Dáil Éireann debate -
Wednesday, 27 Nov 1985

Vol. 362 No. 2

Private Members' Business. - Economic and Financial Policies: Motion (Resumed).

The following motion was moved by Deputy Haughey on Tuesday, 26 November 1985:

That Dáil Éireann condemns the failure of the Government's economic and financial policies and their disastrous impact on employment, investment and living standards.

Debate resumed on amendment No. 1:

To delete all words after "That" and substitute the following:

"Dáil Éireann notes with approval the success of the Government's economic and financial policies as shown by the significant improvements in economic performance during this Government's term of office, notably in relation to:

(i) the rapid reduction in inflation rates;

(ii) The reduction in interest rates;

(iii) the reduction in the growth of unemployment;

(iv) the improvement in expenditure control, both on capital and current account;

(v) the improvement in the balance of payments."

—(Minister for Finance).

Mr. S. Brennan

Before I concluded last night I was talking about the decline in living standards, the growing pressure under which the middle income group find themselves, the number of repossessions by building societies, the taxation burden and emigration among that group. We hear many speeches about unemployment generally but I would put it to the House that unemployment among the middle income group — the so-called executive class — is quite frightening. Behind the lace curtains in modern suburbia there is a very difficult situation of despair and growing indebtedness to the banks. That is not often said in this House but it is very important because many a person is experiencing these difficulties although on paper he appears to be doing nicely. He might appear to have a reasonable salary, a tax free allowance, a car, a house and so on. I have come in contact with the reality and misery. There is as much, if not more, poverty and depression among the salaried classes as there is among any other section of the community. That is not often realised or said. It is important to put it on the record of this House.

I said last night that the central feature of Building on Reality was the attainment of 5 per cent of GNP as the current budget deficit. It is quite clear now that not alone will we not totally bridge the current budget deficit but we will be somewhat off that 5 per cent. According to my calculations it will be about £800 million. I asked the Minister last night where we might find that £800 million to bring the current budget deficit back to the 5 per cent envisaged in the plan. I spoke also about the national debt of £20 billion compared to a figure of £8 billion or £9 billion a few years ago and the fact that the current budget deficit represents the highest percentage of GNP of any industrial country.

One cannot judge a Government on political speeches, glossy brochures or television appearances. On can only do so by considering what was laid out and predicted in the plan and dispassionately comparing that to what has happened in the period outlined. That is the only way I would attempt to criticise this Government. I do not criticise them in a deeply political way but simply from sadness that we have not managed between us to achieve some of the targets in the plan. The 5 per cent target is gone. The unemployment target is off by over 15,000. It was predicted that manufacturing employment would increase but it has actually gone down. The Taoiseach told me in reply to a parliamentary question that unemployment is now 21 per cent. The current deficit and the borrowing situation are way out of line with the plan. All I can do is compare what the Government said they would do with what they actually did and point to a failure of policy.

I also spoke last night about the repatriation of profits from this country. It would appear that about £1 billion in profits made by companies are being repatriated. I asked the Minister for Finance to tell the House about the success or otherwise of the scheme to attract money from multinationals into Government stock. I would dearly like to know how many of them have bought Government stock rather than repatriate their profits. I suggested that most of these companies would not take up this scheme because if they have a choice between reinvesting their money in their own company or putting it on deposit in one of their own banks abroad or, on the other hand, lending it to the Irish Government, they will not choose the latter option. I am keen to know exactly how the scheme has been working.

I have taken apart in my contribution the detailed figures laid out in the plan and compared them with the figures available today. Any objective person must agree that the assumptions underlying the national plan were totally and utterly false and the plan should be withdrawn. The figures emerging daily in reply to questions from this side of the House show that the plan is no longer operational and has no relevance to where we go from here.

I do not want to be entirely negative because that is probably too easy a way out. There are very positive things that I have welcomed. I have welcomed the Government's moves on PRSI and in the grants area. They will do some good.

We must do more in the area of curtailing State involvement. This is why I so strongly opposed setting up the National Development Corporation as just another layer of State involvement in the economy. I was interested in the Minister's reactions to my statement in his speech. Do we not realise that the State is spending £2 out of every £3 spent? The level of State involvement in the economy is unsustainable. In the light of this fact, is it not a move in the wrong direction to establish a National Development Corporation on top of the existing layers of government? With the State being so central in the economy, how is it possible for the private sector to breathe?

I hold very strongly the view that the State does not create employment. It creates the conditions around which the rest of us will create employment. It is that philosophy which is missing from this Government's approach to the economy. They seem to think that the NDC is an adequate response to the unemployment problem. I suggest that it is not an adequate response. I suggest instead that an adequate response would be the curtailing of State involvement, deliberate moves to create the atmosphere wherein everybody else could create jobs, an improvement in the venture capital scheme by taking off the gloves and the red tape, a greater commitment to exporting and the removal of our paranoia in this regard, a concentration on small business rather than the large multinationals. Generally we must take the kind of steps which will enable the State to create the environment and conditions in which the Irish people will solve the problems. Until we get that philosophy we will not tackle the crisis in this economy.

Minister for Industry, Trade, Commerce and Tourism (Mr. J. Bruton)

The premise on which the Opposition base their case in this debate does not hold up. They claim that the economy is in a worse state than it was three years ago. This is not true. Budgets have been brought under control. Whereas there were huge over-runs in the 1979-82 period — 56 per cent on average — since we took over budgets have been kept broadly on target. Any deviations have been on the revenue side, where the Government have little direct control. In the earlier period the over-runs arose simply because the Government spent more than they said they would because they had cooked the books initially and used too much baking .

A huge part of what the Government are now spending is interest on past debts. All that is raised in income tax has to be paid over to bankers from whom Irish Governments borrowed in the past. The only other area of Government spending that has increased as a share of GNP is transfer payments, mainly social welfare. Many will assume that this is just because unemployment has risen. This, however, only accounts for half the increase. Rates of payment of social welfare have increased which accounts for the other half of the increase. For instance, a non-contributory old age pension grew by 146 per cent since 1980 as against a CPI increase of 92 per cent.

When the Opposition complain about the budget deficit, as Deputy Haughey did last night, how does he suggest that we should economise? By failing to honour interest payments? By reversing the social welfare benefit increases? Let him be specific when he intones his oratorical concern about public financial problems. Let him say exactly what he would do.

The Opposition complain about deflationary policies and monetarism, two defunct theories that have never been Government policies. The Government policy has been a much more mundane one. We believe that a Government, like a household, must live within their means — no more and no less. We recognise that a legacy of ten years of cumulative budget deficits, started in 1972, will not be reversed in three or four years. It is a process that requires patience and a long term view of the nation's needs.

I should like to ask the Opposition a direct question. Have they abandoned the policies underlying The Way Forward which called for a reduction in the budget deficit from 7.5 per cent of GNP in 1982 to 2 per cent in 1985 and zero in 1986? The Government reckoned that these targets were unattainable and were honest enough to set more modest ones in Building on Reality. What is the Opposition's fiscal policy at this point? Is it one of calling simultaneously for reduced borrowing, reduced taxation and increased spending? I do not know if the public would like to know the answer, but it might be of interest to historians writing text books on economic debate in Ireland in the eighties.

