Deputy O'Leary is in possession.
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.)
I should like to refer to what Deputy Keating said at the start of his contribution to the budget debate. He stated that the provisions introduced in the budget have long since been forgotten by the public. I can assure Deputies that the electorate will not forget the provisions of this budget for a long time. I should like to make my contribution covering briefly each of the following fields and to make positive suggestions to the Minister regarding job creation. I should like to deal with the effect on the less well off areas of the absence of regional policy. The Government are not operating any regional policy. I shall refer to the need for a decentralisation programme and the need to do more for the tourism industry. I shall refer to the necessity for positive planning in regard to agriculture and horticulture.
Will the Minister state what the Government intend doing to bring to an end the dismantling of the health services that is taking place? I will be referring to the failure of the Government to combat poverty later and it is my intention also to deal with the state of the construction and footwear industries, to the sorry state of the fishing industry and the fact that very little has been done to help those living in Gaeltacht areas. It is my intention to make some suggestion regarding the financing of local authorities.
I am convinced that the budget will not do anything to solve the major problems facing us, particularly the serious unemployment problem and the unacceptable level of youth unemployment. The budget will not do anything to curb imports of agricultural by-products or horticultural produce. It is sad to see in 1985 such commodities as cabbage, potatoes and many vegetables being imported.
It is well known that more than 240,000 people are registered as unemployed despite the fact that emigration is increasing at an alarming rate, particularly from the west and south-west. I have seen people queuing on Sunday nights in Killarney for a bus to take them to Rosslare en route to London. Any Member in touch with his constituents will realise that emigration is rampant in our provincial towns.
Many jobs could be created if our farmers were encouraged to get involved in an intensive form of agriculture and horticulture. I suggest that the Government make grants available to farmers to get them involved in such enterprises. Food processing plants should be set up. Those schemes should not be run by State or semi-State organisations but operated by co-ops or public companies where farmers, management and employees would have shares. I accept that there would have to be supervision and control by a central marketing board. I put that suggestion forward in 1983 and 1984 but it has not been acted on. It is my view that between 8,000 and 10,000 jobs could be created in Cork and Kerry alone within a few years of the commencement of such a scheme.
The failure of the Government to put forward regional policies has cost the less favoured areas a great deal of money because they have not been able to avail of grants from the EC Regional Fund. I estimate that the absence of a regional policy here has resulted in Ireland losing between £20 million and £30 million per annum. There is no reason why the Government cannot produce a regional policy. If such a policy was in existence EC money could be paid directly to local authorities. Some months ago I read in a report of the proceedings of the European Parliament where Commissioner Richard said he would prefer to see money from the EC Regional Fund being paid direct to local authorities for the benefit of less favoured areas than to Departments of Finance because he was convinced that the money would be put to better use.
If the EC adopted such a policy the west and south-west would benefit greatly. Such a change would be a boost to south-west Kerry, the Ring of Kerry and east Kerry. One must ask if the Government are serious about a regional policy having regard to the fact that they abandoned the programme of decentralisation of Government offices. The absence of a proper decentralisation policy has caused many of the serious social problems we have in Dublin. There is an obligation on the Government to give a lead in regard to decentralisation. The decision to abandon the programme of decentralisation was a bad one. If carried out efficiently a programme of decentralisation would help to eliminate many of the environmental and social problems in Dublin. It would ease the housing and traffic problems and would make it less expensive for the Government to provide some services.
It is well known that the east coast is top heavy compared to the west and south-west. There is a tendency to concentrate on the Dublin or east coast area in relation to tourism and commercial and industrial activity generally. One need only look at our ports giving access to trade, commerce and tourism to recognise that fact. The Government have failed to provide an adequate car ferry service into Cork to service the south-west region while there are major points of access on the east coast, with traffic travelling through Rosslare, Dublin Airport, Dublin Port, Belfast and other ports in the Six Counties. There is nothing being developed by way of provision for adequate transportation in and out of the west region. It is well known that business people from England or the Continent will not drive long distances from Rosslare, Dublin or elsewhere to the south-west, the west or north-west if they can conduct business at nearer points of access.
