At the outset, I would like to say something about the general nature of this budget and the way in which the Minister for Finance aproached his task. The Government are suffering from a severe case of economic paralysis. This, the fourth budget in succession produced by the Coalition Government, is almost totally devoid of any development strategy. One of the first requirements of a budget is that it set out for the people proposals for economic and social development for the year ahead. That has been wiped out of this budget altogether. We have now a one-sided tinkering with the finances without looking to see where the country is going and what the economic development strategy should be. It is not as if it were this Government's and this Minister for Finance's first budget. The people are finally beginning to see what we predicted at the beginning of the reign of this Coalition, that there was no intention of having any development strategy within the budgets of that Coalition over the years and the fourth budget shows this very clearly. It is also very clear that we have got the worst of both worlds. The Government have failed quite patently to curb the national debt and the budget deficit. They cannot now say anything further about these figures. They are stark and realistic and represent a total failure on their part.
The Government based much of their pre-election propaganda on the magic wand that they could wave and that if people accepted the harsh measures they would bring in this would lead to a reduction in the national debt and that as a result everything would be well and they could then get back to considerations of employment, better welfare benefits and so on. The fact is that they have clearly failed in relation to the national debt. It has risen from £12.5 billion to £20.4 billion — a difference of £7.6 billion in just over three years, or a 60 per cent rise. That is the reality of the position of the Government.
We have had the lectures, hardships, hairshirts and depression traditionally associated with Coalitions. We have had the worst from that point of view but not of the best, even accepting all that hardship. We in the Opposition were prepared to go along with the Government in accepting that times were difficult. The trade unions also accepted this and moderated their demands. They said that if the Government thought that keeping pay demands down and accepting moderate, very small increases in pay demands and social welfare would help, they would agree to this and not disrupt the economy by having strikes. By and large, that is what the trade unions have done. Having accepted all that hardship in good faith, we are worse off at the end of the period. Our national debt has gone up, as I say, by 60 per cent which is an even greater restriction on the Government and the Minister in their activities now.
In the meantime, we have experienced the concomitants of this policy anticipated by us, which were unemployment and emigration. I am sorry for Deputy Barry that we have to mention and remention emigration because that has become a major part of our life. Even Deputy Barry indicated that it was a problem and that the reality could be found every day in the community. Families have been devastated by these four budgets but, above all, our youth have been neglected in a cynical way. Apart from a few palliatives such as short term courses and short term work, they have cast our youth aside. We hear echoing from the Government side that nothing can be done about emigration and unemployment. I know that the Coalition cannot do anything about these two problems, but this side of the House can and will if given the opportunity. Hopelessness is endemic in this budget. Therefore, the Minister for Finance makes no provision for development in the proposals which he has put before us.
The Coalition are now trying to extract blood from a stone and are finding it impossible. With all the acceptance of low standards of living and hardship, the people cannot accept the position any more. It is quite clear that the Coalition have no ideas. They are unable to tackle the problems of the country today and should face that reality. In each of the last three budgets tax revenue has shown a shortfall. In 1985 it was short by £123 million, in 1984, £40 million and in 1983, £49 million. What let the Minister down each time? The tax revenue was not there. Blood would not come from the stone. The ordinary people have no more to yield. They need leadership, strategy, investment in development. They need, above all, a new sense of confidence. How can we expect 1986 to be any different? It is incredible for the Minister to suggest that having had shortfalls in tax revenue in the last three budgets he will not have a shortfall in the present one. It is even more likely that there will be a greater shortfall this time. That stone has been drained completely. The Government are trying to squeeze taxes out of the economy faster than the economy is growing and that is not possible. Indeed, in the meantime the public capital programme has shrunk from 15½ per cent of GNP in 1982 to 10 per cent in 1986. That is a clear indication of the Government's withdrawal of resources from the economy. Eventually, it will have an effect on the revenue the Government hope to collect from the economy.
