Dáil Éireann debate -
Wednesday, 24 Apr 1985

Vol. 357 No. 8

Finance Bill, 1985: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Dr. O'Connell

There is no basis for the Minister's assertion that there is a growing confidence in the economy. Never was there such despair and depression. Investment is at an all-time low. The building industry, that sensitive barometer of economic activity, is virtually at a stand still. Public confidence in the Government is badly shaken because of the monetarist policies they are so determined to pursue. The present taxation policy, which is punitive, is a serious disincentive to work. We have the highest unemployment rate in Europe and there is a lack of job prospects for our young people. Despite what the Government say, emigration is at the highest level for ten years. This is a graphic picture of our position today and it is having serious repercussions in other areas. How can the Minister in all honesty make such a bold assertion that there is growing confidence in the economy? I see no evidence for such an assertion. How much longer must we suffer such inanities? Further evidence of the serious state of the economy can be read in the statement by the economist, Dr. Barrett, in this morning's newspaper which gives a much more accurate picture of the state of the Exchequer finances. He suggests that the IMF should be called in to sort out the financial mess.

The Taoiseach went to great pains to say that this Government's proposals would solve our problems, but despite the hardships imposed by their budgets, there is no evidence that the State's finances are being regularised, no evidence that we can expect any easing of the intolerable burden being borne by the people, no respite being offered to those suffering serious hardships and no prospects for our youth. I sometimes think Ministers are out of touch with reality and with the views of the public. This is especially true in the case of the present Taoiseach and the Minister for Finance. There is nothing personal intended here. The Minister has no basis for saying that there is confidence. A glance at Iris Oifigiúil will show that an alarming number of companies go into liquidation each week. That is most depressing. I counted 11 companies in three days last week.

In discussions with different groups from every stratum of society the constant theme is our punitive tax system. Take, for example, a group of employees who are currently negotiating a salary increase and with whom I have had discussions. They have a salary of £10,000 per year and are seeking a 10 per cent increase. They told me that such an increase would give them £83 per month gross but of that amount they would get a net increase of £26.15. That shows the effect of income taxation. The rate of taxation payable on £10,000 is 60 per cent plus 8½ per cent PRSI. If that is not punitive I do not know what is. Is it any wonder there is little incentive to work or that people lack enthusiasm for Ministerial promises? Is it any wonder the budget was so coolly received? The grim reality is that there is little prospect of any change or respite and that is what is undermining the morale of the people.

I have no doubt the Government are well intentioned but they are totally inexperienced in the complexities of high finance. They are advised by economists who are so inherently conservative that no major innovatory changes can be expected while they are in power. There is little to be gained by the public from the Government and that accounts for the general malaise throughout the State. The Government may have a goal but they are not providing any incentives towards meeting that goal. Their promise of rising living standards are nebulous, meaningless statements that give no firm commitment to the nation as a whole. Despite their assertions to the contrary they are merely tinkering with the system. They said that anything other than selective readjustments would be no more than tinkering with the system on the margin without tackling the basic problem.

This Bill which gives effect to the proposals in the budget is merely tinkering with the system. The national plan was a timid effort which will not inspire the people. It was devised by economists who were cast in a very conservative mould and incapable of imaginative thinking. There is no hope offered to the people and very little imaginative thinking by the Government. There are two parties in Government each serving their own purpose, vying with each other to try to claim credit for legislation. As I see it, it is a case of one-upmanship between Ministers. They are over half way through their term of office and we have seen nothing but panic measures being taken by them in an effort to woo the electorate. Legislation will be brought before the House and many promises will be made. I have seen it all before. I saw it during the term of the last Coalition. I saw the public relations work carried on by the then Government which was nauseating. I heard a Minister for Health announce a hospital plan on no fewer than six occasions. He merely altered the words in the press release. In the last Coalition the Minister for Education announced that 250 extra teachers would be recruited. In my naivety I believed it and rushed with enthusiasm to the Department of Education to know if some of them would be appointed to the area I serve. A civil servant told me that was not quite what the Minister said. It is no wonder I am cynical about it. I have seen it all before. What do I see now in the media? A massive PR job by the national handlers on a very wide scale.

