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Dáil Éireann debate -
Tuesday, 26 Feb 1985

Vol. 356 No. 4

Financial Resolutions, 1985. - Financial Resolution No.9: General (Resumed).

Debate resumed on the following motion:
That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.
—(Minister for Finance.)

Deputy Taylor-Quinn is in possession and has 42 minutes remaining.

I had dealt with the question of how the budget had related to tourism, industry and employment.

I want to elaborate now on how the budget has given a major boost to our single largest industry, agriculture. The economic policies being pursued by the Government have helped farming enormously. Inflation has been reduced from 20 per cent to 6 per cent, which is particularly important to those farmers who borrowed heavily in recent years. It is important also for younger farmers anxious to expand their activities, the present economic climate being conducive to further development within the farming community.

I was heartened to hear the Minister for Agriculture say that the volume of agricultural exports had increased by 14 per cent in 1984, an important year, particularly for our dairy farmers because it was in that year that the super-levy was introduced. The Minister must be congratulated on the way in which he conducted those negotiations, securing such a good deal for us while competitor countries were subjected to a reduction in their percentage quota.

It is also heartening to note that the milk cessation premium scheme, introduced because many farmers through some misfortune or other — perhaps having been badly affected by TB or brucellosis in their herds — had to give up dairying or substantially reduce their quota in 1983. This scheme frees quotas in order to create a reserve to cater for producers who lost out in 1983. The Minister for Agriculture should closely monitor how these quotas are received by way of involvement in the scheme and ascertain how they are allocated. I would ask that he monitor in particular those farmers who have had some great misfortune over the past three or four years. It is important that progressive farmers who were forced out of dairying in the past three or four years be allowed to resume in that sector. I have no doubt but that this scheme will prove its worth in coming months.

Our dairying sector produces an extremely important product but unfortunately it is not being promoted or marketed as successfully as it ought to be. Therefore, we shall have to do so more effectively than has been done in the past. While we have an excellent produce, competing countries do a better promotion and marketing job. Indeed, all dairy farmers should take note of the advice given them recently by An Bord Bainne.

If our agricultural industry is to go from strength to strength two important factors must be considered: first, the mobility of land; and, second, an incentive given to younger farmers. This Government and Department are handling these areas well. To acquire land a young farmer must either buy land or receive it from his or her parents. The Minister indicated that he intends allowing young farmers stamp duty exemption on transfers of land for 1985 — an important incentive being availed of, particularly by farmers in the west. Another feature mentioned by the Minister for Agriculture is the introduction of an installation grant. When a young farmer acquires land and is anxious to develop it he needs an incentive and I am pleased that the Minister intends bringing in this grant which will help towards the development of farms. This is very important if we are to get the best results from farming.

I was delighted with the announcement of the Minister for Agriculture that although the rescue package is supposed to finish in two months he is having it reviewed and is not confirming or denying anything at present. I hope he will be in a position to extend that package for some time as it has served a very fine purpose and it would be wise to continue it.

In the west, we are particularly concerned with the disadvantaged areas and, if western agriculture is to develop, it is very important that the disadvantaged areas scheme and the western drainage scheme should continue. During the year, the Minister made an announcement that the off farm income limit will be raised from £3,500 to £6,400 per annum. This will benefit the lower paid workers and seasonal workers involved in forestry, fishing or county councils. It is very important that that income limit has been increased because it will be an incentive to greater development in the agricultural sector and community in western areas.

I was also happy to note that the grant for the beef cow scheme will be increased next year from £32 to £70. It is a very significant increase and is very welcome. There has been much discussion inside and outside this House in regard to the western drainage scheme and I am happy that so many farmers have taken part in the scheme. To date, over 330,000 acres of field drainage have been approved and the Minister announced that the Government will make additional sums of £3 million available for 1986-87. That is very important but it is not enough to do field drainage alone; it is also very important to have arterial drainage as, unless rivers are drained, it is pointless to drain the land. In future, therefore, greater attention should be paid to drainage of rivers and waterways which relieve field drainage.

It was announced last year that the Land Commission were to be abolished. I had mixed feelings in that regard as the Land Commission have served a very fine purpose in County Clare and I was reluctant to see them abolished. As the Minister stated they have done a very fine job, particularly in the acquisition of large estates and their subsequent disposal. The Land Commission were faced with great difficulties in recent years because of the increased cost in acquiring land and it is unfortunate that that is the case. However, the personnel in the Land Commission can serve a very useful purpose in relation to the application of land policy in future. It is very important to keep these personnel in each county to monitor group purchases so that when a group of farmers are anxious to purchase a property they would have assistance from the Department of Agriculture through the personnel who are at present involved in the Land Commission. They have tremendous experience in this area and it would be advisable to retain them. They should also assist in the promotion and publicity regarding long term leasing. In 1984, this House passed a Land Bill, which may have been too progressive for many farmers because I do no think the mentality of farmers is geared towards land leasing. While the Department of Agriculture conducted a good public relations exercise, there is room for greater public relations and promotion of this scheme. I hope that more farmers will avail of it in the future because there is a lot of land lying idle, which could be put to good use. If the longer leasing system is used it will be very advantageous to young and old farmers. In this regard, I am happy that in the budget the Minister provides for the exemption of tax liability on the first £2,000 of leasing income obtained each year by the lessor of agricultural land. That refers to farmers over 55 years of age or who are incapacitated. This move should encourage more farmers to lease their land.

I was also very pleased that the Minister for Agriculture announced that the Government's commitment to the social welfare code is being examined to see if there are any further ways in which land owners could be encouraged to release land for leasing. Last year, social welfare legislation provided that the means test for a farmer who leased his land would be assessed on the same basis as a farmer who let his land on the 11 months system. This provision changed the system of assessing income for social welfare purposes which previously discriminated against leasing and was an obstacle to its adoption. That move, combined with the announcement in the budget by the Minister for Finance allowing tax exemption, is a very encouraging step forward which I hope will be accepted by the farming community, especially those who are in a position to let land under the new leasing system.

Overall, the budget is very sound for the agricultural community. It is aimed primarily at ensuring an economic environment in which the industry can prosper. The various measures adopted in the budget show the commitment of the Government to this sector.

While we are all anxious that there should be increased employment, we must also face the realities of those who are unemployed because they cannot get work, are disabled or too old. There are two categories which should get priority under the social welfare code, the disabled and the old age pensioners. Other people who are unemployed but sound in mind and body should be given an incentive to work and, while it is good to have social welfare assistance and unemployment benefit, most of the people on these are not happy to be unemployed.

They would prefer to be working. Some incentive should be given to those who receive social welfare payments to enable them to do some kind of community work. If this approach was adopted it could be of great benefit to us all. I hope the Government will examine that aspect of social welfare payments.

The Minister announced that free fuel vouchers would be increased from £4 to £5. I ask him to examine the application of this scheme as many people who are in great need do not qualify for them at present. One very welcome announcement was that dental and optical benefit would be provided for pregnant women whose husbands are fully insured. That scheme will operate with effect from July 1985. It is long overdue. I congratulate the Minister and the Government for taking the initiative in this area. The move is very welcome. I am sure it will be broadened in future budgets. All women whose husbands are insured and who are not in employment should be entitled to optical and dental benefit. Next year I hope the Government will be in a position to extend the benefit to the wives of lower income insured workers and eventually to the wives of all insured workers. It is a very welcome step.

This budget has put us on the road to recovery. It is a watershed in our economic history and in years to come it will be viewed as one of the most innovative and progressive budgets ever presented before the House, given the economic climate. The Minister and the Government are to be commended for their action. I have no doubt that during 1985 and early in 1986 the benefits of this budget will be seen by the entire community.

I welcome the opportunity to contribute to this debate. I am glad that we are back to discussing the budget having spent a number of days discussing other matters. The budget introduced on 30 January was described very well by one correspondent in The Irish Times when he called it the annual juggling act. There was a cartoon of the Minister for Finance juggling with taxes, public service pay, debt servicing and social welfare payments. The cartoonist could have included unemployment figures which are out of line and were even since the national plan was launched. He could also have included buoyancy figures. I am concerned that now, at the end of February, we are discussing a different budget from the one introduced in January. Not alone have we increased unemployment figures but VAT has been postponed to 1 May and there have been changes in the terms of the new house grant which will be paid after 1 May. Payments to be made to recipients of social welfare have been underestimated.

In the newspapers today we see reports that the dollar is strengthening. According to economists this means that £6 million will be added to our foreign debt. It is no wonder people are asking if a supplementary budget will be introduced before the end of the year. I am not saying the Government are to blame for all these changes but in the national plan we were told they had assumed that foreign interest rates, particularly US dollar rates, while they might remain high in the immediate future, would fall significantly over the period to 1987. It is frightening to think that possibly next month a gallon of petrol will cost more than £3. Our foreign debt will be worse as will the budget deficit when all these matters are taken into consideration. There is also the possibility of increased prices for coal and oil. That is very bad news for agriculture and industry. It shows the folly of the Government increasing the price of petrol in the budget when there will be further increases next month.

The Government have given some details about savings that are to be made to the tune of £28.6 million. The first thing that amazed me was that £7 million was taken out of the youth employment fund and was put into the post-primary education Vote. It is disappointing for people who contributed 1 per cent to this fund to find that this money is now being transferred to another Department in substitution for what that Department should receive from the Exchequer. The same kind of treatment was meted out in the social welfare area.

Unemployment figures have not been properly estimated by the Government. Yet they propose to take £7 million out of the Department of Social Welfare. They also propose to take £1 million from the Office of Public Works at a time when every arterial drainage scheme is under review and they propose to take £3 million out of the Department of the Environment. We must ask why there have been so many changes made and if we are discussing the same budget as the one introduced on 30 January. I put it to the House that we are not.

The serious problem of unemployment has been mentioned by many speakers. One of the factors which contributed to job losses, particularly in 1984, was our very confused energy policy. We know that electricity prices are too high. A recent report on electricity prices showed that industrialists here are paying an average of 20 per cent more for electricity than their competitors in other European countries. I welcomed the announcement by the Tánaiste on the day after the budget that the cost of electricity to industry was to be reduced, but the House will recall that in November last the Government sanctioned a 7 per cent increase in the cost of electricity. Again, that is another example of the confusion created by Government policies: an increase followed by a decrease within months in the cost of one commodity. However, we should like to hear whether the Government have any intention of reducing the cost of electricity to householders. The recent bad spell of weather has caused hardship to many people in terms of paying for electricity because of the extra energy needed during that bad spell.