What does this mean? In simple terms it means that the Government have failed. That is clear in the figures I have given, in the Minister's statement and in his budget proposals. The Government have failed the country. They have only tinkered with our problems in the budget and not tackled the core of our problems. The strategy from the beginning was an abysmal failure. The Government did not deal with the problems from the outset and did not have any proposals for the future. Midas may bury his few shillings in the ground and return to look at it every so often but he is protected in the sense that interest is not running up all the time. The Government have cut back, held down initiative and are not using their talents, as the Bible would have advised them to do, to make something extra. Clearly, they have failed. They have robbed a little here and given back a little somewhere else. The budget is full of cosmetic manipulations but lacks a development plan. The people were prepared for hardship provided the resources were put to some constructive use but that has not happened.
The budget is similar to those introduced in the last three years by the Coalition. It lacks any semblance of a development plan. At one time Ministers for Finance were very proud of their development role. Economic development was so important at one time that it was decided to establish a separate Department to deal with it. The development role of Departments of Finance is questioned by some people because the Department is expected to carry out two functions, control spending and at the same time exercise a development role. The development element in the Department of Finance has withered under Deputy Dukes. He has let that function die. Now we do not have a development strategy in the Department. We have lost everything. The Minister for Finance has become the national liquidator who cynically and without mercy stands over the liquidation of companies. If we had a Minister for Finance who was prepared to take some risk those companies would have been given a chance of survival in these difficult times. However, we have to cope with the cold, merciless approach of the Minister who appears to take pleasure out of such liquidations.
There is another way to approach these problems and that must be contrasted with what is in the budget. There is a need for a coherent and balanced economic strategy. The need has never been greater than today. However, for the fourth year in succession the Coalition have produced a budget devoid of any semblance of economic development. They are preoccupied with expenditure cuts and reductions in services and this has resulted in a complete lack of investment in new products and market development. The Government have failed to provide any stimulus for enterprising investors or the many young, highly qualified people now being forced to emigrate.
Fianna Fáil have pointed to the urgent need for investment in our natural resources, the construction industry, agriculture, horticulture, mariculture, tourism and industrial and scientific technologies. Another approach could be adopted at this time but it has been ignored by the Government. The construction industry has been crying out for investment. I was disappointed that the Minister did not reduce the level of VAT on that industry. He must be aware of the tremendous difficulties the high VAT rate caused to that industry in the last 12 months. The decline in activity in the industry in 1985 — it is still continuing — was contributed to in a significant way by the doubling of the VAT rate in last year's budget. At that time I suggested that it would do damage to that sector particularly in regard to the building of new houses. There was a decline of 15 per cent in the number of new houses built in 1985.
A reversal of the VAT measure introduced last year would have given a major boost to activity in the construction industry. We are all aware that that industry is the big provider of employment in the Dublin region, an area where most of the unemployed live. That industry was also affected by a reduction of £25 million in the public capital expenditure programme. There have been cuts in sanitary services amounting to £4 million, £3 million in the case of schools, £3 million in respect of house purchase and improvement loans, £3.2 million in the case of the farm modernisation scheme and a cut of £3 million in IDA grants. The impact of those cuts will be extensive throughout the economy and they will further deflate the construction industry which is so important in the creation of employment. We can afford to invest in that industry because money spent in it amounts to an investment in our future. When we invest in roads and housing we have something to show for it.
Other ideas have been put to the Minister but he has ignored them. Those involved in the association that represents small businesses have said that their studies indicate that steps could be taken to create an economic climate that would generate between 60,000 and 70,000 additional jobs in that sector by 1990. It is not as if the Minister did not have proposals for job creation. We have suggested the development of marine culture and developments in the area of science and technology. We have indicated where new jobs can be created in those areas but the Minister turned a deaf ear to our proposals. It is interesting to note that there are only 13 indigenous companies in the food, electronics, chemical and pharmaceutical sectors which employ more than three research people. We have 15 such companies in the country as a whole. We could beneficially employ up to 1,000 extra researchers and technological personnel to develop new products, services and markets.