I am surprised at the media succumbing to this kind of nonsense. The media should maintain their independence and integrity. They should not succumb to this but rather adopt a critical attitude. By doing that we will have a healthy democracy. I would not like to think the media would not be objective but they should be more critical and analyse some of the press releases emanating from Government Departments and monitor some of the statements made by Ministers. They should determine how many of the promises have been fulfilled.

I notice that the media are bedazzled by the Taoiseach and his Ministers. That is not good for democracy or for the country. I hope that the members of that very honourable profession, of which I am honoured to be a member, will be much more critical and analytical in their approach to the performance of this Government. By doing so they will ensure that the credibility of the media will be upheld.

Mr. L.T. Cosgrave

I welcome this Bill. It gives effect to some of the items announced in the budget which I hope will go some way towards giving a further boost to the economy, getting people back to work, and give credence to the fact that the economy is slowly beginning to come around and get back on an even keel.

The budget in January gave a much needed and long overdue boost to business. Over the past number of years there were many factors which alarmed the business sector. The budget introduced some taxation reforms, restructured the VAT rates, and made some changes in income taxation. There is a long awaited realisation that our taxation system is a hindrance in many ways and needs to be changed. Our taxation system is overelaborate and is a hindrance at administrative levels, particularly in relation to small businessmen who do a great deal of work for the Revenue Commissioners for which they are not given any credit. We must get rid of the long drawn out bureaucratic battles between the officials of the Revenue Commissioners who are trying to do their job and individual taxpayers. It becomes a test of endurance between businessmen or their accountants and the Revenue Commissioners. The bigger companies have greater expertise and they have the facilities to send in their tax returns and to claim whatever is claimable. Smaller businessmen get themselves into difficulties and find themselves harassed by tax officials about making returns.

At one stroke there was a reduction from six rates to three rates and there was also a reduction in the level of taxation, and in particular the punitively high 35 per cent rate. This will restore a certain element of confidence and will generate a greater cash flow in business. We are all aware of the cross-Border traffic prior to Christmas. We must get our rates down to a reasonable level. Possibly we could have two rates between 5 per cent and 8 per cent with a higher rate on certain items of 20 per cent. Hopefully the 23 per cent rate on certain items can be brought down to 18 per cent or 10 per cent as the case may be.

Two industries benefited in particular. One was tourism. From reports it seems that the bookings are up this year. The more people we can attract here the better. Apart from accommodation, they will spend their money in other areas. The newspaper industry which had a fairly extensive VAT rate bill to pay also got a reduction. This was very important for rural newspapers which are so necessary. It was great to see the price of one item coming down. I hope the tax changes which were introduced will give a boost to the economy, get business moving again and get more people back to work.

We have to work much harder to ensure that people take home more of their pay. They should be able to decide how they will spend their money. We must try to increase the allowances and reduce the rates and extend the bands and get down the crippling rate of 65 per cent. That rate is reached very quickly. One does not have to be on a very high salary before one receives 35p only in every £1. We have taken a step towards ensuring that there is a greater incentive to work and that people take home more money. People should have a choice in how they spend their money and whether they save it or spend it. The choice should be theirs in relation to the greater part of their salaries.

The changes introduced go some way towards improving the tax system and spreading the burden more evenly. We have to go further in simplifying the tax system and making it easier for people to make their returns and ensuring that there is not a log jam which causes unrealistic assessments to be sent out and creates bureaucratic battles between the Revenue Commissioners and individuals. More has to be done, but we have started. We are beginning to make progress. The changes introduced were overdue but we are beginning to improve the taxation system. Some small elements of the various taxation reports have been introduced, but much more has to be done.