I know that historians will have little opportunity to find out what the Opposition would do because they will not be taking any active role in policy making. However, it would be of interest to historians to know what the Opposition would have done if they had been returned to office. That is why I am asking this question which I presume they will answer. If they do answer, I will be surprised because they have not answered it over the past three years even though it has been repeatedly asked.

Let us look at the facts. Inflation and mortgage payments have been cut dramatically since we took office. This means that ordinary householders can save more money and that our industrialists can compete overseas. The CII newsletter of 3 September said:

The catastrophic decline of many traditional industrial sectors has at last been halted and the long hard fight back to recovery has commenced. These sectors are an extremely important part of the Irish manufacturing sector and account for about three-quarters of total employment. Their recovery has been helped by the reduction in inflation to average EEC levels. Irish inflation is now slightly below the EEC average and expected to fall further. However, EEC inflation will fall over the next year. By keeping Irish inflation at or below the level of our EEC partners the recent recovery of traditional labour intensive industries can be sustained.

They are not my words. They were said by the Conferderation of Irish Industry who were well known for complaining in the past if things were not going the way they wanted them to go. They have clearly indicated that there is a significant recovery as a result of the Government's anti-inflationery policies in regard to employment and output in traditional manufacturing industries. Investment and spending are beginning to recover. The demand for producers' capital goods — a leading indicator of investment — is substantially up on 1984. Commercial vehicle sales, used by much of the productive sector of the economy, have increased by 15 per cent on last year. The volume of retail sales is growing and we expect 3,000 extra jobs to be created in the construction industry as a result of the home improvements package. This boost will go to the legitimate builder and not to the black economy merchant.

Let me turn to taxation. In 1985, for the first time since 1979, the overall tax burden will fall. Admittedly it is a modest fall but it is a move in the right direction. At the end of 1982 unemployment was rising at the rate of 40,000 a year. Despite the massive increase in the number of school leavers this year, as against a decade ago, we have now halved the rate of increase in unemployment from that which obtained in 1982.

Mr. Reynolds

We are exporting them.

Mr. J. Bruton

It is still a tragic situation and by no means good enough, but the trend is in the right direction and the trend was in the wrong direction when the party opposite lost office. That is why things are getting better. We must face up to the reasons for unemployment. Since 1979 hourly earnings in manufacturing have doubled. Earnings in our competitor countries increased by only 57 per cent. This led inexorably to a loss of markets and jobs but we have now got that back under control. This year the increase in earnings will exceed the average of our main trading partners by a smaller margin than for some years past. Again the trend is in the right direction, whereas it was in the wrong direction when we took office.

The Opposition claimed that the Government's policy is — to use Deputy Haughey's words — to close down State companies. It is the opposite, as our policy is to reconstruct them on a sound and viable basis. This requires tough but constructive decisions. Pouring more money into an inherently loss-making structure guarantees nothing except its ultimate closure. Instead, the Government have pursued a policy of rigorous reconstruction. We have worked effectively towards getting Irish Steel, Cork Dockyards and Clondalkin Paper Mills onto a solid footing. The Opposition policy of pouring in money without addressing the problem will just not work.

We now need a policy for producing more and selling more. All the Opposition can offer is a policy for spending more and borrowing more. They seem to feel that spending money generates confidence, but confidence does not come from spending, it comes from success. We will only succeed if we turn up in time for work every day, work to ensure the highest quality of goods and services and, if we are working in a profession, provide good services at minimum cost rather than use restrictive practices to protect our income. If we are engaged in the public service, excellent service at minimum cost must be our watchword. This is the road to confidence based on success rather than the road to ultimate lack of confidence based on spending money instead of addressing the fundamental problem, which seems to be the policy of the Opposition.

If we could create a society in which everybody saw wealth creation not just as the enrichment of the few but of the entire community, then we could achieve our full potential. This must be done on an individual, personal shareholding basis and that is why the Government and I have put so much emphasis on tax concessions for profit sharing and workers' shareholding. It is also why the Government have put so much emphasis on the development of an over the counter market for shares so that individuals will have an opportunity to buy a share in a small company in their own town. That is why we have introduced a business expansion scheme which will encourage chambers of commerce, if they so desire, to set up investment trusts so that people will have the opportunity to invest in the establishment of an industry in their own locality. That is why we want to create a situation in which people can buy back their own shares so that if a person buys shares there will be always somebody to whom he can sell them.

All this policy is based on giving ordinary people a share in the wealth of the country, a stake in making our productive sector more efficient. The people who vote in elections must be made aware that the wealth generating process will make them better off rather than relying on some anonymous corporation or rich person in their locality whom they can only envy. If we can get to the point where the broad mass of people on an individual basis — not on a collective basis, as perhaps some other Deputies might argue — could own shares in industry, then people will be able to see wealth creation through capital gains and growth as a means of making them better off.

That is how we can get away from what obtains at the moment where people tend to see wage increases as the only means whereby ordinary people can share in the wealth creation process. In reality, wage increases only push up costs and deprive us of jobs. That is the road to destruction as I indicated. There have been job losses here because wage costs have gone up faster than elsewhere.

If we want to change we have to provide an alternative means whereby owning a share either in his own or in other business the man in the street can have a direct return from the wealth generating and investment process rather than having such benefits confined to the few. That is a fundamental approach to the regeneration of the productive centre which is being pursued by this Government.

Of course other initiatives are being taken to boost the productive sector. The combined effect of the employment incentive and PRSI schemes will be to give an employer who recruits extra workers from among the unemployed a wage subsidy of £45 per week or more. That will mean that many employers will take on more workers between now and 31 March. I address an appeal directly to those engaged in manufacturing industry — I have already said this to the Confederation of Irish Industry and to the IDA — to make sure that they use the scheme between now and 31 March to increase their workforce.

We have got to get away from the psychology that unfortunately obtains in industry to a great extent that it is all a question of cutting costs, of replacing people with machines, so that ultimately we will have factories with no people. That is an unsustainable policy from a social as well as an economic point of view. It has derived in large measure from the fact that in the past the incentives in our tax code and our grants code have been those that encouraged people to invest in machines rather than in workers. They had to pay a tax, whether PRSI or PAYE, if they employed a worker and they could not replace a worker without all kinds of requirements being imposed on them through labour law, whereas if they replaced that worker with a machine they could get grants and tax allowances.

This scheme that will give up to £45 per week to employers who take on additional workers is a timely reversal of past policy. It is aimed at making the recruitment of people more attractive than was the case in the past. I hope it will make employers think again before they contemplate replacing workers when, with profit to themselves and to the community they could increase their number of workers.

The emphasis in industrial policy is being placed on home-based industry entering export markets. I do not deny we need to continue to attract foreign investment, but the fact is that since 1978 — statistics on this were produced in a recent publication entitled Perspectives on Industry, edited by a Mr. Fitzpatrick and another gentleman — we have been losing our very generous share of US investment in Europe. This is because of increased competition from other countries who are looking for American investment and also because our labour costs have run out of line vis-à-vis our competitors. That is a process that will be difficult to reverse, although we intend to make every effort to do so.

