, will be starved of finance under this plan. The IDA are internationally recognised as an outstanding Irish organisation capable of creating jobs and competing professionally in all aspects of industrial promotion with their many competitors throughout the world. The plan states emphatically that IDA expenditure for the provision of land and buildings will be financed entirely from the proceeds of the disposal of IDA owned land and buildings. Where is the employment generating opportunity being created here, and where is the sustainable employment that this Minister talks about? What hope have towns or areas where there is no industrial base already or where there has been in the past and it has been sold to an existing company which in the interim, as a result of this Government's pressure may have gone into liquidation and may have been disposed of as part of the liquidator's assets in meeting the commitments of the company, thus leaving a town without any industrial base? What hope have these towns or areas of getting any industrial base or facilities during the life of this negative Coalition?

No later than yesterday the Minister for Finance admitted for the record of this House that we have the highest level of indirect taxation in the EC countries. This plan does nothing to ease this burden. VAT is the main source of indirect taxation in this country and the report of the Commission on Taxation recommended in early summer that there should be a single VAT rate in the country. The Minister himself has repeated this several times in this House and outside it. After two years in Government it is now long past the time when this Government should have moved in that direction and ensured that at least from January 1985 a single VAT rate would be available to the business sector of our conmmunity who collect the VAT and to the consumer sector of our community who pay the VAT.

The Minister also has admitted, for the record of this House, that Ireland has the second highest level of personal taxation in the EC countries. This clearly illustrates, I am sure, my earlier remarks about the new poor in our country.

Much ado has been made by the handlers, through the media, of the farm tax situation. This is to appease the Labour Party and the PAYE workers on whom the Government will be depending for votes in the next general election. There is total confusion within the agricultural sector and indeed by professional people vis-à-vis the farm taxation system being proposed, as it is both vague and unclear. The plan states that the level of farm taxation will be expected to yield twice as much in future years. It is estimated that there will be £10 per adjusted acre as a yardstick for collection. Firstly, how will the adjusted acre be arrived at and what guarantee have farmers that this will remain at £10? It is my belief that, if farm taxation is to yield twice as much to this Exchequer, then it will be the small farmers in the 20 to 60 adjusted acre bracket who will make the major contribution. I would like the Minister to clarify in particular the situation whether the farm taxation imposition will have an exclusion base of 20 adjusted acres for all farmers.

This plan fails to recognise the fact that farmers are the biggest indirect taxpayers in the country, and that agriculture, as the bedrock of our economy, needs to be stimulated in order to create jobs, both on and off the farm. I believe that farmers, like every other sector of our community, must pay an equal share of tax; but on the imposition of any tax on any particular sector it must show complete equity. This plan takes no account of a married man with a wife and family on the land vis-à-vis a single man on the land and therefore fails completely in equity. I hope the Minister will clarify all this at the end of this debate and allay the fears of many people in agriculture that they may be forced out of this industry.

We also have the situation in the accounts system where no allowance has been made for capital investment by farmers in necessary equipment, whether it be a tractor and farm machinery or a motor car and trailer or whatever. This again is blatant discrimination towards agriculture and I expect that the Minister will remove this anomaly immediately.

The Government have failed to recognise the ability of the construction industry to lift our economy from its present doomed situation. They have made pious promises regarding their investment in housing and infrastructure, but again it is not quantifiable. Their initiative in a special subsidy of £5,000 per head for local authority tenants who wish to acquire or build their own houses is to be complimented. However, this is going to exasperate an already overloaded local authority housing demand still further and the plan takes no account whatever of the necessity to provide a certain minimum amount of money each year for mortgage finance. Already the Housing Finance Agency have failed to meet their target this year and many people who got loan sanction some months ago are now in serious difficulty on extended bridging finance. Is this the pattern that is going to emerge throughout the life of this plan, or can the Minister or the Government clearly point to the amount of money that will be available to local authorities and finance agencies over the next few years?

The financial cutbacks being imposed by the Government and their own capital programmes through the postponement of projects like the Derryfada briquette factory at Ballyforan are absolute financial lunacy. An office block and a workshop have been built on a large tract of developed bog and progress has been completely halted. One-hundred-and-fifty jobs permanently on the bog are going, and 150 more that could be created after the building of this factory will never be realised if this Government get their way. Millions of pounds are being spent by this Government on professional fees through Government Departments to planners and consultants to design and redesign buildings which the Government have decided they are not going to proceed with. Many of these, particularly in the prison services, were planned under Fianna Fáil. We now have a situation where, rather than build a prison, the Minister for Justice is demanding that the internationally known forestry college at Kinnity, County Offaly, would be taken over as a detention centre. This shows the Government's total lack of support for forestry and their particular trait of short term decisions for political expediency.

