Deputy B. Ahern is in possession and has 22 minutes remaining.
Financial Resolutions, 1986. - Financial Resolution No. 13: General (Resumed).
Debate resumed on the following motion:
That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.
—(The Taoiseach).
In concluding on Thursday last I was talking about the teachers' dispute. Since the Government have since circulated an amendment which they propose to bring to the House on Thursday changing the conciliation and arbitration awards to teachers — this is based on various clauses, the details of which I will not go into — I would appeal at this late stage to the Minister for Education to call together the teachers' unions, the ASTI, the INTO and TUI leadership — what they call "teachers united"— to enter into discussions.
In his Budget Statement the Minister said he was prepared to allow back money to teachers who have retired or who are retiring and taking a lump sum so that they can all at once receive the 10 per cent. The Government's proposal, which they will attempt to pass on Thursday evening — and which I am sure will be because of their majority — breaks the whole principle of conciliation and arbitration which has obtained in this country for 30 years and has led to the orderly behaviour and control of collective bargaining in the public sector over that period. If that principle is broken, bearing in mind what the teachers' unions have already said, it will lead to disruption. We have heard already today that 68 per cent of the total man-days lost in 1985 were in the public sector because of the teachers' and Civil Service one-day strike involving over 200,000 people. That loss was 38 per cent higher than in the previous year. The continuation of hostilities between the Government and the teachers' unions, leading to disruption of education and family life and to anxiety for parents, will give nobody any joy. It should be remembered that it can be avoided. The issue is no longer about the dates on which the relevant increases will be implemented.
The Minister for the Public Service, at a meeting on 2 January last, said that the Government would honour the arbitration award. "Honour the arbitrator's award" could only have meant that they would honour it in full and pay the 10 per cent. The teachers' unions have made it quite clear that they understand fully the financial position. The arbitrator understood the financial position. He stated finally that he had taken into account the economic circumstances of the Government. The teachers' unions accept that position. The impasse has arisen because of the argument about whether when it is paid the full retrospection will be paid. That is the issue. The teachers united and various sections of them and their leadership have made it quite clear at meetings with me in the last few days that they are prepared to negotiate with the Government a phased payment of the award, but for the Government to say that paying it in three phases in December 1986, December 1987 and July 1988, with no retrospection is honouring the arbitrator's award in full is nonsense. Argument here is not so important in that the Government have the figures to vote it down and apparently they are getting support from the Progressive Democratic Party who do not believe that the teachers merit this increase. We want to avoid difficulties in future months which could put the educational system under further pressure. I ask the Minister for Education to try to come to some settlement on that or even to postpone Thursday's debate for a week to give an opportunity for meaningful talks to take place.
I want to refer to PAYE. It was stated during the Budget Statement that the Government had made it quite clear that there would be substantial reductions in PAYE and in the take from the PAYE sector in 1986 and a reduction of what the Government would take out of the economy under PAYE headings. We all know that of the income tax collected by the State 85 per cent is paid by PAYE, 13 per cent by the self-employed and 2 per cent by farmers. The argument that the Government put forward does not stand up. I want to put on the record of the House that more tax under PAYE will be taken from the taxpayers in 1986 than in 1985 regardless of the miserly allowances given by the Government. The reason is that there will be roughly a 7 per cent increase across the board for people in the PAYE sector and the tiny allowances given by the Government are based on the 1985 position with the same tax bands and allowances and there is no indexation. These small increases will assist only somebody who has no increase in 1986.
Once you have an increase in 1986, between Labour Court findings, public sector pay agreements, carryovers and 25th round increases it will be about 7 per cent. People will get 7 per cent on top of their 1985 earnings, then because of the way the system operates and the progress of PAYE they will go into higher tax bands at very moderate and low incomes, pay higher taxation and on top of that will be paying the full whack of the PAYE tax on their increase in salary. Therefore, the marginal increases will not take less tax. The Government raised the figures slightly for the PAYE sector knowing that because of their increase in pay they will continue to pay double the rate of inflation. That is the problem. So much money is being taken from the PAYE sector because the tiny increases given by the Government in the last two years are based on the 1985 levels with no indexation while the pay increases in 1986 will all be fully taxable. A higher proportion of salaries will be taxable and every individual who gets an increase more than about 2 per cent in 1986 will have higher taxable earnings and pay more in PAYE. The case the Minister made last week on that is false.
Regarding the withholding of the tax in banks, I want to make an argument on one point. I argued last week that the Government have tried to put forward a false argument that they have helped the PAYE sector and put taxes on to the banks. There is no tax on any bank or insurance company. It is on the people who save with them and comes back to the consumer. Most of the money saved in the Irish banking system, £2.6 billion, is deposited by the small saver and earner who would already be paying progressive rates of PAYE anyway. Over the weekend I studied the Minister's document. At the moment interest in excess of £50 must be declared. If a person is not liable to tax, if his income from other sources is less than would take him into the PAYE net, he can claim back that tax. That is according to the present tax and accounting system that I have studied and operated for years. The Minister in his Budget Statement last week said that if a person who is not liable to tax in the normal way has money in the bank and his income generated from that deposit and whatever other income he has is less than would bring him into the tax net, such a person cannot claim that tax back under the tax system. The person who is on a higher tax rate, who would have 35 per cent deducted at source by the bank because he is paying 60 per cent on his other income, would have to declare that money and pay the difference between what the bank took and what he should have paid when that interest was taken as income.
Surely that is a total anomaly? The Minister was badly advised on that. He should clarify this because it is of great concern to the ordinary person who has money saved in the bank. The fact that you have money in the bank does not mean that you are rich or a capitalist. Many old and infirm people have saved for their old age and for a rainy day and put whatever little resources they had in the bank, and their combined income on deposit accounts in the bank and investments is less than will bring them over the tax threshold. Surely a Government cannot say that they are not allowed to claim that back, yet that is what the Minister said in his Budget Statement. I ask for clarification on this. I hope that we do not have to wait until the end of the debate for that. I assume that the official from the Department of Finance here can give to the next Government speaker a clear statement on the position. I know from letters received by my party and by other people that this is of great concern. I do not know if I am right or wrong but the perception is that what I have stated is correct. It is not my opinion, it is the opinion of people outside who are involved in the day-to-day banking system and people in accountant's offices. I would welcome clarification on it by the next Government speaker today.
I tried to make a few points at Question Time. I was trying to get the Government's position on jobs. What plans have this Government for jobs that have not been announced in the 1986 Budget Statement? What hope is there for the 240,000 plus who are unemployed? That figure does not take account of the massive numbers emigrating and the 30,000 or so people the Minister for Labour spoke about who are on short term courses. What about all the other people who for one reason or another, because their families are means tested, are not part of the unemployment register?
Without any exaggeration, there are certainly 300,000 people unemployed in this State, and what proposals have been made to give them hope?
The Minister said that the Government's policies in relation to job creation were outlined in Building on Reality. If that policy is like their other two policies in Building on Reality and like their Programmes for Government, there is no hope that they will reverse the levels of unemployment, eliminate the current budget deficit by 1987-88 or reduce the national debt, as promised. Since this Government came into office, the unemployment figure has gone up by 70,000. The figure given in Building on Reality for the autumn of 1983 was 218,000. The Government estimates have allowed for a figure of 240,000, on average, for the whole of 1986. There is no logic to this. The Government probably do not know what figures they are working to, or what policies they have. If they have no policy on job creation, they should honestly tell the public that.
I put down a question today to the Minister for Labour asking him to outline the programme on job creation, but he outlined only the courses and schemes being run by AnCO for short term work, social employment, the enterprise allowance scheme, the youth employment scheme, guarantee funds — everything but job creation. The definition of jobs is work, not short term courses and retraining, although these help in another way. The Minister told us today that he has no manpower policy and that no direction has been given on this. There possibly may be a manpower policy sometime in 1986, shortly before the next election. What good will that be? Building on Reality is now out of date. There is just no policy for combatting unemployment.
We have had to suffer from the massive borrowing of this Government, from the effect on unemployment, from the first edition reports followed by no action. This has led to deep demoralisation, with people feeling that they have no future and might as well emigrate. What they need is hope, confidence and a future. We on this side of the House have outlined policies on afforestation and on our other natural resources. We are trying to develop the Irish economy and build up our semi-State structure to combine with their present services in an attempt to create employment. We are looking to the policy of the IDA to try to switch money from the capital side to the investment project side and link the grant aiding of firms with the number of jobs created. This can be done; it has been done in other countries.
As long as we continue to give billions of pounds to firms on the basis of capital orientated grants and not on the basis of employment, our unemployment figures will continue to rise. Why can the Government not see that? Why do they make no attempt to stimulate our industries into job creation and a fight to take on EC markets? Why do they not step up a programme of import substitution in areas where that would clearly be helpful to the economy? Why is there not a selective alteration in the embargo on the public sector in areas where this could be cost efficient? Why is there no clear policy or combination of policies to try to change the situation?
Last week we heard of the closure of hospitals and today we hear talk about the closing down of Carysfort Training College. It is believed on this side that the Government decision has been taken in that regard, but has not been announced. The Tánaiste and the Minister for Education were in the House and would not confirm or deny this. This famous college in the south of Dublin has provided services for many years. Is it to be closed down, like the hospitals, with no attempt at justification, no plans, no alternatives? It is difficult to give fair and credible opposition to a Government who will not put forward policies. More factories closed yesterday with more redundancies and job losses. Government intervention which would have helped in several areas was just not forthcoming. I know that the Leas-Cheann Comhairle has a great interest in the trade union movement and has been involved in it. He must be aware of the demoralisation among trade union members, the fear and anxiety they are expressing because of massive loss of members through lost jobs, with no hope, in the short term, of regaining employment. There are also numbers of people just hanging on to their jobs.
I have been told on several occasions by accountants that if the Revenue Commissioners were to take action in the PAYE field, thousands more jobs would be lost. Firms all across the country are using the money collected for PAYE as cash flow to keep them in operation. This is totally ludicrous, but it is happening. We can only plead that the Revenue Commissioners do not come down hard on these firms. That is the reason why so much money is outstanding. It is very difficult to move out of this disquieting position.
Banks are unreasonable, which results in money being tight. They are putting pressure on people and putting down deadlines. The same banks, when in difficulty less than a year ago, put fierce pressure on the political system when everybody thought that the AIB were going to the wall. They put pressure on Members to come to an all-party agreement to float millions of pounds for their support to get them out of a mess which they had made of an insurance corporation because they had not done their sums in the first place. They do not have the same respect for people who have made good commercial decisions but cannot succeed because of the economic environment. The banks do not practise what they preach. They hammer those who are overdrawn and cause job losses, while they moralise in the safe knowledge that if they make major errors these will be picked up by the taxpayer, the same taxpayer who is suffering because of their policies.