What we need to do — and what the White Paper on Industrial Policy has said we will do — is to put more emphasis on developing Irish companies to get big enough to break into export markets. We do not need to bring in foreign companies with foreign technology as the sole means of exporting our goods in the high technology area. We have to build up the strength of individual companies here. One provision in IDA legislation which has been little used in the past allows the IDA to give assistance to the reconstruction and regrouping of Irish companies in the private sector by getting them to merge. By becoming stronger they will have the clout to enter foreign markets. That is a policy instrument I have asked the IDA to use much more fully than they have in the past.

I have also asked the Irish Export Board to put more emphasis on getting Irish firms to come together and to market their products as a group. Small businesses do not have the money to spend on expensive product development and export marketing schemes. However, if they can come together and share the costs and overheads there is the strong possibility that they can overcome existing barriers. In that way we could have Irish flag bearing companies selling our goods overseas rather than having to rely on overseas companies, welcome as they will continue to be.

Long term reforms, not short term palliatives, are the Government's aim. We have revamped educational policy, the curricula in schools, the way the Dáil works. Through the White Paper we have revamped the public service and we have published major policy documents on tourism and industrial policy. All of this is aimed at laying a foundation for sustainable economic growth and employment. We are switching the emphasis in the health service from the treatment of illness in hospitals to the promotion of health in the community. These are reforms that will still be of benefit to the Irish people in ten or 20 years time.

All the evidence of recent polls is that the people are beginning to see the contrast between the patient policies of the Government and the erratic expedients of the Opposition. The trends indicate clearly that, from the point of view of the Opposition, this is a mistimed motion in the sense that the public are beginning to see that the policies of this Government which are long term, constructive and consistent are more valuable than the policies of the Opposition. These policies are announced by their spokesman on Finance on a Saturday night and disavowed by the Leader of the Opposition on a Sunday night. They are advocated by the Leader of the Opposition a week before a Government initiative is announced and then they are subtly changed when they are presented in the Dáil at the conclusion of the debate. This type of metamorphosis in policy on the part of the Opposition is very speedy. It would do credit to the great advances taking place in the area of bio-technology, the way one being can be transmuted into another. This is the way Opposition policy is changed from day to day and from week to week depending on who is talking at the time.

Mr. Reynolds

The Minister should read the speeches of the Taoiseach.

Mr. J. Bruton

Before they introduce motions condemning the Government, before they start offering themselves with a brave face to the people, they should get their own house in order. Then, perhaps, they would have some basis on which to criticise others.

Mr. Reynolds

Not bad for an after-Mass meeting.

Mr. Coveney

I should like to refer to a speech I heard at the opening of a large industrial plant in Cork three weeks ago. The president of the US corporation explained why his company came here. For me it was the best evidence I have seen that the policies of the Government are working. He said that his company wanted to come to Europe; they had a very wide choice but they came to Ireland for four reasons. First, they were struck by the dramatic drop in inflation from 20 per cent to 5 per cent in a few years which, they felt was an indication of the commitment of the Government and people to make the country competitive; they were struck by the rapidly falling bank interest rates, and from their experience of talks with other Governments and their agencies they considered that our industrial development policy and our agencies were the best they had encountered. Last, they commented on the young, well-educated and enthusiastic work force.

If one of our Ministers had made that speech he would be accused of being political, but that was a man who had never been here before, who had no Irish background and who had made that speech on the facts his company had ascertained. He said, better than any Minister or Government spokesman, that with all our problems we are beginning to get things right. As further evidence of the effectiveness of our policy, I would refer to the most recent CII publication, The Economic Trend which stated:

Current indications point to a resumption of growth, albeit at a slower pace than in recent years. Looking at the seasonally adjusted figures, the picture is quite encouraging and suggests that manufacturing is currently experiencing a more widespread growth, even though at a modest rate. Some of the traditional industries are showing growth.

The report went on at length to name the industries that are showing growth, and it continued:

In June employment in manufacturing fell by under 0.4 per cent on a seasonally adjusted basis compared with March, the lowest quarterly fall in growth in over three years.

There is a cautionary note in that report about competitiveness — the Minister for Finance made that point last night. There is no room for complacency. We have an inflation rate of about 5½ per cent and naturally we regard it as an excellent achievement. In Europe the Commission are talking about an average inflation rate next year of 3.9 per cent. Therefore, unless we can maintain pressure on inflation our competitiveness will begin again to be eroded. That is not monetarism, it is a fact of life if we are to continue to complete as we are beginning to do successfully.

There are other indicators. For the first time there has been a pickup in our domestic economy. Retail sales are up overall, car and truck sales are up. The effects of the changes in VAT rates and reductions in duties have shown up very dramatically in the sale of colour televisions, which are up 50 per cent, and videos, up 100 per cent. So, the domestic economy which takes so long to respond to any stimulation, is beginning to show signs of recovery.

That does not remove the problem that during this generation and the next unemployment will be our greatest single headache. It is easy to see from history that this is not a party political issue. In the five and a half years from October 1979 to April 1985, unemployment figures have grown from just 80,000 to 228,000. During that period alternative Governments were in power for two and a half years and three years, respectively.

We are talking about a dreadful, difficult problem that will confront any Government here. Because of the growth of our labour force, in addition to our other problems we would need to create 100,000 jobs by 1991 just to stand still, because that is the anticipated size of the growth in the labour force. That is unique in the developed world. If we want to get employment down to, say, 100,000 and make up for job losses we will need to create 40,000 jobs a year. That will require ingenuity, innovation and determination on all fronts. We will have to cut out ideological claptrap and concentrate on every front. We must continue to reduce and control Government expenditure, reduce borrowing and reduce taxation. We must not just talk about reducing taxation because the corollary must be to deal simultaneously with the other two. The Government must get down the present level of borrowing.

We must increase incentives to persuade investors to go into the manufacturing industry where jobs can be created. We must encourage the private service sector to grow because there we can get new jobs. We have always tended to assume that that would grow by itself. We must encourage private investment in infrastructure to get the Government out of some of that heavy involvement. We must speed up our oil exploration programme because that could give the spark the economy needs. We must eliminate at least some of the disincentive to employment, and there are many. We must get on with developing industries like food processing, and promote greater growth in tourism. So there is no room for complacency, but the Government are moving in the right direction, are making clear progress. The indications are all positive and we must build from that.

Tomás Mac Giolla

Táim buíoch duit an cúig nóiméad seo a thabhairt dom. Deputy Conveney has illustrated my reason for putting down an amendment. Unemployment is the greatest issue facing any Government, has been over a number of years and will be in the future. I commend the Minister, Deputy Bruton, for his enthusiasm and optimism but I must deflate that optimism some what by pointing to the words of Deputy Coveney. I doubt if we accept even half of what the Minister said, but if we accepted it all about the turn about in the economy, our problem would not be solved. Our unemployment rate will continue to increase throughout the next decade because of the increasing labour force, as surveys have shown.

That is and will be our major problem, but if we could tackle the major problems leading up to the Anglo-Irish Agreement in the past four years why can we not do something of that nature on the greatest issue facing us now, unemployment? That is why I suggest that some forum be established to do that.

I would not agree with Deputy Coveney that ideology is claptrap because if there is an ideology which dictates that a handful of people must control the cattle trade or the wool trade or the grain trade while what the rest of the people have to say is of no consequence we much change that sort of ideology. Ideologies are very real. They are operating in this country but we must face up to the issues affecting people. The need to base our industry on the production and processing or our own material of all kinds is becoming more widely accepted. That is the real wealth creating effort but why must we allow the Mallow Erin Foods plant to close when it was the only alternative for farmers now that the CAP is collapsing in Europe and meat and dairy production is no longer able to sustain all the farmers? We should be going into the area of new products and in that way creating jobs.