At the end of 1984 the Confederation of Irish Industry stated clearly that the increase in electricity charges would lead to a loss of jobs in industry and in this context they referred to a figure of 3,000 jobs. In addition they said that the increase would add about £3 to the electricity bill of each household. At a time when there is such a high level of unemployment and when factories are closing as a result of the increases in the cost of energy, we will experience a higher level of imports. The result of this on our export market is obvious. More than ever before we should be concentrating on the promotion of our exports on every market that is available to us. Government policies are leaving the country less attractive for new investment. The figures I have given for electricity here compared with corresponding figures in other countries illustrate that we will not be competitive, though we know that to survive we must be competitive.

Another problem that manifested itself during the cold spell was that some people were in such difficulty because of the cost of fuel and electricity that they had to have recourse to their health boards for the purpose of being allocated a little extra by way of fuel vouchers. One Dublin mother, for instance was forced to go to the High Court in order to have the court squash a decision by her health board not to allow her a free fuel allowance. This gives some indication of the difficulties people have been experiencing in this regard. In that case the judge observed that the Minister had gone beyond his powers in the operation of the Social Welfare Acts.

While talking of energy, I should like to refer to a project in my constituency, namely, the proposed briguette factory at Derryfadda, Ballyforan. It is important that the Government reach a decision very soon on this project. More than £20 million has been committed, much of that having been spent already, in the area bordering Galway and Roscommon, so we should like to know what the future is for the 56 people working at Derryfadda. Originally the number employed there was 156 but 100 of those were laid off last year. It is hardly necessary to stress the importance of the development of our natural resources especially in an area of high unemployment. Bord na Móna were allowed a price increase with a view towards proceeding on their capital programme expenditure with the Derryfadda project. Last year the board made a profit of £16 million. Is it not ludicrous to be granting them increases if they are not being allowed continue with their capital programme? Another aspect of this situation was highlighted also during the cold spell in the form of a shortage of briquettes in the west. I am not prepared to accept the Government's excuse that there is no market for briquettes. They have been in very short supply in recent months.

Up to this year there was a sum of money allocated in the public capital programme for the completion of the project at Derryfadda. In this regard the amounts were £5.2 million in 1983, £8.4 million in 1982 and last year, £15.4 million, which was the biggest allocation; but not a penny of those moneys has been spent because of the Government and Bord na Móna not reaching a decision on whether to proceed with the factory.

I was very disappointed to find in the 1985 public capital programme that no provision is being made for this very important project. The sod was turned on the site of the factory on 8 November 1982. A lot of development work had been undertaken before then and some further work of that kind was carried out after that date. It was surprising that at the time when a contractor was about to be appointed, when the civil engineering works were completed and the site cleared, the Government said they would review the project. That was to have been the second review in five years. In the past three years the unemployment level in the Galway area has increased by about 100 per cent. We are anxious that the project at Derryfadda be proceeded with and I have every confidence that Bord na Móna will be able to complete that development, assuming they are allowed complete it. I am confident also that they will be in a position to repay the interest on the money borrowed. As I have outlined, their financial affairs are in a healthy state. There is no reason for the project being delayed further.

The local authorities in Galway and Roscommon have completed a good deal of work in the area in the interest of ensuring that the necessary infrastructure is there. In addition, Bord na Móna have spent a lot of money and have given a number of commitments with a view to proceeding with the project. One of the main attractions of such factories is that young people can be apprenticed to trades. Bord na Móna have trained many people and given them skills which they would not have been able to acquire in other parts of the country. When Bord na Móna go into areas like Galway and Roscommon they do great drainage work and this leads to better land use.

Mention has been made of our health services. The Western Health Board met on three occasions to try to deal with the cutbacks which have been forced on them. Even at the third meeting, held last Monday, they could not resolve their problems. They are very anxious to meet the Minister to discuss the health services they provide for the people of Galway, Mayo and Roscommon. I call on the Minister to meet them as soon as possible and to meet the local authorities of Galway, Mayo and Roscommon who owe the health board money paid out in supplementary welfare allowances.

At present the Minister for Health is trying to dismantle the health services which have taken many years to build up. I want to praise the Western Health Board, their chief executive officer, management and staff who spent many years building up those services. I will give an example of the economic lunacy I see in my own county. A maternity unit in Galway is not in use because there are no funds to staff it; a CAT scanner costing £500,000 is not in use for the same reason, and 14 buildings intended for the mentally handicapped are lying idle. This is a contradiction of what was stated in the Government's national plan when they told us they had a policy to develop services for the mentally handicapped. Other proposals put to the health board are that they should close the fever hospital in Galway and other wards. The Western Health Board had a £4 million deficit in 1984 and it is now proposed that they will have another £4 million deficit in 1985. The total deficit for all the health boards in 1985 will be about £37 million. Bearing this in mind, I do not see how the Minister can look for these cuts and at the same time expect to provide even a minimal health service.

I would like to refer to the supplementary welfare allowance scheme. Obviously this scheme is very necessary but local authorities do not have a great say in it, except that they pay the health board whatever is demanded of them. I have seen some figures for the operation of this scheme and I am not satisfied with the percentage we receive from the Department. It appears that the Western Health Board have to ask the councils from Galway, Mayo and Roscommon to pay more each year towards the balance of these funds. If the Minister met representatives from the area to discuss the supplementary welfare allowance scheme and the cutbacks, he would be doing a very good day's work because we could explain the problems facing us.

I do not agree with Deputy Taylor-Quinn's statements on the agricultural industry. I do not agree that either the super-levy negotiations or boning over the figures has been well handled by the Minister. Many of our dairy farmers hoped to get rid of some of their financial difficulties through increased output. Many farmers had resolved their financial difficulties through the reduced interest scheme but the Minister has not given a commitment to renew that scheme. Recently I asked a question about this scheme and was told there were 6,227 applicants up to the end of December 1984. Out of that number 5,418 farmers had been granted interest relief by the lending institutions. I know that at least 3,000 farmers got themselves out of financial difficulties through this scheme, but what about the other 3,000 farmers? Would the Minister consider reintroducing the scheme to help them? These farmers are working with ACOT instructors to try to get out of their financial difficulties, particularly through increased dairy output but now they find the scheme will not be extended. Another problem is that we do not know what is going to happen about the milk cessation scheme. It is about time the Minister gave some figures about this. We do not know what is the situation for farmers with diseased animals. The Minister owes it to the agricultural sector to explain these points clearly.

One of the most serious problems in my constituency is diseases in animals. The Minister should be committed to eradicating all these diseases but particularly bovine tuberculosis. I regret that the bovine tuberculosis scheme is in difficulty but I would like to talk about the attitude of the Department towards farmers whose animals have been hit by tuberculosis. I inquired from the Minister about the hardship fund in relation to a farmer who lost 32 animals through bovine tuberculosis. I was told that the fund was restricted to herdowners who, on the advice of the district veterinary office, depopulate their herds. This procedure was not considered necessary in the case of the farmer for whom I made the inquiries. Farmers are losing thousands of pounds and their livelihood is at stake when we have a system which does not cater for the major losses they suffer. I would like the hardship fund to be operated in a more flexible way.

With all the talk I have heard over the past few days about the Minister's attitude and the veterinary surgeons' attitude towards the disease eradication scheme, I heard very little talk about the actual research into the causes of bovine TB. It has been pointed out to me, particularly by farmers in south Galway, that there is a very serious problem in that area and that wildlife and particularly badgers have been carriers of TB. It is clear that in the south Galway area, testing alone will not solve the problem. There is conclusive evidence in a survey carried out by the Department's veterinary office in Athlone that badgers have been carriers of TB. Many farmers are looking for a licence from the forestry and wildlife section to tackle the problem themselves.

I hope the Minister will consider research into the causes of bovine TB and take action to clear up the confusion which exists. I hope he will consult with his colleagues in the Department of Fisheries and Forestry to see what can be done about TB in wildlife, and that he will appoint more staff to the research end of his Department to inquire into the causes of TB.

Along the western seaboard we are also concerned about the way applications for re-classification of the severely handicapped areas have been dealt with. I would love to know what commitment the Government have to including extra areas in the west of Ireland. Other countries in the EC have had extra areas included. The British, the Dutch and the Italians were able to re-classify parts of their countries for increased headage payments. We have not had any extra portions of land included in the severely handicapped areas since 1981. What has become of the Government's submission on these areas? I understood that the closing date for applications to the Commission was 1 January 1984. It now appears that all the submissions will not have been made until 1 January 1986.

The Government have had a long time to look areas in the west of Ireland and other areas which, because of their height above sea level or other factors, should be included. The Government had plenty of time to put these proposals before the Commission, to have them examined and to establish that farmers who own land in these areas are entitled to increased headage payments. The United Kingdom, the Netherlands and Itlay had areas included. I have had no satisfactory answer from any person about that. I have been in contact with the MEPs to try to follow up this matter. Perhaps Deputy O'Donnell could take it up in the European Parliament.

The decision by the Government to abolish the Land Commission was very regrettable. I raised this matter here on a number of occasions with the Minister for Agriculture and in particular with his Minister of State, Deputy Connaughton from my own consistuency who is in charge of the land structures.

I cannot understand why this decision was made without setting up an alternative land authority, or land agency, or somebody who could intervene on behalf of small farmers when land comes on the open market. Small farmers will be at a severe disadvantage when land is put up for sale and there is no one to intervene on their behalf. There is great concern about the danger of multinationals, non-farmers, or people with no interest in agriculture buying land while there is no agency or authority to prevent them from doing so.

Macra na Feirme have made some very good proposals which I understand were sent to the Minister about how young farmers in particular could be helped through the land leasing system. I support what they said. They gave us information on help for young farmers in other EC countries. This information suggests to me that in countries like France, Belgium, the Netherlands, Denmark, Germany, Luxembourg and Italy, there is either a low interest loan scheme, or a grant scheme, or a rebate on interest payments scheme to help young farmers to lease land. We know how expensive it is for a young person coming into agriculture.

To give credit to the Government there was a slight change in the operation of the land leasing system in the budget. It was confined to people over 55 years of age, or handicapped people. It did not go far enough. There is still the question of social welfare and taxation to be looked at in the Land Leasing Bill. There is still a need for some agency or body to acquire land. To the credit of the Land Commission they could always intervene when there was a dispute about the sale of land. We criticised them because they took so long to divide land.

