Deputy Dowling has 19 minutes remaining.
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.)
On Thursday last I dealt with two important aspects of the budget, the continuous need for improving our national finances and the progress this Government have made in that direction. I am glad that the provisions of this budget continue to make that a priority. I dealt also with the unemployment situation and the measures taken in the budget to somewhat lessen the trauma of long term unemployment, with specific measures being provided for the creation of jobs for young people. I want now to deal with the third and most important aspect, that of taxation, to which this budget has addressed itself to some extent. The budget was regarded as imaginative as far as taxation was concerned. In some quarters it was suggested that it marked the end of a long period of rising taxation. It would appear to be adhering rigidly to the national plan and the commitment therein in relation to taxation. We have a very excessive taxation system which has stifled economic development. Perhaps it constitutes one of the causes for our remaining in recession for so long. It is not something that has developed over a short period but rather something which has been aggravated over a long period by successive Governments. It will not be easy to undo much of that damage.
Some people might contend that the simplification of the tax system in this budget was somewhat radical. Perhaps it was not sufficiently radical; perhaps there were not sufficient reductions in the higher bands of taxation. However, it constitutes a beginning. In line with the difficulties we all know exist, the demand on the level of current expenditure — which cannot easily be met — means there must be a level of taxation consistent with the types of services the State must provide. Nonetheless, for the first time, the Government have recognised there is a need radically to reform the whole taxation system. I hope this constitutes a meagre beginning in that regard.
The income tax changes would appear to reduce the taxpayer's bill to some extent. Certainly it will reduce the marginal rate of tax for quite a large number of taxpayers. It will bring one-sixth of those in the higher tax bands down to the 35 per cent rate and abolishes the penal 65 per cent tax band, reducing that to 60 per cent. Therefore there is some sign of hope for the hard pressed taxpayer as a result of these budgetary provisions. This is a demonstration that something worth while can be done in that respect. Therefore the simplification of the tax bands and the reduction in indirect taxation constitute the most significant improvement in that area.
Lip service has been given to the reduction of VAT over many years but it has taken courage to do what has been done in this budget though the Minister is not sure at present that it will yield the amount of revenue he would like. Of course he is hopeful that it will. It may not yield revenue directly but it will stimulate economic development in other areas. I am certain that the job situation will improve as a direct result.
Perhaps the tourist industry has received the greatest benefits as far as VAT reductions are concerned. Hopefully that industry will respond in such a way as to provide additional jobs and revenue to the economy in the years ahead, particularly in the current and ensuing years.
One of the most contentious areas is that of farming taxation on which I should like to dwell briefly. The Minister has said that he will introduce a Bill to provide for a different form of taxation on agricultural land, based on adjustable acreage in a1986, which would appear to be meeting much opposition from the farming organisations. I agree with the principle of that form of taxation as it applies to a productive sector such as agriculture. For some time I have perceived that if one over-taxes a productive sector one tends to reduce productivity. In this respect it will be seen that the farmers will not invest because nobody wants to pay marginal taxation on additional investment or effort at 60p or 65p in the £ as obtained before the implementation of this budget. Therefore the budgetary provisions entail a simplification of the system of taxation of farmers which I should have hoped would have met with the acceptance of the farming organisations. However, I can appreciate their difficulties having analysed that system. While the details of the Bill to provide for the collection of this tax are not yet known I should hope that there will be provision to take account of some of the objections to that form of taxation.
It has been clearly established that taxation of any enterprise or profit, farming or otherwise, should be based on ability to pay. That is recognised as being fair. Under the system now proposed the ability to pay principle is subservient to the objective of securing an overall revenue target. There will be a doubling of taxation of the farming sector arising therefrom. Farmers may still pay the same amount in taxation but it will simplify the system for them because, as we are aware at present, 50 per cent of the total payout of farmers goes to the accountancy sector. Therefore this constituted an attempt at simplification of the system and, at the same time, to direct the level of revenue generated from farming profits into the central Exchequer so that those moneys could be utilised among local communities, perhaps through the relevant local authorities, allowing them an additional level of expenditure.
What concerns me is that a taxation proposal without ability to pay, or without consideration of ability to pay, creates an undesirable precedent in any productive sector. On that basis I would suggest that the Minister for Finance would provide in the proposed Bill some mechanism for the lodgment of an appeal where hardship is created on a farm, where there may be sickness or where a considerable level of borrowing over the last five or ten years has reduced profitability or eliminated it altogether. In those types of cases any income derived from farming goes to lending institutions.
With regard to the increased revenue to be derived from farming taxation one must ask: Will that go towards financing local authorities? If that were the case there might be greater acceptance of that form of taxation. Of course some farmers view the operation of this system, particularly farmers in excess of the 80 adjustable acres, as another form of resource tax. In a sense, I suppose it will have that type of impact. I should love to see a form of taxation introduced which would eliminate any upper limit and which would include the whole farming sector, taking into account certain suggestions which I made.
The Commission on Taxation suggested that it would take about 15 years to develop a sufficiently detailed survey to enable land to be taxed on an adjustable acreage basis. There will be many problems associated with this because already in County Waterford there has been such a survey and its findings have not been acceptable to farmers who examined it. On the basis of that survey almost all County Waterford appears to be highly inflated regarding adjustable acreage. If that is the case I do not think that this system of taxation will ever get off the ground, which is a pity as there is great merit in it.
The health charges, income and youth employment levies must be dealt with under the adjustable acreage scheme and I should like to know how that will be achieved. How will the child benefit scheme operate? However, in regard to taxation the Government have made a meagre start and I hope that in the years ahead a much greater impact will be made in relation to all areas of taxation, particularly the PAYE sector. Of course it is extremely difficult to do anything quickly in this area. It would be easier if we were starting from base level to implement the various proposals set out in the report of the Commission on Taxation, but we have inherited a regressive taxation system which will have to be tackled.
Opposition Members have been very quick to say that there is nothing in the budget for farming, our most important industry. I do not agree. This budget in an indirect way has improved the potential for farming profits. In 1984 farm incomes improved, and it was the best year for farming since the middle seventies. The prosperity which resulted from our entry to the EC diminished considerably in the late seventies, but 1984 gave a ray of hope and perhaps will give rise to increased investment in farming. The main reason for this is that inflation has been lowered by the policies of the Government. In 1980-81 inflation was running at 18 per cent and the rate is now at 6 per cent, which is a great help to the farming sector.
Stock relief has been retained, and that also is very welcome. There is now an incentive for people to lease land as the first £2,000 will not be considered for tax purposes. The exemption for another year from stamp duty for young farmers under 35 is also very welcome. The Minister for Agriculture and the Minister for Finance should consider extending the rescue package for at least another year or two. The biggest subvention in the budget is for disease eradication and in the current year almost £32 million is provided for this purpose. Unfortunately, the scheme appears to be running into difficulties with the Veterinary Union and the Department of Agriculture. I hope that the problems can be resolved because we cannot afford to tinker with such an important industry. So much money has been spent over the last few years in this area that it would be a shame if we did not continue our efforts in this regard. The farming organisations are most anxious to co-operate with the Minister and the Department and I ask the Veterinary Union to resolve the difficulties and to get the scheme off the ground.
Taxation levels will continue to be very high over the next couple of years although attempts are being made to reduce them. The overall borrowing level in terms of GNP is too high and, although the budget deficit is moving in the right direction, it is still too high. When the Government came to office in 1982 Exchequer finances were in serious disarray, which damaged confidence in our economy. The process of getting order back into those finances led to tax and PRSI increases. Even with the relief given in this year's budget, personal taxation is still too high and is a disincentive to work.