A Government spokesman put forward the view that the banks were hit by tax but they have not been caught for one penny by the recent budget. In line with all other Coalition budgets, this was against the old, the infirm, the workers, the trade unionists, people in small businesses, the self-employed and the PAYE sector. They will fund the 1986 Exchequer. That is another example of hardship, on top of the removal of food subsidies, which this Government are prepared to force on the public.
Much has been said and written about this Budget, but it would be fair to say that the general consensus is that it has managed, in an imaginative way and in the face of considerable economic adversity, to meet several desirable economic and social objectives. It has brought us a step further in dealing with the imbalance in our public finances, while avoiding any severe impact on the economy. Also, as stated by the Minister for Finance, the shift in the balance of income taxation brought about by the budgetary changes in personal taxation and in the taxation of financial institutions and financial assets will tend to shift the pattern of expenditure in a way which will be favourable to the expansion of economic activity.
The inflation rate continues to decline, having been substantially reduced from over 8½ per cent in 1984 to less than 5½ per cent last year. It will fall further in the course of 1986 to an expected 4½ per cent. For the first time in four years, personal consumption rose in 1985 in real terms and this is expected to continue in 1986. For families, the effect of these developments is seen most immediately in greater disposable income and increased purchasing power. The housewife operating the family budget can expect to continue to manage within acceptable limits the weekly grocery bill with prices continuing a downward trend.
The household's pay packet will show an increase, showing an improvement for many in their standard of living. While the prices of drink and tobacco are being increased, at least these are areas over which people can exercise discretion.
There are certain key elements in the budget which will be of particular help to women. The introduction of the new monthly child benefit payment of £15.05 per child must be welcomed. While this scheme will replace most of the existing child support schemes it involves a further allocation of £11.1 million by the Exchequer, over and above what would have been spent on the existing schemes. The effect of the new scheme will be to achieve a more selective distribution of resources, with lower income families on social welfare or below the tax threshold benefiting while the position of standard rate taxpayers will be protected. While those losing the £100 child tax allowance may complain to some extent, it must be remembered that this benefits the higher income taxpayer most, a difference of £25 per year per child between someone paying tax at 60 per cent and someone paying tax at 35 per cent. Everyone with children will now get the same state child support payment per child.
In addition there is a transfer of child support resources from the pay packet to the purse, thus giving a more significant independent income to mothers. Even in homes where husbands divide their income in full consultation with their wifes and where her control of the family budget is considerable, the tax allowance would tend to be viewed as hidden and already taken care of before the income is divided up. An extra £9 per month for, say, an average three child family, from April, will be directly payable to the mother.
It is interesting to consider briefly the history of the children's allowance scheme. Children's allowances were introduced in August 1944 for families with three or more children. It has been non-contributory from the beginning and there has never been any means test. Income tax clawbacks between 1944 and 1954, however, confined the net benefit to parents below the income tax threshold, who were the vast majority of parents at that time. In 1952 an allowance for the second child was introduced. These changes coincided at the time with the general removal of food subsidies. In November 1963, an allowance for the first child was introduced. In July 1974, title to children's allowances was vested in mothers instead of fathers. Up to then, mothers had to be nominated by husbands to receive the children's allowance in about 80 per cent of cases. That left one in five mothers without discretion in regard to spending.
Under the child benefit scheme there will be no change in the legal position under which the mother gets paid the benefit directly giving her freedom to spend. This is very important because some mothers felt a bit uncertain about it. They thought that perhaps because of the new title of the scheme the payment would be made to the family, either the father or mother. Though in the vast majority of cases mothers are adequately supported according to the family means, there are cases, more numerous than people care to believe, in which wives get little or nothing from a husband when he is the only breadwinner. In most marriages there is not a problem, husbands and wives deciding on how the income should be spent, but when the husband is the only breadwinner and may have a difficulty with gambling or alcoholism which turns him into a mean man, the woman can do very little.
Recently, a woman visited my clinic from a good middle class estate in my constituency. She has three children and the husband earns £16,000 a year, but gives her only enough money to go out one night a week to do the shopping and then expects her to give him the supermarket receipt and the change. That woman depends on her children's allowance of £36 per month for spending money for herself. She has to point out clothes which she may want to her husband and let him buy them. The husband believes emphatically that his income is his alone and that money spent on his wife, for clothes or health or teeth care is a concession to her.
It might be relevant to refer to a little disagreement between the Minister for Finance and a certain department store advertisement yesterday. The underlying concept in that advertisement was that the husband who earns has the power to make any concession, or take up a position in the family with regard to spending. I suggest that the concept in the advertisement concerned in this discussion did not reflect the expectations and the practice in the vast majority of today's marriages. We cannot legislate for equal sharing in the household budget but I suggest that we should try to change the attitudes reflected in that advertisement. Advertisements should reflect reasonable and fair attitudes and not perpetuate old traditions of unequal and unjust attitudes, and I suggest that the advertising whiz-kids in this case go back to basics and learn the reality of life between today's husbands and wives.
The thinking behind the introduction of children's allowance in 1944 is expressed in a Department of Social Welfare report as follows:
It became clear that measures were required to remove the relative disadvantages in material circumstances which harassed parents of families, and thus to mitigate the handicaps arising from parenthood. Any reduction in the economic difficulties besetting parents in the raising of families, would, in the long-term view, have favourable repercussions on other national problems, such as the decline in the population, the low marriage rate, late marriages, and emigration.
The reasons today for helping the family through child support policies may be different from those in the forties. However, certain fundamental principles remain the same. It is generally acknowledged that there are three main stages in an individual's life cycle when he is likely to be in poverty — as a young child, as a parent of growing children and, finally, in old age. Social policy attempts to smooth some of the natural fluctuations in living standards over the family cycle and one of the most important ways is the help given to children and their parents. Social services like free education, child health services and children's allowances help to spread the cost of raising children over the community as a whole and to soften the relative poverty in childhood and at parenthood. The objectives of sharing the financial burden of parenthood and of redressing inequalities in living standards arising from different numbers of dependent members in different families are valid social goals at all income levels.
I wonder is it fully appreciated what in fact the relative costs of families are. A study done in this area shows for instance that an average household with one person costs 60 per cent of that of a married couple at the same living standard. A family with three children aged ten, 12 and 14 would require on average 75 per cent more income than a married couple alone in order to have a similar standard of living. Put another way, a single person with an income of £60 a week is as well off as a married couple with £100 a week, and a couple with three children aged ten to 14 years with £175 a week to spend. The same study found no clear evidence of economies of scale in larger families. While some economies exist with regard to housing, in terms of the overall income scale it was unimportant. Economies of scale exist of course where there are say three to five adults, earning income, sharing. It is welcome then that our budget provides for a payment of £21.75 in respect of sixth and subsequent children, reflecting the additional costs of larger families.
Looking at trends in the value of the children's allowance, it is notable that in the first 25 years of the scheme, children's allowances were only increased three times and these increases in the scheme coincided with particular measures which adversely affected the income of families. However, during those years, inflation was low. During the seventies, when inflation was high, the allowances, which reached a peak in 1973, fell in real terms after that. In the 1985 budget children's allowances were increased for the first time since 1982. As we move progressively towards a full child benefit scheme, as provided for in the national plan, hopefully we can further improve and secure the financial position of families, particularly the less well off. The principles underlying the introduction of children's allowances in the forties are just as valid today as they were then and regrettably perhaps the rights of families to income support are not always accepted in today's more individualist world.
I welcome the fact that social welfare increases will continue to more than keep pace with the cost of living. As the Minister for Finance has pointed out each of the welfare increases given in the first three budgets of this Government has exceeded the following year's increase in the cost of living. In the period mid-1983 to mid-1987 it is estimated that the real increase in welfare payments for the long term unemployed will be over 13 per cent, for other long term categories the figure is 7½ per cent and for short term payments is estimated at about 5 per cent. Thus with inflation continuing to fall, the rate of welfare increase which is necessary to protect the real value of social welfare transfers is correspondingly contained, and the general increase in personal and adult dependant rates of welfare payments, from mid-July, will assure the living standards of those on welfare for a further year. While clearly I would wish to see even greater increases in social welfare payments than those we are providing, it must be remembered that we continue to have an underlying dependency ratio greater than most countries with broadly comparable levels of development, a problem which has been aggravated by the economic difficulties of recent years.
While a sizeable proportion of our population are now dependent on social welfare, growing numbers of women enter this category whether as single mothers or women faced with unemployment. While it is a source of regret that it has taken some time to implement the legislation providing for equal treatment between men and women in matters of social security, provision is made in the Estimates for its implementation in the first half of this year. This will have the effect of removing one of the remaining key discriminations affecting women in our economic life.
There are certain interesting features of the budget which to date have not received much comment but which will improve the lot of several categories of women. At present ex-gratia pensions are payable to the widows and children of pensionable public servants who retired or died prior to the introduction of the contributory widow's and children's pension scheme. Since 1979, the rate of this pension has stood at 5/6ths of the rate payable under the contributory scheme. The difference will be eliminated between now and 1987 at an estimated cost in 1986 of £2 million. This will clearly be a welcome provision for this category of widows and their children.
I also welcome the proposed changes in the family income supplement scheme, whereby the weekly income criteria which determine entitlements to the scheme will be increased in line with the budgetary increases in short term social welfare benefits and changes in personal income taxation. This will enhance the position of low income employees with dependants, a number of whom would be single mothers trying to cope on low incomes. It is very important that the details of this scheme are made known to this group.
The increase in the allocation of onceoff grants to voluntary organisations undertaking projects in the social services area from £650,000 in 1985 to £750,000 in 1986 is most welcome. Very many of the organisations helped through this allocation are organisations involved with families.
There is a further, little commented upon, aspect of the budget on which I would like to comment. This is the provision of £250,000 for the continuation of the measles vaccination programme. I do not believe that it is fully appreciated how serious a childhood illness measles can be. In the more developed countries until quite recent times this carried a risk of mortality for many children because of the complications involved. Even in our own country, measles can be quite devastating in terms of complications, such as possible loss of hearing and in the case of an infant convulsions, as well as the better known risk to the foetus if a pregnant woman is infected with measles. It is, therefore, essential that parents bring their children for vaccination, which is now a free service.
We tend to take for granted the basic maternity and child welfare services which have brought down maternal and infant mortality to an extremely low level and which ensure protection from the appalling childhood illnesses which were the lot of many families even as close as a generation ago.