Many of the staff who were involved in the division of land who used to drain and fence land, and make roads if necessary, were laid off at the end of December 1984 and in January 1985. The funds made available for the division of land used to be of the order of £1 million a year. Two years ago the figure was £4 million. It was reduced to £160,000 this year. I should like to know from the Government who exactly will be involved in the division of land, who the people on the ground will be to divide land between a number of farmers. It is not fair to say to farmers: "Here is the land. Divide it yourselves."

We are aware of the high rent charged for these lands. Will it be done through some contractor whereby some tenders will be submitted, or will some of the staff from the Land Commission be involved? We were told that Land Commission staff would be involved in assessing land for the new farm tax, but we have not been told if Land Commission staff will be involved in the division of land. Especially in the west, there are many acres of commonage but there has been no effort to divide these lands even though in many cases farmers have agreed to the division.

I am also concerned about the termination of the AI subsidy and the land subsidy. Cutbacks have been made in many schemes that were benefitting farmers: the hogget ewe scheme has been cut back; the EC premium subsidy scheme for sheep has been changed as well. That scheme was always paid in two instalments but the Minister said it could not be done because they could not have the inspections in time and that there would be one payment only. After some pressure from this side of the House and from the IFA we are told that an advance payment of 30 per cent of that premium would be paid early this year and that the balance would be paid in July. At a time when we are trying to develop the sheep industry it is not good enough for the Minister to change these schemes. The Galway IFA branch say that the premium is worth £4.5 million to sheep producers in Galway. Under the hogget ewe scheme there will be a reduction of approximately £100,000 to the 4,500 producers in County Galway. All these cut backs mean less money for farmers although costs are continually rising.

I agree with Deputy Taylor-Quinn about the importance of arterial drainage. I was amazed recently to hear from the Minister of State that the Government had decided that all arterial drainage plannings should be halted pending the outcome of a review. He said this in reply to a query from me about the Dunkellin River. I was told that the review had been carried out by the Office of Public Works and was currently under consideration in the Department of Finance prior to a submission to the Government. The letter giving me this information is dated 30 January. By this time surely the review has been finalised. It seems to be the policy of the Government to put the dead hand on arterial drainage. Many of these reviews are not needed at all. For example there was a review of the scheme involving the River Nanny which supplies water to Tuam. This scheme was almost completed until it was decided that the water supply needed to be improved. Now, 30 years later the Government have decided to review the scheme when there is only something like 10 per cent of the scheme left to complete. There is no need for a review there.

I wrote to the Minister about the Dunkellin River and I am disappointed that the review is still going on and that we are still talking about a cost benefit analysis and serving notice on the interested parties. The interested parties are the landowners, Government Departments, the people involved in fishing, with particular reference to the oyster beds at Clarinbridge and those involved in the wildlife sanctuary near Croaghwell. I hope these negotiations will be completed soon and that the scheme will continue. In 1971 the Dunkellin River was second on the list of priorities to be tackled by the Board of Works but it was down at the bottom of the list some years later.

Arterial drainage is important in the context of field drainage. We had made a lot of progress with the western drainage scheme but unfortunately since 1981 no applications have been processed and applications have not been accepted since last year. This means that there are about 8,500 applications with the Department of Agriculture and less money is being provided each year for drainage schemes. It also means that millions of pounds of contractors' machinery is lying idle. The west is the only part of the country where no drainage is taking place. That is unusual if we are trying to improve the land. Although the grants in other parts of the country may not be as good, there are at least drainage schemes. This situation in the west is very disappointing. I hope the Government will give more priority to both arterial and field drainage and that we can get a commitment from the EC to renew funds for drainage which were so beneficial particularly in the west where 50 per cent of the cost was recouped.

The VAT changes in the building industry must be commented on. They will have disastrous effects on young couples buying or building their own houses for the first time. The Government action will make it very difficult for young couples trying to buy their own houses because not only will the houses be dearer but the increased tax on the building societies and the new insurance cover charges will render house prices much dearer. The construction industry have met all political parties and have clearly stated that the VAT increase would cost the industry £75 million per year and that it will add £1,714 to the price of each house. This will more than wipe out the benefits of the new house grants announced in the budget but deferred until May.

The building industry always has provided good jobs but in the past four years 24,000 building workers have lost their jobs. Now the budget will increase VAT on the industry. Originally VAT on the construction industry was levied at 23 per cent; it was increased to 32 per cent and now has been increased by another 10 per cent.

Much publicity was given to the £5,000 grant per person to those who vacate local authority houses. We would welcome that but it will not decrease the number of houses required to be built by local authorities, and it will not add to those who will be likely to buy or build their own houses.

The CIF have concluded that job losses this year in the industry will be as high as 5,000. We in Fianna Fáil have asked on many occasions that steps be taken to increase the number of jobs in this industry rather than have job losses. Unfortunately the industry continues to decline with more and more people losing jobs.

I was glad to hear comments on the help given in the budget to tourism and I welcome the small benefit. Tourism should be promoted much more widely and I hope that special events like the celebrations in Cork this year will mean extra visitors from abroad. I hope as well that all of those visitors will not go just to Cork. Cork will be doing excellently if they benefit as well as Galway last year. These celebration efforts are very important, but we must try to put the entire industry on a much sounder footing. We were concerned about changes in the regional boards and in today's newspapers we read that there will be increased charges in petrol and diesel prices. That will affect tourism in a major way. I was glad to hear references to the need to develop our natural resources, particularly fisheries and forestries. I should like to see more promotion of private afforestation. I do not think people are aware of the money available for this, having heard the Minister for Fisheries and Forestry yesterday speaking about the small amount allocated or claimed out of the £20 million available.

Still talking about our natural resources, I must refer to the Tuam sugar factory. I hope the Government will continue their commitment to this industry. I am disappointed to hear the Sugar Company always referring to Tuam as having a cost penalty of £2 million a year. That is a management accounting term when in fact the losses in Tuam in the past two years have been less than £2 million. Much work has been done there to get the costs down and 85 people have been let go since 1982. The workers action committee and management are trying to have more rationalisation but I do not agree that 28 full time jobs should be lost when the company transfer their packaging to Thurles. I had hopes that money would be invested in improving and modernising the existing packaging facilities. When a small part of a factory closes down, its overall viability is lessened. I hope that the negotiations which are going on with the unions will result in as many of those jobs as possible being saved.

There is also a problem in that the Sugar Company are trying to take from Tuam some of the areas in which beet was traditionally grown for Tuam, for example in Countries Meath and Louth. If they propose to take away 1,200 acres overnight, they cannot expect this acreage to be found immediately in the western area. The catchment area for Tuam should be left as it is. The Tuam growers grew 8,500 acres of beet last year and would grow even more this year if left their catchment area.

One of the most disappointing aspects of 1984 was the number of factory closures; the list is endless. A figure was given of 500 companies going into receivership or liquidation during that year. The Government will have to ensure by their policies and the type of environment which they create that there will not be further closures this year. Two of the Fine Gael backbenchers, Deputies Gay Mitchell and Liam Cosgrave, clearly called on the Government for a change of policy as regards the industrial sector.

Deputy Gay Mitchell is quoted in The Irish Press of Tuesday, 15 January, as saying:

We must earnestly ask ourselves if our performance in Government is making any difference.

He went on to ask this question:

Can any of us honestly pick a number of Government Departments, or even one, with which we can be reasonably satisfied that Government policy based on public need and social justice is being pursued?

That sums up what one of the Government Deputies thinks of the performance of his own Government. Deputy Liam Cosgrave said:

A mental fixation on figures and statistics without regard to the personal difficulties and situations currently being experienced by individuals and families ignores the reality of the present problems in the country.

Is é seo an ceathrú ócáid is fiche ó toghadh mar Theachta Dála mé go bhfuil sé d'onóir agamsa labhairt sa díospóireacht ar an cháinaisnéis bhliantúil. Ba mhaith liom a rá ar an gcéad dul síos — ó feicim, a Leas Cheann Comhairle, nach bhfuil an tseirbhís aistriú cháin ar fáil, I see that a translation service is not available, so there is no point in my continuing, in Irish, in fairness to everybody. I shall reserve what I intended to say in relation to the Gaeltacht and to the Cúrsaí Gaeilge until a translation service is available.

I have said that this is the 24th occasion since I was elected to this House that I have had the privilege of speaking in the annual budget debate. Looking at the overall budgetary strategy, any fair-minded person must admit that the Minister for Finance has achieved the three major objectives which he set himself in this budget. It must be admitted that he has succeeded to a remarkable degree in achieving what he set out to do when this Government came into office more than two years ago. That objective, to which we committed ourselves in the general election of November 1982, was the major national priority of restoring some semblance of order to the nation's finances. The Minister inherited an appalling mess, a state of absolute national chaos, in so far as the finances were concerned, when he assumed office. This budget indicates quite clearly to anybody who studies its basic strategy realistically and honestly that the Minister has made remarkable progress in that our national finances have been restored to some semblance of order and the road ahead has been signposted.

The second marked characteristic of this budget is the manner in which the Minister has faced up to some of the anomalies in our national taxation code. The problem of tax reform with all its various aspects has been referred to by many speakers on all sides of the House in recent years. The basic taxation strategy in this budget is a good one. There has been criticism of some of the previous budgets that they were book-keeping or book balancing budgets, but that criticism cannot be levelled at this budget. In addition to putting the finances into some semblance of order, the Minister has examined the whole area of taxation.

I am particularly glad that he has put into this budget some real incentives for entrepreneurship, for investment, for job creation. I particularly welcome the VAT concession to the hotel industry, which will have a major impact on our tourist industry. There is no doubt that the previous level of VAT has been a major inhibiting factor in the development of that industry. I also welcome the other incentives to the creation of jobs and the generation of more economic activity.

I am particularly impressed by the manner in which the business and industrial sector have welcomed the budget and agreed with its basic strategy. These incentives are direly needed in these times of severe economic difficulty, with growing unemployment. I am concerned about the construction industry. I should like to have seen some incentives given to enable that industry to generate new activity. It is accepted internationally that in time of economic recession and rising unemployment the building and construction industry is one of the quickest areas in which one can get people working gainfully. This has been accepted in the EC. It has been debated by the European Parliament at length and in some of the relevant committees over recent years, whether it was wise, in the context of a world recession, to finance the creation of an infrastructure, roads and water supplies, tourist schemes, advance factories and various other infrastructural work. This applies also to schools and public buildings and public works as well. It is accepted that a time of economic recession is an appropriate time to channel funds into the provision of an infrastructure. Then, when the economy, as it inevitably must, picks up again, that structure will be there and we shall be able to make the best use of the opportunities which it is hoped will then arise.