I congratulate the Government on their efforts to provide an economic plan. Building on Reality is a modest attempt to indicate our growth levels and how our economy will develop over the next three years. It is a realistic approach and I am confident that its aims can be achieved. The budget is in line with the expectations of a large number of people. Perhaps it does not live up to the expectations of the Opposition because in Private Members' motions in 1984 they advocated spending something in the order of £800 million. I do not know how they purpose to finance that expenditure and perhaps they will enlighten us. It is easy to spend money but it is hard to convince the public that finances must come from levels of taxation. I wish the Minister for Finance success in his endevavours to put the economy back on the road to prosperity and to create an environment which will provide jobs at all levels, especially for young people.
Our greatest national problem today is finding occupation for all our people within our community. I regret that the budget has done little to ease the anxiety or frustration of young people in this regard. The budget and the Government policy document Building on Reality projects little or no increase in employment over the next few years. This is a clear sign, especially to young people, that they should emigrate. More and more people are being let go from employment and we have now reached the record figure of 234,000 people out of work.
Our income tax system remains basically unchanged and the PAYE worker is being asked to pay more tax in 1985 as a result of the budget. Social Welfare increases of 6 per cent and 6½ per cent may balance off the rise in inflation but they will not recoup people for all the day to day increases in prices which will rise as a result of the budget. There is no acknowledgement of the contributions made to the economy by business people, employers, farmers and workers.
It is difficult to know what present Labour Party policy is. Their members voted here for the budget but say outside that it is not really their budget. It is obvious that Labour have abandoned the working person and the person on social welfare. I am sure that if they were to conduct a poll among their supporters the result would be in the from of a certain and unequivocal message.
Before the November 1982 general election Fine Gael told the people they were the only party who could solve our economic problems. When the Coalition were returned to office after that election the national debt amounted to £12 billion but it is estimated that by the end of this year the corresponding figure will be £18 billion, an increase of 50 per cent in three years. At that time in 1982 also Fine Gael promised that in office they would phase out budget deficiting by 1987. Instead, the 1985 budget deficit is also a record at £1.234 billion. That is another example of a broken promise. Fine Gael misled the people.
When Fianna Fáil left office in 1972 the economy was in fairly good shape. We did not have the bad habit of borrowing abroad to finance current expenditure. At that time the foreign debt was £126 million while the current budget deficit was £5 million or a negligible 0.3 per cent of GNP. But when the Coalition left office in 1977 our foreign debt had increased to 825 per cent or £1,040 million. That increase was due mainly to the foreign borrowing that had been engaged in for the purpose of funding current expenditure. Therefore, the current budget deficit increased some 0.3 per cent of GNP in 1972 to 6.9 per cent of GNP in 1975. It was during the time of the Coalition Government, too, that people were conditioned into accepting the idea of borrowing to finance current spending. The present Taoiseach was then the economic think-tank of Fine Gael. We must not forget that.
A Coalition Government were returned to office again in 1981 and with the exception of the period from February to November 1982 have been in office since. The average current budget deficit in that time has been at annual rates of 7.6 per cent, 8.2 per cent and 7.5 per cent in terms of GNP. The policy in this country for the past 12 years or more has been one of increasing budget deficiting and the Coalition parties must accept a very large proportion of the blame in this regard.
In 1983 interest repayments on our national debt amounted to £1.33 billion. In 1984 the figure in this respect was £1.57 billion while the estimated figure for 1985 is £1.84 billion. To put the matter in different terms, each income tax payer, and mainly the PAYE worker, will contribute 84 per cent of his tax to repaying the national debt in 1985. At the time the Coalition took office the corresponding figure was 80 per cent. PAYE workers pay between 80 and 90 per cent of the total income tax collected. The share of income tax to total tax revenue in 1983 was 35½ per cent while in 1984 it was 37 per cent and is estimated at 39 per cent for this year. This must mean that more income tax will be taken from the everdecreasing employment force despite the Minister for Finance giving the impression that the amount in this regard would be less than has been the case. It is difficult to understand how increasing levels of income tax can be got from a decreasing employment force. Obviously, there is a need to broaden the whole taxation base so that the burden will be shared by more. If this is not done those who are employed will lose the initiative to continue to work.
There is a great need for a new understanding and a new national spirit. More than 65 years ago our people fought for the right of self-determination, for the right to make their own decisions and to deal with their own affairs; but, regrettably, we are slowly but surely losing these rights. Others are taking control of our trade and our finance.
Our greatest national problem is unemployment. Many of the 234,000 out of work are young people. In addition, emigration is increasing. Again, many of those leaving the country are young people. The Coalition who have been in office for two years have a responsibility and a duty to create incentives and policies that would encourage and support our people in motivating them into a new national spirit of achievement and success.
The people must realise that they too have a major part to play in helping to solve the problem of unemployment. No Government can solve that kind of problem without the support of the people. Every country in Europe has an unemployment problem, so it would be foolish of us to think that any other country might be willing to solve our unemployment problem before they solve their own. We must as a community solve our own problems, but this is a very difficult task especially if the people have lost confidence in the Government of the day. Young people are telling us that there must be less talk and more action. The Coalition are losing touch with the people and should call a general election. Fianna Fáil are the only party in whom the people have confidence to improve the employment situation. On each occasion on which we were returned to office we were successful in that regard. The people await eagerly the next election.
A small community like ours, who have been members of the European Community for the past 12 years, have not succeeded in making the inroads we are capable of making into the European food and processing markets where there is a population of up to 280 million people. All these people must eat too. Some of their foods may be different from the foods we are accustomed to, but they must eat. We must survey the markets and ascertain the kinds of food that we could sell best there and the prices those people are willing to pay for their food. Surely many of our educated young people would be capable of assisting in finding and promoting these new markets. There is not much point in investing large amounts of the taxpayers' money in educating young people for the emigration ship thereby allowing other countries to reap the rewards. We are inclined to look at other countries and say matters are easy for them, that they have oil, coal, silver mines or some other minerals.
Yet, we have our own asset — the land of Ireland. We have a good climate and a good workforce: what we lack is the commitment and the initiative to realise and to develop these assets. Let us put more taxpayers' money into ventures such as food processing, dairy products and marketing. This will create real employment. With proper Government, leadership and initiative there is no reason why such ventures will not be successful. Surely the Government have confidence in their people? With proper investment and incentive, with better production and management, continuity of supply, quality goods, packaging and marketing we should be able to create new markets in Europe for our food and dairy products. Our best future lies with Europe. Let us get down to the job now because if we delay it may be too late.
We could create a market for more food and dairy consumption at home if we encouraged more tourists here. This is another area in which the Government are failing. What is needed is a definite, long-term plan for tourism, to give encouragement and incentives to people who have invested their money and also to encourage those who would like to invest in the tourist business. Sweet money pleases the child for only a short time and that is the way I see the recent VAT reductions in respect of tourism. The Government should give serious consideration to the matter. There is not much sense in reducing VAT while at the same time the price of petrol is increased. That is like a seesaw, with no long-term benefits for those involved in the tourist business.
Tourism is of primary importance but we do not seem to develop it properly. We have our people and their way of life, castles, historical sites, rivers, landscape, sports, our song and dance, festivals, and we have our special kind of welcome. But what we do not appear to have is good value for money. Our taxes and VAT rates as they affect tourism are far too high. If we reduce these taxes we would create more wealth. We want more money to come into this country and we want more money spent on food and services. All of this would create more employment. By reducing taxes and VAT in this area we would get a good return.