Moving on to a somewhat different aspect of the budget, I welcome one of the particular taxation measures. This arises from the Age of Majority Act, 1985, which reduced the age of majority from 21 to 18. A change will be made in the Finance Bill whereby a parent will be in a position to covenant part of his or her income in favour of a child aged 18 years or over, subject to a limit of 5 per cent of income and for a period of six years. This will provide a measure of tax relief for such parents which they can put to good use by setting aside funds for their children's third level education. As more and more young people enter third level education, the length of time in which a parent has to provide for children lengthens, often until children are well into adulthood. This is exacerbated by the difficulties in finding employment for young adults subsequent to their graduation. The new budgetary provision will ease this problem for many parents.
I would refer to the budget for my own office. There are two separate aspects to my budget this year. The estimates allocation is £185,000, an increase of £15,000, or over 8 per cent on the 1985 provision. Through this allocation I will continue — as in the last three years — to support projects and activities of assistance to women. From the response I have had, I know that the grants allocated have been of considerable assistance in a wide range of areas, including adult education projects, play groups, seminars and conferences on major themes of interest to women, publications and research. Part of this allocation also goes to funding the Council for the Status of Women to enable them to continue their essential role of representing women's voices, outside of Government.
The second aspect of my budget this year is the special budgetary allocation of £150,000 for a women in business enterprise programme. In the past year I initiated a range of promotional activities directed at encouraging more women into business careers. The IDA and SFADCo followed my lead and also promoted a number of activities in this context. The overall result was a significant response from women to the idea of business activity, resulting in a considerable increase in the number of inquiries to the State agencies involved, and a positive follow up in many cases. We now know from the experience gained on this programme that with special encouragement and advice, a number of women with good practical ideas will respond to specific promotion directed to them and the overall result should be an increase in the number of women setting up, maintaining and expanding their own businesses. In recognition of the great potential, both economically and socially in this area, the allocation of £150,000 was made to intensify and develop our efforts to achieve results. Within the next month I hope to give details of how, in broad terms, this money will be spent over the year.
Finally, the Government in the budget have brought us a step further in dealing with the imbalance in our public finances while maintaining increases to the vulnerable sectors in our society.
The fourth budget introduced by the Minister for Finance can best be described as a bandit budget. Once again it has all the hallmarks of the technocrat, the bureaucrat and the academic. It is yet another stage in the great bluff of the Coalition. More than ever before it shows that the Taoiseach and his Ministers are running faster in order to stand still. However, on this occasion the Irish people have had enough. My message to the Government is: "Your bluff has now been called. You can prolong the agony for as long as you wish, but after this miserable effort your time is up".
This was to be the Government of honesty and integrity which was to steer the ship of State on the straight and narrow course as decreed in the document, "Programme for Government, 1982." That document stated:
The unemployment situation with 170,000 unemployed, 50,000 of them under 25 years of age, and the state of the public finances facing a new Government taking office at the end of 1982, are alarming. Both require firm and decisive action by such a Government. The dual task of halting and reversing the growth of unemployment while phasing out the current budget deficit poses a greater challenge than any Irish Government has faced domestically since the early years of the State.
The document, under the heading "Financial Stability", states:
The phasing of the elimination of the current Budget deficit between now and 1987 will have to be undertaken with due regard to prevailing economic conditions, and in particular to the importance of achieving economic growth and dealing with unemployment.
That was the promise the Coalition made when they took office three years ago. The position now is that unemployment has increased from 170,000 to 239,867 at the beginning of January and a further 50,000 young people emigrated since 1982. That national deficit has increased from £12.8 billion or 104 per cent of GNP when the Government took office late in 1982 to a staggering £20.4 billion or 130 per cent of GNP at present. The current budget deficit at the end of 1982 stood at £988 million or 8 per cent of GNP but today it is a staggering £1,284 million or 8.2 per cent of GNP. Those figures show how the Government have performed since they took office. After a series of measures that have devastated the Irish economy, after a series of promises that were broken and a series of U-turns they have got the country in a financial mess.
I should like to quote what Deputy Dr. Garret FitzGerald said on his appointment as Taoiseach on 30 June 1981, which was as follows:
Fianna Fáil were rejected at the polls basically because of the perception by the people that that party failed to govern, a failure to govern that has no precedent in the annals of this country and which has led to the near collapse of our public finances. In the couple of hours since I was appointed Taoiseach I have had many things to do because the nature of the changeover on this occasion was such that tasks that might have been undertaken earlier could not be undertaken until this afternoon. However, even in that brief time I have learned something of the scale of the damage done. I have to say I am shocked to find the position is even worse than our most pessimistic...
I do not say that without careful consideration. It is not a propagandist remark; it is a factual remark. When the facts are disclosed they will validate what I have to say. This Government have an enormous task ahead of them. It is many decades since any Government faced the kind of problems we face.
The most significant sentence in that statement was the following:
The scale of the mess is beyond anything that had to be faced previously.
What kind of mess is the Irish economy in today following almost four years of so-called financial rectitude in order to bring the nation's finances into order? What price has the country had to pay in economic and human misery as a result of those misguided financial policies? What improvement has taken place in the nation's finances? It is clear from the figures I quoted that no improvement has taken place. The figures have become progressively worse. I should like the Taoiseach, and the Government, to answer the questions I have posed.
The Taoiseach is reputed to be good at statistics and I should like to hear his comment on the catastrophic rise in bank interest rates. The real rate of bank interest when he took office was minus 3 per cent, 3 per cent below the level of inflation, but at the beginning of 1986 the real level of bank interest was 8 per cent and shortly it will go to 10 per cent. That trend could hardly be described as a contribution to a climate conducive to industrial expansion.
Let us look at the taxation trend. VAT increases, as a percentage of GNP, have gone up from 7 per cent in 1982 to 9 per cent in 1983, to 9.4 per cent in 1984, back to 9 per cent in 1985 — that was because the Government were not able to collect the taxes — and the projected figure for 1986 is 10 per cent.
Let us look at the trend in regard to income tax as a proportion of GNP. It rose from 12.1 per cent in 1982 to 12.5 per cent in 1983, to 13.6 per cent in 1984, to 13.84 per cent in 1985, and the projected figure for 1986 is 13.9 per cent. One of our most respected commentators, Paul Tansey in last Sunday's issue of The Sunday Tribune stated that the projected percentage of income tax take of GNP will be as high as 14.7 per cent in 1986. The social welfare payout is up from 13.7 per cent of GNP in 1982 to a projected figure approaching 20 per cent in the current year. They are the facts.
On the occasion of his appointment as Taoiseach in 1981 Deputy FitzGerald said:
I am glad to have assembled a team whose talents will see us through this difficult period.
The financial trends I have quoted show the talents of the Taoiseach and his team in their true light. Further comment from me would be superfluous.
I should like to deal with the budget under four headings — unemployment, economic policy, public service reform and taxation. Last Sunday's issue of The Sunday Press carried a story under the heading, “A Heavy Blow For The Old”. This has to be the most cruel and callous effort of all in the budget. Last year the Government made great play of their efforts to get old people to put their money in the banks assuring them that there was no problem and that the tax take would be little or nothing. That move followed the dreadful attacks on old people, particularly in the west. Many old people, on the advice of all of us, took advantage of the improvement in the 1985 budget and lodged their money in banks. However, their money will now be taxed at the rate of 35 per cent. Such a callous and cold attitude to old age pensioners is hard to believe but it typifies many aspects of the budget. More than any other feature of the budget, that needs to be changed immediately.
On the question of unemployment, it is no secret that there are almost 240,000 people on the unemployment register. The Minister for Finance, in the course of his budget speech last year, said:
Unemployment, taking account of the impact of special employment measures, should begin to level out and, given moderation in pay developments, there should be some pick up in employment.
In presenting this budget the latest figures which the Minister for Finance had available to him showed that unemployment stood at 225,000. He projected an average unemployment figure of 217,000 for 1985 as the basis for unemployment gradually falling to a figure below 219,000. What was the outturn? Instead of decreasing, unemployment has increased to 240,000. Not alone did the Minister get the figures wrong, his projections were in the wrong direction. It is amazing that the Minister could be so wrong in his projections in last year's budget in regard to the greatest social and economic problem facing us. It is even more amazing that he has held on to the job to present this year's budget. I have no fault to find with the Minister as a colleague in the House. He is a nice, courageous fellow but, as Minister for Finance, he has proved to be an unmitigated disaster. He has constantly introduced budgets which have hindered the general development of the economy, which led to an air of pessimism in the commercial sector and submerged entrepreneurial spirit and initiative under the rising tide of taxation.
Unemployment is the greatest scourge of our time and has attacked all sectors of society. It represents no class, regional or age boundaries. As Thomas Carlyle once stated "a man willing to work and unable to find work is perhaps the saddest sight that fortune's inequality exhibits under this sun". To conquer and root out this disease requires strong and decisive Government action. The Government had a clear objective, as stated in this infamous policy document which I describe as the Taoiseach's book of fairy tales, to commit themselves to a coherent and insistent attack on the lack of jobs. However, there are few incentives to employers to increase employment. The budget makes incentives available to industry on a very limited scale. The available incentives encourage firms to invest in equipment rather than in labour. The National Planning Board and the Commission on Taxation proposed that our tax system should at least be neutral in regard to employment costs and capital equipment costs. Despite the catastrophic level of unemployment the Government have refused to consider the recommendations of those two bodies although they have had the opportunity to directly affect the levels of employment through the public capital programme. However, they have refused to use this method.
If the Government were serious about employment they would look at the areas where it can be created usefully and quickly. In the construction industry there are now 45,000 people unemployed. With the welcome exception of the belated grants for restoring houses which are going very well in County Galway, the Government have consistently attempted to flatten the construction industry into the mud of undeveloped sites and waste ground. This has resulted in the output of the construction industry falling by over 30 per cent since 1980. The fact that the Minister devoted only a paragraph to the construction industry containing no proposals for its stimulation shows their disregard for the plight of the industry. They have devastated the industry through their penal imposition of taxes, such as the 10 per cent VAT rate and the failure to provide incentives in this year's budget.
It is disappointing to see the treatment which agriculture has been given in the budget. The Minister devoted only one small paragraph to it and, when one compares that to the pious platitudes in Building on Reality, one can see how serious the Government are about the development of agriculture. The Government spoke in glowing terms about the farm modernisation scheme; nevertheless they discontinued it. They are now talking about a new scheme——
Do not say too much about it.
