Deputy J. Leonard is in possession. He has one hour.
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.)
We are discussing this budget in a vacuum. We are in the unique situation of discussing a budget, the author of which has been moved from his ministry. He was shown the red card and moved out.
It was interesting to listen to Deputy Bell and the assessment he cited from that girl in Philadelphia. I do not think one would need to go to Philadelphia to ascertain the same views on the problems confronting us, those created and what must now be done to remedy the ills of our economy. There is no doubt that this budget constituted a juggling with figures and meant minimal changes only. Budgets should charter the country's economic course for the ensuing year. Budget time is opportune to examine how the economy behaved in the preceding year, a time when we should establish our priorities for the coming year, taking a hard look at the overall economic position. An area crying out for attention is that of job creation and the development of our resources. As time goes on we will have to look more attentively toward long-term development. What we have been tending to do year after year is to borrow long term for short term benefits. As a nation we cannot continue in that vein.
The Minister for Agriculture made a couple of disturbing statements today. It makes one realise that a reassessment must be carried out of our agricultural production, our methods and marketing. The fact that surpluses have increased fivefold over the past four years says something in itself. What really concerns all of us are concessionary imports. The Minister said we had 690,000 tonnes of beef in intervention, with 4,000 tonnes recently imported from Austria. This will have to cease. We talked for the past hour about the cessation scheme and the milk super-levy. It appears that the more we reduce production the more other countries increase theirs, so that the problem remains.
I might refer to the importation of food from non-Community countries. In this respect in the years 1980 to 1982 18 per cent of livestock products were produced by way of food from outside the Community. Had we not had to cope with that 18 per cent we would have very few problems today. For example, West Germany used 13 million tonnes of non-Community food to produce 56 million tonnes of livestock produce. The corresponding figures for other countries were: Holland 13.4 million tonnes to produce 26 million tonnes of produce while we produced 9 million tonnes and imported 9 million tonnes only in non-Community foods. Holland, a country with only 2.03 million hectares of farmland imported the equivalent of the produce of 2.4 million acres, effectively increasing their acreage by 117 per cent. That is the problem with which we are faced. It might be noted also that West Germany's imports increased their acreage by 24 per cent while, in Ireland, that would boost ours by 3 per cent only.
There is much talk about the Common Agricultural Policy. This must be subject to critical examination. A country like ours cannot continue to have penalties inflicted on it by other member states, states with massive imports from outside the Community.
It is very frightening to think that we are getting 20 per cent less for our milk and much of our agricultural produce than other member states in the EC. This happens at a time when everything is supposed to be levelled off, when Jack is supposed to be as good as his master and when everyone should have the same benefits.
As regards the super-levy, if the 3 per cent was imposed on us at EC level for the cessation scheme it would cost us £35 million in exports. It would mean 35 million gallons of milk less than at present. It would have a serious effect on the production of calves for the beef sector. Job creation in those areas will be almost impossible. The Minister mentioned that 78 per cent of our land is used to produce surplus products. That is a frightening figure. People say that if this country was free from tuberculosis we could produce high quality products. That would depend on the availability of money in other countries to purchase those products. We will have to move into the areas of fruit, vegetables and mushroom growing. The sugar company, with all their State backing, show substantial losses. In County Mayo the mushroom industry is going from strength to strength. People must wonder where the fault lies. It will have to be identified and eradicated.
Money cannot be shifted from place to place either at local authority level or national level. In the area of administration we seem to be very top heavy. The machine is too big for the size of the field. If the amount of money to implement the schemes has to be reduced then the administration will have to be reduced accordingly. Deputy Bell dealt at length with the problems created by a succession of budgets in respect of Border areas. The increase in the price of motor fuel has made the situation even worse in the Border areas. Over the past four years dozens of small garages and filling stations went out of business because of the unfair trading position in which they were placed. The Minister should accept that it is his responsibility to avoid making a certain area disadvantaged. That is what has happened in the Border areas.