That is why I say that if various parties, while not agreeing perhaps on every issue, on social policies or on health policies or on many other policies, could agree on industrial policy and on this very area of job creation we would be doing a good day's work. I think that is what the Minister is talking about though he may be speaking in terms that are different from those I would use. Nevertheless, he is talking about creating new wealth and that is vital when we talk also of the creation of jobs. The Minister referred to the current thinking regarding emptying factories rather than filling them with workers. I suppose we will continue to have different ideas on policies but this is an issue of such great importance that something on the lines of what happened in relation to the Anglo-Irish Agreement should happen here also because we must get together and agree on a job creating policy.

Mr. Reynolds

If many people here were to share the perception of Building on Reality that was portrayed in the House this evening we might very well end up like a ship at sea without its captain. No analysis of what the Government were supposed to do and of what they have done in their three years in office would support any of the optimism that has been expressed here this evening. I do not disagree with Ministers being optimistic if they are convinced that there is reason for optimism but the Minister for Industry, Trade, Commerce and Tourism does not believe in what he says. Deputy Coveney quoted a man who, though not knowing anything about Ireland, made a lovely speech in Cork. I can tell the Deputy that if that man did not have all the facts at his disposal, if he did not know enough about Ireland, he would not be putting his money into Cork in the first instance. However, many more people of that kind are needed in Cork if the damage done by the Government is to be redressed. The devastation that this Government have been responsible for in that area will require ten to 15 years of good Fianna Fáil Government to put right. That is the length of time that would be required for us to build up the area again and to do the job the Government have failed to do.

The Minister for Industry, Trade, Commerce and Tourism invited us tonight to consider the marvellous job he is doing. Is there any chance that the Minister would make up his mind? Does he believe in the National Development Corporation?

Mr. J. Bruton

Not this again.

Mr. Reynolds

In a major contribution to an economic debate, the Minister failed to mention the NDC. Three years ago he indicated that he did not agree with the concept of a national development corporation and that is still his position.

Mr. J. Bruton

I devoted one and a half hours to it this morning.

Mr. Reynolds

In the Programme for Government a national development corporation was singled out as the one answer to the unemployment problem but in these last days of November and three years after the Government coming into office we have just concluded the Second Stage of the Bill setting up the corporation. The Minister knows that the NDC will have no effect in terms of solving the problems we are told it will solve. The legislation was introduced merely to keep the Government hanging together for another six to nine months. Eventually the Minister put his name to the Bill and under pressure allowed it to go forward. However, the Government will not be long enough in office for the corporation to be put into operation. But this is typical of what the Government are all about. After three years in office they are talking about what they intend doing. That is the average term for a Government here, though there was the exception of that time not so long ago when we had three general elections in 18 months.

One would expect any Government, on looking back on what they had done, to say, "This is what we said we would do when we were coming into office and here is what we have done." That is the criterion by which they will be judged on the day of reckoning, on the day when they take to the streets to look for votes. We all remember what the Government promised. They said they would reverse the unemployment trend and put our finances in order, to mention but two aspects of their programme. I shall not take time to go through the Programme for Government. After 12 months in office the Government decided to produce that new bible known as Building on Reality. Apart from one figure in that document, it is off target in every respect. The Government might as well give the national plan a decent burial and forget about it. It, too, was produced in an effort to hold the two parties together.

One would not have believed that the final bible to be produced would be the CII. The Minister gave the impression that the CII are the bible in terms of what is happening in the economy. I wonder if anyone in the Government read the Central Bank reports.

Mr. Coveney

Has the Deputy got The Way Forward?

Mr. Reynolds

Who are in Government now? I have here the latest report from the Central Bank. The bank offers no signs of optimism of the kind the Government are trying to offer. I wonder, too, whether anyone on the other side has read Coopers & Lybrand's analysis of the economy. What we have are a Government, not of performance, but of presentation, a presentation of nice marketing ideas by way of trying to con the people in regard to what is the reality.

What an insult it is to the PAYE sector and to taxpayers generally for the Minister for Finance and the Minister for Industry, Trade, Commerce and Tourism to say that the level of taxation is reduced this year. I would refer those Ministers to an article written recently by that good economic journalist, Paul Tansey, though it is not necessary to quote him to show how bad matters are. One need only speak with any wage earner to know whether the level of taxation has been reduced. His answer will be in terms of hard cash. There is no point in the Government indulging in fancy statistics, percentages of GNP and so on, though the figures in that regard, too, are wrong despite the picture the Government are trying to portray. The people opposite knew what the problems were on coming into Government. They had been in Government only 12 months earlier. They presented a programme but they have failed dismally in every aspect. They will pay dearly for that failure whenever they take their courage in their hands and go before the electorate.

Both the Ministers to whom I referred endeavoured to concentrate on four areas. The first of these was what they referred to as the rapid reduction in inflation, a mighty achievement, they say. In the knowledge that members of this Government like to reminisce, let us consider inflation figures for some previous years. Between November 1981 and November 1982 inflation fell by 10 percentage points while the reduction from November 1982 to November 1983 — during which time the Coalition were in office — was of the order of two percentage points. During the period November 1983 to November 1984 inflation fell by 3½ percentage points and my best estimate — and I am being generous — is that the decrease will be of the order of about 1 per cent from 1984 to 1985. That is against a background of the lowest inflation in the EC in the past 15 years.

Mr. J. Bruton

The Deputy's arithmetic is suspect.

Mr. Reynolds

The Minister knows as well as I do that irrespective of what Government are in power, we can only control 50 per cent of inflation because of our open economy. Outside influences play a major part. In the three years this Government have been in power, they have done slightly more than half as well as we did up to November 1982. We went out of Government on 14 December.

Let us talk about controlling expenditure. I refer the House to the last year we were in Government, 1982. Was Government expenditure controlled in that year? The record will show that it was. Have this Government controlled it since? In their Programme for Government they set out to control current expenditure but they have not done so because real expenditure on the current side has continued to grow. In 1982 the current budget deficit was £989 million; this year this Government will establish a record when the current budget deficit will be more than £1,300 million and, on 15 November, it stood at £1,350 million. The Taoiseach likes to talk about percentages, and that is the highest percentage of GNP ever recorded in the history of this country.

This Government will leave power having made records. This Minister, Deputy Bruton, will hold the record for the largest increase in the numbers unemployed; the Minister for Finance, whenever he decides to move over or the Taoiseach decides to move him, will have earned another place in the history books. He will be the Minister who borrowed most but has the least to show for it. This Government will go out of office with these two fine records which deal with the issues on which they came into power in December 1982. If they are proud of that, then they should take their courage in their hands and run to the electorate. They will get the real answer there.

I will dismiss what the Minister had to say here this evening, because he did not even mention the NDC. He tried to tell the taxpayers that the burden of taxation was no longer there and he said the Opposition claimed that the Government policy was to close down State companies. Last night the Minister for Finance, Deputy Dukes, said we were insulting the intelligence of the people by even suggesting that the financial and fiscal policies pursued by this Government contributed to unemployment. I will tell him in a few words how their policies have contributed to massive unemployment.