Tourism is our most decentralised industry which has, and should have, a major impact on every parish and town-land, each having its attractions or amenities sited nearby to encourage tourists. The immediate future looks good as far as package holidays are concerned. That is all right for hotels geared to package holidays but probably it is not a good idea for all hotels to be dependent solely on package holidays. It is well known that hotels must cut their prices and be most competitive in the package holiday area. We must bear in mind that generally the hotel industry base such competitive charges for package holidays on the assumption that holidaymakers will partake of evening meals at their hotels, will probably then resort to the bar or to cabaret functions where they will spend money in a general way within the confines of their hotel. With the new trend in the tourist industry, with couriers and bus drivers tending to take holidaymakers to other places of entertainment or amusement nearby some hotels are experiencing great difficulty being as competitive as they must be in order to attract package holiday groups. There is no point in filling bedrooms and having full dining rooms for breakfast if there is no money to be had in it at the end of the day. Compared with the motoring tourist the package holidaymaker does not benefit the bed and breakfast, guesthouse or farmhouse holiday business, particularly in the west and south-west.
I am convinced that the lack of a car ferry service into Cork is detrimental to the whole tourism industry in the south-west regions. It is a well known fact that very few GB or continental cars were seen on the Ring of Kerry or around west Cork in the last tourist season. It appears that the same could obtain this year because of the lack of that service. I would ask the Minister for Finance to make the requisite finance available — I understand that it is not a great deal — to ensure the provision of this car ferry service for 1986 because it is obvious that it will be non-existent this year. I attended a meeting in August last organised by the Cork Harbour Commissioners at which confidence was expressed that a car ferry service would be available into Cork for the 1985 tourist year. It was interesting to note that the Swansea port authorities were prepared to put up a substantial amount of money for the provision of this service, having regard to the amount of business it would bring into Swansea, as were the local council in Swansea. The Cork Harbour Commissioners were also prepared to put up a certain amount of money, because it was they who were promoting the idea, as were Cork Corporation, Cork County Council and Kerry County Council. Its provision failed mainly because of lack of encouragement at Government level and particularly on the part of the Department of Finance. I am appealing to the Minister and to the Government to ensure that the proposed car ferry service for 1986 is established in good time so that its existence will be well known before the publication of Bord Fáilte's literature for the 1986 season within the next seven or eight months.
More money should be allocated to Bord Fáilte in order that they can encourage hoteliers to maintain and renovate their hotels, rendering hoteliers in a financial position to do so and to refurbish their hotels where necessary. I believe Bord Fáilte should be completely revamped, that they should receive a much greater annual allocation. They might also operate a scheme to ensure the availability of winter working capital for hotels at a subsidised interest rate. This suggestion was made to me by a number of hoteliers in Kerry recently. It is well known that it has now become difficult for hoteliers to get winter working capital, a commodity which is very necessary because the winter months are very lean for that industry. If they are to retain the nucleus of a good management and general workforce for the following tourist season they must have available to them working capital to pay their overheads during those winter months.
Agriculture is our greatest industry and I am not satisfied with the handling of the super-levy by the Government and the Minister for Agriculture. Every weekend I meet farmers who inquire as to how they stand in regard to the quantity of milk which they will be allowed to supply to the creameries this year without incurring a penalty. Many of them are very worried because they do not know what they will lose on milk this year as a result of indecision on the part of the Government, the Minister and the EEC. This matter should have been cleared up long ago in the interests of our dairy industry. To add to farmers' problems, there are now no agricultural grants for farm buildings. Many farmers were badly caught out as a result of the sudden abolition of the scheme of farm building grants by the Government in 1983 as many farmers had committed themselves to heavy expenditure on farm buildings in anticipation that the grant scheme would continue. They completed their buildings but many of them owe considerable sums to banking institutions which they will find very hard to repay. The Government and the Minister should do something positive in relation to helping farmers in serious financial difficulties and who could be regarded as hardship cases because of the effects of the abolition of the scheme.