This plan falls down completely on job creation. At best it is patchy and scratchy. It juggles with new job terminology and tries to play computer games with unemployed people, school leavers and part time workers. It proposes to create 10,000 part time, half week jobs in 1985. Would it not be better for both the economy and the people if a sufficient effort was made to create permanent jobs for half this number, and quit creating an image of effort for many when the end result is more job frustration?

Prior to the last election this divided two-party Government promised that they would be totally committed to law and order. Extra police were to be recruited, but this has not happened. We now see the virtual breakdown of law and order and the total turn around by this Government on this key State area over the past year. There have been cutbacks as regards manpower and the deployment of manpower, and several times the Minister for Justice has stated that gardaí would be recruited only on a natural wastage situation, that is, through illness, resignation or death. In these days of such turbulence throughout our community, when old people and women fear for their lives in remote rural areas and in highly populated city areas, there should have been more recruitment to our police force.

Our national Army are of credit to our country. Their support for our own civil police force has been exemplary and their record in international peace keeping situations overseas has made us all proud of our great Army. There is now a large volume of educated, intelligent young people unemployed throughout our country. There was an opportunity here in this plan to create some pride in our country through an extension of our Army numbers and the discipline and the training that would be available even on a short-term basis to some of our young people should have been utilised through an extension of the regular Army, or, indeed, the FCA.

The Government have failed to recognise this situation but are prepared to allow our Army to take part in an anti-national controversial British Legion Remembrance Day ceremony. This, despite the fact that the Taoiseach after last year's debacle on the same situation, gave a commitment that the Army would not participate this year and that a National Commemoration Day for all Irish soldiers who lost their lives, irrespective of the cause, would be set up. I hope the Taoiseach will clarify this situation immediately and allay the fears of the majority of Irish people and save our Army from any further embarrassment.

I believe that the main purpose of this plan is to bring two different parties of varying ideologies together again after their mid-summer disintegration. The figures throughout the plan are not quantifiable and cannot stand the test of justifiable economic criteria. Is it any wonder that six economists have left the Department of Finance totally frustrated by the Government's insistence on the inclusion of figures in this document that have not been acceptable to their key advisers? The Government Press Secretary, Mr. Prendergast, has done his utmost to fabricate this statement similar to the fabrication he did in the prison officers situation. He was at pains to name the seventh adviser who moved to the ESRI and, surely, if his other statement was correct he should have named all or none.

It is my view that this plan lacks a straightforward coherent, streamlined, positive economic remedy for the problems facing this country at present and I believe that this Government will founder striving to hold politically together, while there are stark economic realities which they refuse to recognise. This plan could be re-named "Coalition Promotion — starve horse and you'll get grass".

Mr. S. Treacy

This plan does not contain all that we in the Labour Party desire, especially in the vital area of employment and tax equity. It does, however, contain very many features of a desirable nature which we have been advocating for a very long time. There are many proposals in this plan which will give hope and confidence to many sectors in our society, especially the underprivileged. I find it particularly gratifying to observe that many of the features in this plan are distinctly Labour.

The imprint and the impact of the Labour Party is to be seen in many aspects of this plan. I welcome the serious efforts to provide jobs by stimulating and aiding industrial recovery and by extending and improving the enterprise allowance scheme which has already put 3,500 people into productive work. This laudable scheme will reduce unemployment by a further 11,000 over the next three years and will bring back dignity to thousands who had begun to lose hope.

A new training and placement scheme for long-term unemployed will provide 2,500 jobs per annum, each for a six-month period. I dearly wish that could be on a long-term basis. A new scheme for social employment will provide part-time jobs for at least 10,000 long-term unemployed at a cost of £57 million. Employment growth in industry and private services will absorb some 35,000 workers over the next three years.

Housing and the construction industry receives a welcome boost in this plan. Some £53 million is about to be invested in major road projects, resulting in thousands of extra jobs with local authorities while, at the same time, consolidating the jobs of the permanent staffs of local authorities who in recent times have experienced short-time working. This is the first time since the abolition of car tax, and with it the abolition of the road tax, by Fianna Fáil in 1977 that something practical is being done to remedy the grave deterioration in our roads in recent years. It is timely and welcome. In the vital area of employment, I observe that an additional £50 million contingency provision is being made for projects not yet evaluated. I look forward to the detailed proposals in this area.