When this Government came into power they knew what the problems were, but what solutions did they apply? They ran away from making the decisions they had convinced the public they would make and turned to the softer option without calculating how that would damage the economy and traditional industries. They increased taxation to horrific levels. VAT is the highest ever, 35 per cent. At that time we told them they were wrong. We told them they would lose business to the North, and that they would destroy consumer spending, but still they increased personal taxation to a level which has created real problems for the people who are trying to make ends meet.

Anybody who looks at recent statements from the banks will see that personal borrowers are becoming bad risks because the Minister has not left them enough to meet their commitments, whether to children at school, the family budget or buying the necessaries of life. The Minister for Finance has taken so much money by way of taxation, directly or indirectly, that he has crushed consumer spending and put thousands of people on the unemployment list. That is the reality. Anybody who knows anything about running an economy knows that when consumer spending is crushed, massive unemployment will result. That is what has happened here.

Companies have gone into liquidation and receivership. This Government will hold another record, which I had forgotten up to now. During their term in office there have been more liquidations, more factory closures and more people on the dole queues than ever before in our history. That is a fine record to try to boast about. This Government will go on trying to mislead the public and use every marketing device to tell them they are doing a decent job. The people were fooled the last time, but never again.

We heard about the great things this Government were going to do for our natural resources and the development of the food industry. When they came into office they immediately set up a task force of junior Ministers to look into the food industry. I do not know if they are abroad all the time, but they have not appeared on the horizon for the past three years with a plan to set up a food industry. As Deputy Mac Giolla said, this Government are closing down the last food processing industry in the mid-Cork region. That industry has been part of the economic makeup of the region.

The farmers in the region grow vegetables for this processing plant and all the necessary ingredients are there on which to build a food industry and, yet the Government are closing that plant. I looked at Building on Reality to see what the Government intended to do about the food industry, but there were only a few lines which said that the Government were going to appoint a marketing consultant. I do not want to get uptight about all these consultants and task forces that are to be employed and the committees that were being set up, but in my view that was a recipe for doing nothing. This Government have nothing to show for three wasted years in power.

The Minister, Deputy Bruton, spoke about the fire brigade package which he introduced to try to build up the morale of Government backbenchers. He said that as long as he was Minister he had not heard one constructive idea from this side of the House. For two and a half years we preached that the Government policy in the area of building and construction would lead to more unemployment. He is the man who sat here and tried to sell the magnificent budget of last February, who tried to convince the people in a television programme that this was an imaginative budget, a new breakthrough and that all the fancy ideas would be good for all, but when the PAYE taxpayers got their pay packets in April and May they found out the truth.

I said to the Minister on that television programme that, so far as the building and construction industry were concerned, the Government had put the final nail in their coffin by increasing the VAT rate from 5 per cent to 10 per cent. He said that was nonsense because it did not work that way. The reality is there to be seen. The Minister, Deputy Bruton, and the Minister for Finance were more interested in getting the idea across that this was a marvellous innovative budget. Is it any wonder people are crying out for a new Minister for Finance because they say nobody could be worse than the present Minister?

There is nothing worse than technocrats trying to bring in fancy schemes, people who have no idea what the repercussions of their decisions will be. All I can say to the technocrats on the opposite benches tonight is that, in my view, not one of them could make a living running a sweet shop on a corner in Pearse Street, never mind being able to manage the economy of the country.

We have talked about unemployment figures. This Government would like to ignore the 40,000 people who have had to emigrate. In the future we will need people who are talented in the areas of science and technology. It is a sad reflection on us that having spent so much scarce taxpayers' money on educating people in science and technology they are now emigrating. At least 700 of the brightest graduates in the area of science and technology alone have gone abroad in the last 12 months. This emigration is occurring because of the punitive taxation system and because the Government cannot reward the people who would be the leaders in industry. Well educated people know that they can command high salaries abroad and that they will be remunerated for their work. The Government have not recognised that fact. These people are gone, though we will badly need them when we return to power, to try to rebuild the economy. If the Government do not get out of office fast, there will not be much to rebuild because the foundations will be gone.

We put forward ideas in relation to the building and construction industry because for every £ invested in the construction industry, 90 pence keeps spinning around in the economy. That makes good economic sense. The Government have always been the biggest investor in the building industry and 90 pence of the money invested goes round in the national economy. Anybody who says that that is bad for the national economy must have a hole in his head. I do not accept the logic of the technocrats of this Government who say it is good policy to borrow money to pay people to do nothing while there is so much work to be done, whether it is filling potholes, building new roads, houses or the various areas of infrastructure. If the Government hang on to the old-fashioned idea that it is good business to borrow money to pay people to do nothing, things will remain static. Fewer prople will have to pay more and more tax to pay people on the dole. Our first criterion must be to get people back to work so that more money will be paid into the Exchequer. That is why we stand over our commitment to the building and construction industry, as the quickest response to the national unemployment crisis. For two and a half years we have preached that doctrine. We are glad of the conversion by some of the Government speakers, even if it came on the road to Damascus.

In their great package produced a few months ago they finally recognised that the building and construction industry could do with a little injection. We welcome that injection. I would refer both Ministers, Deputy Bruton and Deputy Dukes, to an article in this evening's Evening Press that shows that it is clear from a survey done for the Institute of Chartered Surveyors that not alone will that package not redress the damage done by the budget by raising VAT, but that already that VAT increase has contributed to the loss of an additional 1,200 jobs in the industry and that next year it will cost 3,300 jobs. I do not have time to go into the article but I hope the Deputies opposite will read it. That is the reality.

The Government, having for two years ridiculed inner city development proposed by the Leader of this party——

An Leas-Cheann Comhairle

The Deputy has five minutes to conclude.

Mr. Reynolds

——saying that he had queer reasons for getting involved in inner city development, have in this package given inner city development their blessing. It is now the "in thing" to do. We are glad of their conversion. We should be proud to develop and renew the capital city. We should be proud of our capital city and we should not see it falling into ruin. When the proposition for inner city development came from this side of the House, the Government poured cold water on it — and they say we lack ideas. For two years I told the present Minister that one of the greatest weaknesses in industry was lack of equity capital. I told the Government, on two successive budgets, that the way they were handling the venture capital system, or the business expansion scheme, would not work. The proof of the pudding is in the eating. So few applicants have taken up the scheme that it is clear that it has been a total disaster.

When the Government went overboard in trying to plug every loophole, they left it inoperable. People could invest their money, not get the tax relief, and not get their money back. That is a double edged risk that a person with money to invest would not be prepared to take. We need incentives to invest and incentives to work. The Minister, Deputy Bruton, referred to our non-competitiveness and the wage rate scheme. I employ people. The problem is not how much is paid, but the level of productivity one gets for what one pays. A proper comparison between here and Germany for instance will show that our wage rates with the productivity we get is only 55 per cent of the German rate. Our productivity is way behind. Our problems are also related to taxation. Deputy Haughey outlined what he believed to be the first prerequisite to get the economy moving — a reduction in the levels of taxation. We do not advocate the spending of money but the Government have brought the economy to the depths and there must be selective investment and taxation reduction to get the economy out of the depths and on the road again.