People have become quite cynical. They listened to politicians telling them what they were going to do about cross-Border development, the Anglo-Irish Agreement, the disadvantaged areas and so on. There is no sympathy for the traders. People in the Border areas are beginning to wonder how many politicians are concerned with the development of that region. I would like to see more action in this regard. There should be some action taken in regard to the protection of traders in the Border areas against loss of profits arising from the major differential in motor fuel prices.
Over the years costly surveys have been carried out and reports were issued on three different areas, the Erne catchment report, the social and economic committee of the EC and the NERDO report. They all mentioned the severely handicapped areas. The regional development organisation submitted a very detailed action programme on development strategy for Cavan, Monaghan and Louth to the Minister for Finance. One of the last letters the Minister dictated before he left office was in keeping with his attitude towards that region. It is a letter from the office of the Minister for Finance to Mr. Michael Garrett, the Director of NERDO. It states that moreover, little evidence is provided that there would be an adequate net return to the economy as a whole and to the Exchequer on many of the expenditures proposed.
We are talking here about returns for money, irrespective of whether or not the area is seriously disadvantaged. Before the last election and since then the Government wearied everyone with their concern about balancing the books and the action they would take to achieve it if they were given time. It is becoming more and more evident, particularly in this year's budget, that their concern was to have the figures right without any thought as to whether the proposed benefits would accrue to the intended recipients. For example, in order to show that some effort was made to ease the burden on the PAYE sector, the Minister taxed a number of financial institutions while disregarding the small saver. It is essential to save money in order to meet education fees, weddings and funerals, to replace your car and to provide against illness. Practically all PAYE taxpayers make some savings, great or small, on a fairly regular basis. The Minister reduced tax in one area and increased it in another. It is dishonest to claim that the burden is eased for the PAYE taxpayers when, in fact, it is the same or even greater.
Over the past few years, when the series of attacks on our old people in remote rural areas was at its peak, there was great emphasis on the need to reassure these people that they could with confidence use the Post Office and building societies for their small savings and nest eggs. The Minister by a sweeping action and without making any special provision for those people or providing any means for claiming tax back, which they are not liable for, has made it almost certain that the small nest eggs will remain under the mattress or in a jug on the dresser. The old will remain at risk because of the panic measures to extract this small amount of money from their savings. Early in their period of office the Government called on people to bear with the hard measures then considered necessary. The Government promised that there would be achievements as a result in regard to jobs, easing the tax burden and so forth. People put up with the penalties and, unfortunately, they have not received any of the rewards. The job situation is worse than ever and the most recent budget measures have given no net improvement to the taxpayer.
There is a loss of confidence. I do not mind people losing confidence in the Government but, when the Government lose confidence in themselves, the situation becomes serious. In the budget no effort is made to get the construction industry moving again by easing the massive burden imposed by the 10 per cent VAT rate. Regarding the house improvement grants I did welcome the decision of the Minister because 26,000 people who were waiting for inspections who would not have got them because of shortage of inspectors. That was a good idea and the work will get going. The scheme should provide a lot of work this year. It should improve employment in our quarries, for block manufacturers and builders providers. That is to be welcomed. The Minister should be well aware of the problem which has been caused by the doubling of the VAT rate and should appreciate the benefits that would flow from cutting it back to 5 per cent. The Minister should accept that the construction industry is in a very serious state of collapse at present. If the construction teams which were built up over many years were to be disbanded or greatly reduced it would have a serious effect.
A glaring omission from the budget is provision for dealing with the unemployment problem. There is a saying that things are looking up. Recent returns, when adjusted for seasonal factors, show only a slight improvement. There is no real provision for action on the ground in the creation of more jobs. We are not able to create jobs either in manufacturing or in agriculture. We believed for many years that there was a great opportunity in the added value products of our agricultural production. That has not materialised.