In this plan there has been a great breakthrough in the housing area. Already the introduction of a special grant of £5,000 for a local authority tenant buying or building a private house has caught the imagination of thousands of home seekers. I believe we shall see a great moving out of corporation and council tenants to new homes of their choice, thereby making available thousands of local authority houses for those in need. Waiting lists are bound to be reduced considerably and the long purgatory of waiting many years for a decent home will be shortened out of all proportion. This special grant of £5,000, plus the existing £1,000 grant and the £3,000 mortgage subsidy, is novel and generous and will be availed of gladly by thousands of families who up to now were locked into an environment from which there seemed to be no escape. It is estimated that some 9,000 or 10,000 local authority houses will be made available each year for new tenants, and this is welcome news for the homeless.

It is good to know that the serious problem for home seekers of meeting the high cost of legal fees and the extortionate rates of interest charged on bridging loans is at last being tackled. We have the assurance in this plan that the Government will act to reduce the high cost of conveyancing and of bridging loans. I should like to impress on my colleague, Deputy Kavanagh, the Minister for the Environment, the urgency and the importance of this problem. This particular exploitation of the homeless has gone on for far too long. Let us have action quickly in the matter. All this activity, coupled with joint ventures in housing and tax incentives and so many other new proposals, will create an upsurge of activity in the housing and construction industry, thereby providing jobs for the large number of tradesmen and labourers who are idle at the present time.

Despite these measures to provide jobs, they will do little to solve the overall problem of unemployment. I find it most disconcerting to realise that after the expiration of three years we are likely to have as many unemployed as we have now. That is an intolerable situation that we cannot and must not condone. To do so would be to court social upheaval of a kind never before seen in this country. We must bend all our energy and resources to the provision of gainful and productive employment for all our people. That must be the cardinal aim and it must have top priority. The effort must be sustained and unrelenting and it must be seen as such through every day, month and year of this plan.

Central to the plan is the establishment of a national development corporation to give a new commercial and strategic thrust to public investment in industry.

In the Labour Party we place our greatest hope and reliance on the speedy establishment of such a corporation as the real engine of activity in creating work for our people. Without it we shall fail. Clearly, private enterprise has failed miserably in the past to provide jobs and it will not do so now. The State has a bounden duty and responsibility to intervene directly in this area. Therefore, the speedy establishment of a national development corporation is the most effective way of doing it. It was an integral part of the plan for government. Nearly two years have elapsed but nothing has been done about it. It must be done now and there must be no hedging about it. Unemployment is the greatest cancer eating away at the body politic in this country and we ignore it at our peril. The signs are there for all to see.

Taxation is the other great disturbing and disuniting element in our society. From these benches we have consistently called for equity, fairness and social justice by extending the tax net to all sections who could and should pay tax. One section and one section alone has borne the main brunt of taxation — the PAYE sector. In its present form the plan does little or nothing to redress this terrible wrong. Stabilisation of present taxes on the PAYE sector is simply not good enough. The crippling, crushing burden of taxation on all of us in the PAYE net must be lifted quickly. The naked robbery of the hard-earned money of the working classes has simply got to stop.

We had a statement from the Taoiseach and the Tánaiste recently that any additional taxation from new sources would be applied to give positive relief to the PAYE sector. I want to know when we will get this long sought-for relief. How long must we wait? That is a promise made by the Taoiseach and the Tánaiste that must be fulfilled and fulfilled very soon. They will not be permitted to forget it.

The enormity of the injustice to the PAYE sector was highlighted by the facts and figures revealed in this House by the Minister for Finance, Deputy Dukes, last Tuesday when he revealed that the top 44,000 farmers in the country, including those with another trade or profession, paid an average income tax bill of £724 last year compared with an average levy of £1,875 on a PAYE worker. The Minister also disclosed that the average tax bill for PAYE workers had increased by 600 per cent over the past ten years. Between 1979 and 1983 the average tax take from a PAYE worker had risen from £915 to £1,875. In the same five-year period, the average tax payment made by a self-employed person rose from £714 to £1,573 and for the top 20 per cent of farmers from £488 to £724. These startling facts clearly illustrate the injustice and the urgent need for remedy.