It is now virtually impossible for farmers in the west and south-west to get grants under the western drainage package to drain their land or for joint landowners to drain streams or small rivers. This is not good for the agricultural industry, the west or south-west and it militates against employment in these areas. If cattle prices were not so good at the moment the agricultural industry would be in a very bad state. Of course the only reason for the high prices at present for cattle and sheep is because the dollar is so strong against the punt. The strength of the dollar plays a vital role in relation to farm prices nowadays.
I am very disappointed that no special provision was made in the budget to assist the health boards who are now in serious financial difficulties. The Southern Health Board had a debit balance of £9.7 million in 1985 and I am surprised that the Government did not make special provision to alleviate their plight. The effects of this on hospital services is very serious. We are now witnessing the dismantling of hospital services. This week, the Southern Health Board closed hospital wards and have removed hospital beds from other wards which are not being closed altogether.
There is a long waiting list for urgent medical treatment in Cork Regional Hospital which is the principal hospital for specialist treatment in Cork and Kerry. I was approached by quite a number of people over the past few months who told me that members of their families are on waiting lists to receive radium treatment and we all know how serious a delay can be in such cases. It also causes great distress to their families. The reason given is that the health board are forced to operate only two or three units at a time for radium treatment where previously they operated five such units at a time. Persons who can afford to do so come to hospitals in Dublin and receive treatment on a private basis by paying the full cost of same and also paying for professional services rendered. To complicate matters further, the Government allowed the Voluntary Health Insurance Board to increase their charges again, which means that many families will now drop out of that scheme. I know that the board would like to keep their charges to the minimum but they are also faced with increased charges by health boards and private hospitals as a result of Government policy in this area.
The Minister for Health should make a clear and positive statement to clear the air regarding rumours that seven or eight psychiatric hospitals will close within a short time. There is panic among staff in some psychiatric hospitals at present because they do not know what the future holds. There is also panic among relatives of patients in these hospitals because they do not know what will happen. There is a suggestion that St. Finian's Hospital, Killarney, is to close and we should like to know if this is true.
I am convinced that the increase of 6 per cent for social welfare recipients from 1 July covering a six month period this year could be equated with a 3 per cent increase over the year. This will not help the less well off sections of the community who are dependent on social welfare benefits. Prices are increasing daily despite what we are told about the level of inflation. I am very concerned regarding the long delay experienced in deciding applications for unemployment assistance. It has come to my notice that in a large number of cases the period for deciding applications for unemployment assistance is getting longer and longer.
The reason for that is the number of social welfare officers has not been increased although the number of applications has increased considerably. It is very hard to explain to people who apply for unemployment assistance why their applications have not been investigated. It may be necessary to employ more social welfare officers to decide on applications. The Department should have a deciding officer or officers in every county. It should not be necessary to submit cases to Dublin for decision. That power should rest locally.
The appeals system is ridiculous. I understand there are between 4,500 and 5,000 appeals from the west, north west and south west under consideration at present as a result of smallholders having payment of their unemployment assistance substantially reduced or discontinued. There are only a few appeals officers to deal with all the appeals. In the vast majority of cases the applicants request an oral hearing. This will not be possible due to the inadequate number of staff in the appeals section. There should be one appeals officer in each county.
Deputy Keating referred to the extraordinary poverty which exists. There is poverty in certain areas in south Kerry, in my own constituency and my town, Killarney. There are people living and rearing families on incomes which are well below the breadline. I have had experience of parents coming to me seeking my help to enable them to get supplementary welfare allowances because they cannot afford to pay their bills and feed and clothe their families on what they get in social welfare payments. This has put undue pressure on health boards. They are considering a high number of applications for supplementary welfare allowance at present.
The whole social welfare code in under severe stress and strain at present. It is inadequately financed and requires urgent reorganisation. That is of paramount importance. I know of families who cannot pay their ESB bills or meet the rent on their local authority houses. It is very difficult to put up cases continuously to community welfare officers for people seeking supplementary welfare. If it was not for charitable organisations such as St. Vincent de Paul in some provincial towns there are many families who would have their electricity supply disconnected and who would be in serious trouble with their local authority.