During the course of the year in various debates we heard a lot of talk about the highly qualified people we have but we could create 1,000 jobs for such people in the area of science and technology. They should be associated with the universities and put into industries that are almost devoid of development and research work. If we do not have such research work going on we will not develop our indigenous resources. There is a tremendous need for this kind of development but, instead of using the resources we have in terms of our people, they are being forced to go to America or elsewhere where their technology will form the basis of economic development in those other places. The loss is not only on the part of those who must go away. The loss is ours as a country, too.
Of all our indigenous companies only 15 have three or more researchers. This indicates how low the level of technology, development and research is within these companies. Many of our indigenous companies have no researchers. We are talking about areas in which there is much potential for development. I suggest that those indigenous companies who have a capacity for science and technology development should be helped by way of the Minister setting up a scheme to appoint 1,000 additional researchers and technological personnel who would help to develop new products, services and markets. These should be people who are associated with the universities. Some of our universities are extremely good in undertaking these tasks and they are only waiting to be given support, assistance and encouragement from the Minister for Finance. If he developed a scheme which would encourage the companies to take on the researchers and which would encourage the universities to place the personnel with the companies, we would have the linkage that is necessary to develop new products and indigenous scientific and technological products.
The universities and other third level institutions should be encouraged and assisted financially to become involved in such a development programme while industry should be given the incentive to participate in such a scheme. It is the function of the Government to stimulate and promote the capacity of industry to innovate. The NBST have indicated clearly the potential in this area and yet the Minister's proposals are devoid of any development strategy and there is a sinister deafness in relation to the problems our young people are experiencing. In other words, the Minister has ignored the potential that is available. If he fails to take up my suggestion, the resources that could be used now in terms of our proposals will not be available within a short few years because these people will be using their ability and expertise in America and elsewhere.
Because the Coalition have no hope, they offer no hope. Consequently, unemployment, emigration and national indebtedness continue to grow unchecked. The Government are trapped in a downward spiral of self perpetuating gloom. Unless this cycle is broken by a new and positively balanced approach the country faces massive unemployment, increased emigration and widespread depression. In relation to emigration it is clear that, as indicated by the CSO and as suggested by the passenger figures for 1984, there is a new massive loss of people to the country. There is argument as to whether the annual figure is 15,000 or 30,000 but we know that it is very substantial. Deputy Barry posed the question as to why we should complain if people wish to emigrate. We do not object to people moving around Europe or elsewhere if that is their wish and if they have the opportunity to do so. What we are complaining of is the enforced emigration of so many of our people and particularly young people.
We are one of the best equipped countries in terms of youth and of their ability and their capacity to help to develop this economy. All that is required is the leadership and the assistance necessary to enable them to put those resources into practice. We will continue to be angry so long as the Government ignore our people and what they have to contribute.
The Coalition policies in this, their fourth successive budget, have failed manifestly with the people and particularly the young. The most positive step the Government could take at this stage is to recognise this failure and to make way for a Fianna Fáil Government who would introduce a balanced programme of national reconstruction. In the past the people have looked to Fianna Fáil in times of depression and we have never been found wanting on those occasions, because we have always believed in the ability of our people and were prepared to stand by them and to enable them to develop the country that is theirs. We will do our utmost to prevent emigration.
So far as the budget is concerned one would be forgiven for thinking that crime was not a major problem. As I have pointed out, there is no evidence in the budget of a strategy for economic development. If one were studying this budget from an academic viewpoint one would have to say that the Minister for Finance has dropped the concept of social and economic development. One can think of the different approaches in this area in previous years. At one stage there was a Minister for Economic Planning and Development, for instance, while in the Lemass era the economic and development role of the Department of Finance was moved into high gear. That was what the people wanted at the time but this Minister is not moving economic development into high gear. He has dropped it totally. At best it is being put into neutral but possibly into reverse so far as the Minister's commitment is concerned.
The figures relating to indictable crime show an increase from 62,000 in 1978 to 99,700 in 1984. That was a decrease of 2½ per cent from the peak figure of 103,000. In the light of the size of this problem one would have expected the budget to have indicated that the major problems are unemployment, taxation and crime. That is the ABC of living in Ireland today. Let us consider what the Minister has to say in the budget on the matter of crime. The budget will have no effect in terms of easing the problem. There are no special provisions to tackle the widespread incidence of crime and vandalism. There are further cutbacks in the provisions for the Garda to the extent of £2.25 million. Therefore, one may expect that this will result in less Garda overtime and consequently in reduced availability of gardaí on the beat.