There are several items in the Finance Bill with which I should like to deal briefly. One item is new in the Finance Bill as distinct from the budget, that is, the inheritance tax. The threshold for inheritance between spouses is being abolished. It stood at £150,000, which to some might seem quite an amount of money. However, between businesses, houses and assets, possibly along with a pension which was capitalised, that £150,000 threshold was being reached very quickly. People were being left in the difficult position, at a time of other distress often occurring very suddenly and unexpectedly, of having a demand for inheritance tax. How were these people going to discharge that liability? Possibly there were some assets such as a business or part of one which could be realised, but the reality was that the main asset might have to be sold. The fact that the pension had been capitalised and would be estimated on what it would amount to over the next ten to 15 years left people in very difficult circumstances. This proposal is a most welcome development, as is the provision where insurance policies are taken out specifically for payment of such inheritance tax. If an inheritance, say a farm or business, is to be left to a son or a wife one should not have to resort to partly selling the main asset, putting the family into a difficult situation or causing a factory to close or partially close, thereby putting other people at risk. While this proposal is not the most popular one, in time people will realise its benefits.

In cases where a farmer or businessman is getting on in years and wants to bring into the business his son who may have new techniques and further developments in mind, progress will not be stifled if greater allowances are made and such bequests or inheritances are not liable to too heavy a tax. These things all cost money, but I hope that we can go some way towards further extending the allowances or raising the thresholds. The inheritance tax came into being in 1975 or 1976 as a replacement for death duties but it is interesting to note that while other taxes have been raised from time to time thresholds tend not to have risen so quickly. We must keep an eye on this, particularly in relation to the valuation of premises or businesses which can go up by £25,000 to £50,000 without any raising of the allowance, which can cause difficulty. The abolition of the tax on inheritance transfer between spouses will be seen as a most significant development in the years to come.

I also welcome the provisions in relation to interest allowances for those over 65 years of age and the rent allowances being increased. I hope this will encourage them to keep at home as little of their money as is necessary and earn more interest on it. This might put a stop to the harrowing cases of old people being beaten up and robbed for a paltry few pounds. People will then not be afraid of receiving tax demands for the few hundred pounds which they have put into a savings account, often making provision for their funerals.

It has been drawn to my intention that people will still receive demands for the tax at the old levels because banks will still return the forms in the old manner; in other words where interest of £50 is earned, even though a person may now earn up to £100 in interest tax free, the Revenue people will be informed. It may be the case that the person is not liable to pay tax on the interest due, but these demands have a very disturbing effect on old people who do not understand the position. Perhaps some provision could be made with regard to the new tax-free allowances that if a person is to reach the age of 65 within that year the matter will be drawn to attention.

Sections 20 and 21 relate to refurbishment and conversion expenditure allowed in relation to the improvement and conversion of buildings which will then be used as dwelling places, where there are two or more units within them. I hope this will boost the building industry, whose difficulties I appreciate. The doubling of the £1,000 allowance, plus the added £3,000 mortgage subsidy, plus the grant recently announced in the national plan of £5,000 for people surrendering local authority housing and making the effort to buy a new house— all this amounting to £10,000 allowance — will go some way towards assisting the construction industry. There must be two units prior to the development and I would hope this would not cause too much difficulty. Houses may have been let in various ways, possibly not qualifying under the two unit regulation, but these would go towards providing accommodation in the future. This allowance may be claimed for two years from 1 April.

I hope the scheme will not get bogged down in relation to whether dwellings were used in two separate units prior to 1 April. We know the difficulties encountered by people who are trying to improve their house. Builders are anxious to commence work and it often happens that certain works are carried out prior to inspection by the Department officials. I hope we can improve the manner of inspection and expedite the matter. I am sure that quite a number of people will avail of this allowance in respect of refurbishment and conversion and I appeal to the Department of the Environment to be flexible in their approach. I appreciate that inspectors have a difficult task in inspecting all houses but perhaps some improvement in the procedure could be introduced. Unfortunately what happens sometimes is that people start work and then they find they are disqualified from obtaining a grant. I realise it will not be easy to get over this difficulty but perhaps greater leniency could be shown, even if it meant a reduction in the allowance. Builders are going through difficult times at the moment and they are anxious to get on with work. The problem arises in that it may take several weeks for an inspector to visit a house and if works are carried out prior to his visit there may be problems.