Many people buying houses are under the false impression that they are entitled to the supplementary grant of £750 announced in the budget. This scheme will not come into operation until 1 May when VAT on building materials will increase to 10 per cent. It is also well known that the grant of £750 will only cover approximately 50 per cent at most of the increased cost of materials for new houses. I cannot see the logic behind increasing VAT to 10 per cent and giving a new grant which will be the equivalent of only 50 per cent of that cost. It will impose further strain on the construction industry and on employment.
I was disappointed to see VAT imposed on footwear as this will prove disastrous for the industry. There is great concern in Killarney among those working in Tuf about this. There are fears for the industry there as a result of this decision.
I should like to see an overall development plan prepared by the Department of Fisheries and Forestry for our fishing industry. We seem to be concentrating on continuous negotiations in the EC in relation to problems arising with regard to fishing. If we took a positive view and prepared an overall development plan for this industry it would be well worth while. There are serious problems facing those who are anxious to get into the industry or those who want to buy or build new boats in regard to grant aid and loan facilities. It is well known that it is almost impossible to get grant aid from BIM. This is a sad reflection on the attitude of the Government towards the fishing industry. This industry provides employment and contributes significantly to the economic development and survival of areas along our seaboard.
I have been in touch with the Minister with a view to having a development plan prepared and implemented in relation to Valentia Harbour. I invite the Minister either to come down himself or to send senior officials of his Department to speak with the interested parties there so that a proper development plan for Valentia Harbour can be devised and implemented. The area is rich in natural resources. There is good fishing off the south and south west coasts. Valentia Harbour should be developed properly. If necessary, the Minister might seek a meeting with the county development team in this respect.
The Government appear to have lost all interest in the development of the Gaeltacht areas. No money has been provided specifically for roads in the Gaeltacht in the past few years. The job creation programme in those areas is very disappointing having regard to the resources at the disposal of Roinn na Gaeltachta and Údarás na Gaeltachta. Relatively speaking, there is very little happening in the Gaeltacht. The lack of interest on the part of the Government in the development of the Gaeltacht coupled with the loss of unemployment assistance to smallholders in these areas may very well mean that they should be designated total disaster areas rather than severely handicapped areas which is their designation in so far as the various EC schemes are concerned.
There is a good deal of concern regarding local authority financing. Local authorities are short of money and cannot therefore undertake some very desirable schemes. Fianna Fáil are opposed totally to the present system of local authority service charges. When we are returned to office we will repeal the Local Government (Financial Provisions) Act, 1983. In order to enable local authorities to provide a given service for a local community, they should have some power to raise finance locally. It is Fianna Fáil policy to introduce new legislation to bring to a conclusion the present unsatisfactory position in local authority financing. It is our intention to introduce reform in the system of financing local authorities. Our legislation will provide that local authorities receive a guaranteed statutory contribution from the Exchequer. That is very important. Second, we will provide that local authorities be empowered to impose strictly limited charges in order to finance a local amenity or service but we would provide that any such charge be imposed only by elected members.
Fianna Fáil would run away from anything like that.
We would propose also that any charges be related specifically to the cost of the service in question and that the money be used only to supplement the statutory grant from the Exchequer as opposed to being substituted for any part of that grant.
That type of legislation would eliminate the present uncertainty whereby we cannot anticipate what level of grant they are to receive from central funds. This results very often in county managers having to impose an exorbitant level of service charges and to do so against the wishes of the community and of elected representatives. In this year, for example, the Government have left local authorities in an impossible position by allocating grants from the central Exchequer which represent a mere 1 per cent increase on last year's allocations. This is at a time when the anticipated rate of inflation is 6 per cent and when an average increase of 5 per cent is being granted to central Government Departments. The result of this is that county managers will have to impose prohibitive charges on local communities, an imposition that is bound to be rejected by the community.
Fianna Fáil recognise fully the difficulty for members and officials of local authorities in providing a satisfactory level of services in present circumstances but we are convinced that further large increases in local charges this year will cause widespread public resentment which can only have the effect of damaging the entire system of local government.