We should carry out necessary repair and maintenance work on our castles and historical buildings. In Trim, County Meath, we have one of the most important castles in the country. It is called King John's Castle. At present it is being allowed to fall into decay and complete ruin because for the past 20 years the Department, the Office of Public Works and others involved cannot come to an acceptable understanding. It is not a Trim or County Meath monument: it is a national monument of great importance. Nothing is being done to repair the castle and that is a national disgrace that would not happen in any other country. I appeal to the Minister to get rid immediately of all the red tape that is obstructing this development. There is enormous tourist potential here and employment could be created in an area that is a crisis unemployment area. What is needed is an honest decision by the Minister. He should tell us clearly if his Department will provide the necessary finances to repair and maintain King John's Castle. It is no excuse to say that the castle is in private ownership and, therefore, that State money cannot be spent on it. Such money has been spent on this castle in the past. It is a national monument and it is the duty and the responsibility of the Government to preserve it for the people and for the next generation.
King John's Castle, Trim, is owned privately by the Dunsany family and has been in their ownership for many generations. Recognising the historical and architectural importance of the castle, the Commissioners of Public Works made it the subject of a preservation order on 3 November 1965 and the reason for such an order was that the castle was falling into decay through neglect. On 27 October 1966 the Commissioners of Public Works appointed themselves guardians of Trim Castle in accordance with the National Monuments Act, 1930. Section 12 of that Act states that where the Commissioners are the owners or the guardians of a national monument they shall maintain that monument. Clearly they have a statutory duty to maintain this castle. Extensive maintenance works were carried out between 1970 and 1977 to the greater portion of the walls, including the gatehouse and the barbican, at a cost of £48,000, which is equivalent to £100,000 at current prices. The Commissioners of Public Works estimated that the cost of completing maintenance work of the same standard to the castle walls east of the barbican and to the keep would be a minimum of £250,000. They have not spent any money on the castle since they took it into guardianship in 1966 when, in their own words, it was falling into decay through neglect.
While commending the excellent work carried out at the request of the Commissioners during 1970, the "Save Trim Castle" Committee were deeply distressed that such a stalemate as ownership clarification should be allowed to continue. This would be serious enough if the condition of the castle were stable but it continues to deteriorate each year. One effect of this deterioration is that when repair works are carried out ultimately there will be much more work to be done and at greater cost.
These are difficult economic times. The "Save Trim Castle" Committee are not asking that the existing budget for national monuments be increased but rather that Trim Castle be given priority in the scope of the present budget. The Commissioners of Public Works point out that their present national budget is less than £3 million and they estimate that maintainence work to Trim Castle would cost a total of £250,000. Nobody expects £250,000 to be spent on Trim Castle in one year. We are asking the Commissioners to undertake a programme of works on the castle to be spread over the next five or ten years so that the annual proportion of the national budget used will not be enormous.
In 1172 history records that the first fortification was erected by Hugh de Lacy on this castle site and he was granted the then lands of County Meath by King Henry II. The present castle was built around 1220 by William Peppard, Lord of Tabor. History also records that within its walls parliaments were held frequently during the 15th century. An immediate meeting with the Minister is urgently requested by all interested parties and I hope it will be successful. It is obvious that this castle is an integral part of our Irish heritage and as such deserves the support of everybody for its preservation and especially the support of the Coalition Government.
Employment can be increased in the industrial area, but our problem is that the tax system crucifies both the employers and the employees, especially PAYE workers. Let me give an example. A company with 50 employees makes £1 million profit and another company employs 500 people and also makes £1 million profit, but both companies pay the same profits tax. This is clearly not giving employers an incentive to increase their number of employees.
I would like to see some type of investment trust funds in parish areas where local people would be prepared to put their money in to the local trust fund and so create employment for young people. I would like the Government to give some financial encouragement to that type of development. The problem facing young people today is that when they go looking for a job the first question they are asked is if they have any experience, and usually the answer is no. That is the reality and we must accept it. We must find other ways to give encouragement to our young people to set up in business, perhaps by forming a co-operative. This would create a great deal of work for many young people. I believe the people in local areas would come forward with their money to invest in such a scheme if it was supported by the Government.
It appears that the investor with capital has decided to look elsewhere where he will get better terms. It would also appear that those on social welfare are just as well off, if not better off, than those in employment. If this situation is allowed to continue our financial and economic position will continue to worsen. Action must be taken by the Government to correct this situation. I cannot understand why very high taxes are taken from PAYE workers and employers to create new agencies of administration to help young people find employment when part of that money could be left with the employers and the employees to invest in their own business and create more jobs themselves. This would cut out the ever increasing administrative costs which are a burden on production.
It is interesting to record that over the past three years employment has been maintained in the public service sector but there has been massive unemployment in other areas. This trend cannot be allowed to continue because if it does, our production will become less price effective as a result. Too much administration versus production must be identified as a tax on production. That means our products will become less competitive, consequently, with less employment. As a country we would be much better off if we had people in profitable employment. We have reached the stage where production cannot afford the administrative costs it has to bear.
The introduction of a proper attractive national retirement scheme would help to create employment for young people. I look at employment as if it was water going through a pipe, and the water represent unemployment. If the pipe cannot take the flow of water, the water will accumulate at the inlet forming a lake. We have a huge lake of unemployment which has been greatly increased over the past two years. How do we get rid of this lake? We can build another pipeline and this will release the water; but it will cost more to build these pipelines and that means borrowing more, which we cannot afford to do at present because our national debt will reach a record £18½ billion by the end of 1985. Building a new pipeline is out.
Another option would be to make the water flow through the pipe faster. This is where a good and attractive national retirement pension scheme would be most effective. It would be possible to offer an attractive pension scheme to those willing to accept early retirement. The finance being used at present to pay dole to young people could be diverted into such a pension scheme. People who can afford to retire earlier should give it serious consideration to allow our young people to work at home.
If something is not done quickly by the Government we will end up with a ten year span of lost youth, a youth in which the taxpayers have heavily invested. Due to emigration other communities can benefit from our young people's education and skills free of charge. There should be a national early retirement pension scheme with a scale of payment based on age of retirement and on the numbers unemployed. Our young people are anxiously waiting to play their part in the future development of this country and they have a right to make that demand. It is the duty and responsibility of all politicians to seek ways and means of allowing young people to avail of this right.
At present there is a limit to the amount of employment that can be created within our community and unless we can produce and sell more at home and abroad it will be difficult to improve the situation. But a more serious national effort must be made by the Government. I fear for this country. I know our young people are willing to make a strong contribution to the development of this country, but if they cannot we will be much worse off as a country in the future.
I would like to say a few brief words about agriculture. I welcome the extension for another year of the existing stock relief arrangements to farmers and the stamp duty exemption to young trained farmers. However, I am disappointed that the rescue package for interest subsidy relief has been discontinued. Many farmers now have no option but to sell out. Dairy farmers do not know what their quotas or prices will be as a result of the milk super-levy. There is nothing but worry among dairy farming families. If we expect more agricultural production and exports, this area needs special attention by the Government. Recently, Clover Meats in Waterford closed down and many farmers were left without their money. Something is seriously wrong that a situation like that could arise. The farmers worked hard tending their livestock and so on and sent the cattle to the factories and then they were not paid for them. There should be some system of insurance bond to cover that situation. Some years ago there was legislation where people involved in livestock cattle marts — solicitors and auctioneers — had to open up a client's account and the money was put into the client's account and it was not used in the trading of the company. I understand that beef factories do not get paid for the cattle until perhaps months later but the Government should be able to safeguard the payments to farmers for the production of cattle. Unless something is done to solve this problem farmers will become cautious in trading and this will seriously affect the co-operative movement and further agricultural production.
In relation to education I am disappointed that the grant in aid fund for sports organisations has been reduced by 9 per cent from £1,196,000 to £1,085,000. When we add to that the 6 per cent inflation rate sporting organisations will have to operate under a 15 per cent reduction. It is ridiculous that the Government made such a decision. People working in sporting organisation work voluntarily to help young people to find an alternative occupation to being unemployed. It is also a good form of health education.