I am sick and tired listening to the Government speakers saying that we are turning the corner. In the first issue of The Democrat by the Fine Gael Party in May 1983 there was the banner headline “Economy, up, up and away”. I repeatedly heard the Minister for Foreign Affairs, Deputy Barry, say “We have turned the corner”. I heard the Taoiseach say many times “We have turned the corner”. We have turned the corner so often that we have gone the full circle and we are meeting ourselves on the way back. They talked about the light at the end of the tunnel. The Taoiseach should make sure that it is not a train at the end of the tunnel which he sees. That is the light which the Taoiseach sees. There is not a light at the end of the tunnel. The facts do not support the view that they tried to put forward again tonight. This is reflected in the Central Bank report and in the Coopers and Lybrand report. What the CII are saying is that productivity has tailed off, our exports have tailed off, and not increased, which was the impression which the Government tried to give here tonight. What really happened is that the large investment which came here in the Fianna Fáil years of Government kept the economy going for the last number of years, but investment failed dramatically in 1983 and there was little difference in 1984. Without investment we cannot have jobs. Investment today means jobs tomorrow. Until we can recognise that first of all to get investment you must be able to reward that investment and not witness the corporate migration we had across to the States to get a reward for investment, and secondly until we recognise that the workers who do the work also have to be rewarded for their work——

An Leas-Cheann Comhairle

Deputy, you have gone over your time.

Mr. Reynolds

If we do not go along that road but continue in the begrudging society in which we live where profit is a dirty word, then my last word to this Government is that profit today is investment tomorrow and investment tomorrow is jobs next week. This Government do not recognise——

An Leas-Cheann Comhairle

Do you recognise the clock?

Mr. Reynolds

——that the level of profitability in traditional Irish industries——

An Leas-Cheann Comhairle

Deputy, resume your seat. You have gone over your time.

Mr. Reynolds

The level of profitability in a recent survey showed a return on sales of 1 per cent. If they think they can give jobs on 1 per cent profit on sales they are living in fantasy land and the good doctor will have the wrong recipe for the cure of the sick economy.

An Leas-Cheann Comhairle

Minister, you have five minutes.

Minister of State at the Department of Finance (Mr. J. Bermingham)

Deputies on the far side last night and tonight have attempted to discredit the Government's performance and in doing so have made a number of unsubstantiated and totally unfounded allegations about recent economic developments. I do not share their obvious desire to reduce the tone of the debate to a squabble about numbers and statistics. The issues at stake are far too serious. However, I feel obliged to put the record straight by pointing out just how wide of the mark those Deputies have been. It would take all night to complete the job but, in view of the limited time at my disposal, I will have to concentrate on the bigger issues, such as inflation, interest rates and output.

(Interruptions.)

Mr. J. Bermingham

Facts are stubborn things. Let me say my piece now. The Deputy took some of my five minutes. Let us be practical with one another. Deputy Haughey alleged last night that the improvement on the inflation front is no more than a reflection of international development. This is utter nonsense. At the end of 1981 inflation here was running at an annual rate of 23 per cent. These are facts and they are stubborn things. That was about double the rate which prevailed in the UK and the EC at that time. Today the picture is transformed. The latest figures show that inflation is down to 5.5 per cent which is in line with the EC average and below the UK rate. Furthermore, evidence that our inflation performance is not simply a reflection of international trends comes from the comparison of inflation rates here and in the wider group of 24 main industrial economies.

In 1981 we were among a small group of countries which were at the bottom of the league in that regard — Iceland, Turkey and Greece. Since then we have pulled clear of the danger zone and are situated comfortably at the middle table ahead of such industrial powers as Sweden, Italy, Spain, Australia and, of course, the UK. The inflation rate here has been cut to just a quarter of the rate which prevailed four years ago. These simple facts and figures demonstrate what is necessary.

Deputy Haughey also had the gall last night to suggest that the performance of the manufacturing industry has not been up to scratch. The facts are as follows. Over the last three years manufacturing output has risen in real terms by nearly 30 per cent and by the end of this year we should be on schedule with the targets set in the national plan. Certainly the growth of output this year may be somewhat less——

(Interruptions.)

Mr. J. Bermingham

——but that was expected. It was not expected that the output would continue. I ask the Deputy to have manners. He talked and I never interrupted him once.

An Leas-Cheann Comhairle

Deputy Reynolds, conduct yourself please.

Mr. Reynolds

Give us just the facts.

Mr. J. Bermingham

I am giving the facts and they are hurting him. That is what is wrong with him. He is not prepared to listen to them.

An Leas-Cheann Comhairle

You have one minute.

Mr. J. Bermingham

A number of glib, unhelpful comments have been made about the special employment and training schemes introduced by the Government. Would the Opposition prefer that we had done nothing for the over 50,000 young people who participated in youth employment levy funded schemes in each of the past two years? Are they saying that the 10,000 or so who have shown commendable initiative in starting their own businesses under the enterprise allowance scheme would have been better off to remain on the dole? They seem to imply that the people in the social employment scheme should have been condemned to an even longer period of joblessness. We admit that on their own special measures can never be sufficient, but we think we have made commendable efforts in that area. Even though some of my time was taken I am prepared to submit to the Chair. If I had time I would go on and deal with much more.

Mr. O'Kennedy

I would like to offer the Minister of State some time, but having regard to the short time available to me perhaps I had better use it. I put down this motion on behalf of Fianna Fáil about two years ago, in October 1983. We decided at that point that since it was only nine months after they took up responsibility it was only fair to give the Government an opportunity to honour the commitments they made on coming into office. The signs were already very worrying; the rends were alarming; but we held back and did not proceed with this motion.

During this past year we contemplated putting it down again or proceeding with it. Then the Government came up with a new target and plan Building on Reality 1985-1987. Again we felt, as a responsible Opposition, that we should wait and see if even that belated action, which obviously we expressed no confidence in, might turn the economy around and provide encouragement, incentive, opportunity and hope, and we held back again. We have decided after over two years that it is time that we brought this motion before the House to demonstrate exactly the extent of the failure of this Government.

To be fair to the Government, one should rely not on what we say but rather on what they say themselves. The Joint Programme for Government contained four main planks of Government policy: first to eliminate the current budget deficit in four years, second to reduce the proportion of tax paid by PAYE, third to reduce the level of our borrowing, and fourth, to halt the alarming increase in unemployment.

I want to deal first with the budget deficit. We start with chapter 1, the budget statement of the Minister for Finance in 1983. He said in his statement that the reductions in the levels of both the current deficit and the overall Exchequer borrowing requirement were substantial. He was then presuming that the target he set was already achieved, and the target he set in that year was £997 million or 6.75 per cent of GNP. The statement of the target was already the achievement, having regard to his assertion that this is a substantial level of reduction in the budget deficit. He went on to say in the next breath, as if this Government were going to be consistent and reliable, and I quote from the official Report of 9 February 1983, column 1515, volume 339:

As the experience of recent years has amply shown, the mere setting of targets, and the introduction of proposals to achieve these targets, are not in themselves any guarantee that the targets will be reached. The Government are strongly committed to avoiding any major overrun this year.