In speaking on every budget since I came into this House, I have concentrated on one aspect of the national budget. Most people tend to look at the budget from the point of view of taxation. They consider the increases and decreases in taxes or whether various commodities will be increased in price as a result of a budget. Budgets are not looked at in the light of what they are — the major instruments of a Government's economic policy. The acid test of the policy of any Government is the type of economic strategy underlined in a budget in relation to job creation and the tackling of the problem of unemployment.

In regard to the latter the Minister has made some very wise decisions. The tax incentives already mentioned will be a great morale boost to the business community. There will be greater opportunities and, more important, greater incentives for people to invest money to generate new activities. We will have a greater spirit of enterprise and the encouragement of entrepreneurship. Irrespective of which side of the House we are on, we all share a deep concern about the massive and frightening unemployment problem that continues to grow. There is no overnight solution to that problem, and that has been accepted by all EC countries, although some countries have made more progress than others in tackling it. Deputies on all sides should be more honest: they would make a greater contribution towards finding a solution if, instead of blaming the Government, they put forward suggestions and helped in the implementation of projects.

Former Deputy Martin Corry, a distinguished Member of the House for many years, always made the point that a Deputy who did not create a few jobs or establish at least one small industry in his constituency had not achieved a lot. There is a lot of truth in that. Taking into account the budgetary strategy, the White Paper on Industrial Policy produced by Minister Bruton and the various strategies outlined by the Ministers for Agriculture and Fisheries and Forestry, I am satisfied that the Government — to use a modern phrase—have got their act right.

The Minister has directed considerable attention to industrial development as a solution to our unemployment problem. It has been referred to by the Taoiseach and other speakers also. I should like to pay tribute to Minister of State Birmingham who has responsibility for youth policy and administering a number of schemes. Those practical schemes are succeeding in giving young people gainful employment. I have had practical experience of the success of the scheme in my constituency. I am sure most Deputies have been involved in schemes which have involved establishing small industries and many community projects. The schemes are making a substantial impact on the unemployment problem and they will show more tangible results in the near future.

I should like to put forward a suggestion that may be helpful in this regard. It relates to the multiplicity of schemes we have for youth employment and the many agencies that are involved. We have reached the stage where there is an urgent need for co-ordination at local level of such schemes. I was called in by the local development association in the historic village of Castleconnell in County Limerick recently to discuss a problem. That progressive group had identified areas where work could be provided for young people in improving the locality. They were aware that they could avail of a variety of schemes to carry out that work; but while they had the imagination, the initiative, the interest in their locality and concern about unemployment, they did not have the time or expertise to cut through all the red tape and deal with all the forms involved in such schemes.

Our county manager, Mr. Richard Haslam, a very progressive official, in the course of a conversation following my visit to Castleconnell, pointed out that local authorities had the expertise and administrative facilities to deal with such schemes. I urge on the Minister to consider the desirability of assigning to local authorities responsibility for the co-ordination of the various schemes now in operation. That would represent a major step forward. The schemes could be utilised more efficiently and yield more desirable results. The various schemes emanating from the offices of Ministers of State Birmingham and Creed and the many community projects are worthwhile but there must be more involvement by local authorities. They should be involved in the formulation and implementation of the various schemes.

I welcome sincerely the concessions granted to the hotel industry. Our tourism industry has tremendous scope for further development. I should like to congratulate Bord Fáilte and the Shannon Free Airport Development Company on their outstanding success in 1984. The arrival of Deputy Coveney in the House has reminded me that I should make a point in relation to SFADCo, which was sniped at by some Cork Members recently.

I want to congratulate SFADCo on their magnificent achievement in regard to traffic figures for Shannon in 1984, constituting an all time record. This is a remarkable success story. SFADCo is the most outstanding regional development agency in Europe. I have been a member of the Regional Policy Committee of the European Parliament since 1979, having had the privilege of being very closely involved in regional affairs there. I have examined similar type agencies in Europe. SFADCo, through its structure, policies and the manner in which it involves local communities in different areas, is a model of what a regional development agency should be. Might I say to my Cork colleagues that, rather than looking with envious eyes at SFADCo, bemoaning the fact that because of SFADCo the mid-west region enjoys certain advantages that Cork does not, they should be seeking a similar type agency in Cork. In fact, with the help of my colleague, Tom Raftery of Cork, I have tabled a motion in the European Parliament. I should like to see a similar type agency in all our regions.

A solution to the problem of Cork does not lie in sniping at SFADCo; rather does it lie in getting the act together down there. I see no reason why the South West Regional Development Authority should not be given statutory authority. I have tabled a motion at the European Parliament to that effect. There is no reason it cannot be done. The basic structure being there, the Government could give it statutory authority. There are problems with regard to Cork Airport, the port of Cork and the cross-channel services there which can be tackled only in the context of a proper regional development policy, properly co-ordinated annual developments within an overall, integrated development programme for the south-west region.

I recently had an opportunity of visiting the largest ever holiday fair held in Stuttgart at which Bord Fáilte and SFADCo had stands, as also had the Northern Ireland Tourist Board. I was very pleased to see them represented there. I had an opportunity of examining the overall picture in relation to the European tourist market. There were 432 stands at that exhibition with countries from the five continents being represented. It could be seen that the European tourist market is a highly competitive business. Undoubtedly we have something to offer by way of competitive holiday packages and special interest holidays in which respect Bord Fáilte are doing a fine job. I want to place on record particularly my appreciation of the outstanding work of SFADCo in the European tourist market. For example, during the current year there will be a series of charter flights from Hamburg, Dusseldorf, Munich, Milan, Copenhagen and Zurich into Shannon, apart from the North American traffic, which, it is predicted, will break all records in this year because of the value of the dollar viz-à-viz the Irish púnt.

I was very pleased to be told today by a representative of the tourist industry that they could not get a booking at Bunratty for a party of tourists in 1985, which is of great credit to SFADCo. I could not let this occasion go without expressing my disgust at the sniping being done at SFADCo, without defending them and paying tribute to their achievements. Out of a bog, which is what Shannon was before there was developed the international airport, has grown a town with a population of 10,000 and some 28 modern industries. I should love to see a similar type agency catering for the Cork region, and the west also. Ba chóir go mbeadh eagras cosúil le SFADCo ar fáil do mhuintir iarthair na hÉireann chomh maith.

Discussing an annual budget in a national parliament, nowadays one must take account of the fact that we are members of the EC and realise that, in arriving at the final budgetary package, the Government must take into account revenue from the EC, its various instruments and so on, in addition to our contribution to the EC. Unfortunately, the EC is faced with very serious problems at present of a budgetary nature. There was the ludicrous situation last December of an annual budget being presented to Parliament which was adequate for ten months only and which was rejected by the Parliament. I shall not go into that question in detail but I hope we shall shortly have a budget agreed which will also have implications for national budgets and so on the outturn of budgetary figures in the current year.

Two major funds which benefit this country substantially and which constitute a source of substantial revenue each year are the European Regional Fund and the Social Fund. I hope it will be in order for me to refer to these two funds in the context of our national budget. I recall a time when the Minister for Finance, presenting his annual budget, always referred to the projected revenue from EC financial instruments. Since joining the EC in 1973 the European Regional Development Fund has constituted a source of considerable revenue for this country. I have not yet seen the final figures for 1984 but I believe them to be in the region of £90 million. In the overall context of European regional policy this fund has major implications for economic development and job creation here. The time has come when we must examine the manner in which our Government — and ours is not the only Government blameworthy in this respect — allocate or utilise the £90 million to £100 million accruing to us from the Regional Fund, which is being ploughed straight back into the national Exchequer with recoupment in respect of parts of projects already in operation. A list is issued two or three times a year with regard to, perhaps, a bridge here, a water scheme there, road works and so on. There are now no regulations governing the Regional Fund, whereas the Regional Fund could provide this Government with a tremendous opportunity for implementing a coherent national regional development policy. Under the new regulations it is now possible to allocate substantial funds from the ERDF instead of having ad hoc, unco-ordinated projects scattered throughout the country. The Regional Fund can now be utilised to finance the formulation and implementation of multi-annual integrated regional development programmes. Such programmes are badly needed in Cork and in the west, to which Deputy Kitt referred.

I tabled a question to the Minister for Finance last December regarding multi-annual, regional development programmes. Unfortunately, the Christmas recess intervened and the matter was not dealt with orally; instead I received a written reply from the Minister. I was very perturbed to learn that the Government did not intend to formulate and implement these programmes. It is their intention to use the money from the ERDF to finance infrastructural projects as has been the case since 1973, and this is a mistake. The Minister in his capacity as President of the Council of Finance Ministers met members of the Regional Policy Committee of the European Parliament last November for an exchange of views. It was clearly spelled out to him that the thinking now within the EC in relation to tackling economic and social problems of remote and peripheral regions is by means of a properly formulated, co-ordinated, implemented, integrated development programme. This formula offers tremendous opportunities, especially to the western regions.

In the context of my reference to SFADCo and the possibility of giving the south west regional development office a statutory function as development agency, this should also be done in the four western regions and I am sure that Deputy Coveney agrees. When he was Lord Mayor of Cork he articulated very clearly the need for regional development, a development agency and a long term, co-ordinated, integrated regional development programme. To get the maximum development from the Regional Fund, especially in relation to creating employment, it is very important to maximise the utilisation of our natural resources. It must be looked at in a regional context, there must be a development agency and the RDOs are readymade to be the statutory agencies for regional development. If, for example, statutory authority is given to the south west RDO tomorrow, 50 per cent of the cost of formulating the development programme, plus 50 per cent of the cost of implementing it, will come directly from the ERDF which means that the south west RDO could get down to their job of formulating a four year integrated development programme, to take account of agriculture, industry, tourism, transport, communications and all the natural, physical and human resources of the region. Instead of allocating grants in a haphazard fashion, the money would be channelled into the development agency on the basis of a progress report each year. I am sorry that the Minister for Finance did not think very highly of integrated, regional development programmes.

In south west Kerry, four years ago, the local community formulated a development programme for the region, one of the most depressed and rapidly depopulating regions in Western Europe. They drafted this programme on the lines which the EC had suggested. I went with a deputation from the region to Brussels and they were told that it was a fantastic scheme and that they should get the approval of the Government as, without that, the EC could not help them. It would be ideal if the Government gave statutory authority to the south west RDO to assist them in their development programme. I am trying to be practical in this regard and I have seen tremendous results produced in different regions of the EC by way of integrated development programmes.