In relation to child care assistance in national schools for the handicapped we have seen a 1 per cent increase of £416,000 to £422,000 and if we deduct 6 per cent inflation we arrive at a minus 5 per cent situation. I regret the reduction in this area. I am pleased that the residential homes and special schools will be getting extra money. Percentagewise it looks big, but in real terms the amount is small from £26,000 to £53,000. I welcome the increase from £500,000 to £970,000 for building and equipment in special schools for the handicapped and I hope that such schools in my constituency will receive some of this extra finance to continue their good work. The schools for the handicapped in County Meath, St. Mary's in Delvin, St. Ultan's in Navan and St. Peter's in Castlepollard are all doing great work. The population of Meath has increased tremendously over the past few years and there is a long waiting list for new schools and improvements to existing schools. We are waiting for an extension to St. Patrick's classical school in Navan, we are waiting for a new community school in Kells and a new secondary school in Trim. There is no secondary school in west Meath and there is a large population there. The children from those areas must go to Drogheda or Dublin. Either Duleek or Julianstown would be an ideal geographical situation for a new secondary school and there is a demand for it in the area. Another area crying out for a secondary school is the Ashbourne, Dunboyne, Ratoath, Dunshaughlin area. I appeal to the Minister to take a serious look at these problems and give an early decision. In relation to vocational schools in county Meath we are awaiting extensions to schools in Longwood, Oldcastle, Dunshaughlin and Athboy. We are also awaiting a vocational school in Nobber and in Trim.
These are matters for the Department.
I am just pointing out that within the Estimates for Education——
When the Estimates are being debated the Deputy will have ample opportunity.
I appeal to the Minister and to the Department of Education to take note of the serious educational accommodation position in County Meath. In relation to the national schools in County Meath there is a long list of schools awaiting extensions and we need new schools as well — Baconstown, Ardcath, Oldcastle, Bohermeen, Batterstown, Ballinlough, Navan and many more.
In relation to better use of taxpayers' money we politicians can talk as much as we like and make as many suggestions as we like but if nobody listens, if our suggestions are marked as read and if people wish to continue to blame and criticise the next person we are all wasting our time and in doing so wasting our own money.
It is obvious that we cannot continue to accept that there are no better systems of spending taxpayers' money than those which prevail. New and better ways must be found. I should like to take the example of the OPW, a large and complex organisation with more than 1,000 staff costing in salaries, wages and allowances £12.384 million in the 1985 Estimate. In terms of financial responsibility the gross budget for the OPW in the 1985 Estimate is £111.151 million. One can add to this the capital works amounts included in the Estimates of other Departments which are managed or designed by the OPW. They are estimated at approximately £60 million for 1985.
They will come in the form of a special Vote to the House.
I am anxious to develop a point.
The Deputy may have a general swipe at it but to develop it would be out of order.
I appreciate the decision of the Chair. The area of responsibility exercised by the OPW in 1985 will be approximately £171 million. My comments are not intended as a criticism of the employees of the OPW because I am satisfied that they are doing their best but the present framework——
I regret to have to tell the Deputy that he is completely out of order and I cannot allow him to continue in this manner. The Minister for Finance, wearing another hat, is responsible for the OPW but this is not a matter for the budget debate.
It is strange that no matter what projects are decided on none appear to be completed on time. Very few, if any, end up at the original estimated cost or even close to it. However, if any persons in business outside the public sector were to run their businesses in a similar fashion they would not be too long in business. Keeping projects on target, within the projected estimated cost and with proper management control is essential if we are to get the maximum benefit from spending hard earned taxpayer's money. It is also essential that Departments are not allocated money on budget day that will not be fully spent during that year. Otherwise other deserving and worth while projects will be delayed. Time is money and it should be the ambition of all workers, professional and otherwise, to ensure that projects planned and costed in advance are kept on schedule if at all possible.
I should like to deal with the question of extra taxation outside the budget. It must be made clear that we have more than one budget annually. We have an ESB budget and a telephone budget. We have local authority budgets. They occur because less money is given by central Government to local authorities. If one looks at newspapers one will see that in Limerick water rates jumped from £50 to £60, in Galway water rates jumped by 10 per cent, in Cork and Kerry by 10 per cent, in Meath by 5 per cent, in Westmeath by 15 per cent, in Mullingar town by 19p in the £ and in Mayo by 10 per cent. In Waterford there was a 100 per cent increase in water charges. Those increases represent extra taxation at local level which could have been included in the budget if central Government were giving more money back to local authorities.
Even with increased charges in my constituency we will have to cut out maintenance of our main and county roads because we do not have the money. Surface dressing on our main roads will be reduced by 21 per cent and on our county roads by 10 per cent in 1985. Our county roads are getting worse daily but nothing can be done about it by Meath County Council if they do not get State aid. I appeal to the Minister for the Environment to act now and assist that council because the roads must be repaired. If the repair work is not carried out now the cost in the future will be much greater.
We have a unique problem in County Meath because we have a lot of traffic going to and from Dublin city using our county roads which our ratepayers are financing with some State aid. It is not right that the ratepayers of County Meath should maintain roads for traffic going through our county in these circumstances. Putting more capital into our roads would be another way of giving extra employment especially in County Meath. Since the Coalition took office in 1982 unemployment in Trim has increased by 80 per cent, in Kells by 60 per cent and in Navan by 30 per cent. We now have 4,500 people unemployed in my constituency.
I am disappointed that the Minister for Finance did not consider the serious business and financial problems that the carpet and furniture manufacturers in my county are in, especially in my home town of Navan. They are struggling to keep people employed but the Coalition have forgotten them again because they are asking them to continue to pay the very high VAT rates. There is no provision in the Estimates for the development of Drogheda harbour which is in urgent need of attention. The harbour is in a bad state of disrepair but the Government do not appear to have any interest in it. Many business people in my constituency as a result will have to use other port facilities at a greater cost.
Money has not been provided in the budget for the protection of the Meath coastline from Donacarney, Bettystown, Laytown to Gormanstown. Meath County Council give £10,000 annually for that work but that will not go too far. I am disappointed that the Comptroller and Auditor General does not appear to have got any extra finance to bring the books of semi-State bodies up to date. In the course of his report he stated that many of the semi-State bodies were in arrears with their accounts. I cannot understand how the Minister overlooked that. If we cannot keep our books up to date in the area of semi-State bodies we could find ourselves in serious trouble in the future.
I should like to point out that postal service costs in the Estimates have increased from £46½ million to £52 million. The Department of Social Welfare spent £16.435 million on postal services; the Revenue Commissioners, £10.507 million; the Garda Síochána, £4.83 million; the Department of Agriculture, £3.319 million; the Department of Finance, £1.657 million; Houses of the Oireachtas and European Assembly, £1.48 million; the Department of Education, £1.256 million; the Office of Public Works, £1.139 million; and the Department of Communications, £1 million. They are frightening figures. These are all servicing costs. This is an area which should be investigated to find out if we are getting the best value for this money.
Consultancy services have gone from £3 million to £3.84 million — an increase of 27½ per cent. Travelling expenses within all the Departments have increased by 10 per cent. These are figures worth recording in the House and they are areas which need investigation if we are to spend better the taxpayer's money. It is now clear that this budget will seriously affect the spending power of the average family. Most people certainly will be less well off in 1985 as a result.
This budget is based directly on the policies and projections contained in the national plan. It is not in itself an instrument of direct income policy, as a good budget should be. It merely marks time. It has little or no relevance to the real issues confronting our people, such as the massive unemployment, lowering standards of life, crime and violence rampant throughout our country, nor does it effect to any appreciable extent the oft-sought reliefs from the crushing burden of taxation affecting our PAYE sector in particular. All these issues simply have not been faced up to in this budget.