What is the point in Members from the Government side saying that there should be more gardaí on the beat when in practice the Minister is taking them from that role by way of reducing overtime? We know that already there has been a serious reduction in overtime for the Garda with the result that there are not enough gardaí available for duty at shopping centres, banks or at blocks of flats. We have gone into that matter here repeatedly. The Minister for Justice may say that when the problems arise more gardaí will be made available.
If that is the case we are only codding ourselves. The Minister is cutting back the amount in that case and he is cutting back on prisons. Does anybody think that our prisons will have fewer residents in the coming year than last year, or that the prison officers will be working less overtime? We lost one prison completely last year: it was wiped out, destroyed. Where is the policy on prisons? The Minister cannot come back later in the year and tell us it is up to the Minister for Justice to deal with the problem. This budget takes away resources from the prisons.
Let us look at some of the other things — for instance, criminal injury compensation. The amount for that is to be cut by £1.3 million, or by a third, from April. The Minister announced this cut after the budget in the midst of all the budget noise and fuss when a number of Ministers were rushing in to make their case briefly.
How will the Government reduce this allocation when more people are being mugged, attacked and assaulted and when there is no indication there will be a reduction in the general crime rate? The Minister is removing the pain and suffering clause from the compensation. It was appalling to see the Government doing that when we remember the experience of the victims of rapes and muggings. That reduction is typical of Government thinking. This is a mean petty Government who are making mean petty cutbacks.
Women suffering from rape attacks were given compensation under that clause. What a mean thing to cut it out. The old folk will suffer. We saw a photograph in a newspaper recently of an elderly lady in the west who died following attacks. Her face cried out from the newspaper page. The Minister is taking away compensation for those people. That is one of the ways the Minister for Finance will make his miserable saving from 1 April. I was amazed to see that cutback in the midst of such violence and when physical assaults are rampant. Surely the Minister must realise that the solution is to stop crime and punish the criminals.
Today we have seen further reductions in the resources to fight crime and criminals. I have just been referring to compensation for the victims of pain and suffering following attacks. The criminal compensation scheme has been adjudicated on by a tribunal, not by juries. Therefore, the Minister cannot say that juries have been awarding exorbitant rates of compensation. If he could have said that, he would probably have abolished juries. Average claims under this scheme have been approximately £4,500, and of course there will have been claims for £300, £400, £500 and £600. Yet we find the Minister cutting some of that allocation at the expense of people who have been the victims of pain and injury, whose property has been vandalised, the weakest in our community. From 1 April, a woman who has been raped will not get anything for her pain and suffering. Up to now she would have had compensation. It would not have been much and would not represent a drain on the resources of this great State.
What has the Minister to say about all this? I asked him a question and he replied that the scheme is proving very costly for the Exchequer, and following a review the Government have sanctioned changes in the conditions of the scheme "which I will announce in detail shortly". The £1.3 million for pain and suffering is to go on 1 April.
The malicious damages compensation system is being vandalised by the Government. They are about to virtually abolish it, except for damage done in riots and subversive activities. It will have very little effect in some areas, like Dublin 4, but it will have a major effect on Dublin Central and the people and business communities there. It is from there that the Minister will save his few shillings.
The budget is a strategy for crime, not for crime prevention, but the Government display general complacency in relation to it. There is no dynamic policy to tackle crime. The Minister for Finance has made selective reductions in VAT in certain services. The reduction has been from 25 per cent to 10 per cent in cases like contract cleaners. The strategy in this was aimed at bringing down the black economy operators. But the security industry is labour intensive: employment in it is estimated to be 3,000 in the recognised companies and about 2,000 in unregistered firms. Those employed include people with double jobs and people who are working and on the dole. The Minister had an opportunity in the budget to assist such an industry. Surely the security industry is an industry that should come to mind when thinking about selective reductions in VAT in certain circumstances. By reducing VAT here the Minister would bring more jobs onto the market and bring some jobs in the black economy out into the open and increase the contributions to PAYE and PRSI which registered companies are making. By applying this reduction from 25 per cent to 10 per cent one could bring 1,000 new jobs onto the market.