A very serious situation exists within county councils particularly as a result of the state of county roads. It seems to be in order for Government speakers to say that some county councils are receiving up to £6 million this year for road works but the greater amount of these moneys will be spent on improving national primary and secondary roads. This leaves very little for the maintenance and improvement of county roads. The position in Kerry is so serious as to render the county council unable to undertake any improvement works on county roads. The engineers and officials are engaged in organising the carrying out solely of urgent repairs on these roads and it will not even be possible to carry out urgent repairs on all county roads. This is very serious, especially in view of the high level of taxes being paid by motorists and others who are liable for road tax. Neither is it fair to those generally who are paying high service charges, taxes ahd rates.
The Government must take positive steps to finance a crash programme so as to restore county roads to a proper standard and to provide a base from which they can be improved.
The budget is an indication that the Government have little concern for the west and south-west. There is a failure to provide funds for the various services so as to enable them to be provided satisfactorily. We know what is happening in relation to agriculture, to tourism, to the promotion of industry and commerce, to transport and to social services apart from the difficulties arising from the proper financing of local authorities.
We have been debating the budget since 23 January. One wonders if a debate of this kind has any relevance at this stage. In the past 45 minutes Deputy O'Leary has been telling us to spend perhaps several hundreds of millions of pounds, most of it in Kerry. It amazes me to think that Fianna Fáil have all the answers in Opposition. They have been in Government for a far longer time than either Fine Gael or the Coalition with Labour, yet the whole economy has degenerated to the extent that it has. A great deal of the blame for that must be laid at their door, irrespective of what forecasts they make in relation to another election year. When they make their budget speeches they are condemning local authority charges already. Perhaps it is expedient for them to do so to gain an extra seat or two at local authority level, but in the long term interests of local authorities it is damaging to enter into that type of promise campaign.
This is my third opportunity to speak at budget time since I came into politics. In 1981 I felt that there was a need for a change in the direction in which we were programming events for ourselves. Not knowing the difficulties and intricacies which are part and parcel of the annual budget, I felt it essential to carry out deliberately certain programmes relating to the finances of the State. The Taoiseach when he spoke on this budget put the whole situation in perspective. He said that it marked the end of a period of rising taxation and falling living standards forced on our people by the need to pay belatedly for the vast increase in public expenditure that occurred between 1977 and 1981 and which has now been brought to a halt. Therein lies the problem, and we must never allow ourselves to forget that. We borrowed heavily for purposes and projects that yielded nothing by way of return of jobs or wealth creation, and several years later the total income tax take went out of this country to foreign bankers. The task which faced this Government from 1982 is not necessarily complete — indeed it is far from complete. I do not share the Taoiseach's optimism in this regard. Nonetheless, in the context of research into the economic plan and the work put into it on behalf of the Government and their advisers, it is most important to feel that at least there might be a ray of hope for our children if we continue along that course rather than run away from our responsibilities as politicians in that regard.
Over the years we have seen various attempts to balance our books and lately we have had a far greater level of success than heretofore achieved in the last 10 or 15 years. This year for the first time we have spent less than we budgeted for at the beginning of the year, and that is a significant achievement by any standards. Therefore, I hope that gone are the funny money days that Deputy Reynolds referred to when he was contributing to this debate on 31 January, the morning after the Budget Statement was delivered to the House. I suppose it was not difficult to predict the trend of the budget because all of the homework and spadework were done in the economic plan. One might say that the plan has many critics, that it is not ambitious enough, it does not target sufficiently for job creation or prudent reflation of our economy. I do not know what that means. Perhaps in political jargon it means something and in economic jargon it may mean something else, but it sounds all right to the general public. The point is that politicians, if they are to run the affairs of this State with any degree of integrity, must face the fact that we are spending more than we can afford to spend and generating less wealth than we are capable of generating, and as long as we go on in that vein the job situation will not improve.