Ba mhaith liom cúpla focal a rá faoi chúrsaí Gaeltachta, cúrsaí cultúrtha agus cúrsaí teanga. Caithfidh aon Teachta a bhfuil suim aige sa Ghaeltacht a admháil go bhfuil staid na Gaeltachta an-mhíshásúil sa lá atá inniu ann. Tá mé ag caint mar iar-Aire Gaeltachta agus caithfidh mé a rá go gcuireann sé brón mór orm a fheiceáil agus a chloisteáil nach bhfuil an Ghaeltacht ag dul chun cinn faoi mar a bhí an scél sna blianta atá thart. Ní hé amháin go bhfuil staid eacnamaíochta agus sóisialta na Gaeltachta mí-shásúil ach tá mé buartha thar cuimse — agus caithfidh éinne a bhfuil suim aige i leas na Gaeilge a bheith buartha — faoi staid na teanga.

Cúpla mí o shin i rith an toghcháin do Udarás na Gaeltachta bhí deis agam cuairt a thabhairt ar cheantair Ghaeltachta i gCúige Mumhan. Nílim sásta leis an dul chun cinn atá á dhéanamh sa Ghaeltacht faoi láthair. Tá Udarás nua tofa anois agus tá súil agam go mbeidh an tÚdarás nua in ann polasaí nua réalaíoch a bhunú chun leas na Gaeilge agus leas na Gaeltachta a chur chun cinn.

Bhí a lán argóinte faoi imeachtaí Gaeltachta ar feadh cúpla bliain. Tá súil agam go bhfuil na hargóintí agus mar sin de thart anois agus go mbeidh an tÚdarás nua, le cabhair ón Aire, ó Roinn na Gaeltachta agus ón Rialtas, in ann polasaí nua a bhunú.

I am very concerned about the state of the Gaeltacht and the language. I cannot let this budget debate pass without referring to the Gaeltacht which is the tobar agus foinse dár dteanga agus dár gcultúr, the source and fountain of our language. We may be preoccupied with economic matters such as unemployment and so on but we cannot overlook the fact that we have a Gaeltacht, a national language and a rich, cultural heritage. The Gaeltacht regions, by virtue of their remoteness, are suffering severely from the impact of the world recession. Nevertheless, there is an even more serious problem to be tackled in this regard.

I appeal to the Minister for Finance to make the maximum possible funds available to the Minister for the Gaeltacht to enable the newly elected Údarás na Gaeltachta to formulate and implement a dynamic programme for the economic, social and cultural development of the Gaeltacht. The late Dr. Lucey of Cork referred to rural Ireland as stricken and dying and the worst feature is that the will to speak the language has almost disappeared. I am confident that all the controversy, problems and arguments about the Gaeltacht in recent years have now ceased and that the new authority will have maximum support from the Department of the Gaeltacht. I am confident they will make a last ditch effort to save our language and culture.

Reference was made to the role of agriculture in the economy, the problems facing it and the budget strategy in relation to it. I will not go into detail on that because it is more appropriate to the annual Estimate debate. The rescue package worked effectively and was a tremendous help to many farmers. From my experience of speaking to farmers in Limerick and other parts of Munster, I can say without fear of contradiction that many farmers who availed of this package are among the most progressive and advanced farmers in the country. Many of them invested very heavily in modernising their farms and then found they could not meet their repayments. I appeal to the Minister and the Government to re-examine the question of the rescue package. I know it would have to be a joint venture between the banks and the Government but there is dire need to continue this package for another year or two at least. I hope the Minister accedes to my request. Everyone involved in agriculture is very concerned about this.

As regards industrial development, substantial funds have been allocated to the IDA, SFADCo and Údarás na Gaeltachta. Much criticism has been levelled at the IDA over the past year or two. It was inevitable that this would happen. There have been many factory closures but new industries have not been secured as rapidly as one would like. People see empty factories and so on and they look for a scapegoat. That scapegoat is the IDA.

The IDA have been faced with an almost impossible task over the last few years. I am familiar with the European scene and the fact is — it applies to the US also — that the countries from which we have been attracting industry for 20 years or more have all had recessionary and economic problems of their own and they are not investing abroad. It is impossible to attract the same flow of industry from Europe which we attracted in the sixties and seventies. Despite this the IDA have succeeded in bringing to this country during the past two very difficult years some substantial industrial projects.

Hopefully the recession may be beginning to bottom out. Perhaps the flow of foreign investment will improve once again. Looking at the European scene I do not hold out any great hope for the current year in relation to a massive flow of industrial investment to this country. Germany, Holland and other countries are faced with economic problems and there appears to be a policy of consolidation in those countries. It is not fair to blame the IDA. In the White Paper on Industrial Policy Deputy Bruton stated that we must look at our own natural resources, at the possibility of developing agriculture, tourism, forestry, fisheries and mineral resources. I read in a newspaper today that we import £25 million worth of fish products annually. I am sure the figure is in the region of £1 billion for food imports. There has been a lot of talk and argument about agriculture, much of it academic and unrealistic. If we are to meet the daunting challenge of creating employment and provide opportunities for young people we will have to have a new industrial development strategy. We can no longer rely on foreign investment to create industrial jobs.

Mariculture and fish farming offer immense opportunities for job creation and substantial export business. I speak with some experience of this because in 1975 I succeeded in persuading the then Government — it was not a difficult job — to invest £500,000 in the development of fish farming in Connemara. One day on a visit to the marine biology research station at Carna, directed by Professor Paddy Keady. I saw the culmination of two years of intensive scientific research into the cultivation of oysters and mussels. My opinion was that all that would be lost unless an attempt was made to exploit the operation commercially. Consequently, I directed Gaeltarra Eireann to set up a company who would engage in the growing of mussels and oysters. That was done and I understand that the company are very successful and that there are similar projects in west Cork also.

I should like the Minister to tell us when we are to have the legislation to enable the national development corporation to be set up. I ask the question in the light of the urgent need for the corporation. The concept has been talked about for a long time. It was mooted in 1977 while the Government of which I had the honour of being a Member were in office. There seems to be a certain amount of confusion about the corporation. People do not understand precisely what is involved or what role the corporation will play in national development. Apparently there are ideological hangups about the development of the corporation. This is a great pity when there is such a dire need for the corporation. The legislation in this regard is needed far more urgently than was some of the legislation that was brought before the House recently.

A national development corporation can play a very important and very necessary role by working in the area in which the private sector as well as the State and semi-State sectors appear to be unable or unwilling to engage. I am referring to the development of our natural resources — our land, agriculture, afforestation and other areas. It is time to stop arguing about the pros and cons of private and public enterprise. We must set up a national development corporation and forget about the various ideological and academic arguments being put forward whether in the media or otherwise.

I have held the view always that what we need in a small country like ours is a realistic mix of public and private enterprise. There are some who seem to think that the corporation would engage in work that the private sector are doing and can do or that the corporation would be duplicating the work of the IDA, of Bord na Móna, BIM or some other State agency. If we are to reduce our unemployment figures we must rely on the development of our natural resources and to this extent the national development corporation could contribute significantly, given the right terms of reference, proper financing and the maximum degree of autonomy. The corporation in these circumstances could be a major instrument for economic development, for job creation and for export development, too. I assure the Minister that within three months of the setting up of the corporation I will be able to put before him two, if not three, projects of the kind I have been referring to. Gaeltarra Éireann would not have been able to proceed with the development of the oyster and mussel project in Connemara if there had not been a State body who, under the direction of myself as Minister, were able to make funds available immediately. These are the kinds of developments in which I would envisage the national development corporation involving themselves. We must get on with the job of setting up the corporation if we are to make some impact on unemployment.

Is é mo thuairimse go bhfuil árd mholadh ag dul don Aire as ucht an dul chun cinn atá déanta aige. Tá cúrsaí airgeadais na tíre seo á geur ar an mbóthar ceart anois.

There is some light appearing now at the end of the tunnel. I commend the Minister of the tremendous determination and courage with which he has attempted to rectify the appalling financial mess inherited by him two years ago. I endorse fully the taxation measures announced in the budget and I trust that the third and major objective of the Government in this budget — the generation of new economic activity and the creation of employment — will be fulfilled.

I am not especially pleased to have the opportunity of contributing to this budget debate. I say that because after four weeks it is somewhat unrealistic that the debate continues in the House. I submit that discussion of the budget should be speeded up and the Finance Bill published as quickly as possible. There have been so many U-turns since the budget was announced on 30 January that it is no longer relevant. What we are debating is a revised budget.

Various opinions have been expressed in regard to this budget. My opinion is that it was a disaster and will not do anything to resolve our many problems. More than 234,000 people are unemployed. At 17 per cent of the population, this is the highest unemployment figure proportionately in the EC. Our unemployment figure includes 72,670 who are under the age of 25. When we left office in December 1982, the unemployment figure was 168,000 and I regarded that as an unacceptable level. Of those, 31,000 were under the age of 25. Since then there has been massive emigration. The estimate in this regard is 30,000 people per annum and the figure is increasing.

During the election campaign in 1982 the Coalition partners promised that if they were returned to office they would bring about a reduction in the level of unemployment but instead there has been an increase in the meantime of about 66,000. Of these 41,670 are under 25. Approximately 600 people per week or 85 per day are losing their jobs. That is a graphic way of describing the crisis. Surely even at this late stage the Government should declare a national emergency. They should appoint a Minister for employment with responsibility for coordinating all Government activities in the area of job creation and job maintenance.

The increase to 10 per cent in VAT on the building industry, which was postponed from 1 March to 1 May, spells disaster for that industry in which there are 47,000 people unemployed. The increase will result in the closure of many building firms. It has been estimated by the industry that a further 5,000 people will lose their jobs because of the increase. All the Government's projections have now be left aside. Since the budget was introduced over £6 million has been added to our balance of payments difficulties due to the fact that the present Minister for Finance in 1983 borrowed $500 million. At present the situation as regards the dollar and the púnt is disastrous. The Minister is responsible for switching borrowing from European currencies to the US dollar and the Japanese yen. This Minister has made a major and serious error and he should account for that error to the Committee of Public Accounts or to the Dáil. He should confirm at this stage whether a mini budget will be required to balance the books for 1985.

Where is the Government's oft-stated commitment to wipe out borrowing? We know that the national debt at the end of 1984 was £18.5 billion and that the foreign debt has increased from £5.2 billion in 1982 to £7.9 billion in 1984, an increase of £2½ billion. The total increase in our national debt is £6 billion since 1982 — and this from a Government which promised that they would control the national debt and national expenditure. The national debt has increased by 46 per cent since this Government took office in 1982 and foreign debt has increased by 49 per cent in the same period. That indicates that all the promises and projections this Government made during their election campaign have been broken and the reality is that the debt has increased to such an extent that it is an impossible burden on our taxpayers. The total amount of PAYE tax now goes to repay our national debt and national borrowing.