The more one analyses the budget from these various standpoints, the more one comes to the viewpoint that it is disappointing and most ineffective in dealing with these social and economic problems. Despite the various measures taken to provide jobs for our people — and this is to be acknowledged in respect of many Ministers in the Government who strive desperately to provide job opportunities for our people — other Ministers would seem hell bent on destroying job opportunities. That is evident from the cutbacks and the curbs on the employment of people in all the State services. Despite these genuine measures taken to provide work, especially for our young people, it must be said that these various employment schemes are in the main of a short term nature — part time jobs, blind alley jobs, leading to nowhere at the end of a few months.
There is no semblance of security involved in these various work schemes, no real prospect of planning ahead and the blight on our young people's lives remains for the future. The need effectively to tackle unemployment has simply not been faced up to. The overall problem of mass unemployment has been very largely sidetracked. There is no long term policy to tackle this great social evil. It is extremely disconcerting to realise that at the expiration of this three year plan we shall still have as many people unemployed as were unemployed at the beginning. This is a frightening prospect, and intolerable situation which this House cannot and must not condone. We must never accept the doleful philosophy that the poor, the poverty stricken, the unemployed masses we shall always have with us. That that unemployment problem is so great that it is incapable of solution seems to be a philosophy with which we have to contend here. That is a philosophy which I reject and repudiate. I also reject the philosophy that our fiscal and economic problems can only be solved on the backs of a vast army of unemployed. I contend that idleness is the devil's workshop and that from it flow many of the attendant evils of crime and violence and of drug addiction which is so prevalent in our society today.
If we provide jobs for our people it will bring about a rich reward, and many of the evils with which we are contending today will certainly diminish or fade away. Mass unemployment is the great contributory factor to crime, violence and fear in the life of this country at present. Central to the plan for job creation is the speedy establishment of the National Development Corporation, designed to give a new commercial and strategic thrust to public investment in industry. I have always regarded the establishment of such a corporation as the real engine of activity in creating work for our people. Without this National Development Corporation there is no prospect of making any worthwhile impact on unemployment.
Clearly, private enterprise has failed down the years to do the job, despite all the lavish State aid conferred on it by various Governments. We have all seen in recent years so many thousands of workers discarded, declared redundant and thrown on the unemployment scrap heap, sacrificed on the altar of greed and profit. I submit that in these circumstances the State has a bounden duty to intervene directly in providing jobs for our people. If private enterprise fails to do the job and the State is not intervening, to whom do we look to provide work for our people? Are we to leave this whole matter to the free flow of the market, of supply and demand, in which the weak always go to the wall? I said before and say again that unemployment is a great cancer eating away at the body politic in this country and we ignore it at our peril.
The flagrantly unjust system of taxation is the other most disturbing and disuniting element in our society. This budget does not provide the reliefs required, especially in the PAYE sector. Sleight of hand tactics will not do. There must be real reform of the tax code. The tax net must be extended to all sections who can and should pay. Equity, fairness and social justice must be seen to be provided in respect of our taxation code. The overbearing crushing burden of taxation on the PAYE sector must be lifted.
What was meant to be a painless exercise in the extraction of tax from the pockets of the working class people has become naked robbery of the hardearned wages of working class men and women. PAYE, which was sold to us in this House as the painless extraction of tax, has become a detestable system, a robber's system, a vicious system, an avaricious monster plundering, in the main, one section of our people — the working class people. It is a disincentive and it is damaging to the whole future of our country.
The enormity of the injustice done to the PAYE sector is highlighted by the facts and figures revealed by the Minister for Finance in this House. He told us that last year 44,000 farmers, including those with another trade or profession, paid an average income tax bill of £724 compared with an average leavy of £1,875 on PAYE workers. The Minister also disclosed that the average tax bill for PAYE workers had increased by 600 per cent over the past ten years. Between 1979 and 1983 the average tax take from a PAYE worker rose from £915 to £1,875. In the same five year period the average tax payment made by a self-employed person rose from £714 to £1,573. For the top 20 per cent of farmers the increase was from £488 to £724.
These startling facts illustrate the injustice done to the PAYE worker. Leaving aside an aspect of taxation which the Taoiseach and the Tánaiste have yet to deal with effectively, as was promised in recent time, I avail of this opportunity to pose the question: when will the national income related pension scheme be introduced in this House? I observe that my colleague, the Minister of State at the Department of Social Welfare, is present. I would be grateful if he or the Minister concerned would indicate to us when we shall see this measure. As an industrial worker I realise that no provision is made by way of pension at the end of their working lives for tens of thousands of workers. This type of callous treatment does not apply merely to small firms but also to the multi-nationals, the big ones, many of whom show a callous disregard for the welfare of their workers when it comes to retirement.
The national income related pension scheme would also apply to the self-employed. I look forward to its implementation. When will it be introduced in this House? Will it be introduced between now and the summer recess, or will we have to wait until Christmas or perhaps next year?
I have strong reservations about certain aspects of the three year plan upon which the budget is based. I mentioned the area of job creation and relief for the PAYE sector. I do not believe that the ban on employment in the public service should continue when so many of our young, highly educated, talented people are seeking desperately for jobs. I have already commended Ministers for striving to create jobs, but I cannot understand the mentality of other Ministers who prevent job creation at a time of massive unemployment when a quarter of a million of our people are unemployed. I appeal to the Government for a more consistent and humane approach to this problem so that young people may be afforded an opportunity to apply their talents and their genius to the service of their own country.
There is another very serious aspect of the ban on jobs in the public service. As a member of the Committee of Public Accounts I have been appalled at the inability of various Departments of State and semi-State bodies to operate effectively and efficiently without additional staff. In the area of taxation to which I have already adverted, it is deeply worrying to realise that thousands of people are getting away without paying any tax whatsoever, or very little. Those of us in the PAYE net are mulcted. We are sitting ducks. We are exploited. Other categories of persons seem to get away with virtual murder.
Taxmen have failed in recent years to collect some £680 million. At least £677 million in tax remained uncollected up to May of last year. The figure could be a lot higher. The Revenue Commissioners' books put the total amount due at £3,500 million. They admit that their assessments are grossly inflated and £677 million is the best estimate of what could be collected eventually and is in fact due.
The Comptroller and Auditor General gave us these figures at our meeting. He was critical of staff shortages which impede him in his great national work as the watchdog of State expenditure. It was impossible for him to carry out adequate audits of Government accounts because of an acute shortage of staff in his Department. How can we, as a committee, or he fulfil our constitutional obligations, being so handicapped by lack of manpower at a time when there are so many brilliant young boys and girls crying out for jobs? The audit carried out recently and the lack of proper assistance to do the job have far reaching implications for this House and nation. There is evidence of a wide range of fraud, overruns and undoubted wastage in public Departments. Inadequate staffing has meant that it was not possible to achieve an adequate level of audit examination in very many vulnerable areas. Many anomalies have been turned up which have not been resolved satisfactorily primarily because of the Government embargo on the recruitment of personnel to various Departments. The whole situation is fraught with the most serious implications. It is a futile policy that must be changed.
In respect of income tax and taxation generally the report received by the Committee of Public Accounts reveals that sheriffs and county registrars have been swamped with orders to enforce collection of unpaid taxes. It reveals that in January 1983 there were 69,000 cases on hand, with another 96,000 cases having been referred to them during the year; but they could manage to clear only some 51,000 cases, ending the year with a massive 114,000 cases outstanding in respect of almost £300 million. In 1983 they managed to collect a mere £30 million. This inability to collect taxes, which impinges so much on all of us taxpayers, is due primarily to the rigid implementation of the embargo on recruitment of people to the public service.