At least we can say in this budget that the deficit is more or less along the lines projected in the plan. There is a slight increase of £6 million. I know that the Leas-Cheann Comhairle has heard all of this before, probably many times, in the debate so far. Nonetheless, I think it worth repeating and recording. The borrowing requirement is slightly off target, not very much, more or less in line with what was projected. At the same time we must be concerned that in 1982 the budget deficit was £988 million. Perhaps in real terms today it may not have increased greatly; I will not go into that, but in this budget that will increase to £1,234 million or 7.9 per cent of GNP. That is about 2 per cent over the 1984 figure or £200 million more. Therefore, we are still a prisoner of the economic situation that we have created for ourselves during the last seven or eight years and we are finding it exceedingly difficult to emancipate ourselves from it.
The Exchequer borrowing requirement is 13 per cent. It is far too high, and as long as it remains as high as that we will not have the competitiveness to create jobs in manufacturing or any other sector that this country so urgently requires. The public sector borrowing requirement this year will be 16.2 per cent of GNP. Nobody can tell me that that is a realistic figure. It is realistic in so far as nothing else is achievable but it is too high and we must work towards reducing it. We talk of debt. Looking back I thought that the debt of this State in the fifties was enormous. Compared in figure terms with today's debt it was very small, but perhaps we are no worse off in real terms. The Government's record in their short term in office has been exceptionally good, in fact excellent. I say to the Government, the Taoiseach and the Minister for Finance that in the longer term their approach will be appreciated. Perhaps in the shorter term people will find a measure of dissatisfaction with the Government. They can reflect that dissatisfaction in the local elections in June, although I hope they will not. I am confident they will appreciate the difficulties the Government are experiencing.
It is very difficult to speak in debates in this House. It appears it is the preserve of a select few. Even today I had to wait all day to get an opportunity of contributing to this debate. I should like to contribute to most debates and I know many of my colleagues feel the same, but there is something radically wrong with the system and it urgently needs change and modification. To most of the people outside this debate is irrelevant but at least it allows an opportunity to backbenchers on the Government side and the Opposition to put on the record their views for the benefit of their constituents. That is important from a political point of view. I am sometimes told that I do more talking at weekends than I do during the week, and I am sure my colleague across the floor has also been told this. However, the opportunity to speak in this House does not present itself very often. There is also a fair amount of committee work to be done. I was extremely annoyed when I saw a report in a magazine that backbench politicians do not contribute to debates. Some of us are not even known to the people who write such articles. What they say is slanderous, downright undignified and is totally and utterly misleading and inaccurate. I hope those responsible will think before they make such ridiculous statements in relation to Members of this House.
Deputy O'Malley in the past week has fallen foul of the party to which he has contributed so much and it is my personal regret that that happened. I listened to his speech last week and I considered it the best political speech I ever heard. It was accurate and to the point and I felt I was on the same wavelength as the Deputy. I have thought for some time about all the matters he raised. I hope he is not on the way out of politics because this country needs such people to stand up and say such things.
In 1981 the then Government brought in a budget that was 81 per cent off target in respect of current expenditure. They did not even do their homework. In 1982 they corrected it a little and brought it down to 45 per cent overspending. By 1983 we had almost a full year of Fine Gael and the Labour Party working together as a team in Government. Irrespective of what may be said, they have worked together as a good team in the interests of the country. They did a good job and nothing should undermine their capacity to continue with that work. Last week was an indication of their willingness to serve all the interests of the State, irrespective of any pressure that was brought to bear on them. I was very pleased with the result last week.
Last year the Government underspent and that is something of which we can be proud. Despite that however this year our debt repayments will be of the order of £2,000 million and that means all the income tax raised in 1985 will be required to service that debt. That is the disheartening aspect, that we do not seem to be able to come to grips to any appreciable degree with that problem.
Members were under no illusions about the situation that existed before the budget. There was a deep and growing crisis in respect of unemployment, there was spiralling foreign borrowing and everywhere we heard an almost insatiable demand for tax reform. That was the background against which the Government and the Minister for Finance found themselves when introducing the budget.
What were the Minister's options? We could borrow some money, have higher spending and increase the deficit but inevitably that would lead to a higher level of taxation. We could borrow less and cut the deficit, but then we were told that would lead to higher unemployment. We were trapped in this economic malaise out of which we find it exceedingly difficult to extricate ourselves. What was the view of the voters? They maintained taxes were too high, spending too high, borrowing too high and unemployment too high. I say they were right on all counts and they must get full marks for their perception.