The partial withdrawal of the food subsidies without putting something adequate in their place was deeply resented by myself and my colleagues and we spoke out against it at the time. Thankfully our protests did not go unheeded and we now have the assurance that the low income family supplement scheme will be brought forward. This will compensate to an appreciable extent the working classes for the reductions made. My primary concern with regard to this scheme is that it applies only to those at work, the employed as distinct from the unemployed. The scheme should be extended to include at least the long-term social welfare beneficiaries, and I urge the Minister to consider this proposal seriously.

One of the very worthwhile proposals in this plan is the child benefit scheme which will provide some £30 monthly for each qualified child in a relatively short time. Here we have concrete evidence of a real attempt being made to redistribute the wealth of this nation from the rich to the poor. This is a great breakthrough in social justice and child welfare and will prove to be a boon to all working class families. I congratulate most heartily the Minister and the Government on introducing this unique and generous scheme which is widely acclaimed already.

The provision in the plan for the introduction of a national income-related pension scheme is a joy to behold. I have advocated and agitated for such a pension scheme for a number of years. As an industrial worker, I realised that there were tens of thousands of workers for whom little or no provision was being made by way of a pension at the end of their working lives. This type of callous indifference does not apply merely to small firms. It applies to the larger firms and especially to the multi-nationals who show a callous disregard for the welfare of their workers when they have no further need of them.

The self-employed are also included. Many of these cannot strike for their own pension needs and have no one to speak for them. It is right that they should be included. This pay-related pension scheme published in this document is to be admired and my concern now is as to when it will be implemented and that it be implemented as quickly as possible. It has been talked about for a number of years by many Governments. The time for talk is over. It is now time for action in this area.

I have strong reservations about certain aspects of this plan, especially the failure to plan effectively for job creation and provide generous relief for the PAYE sector. Neither do I believe that the ban on employment in the public services should continue when so many thousands of young people, highly trained and educated, are desperately seeking jobs. It is mystifying to me that some Ministers in the Government are desperately seeking to provide jobs — and in this area I would commend the Minister for the Environment and the Minister for Labour — while other Ministers would seem to be hell bent on getting rid of existing jobs in the health services and education, Departments of State and State and semi-State bodies. I find it difficult to understand this approach which is clearly at variance with the whole idea and ideal of job creation. I appeal to this Government for a more consistent and humane approach, so that our young people may at last be permitted to apply their talents, their energies and their ingrained genius in the service of their own country.

I have grave reservations also about the public service pay policy contained in this document. Let us not forget that the majority of workers here are, in fact, poorly paid — ordinary working class men and women in the local authorities, the health boards, Departments of Forestry, Defence, Education and so on and in the State and semi-State bodies. My concern here is for the lowly paid workers. In any wage agreement, their standards should and must be safeguarded. It is therefore my ardent hope that the machinery which has been established in the area of conciliation and arbitration will have regard to these facts and ensure that justice is done and seen to be done to maintain decent standards and decent working conditions for the ordinary working class people engaged in the Government Departments and the State sector, and that any awards which are made in this regard by the arbitration board or the arbitrator will be honoured.

The plan will do much to eliminate uncertainty. It will create confidence, confidence that we can plan ahead in the knowledge that there will be no radical change in Government policy for at least three years ahead. Intervening budgets, I understand, will not have any disrupting influence on the plan. The important thing is that all sections of our people know where they stand in respect of this Government and what to expect from them over the next few years. In the meantime my colleagues in the Labour Party and I will be striving to mould this plan to the varied and urgent needs of the people whom we have the honour to represent.

An Leas-Cheann Comhairle

I call Deputy Joe Walsh.

Mr. N. Andrews

I agree with the Deputy. He is right about that.

An Leas-Cheann Comhairle

Deputy Andrews, I call on Deputy Walsh, without any interruptions.

Mr. J. Walsh

I have been allocated 20 minutes to speak on this debate and with the Chair's permission I would like to divide that 20 minutes between my colleague, Deputy Foley, and myself.

An Leas-Cheann Comhairle

Is that agreed? Agreed.

Mr. J. Walsh

The national plan, Building On Reality, is a sad reality. The first objective of the plan, boldly stated in the summary on page 1, is to increase employment. If we turn to page 26 of the document we see that the actual figures for unemployment will increase at the end of the period of the plan. That is the sad reality, and it goes to show how completely unrealistic the document is.