I welcome the reduction from 23 per cent to 10 per cent VAT on newspapers from 1 March 1985. In 1984 Fianna Fáil proposed a major reduction to 5 per cent VAT on newspapers and we stand over that policy. Over 100,000 tabloid newspapers are imported daily from Great Britain. This is a major challenge to the newspaper industry. It undermines our national identity because some of the British tabloids can only be described as British thrash press. Because of the difference in the cost of Irish produced newspapers and the British so-called popular press, a number of people buy these papers which have no commitment to this country. I believe we should have a nil VAT rate on newspapers — up to recently this applied in Britain — because this would allow our newspapers to compete with British newspapers. If possible we should put a charge on imported newspapers because they are advocating a different ideology and promoting British goods through advertising. I ask the Minister to consider the VAT rate on magazines. There is no mention of a reduction in VAT from 23 per cent to 10 per cent on magazines. This is a very important area which would be greatly assisted by a reduction in the VAT rate.

The proposed VAT increase on clothing from 8 per cent to 10 per cent is bound to create unemployment. That industry should be protected because of the high level of imports and dumping in this country. The new 10 per cent VAT on footwear will sound the death knell of many Irish footwear factories and will cause major hardship to consumers. The majority of parents realise that, although the increase refers to adult footwear, this will also apply to young people from the age of ten years and up. This is a major burden on parents especially when children's allowances were not increased in this budget.

We note with dismay the increase in the cost of petrol and diesel by 10p per gallon. Because of the devaluation of the púnt, roughly 9 per cent against the dollar over the last week or so, petrol could cost £3 a gallon by June. This will be a major burden for industry to carry.

As regards job creation, I believe there is a crisis and we must all try to play a constructive role. There should be a Minister for employment or a Minister for job creation who would co-ordinate the activities of all the agencies. A specialist team to deal with unemployment should be set up in every county representing the State and local authorities, the IDA, the National Manpower Service and Córas Tráchtála Teoranta. We should be realistic about this problem. It is easy for us to make speeches about the problems facing the country but we must play a more positive role in the area of job creation.

I have initiated the setting up of an enterprise development association based in County Roscommon which will have its inaugural meeting on Monday, 4 March. The purpose of this organisation is to identify products and services that can be manufactured or provided in my constituency. I believe that by bringing together independent individuals at present engaged in the provision of services and industry in my county, including unemployed people with skills and ideas, we could bring about a change of view in relation to job creation. There are a number of people with ideas to contribute and if they had a vehicle to launch those ideas I believe they could create much needed jobs, but to do this we must do away with the doom and gloom philosophy.

At next Monday's meeting I have invited personnel from the Athlone Regional College, the three post-primary schools in the area and other post-primary schools in my constituency. I hope to have representatives of the Youth Employment Agency also.

My contact with Mr. Green, the chief executive of that organisation, has been very fruitful. He has expressed great interest in this organisation and he will be represented at this meeting. Also attending will be members of the local development team, the IDA, the National Manpower Service and other State organisations in the area. The purpose behind my proposals is to identify products and schemes that can be developed in the area. I do not believe in waiting for a change in Government policy. We have the power to assess our problems and to analyse our difficulties. Our first mission is to provide a very detailed labour survey, to earmark the available people who are unemployed, to list their skills, to estimate the projections for employment and unemployment for school leavers in the years ahead and to highlight the available empty factory space and the sites we have for industrial development. From that I hope we can project our area as distinct from anywhere else and bring about a change of emphasis.

By setting up this organisation on a non-political, voluntary basis and attracting representatives from the whole community and from all the State agencies, we will be in a position to attract investment from those who emigrated many years ago and who are now successful in cities and towns throughout the world. From my contacts I have been given great encouragement that many people are prepared to invest in projects in their own counties, in their own country to help us to deal with the crisis we have to face.

We have a great deal of goodwill across the world. The enterprise investment scheme in the budget will be a major attraction to people who have money to invest in small businesses. There is no limit to the schemes which we hope to consider. The main idea is to develop the facilities we have in the industrial, tourism and services areas. I know we will receive the full support of all the State agencies. They are ready, willing and able to assist in any project which will bring about change. We have people who are skilled and who wish to work in their own areas. With leadership we will bring about a change. If we created only ten jobs it would be successful, and let us hope it will create more.

I want to encourage my colleagues in the Dáil and Seanad to leave aside the essential role of being a representative of the people and to move into the development spheres whether through co-operative movements, development associations or chambers of commerce. They should become more involved in job creation in their constituencies. There is a need for leadership. It is not enough to come to the Dáil or Seanad and make long-winded speeches about our problems. There is no point in trying to minimise those problems.

We should use our positions as elected representatives of the people to open doors, to represent our areas and to work with the State organisations. The State organisations respect the role of Oireachtas Members and will support their efforts in the job creation sphere in their own constituencies. In this constitutionally elected forum we have an opportunity to highlight our difficulties and also our potential and to mobilise the State agencies to work with the people for that development. Communities should get together to work for the development of their own areas.

As spokesman in the area of Communications I am concerned about the proposed imposition of a major tax on Telecom Éireann. In 1984 Telecom Éireann contributed £44 million to the Government by way of loan and capital repayments. They are also expected to contribute £50 million to balance the books of the Department of Finance, as announced in the Budget Statement and in the national plan. This contribution is an impossible burden for this young company to carry. According to the chairman, Mr. Michael Smurfit, the expected losses in 1984 were between £30 million and £50 million.

The national plan stated that Telecom Éireann would be required to pay their way on a commercial basis including remunerating both the debt and equity capital. In the short term this will involve Telecom Éireann in being required to make contributions to the Exchequer of £50 million in 1985, £60 million in 1986 and £70 million in 1987. To achieve this performance Telecom Éireann would have to take the following courses of action. They would have to increase all charges by 25 per cent bringing in its wake diminishing returns and an impossible burden on both consumers and commercial and domestic interests. We have the highest telephone charges in Europe. This burden would damage our industrial progress and development and would make Ireland an even less attractive place in which to invest.

The second option is to increase external borrowing to finance State expenditure. This would be unacceptable to me. The Government have stated that they are not in favour of an external borrowing policy decision. In 1984 Telecom Éireann borrowed £160 million for their capital programme. They will require £120 million in 1985, £120 million in 1986 and £100 million in 1987 for capital works. The Government's proposals would increase borrowing to an impossible level and place the company in virtual bankruptcy. If the Government pursue their objective of collecting this levy of £180 million, they will place this company in a very serious position.

Another very unacceptable option for Telecom Éireann is to introduce involuntary redundancies. The Government should review their proposed charges and give Telecom Éireann an opportunity to survive. They are doing an excellent job. There is progress right down the line. If the Government peruse the policy of using Telecom Éireann and the telephone system as a form of tax collection the company, formed and vested on 1 January 1984, will face serious difficulties in the years ahead.

I want to clarify our position on those charges. We believe Telecom Éireann should make a contribution to the Exchequer when they are in a position to make that contribution from their own resources. I do not believe that will happen until 1987 when they will be in a far stronger position to provide a refund to the Exchequer for the massive investment of £1,000 million over the past five years. These charges would stifle the company and would be a very unfair method of tax collection. As I said, our charges for telephones are the highest in Europe and an increase in those charges to pay £180 million to the Government would put them beyond the capacity of the ordinary consumer and business man to pay.

On the question of local radio, I welcome the fact that the independent local authority will be based in Cork. We welcome a policy of decentralisation. Not that many jobs will be created in the independent radio authority but, as a matter of principle, we should locate semi-State organisations away from the capital, which is already overcrowded. Other companies like Bord na Móna and the ESB should relocate some of their massive organisations where the actual wealth is produced. The wealth of Bord na Móna is produced in the midlands and in my constituency and that is where Bord na Móna should be located.

I am disappointed that the Government have not brought a local radio Bill before the House. As yet such a Bill has not been published. When it arrives we will give this Bill a speedy passage because it is a matter of urgency to have some form of legality in relation to broadcasting. The independent pirate stations have mushroomed throughout the country. They were allowed to carry on because of the lack of Government action in bringing a Bill before the House to provide the proper licensing of stations. They have placed a major burden on and are a major competition to our national broadcasting services and to the newspaper industry. They are providing a very popular service. The State should not have allowed a situation to arise where local pirate stations were allowed develop. I do not blame young people who are anxious to listen to modern music.

Five years ago a Bill should have been introduced to legalise local radio services. Although it is late, I would ask the Government to expedite this Bill to bring about a situation in which we can legally establish local independent services. RTE have enough on their hands at this stage. The proposed stations should be as far as possible locally orientated and locally controlled and managed. I compliment RTE on their fine facilities for radio and television. They should develop these services and where possible they should control some of the present setups. For instance Cork radio is extremely popular and it should be given extra broadcasting hours.

This budget debate has gone on for four weeks. The Finance Bill should now be published as quickly as possible so that we can discuss the realities of the budget. There have been so many changes since 30 January that the budget is not now relevant. In those circumstances the Finance Bill should be debated at the earliest opportunity. The budget has contributed nothing to job creation, it has only added to unemployment. Over the next 12 months, as a result of the budget provisions we will see further difficulties with the level of unemployment.

The budget has been a turning point for the Government and the country from the great recession we have been through. The Minister, despite a very tight financial position, has managed to produce a budget which moves in the right direction. The Minister has commenced the reform of the levels of personal taxation which have been a source of great frustration to all who have had to pay them. I would encourage the Minister to continue his policy in 1986 and 1987 so that at the end of the three years we will have levels of taxation which will provide a real incentive for people to work.

In relation to the reorganisation of VAT the Minister emphasised that it was only a reorganisation and not an overall reduction as this was not possible in the present financial climate. If the Minister removes the really punitive rate of 35 per cent then something at the other end of the scale has to move upwards. We had on the one hand the removal of the 35 per cent rate and some increases at the bottom end of the scale. Tourism will benefit both in relation to the car hire reductions from 18 per cent to 10 per cent and in the hotel accommodation end.