It is unfortunate that the car allowance has not been extended. There have been considerable increases in respect of road tax, petrol and car insurance. In that connection I hope the long awaited disc system will ensure that more people will have proper car insurance. In addition, the cost of car repairs is quite considerable. The allowance of £3,500 has remained static for a number of years and perhaps the Minister would consider doing something with regard to this matter in view of the high costs of motoring. Running a car is a most costly matter and a greater allowance should be made to businesses who depend for their trade on having cars on the road. When one considers the price of a new car, in addition to the running costs, it is obvious that £3,500 is quite low. I know it is not easy in one budget or over a few years to do all the things one would like but I ask the Minister to give some thought to the point I have made. Perhaps in his reply he will give some indication why this allowance has remained static for so long.

One item that has received a favourable response relates to the reduction in betting duties, both on course and off course. I hope bookmakers are doing what they can to ensure that money is not going out of the country and that the extra money generated will be put back into the racing industry which is the backbone of the country and which, directly and indirectly, employs about 25,000 people in many different areas. The Minister told us that the measure he announced would apply for one year in order to see what would be the effect. I hope the Minister will be able to give some indication that there has been a positive response. As in other areas, I hope it will be shown that with a less penal and punitive tax, more money will be generated and the Exchequer will not be any worse off.

I hope that the tax reform started in this budget will continue. We have much more to do. We have to look at all areas of public expenditure, but particularly the value and return we get from the semi-state sector which uses vast sums of public money. This is essential when money is in short supply. We must consider having a total overhaul of the various bodies and see if the structures are outdated. We should also consider if there is duplication of services and question if the various bodies are considering the needs of today in relation to jobs. We must question if there is the necessary follow-up to the various courses, particularly AnCO courses. Is there a constant monitoring of people who go through such courses? When a person goes to the IDA for a grant or some kind of assistance he should not be thrown out if, for example, the machinery he proposes to use is movable. I had a case recently in relation to forestry where the IDA were reluctant to help because large combine machines were being proposed rather than stationary machinery. One of the objections was that individuals might not know where the machines were held. In this age we have to consider using modern machines and to realise that even if they are movable a person will not just walk away with one of them. We must change our views and our procedures in regard to this matter.

I welcome some sections. In regard to section 67, and hopefully retaining more of the funds earned by foreign based subsidiaries here, perhaps there is need to examine further whether greater benefit could be reaped from this section by extending its scope. It appears that there must be a tax treaty drawn up between this and other countries which may eliminate some companies with bases in other jurisdictions, for example, in places like Bermuda.

I would hope that my queries will be answered, particularly that relating to the car allowance which I hope will be examined further in continuing tax reform.

Mr. Noonan

(Limerick West): I might first refer briefly to section 10 of this Bill which relates to the exemption of certain income from the leasing of farm lands. I welcome the Minister's attempt to encourage land leasing by way of tax exemption, but at best it constitutes a half-hearted attempt. It is a step in the right direction but does not go sufficiently far. Were the Government serious in their intent to promote land leasing they would offer positive financial incentives and allow greater flexibility over the duration of eligible leases.

Fianna Fáil have consistently put forward the need to ensure that agricultural land is retained by farmers. We have consistently warned of the need for safety measures to ensure that agricultural land does not fall into the hands of rich outsiders with fat cheque books. It is our view that it is far better to discriminate positively in favour of those who make their living from the land than render it easier for the rich speculators to build up ranch type holdings. It is also the view of this party that young educated farmers should be encouraged. I am happy to note that the provisions of this Bill continue the scheme commenced some three years ago by Fianna Fáil under which land transferred to farmers under 35 years of age, and with the requisite agricultural education, will be exempt from stamp duty. This incentive has played a vital role in encouraging early inheritance, ensuring that a greater proportion of our land is transferred to qualified farmers at a much earlier age. We on this side of the House will be examining this aspect of transfer.