There are a number of nettles to be grasped by the Government if we want to increase employment. There is no reference whatsoever to them in the plan. There are some appalling management practices in industry in Ireland today. In many cases managers know their way around their favourite golf courses better than their way around the factory floors. Industrial relations are in a pretty appalling state too. Something must be done about work practices and management practices. We have had avoidable stoppages with the cessation of production. The sooner something is done to implement some of the recommendations in various proposals for better industrial relations the better. Unless something is done we will have to continue with the shameful level of unemployment which exists today. But we are told that at the end of the period of the plan we will be in a worse position.

The position in relation to agriculture is another sad reality. On page 42 of the plan we are told:

The Government believe that efforts to accelerate growth in agricultural output must concentrate on that segment of the farming population which has real development potential.

A small number of farmers will be singled out for encouragement and development. There is another plan — the four year plan for agriculture. At the rate plans are coming out these days, the Cabinet table must be in imminent danger of collapse.

Mr. F. O'Brien

Just one plan.

Mr. J. Walsh

I have another one here. On page 10 of the Four-Year Plan for Agriculture it is recommended that Government aid should be concentrated on 40,000 to 50,000 farmers. It is unfortunate for the other 100,000 farmers that they will be discriminated against in the provision of Government services and in particular in the provision of advisory services. I suggest that those are the farmers most in need of the services. When we consider the shameful level of unemployment in industry, with nowhere for those farmers to go to find employment, it is incredible to think that the Government who are supposed to be building on reality, are leaving 100,000 farmers to their own devices.

That did not start today. The level of aid to farming in 1982 was £109 million. In 1983 that was cut to £85 million and it is continuing to be cut. The real cutback in investment in agriculture is 42 per cent in the past two years. A number of schemes were cut back completely, including the abrupt termination of the farm modernisation scheme on 9 February 1983. It was reintroduced in January of this year in a scaled down model which will be of no benefit whatsoever to the farming community. Western drainage schemes and western packages have long since dried up. The lime subsidy and the AI subsidy have been shelved.

We have had the most recent example of the neglect of agriculture in the pretty bizarre outcome of our application for a super-levy quota. I do not need to spell out in any more detail the history of that. I ask the Minister at this stage in that sad episode to implement a national system for quota arrangements. At this point 75 per cent of the national milk quota has been filled and, as everybody knows, in Ireland we do not produce much milk in the winter time. The room for adjustment is becoming very acute and most farmers will not find it possible to adjust to the new situation. I ask the Minister for Agriculture as a matter of extreme urgency to stop washing his hands of his responsibilities in this regard and to implement a national system.

The whole problem about the development of agriculture is related to the attitude of the Department of Finance. They have decided to turn off the tap and to give no further aid to agriculture. There is an appendix in the Four-Year Plan for Agriculture on page 137 from the Office of the Minister for Agriculture to the chairman. I quote:

I understand that the work of this group has progressed to the stage where it might expect to complete its report in the near future. It is important, therefore, that the group should be fully cognisant of the current budgetary situation and the serious difficulties in the way of providing substantial additional Exchequer funds for any purpose.

The Department of Finance are calling the tune and sadly the Minister for Agriculture has acquiesced in that. The theory in the Department of Finance is that investment in agriculture is not paying its way.

I should like to point out to the Minister for Finance the findings in a recent study by ACOT published on 6 June 1984. They said that farmers participating in the farm organisation scheme increased gross margins by more than one-third between 1976 and 1982 and, in marked contrast, the gross margins of farmers not participating in the scheme declined. They went on to detail the very good return from money invested in agriculture.

Under the plan taxation is to continue at its present punishing rate. We are told it will not increase. That is a fat lot of good to people suffering under one of the most severe tax systems in Europe. It is a pity that some aspects of the reports of the Commission on Taxation were not implemented. There has been no reform of the absolutely chaotic system of taxation we have. We are to continue as we were with tax rates in excess of 70 per cent for people on relatively low incomes. In the part of the plan relating to public finances there is a similar attitude, the attitude adopted earlier this year when the Minister for Finance, having outlined in some detail the problems of the economy, proceeded to say that he would introduce a neutral budget, in other words, he was doing nothing about it.