Deputy Leyden referred to Irish newspapers which have been under great pressure but the reduction from 23 per cent to 10 per cent will relieve some of the pressure. I understand that 23 per cent will still apply to imported newspapers so that will be an advantage to the Irish newspaper industry. The Minister clearly wanted to aid the theatre industry when he removed the VAT on theatre tickets. If the Minister really wanted to help it would have been better if they had been zero-rated because they could have set off their input VAT costs against a zero rate of VAT which would have been a positive advantage. The Minister might address that issue in the Finance Bill.

In relation to the construction industry in which I have a background, I listened carefully to representatives of that industry. Increasing VAT in this industry was a mistake. The Minister explained that he was reorganising VAT, reducing the number of rates and that he was specifically removing the top rate. In general everybody would agree with that but in increasing the level of VAT on construction, specifically on the house building end, we are talking of applying an extra 5 per cent to a product costing £30,000 to £35,000 on average. Even allowing that half the VAT is effectively repaid in an increased grant, this provision may well be the straw that breaks the camel's back in an industry that is suffering under severe recessionary conditions. I would ask the Minister to look at that. The Minister has mitigated some of the short term problems by extending the date to 1 May but with contractors going out of business before this is operating at all, anything that adds to that burden is undesirable and will lead to more companies going out of business and to job losses. Any measures which would lead as a near certainty of job losses should be reconsidered and I hope the Minister will consider that.

It is well to note that in a period of severe financial constraint the Government have managed to keep the level of social welfare payments at least in line with inflation. That is as it should be but it has not proved to be something which every EC country has managed to do in recent years. It at least shows a social concern in this Government which I am glad to note.

The budget is also consistent with the national plan. The broad strategy of the plan and the financial figures in it are maintained in the budget and people can at least begin to see that there is a strategy to try to solve our economic problems and, we hope, increase employment. Still, I think the borrowing level is dangerously high, particularly because of what has happened to the US dollar in regard to exchange rates. I have noted what Deputy Hyland said about increased borrowing in dollars in recent times but it is widely accepted that the Department of Finance officers are about the most skilled and respected in the world. They have been doing a crystal ball gazing job but they are constrained by the currencies available to us to borrow. The German currency, freely available in former years, became much less available recently and our increased dollar borrowings must correspond. Nobody anywhere expected the increase in the dollar value to last so long. Soon it will have to return to more realistic levels.

The budget has been outlined outside the House by people who have no affinity with one party or another, and in a leaflet published after the budget the Confederation of Irish Industry stated:

The budget contains several features which will improve the business climate and which will help to increase economic growth. The restructuring of the income tax bands and the elimination of the 65 per cent rate should have a positive effect on the incentive to work and to take on additional responsibility. The reduction in industrial electricity prices will help the competitiveness of Irish industry. The conditions for additional competitiveness have been set as the budget is estimated to have added only one quarter per cent to the cost of living and the income tax increases have increased take home pay, if only marginally.

These are positive features which should increase the level of economic activity.

I should like to address most of my contribution to unemployment. The creation of jobs is by far the most crucial problem facing us. There is very little disagreement about that. I will go further and say that if we can solve or make a major impact on the level of unemployment, as night follows day we will make progress towards solving the others that confront us, including the problems of Northern Ireland, taxation, the escalation of crime, poverty and a whole range of other social and economic issues. To break and reverse the vicious upward spiral in the numbers out of work is a formidable task made much harder by the precarious state of our national finances.

In terms of debt per head of the population we stand in the unenviable position of being at the very top of the international list of debtor nations, a sad reflection indeed on a decade in which we consistently awarded ourselves a standard of living which we could not afford and promptly eroded it with rampant inflation and paid for it all by reckless foreign borrowing and latterly by crippling levels of taxation. Though that disastrous course has now been halted and is being reversed gradually it will continue to restrict the ability of Governments to prime and rapidly to expand the economy which in other circumstances would be a policy option. There are, or course, simplistic solutions like pumping hundreds of millions of extra money into this or that, but they are simply not on. Those who propose such measures nearly always avoid the inevitable consequences of Governments not putting the country before self. If we learned nothing from the last decade we must have learned that.

This brings me to the theme of learning from the experience of others. Traditionally, Ireland has tended to relate our economy to that of Great Britain. We have largely borrowed, consciously or unconsciously, for class structured management and trade union practices, with all their warts, and we managed to add some of our own. Though historically and geographically this preoccupation with Britain might be understandable, it is no longer defensible unless it can be said that Britain is a successful model on which to base our economy. Unfortunately, the reverse is the case. If Britain were not self-sufficient in oil as well as being a substantial net exporter of that commodity her economy would be in dire difficulties by now and indeed it is in dire difficulties. The best barometer of that is probably the realisation that in 1945 the British pound was worth four US dollars and today it is struggling to retain parity with the dollar. That is the measure of the real success of the British economy. Yet that is the economy on which we based our economy, very often unconsciously.

Therefore, we should look at what some of the other countries closer to us in size are doing. In order to find suitable models from which we could learn we would have to insist on basic criteria. Those criteria would be in countries of relatively comparable size and similarly endowed with physical resources and which are further developed economically than we, countries that have managed to achieve much lower levels of unemployment as well as higher per capita income.

The House may be surprised to know that there are at least five countries which fulfil all these criteria. My source for that is the Faculty of Commerce and Business Management at UCC which has done a study on that subject. It has come up with startling statistics. The five countries they have selected are Austria, Denmark, Finland, Switzerland and New Zealand. Their average populations are 5.4 million. We are below them, our population being fewer than 4 million. Their per capita income averages $10,500 per annum and ours averages $5,000. Their unemployment expressed as a percentage of the labour force in 1984 was six against our figure which was close to 17.

The only factor which would provide some reason for those wide disparities would be the fact that our labour force growth is substantially greater than the average of theirs. No matter how one qualifies these figures for whatever special circumstances we may feel we have here in Ireland, the message is still loud and clear that we are not doing well enough and that we are out of step. It is true, of course, that our rapidly growing young labour force, the prolonged world recession, the on-going substitution of machines for labour and the poor state of our national finances all conspire against rapidly increasing employment. Nevertheless, it is high time that we stopped seeing our problems as being somehow unique and stopped accepting the inevitability of permanent high unemployment. It is not inevitable. It is, however, very likely to continue if the future responses are no better than the past and if we do not adapt to change and do not learn from the success of comparable small nations. So, what can we learn from these nations? First of all, it is worth noting that while all five — that is Austria, Denmark, Finland, Switzerland and New Zealand — are free democracies, they vary widely in political ideology and in their administrative structures. In other words, there is no one way. These countries approach the problems in different ways, but they have certain things in common.

Again, I rely on the studies of the Department of Commerce and Business Management and specifically, Professor Wrigley at UCC, to identify some of these factors. First, in all these countries the ideal of the responsible society holds primacy. It seems to permeate through the population and across the sectoral groups. Ireland today, unfortunately, cannot claim to have that theme or ethos of the responsible society, putting the country before self.

Secondly, there is the question of consensus. In each of these countries, consensus is a key factor in all matters of critical national importance. In our case, conflict still seems to be more the norm than consensus. In these countries also an emphasis is placed on human resources and the development of excellence in technological and business skills. They aim to be the best because they have to be the best. They are small countries among big countries. On the question of industrial development, they tend to specialise and to concentrate on products which are related to each other technologically. They do not seek to be good at everything, otherwise they could not hope to compete with the industrial giants. I am not sure at all that our industrial strategy really addresses itself to that kind of issue.

These countries also accept the constraints of the international marketplace. They compete on the international market and accept the necessity to live in the real world. Competitiveness and efficiency are regarded as absolute prerequisites to success. Here, I am afraid, those qualities are often seen merely as some device to lower wages. Yet the countries listed as well as being more competitive than Ireland also have a per capita income which is, on average, double ours. So the obsession with relating competitiveness to lowering wages is a misconception which we still continue to practise here.

These five countries generally have a small number of strong trade unions, industrially rather than craft-based. There is far less evidence of a "them and us" mentality in industrial relations. The class battles of earlier times are no longer regarded as relevant. Increasing the size of the cake takes priority over how to divide it. As a result there is a much larger proportion for everybody, as the per capita income figures clearly demonstrate. In our case we seem to be still hung up on the old class battles and rigidities, to the detriment of everybody.

All five countries possess a strong work ethic and a willingness to adapt to change. They have each significantly improved their international competitiveness in the eighties. We certainly have a lot of catching up to do in this respect. These broad common qualities are but the tip of the iceberg, but again the message is loud and clear that Ireland is out of step with the successful small nations in Europe and elsewhere.

In presenting this brief analysis I do not want to bear a message of gloom but rather a message of hope in that there are other countries which have confronted and solved the problems which we now face. I want to challenge the widely held view among many Irish people that current levels of unemployment are somehow an inevitable consequence of circumstances outside our control. They are nothing of the sort. For example, we place far too much emphasis on the burden of a rapidly expanding young population, conveniently forgetting that for a century or more we had the slowest population growth in Europe, which we also regarded as a burden. Today, Ireland has the most sparsely populated inhabitable land mass in Europe, so how can we honestly say that the recent reversal of a century of population decline has now become a dreadful burden?

Where, then, is the hope? It lies in the fact that there are other comparable small nations from which we can learn, if we have the will to do so. We know that at least five of these have on average double our income levels and one-third of our unemployment figures. Unless we are utterly stupid or morally bankrupt, then surely we must start to make honest comparisons between the successes of these countries and our own failures. The lessons are there to be learned, but they are not always comfortable lessons. They challenge some sacred cows, they queer the pitch for all of us. They demand fundamental changes in our attitudes from top to bottom and that will not always be easy. It will not be easy, particularly after years of protectionism, subsidies, mediocrity, sectoral conflicts, national disunity and the assertion that reform and change are always something for others and never for us.

The primary national question today is to find jobs for our people. It is a stinging challenge to our moral fibre and to our practical patriotism, but it is not a unique or insurmountable challenge. It has been faced by others and I submit that in their success and the reasons behind it lie our hope for the future. It may be said, of course, that this is all very fine, but it is too theoretical and too long term. All I can say to that is that we do not have any alternative. Is it not about time we brought reason and thought, tolerance and unity of purpose to bear on our problems rather than the predictable emotional responses, the acceptance of the status quo and an irrational refusal to change anything?

I should like now to mention a number of diverse areas where progress could be made, with clear benefits on the jobs front. I want to say something first about the bank levy. Currently, the Government take £25 million annually by way of levy from the banks. That may sound fine on the face of it, especially to overburdened taxpayers. However, I do not think it is the best way of mobilising the banks behind the great effort needed in job creation. Let me explain why. This levy, which is deducted straight off the bottom line, effectively erodes the equity base of the banks.