It will be a little election gimmick for the farmers and will be awaited with bated breath because the farmers of County Galway have a big problem in relation to their indebtedness to the Bank of Ireland, Allied Irish Banks and other financial institutions. A scheme at this stage will do little to help the plight of so many farmers. The Government do not have an economic policy, although they have a financial one. They can encourage economic activity and employment for the climate they create and their economic policies. This has been recognised by the Commission on Taxation when they suggested that the level of economic activity is affected much more by the general economic policy of a Government than by any set of specific measures or incentives. The problem with the Government is that they have created a hostile environment for economic expansion. They have simultaneously increased taxation, reduced capital expenditure and, through their borrowing policies, kept interest rates higher than they need be. What individual or company in their sane mind would invest in productive areas in Ireland today? The thrust of the policies of the Minister for Finance has been to drive investment funds into Government gilts where they only serve to prop up an inefficient administration system.
The other aspect of the Minister's policies, clearly outlined in the budget, is to drive money out of the country as hot money. The biggest indicator of the lack of confidence in Ireland as an investment location is the way in which foreign multinationals have repatriated the sum of £130 million in profits and dividends in 1985. The largest growth in exports since the Government came to office is that of hot money, money which is not being disclosed to the Revenue Commissioners. Millions of pounds are leaving the country. The bond washing exercise in last year's budget, the taxing of banks and building society deposits and the 15 per cent taxation on investment income this year have had one sure effect — they will further boost the deposit accounts of banks in Northern Ireland and the Isle of Man.
After three years in office, the Government are still floating in an economic policy vacuum. So far, they have pursued a financial policy which has been detrimental to the economy. Economic policy has been left out in the cold. The real economy consists of people, production and productivity and that is where the action is. However, the Government have hardly addressed the central core of the economy. The central strategy of an economic policy should now be focused on increasing the volume of national output. This can be done through better investment decisions and higher productivity which will produce more output. During the last three years this country has received poor value for its investment income. We have been investing at Japanese levels to attain British levels of output growth. In the last year, for instance, the rate of expansion in economic activity slowed significantly according to the Central Bank's latest report. Real gross domestic product grew by only 2¼ per cent and was only 0.5 per cent compared with 2¼ per cent for 1984.
This rate of growth is clearly unsatisfactory and the outlook for 1986 is for only a marginal improvement. Our rate of growth since 1980 has been marginally higher than the EC average but, given our initial low base, it is not satisfactory. Our gross domestic product per head of population is less than 60 per cent of the EC average. The Government do not have the policies to give this country the type of economic growth it needs. The biggest detriment to economic well-being is our national debt. In 1985 the Government borrowed over £2 billion, the highest level of borrowing in the history of the State. The total Government debt is approximately £20.4 billion. This debt has increased from £12.8 billion at the end of 1982 to £20.4 billion now, an increase of almost 50 per cent in just three years of Coalition Government.
One recalls the cries of anger and panic from politicians now on the Government's side when the total borrowing by Fianna Fáil Governments was less than half the present figure. The bulk of the increase in borrowing has gone to finance the current budget deficit. It might be excusable if it was financing worthwhile capital investment, but the Government's ability to control the current deficit suggests that they have neither the inclination nor the courage to tackle this task. Are Ministers incapable of finding those wasteful areas of expenditure in their Departments? No manager in private enterprise would survive if he followed the example of this Government. My contention is that £1 million per day is being wasted on public expenditure at present.
Another feature of the very high level of borrowing is the adverse effect it is having on the domestic money market. The amount of indebtedness of the Government to the associated and non-associated banks increased from £1,087 million in December 1981 to £2,321 million by September 1985, an increase of almost 114 per cent. This enormous increase has led to the demand for money and hence pushed up the interest rates. The real level of interest rates are now higher than they have ever been. This has created major problems for the business community, exacerbating an already difficult situation. The cost of working capital has been identified by the Small Firms Association as a major inhibiting factor to continued business expansion.
There is a moral obligation on the Government to curb this level of borrowing. Let me quote from a speech made by Mr. T.F.O Cofaigh, Governor of the Central Bank, on 14 November 1985, when he said:
It is a bitter irony that a family conscious society, which has traditionally espoused personal thrift and has sought to help the next generation, is now effectively prevented from doing so. Instead, we have got ourselves into a situation where, in part at least, we are living off the next generation which has been given no choice in the matter. Distributed justice, that which applies over time as well as of the present, demands that we put an end to this practice of banqueting upon borrowing.
As I said before, what an outrage there was when Fianna Fáil borrowed what was then considered to be large amounts. In my view the borrowing of this Government is much more serious because it makes very little provision for capital expenditure.
I come now to a number of suggestions involving the spending of the money we borrow. We all accept that a certain amount must be borrowed. My proposals were contained in a number of the reports from the Oireachtas Joint Committee on Small Businesses, of which I am a member. Like many other reports, these reports, setting out the wonderful work done by this committee, lie on the shelves gathering dust. I hope the proposals I am making today will be considered in the context of this debate and of the Finance Bill.
Our first report, published two years ago, dealt with manufacturing industry and said that the high level of bank interest rates was causing major problems for small firms. This is of particular concern to small Irish companies facing foreign competitors who have lower interest rates. However, manufacturing industries in Ireland, and particularly our small manufacturing industries, are still facing the consequences of high interest rates. Only yesterday the Central Bank raised interest rates by a further 2½ per cent above a previous increase of 2 per cent only two weeks ago. High interest rates add to the cost burden of our manufacturing firms, impede their competitiveness and cost jobs. We can only speculate about how many hundreds, even thousands, of jobs will disappear as a result of the latest round of increases in interest rates. Although I accept that this is largely due to outside factors, this increase has to be laid at the door of the Government, who have no foreign exchange policy and who failed to spell out their proposals on exchange rates. This has led in large part to the kind of speculation which has taken place in recent days thereby increasing bank interest rates.
The committee's report contains a number of sensible recommendations related to loan finance for small firms and with regard to employment creation generally. These recommendations include a system of loan guarantees and interest subsidies to smaller firms so that they would have the same level of access to loan finance as larger firms, and at the same levels of interest, and also a scheme to channel personal savings into loans for small industry. This was a particularly good proposal and is one which the Minister for Finance should have taken into account when introducing the tax changes for personal savers. A similar scheme in France proves this point. Many millions of pounds at present under the bed or else where would be channelled into small industries if the Minister provided a proper tax incentive scheme for small firms. IDA grants should be optional between additional employment and the cost of fixed assets. The grant aid package should provide for aid for full time employment in firms not eligible for capital grants. There should be special income tax rebates to export and marketing personnel who spend more than 30 days a year outside the country and to key technical staff in order to provide a real incentive to achieve export led growth; and there should be a drop in the grant guarantee aspect of VAT at the point of entry. The introduction of these measures, many of which could be achieved through redeployment of existing State funds in industry, would not cost the economy an extra penny and would go a long way towards reducing the cost burden on our small manufacturing concerns and reverse the trend towards fewer jobs in industry.
With regard to the burden of indirect taxation, the committee made it clear in the report on the retail and distribution trade and in the report on the construction industry, published recently, that the most effective way of broadening the tax base is to reduce the scale of that other economy which has become rampant, that is, the black economy. The most effective way of hitting the black economy is by making our legitimate businesses more competitive, particularly in the services sector. In the report on the construction industry we stated that as long as there is no distinguishable lower VAT rate for services, including construction and related professional services, the incentive for the black economy operator will be substantial.
The committee went on to recommend a low 5 per cent labour intensive services rate, which would include construction, and stated that such a move, combined with effective anti-evasion measures, would effect a major reduction in the black economy and in consequence widen the base of the legitimate economy. The positive implications for real jobs arising from such a move are obvious. As far as my influence on an incoming Fianna Fáil Government goes, those are the kind of financial and economic policies which will be put in train to put this country back to work.
What about Bobby?
We will deal with him when the time comes.
You were very fond of him one time.
I am still very fond of him but we will deal with him and all the others when the time comes.
The appointment of a full Cabinet Minister to the Department of the Public Service was indicative of the interest of this Government in reforming the public service. What are the fruits of Deputy Boland's three year term of office? The cost of Exchequer wages and pensions has jumped from £1,982 million to £2,464 million in 1985. This is an increase greater than the rate of inflation and this despite a decrease in the number employed. In the latest debate on pay we have the Minister and his officials not able to produce sufficiently good reasons for denying teachers their pay award and now they are going around like spoiled children whingeing that they cannot afford to pay the award. This refusal must be seen for what it is, namely, an attack on the system of conciliation and arbitration that has served this country well for decades. What the Minister cannot win by persuasion he is now intent on winning by force. This augurs badly for any attempt by him or by this Government to bring the social and economic partners together.
Of course, the greatest reason for the failure to curb and control public expenditure is the lack of a proper framework within which to take the necessary measures. Public expenditure can be reduced significantly only if it is part of a comprehensive plan of public service reform. The Minister for the Public Service has singularly failed to make any inroads in this important area. He has made some semantic changes in the policy regarding the promotion of senior civil servants, getting civil servants to wear identity tags and to give their names on telephone calls. These changes are welcome but we cannot be fooled into thinking it is reform of the public service. He is tinkering with the system, not overhauling it.
It appears the philosophy of the Minister and his officials to reform of the public service is still based on the 1969 Devlin report. I have always thought that this report did not get its approach correct. If the public sector is to be reformed the approach must be from the top downwards. This means that the first issue to be addressed is to decide on the services required in Ireland, given its size and demographic structure. Once that has been identified, the next stage is to see how the services can be organised so that they will be effective and efficient, with duplication of effort eliminated.
The other significant aspect of the Devlin report is that it is more than 15 years since it was published. We are living in a dynamic era and our needs for the future will not be based on those of the past. We must base our new strategy on future requirements rather than on past assessments. This Government are squandering £1 million per day in wasteful and misguided expenditure. For example, we spend £3 million per week on people who submit doctors' certificates. That was the figure for last year and I am sure there has been an increase. This is despite the fact that our health services cost in the region of £25 million per week. Either the health services are very poor or the many people on doctors' certificates are not sick. It is my belief that many people on those certificates are not sick. Rather, they are mitching from work and are playing the system. It has been estimated that millions of pounds are squandered each week through abuses of the social welfare and taxation systems. Millions of pounds are squandered each week on the plethora of youth employment schemes that are leading nowhere but to the emigrant ship. There are numerous other examples of wasteful expenditure——
What about Knock airport?
I am talking about current expenditure, not capital expenditure.
We will be paying for that for a long time.