There is a similar attitude in this national plan. The only gesture is that the actual amounts of deficit and Exchequer borrowings will be changed from actual amounts to percentages in the hope of confusing people. I suggest that a greater effort should be made to rely on domestic sources of finance rather than foreign borrowing. We all know the outrageous penalty we are paying for foreign borrowing in the wrong places, in the wrong currencies, particularly in the dollar currency. In 1983 alone, the exchange losses amounted to £810 million, and since then the dollar has become much stronger and will cost us infinitely more than that. Some people say we cannot do much about that, that it is outside our control. The Taoiseach and the Minister for Finance in particular should have a look at small countries similar to our own, particularly Switzerland, where they have a small and very difficult terrain, no mineral resources and yet, possibly the best economy in the world.

The National Development Corporation are the latest addition to the ever-growing herd of white elephants and this is just substituting for entrepreneurial thinking further bureaucratic bungling. No doubt the whole matter will be tied up neatly with further red tape. In conclusion let me say that unless the money earned by employees goes substantially into the workers' pockets rather than being looted by the greedy hands of the Revenue Commissioners we will not make any progress.

An Leas-Cheann Comhairle

Deputy Foley, and he must conclude at 2.19 p.m.

Mr. Foley

I thank Deputy Walsh for allowing me some of his time to contribute to the discussion. As time is against me I would be commenting only on specific points.

On health, the present curtailment is dishonest. I speak with particular reference to the Southern Health Board where, as a result of a decision by the Minister for Health, within the last week or ten days staffs have had to be reduced. Most of the temporary staff have been let go. Many wards are to be closed throughout the Cork and Kerry region and the standard of service to the weaker sections of our community, particularly the underprivileged, is going to deteriorate to an all-time low and the result is that many people are going to die.

Some months ago the Government made a special capital allocation available to open the new general hospital in Tralee, which was done on a phased basis and it was to be fully operational by the end of October. At the moment less than 50 per cent of the facilities within that hospital are being utilised with no intention of opening the remaining wards. Within the last week many of the staff there have been let go as a result of the cutbacks in health. What about the special capital allocation?

It is of great concern to me that no effort has been made in this document Building on Reality to face up to the serious unemployment problem. No effort has been made to avail of worthwhile job opportunities for our well-educated young people. I welcome the extension of the AnCO training scheme. Here there is potential to create further worthwhile employment. Be that as it may, at the moment over 215,000 people are unemployed and the document accepts that this figure will still remain in December 1987. How can we as politicians and legislators with such massive unemployment — and present indications are that it is a permanent problem — accept this situation? We are not doing our duty in the eyes of the people, and the Government are not living up to their pre-election promises, especially the Labour Party whose slogan was “We as a party cannot accept the prospect of a continuation of the unemployment position”. What is the Labour view of this plan? The first step to resolve the situation is the setting up of an all-party unemployment task force. Reform the tax code and introduce incentives for employers to take on more staff because at the moment they are crippled with heavy taxation.

Tourism is our greatest potential for job creation, and I am disappointed that no indication is given in the plan of a reduction in VAT. Many of our leading hoteliers are finding it impossible to market on a competitive basis due to the high VAT rates and even in the last budget indications were given that this would be considered and possibly a reduction implemented before the end of the year. Tourism is responsible for 76,000 people in employment, or 7 per cent of all employed in the Republic are depending on tourism. In my contribution on this year's budget I made the point that tourism is the only export industry which is being penalised in every conceivable way. There are special concessions for export manufacturers in the special income tax rates. Exports are exempt from VAT, yet export tourism is subject to the 18 per cent and 23 per cent VAT levels. With high labour costs and PRSI this is hindering growth and does not provide incentive. The plan should have recognised this fact and given an indication of Government investment in tourism over the next three years.

The Cork and Kerry region is the largest and the most viable of our eight regions and needs a commitment from the Government for a new ferry service into Cork. The service there has existed for 60 years and its loss is a very big blow to the region. In 1983 the ferry service was responsible for 100,000 visitors plus 20,000 cars. This is business we cannot lose, hence the reason for securing an alternative ferry for the 1985 season.

I welcome the introduction of a non-repayable grant of £5,000 for a local authority tenant of three years' standing. What about extending the income limit of £8,000 for SDA loans to encourage young couples to build their own homes and, as a further incentive, increasing the £1,000 new house grant to £5,000? This would help in a very big way to reduce the present local authority housing lists.