It is now positive Government policy — the right one to be adopted — to encourage joint ownership of farms. Here an anomaly has arisen on the transfer of farms to joint ownership when one of the parties may not have reached the educational standard required, when there is an element of duty charged on the portion applicable to the spouse not qualified. Where a farm is jointly managed, in circumstances in which one party is qualified as stipulated under the appropriate section of the 1982 Finance Act, there should be exemption from duty as is applicable to cases where the transfer is to one single person qualified in so far as agricultural education is concerned. I would ask the Minister to examine that aspect on Committee Stage and to comment on it when replying.

The small crumbs meted out in this legislation constitute a far cry from the anticipated land policy announced by the Fine Gael and Labour Parties amidst much fanfare and which kept at least one agricultural journalist busy for two years or more. Even that journalist is having second thoughts about the sincerity of those who fed him pious aspirations at that time. On this occasion the chickens have come home to roost. The proposals of the Government then with regard to the positive promotion of land leasing, enshrined in the provisions of this Bill, constitute a far cry from the proposals outlined originally by the Minister of State at the Department of Agriculture, Deputy Connaughton.

The Government are expert at paying lip service to popular ideals while performing in a totally different way, which can be demonstrated by the contribution yesterday of the Minister for Finance. While blatantly ignoring the recommendations of the first and second reports of the Commission on Taxation, he claimed that this Bill represents, as he said, substantial changes in the taxation system and he cited the changes in PAYE and PRSI as an example. Who does the Minister think he is fooling? The only substantial change is that at the end of the day they will pay more taxes. The Minister is living in a world far removed from reality. I fail to see where the substantial changes come in. All tax payers will pay far more taxes both directly and indirectly.

The proposed land tax is expected to double the tax take from the farming community. The Government should not count on it. This tax is inequitable and it will bring widespread disharmony. It will tax farmers without regard to their ability to pay. No other section is taxed in that way. It is an unworkable tax, it is unjust and it is probably unconstitutional. This tax is being strongly opposed by the farming organisations and is being vigorously opposed by Fianna Fáil. It is amazing that this Government of economists and socialists seem hell bent on pushing through this land tax as it makes neither economic nor social sense. Even the Government's advisers, the Economic and Social Research Institute, have warned against it. The chairperson of the Commission on Taxation has also spoken against it, but still the Government persist.

This tax is expected to yield something in the region of £60 million in 1986. That is unlikely to be any great improvement on the existing accounts based system. The existing system has been accepted by farmers and if it is still in operation in 1986 it could yield £60 million. The difference would be that it would be a tax on farm profits and not on farm sizes. The system in operation whereby farmers are taxed on income like other sections of the community has now been accepted by everybody as the only fair system of farm taxation. Since farm taxation was introduced in 1974 we have tinkered with it. We have moved from a system based on incomes to a system based on a notional assessment. We have an equitable system operating at the moment. Surely it is folly for the Government to introduce a system which will not be accepted by the farming community. Why are the Government persisting in this approach? Perhaps this is being demanded by the junior wing of the Government, the Labour Party, with their socialist approach. When Deputy Dukes was the Opposition spokesman for agriculture he opposed such a system of farm taxation. In the Fine Gael Programme for Government coming up to the 1982 general election they said they would totally oppose that type of farm taxation. Why have they changed? Hopefully we will get the answers in due course.

We in Fianna Fáil know that there is no great revenue for the tax man from the farming sector. Farmers are willing to pay their fair share of tax when they make enough money to warrant paying tax. The only way to tax the farming community is on earnings, giving them the same allowances as those available to the rest of society.

The way of life of the farmer is different from the way of life of the factory worker or the office worker. The farmers' methods of earning income are different also. This must be taken into account in computing their tax liability. Currently there are administrative difficulties which are preventing the collection of tax from a small section of farmers. The Minister would be far better employed in having these difficulties resolved. The farmers cannot be blamed for that situation but the general body of farmers should not use those difficulties as an excuse for not paying their fair share of tax. Conversely the situation must not be used by the Government as an excuse for imposing a new and inequitable tax. The land tax cannot be implemented because the essential information on which it might be based is not available. Tax liability should be related to ability to pay.