How many State agencies are almost competing with each other to spend as much money as possible in the same areas so as to exhaust their budgets? The system of deciding budgets for the forthcoming year essentially on the basis of what was spent in the previous year is crude and not appropriate to our needs. However, this system of allocation of funds will continue as long as we do not have properly planned medium and long term programmes of action for each area of Government expenditure. The White Paper on the Public Service gives me no grounds for the comfort or for thinking that this Government will take the right course of action.
Public service reform involves reform of the role of politicians. Two years ago I said in this House that unless politicians tackle the political process from the point of our own performance in that process we will find it difficult to put right the problems of the country. The fact that politicians spend 95 per cent of their time acting as messenger boys and 5 per cent acting as legislators is having a damaging effect on the country and on the economy. The public service is inefficient. I wish to make it clear I am not being critical of public servants. By and large they are probably the finest people and are the most hard-working but the problem is that they work in a structure that militates against initiative, hard work and good performance. As politicians we continually foul up that system with a paper chase in which all of us are involved. The time has come for us to look at our role as part of the reform now so necessary in the public service. Together with civil servants we have to get our priorities right.
When one sees the wastage throughout the country, it is shocking that we are allowed to get away with it. I will give an example of what I mean. In a parliamentary question in 1982 I asked how much we were paying for the rent of O'Connell Bridge House. All of us write hundreds of letters every week to that address about £1,000 grants, group water supply schemes and so on. We paid £552,000 for the rent of the number one spot in the country on O'Connell Bridge so that we could process applications for grants from people in Clifden, Lettermore and Letterfrack in County Galway. We pay an engineer to travel from Ballyhaunis to Clifden to inspect a house for a grant of £1,000 while, at the same time, there is an engineer employed by Galway County Council living in Clifden who will inspect that same house three times for planning permission and for the payment of a local authority loan. Incidentally, that is paid by Galway County Council on an agency basis for the Department of the Environment. Yet, this Government and indeed the previous Government — there is no difference in this case — insist the another engineer must travel 70 or 80 miles to inspect that house. The man employed by the Galway County Council will not be allowed to carry out the inspection despite the fact that he has already done so in respect of the payment of a £16,000 local authority loan. Is it not time that we stopped this sham? Is it not time for politicians to face up to the fact that by adding more paperwork to the system the payment of grants will be delayed. The applicants come to us to speed up the procedure but because of the centralised system of the public service our input only serves to slow it down.
I will cite another example of what happens in County Galway in respect of unemployment assistance. The person concerned applies for this help in one room, the file has to be spent to Galway and then to Dublin before it is sent back to another room in the original building for the pension officer to decide on the eligibility of the applicant. It is time for us to stop that sham. It is time to decentralise the public service, to allow public servants to be responsible for their decisions and this is something they wish. It is time for us to keep our noses out of many aspects of public service administration that are none of our business. We in this House must be the catalysts for action in this area, a role that we have neglected very much up to now.
While the Government have failed to curb current expenditure, they have attacked savagely the public capital programme. Their approach reminds me of the story of a manager who was brought into a company to increase the profits and who at the end of his first year had achieved his objective simply by not engaging in any capital expenditure and by selling off as many assets as possible. The following year the company went into liquidation. The figures in this year's public capital programme represent decreases in capital investment in the various sectors since 1980. These decreases are 59 per cent at least in agriculture, 39 per cent in industry, 60 per cent in fisheries and 31 per cent in transport. These figures probably underestimate the position because they are based on estimates for 1986. If the experience of 1985 is to be repeated when the provisional outturn for agriculture, industry and fisheries was less than the actual outturn, we may expect the Government again to tackle the public capital programme as opposed to the current capital programme. It is interesting to note that the two areas of greatest growth in public investment — tourism and roads — were the subject of the biggest increase in 1982 when Fianna Fáil were in office.
Finally, I shall deal with the two areas that come within my ambit as a spokesman for my party, namely, youth affairs and sport. In a recent article in a national newspaper the Minister of State at the Department of Labour was reported as saying that the national youth policy launched recently represents the single most valuable contribution by any Irish Government to the future of our young people. That kind of statement indicates how much out of touch the Government are with the conditions in society for our young people. The long awaited youth policy is a bitter disappointment for our young people. It is comprised of many pious platitudes and makes no attempt to outline specific action in many vital areas affecting young people. It is an insult to the army of unemployed and underemployed young people. Their plight is totally ignored so far as the policy is concerned.
It contains no proposal for the creation of long term sustainable employment but contains references to other generalisations such as the job creation targets of Building on Reality and the White Paper on Industrial Policy. There is no reference in the policy to emigration, although between 45,000 and 60,000 of our young people have been forced to leave this country since the Coalition came into power in order to seek employment elsewhere. A youth policy which ignores the greatest problem of our young people cannot be regarded as serious in terms of attaining the Government's stated objectives of helping all young people to become self reliant and responsible and active participants in society.
However, the publication of this document, together with the meagre financial provisions associated with it, is welcome. It brings to an end a three year wait during which time the Government have not taken any action to deal with the problems in this area. Unfortunately, the great expectations of a new deal for young people which the comprehensive publication had created has evaporated on a close scrutiny of its provisions. The insignificance of this policy document becomes clear when one considers it in the context of Government performance on youth affairs to date.
As far back as 1981, Fine Gael promised a policy on youth affairs and that was to be an immediate priority in the event of the party being returned to Government in 1982. After almost 12 months of Government inaction, a discussion document entitled "Shaping the Future" was launched. It coincided with the establishment of a national youth policy committee who would make recommendations in respect of youth for consideration by the Government. Though we had already two comprehensive reports on youth affairs — a policy for youth and sport which was commissioned in 1977 by Deputy John Bruton and the O'Sullivan report commissioned by Jim Tunney in 1980——
The Deputy should refer to office holders in terms of the office they held at the time he is referring to.
I apologise. This committee which was chaired by Mr. Justice Costello was clearly a holding exercise on the Government's part, a wish simply to be seen to do something as another year passed. The irony of this youth policy is that its central strategy, a national youth service based on the Costello recommendations, is a replica of the proposals of the O'Sullivan committee of 1980 with minor changes of emphasis. Why, then, did the Government not implement the 1980 recommendations? Why was it considered necessary to set up another committee? After 12 months work the Costello committee produced their report in September, 1983. That was a comprehensive report and was launched by the Government as a massive public relations exercise. We were assured then of an immediate Government response in the form of a Government youth policy.
The Costello committee recommended that a fitting inauguration of International Youth Year, 1985, would be the announcement of the effective implementation of the first stage of the national youth policy. Finally, the policy document arrived. That was on the second last day of International Youth Year and 15 months after the Costello committee had reported. The central strategy of the policy is the establishment of a national youth service. In essence this means the establishment of an administrative structure involving new committees on a localised basis. This may be an admirable objective, given the required finance which is estimated at £20 million, but to propose such a service as a central strategy in a Government policy in the absence of the necessary financial provisions will only cause further disillusionment among young people and among those who have dedicated their lives to helping them.
What is not required in the immediate future is another administrative and bureaucratic structure, though that is what is now proposed. Local agencies and youth organisations are only too well aware of their requirements. What are required are the resources to meet those requirements. A developmental and innovative approach designed to complement and expand volunteerism with an input of professionalism, with proper support mechanisms, is required urgently for the provision of a comprehensive youth service. This will be the central strategy in Fianna Fáil's youth policy on our return to Government. It will involve the support of existing youth organisations and structures where the massive reservoir of voluntary effort and goodwill needs to be supported and expanded with the employment of full time professional youth workers on the lines of the successful development officer concept and with a 100 per cent funding of salaries and expenses.
Such a policy will involve also the provision of youth facilities throughout the country. State provision of such facilities would be conditional on community involvement in youth affairs. In this way the status of youth work would be raised. For example, if each of the 38,000 primary and post primary teachers as well as each of the 11,000 members of the Garda were to devote voluntarily one hour per week to youth work, there would be the equivalent of a total of 1,200 full time workers engaged 40 hours per week in this area. Undoubtedly the goodwill for this kind of arrangement exists among those professions. It is already very much in evidence. All that is required is an innovative and a motivating approach to harness that resource. This Government are long on reports, promises, discussions and philosophy, but they are short in terms of a commitment to positive action.
We do not have any O'Donoghue on this side.
The Government accept the serious error three years ago of transferring youth affairs to the Department of Labour and they have now returned that area to Education where yet another new structure has been established, namely, the community, education and training division. This, together with three further committees at various levels and with the local youth service boards, indicates that the Government are not in any way short on committees.
An important aspect of the youth policy was expected to be in the form of a series of initiatives to assist deprived and disadvantaged young people. The Costello committee dealt extensively with this facet of youth affairs. It made many very worthwhile recommendations. However, the Government response is miserable. Their policy fails to signify an attack on the causes of juvenile delinquency, particularly in inner city areas. There are no proposals to tackle the root cause of crime and vandalism in Dublin's inner city, namely poverty, unemployment, poor education, school truancy, bad accommodation and recreational facilities. They failed to implement a series of measures which are urgently required to deal with drug abuse, such as the improvement of customs and immigration controls, the provision of custodial centres for drug treatment and the provision of detoxification and rehabilitation facilities for young people in prison. The only definite provision was for a bed facility in the new Beaumont hospital. Let us hope it opens soon.
On the question of the young offender, the policy contains the same kind of generalisations which characterise the policy of this Government. It is stated that the Government are determined to bring about improvements in the juvenile justice system and as part of their youth policy relevant Government Departments will be required to formulate appropriate proposals for consideration. That is the kind of statement one would expect from a group of people expecting to come into Government in five years time. One would have expected this policy to contain specific proposals of a preventive nature from a Government who have been three years in office, faced with an increasing army of young offenders. Measures which should have been included in a Government youth policy include proposals for the extension of the range of services to make probation an effective alternative to prison, the provision of probationary and aftercare hostels, the employment of adequate numbers of school attendance officers, the expansion of the juvenile liaison officer system and the probation and welfare service and, especially, the increase of the age of criminal responsibility to 15 and the provision of a juvenile court system. These are all urgent requirements and they should be included in Government youth policy.
The policy document's provision for homeless young people is passed to the health boards who do not have the financial resources to provide their current range of services. There is no commitment to provide the health boards with the required finance to provide for the homeless. The provision for homeless young people reaches a cynical level with the information that voluntary bodies can qualify for a £16,000 SDA loan to provide shelter and accommodation. The policy on young travellers and the young disabled is merely a restatement of existing policies, many of which are waiting to be implemented.