Page 113 of the plan points out that the average weekly rent paid by all local authority tenants in 1983 was almost £7 for new lettings. I know that in Kerry County Council it was on average £14 and upwards. The Government have now indicated that all local authority housing rents, both fixed and under the differential rents scheme will be substantially increased. I must point out that in 80 per cent of local authority houses unemployment is rampant and a further rent increase will only add to the present hardship of the people there. According to the plan, repairs to local authority houses are to be phased out over a number of years.

The plan also refers to local authority estates where vandalism is rampant. The Department of the Environment should take the initiative here in setting up various committees such as we have in the country and get them to take an interest in the developing of the estates. I recommend that such committees should qualify for special amenity grants which would encourage them to expand the excellent work they are doing. I welcome also the establishment of the national youth policy committee. I hope that in adopting a national youth policy all youth throughout the country will have an input which will be taken into consideration.

I welcome the massive investment in roads promised in the plan and I hope that special attention will be given to tourist counties especially with regard to bridges and relief roads.

Finally, I appeal to the Government to reconsider the problems facing youth especially with regard to job creation. They cannot afford to wait until the nineties as recommended by a leading member of the Government this morning.

The Minister for Agriculture, Deputy Deasy, is not the main speaker for the Government on the concluding debate on the national plan. The Minister, Deputy Deasy, is coming in for ten minutes now to conclude at 2.30 p.m. and the main speaker for the Government will be coming in at 4.15 p.m.

Minister for Agriculture (Mr. Deasy)

I have already conceded half of my time. I was to speak for 20 minutes, now it will be ten minutes.

Planning the development of the country's national economy demands that we take cognisance of the following realities: our present position, the resources we have available for development, the constraints arising and, finally, the realistic prospects for growth and the policies necessary to achieve that growth.

The Government believe that continued agricultural expansion requires, as a first priority, policies to achieve stability and certainty in the national economic environment, in particular to reduce the levels of inflation and interest rates which caused such havoc in the agricultural sector here in the late seventies and early eighties. In fact, it resulted in a reduced volume of agricultural output to the extent of 4 per cent between 1978 and 1981. In the same period farm incomes fell by more than 40 per cent in real terms.

The year 1982 was one of recovery in farming. Net agricultural output rose by over 6 per cent in volume terms. After adjusting for farming expenses, family incomes grew by a quarter in nominal terms and, when allowance was made for inflation, there was a real increase in farm income of 5 per cent. Agriculture continued its development in 1983, with further increases in real output and incomes. Total farm incomes increased by nearly 14 per cent in current values and real income per head rose by some 6 per cent.

The outlook for the current year's performance is one of continued growth in farm output. The volume of net agricultural output is expected to increase by around 5 per cent, largely as a result of increases in milk and cereal output. With some reduction in the quantities of farm materials used and other expenses, per capita farm incomes can be expected to be maintained in real terms.

In summary, therefore, there has been a considerable reversal in recent years of the downward trend in farm output and income as experienced in the late seventies and early eighties. The volume of real agricultural output this year will be some 12 per cent higher than it was three years ago. It is no coincidence that during this period the level of inflation will have been more than halved. Since it is unrealistic to expect farmers to expand output in the face of a continuous decline in real returns, a stable economic environment is now recognised as essential if real development in agriculture is to be promoted. The continued reduction in inflation is, therefore, a critical element in the Government's plan to expand farm output and incomes.

It is extremely vital that we have a competent advisory service and a very good educational system in agriculture if we are to achieve those aims. ACOT have been doing an excellent job in that regard. We have asked that body to concentrate their efforts on those farmers who can achieve better results through their intervention.

The courses run by ACOT have been a tremendous success. The quality and training of young farmers has never been better, and hence the long term outlook for agriculture is most encouraging. The special courses ACOT have been running have attracted great attendances and work very well.

Underlying the realities faced by this plan it is recognised that the changes in EEC policy will affect the output pattern of Irish agriculture. Developments in the milk sector highlight the need for maximising efficiency in production and marketing so that a competitive cost structure can be achieved. Milk producers must plan their businesses carefully so that real incomes can be maintained. This will mean intensifying operations by increasing yields and grassland productivity. Spare capacity created must be used for other enterprises. The profit from well-run lamb systems will stimulate increased sheep production, and an increase in tillage crop production such as winter cereals as alternative or supplementary enterprises can also be expected.