Already alarm installations are rated at 10 per cent, but the security services provided by people do not have the 10 per cent rating. The Minister should look at that in relation to changes he is making in that area. Lower VAT would result in more people using security on their premises. When one thinks about removing the malicious damages claims system one will need to provide more security and insurance. All of that would be assisted by the lower rate of VAT on the provision of security. I am reliably informed that approximately 50 per cent of the turnover of the security, guarding companies goes back to the State through contributions in tax, PRSI and levies. The State gets money from those, but not from the black economy.
I am concerned that the Government are dangerously complacent about the level of crime and that is why we see no measures in the budget to deal in particular with crime. The measures in the budget will worsen the crime situation. The Minister for Justice claims that the problem of drug abuse has plateaued out when it is quite obvious that he is unable to control the abuse of even controlled drugs in the prison system, notably in Mountjoy. Drugs like cannabis are now widely available in the community. Because of complacency, the Minister for Finance has reduced expenditure on overtime in the customs service in the ports and airports. Vigilance in relation to the importation of drugs has been reduced. That is a result of the general complacency of the Government in relation to crime and the fact that they are trying to make people believe that crime at the existing levels is something we have to accept.
It is similar to their approach to unemployment. They cannot be expected to do anything about it. They leave the gardaí short of the resources to do the job and they leave the customs agents short of the staff and overtime to carry out proper surveillance of the ports and airports. In 1985 a total of 1,424 people were treated for drug abuse in Jervis Street. That compares with a figure of 1,454 for the previous year and that is why the Minister says the figure is plateauing out. The Minister has failed to recognise that drugs are still a very serious problem and that new people are being affected by drugs all the time. As far as crime is concerned this budget will have only a negative effect. In relation to the economy and employment the Government are failing and in relation to crime the budget will worsen the situation.
On the question of social welfare this is an uncaring, inhuman budget. It would match anything that Cumann na nGaedheal ever produced in their heyday when they took the shilling from the old age pensioner. At that time it was a terrible thing to reduce the old age pension from ten shillings to nine shillings. It is hard to imagine the mentality that would produce that sort of thing. Yet in 1986 we have a Government so uncaring and inhuman that they give social welfare recipients a 4 per cent increase but nothing for their children. For the first time in history the children of the unemployed, the widowed, the handicapped and disabled get nothing. What have they done to the Government to deserve this punishment? What Cumann na nGaedheal did was hardly as bad as making no provision for children in the present circumstances. What could we expect from a Government who took 25 per cent off the extra week for old age pensioners at Christmas?
By making no provision for the children the Minister saves £9 million in one year. The Minister did away with the £100 tax allowance, the last vestige of special allowance provided for children in middle income families, and saved £30 million. On children alone the Minister has saved £39 million in this budget. The Minister will say he gave an increase in children's allowances. However, in 1983 there was no increase in children's allowances; in 1984 there was an increase of 7 per cent delayed until August; in 1985 there was no increase; and in 1986 the Minister gave an increase in children's allowances and expects us to cheer. The Minister is only giving the money he took in the past three years. The money would not even equal what should have been provided for children if the provision were made each year.
Added to that, food subsidies will be halved, which means that the price of bread and butter will go up shortly. The Minister put 2 per cent on the bulk of the supermarket items, the standard items which families must buy each week. How can the Minister be surprised when people say this is an anti-family Government and that this is another in a string of anti-family budgets? The miserable little increases are not much good to the old age pensioners, the widows or the unemployed. The Minister for Finance and the Minister for the Environment said they are happy that the Government have continued their good record in looking after people in receipt of social welfare benefits.