The section dealing with young people in working life is a most disappointing aspect of the report. There are numerous initiatives which could be taken in 1986 which would lead to the creation of thousands of long-term sustainable jobs. I want to spell out a number of those initiatives. In the context of the provision of only £2 million in the budget, many of the areas needing urgent attention will have to be seriously neglected.
I would ask the Minister for Finance to take note of the initiatives for employment. First I would suggest the extension of the 10 per cent manufacturing corporation tax to the entire international service industry to entice foreign banking and re-insurance companies to create many prestigious jobs. One simple statistic bears out the potential in that sector — 0.1 of 1 per cent of worldwide re-insurance premiums is equal to the balance of payments deficit two years ago. If we could attract even that small amount of re-insurance business it would cancel out the balance of payments deficit two years ago.
The implementation of the 1983 IDA report on consumer foods and ideas for development should be considered immediately by the Government. This would follow the appointment of a Minister for food who would co-ordinate and streamline all the agencies involved in food production, manufacturing and marketing with a view to exploiting the vast potential that exists for the added-value manufacture and sale of the finest agricultural products in the world.
The Deputy seems to be covering a very wide field at this stage, going into detail in several Departments. I did not have anything to say about the areas where he is spokesman, although there is doubt about that too. He seems to be covering a very wide field now.
I am making a number of suggestions. The Opposition are usually accused of not doing so. I am suggesting a number of alternatives which I believe the Government should put into practice as part of their budget strategy to create many thousands of new jobs in 1986. If you do not want to hear them——
It is not that I do not want to hear them. I am always anxious as an individual to hear interesting things but as an office holder there are things which I should not hear. I have no objection to the Deputy dealing with areas on which he is spokesman.
In view of the fact that the Minister of State with responsibility for food is here, I could not let the opportunity go.
I am delighted to listen.
I would advocate the promotion of job creation through the existing small industries sector by incentives for product research and development, export sales programmes, transportation subsidies to European markets and market research. The small firms association represents 800 firms with expansion potential, given adequate support rather than the regressive environment in which they operate at present. There are many other areas which can contribute to worthwhile employment creation.
Millions are being squandered on a series of youth employment schemes, many of which only cause further disillusionment among young people before their eventual emigration. Temporary schemes have an important but limited role to play. They must be streamlined and replaced with economic employment proposals. The transition from school to youth and work training must be geared towards the filling of sustainable jobs. There should be proposals for the provision of cheaper car insurance for young people, the provision of affordable homes and an adequate scheme for the provision of mortgage finance. There should be incentive schemes for saving and investment and a "start your own business" package. I had hoped that this budget would contain some of those proposals to give young people a break and prevent them from having to leave the country. Sadly this Government take no interest in those areas which should be to the forefront. This Coalition Government have again failed to recognise the emergence of a vicious two class society. There is now a striking gap between the haves and the have nots, with an alarming increase in the latter group.
The Government have succeeded in making youth affairs the greatest talk shop in recent years. The publication of their recent youth policy has raised this to new status. There will be no further reports or committees when Fianna Fáil return to office. There will be actions based on solutions to the glaring problems facing young people. Our policy proposals will be costed and, realising the severe limitations on our new Government in increasing public expenditure, the cost effectiveness and the return on investment to the economy will be a significant factor in our proposals. There will be a redirection of current expenditure which is being wasted by this Government in so many areas. It will be expended on preventive measures rather than fire brigade actions, of which Spike Island is a particular example. This is the basis of our youth programme.
I might mention the question of sport dealt with in detail in the budget. As Opposition spokesman on sport I must say that the Government's handling of sport has constituted a miserable performance. On many occasions they have endeavoured to do a con job. For example, in the current public capital programme they increased the provision for sport by 19 per cent and then, in the budget, withdrew that money, an effort having been made on their part to be seen to increase the level of expenditure on sport. The therapeutic and health care benefit deriving from sport necessitates investment which can yield a good return. All Governments to date have tended to regard sport as having competitive benefits only. It is my intention that sport be given a new status. At the next general election, I will be putting to the electorate for the first time ever on the part of any political party a comprehensive policy on the development of sport throughout society.
I have today attempted to point out the desperate disappointment, indeed the desperate problems this budget and its provisions will occasion. This Government appear to be determined to continue in office for another year. One thing is quite clear. They can continue as long as they wish but it has now become evident that the electrorate are fed up and feel their time is up.
Ba mhaith liom i dtosach comhghairdeas a dhéanamh leis an Aire Airgeadais as ucht an tslí ar éirigh leis cáinaisnéis reasúnta agus réalaíoch a chur os comhair na Dála. Níl sé simplí ar chor ar bith san lá atá inniu ann freagraí a thabhairt do na deacrachtaí agus fadhbanna móra atá ag brú isteach orainn sa tír beag seo, ach d'éirigh leis an Aire go han-mhaith sa cháinaisnéis seo. Tá mé cinnte go n-aithneoidh gach éinne go bhfuil dea-job déanta ag an Aire.
This is the 25th budget debate in which I have had the honour to participate since I became a Member of this House in 1961. It gives me great pleasure to congratulate the Minister for Finance. I believe he has done a very good job in the preparation of this budget. He has succeeded despite tremendous difficulties, external difficulties arising from the world economic recession and those arising from the appalling financial mess he inherited when he assumed office in December 1982. If one is to judge from the reactions of the various commentators it seems evident that most people recognise that this budget package represents the best possible one that could have been devised taking into account all of the circumstances with which the Minister was confronted.
The Minister made it clear in his Budget Statement that he was determined to do some of the things people had been calling on the Government to do for quite some time past. For example, it was essential in this budget that the Minister for Finance should give practical recognition to the problem of the appalling, almost intolerable, burden of taxation on the PAYE sector. The Minister has recognised that fact and given them valuable and very welcome concessions. The Minister has also, very wisely — particularly in view of the need to generate economic activity and to boost our economy — recognised the need of one most important sector of our economy, the tourist industry, which in 1985 made a valuable contribution to the reduction of our balance of payments deficit and to job creation. As a Member who has been interested in tourism for many years, I want to place on record my appreciation of the fact that the Minister has given valuable concessions with regard to VAT in relation to the catering, food and restaurant trade. I am convinced that this concession will act as a significant boost to the tourist industry and that we can look forward this year to this important component of our economy achieving new targets and records.
I want to deal with the positive aspects of the budget. For example, I welcome its special provisions for sporting and other organisations. While the previous speaker made a constructive contribution, I must deplore his attack on the Minister for Finance. In his concluding remarks he advocated the need for an active sports policy. I am delighted that the Minister has found it possible to give very valuable allocations to our major sporting organisations. When I see the list of organisations, voluntary and others, I am particularly glad to note those who have received special allocations under the provisions of this budget.
I welcome particularly the increased financial assistance given to what the Minister described in his statement as voluntary organisations engaged in promoting cross-Border co-operation. On the occasion of the debate on the AngloIrish Agreement in this House some months ago I drew the attention of the House to the tremendous practical work being done by such organisations as Co-operation North. This gesture on the part of the Minister should act as an encouragement to Co-operation North and other organisations endeavouring to break down barriers, create better understanding, an atmosphere of goodwill and understanding on both sides of the Border. They undertake very valuable work. I am delighted the Government found it possible to give practical recognition to their work and help them by substantially increasing their subvention.
I also welcome the fact that the Government and the Minister for Finance have recognised the many voluntary organisations engaged in projects in the social services area. There has been tremendous growth in the number of voluntary organisations who engage in a wide variety of what the Minister described as social service activities. It is only proper that such voluntary efforts should be supplemented or receive subvention by way of State funds.
I note that the Minister has given an extra grant to the Arts Council. While being in favour of the promotion of the arts, I want to ensure that the Arts Council will not be entirely orientated towards the metropolis, that they will not be completely hamstrung by a pseudo-intellectual type policy. I want the Arts Council to realise that very important groups and organisations in various parts of the country are making a very valuable contribution to the arts. I have a particular interest in Siamsa Tíre, the National Folk Theatre, to whom I had the privilege of according State recognition in 1975 when they became the National Folk Theatre. I hope the Arts Council will bear in mind the importance of the work of Siamsa Tíre and will assist them in every way possible.
Naturally as a Limerick man I welcome the grant of £100,000 for the Limerick Civic Trust. This is another example of outstanding civic spirit and voluntary effort which I am pleased indeed the Government have recognised. I have noted with delight the fact that the Government have recognised the work of the emigrant welfare organisations in the UK. In my 25 years as a Member of the Dáil I have had many an opportunity of going to England and being a guest of many Irish organisations, and I have become very familiar with what has come to be known as the emigrant problem. I am delighted that this Government last year and again this year have recognised the need for practical assistance in the way of financial help and other assistance that should be given to many voluntary organisations in the tremendous work they do. I have seen them in Birmingham, Liverpool and London. I have spoken on this in many debates down through the years advocating State assistance for these organisations. Let me say how pleased I am that a further subvention is now being given.
Rud eile a thugann an-áthas domsa mar Iar-Aire na Gaeltachta ná go bhfeicim go bhfuil deontas ar leith tugtha ag an Aire do chomharchumann Rath Cairn sa Ghaeltacht bheag sin i gContae na Mí. Fáiltím roimhe sin mar tá sé 50 bliain anois ó bunaíodh an Ghaeltacht bheag sin. Is cuimhin liom go maith na laethanta a chaith mé mar Aire na Gaeltachta; bhí teagmháil leanúnach agamsa le muintir Rath Cairn. Bhí sé de phribhléid agamsa tionscail nua a oscailt go hoifigiúil ann agus ionaid phobail nua a oscailt go hoifigiúil i rith na mblianta sin. Tá ard mholadh tuillte ag muintir Rath Cairn as ucht an tslí in ar éirigh le pobal beag mar sin an teanga agus cultúr na hÉireann a choimead beo. Déanaim comhghairdeas leo agus aontaím go hiomlán leis an éacht atá déanta ag an Aire, is é sin deontas fial a thabhairt dóibh.
There is an unfortunate but perhaps understandable tendency to consider the annual budget from a purely narrow, personal perspective, to look at the taxation provisions and price increases per se, without taking into account the underlying fiscal and economic strategy. The budget is, of course, the major instrument of the Government's economic policy, and any consideration of an annual budget must place special emphasis on economic development and job creation. Despite the continuing economic recession this Government have a commendable record of progress on the economic front. I reject totally the contention of the previous speaker from the Fianna Fáil Party in relation to the performance of the Minister and of this Government.