The amounts which banks can lend is determined by the Central Bank and is arrived at by multiplying the banks equity capital by a factor of somewhere between eight and 16, depending on the Central Bank's view of the particular bank. Taking the average of these figures at 12 and multiplying that by £25 million gives a figure of £300 million which because of the levy is unavailable for lending to business or industry. I am not suggesting for one moment that the £25 million should simply be handed back to the banks. I am proposing that the Government should enter into a negotiated arrangement with the banks by which the banks could either pay the levy or, alternatively, invest a like amount multiplied by an agreed factor in approved indigenous manufacturing or service industries.

The future for major job creation lies in small dynamic business enterprises and they are the ones more than any others which will require financial support and advice, especially in their formative years. There are, of course, pitfalls and details to be dealt with; but I believe that the current levy system, once the economy begins to move again as it has shown some signs of doing, will lead to a serious shortage of funds for investment in new business enterprises. That can only delay or prevent the creation of more jobs and as such must be radically altered so as to have the opposite effect.

In relation to the banks also, it is high time that the cartel which operates between the associated banks, and which is supported by the Central Bank, was dismantled. I understand that the Minister for Finance has the same view and I urge him to insist that the cartel which has operated here for many years be dismantled and that real competition between the banks be allowed to take place. That would be to the benefit of the consumer and, ultimately, to the benefit of the banks and the country. It would give us a more efficient, flexible and dynamic banking system.

The venture capital legislation enacted in the Finance Act, 1984, has not been effective. It must be modified to ensure that it provides venture capital on a much wider level than the legislation permits. It is a fact that in the United States, where employment has been growing, the growth of that employment has been mainly in the small businesses sector. In the years from 1976 to 1982 11 million extra jobs were created in the small businesses sector while job losses were occurring in the large multinational companies.

It is also believed that the increase in small business enterprises arose largely because of the encouragement given by the United States Government to the venture capital market. In that connection, when the United States Government reduced rates of capital gains tax enormous funds flowed into the venture capital market. They, in turn, were available for small industrial and business development. If we are really concerned to create extra jobs we should free up that market. We should clear this legislation. There is an obsession and a paranoia about tax avoidance in all these schemes. We must take some risks. We can plug the loopholes afterwards, if necessary, but we must get the thing going. There is no use having venture capital legislation on the Statute Book if it is not working in the market place.

The same is true of the share option scheme which Minister Bruton is keen on, but it has not got off the ground because of regulations. I know of one major company in the Cork region which circulated all its employees with a share option scheme but in the heel of the hunt they were prevented from going through with it. Although they followed the letter of the law as they understood it they were ultimately stumped by the Revenue Commissioners who said they would not permit the scheme. The Finance Bill should address the issues of venture capital and the share option scheme for employees and see that the legislation, which was widely welcomed but has not led to significant progress in those fields, works.

I should like to mention the question of taxation on redundancy payments. The taxation of redundancy payments or, as they are commonly known, golden handshakes, is causing severe difficulties for people who might otherwise have invested those funds in job creation. Those payments have a dual significance. On the one hand they flow to people who no longer have employment and are more likely than most to start a business, while on the other hand they constitute the only pool of disposable capital which many Irish people will ever own. For many, therefore, redundancy payments will represent their only real opportunity to set up a business. Unfortunately, the tax treatment of such payments is severe. A large amount of tax can be charged and very often for a number of reasons the younger taxpayer will have a substantially smaller net sum than his older colleague.

The point I am anxious to establish is that the young ex-employee who is more likely to have the capacity and inclination to start a business finds that a high proportion of his lump sum is lost to him in tax. Thus, far from encouraging him to invest in an enterprise, it is in reality difficult for him to do so. Business formation could be encouraged, however, if a form of roll-over relief was made available so that a redundancy payment would escape taxation for so long as it was invested in a bona fide business. While the Revenue would forego income tax on the lump sum it would follow that the Department of Social Welfare would save in payments and that the State would have a continuing stake through VAT, PAYE and income tax in a business which might not otherwise have been formed.

I should like to turn briefly to our large dairy co-ops. In recent years large dairy co-ops have made a significant contribution to the overall economy in terms of export earnings, employment and farm incomes. However, large and successful as they are by Irish standards, they are facing now a rapidly changing international climate with pressures coming from within the EC and outside. In simple terms, they must sell more and more products outside the sheltered EC market place. That implies the need to develop new products and to sell them against the international giants on the world stage. That is a major task. Instead of fighting over milk supplies, which seems to be consuming much of the energies of some of the larger co-ops at present, is it not about time that the co-ops began to cooperate and try to work out some kind of rational national plan of action for new product development and marketing on a major international scale? Bord Bainne can and have helped in this area but without direct linkages or even amalgamations between the major co-ops we will never be large enough to survive and expand in the international food market of the future.

I should now like to deal with the subject of off-shore oil and gas. This ought to be considered, as it is, as a major potential creator of jobs and wealth. I should like to quote some comparative figures from the UK. Last year alone 116 wells were drilled in UK off-shore waters. In 15 years just over 80 wells have been drilled in offshore Ireland. United Kingdom drilling operations employed practically 30,000 people offshore alone in 1983 against less than 1,000 here.

Of course it is true that the United Kingdom is already a well developed, large international producer and that we are still at the speculative exploration stage. Nevertheless we have failed singularly to achieve the essential prerequisite for success, that is the encouragement into our waters of a far greater number of exploration companies. Make no mistake about it, with all the advances in seismic-technology, finding oil is still like looking for a needle in a haystack. Why have we not been more successful in attracting more exploration here? What is the real reason for postponing recently our third round of offshore licensing from February to June when we so badly need to encourage more and more exploration companies to come here? The answer is easy: the terms are either unattractive or uncertain. The uncertainty is more a problem, that uncertainty concerning State royalties and participation still remains though the statement of the Minister for Finance on 14 January last on the taxation of profits at least clarified a previous uncertainty.

The Government should now spell out loud and clear the position about royalties and State participation, clarifying in particular the position about smaller, marginal fields where the wrong combination of royalties, State participation and taxation in some circumstances could render an otherwise attractive field not worth developing at all. I am not advocating for a moment a soft approach to the tough international oil companies. On the other hand, if uncertainty over how to divide the cake before it is even baked continues to prevail great boosts which oil production could give to our economy, particularly to the hopes of those people now without jobs, will continue to elude us.

I might refer to a few issues in the Cork region. I do not have to emphasise here the situation about job losses in Cork which have been particularly severe. What Cork needs now and quickly more than anything else is two or three major industries. The recent announcement that Advanced Micro Devices from California are to establish a thousand job industry in Greystones is something about which everybody was pleased to learn. In the national interest everybody applauded the fact that the IDA were able to attract such a high technology industry here. But, in relation to the Cork area, if that company were brought to Limerick and Cork by the IDA, it should be remembered that in Cork, at the university, we have the micro electronic research centre under the direction of Professor Rickson, forming an essential feature in the development of these high technology industries here. I am uncertain why that industry is not being located in Cork. I wonder about the position of the IDA in pushing the obvious advantages of locating that industry right beside a micro electronics research centre which will now service that industry in Greystones. Here I would have to question the marketing skills of the IDA in relation to its location which I would not normally. This industry would have been a colossal psychological as well as practical boost to the Cork region. Let us hope the IDA can attract other industries to Cork. We need also to intensify the small industries drive in the region which has been very successful since the decentralisation of the small industries division of the IDA into Cork.

We need a ferry plying between Cork and the United Kingdom. For a variety of reasons which have unfavourably impacted on that issue we may not have a ferry in 1985. I earnestly request the Government to make available the £500,000 guarantee against loss provided for this ferry for 1985, in 1986 if, as it now looks likely, the Cork/Swansea ferry company will be able to establish a ferry in 1986. It is difficult to make that relatively long sea journey pay. It is obvious that it will need some help in the year before its establishment and, as the Government have shown such a definite interest in backing that service, I hope they will transfer that money into 1986 for that service.

Cork Airport is limited because of its runway being too short, which means large charter flights either cannot land there at all or must restrict the number of passengers they carry, a clear obstacle to the development of tourism and other business in the region.

I might say a few words now about decentralisation. Deputy Hyland welcomed the establishment of the independent radio authority in Cork. Even though it is not a very large organisation in terms of numbers I hope it will point the way to a significant decentralisation. No country anywhere has so much of its population concentrated in such small areas; it is not good for Dublin, it is not good for Cork, the west or anywhere else. There should be a more positive policy with regard to the decentralisation of some of our State agencies when other agencies might well follow the example were the Government to give the lead. Deputy O'Donnell mentioned the Regional Development Organisation which, in its present state, I consider to be practically irrelevant. Either the Government should give them teeth or abolish the organisation. We need regional development but we have a toothless organisation called the RDO. In their reform of local government the Government should think seriously about the role of the RDO, increasing local autonomy, divesting powers from the centre to the regions, the local authorities and the RDO.

I might reiterate my belief that permanent, high unemployment is not inevitable. At the same time it will not disappear or be solved unless all of us, and I stress all, are prepared to make changes, altering some of our fundamental attitudes. The challenge of unemployment can be met but the real question is: will it be met?

Ba mhaith liom a rá ar dtús gur beag duine a dtig leo a bheith sásta leis an cháinaisnéis seo. Tugadh isteach é agus bhí moladh dá fháil aige ó na páipéir nuachta, radio agus teilifís Ansin nuair a rinneadh mion-scrudú ar an cháinaisnéis féin fuair mé amach go raibh cuid mhaith lochtanna ann agus gur beag buntáiste a bhí ann do ghnáth phobal na tíre. Tá sé sin soiléir ón rud a tharla an tseachtain seo caite nuair a tugadh Bille eile os comhair an Tí seo ag iarraidh aghaidh an phobail a dhíriú ar chúrsaí eile taobh amuigh de na cúrsaí a bhí á bplé sa cháinaisnéis. Rinneadh é sin d'aon turas, mar tugadh le tuiscint don saol mór san díospóireacht a tharla anseo ar feadh cúpla seachtain go raibh cur i gcéill, go raibh caimiléireacht sa cháinaisnéis féin agus go raibh dallamullóg á chur ar phobal na tíre. Ní thig le duine ar bith a bheith sásta leis. Tá sé sin soiléir anois agus beidh sé níos soiléire in aghaidh an lae i leith na rudaí a gheall an Rialtas seo go raibh siad ag tabhairt fúthu.

Debate adjourned.
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