I do not wish to dwell unduly on this budget and its many aspects affecting our lives on this occasion as we shall have an opportunity of going into greater detail on the various Estimates. However, I wish to avail of this opportunity to appeal to the Minister for the Environment to bring forward his proposals for the reform of local authorities, for their restructuring and, most important of all, for their proper financing. As one who has been in public life for a very long time I wish to see real power devolved on members of local authorities. I wish to see real democracy prevail in rural areas. I wish also that the powers now vested in the Minister and in central Government be curbed and devolved on members of local authorities. The virtual dictatorial powers now vested in county managers should be curbed and be devolved on members. I do not know how members of local authorities can carry out their duties responsibly and effectively unless proper power devolves on them. Therefore I want to see real, local democracy.
Of course, the most urgent necessity of all is the proper financing of our local authorities. There are many alternatives from which to choose as we scrutinise the manner and method of funding local authorities in other countries, many similar to ours. There are many alternatives and examples available. But, so far as the Minister is concerned, the most fundamental aspect of all is that there must be a change in respect of the use of charges — charges must be abandoned. Multitudinous and every-increasing charges, conjured up at the behest of a county manager must cease, and there has been a violent reaction to them on the part of the general public. It should be remembered that these charges impinge most of all on the lives of working class people, council and corporation tenants, many of whom are unemployed. Those who are working are scourged already by an unfair taxation system in regard to PAYE, VAT, ever increasing costs, a lowering of their standards of living and a clear inability to secure proper remuneration in these times for the efforts they make in their working lives.
I deplore the failure of this budget, and indeed of the national plan, to exploit effectively our resources whether they be in agriculture, fisheries, forestry, turf production, mariculture, gas and oil or mineral resources generally. There is no real effort made to exploit these natural indigenous resources which could put so many of our people in productive work.
I deplore the failure to increase children's allowances in this budget.
I come now to deal with duty on certain items. I observe that there has been no increase in duty on beer, wine or spirits in this budget. It should be remembered that the price of spirits had already been reduced prior to the budget. I find it difficult to understand why the Minister has not found it possible to reduce the price of the working man's pint. It was an unwise decision, economically and socially, to reduce the price of whiskey, brandy and gin and to make them more attractive to the consumer to the detriment of the traditional pint. The Minister should seriously consider reducing the price of the pint instead of encouraging people to drink spirits which have a high alcoholic content.
I am also concerned at the decision of the Minister to increase the duty on cider and perry. My native town, Clonmel, is traditionally the home of cider making. It is one of our basic industries and is vital to the economic life of the town. Cidermaking is a modern industry and it is so advanced that it has its own orchards and engages in the crushing of apples. The Minister raised the duty by 20p per gallon, including VAT, on the ordinary strength cider with a smaller increase for middle strength cider and perry. In picking out a small local industry, confined in the main to my native town, the Minister deliberately struck a blow at cider making. His decision is all the more startling because we heard rumours that the Minister had been canvassed by certain beer barons, especially those in Munster, to increase duty on cider and obviously they were successful. I do not know why cider was picked out and this increase threatens the jobs and future of the industry in Clonmel. The Minister must explain his decision. My county is suffering enough from the recession without this added burden. It is not as if cider was made generally in this country; it is made primarily at Clonmel, and I wish to convey the strong feelings of resentment felt by the workers, the unions and the people of Clonmel in respect of this matter. The Minister did not increase duty on beer and he must have realised that increasing duty on cider would militate against the company in question.
In County Tipperary many industries have been closed, including Tipperary Anthracite, the boot factory in Clonmel and Clonmel Foods, an adjunct of Clover Meats, Waterford, and the Minister should indicate what is being done to reopen these centres of activity. We understand that there are proposals for the utilisation of the anthracite plant at Lickfinn, Ballingarry, and also in regard to Clonmel Foods. I appreciate the difficulty of reviving the boot and shoe trade because it was one of the industries destroyed by our entry to the EC. The closure of the hub of the industry, Clarks of Dundalk, is proof positive that the industry was destroyed by free exchange of men, money and materials involved in our acceptance of the Rome Agreement. Can the Minister give any definite information regarding the reopening of the Tipperary Anthracite factory and of Clonmel Foods?
I was the convenor and chairman of a number of important meetings, along with my colleagues in the Dáil and Seanad, in order to try to avert the closure of Clover Meats and their subsidaries. Naturally, therefore, I am gravely concerned that these factories should be reopened and jobs restored to the workers. The farming community also suffered substantial losses in respect of the supply of cattle, pigs and so on to these factories and they should also be properly compensated. Compensating them, however, I hope will not defer the opening of plants in Waterford, Clonmel and Wexford.
The Government are now at the half way stage of their term in office and we have had to contend with cutbacks and lowering of standards in a deep recession. Job losses have reached a horrific total and there is an increasing incidence of crime and poverty. It is now time for a new beginning, to bring hope and help to our people. A radical change of attitude is called for to resolve the serious afflictions of our people. The time for change is now, because time is running out for the Government.
Deputy Browne.
I have been waiting for two hours to contribute.
The Deputy will be called in due course.
I was told by the Whip that I would be called next.
The Whip is not in possession of the Chair. The Deputy should be aware of the procedure. As a Member from the Government side has spoken, I am now moving to the Opposition.
This budget is perhaps the greatest non-event of the year. Using a high-powered public relations exercise the Minister introduced the budget as one of the most radical and economy boosting budgets in years. At that time and on the following day some economic commentators referred to the budget as innovative and far reaching and one that would boost the economy significantly. However, as the days passed and the budget implications were teased out, we realise that we had been presented with what was no more than a sham budget that had been put together to satisfy Fine Gael backbenchers and the socialist conscience of Labour. Initially one got the impression that this was a soft budget, that the reliefs in taxation would result in job creation and in controlling foreign debt. We were told that unemployment was on the wane, but the minister should realise that our people are not naive. They are educated and are well capable of realising that the budget will do nothing to create a climate in which jobs will be operated.
The morale of the people has been shattered by this disastrous Coalition Government who have abdicated their responsibility to the people in terms of governing in a practical and commonsense way. The Government are pursuing policies which have resulted in putting 234,000 people out of work. In addition, these policies have imposed a crippling burden on the PAYE taxpayer and have destroyed any incentive for business people to invest. Indeed, the Government's policies have destroyed any incentive there might have been for any sector. Perhaps what is most appalling is that the lives of a whole generation of young, highly educated and talented people have been sacrificed in the interest of balancing the books. The social problems that result from 80,000 young people being out of work are obvious and must concern all of us. Are we as politicians blind to the fact that the democratic process is crumbling around us? Young people who have nothing else to do are turning to crime, vandalism, drug abuse, joy riding and many other social evils. I have close contact with young people and I know that they consider themselves to have been let down by the Government and by politicians in general with the result that they are now very cynical of politicians and of what we stand for.
Our young people are not seeking too much. They ask only for the dignity of jobs, for the right to work for themselves and their country. It is a matter for the Government of the day to ensure that there is an environment in which young people can be hopeful and confident.
I accept that the Minister of State at the Department of Labour has made a small effort in this regard by way of his announcement recently regarding a teamwork scheme. We are told that up to 5,000 young people may be employed as a consequence of that scheme. I congratulate the Minister on his efforts, but they may be just too late to stem the rising tide of anger and frustration that exists among our young people.
Taxation is perhaps the greatest curse of our nation, especially as it applies to the PAYE worker. I welcome the Minister's attempts to simplify the income tax code so that we will now have only three bands — 35, 48 and 60 per cent — but let us not be under any illusion that the Minister's proposals represent a radical reform of the tax system. For too many years the ordinary PAYE worker has carried the burden of taxation. There is urgent need for a total reform of the tax system with a view to giving to the worker an incentive to produce more and in turn to encourage employers to invest and develop in the best interest both of themselves and of the nation.