Neither of the parties in Government made reference in 1982 to a land tax. At that time the Labour Party stated that all farmers earning a taxable income would pay tax and health contributions. That implied clearly that those farmers not earning taxable incomes would not have to pay tax. The Government must not take any action now which could only have the result of significant numbers of farmers leaving the land and thereby lengthening the dole queues. The suggested figure of £10 per acre was greeted with a certain amount of relief. Perhaps the Government's public relations people were successful initially in giving the impression that the farmers were being treated lightly but after closer examination the farmers have had second thoughts. The not so fine print indicates that there will be adjustments in the future in the rates of farm tax. The Government will be in a position to increase the rate whenever they wish without any regard to the taxable income of farmers.

The land tax is being introduced by a native Government. There is the question also of adjusted acres. There are a number of questions to be asked as to what constitutes an adjusted acre. There are likely to be many disputes and anomalies in this regard. Therefore, I should like the Minister to outline his concept, if he has any such concept, of what is an adjusted acre.

Another aspect of this policy that is a matter of much concern is the Government's approach to agriculture as outlined in their document, Building on Reality. In that document it was clear that the purpose of the land tax was to double the income tax take from farmers. In other words, more tax would be taken from the farmers irrespective of their ability to pay. We in this party have said repeatedly that farmers must pay income tax but that tax must be based on their income as happens in the case of the liability of all other sections of the community. If the present system does not allow for that it must be improved and the Revenue Commissioners must be given sanction for additional personnel in order to ensure that those farmers who are in receipt of taxable incomes pay their fair share of tax.

To introduce a land tax at this time when farm incomes are not even keeping pace with inflation is to guarantee stagnation in agriculture and, at worst, a fall in output and in the standard of living of most farming families. Some farmers, both dairy and tillage farmers, will be hit very badly by this new tax. But I have doubts as to whether the land tax will ever become law because I consider it to be unconstitutional. However, if it is implemented the most productive sector in the economy will be significantly worse off than they are now.

It is difficult to understand how a Government who must have first hand knowledge of the recession in agriculture could believe that there is a vast sum of surplus money in farming. That is why I am suggesting that the motive in taking additional taxes from the agricultural sector is political rather than economic. One might say that its purpose is to keep this unsteady Government together for a few additional months. It is unfortunate that the farmers must form the glue to keep this unsteady Government together. The Minister in his speech yesterday devoted less than two lines to agriculture, Ireland's single most important industry. That is a measure of the priority accorded by the Government to this industry. Much could have been done in the budget and in this Finance Bill to give a much-needed shot in the arm to agriculture. He could have made finance available for farm development at fixed interest rates and could have eased the disincentives which are strangling the development of our emerging food processing industry. He could have offered subsidies to ease energy costs in the horticultural sector, as his Dutch counterpart has done. He could have boosted the crucial areas of research and marketing by making sums available or by offering tax breaks for others to do so. He could have speeded up early retirement by giving financial assistance to young trained farmers starting off for the first time. He could have expanded the venture capital scheme to include farming and forestry as well as manufacturing industry. He could have done so much, but instead he has persisted in the penny pinching approach of the bookeeper which has typified this Government's performance to date.

I would ask the Minister to refer in his reply to the rescue package which was introduced by Fianna Fáil when in Government. This scheme has now expired. From time to time we hear statements from the Government about consultations with the financial institutions and the farming organisations about the reintroduction or extension of the rescue package, but there is no concrete evidence that such a package will emerge in the immediate future. I hope I am wrong in this impression. Many farmers find that their viability is in question because of uncertainty regarding the future of this rescue package. The Minister must eliminate this uncertainty by making a positive statement that the rescue package will continue in operation. I understand that there is a balance of approximately £12 million remaining on the expiry of this package and it would not cost the Exchequer anything extra to continue the rescue package for a further two years. We have given a commitment to the farming community that this rescue package would be continued for at least two years. Because of our closeness to the farming community throughout the country we are aware that this would enable many more farmers to become viable. I appeal to the Minister to continue this rescue package.