What was the compromise achieved in the budget? There have been small cuts in taxation levels even though the taxation "take" remains more or less the same overall. There has been a commitment to the indexation of taxation and in future years this will yield a greater reward in terms of real taxation cuts. There has been a very small increase in the size of the current deficit and there has been a small pay rise for the public service. Perhaps it was higher than the Government would have liked but it proved extremely difficult to secure a "no pay rise" arrangement in the public service. Like every other sector they think they are entitled to a small pay rise also. Many people in that sector are not well paid. I accept they have secure jobs but a person also needs to have something in his pocket at the end of the week. There has been a considerable improvement in respect of public service pay and I am sure it will have the effect of reducing overall taxation levels in the years ahead.
The most difficult matters is with regard to unemployment. Much of the criticism from the Opposition and in some newspaper editorials is not based on constructive thought or opinion. Everyone knows it is a dreadful waste of human resources to have so many unemployed, but it seems to be impossible to reduce the numbers. We have embarked on a campaign to tackle this problem but we have to bring public finances under control first, irrespective of what economists or politicians say or what stories are told to households with two or three people unemployed. It is most demoralising to be unemployed with no possibility of getting work. Therefore we should work together to help solve this problem.
In 1977 some people said it was possible to solve our unemployment problem and at that time there were about 70,000 people unemployed. That number increased to 150,000 by the time the Government of the day left office and now that figure has quadrupled. We do not appear to be able to come to grips with this problem. The national plan set out guidelines, and if this Government deviate from that policy there can be little doubt but that higher unemployment will result. No matter what way we look at it, extra spending in 1985 means extra debt, which in turn must be paid for in 1986 by increased taxation. That is why it is so important to control Government spending and borrowing.
Deputy O'Leary was calling for additional millions of pounds to service the needs of the health boards. No sector has attracted a greater share of taxpayers' money over the last ten years than the health boards and the health sector. I am not saying that this was not necessary or that a great deal more money could not be utilised if it were available, but the health boards must be more realistic. They are making all kinds of statements in the press and on television saying that the Minister is crucifying them, that he is penalising them and that he is not looking after the interests of the patients. This is completely wrong.
This budget, and the national plan on which it is based, are not just about bookkeeping. The plan contains many provisions for schemes aimed at the underlying causes of unemployment. The problems of unemployment are many, ranging from the work ethic, the attitude of the employer, the relationship between the employer and the workers, the attitude of the workers, efficiency, productivity, costs and so on.
Entry to the Common Market promised much which did not materialise, but we are not the only EC country with unemployment problems. We have to find new products. We must acquire new skills and new marketing techniques. We must educate our young people, and industry will have a role to play here. Since 1980 the number at work has fallen by 41,000. In the same period young people seeking employment has risen by 15,000 per year, adding another 60,000 people looking for work. This accounts for our increase in the unemployment figures. The Opposition say they can solve the unemployment problem, but they said this in 1977, 1979 and they are saying it again now. I do not believe they have a solution because if they had they would have implemented it over the years.
There is a world recession and yesterday and today there was a big drop in the strength of the dollar. I heard economists predict with a degree of certainty that the dollar would fall in 1985 after the American Presidential election, but that has not happened yet. The level of borrowing in America in terms of GNP is even higher than it is here and they continue to borrow. There is going to be a collapse some day if that trend continues. Perhaps they have a stronger base than we have, but that looks like a possibility. I do not believe we should worry unduly about the strength of the dollar. Yesterday's increase of 4 cents, 5 cents or 6 cents in the pound against the dollar meant £40 million of taxpayers' money would not have to go out of this country. There is what I would call a financial game going on all over the world.
What is the situation as regards jobs? The greater the skill acquired by young people the greater the possibility of getting a job. As an educationist for 21 years I cannot but promote the need for additional expenditure in the vital area of education. We talk about our great resource, our young people, yet we are pulling back on the level of expenditure in this area. Within a year of leaving primary school, without any further education, about half these young people find employment. If they finish group certificate level, about one-third do not find employment. If they finish second level education, about one-fifth do not find employment and of those who complete university and third level education, about nine out of ten find a job within a year. These are the statistics.