I have some figures here which illustrate the very real progress made by this Government on the economic front. For example, during 1985 gross domestic product rose over 2 per cent. For the first time in several years the volume of both personal consumption and fixed investment increased. There was another substantial reduction in the rate of inflation from 8.5 per cent in 1984 to under 5 per cent now. This reduction in the rate of inflation to a level which is now in line with that of our major competing countries represents a remarkable achievement unparalleled in any other EC country. During the lifetime of the present Government inflation has been brought down from 20 per cent to 4.5 per cent. Time and time again over the years in the European Parliament I have heard speaker after speaker, from Germany, Holland and elsewhere say that inflation was the mother of unemployment and the cause of all economic ills. By any criteria and in the European context the Government must be congratulated and any fairminded person must realise that this reduction of inflation from 20 per cent down to 4.5 per cent in the space of three years is a tremendous achievement. This is significant also for the future. Naturally, as a country dependent on foreign trading in relation to exports, tourism and so forth, the dramatic reduction in the rate of inflation must have a major input into our cost competitiveness and into the economy and economic development and progress in 1986 and in the years ahead.
As well as the decrease in inflation, there has been a further improvement in both the external trade and overall balance of payments. The trade account moved into a surplus in 1985 for the first time in 40 years. The overall balance of payments deficit fell to around 3 per cent of GDP. That is the best outturn for ten years. Therefore, it is quite obvious that the economic and fiscal policies pursued by this Government over the past three years are now beginning to produce results. These facts and figures cannot be contradicated. They are official figures in relation to inflation; exports and balance of trade are the acid test in relation to the balance of payments and prove clearly that the fiscal and economic policies pursued by this Government are beginning to work.
The underlying strategy in the Minister's budget for 1986 comes through from a study of his speech introducing the budget which reveals that he is bearing in mind the need for a more equitable taxation code and the need to cushion the underprivileged and weaker sections of our community which has been done by increases in the various areas of social welfare. There is also need to reduce the deficit and to try to set the country on a more easy course, fiscally, financially, economically and so forth. I am very pleased indeed to be able to pay tribute to Deputy Alan Dukes, Minister for Finance. He has borne the heat and brunt of the day over the past three years. He has been unfairly maligned. In my 25 years here on both sides of the House I have seen different Ministers for Finance. Deputy Dukes has worked patiently, hard and pair stakingly trying to clear up the horrible mess he inherited and which resulted from squandermania and massive borrowing in the years from 1977 to 1981 and was the price the people had to pay for the manifesto of 1977. In the light of the progress that is now beginning to be perceived clearly, particularly in relation to the growth in exports, the growth in tourism to this country, and in relation to the balance of payments and the balance of trade, the prospects are looking better than they have done for a long time. It has often been said that we are looking for a light at the end of a dark tunnel but in view of this budget, the Minister's speech and the strategies underlying the budget, I clearly believe that there is a light at the end of the tunnel and that we can look forward to further progress next year and in the years ahead.
While giving due credit to the Minister and the Government for the progress made, nevertheless we must be honest and recognise that unemployment remains the most serious problem facing the nation. While one must acknowledge the efforts and strategy of the Government in job creation and their achievements in bringing down inflation and securing a favourable balance of trade and of payments, one must face up to the plain, blunt fact that new strategies are urgently needed if we are to make any worthwhile impact on the frightening unemployment problem. The Minister adverted to this and recognised that unemployment is the real problem. He pointed out that there were indications that the rate of unemployment was beginning to stabilise. However, we must be honest in relation to the problems confronting us.
There is a responsibility placed not merely on the Government but on Deputies on all sides of the House to look at the present situation. Unemployment is not just an evil in itself but an underlying cause of many other social ills in our society today. It is the worst form of social injustice and all the energies of the Government, all political parties and all sections of our people must be directed to finding solutions to the great social cancer of unemployment. We cannot afford the luxury of unproductive and divisive confrontation, for example, confrontation between Church and State, between employer and trade union, between farmer and non-farmer. Nor can we afford ideological argument and debate involving the media and politicians on all sides. We must generate a national consensus that unemployment is the most serious social evil confronting the country.
The Minister referred to the various employment, special, youth and incentive schemes. We have the Industrial Development Authority, SFADCo and Údarás na Gaeltachta. The time has now come for serious stock to be taken of the role and functions of the various organisations. There is a need for great co-ordination in the activities of the various State organisations. I say in all sincerity, in no way as direct or indirect criticism of the Government, that there must be a crusade against unemployment. I would go so far as to say that there should be some form of national forum in which all parties in this House would participate and where the social partners and all sections of the people would be represented. While acknowledging the tremendous difficulties facing this Government when they came into office in 1982 and paying tribute to the Minister for Finance on his tackling of these problems and congratulating him on his achievements which are now beginning to be perceived we must tackle the problem of growing unemployment with new strategies and new determination.
Every member of the EC has been faced with these problems. The European Parliament have produced many reports on unemployment and there have been many debates on the subject. There is no easy answer to the problem. Progress can be made provided the appropriate strategies are now formulated. I have been a very vigorous advocate and supporter of the proposal to establish the National Development Corporation for that reason. There are very major and perhaps exciting possibilities for the intervention of a State body such as this corporation in the development of agriculture, food processing, fisheries and fish processing, afforestation and our other natural resources.
While we succeeded very well in the sixties and seventies in attracting foreign investment into this country, because of the world economic recession the flow of foreign investment has slowed down to a trickle. The countries from which we had succeeded in attracting industries were hit by the recession and were not investing abroad. The outcome has been the creation of great difficulty. The IDA have been subjected to enormous criticism, most of it unfair, because of the fact that they put up advance factories which were not utilised. They had a very difficult job to do. We cannot rely to the extent that we have done on foreign investment to create the needed jobs to bring us to full employment.
We have the youngest population in western Europe. We must rely on our own natural resources and tourism. It is in these areas that future hope lies for job creation. I hope that the National Development Corporation will be brought into being as quickly as possible. I do not know what stage the legislation has reached, but if there is to be a further delay I would ask the Minister to seriously consider establishing the corporation on an ad hoc basis. There are precedents for this among other State bodies. I hope no opportunity or further time will be lost in getting to grips with our massive unemployment, which is now frightening. It can only be tackled through a new national consensus, a national drive, mobilising all the human resources we have.
We must look at the budget as the major implement of Government economic policy, and employment is the acid test of any economic policy. However, we must not overlook the fact that national plans and policies must be implemented at local level. SFADCo in the mid-western region have been an outstanding regional development agency who have blazed trails for regional development. They have been subjected to a considerable amount of criticism. I am worried about this, because having had 25 years experience of dealing with SFADCo. I am very proud of their achievements. That type of agency is now recognised in the EC as the ideal means to promote economic development and social progress in undeveloped regions. In their programme to reform local government I hope the Government will look at SFADCo as a model for similar development agencies, particularly in the four western seaboard regions.
During budget discussions in any national Parliament of EC member states one must consider fiscal and economic policies and budgetary strategies and take into account the fact that many of the decisions nowadays which affect the well being of our people and of our country are not taken in this national Parliament or by our own national Government but in the corridors of power in Brussels. Ireland has been a substantial beneficiary from the EC. There are various agricultural instruments, there is the regional fund, the social fund and the EIB, which have made substantial contributions to the provision of infrastructure, the development of industry and the creation of employment here. I have no doubt that, when arriving at their final budget presentation, the Government took into account the projected income from the various EC instruments. One of them which is vitally important to Ireland and which in 1985 gave more than £100 million by way of grants to Ireland, is the regional development fund. Many projects in operation throughout the country such as construction, infrastructural progress and many industries, would not have been possible if half the cost had not been provided by the regional fund. However, there have been major changes in the administration and the thinking of the regional fund. This is important from the point of view of the Minister for Finance who has special responsibility for the submission of applications for grant and from the regional fund.
Until now a simple system was operating, that the regional fund financed projects of a wide variety of application. Since 1 January 1985 a new strategy has been in being. The emphasis is now on programmed planning on a regional basis. Instead of submitting applications for a bridge here, or a water scheme there, or a road here, or an industry there, regions are encouraged to formulate multi-annual programmes, covering four or five years, involving all aspects of development. This methodology has been applied to the Mediterranean countries and a massive input of finance has been given to these countries for what are called integrated Mediterranean programmes. Those of us who come from the northern periphery areas are very concerned and worried about this because we believe these areas are in need of special attention, particularly this island.
Last September I tabled a motion in the European Parliament calling on the Commission to look at the problems of the northern periphery areas, particularly Ireland, to try to get the integrated Mediterranean programmes applied here. I am am very pleased that the EC Parliament passed the motion to the Regional Policy Committee who agreed to have a special report prepared on Ireland. I am glad that John Hume has been appointed rapporteur to have the report implemented. In the next six or eight months John Hume will be preparing a major report for the Regional Policy Committee on regional development in Ireland. I hope that report will be implemented by the EC Parliament. If we are to do anything about unemployment we must look at overall regional plans here. We have not and will never have a regional policy here. There is a dire need for it. We badly need a multi-annual programme for each region, a comprehensive programme for broad comprehensive development. SFADCo is a model which could be copied and applied in the north-west, west and south-west. Local authorities will have to be directly involved in the implementation of such programmes.
Nuair a bhí mé ag caint ar Ghaeltacht Rath Cairn, chuir mé fáilte roimh an deontas a cuireadh ar fáil do mhuintir na duiche sin as ucht an deá-obair atá déanta acu chun an teanga a choimeád beo. Mar iar-Aire na Gaeltachta, ba mhaith liom tagairt a dhéanamh do na Gaeltachtaí ar fad agus do theanga agus chultúr na hÉireann go ginearálta. Tá brón orm maidir le staid na Gaeilge faoí láthair. Ní thuigim na h-argóintí agus an míthuiscint atá ar siúl. Bhí imní mhór orm nuair a chónaic mé an clár "Today Tonight" ar Thelefis Éireann le déanaí agus nuair a chuala mé an méid a bhí le rá acu maidir leis an Ghaeilge.
The Gaeltacht is only of concern to those of us who have some knowledge of the Irish language. The Gaeltacht is the source of our language and culture. I welcome the special grant to the people of Rath Cairn Gaeltacht in County Meath which has now been established for 50 years. This small community has made a remarkable contribution towards keeping our language and culture alive. During my period as Minister for the Gaeltacht I visited Rath Cairn on a number of occasions. I recall opening a major industry there in 1974 and going back there a year or two later to open a fine community centre. I congratulate the Minister and the people of Rath Cairn on their efforts.