A budget is about the transfer of money, but money is not being transferred to the unemployed or the welfare groups this year. Money transfers are being reduced systematically by this Government. The Minister says that each of the increases given in the Government's earlier budgets has exceeded the following year's increase in the cost of living. That statement contains an awful lot and suggests that the Government are now trying to change the base on which these calculations are made. I was Minister for Health and Social Welfare and I had to prepare this sort of thing for budgets. However, one always prepared it on the previous year's inflation rate so that people were compensated for what they had lost that year. Now the Minister for Finance, through sleight of hand, is compensating for the inflation he expects in the year to come, which means that people lose out. That is a subtle change and people have not noticed it because they do not really care. Members of the House will not suffer as a result of the Minister's actions but the unemployed, disabled and genuinely in need will suffer severely.
In relation to the poor, elderly and unemployed there is one reprehensible measure in the budget, the confiscation of the savings of old age pensioners and children which arises as a result of the 35 per cent retention tax. There are good effects as a result of this tax being imposed but not as far as children are concerned. The Minister has become a piggybank robber, taking the Holy Communion and Confirmation money. The poor children have no way of getting this back. Not satisfied with that, he also comes down on the elderly who have meagre savings put by to give them security. Anyone who knows an elderly person realises that this money means a lot. I should like elderly people to be allowed to have a sum of £10,000 outside the reach of the Department of Finance. The Minister is now raiding these savings which is tantamount to confiscation because, heretofore, they would have been able to claim under exemption limits and tax. He is literally confiscating part of their savings.
These people are old and insecure and are hurt and confused by what the Government are doing. The elderly were originally asked by the Government to trust them and to put their savings in the banks and post offices to help to reduce crime and the risk of burglaries and mugging. They did so in good faith and then the Government take this mean action. Can you blame anybody for sending money out of the country? Those who have the opportunity to invest their money elsewhere are doing so because they do not trust the Government. Many TV and radio programmes featured the Minister for Justice and the Garda Commissioner telling old people to take their money out from under the bed and to invest it. I call on the Minister to change his policy in regard to the retention tax and to come up with some scheme designed to exempt children and those over 65 from this tax, either by non-confiscation in the first instance or by restitution. He has a duty to do one or the other. Responsibility for the budget deficit should not be placed on the shoulders of the leanaí or na daoine aosta.
It is not surprising that the Minister for Health and Social Welfare announced the closure of two major psychiatric hospitals the day after the budget because he needed a smokescreen to divert attention from the greatest clawback in children's allowances in the history of the State. A cut of £5 million in the health area was announced in the budget. Beaumont hospital was handed over in July 1983 and since then has cost £100,000 per month to keep it going. In the meantime, Jervis Street and the Richmond are working away at full blast using up all the resources. Beaumont hospital is costing almost £1.3 million per annum. The Minsiter for Finance announced cuts in awards to victims of rape and mugging but if he had opened Beaumont hospital when it should have opened he would have had more than enough money to compensate people. The Richmond and Jervis Street hospitals should have been closed by now and if they had been closed, a sum of at least £3 million would have been available to put back into the health service. I would have insisted on such a course but that may not be the case nowadays.
The only person holding up the opening of the hospital is the Minister for Health. It is a public scandal. It is a major hospital for the north side of Dublin and I call on the Minister for Finance to hold an inquiry into the scandalous waste of public moneys involved and to stop misleading people about the reality of the situation. When I was Minister I worked out an agreement with the consultants, which included a 1.3 acre site, to build and pay for themselves a private hospital in association with Beaumont. When the Minister, Deputy Desmond, came to office he revoked this agreement between the consultants and the Department of Health. We have now seen the results of that policy. I should also like to mention the effect that the 35 per cent tax will have on many charities and voluntary organisations by bringing them into the tax net. I hoped the Minister would have some new proposals, but there are no new proposals or ideas here.
As regards multiple sclerosis or cystic fibrosis, there is an anomaly in the granting of the constant care allowance to some of these families. A small percentage of patients registered have been refused the allowance based on the recommendations of the local officers. The Minister for Finance could say that such allowances would cost only buttons and that the allowance could be granted straightaway. We used to make a list of things which cost very little but were a great help, and I am very sorry to see that in this budget there is no such list. There is nothing here for people badly in need. There is no strategy in this budget for employment or development.
Deputy Molloy rose.