There are very serious inequities in the tax system but there is no effort made in the budget to rectify this situation. In July last the Minister for Industry, Trade, Commerce and Tourism announced that the Government would be introducing indexation of taxation in the budget this year. I concede that some attempt has been made at indexation but we are probably about £50 million short in terms of what whould be needed for full indexation in the income tax year. The PAYE workers will be contributing this year £160 million more than they contributed in 1984. There was a promise in Building on Reality that the overall burden of income tax would not be increased, yet the budget proposals proved that that was an idle promise. How can the Government expect to collect an extra £106 million without increasing the taxation burden? This is another example of the typical and mysterious juggling of figures in which the Government engage.
The suggested radical reform of the taxation system is no more than a camouflage, a window dressing exercise by the Minister for Finance, while the burden of taxation has been shifted to the middle income group who are the new poor in society. This section have been the constant target for attacks by the Government in terms of high taxation rates, increases in mortgage rates and no increases in the tax bands in respect of allowances for children. In many ways that constitutes an attack on the family. Reform of and equality in the income tax system are essential. The PAYE sector are not prepared any longer to carry the burden. It is the duty of the Government to ensure that all sections contribute to the taxation net in a fair and equitable way. The Government must ensure that those sections who are not paying their fair share are put in the position of having to do so. There are well-heeled farmers and business people who are not contributing their fair share in taxation. I submit that we are on the verge of a revolution in so far as the tax burden on the PAYE sector is concerned. We should look to the report of the Commission on Taxation so that we might devise a more radical and equitable system, one that would help to satisfy the complaints of ordinary working people.
Another area in which there is no investment in so far as the budget is concerned is agriculture. For the past number of years there has been a serious decline in investment in this sector. We are in the era of quotas — beef, grain, sugar and milk quotas. I am beginning to wonder whether there is any future for farmers in Ireland. Agriculture is an industry which should be yielding many jobs, especially at a time of high unemployment. We must have regard to the whole area of import substitution in the area of food. Too much of our land remains with farmers who are too old to make the maximum use of the land. There is a need for a radical change in the pension scheme so as to encourage those older farmers to hand over their land at an earlier stage. It is imperative to ensure the availability of low interest loans for farmers who are prepared to acquire and develop land. There should be interest free loans for young farmers who are prepared to develop agriculture in such areas as vegetable growing because this development would be a help in our balance of payments in that it would eliminate the need for the large quantities of vegetables and other products that are imported.
The younger farmers are not getting a fair deal from the Government. I trust there will be a resumption of the farm modernisation scheme and of the AI and lime subsidies so that once again farmers may be given the incentive to develop.
We must extend also the cow suckler scheme with a view to maintaining our beef herd levels. That is one area in which there is tremendous scope for development and for farmers to make profits. Overall the farming sector has been neglected. Many small farmers are on the poverty line. They are living on a meagre income that makes it impossible for them to look after their families properly. I know many farmers in County Wexford — and I have made representations on their behalf — who are looking for social welfare payments and for help from the health board to tide them over certain periods of the year. Farmers have to suffer periods of drought and they have to endure bad harvests and those who are on a low income have not enough resources to tide them over such times. I should like to see this Government and future Governments put a major investment into the agricultural sector, to radically develop the industry and to provide a proper plan that would evaluate the structure and importance of agriculture. By doing this we could help job creation that is so essential for the country.
Unemployment is at the ridiculous figure of 234,000 and that may not be an accurate figure because there are many young people on short-term schemes or staying on in school for an extra year. Possibly the unemployment figure could be as high as 260,000 or 270,000. That kind of figure may bring us to a flash point. Many people are looking for work: some of them have lost their jobs through no fault of their own but others have never had an opportunity of working. Too many young people have never worked since they left school and many of them are married with young families. That is not in the best interests of the country and it behoves us as politicians to tackle the problem.
In Wexford unemployment has increased to an unprecedented level in the past year. The rate of increase was particularly severe in November and December 1984 and throughout January 1985. Now some 7,580 people are unemployed; in the county. In Wexford town 24 per cent of the workforce is unemployed; in Enniscorthy the unemployment rate is 17 per cent; in New Ross it is 19 per cent and in Gorey it is 17 per cent. This gives an average of 20.4 per cent throughout the county while the national average is 17 per cent. County Wexford is 3 per cent above the national unemployment average. Yet, in deputations to Ministers and in representations to the Government we are told that Wexford should not be given priority treatment in regard to unemployment. This Government have a duty to create jobs in every county but particularly in counties that are hit harder than most. In Wexford we are 3 per cent above the national average and we are in need of priority and instant action in the area of job creation.
There are three Fine Gael Deputies in Wexford and one Labour Senator. The three Deputies have neglected County Wexford. It is a marginal constituency but they have not put the pressure on the Taoiseach and Ministers to ensure that we get extra priority. If this Government remain in office for the next two years, which seems unlikely, I hope those three Fine Gael Deputies will manage to get some jobs for Wexford and give some hope to the unemployed. People have the right to obtain jobs and have the dignity of work. If those Deputies do not succeed in this task, I am sure that only two of them will be returned to the Dáil, and possibly only one. Their efforts are being examined and in my opinion and that of many others they have done nothing for the county. I have no doubt they will be given their answer at the next general election whenever it takes place, whether it be next month, next year or in two years time.
There are areas to which we should look for job creation and one such is natural resources. Successive Governments in the past have gone down the road of having big industries, of the IDA giving massive injections of grant aid to various concerns who leave after three or four years. In my town of Enniscorthy we had many instances in which this happened and in which there were massive job losses. In the future Governments and politicians should look to our natural resources for job creation. This applies to forestry, fishing, tourism, building and the agricultural industries. If the same investment were given to these sectors by the IDA or some other body that might be set up to consider our natural resources, I am sure we could create jobs at a cheaper rate. We could ensure that the money would remain in the country and that we would not have to import vast quantities of timber and vast amounts of fish, to mention a few items. I should like us to set up a proper structure within some Department — perhaps in the Department of Industry, Trade, Commerce and Tourism, the Department of Fisheries and Forestry or the Department of Agriculture — where the various sectors could be considered and where development could be carried out that would be in the best interests of the country.
The development of our natural resources has been neglected for many years. Only 25 per cent of the timber requirements of the construction industry are supplied by the home market but our timber resources are in the region of £1½ billion. We are doing nothing to manage or to regulate that resource. It could make a major contribution to the development of the country but it is not being looked after properly. At the moment a number of sawmills are closing down, are going into voluntary liquidation or are being put into receivership by banks or other lending institutions. That is a grave crime when we should be developing the industry and providing the requirements of our building sector.
In fishing there has been some commitment by the Government: in particular there has been some development work by the last two Governments to help this sector. There is tremendous potential in this industry for job creation. However, we must have investment, the proper strategy at top level, proper marketing and the right loans structure to enable fishermen to invest at low interest rates in boats and in the processing industry. Many fishermen are hardly able to survive in view of the very heavy repayments they have to make on their boats and some of them are in arrears with their payments and are unable to meet their commitments.
I should like to see the IDA play a greater role in the fish processing industry. In Wexford and in Kilmore Quay in particular in the past few years two factories were grant-aided by the IDA and now there are about 300 people working in a small village. There is much more scope for such kinds of development. I hope the Minister will continue to ensure that the rights of fishermen are protected.
We are threatened by Spain and Portugal's entry. I would like to see the Minister adopting a very tough line but I doubt if he has the financial resources or the manpower to take action against the Spaniards if they decide to fish our waters illegally. At present we are not in a position even to control salmon fishing on our rivers. There is massive salmon poaching and interference with salmon fishing, and in the eastern inland fisheries area they are very short staffed. They do not have a pollution officer or an inspector and two or three years ago they had five people patrolling the River Slaney but now they have only two. The Government do not seem to have much of a commitment to the control and development of the inland fisheries industry. I doubt if the Minister is in a position to protect larger fishermen but I hope he will make some effort to ensure that their rights are protected and that the factory type ships used by the Spaniards are not allowed put our fishermen out of business.