I am concerned at the national approach to the Gaeltacht's language and our culture. I was appalled by a recent "Today Tonight" programme and the manner in which the Gaeltacht was portrayed. It was not the first time it happened. I deplore this attempt to denigrate our Gaeltacht, our language and our national culture. Despite the fact that we face enormous economic problems we must not lose sight of the fact that cultural development is an important element of national development. I do not know why attempts are being made to portray the Gaeltacht as being a place where industries start and then fold up, and there is very little reference to the tremendous success stories in the Gaeltacht. There have been successes in projects developing our natural resources, such as fish farming and so on. More jobs were lost in Ferenka in my constituency, and at a bigger cost to the State, than have been lost in the Gaeltacht in the last ten or 15 years. I hope that the media will present the real facts and a balanced picture in future and will not subject the people of the Gaeltacht to gross misrepresentation of the facts.
The Minister demonstrated his commitment to the Gaeltacht not merely by grant aiding this Gaeltacht. I know the Minister to be a man with a deep interest in the language, who speaks it at every opportunity.
The Minister in this budget has done the best possible job considering the circumstances which confronted him. I am very happy with the economic strategies that have been pursued by the Government over the past three years and which are now beginning to show signs of bearing fruit. There has been a dramatic reduction in inflation. No other country in the European Community has had such success in reducing inflation. Inflation is an enormous problem, a major inhibiting factor to investment, enterprise, exports and so on. The balance of trade and the balance of payments are important yardsticks by which one can measure the progress of an economy. These show signs of real progress.
The Minister in his budget strategy has recognised the problems of the PAYE taxpayer by granting reliefs and he has given a boost to the tourist industry by reducing VAT. The Minister did not forget the poorer sections as social welfare increases have also been granted. In recognising the problems of unemployment the Minister made no false claims. Previous speakers tried to accuse the Minister of not stating the facts but the one thing Deputy Alan Dukes has done at all times is to state the facts. The Minister told the truth in recognising the unemployment problem about which we are all concerned. Every day we see more and more young well educated people without jobs. We cannot provide jobs overnight. We must look at unemployment in a new light and assess our physical and human resources. We must look at the employment agencies and we must establish the NDC. More important, the Taoiseach, backed by the Government, the Opposition and the social partners, must launch a national crusade to generate enthusiasm that will lead to an accelerated rate of job creation. I hope the budget paves the way for this based on the strategy the Minister has adopted.
The budget has been analysed by everybody as a complete failure. The points made by the last speaker about the Minister for Finance are totally inaccurate because Deputy Dukes as Minister for Finance in the last three years was responsible for the major increase in our level of unemployment. He had a golden opportunity in the budgets he introduced to bring forward measures that would create the right environment for job creation. There is nothing in the budget introduced last week that will create any jobs. Ministers of the various Departments have been telling us since last week where the job losses and cut-backs will occur. For example, the Minister for Health on Thursday announced the closure of eight hospitals. That will result in the loss of many jobs and a curtailment of the services for many patients. Today the Minister for Education announced the closure of Carysfort College of Education, a major blow to a college that has been training teachers for more than 100 years. Every day Ministers announce closures and the removal of services from the public. Many Government Deputies are trembling because they fear the loss of their seats due to the inability of the Government to bring forward policies that will create the right environment for job creation.
It is no harm to emphasise that 240,000 people are unemployed. A Government that fail to deal with such a crisis which gets worse daily do not deserve to be allowed to remain in office. The Government, if they had the best interests of the country at heart, would face the electorate with their policies for the next four or five years.
Why is it that Fianna Fáil do not put forward their policies?
All political parties have an opportunity to put forward their policies for the next four or five years.
That is the challenge.
The public ask daily when will it be possible to remove the Government from office. That question is put to me on a regular basis at my constituency clinics.
No cuts?
I am asked when it will be possible to remove the Government who have been responsible for the loss of so many jobs in the last three years. I hope that in the next few weeks we will be presented with opportunities that will give Government Deputies the chance to vote against the Government and bring them down like a pack of cards.
The Government have lost their sense of direction. Many people described the Government as being like the Titanic sailing towards an iceberg with a captain who is unable to guide it through the troubled waters. We realise that people are changing the deck chairs in an effort to improve their situation but at the end of the day we know what will happen to the country if the Coalition are allowed to continue on their present course.
Last Thursday the Minister for Health announced in a cold, callous and uncaring manner the closure of eight hospitals in 1986. The hospitals due for closure include St. Patrick's Psychiatric Hospital, Castlerea. That announcement has evoked massive opposition in my constituency which covers Roscommon and part of Galway. That callous announcement was made without any consultation with the Western Health Board, the staff of the hospital, the patients or their relatives. The first those people heard of the move was on the Radio 15 p.m. news bulletin. People in the country are united in their opposition to the Minister's plan. Yesterday, at a meeting of Roscommon County Council, a motion was passed condemning the Minister's actions and calling on him to withdraw the closure announcement in regard to St. Patrick's Psychiatric Hospital. At a meeting of the Roscommon local health committee and the Western Health Board there was unanimous opposition to the Minister's decision. Fianna Fáil will be tabling a motion before the Dáil, in the name of our spokesman on Health, and other Members, calling on the Minister to engage in full consultations with the health board and interested parties and to withdraw his closure decision pending such negotiations.
There is no justification for the closure of St. Patrick's. At present 250 patients are resident in the hospital and 700 patients living among the community are served by 170 nurses based in the hospital. Those nurses provide a 24-hour seven-day service throughout the year for the most deprived people in our society. Those who are psychiatrically or mentally ill are the most deprived people in our society. They do not have any voice in elections because they are not permitted to vote and they do not have any real power. We have a responsibility to speak on their behalf. The patients are sad and anxious following the Minister's announcement. They are able to comprehend what the closure will mean to them.
If the Minister was caring and sympathetic he would be concerned about the welfare of those patients. Ultimately, he is the person responsible for the care and welfare of all patients in institutions. Was it proper to announce the closure of that hospital without consultations? Does the Minister realise that the hospital caters for a population of more than 54,000 people and that there are three consultant psychiatrists on the staff? Is the Minister aware that 107 patients in the hospital are over 65 years of age and that 55 patients have been resident in the hospital for between 30 and 65 years? The Minister should appreciate that the families of those people may not be in a position to provide facilities for them. We must be fundamentally concerned about the welfare of the patients involved, sensitive and deprived people who are totally dependent on the medical, nursing and back-up staff for their lives. Now, without any consultation with the Western Health Board, the nursing staff or the unions, the Minister has decided on this closure. This decision is opposed by everyone in my constituency.
The Castlerea community have set up a very active action committee who will take whatever steps are necessary in this House through their Deputies and in the Seanad through their Senators, in the county council and, if necessary, through the law courts to prevent closure of this hospital. The hospital was built in 1934 and occupied in 1940. Between 1940 and 1948 it was used as a psychiatric hospital. From 1948 to 1955, at the request of the then Minister for Health, Dr. Noel Browne, the hospital was requisitioned for the care of TB patients. It reverted to a psychiatric hospital in 1955. It is set in open countryside in beautiful surroundings, is well maintained and has a farm which is in a position to provide a high percentage of the food required. It is an excellent facility which the Minister has decided to close down without any prior consultation.
The pshchiatric, nursing and other staff are prepared to consider every possible new development in the care and treatment of psychiatric patients. They embarked on the provision of secure homes in different towns throughout County Roscommon and provided for patients who were mentally in a position to be cared for in the community. They also embarked on home care and home visits, consultation and advice and in 1984 over 1,500 people sought the advice and help of the nursing and medical staff of the hospital. The people in the area are not against progress but it is not progress to close down an institution which is vitally necessary for caring for mentally ill patients. We must fight this decision and we appeal to Deputies on the Government side to oppose any legislation which would give a Minister power to close a hospital. I also wish to remind the Minister that the Health (Amendment) (No. 2) Bill, 1985, is now before the House and its provisions will give the Minister power to close any hospital. We oppose this Bill because its passing will mean the death knell for many hospitals, including one in your constituency, a Leas-Cheann Comhairle. We appeal to Deputies who might have influence on the Government side of the House to ensure that the Bill will never be debated and will be withdrawn forthwith.
We have no confidence in the Minister for Health. This was a Government decision and, therefore, we call on the Taoiseach to intervene to ensure that the decision is withdrawn and that full consultations will take place with the Western Health Board and the medical and nursing staff to discuss the development of psychiatric services in County Roscommon and the surrounding area. There should not be a phasing out of this hospital because of the number of people seeking psychiatric care. In 1985 and 1986 I came across a degree of mental instability and associated problems due to pressure caused by unemployment. There are now so many people unemployed that there is immense pressure on them. It is a psychological problem which will result in a higher demand for the formal psychiatric services which have been provided so ably in County Roscommon over the years by St. Patrick's Hospital.
I have experienced at first hand the difficulties which people have in relation to repayment of loans which is putting immense pressure on couples. This is not the time to close hospitals and it is certainly not the time to close the hospital in Castlerea. Apart from the medical side, the social and economic consequences must also be considered. There are social implications when families are not given an opportunity of visiting their most deprived family members in an area near their homes. With regard to the economic side, the closure will result in a direct loss of 250 jobs in an area which has massive unemployment. The number of people at present on unemployment benefit is 356. There are 584 people on unemployment assistance and there are 50 on credited contributions, a total of 990 people. There are 536 people in receipt of smallholders's allowance. The total number of people signing on in Castlerea is 1,526 including the catchment area. There is 31,233 sq. ft. of empty factory space and 18.5 acres of development land owned by the IDA which is lying dormant. There have been major closures over the last number of years and the automation of the telephone service has also caused job losses.
It is estimated that the closure of the hospital will cause a loss of revenue of £4 million to Castlerea and the surrounding district. It is also estimated that each of the 250 employees has four dependants which means that there will be 1,000 affected by the Minister's decision. This should be taken into consideration especially at a time of unemployment. The Government have taken no initiatives to create jobs in the constituency of Roscommon-Galway since they came into office in 1982.
At this stage my constituency is in a very dangerous economic position. The closure of a major institution has very serious repercussions for my county. I thank the Ceann Comhairle for giving me an opportunity to formally reply to the Minister's announcement. I call on the Taoiseach, the Minister and the rest of the Government to withdraw the proposal to close the hospital in Castlerea. I ask him to enter into meaningful discussions with the Western Health Board, the staff associations and all involved in the development of psychiatric services in the Castlerea and County Roscommon area. Any future developments should take place on a phased basis and people should be aware of what is happening in the area. The Minister's actions must be condemned.
Debate adjourned.