Mr. Sheehan

It is a pity Fianna Fáil did not give them such a package before.

Mr. Noonan

(Limerick West): The Government have failed to avail of the opportunity to implement some of the positive and worthwhile proposals in the report of the Commission on Taxation. The Government have failed to take into consideration the importance of reforming the taxation system. There is no hint from the Taoiseach or the Minister that any of the proposals contained in that report will be implemented. This is a pity. The time has come for a fresh look at our whole system of taxation. This was promised by the parties in this Government prior to the last general election but once the election was over and the Government were formed, this commitment and many other pious promises were forgotten.

We need a fresh approach in dealing with our problems. We need new ideas, but most of all our people need leadership. We have not got leadership from the Government and I do not think we are likely to get it in the future whether the Coalition are in power for a long time or not. Irrespective of the length of time the Coalition remain in office I cannot see any worthwhile leadership emerging.

Mr. Sheehan

Deputy Noonan is living in cloud cuckoo land or perhaps it is a case of none being so deaf as those who do not wish to hear. Deputy Noonan accused the Minister of not devoting more attention to agriculture but he must have forgotten about the lengthy debate we had on the Vote for Agriculture. In the course of that debate it was spelt out that the Coalition had done more for agriculture than Fianna Fáil had done in 20 years. It was also pointed out that it was a Cumann na nGaedhael Government in 1923 that appointed the first Minister for Agriculture. The late Paddy Hogan, whose slogan was "One more cow, one more sow and one more acre under the plough", laid the foundation for virile agricultural industry. I should like to assure Deputy Noonan that the Coalition are aware of the importance of agriculture to the economy.

The Minister for Finance in introducing the Bill gave a comprehensive review of all sections of the economy and it would have been unfair of him to devote most of his time to agriculture. We have a good Minister for Agriculture who is well able to tackle any problems that may arise in that sector. There is no doubt that he is able to deliver goods also. The Minister for Finance has played his part in improving the agricultural sector by providing grants for farmers. Under the ewe subsidy scheme a farmer living in a disadvantaged area with 250 breeding ewes gets a subsidy of almost £5,000 this year. What did Fianna Fáil give such farmers? They did not give them one penny. Not one penny was paid out under the premium scheme when Fianna Fáil were in power. I am amazed that Deputy Noonan has seen fit to leave the Chamber and not wait to hear the facts.

One would think listening to Deputy Noonan's mournful speech that nothing had been done for the farming community. If one looks at the prices being paid for livestock and the extent of agricultural exports since the Coalition took office one will see the tremendous progress that has taken place in that industry. Deputy Noonan must be aware that the Coalition have given an incentive to the farming community and the organisations that represent them that is second to none since the foundation of the State.

Mr. Browne

The Deputy should tell that to the farmers.

Mr. Sheehan

The Deputy should discuss the matter with the farmers in west Cork. They are proud to be associated with the progress of the Coalition Government. Farmers on the western seaboard, as the Deputy must be aware, are also proud of the approach of the Government. The Deputy should take a trip to Achill or Connemara to see the progress that has been made there. He will find out how pleased farmers there are with the performance of the Coalition.

Mr. Browne

They are not happy in Wexford.

Mr. Sheehan

If they are not happy in the strawberry plantations I cannot help them, but everything is to their advantage. In my area we work under many disadvantages. Sheep producers and small farmers in my area are aware that the Government are doing their best in difficult circumstances to ensure that all the assistance possible is given to the agricultural community. Our economy returned to a path of growth in 1984. That followed a number of years of virtual stagnation created by the wildcat policies of Fianna Fáil. Everybody is aware that Fianna Fáil were responsible for the stagnation in our economy.

Mr. Browne

The Deputy's party are in Government but they are not doing anything about the problems in the economy.