Now we were entering into a new phase of credibility. We were going to ensure that the targets set would be achieved. No longer would there be anything other than determination, confidence and consistency in Government. What was the result? The budget of 1985 — I will skip the intervening ones — gives the actual story. The Minister for Finance at the beginning of his statement on that actual story said the estimated current deficit was £1,234 million, 7.9 per cent of GNP. That amounted to an increase of almost £400 million or 1 per cent of GNP over and above the proud boast of achievement two years earlier. However, that does not tell the full story because the Minister acknowledged in the House last week that the current budget deficit at the end of this year will be 8½ per cent, or of the order of £1,350 million. Therefore, that proud assertion, that statement of fact that the current budget deficit was now being substantially reduced, can be seen for what it was, totally and utterly misleading. We now have the position that even with the adjustment, as it was called within the framework of the plan, the Government now propose, instead of eliminating the budget deficit by 1987, to reduce it to 5 per cent by that year. Within six to eight months of that assertion we know full well that there is no prospect in the world of the target in Building on Reality— a strange title for a document so totally based on unreality — being achieved in 1987. Even if that was adhered to that would involve the addition of an extra £2 billion per year to our national debt.

Let us now look at the position of the national debt, the second matter the Government said they would tackle in their determination to correct our finances. At the end of 1982 when the Coalition took office the total State debt was £12.8 billion, an admittedly sizeable and very significant sum, but within three years under the Coalition it has increased by 60 per cent to £20.5 billion by the end of this year. In those three years we have succeeded in raising the State borrowing to two-thirds of what was borrowed since the foundation of the State and we are told that we can rely on the determination and credibility of the Government.

I should like to mention that within that huge growth in borrowing one of the most alarming indications is that two-thirds of present borrowing is to finance current expenditure. They are not my figures but facts. Only one-third is going for investment in the capital programme. We have borrowing growing to a totally unsustainable level and that has made us the laughing stock of the democratic world, particularly in so far as the Government presented themselves as being the ones who would correct those matters. It now takes more than total income tax to service the public debt and if, as is now clear, the budget deficit is over-running I wonder what the scenario will be next year. I believe the total income tax will not go anywhere near paying the service on the public debt.

I should now like to deal with taxation and the fact that we were told that the Government would reduce the tax element paid by the PAYE sector. When the Coalition came to office in 1982 the total tax here was £4 billion. After three years that figure has increased by 66 per cent to £6 billion at the end of the year. That is the measure of the Government's success in reducing the overall level of taxation. In considering those figures we should have regard to the concern expressed by the Coalition for the PAYE sector. In 1982, 35 per cent of the total tax, which was a little more than 45 per cent of what we are paying now, on the basis of figures supplied by the Minister, was paid by income tax payers. With the total tax now increased by 66 per cent the income tax payers now pay 38 per cent and we are being told that we are moving towards reducing total tax and within that bringing about a level of equity in terms particularly of the PAYE sector. The estimate for this year is that the income tax element of total taxation will amount to 40 per cent.

We hardly need to state the obvious to the people in regard to unemployment but I should like to make one point in the time available to me. Unemployment has grown to an average of 230,000 this year. The Minister for Social Welfare will within a week or two be coming to the House to move a Supplementary Estimate for not less than £30 million for unemployment benefits and assistance because he acknowledged to me at the beginning of the year that if we had an average of 230,000 people unemployed throughout the year an extra £31 million would be required to fund unemployment benefits and assistance. That is a measure of the total disarray in the public finances. It can be seen more dramatically, and sadly, outside the House in the total frustration, disillusionment and despair of our people.

I should now like to deal with the question of investment. In November 1982 inflation was 12.3 per cent and the AA rate for normal commercial borrowing was 15 per cent, leaving a real interest rate of 2½ per cent. Today inflation, according to the Minister, is 5½ per cent and the AA rate is now 12 to 12½ per cent, leaving a real interest rate for commercial borrowers of 6 per cent to 7 per cent. Is it not clear that interest rates of that level are ensuring that the level of investment in our economy has dropped to an all time low? We would need an annual investment of £1,000 million, in the private sector, to sustain even current levels of manufacturing growth, and they are not something that anybody wants to boast about. At present only half of that amount is being invested with the result that we can look forward to a lower level of manufacturing activity next year than we experienced in the last two years. If we were to see any improvement in the position we would require at least £300 million to be raised per annum for private investment in industry. Instead we have a figure of £80 million being raised on the stock exchange. What is happening on the stock exchange? More than 90 per cent of the turnover there relates to Government gilts. The Government have swallowed up any investment funds that should be available for real enterprise in the economy. The consequence is that by doing that they are driving up domestic interest rates to a level that is totally out of line with the international level.

We find, unfortunately, that instead of the enterprising and the risk-takers being rewarded or encouraged people are going for the safe havens if they are not already shunting their money out of the country. They are the direct consequences of the Government's policy on taxation, particularly their most ineffective attempts to bring an element of discipline into our current finances.

In this area we always attracted investment but we are now driving out our own. More than £1,000 million of the profits of companies that set up here as a consequence of policies we introduced for high technology and pharmaceutical companies, are being repatriated abroad because the companies recognise that this is not the place to reinvest in profitable activities.

Taxpayers' money by way of grants is being leaked at an alarming rate and we are not able to sustain any level of continuing activity through the re-investment programme, either domestically or externally. I want to mention not my judgment or that of anyone else but that of the EC in their annual report for this year. They said:

Fiscal adjustment has effectively marked time for the past two years so that the size of the national debt continues to grow by further substantial annual increments and may, indeed, approach 120% of GNP.

Since that report, published a few months ago, it will have increased to 135 per cent of GNP. They said that the targets in Building on Reality were the very minimum that could be contemplated. Now we know that those targets will be nowhere near realised. The EC has criticised us sharply. The OECD has placed us at the top of the international taxation league. The Central Bank have told us that we will be banqueting on borrowing and have warned us that this kind of borrowing cannot be sustained, particularly having regard to the fact that it is not going for productive enterprise in our economy.

Most important of all is the judgment of the people, and that really counts. They know that this Government, who presented themselves as a Government of discipline and responsibility, have turned out to be quite the opposite, a Government of no discipline. They certainly have turned out to be a Government who have killed enterprise and have ensured that our young people and those with the ability to lift this country out of its present position — please God, sooner rather than later — look to the day when they will have a Government again who will know what the real job of Government is — to create a climate in which the efforts of all will be rewarded and the failures that we have witnessed in the last three years will be history.

Amendment put.

The Dáil divided: Tá, 68; Níl, 60.