The main emphasis on increasing production must, however, be in the beef sector, and a major aim of Government policy under the plan is to encourage an increase in cattle numbers. Because of the importance of the beef cow sector in expanding the breeding herd and cattle production, the Government are providing a substantial increase in the rate of grant for beef cows under the disadvantaged areas scheme. Three-quarters of all beef cow herds are located in these areas, and a sum of £11 million is being made available in the year commencing 1 January 1986 to increase the headage grants on beef cows from the present level of £32 to £70 per cow. As in the case of the EEC suckler cow premium scheme, payment will be made on beef cows of meat producing breeds. The aim of this substantial rise in the grant level is designed to stimulate increased beef production, and I am confident that farmers will respond positively.

Substantially increased funds are also being provided for a fresh and vigorous attack on animal disease, particularly bovine TB. Since the present arrangements for tackling the disease have not proved effective, the Government have decided that a radical change in these arrangements is necessary. Thus the increased funds are being made available on certain conditions; the veterinary surgeon to carry out testing will have to be nominated by the Department; payment of reactor grants will be conditional on removal of the reactor animals within ten days from the date of notification; there will be tighter supervision of trading at marts, and a central epidemiological unit will be set up in my Department to back up and complement field investigations into such matters as disease flare-up and herd breakdown and to advise on preventive and other measures.

For the year 1985 we are providing an extra £10.5 million for the bovine TB eradication programme. Starting on 1 January 1986 we will be providing an additional £2 million for people who have experienced difficulty because of disease in their herd and who have had to destock. That money will be going specifically to help such people.

Mr. H. Byrne

Farmers will be financing all that.

Mr. Deasy

While the elimination of bovine disease will benefit the nation as a whole, the direct beneficiaries, the farmers, are being asked to make an additional contribution by way of the disease eradication levy. This increase will apply for one year only.

Land policy is an area which in the past has not always been given the attention it deserved. The Government recognise that an effective land policy is a crucial element in overall agricultural policy. The general objective is to ensure that Ireland's farmland is used to make the greatest possible contribution to national product and in this way maximise output and incomes and generate down-stream jobs in food processing and marketing. A major aim of Government land policy will be to ensure, so far as this is practicable, that the ownership or management of our agricultural land is in the hands of those best fitted to work it. It is proposed to achieve this aim by measures designed to increase the rate of land mobility, including the promotion and encouragement of leasing as a land management practice, as well as mechanisms to encourage earlier farmer retirement and family succession. I hope the Land Bill will pass all Stages during this session of the Dáil to help us promote that work.

Long-term investment is crucial if we are to achieve higher levels of efficiency and productivity on our farms. The main instrument available to the Government to encourage such investment is the system of capital aids operated under the EEC's structures policy. It has been suggested that a deficiency in aid schemes in the past has been an over-emphasis on capitalisation of farm enterprises, often involving high levels of funding without having proper regard to the profitability of the investment involved. The Government are firmly of the view that, if State resources are to be used efficiently and the best results obtained, investment programmes must be carefully planned and appraised and their success measured by the level of profitability returned. Capital investments must only be undertaken in so far as they are appropriate to the farmer's circumstances and then only after their value has been critically assessed.

The schemes under which the capital aids are provided are currently under review by the EEC Council of Ministers. Commission proposals for changing the schemes envisage a number of major modifications including the termination of the selective approach under the farm modernisation scheme whereby development farmers are given more favourable treatment. Instead, it is envisaged that full-time farmers below a reference income level who work towards an improvement plan will qualify for investment aid. This should allow greater flexibility in planning development. In view of the importance of the aid schemes in funding on-farm investment and their wider implications for farm development in general, the Government propose, in the context of the adoption by the EEC Council of a new structural directive, to undertake a full-scale review of the present capital investment aid schemes. I hope that review will be completed by the end of November, certainly by the end of the year.

I should like to comment briefly on the food processing industry which accounts for one-fifth of those employed in the manufacturing sector here and contributes approximately 25 per cent of total value added manufacturing here. So far the processing industry has failed to exploit its full potential and it has not maximised the added value and employment content of primary agricultural output. Much of our agricultural exports are still being treated as commodities and insufficient attention has been devoted to exploring the opportunities for added value.

In conclusion, I should like to say that I am confident that the growth rate of 1½ per cent to 2 per cent in net output projected for the period of the plan will be achieved.

Debate adjourned.

Dáil Éireann debate - Thursday, 18 Oct 1984

National Economic and Social Plan: Motion (Resumed).

Mr. Byrne

Mr. Byrne

Mr. Byrne

Dáil Éireann debate -
Thursday, 18 Oct 1984