Mr. Sheehan

Fianna Fáil have been in Government for almost 40 of the last 50 years but they did not do anything to help the economy. The Deputy may be too young to know that but he should read the history books to find out how Fianna Fáil depressed the economy. Manpower is our most valuable resource and it is tragic to see so much of it wasted. On the basis of the registered unemployment figures at the end of January last no less than 55 million man-days will be lost this year. Apart from the human misery that that means we must remember that it represents a great loss to the economy. The sooner we reach the stage of having full employment the better. The budget attempts to tackle the problem but if we do not continue that trend we will be going in the wrong direction. The budget represents a start: a degree of fresh air has been introduced into the economy.

Mr. Browne

Hot air.

Mr. Sheehan

Fianna Fáil have been blowing hot air since the Bill was introduced. I have not heard one constructive suggestion from any Fianna Fáil speaker and I have listened to all contributions since the start of the debate. Credibility will be restored to our economy if the Coalition are allowed to proceed on their path of recovery. They are now putting pious proposals before the House and cannot see that there are any problems. Indeed, one of their Front Bench Members is known as a no problems man. However, they have not told us where the money will come from to pay for the cures for all our ills.

I am amazed that members of that party are so gullible as to make such statements in the House when they were the architects of the misfortune of the economy. They lived on cloud nine for years as they borrowed and borrowed for non-productive purposes and now we must try to pay the interest on that reckless borrowing which has been going on for the last two decades. I am very surprised that they could not see the damage they were doing to the economy. If the nation was given half a chance, it would be as good as any other nation in Europe, perhaps even better. Our workforce is as good if not better than any workforce in the world provided they are given a lead. Alas, they lacked that leadership and Government inspiration over the last two decades.

Since the Coalition Government came to office they have pursued courageous policies which can be strongly defended——

Mr. Browne

There are 250,000 people unemployed at present.

Mr. Sheehan

Fianna Fáil's answer was the emigration ship in the forties, fifties and sixties. We then had the inflated boom of the seventies——

Mr. Browne

Under Fianna Fáil.

Mr. Sheehan

Fianna Fáil borrowed £13 billion for unproductive purposes from 1977 to 1981 and they stand indicted for saddling the nation with that debt.

Mr. M. Brennan

The Government are borrowing money at present.

Mr. Sheehan

We are borrowing to pay the interest on the colossal borrowings which Fianna Fáil undertook in 1977, to pay for their pie in the sky policies. The Opposition are moaning and groaning about jobs and emigration but what did they do to steer the country towards the challenges of the eighties? They rested on their laurels and did not plan for the difficulties ahead. Who created our present difficulties? It was the wildcat policies of Fianna Fáil from 1977 to 1981 which crippled our economy. The only bonus as a result of those policies was that it gave Fianna Fáil 77 Members in this House. At that time, Fianna Fáil pledged that everything would be free— manna from Heaven — in an attempt to buy power, glory and government for the party. It was a policy of power at any price to make sure of their return to office.

Mr. Browne

What is the answer?

Mr. Sheehan

I will spell it out for the Deputy.

An Leas-Cheann Comhairle

The Deputy should stick to the Finance Bill.

Mr. Sheehan

Why did Fianna Fáil borrow for the last two decades? It was to sustain the false image of prosperity which they always portrayed when in office and may be the truth is bitter——

An Leas-Cheann Comhairle

Not to the Chair.

Mr. Sheehan

It is bitter to the Opposition. The Coalition Government inherited a very sick economy in June 1981. It was in such a critical state then that it needed intensive care.

Mr. Browne

They got the wrong doctor.

Mr. Sheehan

In February 1982, the patient — the economy — was prematurely discharged from the intensive care unit and between February 1982 and December 1983 the economy suffered such a serious relapse under Fianna Fáil Government that it needed immediate re-admission to the intensive care unit when the Coalition Government took over in 1982.

Mr. Browne

It is now paralysed.

An Leas-Cheann Comhairle

The Chair is exercising great patience.

Mr. Sheehan

When we were reelected and took over in January 1983 it needed to be re-admitted to the intensive care unit. After proper care and attention since January 1983, the economy is showing an upward trend and our exports are almost exceeding our imports for the first time in our history, thanks to a Coalition Government. Inflation has been reduced from 27 per cent in June 1981 to about 7 per cent today.

Debate adjourned.

Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.