Tá

• Allen, Bernard.
• Barrett, Seán.
• Barry, Myra.
• Barry, Peter.
• Begley, Michael.
• Bell, Michael.
• Bermingham, Joe.
• Birmingham, George Martin.
• Boland, John.
• Bruton, John.
• Bruton, Richard.
• Burke, Liam.
• Cluskey, Frank.
• Connaughton, Paul.
• Coogan, Fintan.
• Cooney, Patrick Mark.
• Cosgrave, Liam T.
• Cosgrave, Michael Joe.
• Griffin, Brendan.
• Hegarty, Paddy.
• Hussey, Gemma.
• Keating, Michael.
• Kenny, Enda.
• L'Estrange, Gerry.
• McGahon, Brendan.
• McGinley, Dinny.
• McLoughlin, Frank.
• Mitchell, Gay.
• Mitchell, Jim.
• Moyniham, Michael.
• Naughten, Liam.
• Nealon, Ted.
• Noonan, Michael. (Limerick East)
• O'Brien, Willie.
• Coveney, Hugh.
• Creed, Donal.
• Crowley, Frank.
• D'Arcy, Michael.
• Deasy, Martin Austin.
• Desmond, Barry.
• Desmond, Eileen.
• Donnellan, John.
• Dowling, Dick.
• Doyle, Avril.
• Dukes, Alan.
• Durkan, Bernard J.
• Enright, Thomas W.
• Farrelly, John V.
• Fennell, Nuala.
• FitzGerald, Garret.
• Flaherty, Mary.
• Glenn, Alice.
• O'Keeffe, Jim.
• O'Leary, Michael.
• O'Sullivan, Toddy.
• O'Toole, Paddy.
• Owen, Nora.
• Pattison, Séamus.
• Prendergast, Frank.
• Ryan, John.
• Shatter, Alan.
• Sheehan, Patrick Joseph.
• Skelly, Liam.
• Spring, Dick.
• Taylor, Mervyn.
• Taylor-Quinn, Madeline.
• Timmins, Godfrey.
• Yates, Ivan.

Níl

• Ahern, Michael.
• Andrews, David.
• Barrett, Michael.
• Brady, Gerard.
• Brady, Vincent.
• Brennan, Mattie.
• Brennan, Paudge.
• Brennan, Séamus.
• Browne, John.
• Burke, Raphael P.
• Byrne, Hugh.
• Byrne, Seán.
• Collins, Gerard.
• Conaghan, Hugh.
• Coughlan, Cathal Seán.
• Cowen, Brian.
• Daly, Brendan.
• De Rossa, Proinsias.
• Doherty, Seán.
• Fahey, Jackie.
• Faulkner, Pádraig.
• Fitzgerald, Liam Joseph.
• Flynn, Pádraig.
• Foley, Denis.
• Gallagher, Denis.
• Gallagher, Pat Cope.
• Geoghegan-Quinn, Máire.
• Haughey, Charles J.
• Hilliard, Colm.
• Hyland, Liam.
• Kirk, Séamus.
• Kitt, Michael.
• Lenihan, Brian.
• Leonard, Jimmy.
• Leonard, Tom.
• Leyden, Terry.
• Lyons, Denis.
• McCarthy, Seán.
• McCreevy, Charlie.
• McEllistrim, Tom.
• Mac Giolla, Tomás.
• Molloy, Robert.
• Moynihan, Donal.
• Nolan, M.J.
• Noonan, Michael J. (Limerick West)
• O'Connell, John.
• O'Dea, William.
• O'Hanlon, Rory.
• O'Keeffe, Edmond.
• O'Kennedy, Michael.
• Ormonde, Donal.
• O'Rourke, Mary.
• Power, Paddy.
• Reynolds, Albert.
• Treacy, Noel.
• Wallace, Dan.
• Walsh, Joe.
• Walsh, Seán.
• Wilson, John P.
• Wyse, Pearse.

Tellers: Tá, Deputies Barrett(Dún Laoghaire) and Taylor; Níl, Deputies V. Brady and Browne.

Amendment declared carried.

Motion, as amended, put.

The Dáil divided: Tá, 68; Níl, 58.

Tá

• Allen, Bernard.
• Barrett, Seán.
• Barry, Peter.
• Begley, Michael.
• Bell, Michael.
• Bermingham, Joe.
• Birmingham, George Martin.
• Boland, John.
• Bruton, John.
• Bruton, Richard.
• Burke, Liam.
• Carey, Donal.
• Cluskey, Frank.
• Connaughton, Paul.
• Coogan, Fintan.
• Cooney, Patrick Mark.
• Cosgrave, Liam T.
• Cosgrave, Michael Joe.
• Coveney, Hugh.
• Creed, Donal.
• Crowley, Frank.
• D'Arcy, Michael.
• Deasy, Martin Austin.
• Desmond, Barry.
• Desmond, Eileen.
• Donnellan, John.
• Dowling, Dick.
• Doyle, Avril.
• Dukes, Alan.
• Durkan, Bernard J.
• Enright, Thomas W.
• Farrelly, John V.
• Fennell, Nuala.
• FitzGerald, Garret.
• Flaherty, Mary.
• Glenn, Alice.
• Griffin, Brendan.
• Hegarty, Paddy.
• Hussey, Gemma.
• Keating, Michael.
• Kenny, Enda.
• L'Estrange, Gerry.
• McGahon, Brendan.
• McGinley, Dinny.
• McLoughlin, Frank.
• Mitchell, Gay.
• Mitchell, Jim.
• Moynihan, Michael.
• Naughten, Liam.
• Nealon, Ted.
• Noonan, Michael.
• (Limerick East)
• O'Brien, Willie.
• O'Keeffe, Jim.
• O'Leary, Michael.
• O'Sullivan, Toddy.
• O'Toole, Paddy.
• Owen, Nora.
• Pattison, Séamus.
• Prendergast, Frank.
• Ryan, John.
• Shatter, Alan.
• Sheehan, Patrick Joseph.
• Skelly, Liam.
• Spring, Dick.
• Taylor, Mervyn.
• Taylor-Quinn, Madeline.
• Timmins, Godfrey.
• Yates, Ivan.

Níl

• Ahern, Michael.
• Andrews, David.
• Barrett, Michael.
• Brady, Gerard.
• Brady, Vincent.
• Brennan, Mattie.
• Brennan, Paudge.
• Brennan, Séamus.
• Browne, John.
• Burke, Raphael P.
• Byrne, Hugh.
• Byrne, Seán.
• Collins, Gerard.
• Conaghan, Hugh.
• Coughlan, Cathal Seán.
• Cowen, Brian.
• Daly, Brendan.
• Doherty, Seán.
• Fahey, Jackie.
• Faulkner, Pádraig.
• Fitzgerald, Liam Joseph.
• Flynn, Pádraig.
• Foley, Denis.
• Gallagher, Denis.
• Gallagher, Pat Cope.
• Geoghegan-Quinn, Máire.
• Haughey, Charles J.
• Treacy, Noel.
• Wallace, Dan.
• Walsh, Joe.
• Hilliard, Colm.
• Hyland, Liam.
• Kirk, Séamus.
• Kitt, Michael.
• Lenihan, Brian.
• Leonard, Jimmy.
• Leonard, Tom.
• Leyden, Terry.
• Lyons, Denis.
• McCarthy, Seán.
• McCreevy, Charlie.
• McEllistrim, Tom.
• Molloy, Robert.
• Moynihan, Donal.
• Nolan, M.J.
• Noonan, Michael J.
• (Limerick West)
• O'Connell, John.
• O'Dea, William.
• O'Hanlon, Rory.
• O'Keeffe, Edmond.
• O'Kennedy, Michael.
• Ormonde, Donal.
• O'Rourke, Mary.
• Power, Paddy.
• Reynolds, Albert.
• Walsh, Seán.
• Wilson, John P.
• Wyse, Pearse.

Tellers: Tá, Deputies Barrett(Dún Laoghaire) and Taylor; Níl, Deputies V. Brady and Browne.

Question declared carried.