The Opposition are crying about the number of people emigrating but the number who emigrated last year was extremely low. It is no cause for alarm. Many more people left the country when Fianna Fáil were in office, but they came back over the last few years. I am convinced that rising unemployment is being halted by the policy being pursued by this Government. In 1983 there was an increase of 27,000 people on the unemployment register, in 1984 an increase of 17,000 people and the projected figure for 1985 is 3,500. We seem to be coming to grips with the problem. The plan makes a projection for five years and adjustments can be made as we go along. We should have had such a plan years ago rather than fooling along from year to year not knowing where we were going and finding ourselves overspending at a rate of 81 per cent in some years.
The budget has announced a social employment scheme for the long term unemployed and no better scheme has come to my notice. People who were unemployed for three or four years whose morale was at a low ebb have been given a ray of hope by the scheme. I congratulate the people who thought out this programme. It might not be the absolute but at least it gets people away from the house and back to work.
I am not so sure that all the jobs that people claim could be created in the construction industry under Fianna Fáil would have come on stream were they in power. Nonsensical claims have been made that because Fianna Fáil have always supported the construction industry and the construction industry supported Fianna Fáil that the Coalition Government are not interested in it. The Coalition Government are interested in creating an atmosphere for jobs and in generating wealth. No Government no matter how admirable or high minded they are can create jobs; they create the atmosphere, they generate the climate, but it is up to the people to take advantage of the situation. There has been a change in the promotion in schools of the traditional safe civil service, public service jobs. We have to put more money into vocational type subjects and through the youth employment scheme we have created an opportunity to develop this area. The Government have been criticised for taking money from the youth employment levy for educational purposes. That should be done if it changes the traditional direction of education to cater for manufacturing type skills so as to create jobs and wealth for the future. We tend to create bureaucracies and the people in control want to hold on at all costs.
The construction industry have been very concerned about the increase in VAT. It will not make any difference to the builders. There is still the possibility of a decrease in the cost of housing. The cost of a house about 15 years ago was £4,000 or £5,000 but today it costs £45,000. Young people could not even contemplate buying a house. That situation will have to be remedied. The £1,750 is a very generous increase in direct grants to new house purchasers as is the £5,000 grant for local authority tenants of three years standing. There is the possibility of jobs in the construction industry.
My colleague who is just leaving the Chamber campaigned vigorously for the reduction of VAT on betting tax and I suppose he got the loudest cheer in the House when it was announced. I was pleased at that because more people will legitimately pay their share of tax when they take a bet.
Deputy Keating, Deputy Faulkner and others referred to our natural gas resources. I thought that when natural gas came on stream we would ensure that it would be brought to every area in so far as it was economically possible. The gas pipeline from Cork to Dublin runs three miles from Kilkenny city and the people there are crying out for natural gas. The Kilkenny Gas Company of 150 years standing is about to close down unless the Government commit themselves. The Minister and the Government should not look at this in terms of theoretical economics. They should look at it in the wider sense. Many more people in Kilkenny can use gas. It is a growing city. An advantage of natural gas is that from the point of view of pollution there is nothing cleaner in the form of energy than gas. If we have the resources we should use them. I appeal to the Minister to bring a spur from the pipeline to Kilkenny. It will create additional jobs in the area and Kilkenny will not be found wanting when it comes to doing its share for the economy. Whilst the decision has been postponed I hope it will be the right one on 12 March.
The greatest disappointment I had in 1984 was to see the closure of the Clover Meats factory in Waterford. Something must be done to protect the creditors in industries so that the lending institutions cannot move in to put a company into liquidation. From what I heard recently there was hardly a basis for the closure of that group. A lot of jobs were lost there. I heard Deputy O'Keeffe last week decrying the situation of the bacon industry here. Some day there will be Danish bacon in Dáil Éireann — and we are talking about creating jobs in the agricultural sector.
There was a crying need for reform of the taxation system. I am glad that the Minister has recognised that we cannot continue penalising the PAYE sector.
Debate adjourned.