I welcome the 10 per cent VAT reduction on newspapers. This is essential if we are to protect the jobs of those employed on local newspapers. We have two local newspapers in Wexford, one on a three day week. This reduction in VAT is a step in the right direction but perhaps the Minister will go a stage further and give our newspapers a chance to complete with the British tabloids. Those newspapers are selling for 17p or 18p each and they are being bought by many young people. May be it is because of page three or the sporting coverage but whatever it is, I would like the Minister to make it more difficult for these papers to be sold here. Many people buy a paper for sporting information. They may want to back a horse or to take some sort of a gamble. They are not interested in what type of paper it is.
The Minister should look at the possibility of having a nil VAT rate on newspapers because the present tax is a tax on people who want to read the news and what is happening elsewhere. I read a short time ago that the British Government were trying to introduce VAT on newspapers but there was a public outcry. I would like to see action taken to ensure that fewer of these trashy newspapers come into this country. We should protect our own industry because our daily and Sunday newspapers provide an excellent service and they can hold their own with newspapers of any other country. We have excellent reporters. We should support the newspaper industry, local and national, and do our best to protect them.
A number of representations were made to me about private cinemas. The VAT rate on private cinemas has put some cinemas out of business and will put even more of them out of business in the near future. Many private cinemas in major towns have closed down or are about to close down because of the high VAT rate. One of the councillors in the Enniscorthy area owns a cinema. He has tried to provide a service for the people, particularly the young people, in that town where we have a massive unemployment rate, and the young people have hardly anywhere else to go. I hope influence will be used to reduce the VAT rate to 5 per cent for privately owned cinemas. They have been part and parcel of the life of our towns and villages down the years and it is only right that they should be helped to survive.
We hear a lot of talk about this Government's commitment to social welfare and the Labour Party being the conscience of the working class and the poorer section of our society but one can only be amazed at the small increase in social welfare payments given in this budget — 6 per cent for old age pensioners and the long term unemployed — not even in line with inflation. This will increase the hardship and poverty felt by many families and old people. The Minister should have another look at this area and the increases should at least keep pace with inflation to help the old people, the long term unemployed, the underprivileged, deserted wives and all those living below the poverty line. These people should have a decent standard of living but with the present social welfare payments they are finding it more and more difficult even to survive.
There has been no increase in children's allowances. This could be described as an attack on the family. The children's allowances should have been increased because this money is used to pay the electricity bills and other commitments every month. As I said, the Minister should have given a substantial increase in the children's allowance. There has been talk that at some stage children's allowances would be abolished by this Government and that the new allowance would be means tested or index linked but, whatever Government are in power, I would not like to see these allowances abolished. I would not like to be part of a Fianna Fáil Government which tried to interfere with the children's allowance. It is sacred to the housewife. These allowances should be maintained regardless of income or family circumstances. I will fight to ensure that children's allowances are never abolished. I ask Coalition Members to ensure that children's allowances will always be part and parcel of family life. A person some people might consider as well-to-do might be more dependent on the children's allowances than those who might be described as ordinary people because she may be in very difficult circumstances and have many problems to face. I would like to see children's allowances retained.
The building industry has been devastated by the increase in the VAT rate from 5 per cent to 10 per cent. The effect of this increase on the construction industry will be to increase the VAT take from the industry by £75 million in 1985-86. Private housing, agricultural areas and other commercial developments will be reduced by £40.5 million and £30 million will be taken from public works done by the private sector. The building industry at present is not job creative due to lack of investment by the Government. I wonder why all Coalition Governments seem to shy away from investment in the building industry. The increase has been delayed until 1 May, but I hope that on that date the Minister will not increase the VAT rate from 5 per cent to 10 per cent but will reduce it from 5 per cent to a nil rating. If he does that he will have done a tremendous day's work in relation to job creation in the building industry. At present 50 per cent of building workers are unemployed. We should put a massive investment into the building industry. Not alone would it help that unemployment problem and help to create jobs but it would solve many of the social problems that exist because of the need for schools, houses, regional colleges and whatever. I hope the Minister will see his way to completely removing VAT from the building industry. There has been an increase in the grant from £1,000 to £1,750; but the increase in the price of the average house will be £1,714, so the house purchaser will lose about £1,000 despite the fact that the grant has increased. That is all due to the increase in VAT. It was a nonsensical decision by the Minister. Representations had been made to the Minister but he failed to realise the consequences of this increase. After the budget there was a delay in the implementation of the increase to 1 May and I hope that the Minister has delayed the implementation in order to have another look at it with a view to removing it completely so as to protect existing jobs in the industry and to help create more jobs.
Many problems facing the country must be tackled by the politicians. Many people see politicians in general as living in an ivory tower in Dáil Éireann protected by huge salaries and getting perks such as ministerial cars and drivers, expenses and so on. We must ensure that the people have confidence in politicians. We must ensure that their right to earn a decent living and to the dignity of a job is respected. The people have the right to develop this country as they wish. It is appalling that our highly educated young people cannot, because of the lack of jobs, contribute to the growth of the country. They want to work and contribute, but they cannot. Regardless of political persuasion it is important that we as politicians realise the consequences of our present situation for the future. We should be prepared to give the people the type of country they want for the future.
In welcoming this budget I congratulate the Minister on his efforts, but as a Border Deputy my congratulations have to be muted and qualified. Welcome as the measures are, they are not enough. I am concerned about what is happening to the north-east region where I live and which I would describe as the hind tit of Ireland. The pendulum of deprivation has swung in recent years from the west to the north-east region, the Border region, which in last year's European Economic and Social Council report was identified as being among the most deprived areas in Europe. Those who have the misfortune to live in the region are well aware of it, as evidenced by Deputy Faulkner's speech last night. While the Minister deserves some degree of congratulation for trying to alleviate the hardship that is being felt in that region, he has not gone far enough. Before I concentrate on my parochial area I will touch on some other sectors to which the Minister applied himself in the budget.
The first sector is the newspaper industry. Like many other speakers, I welcome the reduction of VAT on newspapers. I have been in the newspaper industry all my life, not in the glamorous journalistic section but in the basement section, the distribution area. I am well aware of the tremendous increase in the cross-channel newspapers that come here. There is a sizeable population here who relate more to Britain because of buying the Daily Mail, The Star and The Daily Mirror. The Daily Mirror is the one newspaper with a climbing circulation here. They have now got a very significant hold on the market. The reduction in the VAT was very timely, because the bell was tolling for the Irish newspaper industry and there were many newspapers in great difficulty. This reduction was welcome and I congratulate the Minister on it.
The Government should look at the possibility of creating a Press Council because the level of journalism has undeniably slipped. The existence of a magazine called The Phoenix and the licence it takes should be curbed. It is deplorable that reports that frequently appear in a mass circulation Sunday newspaper are totally fictitious. In many cases the stories are clearly unsubstantiated. It does not reflect great credit on the newspaper industry. It is a tragedy to see a paper of the calibre of The Sunday Tribune in difficulties while another mass circulation newspaper yearly announces tremendous circulation increases. It does not say much for the readership and it is an indictment of many of them. It underlines the need for adult education classes.
The other area I would like to touch on is in relation to the betting tax. Here I would take a slight bow on behalf of my colleague, Deputy McCreevy and myself, in giving the nudge to the Minister to reduce the betting tax from a penal imposition of 20 per cent to 10 per cent. I know the Ceann Comhairle would not know much about the racing industry——
I will listen and learn.
——but to those of us who live in that twilight zone there was undeniably a great leakage to the Exchequer in betting.
Debate adjourned.