Over the past few months I have been endeavouring unsuccessfully by way of parliamentary question and adjournment debate to get an explanation from the Minister for Agriculture regarding the monopoly that is exercised by the Dublin and Cork District Milk Boards as far as the supply of milk to those two cities is concerned. I put down a question to the Minister for Agriculture on 26 November 1985 as reported at column 43, Volume 362 of the Official Report asking:
....if he will bring in amending legislation to discontinue the monopoly enjoyed by the Dublin Milk Board for the sales of milk in Dublin city.
The same situation prevailed in Cork. The Minister's reply was:
The system under which the milk boards operate is currently being examined by the EC Commission. I will be considering the position in the light of the outcome of that examination.
The problem has arisen out of the Milk (Regulation of Supply and Price) Act, 1936, which gives those two milk boards a monopoly of supply. The Act was introduced at that time so that better quality milk could be provided. The situation which has now emerged is that when a number of co-operatives contacted Brussels and objected to this monopoly being continued, the Commission gave not a decision but an opinion last December that it could not continue and should be dismantled. I have been in touch with the Department of Agriculture and the EC Commission but nothing has happened since. What is unfair is that the Dublin dairies deny provincial dairies the right to sell milk in the city unless the milk is produced within the Dublin area. Nevertheless, those Dublin dairies go down to the provinces and dump milk there. I take a very serious view of it as, under the Treaty of Rome, one of the things we expected was a fair do and that there would be no monopolistic situations.
What is even more serious is that while we were awaiting a final decision from the EC, earlier this month a very strong lobby went out there to try to maintain the monopoly. That would be in complete conflict with what the EC was set up for. I hope that the Minister and our MEPs will take a serious view of it and ensure that this monopoly is discontinued. One aspect which annoys me is that because the institutions within the Dublin and Cork District Milk Boards have a monopoly they operate a two tier price. They are in a position to quote at a high price as the competition is not available. In the more competitive areas outside they can alter their prices. I ask the Minister for Health to examine the price structure of the milk boards in both Dublin and Cork as this is an area where there is a substantial amount of money spent on milk.
I mentioned earlier that we will have to examine every area in which jobs could be created. There is no doubt that in the field of tourism we have fallen down greatly. Much more could be done. In the region I come from I am continually disappointed at the allocation of moneys for general tourist development. There should be a review and a close examination of all Department of Labour schemes. The emphasis is on short term and temporary employment. If we are to continue with these schemes we will have to have an approach which will provide jobs and the know-how which can be used in the development of our resources. At the moment AnCO are operating a number of worth-while schemes in marketing and research which I hope they will continue.
Although there has been an improvement in the volume of imports in some areas, this is a slow process. Import substitution is an area in which we could provide more jobs. One of the most remunerative areas of production is in the soft fruit area but people are not producing the fruit. Inferior quality soft fruits are being imported and to bring them up to standard they have to use a percentage of our soft fruits. We should develop that area.
The Minister mentioned a reduction in the allocation to ACOT and the AFT. There are serious implications in that, especially if they proceed with the charge for advisory services.
I am glad the Minister indicated that in disease eradication we would not be restricted to the allocation made in the budget but that money would be available to ensure that the incidence of disease would not increase as a result of cutbacks in funds. A number of reports have been issued recently about the results of the super-levy. The CBF report particularly, outlined that as the result of the superlevy calf numbers are expected to decline by over 2.9 million head by 1990. That would have a serious effect on meat plants to whom we are looking for further employment. That, added to the unfavourable position we are in in competing for the market for grain against the French, Germans and British, adds up to a very serious problem.
During Dáil Question Time we raised the question of the problem facing local authorities with regard to finance and expecially with regard to funding for roads. A recent article in The Irish Press referred to the break-up of roads, to a survey done by the county engineers and to the serious implications for the roads structure. In my region there is a substantial amount of development in agriculture. In one area we have a large cold stores and the state of the roads is causing a huge problem for the big trucks who must use them. A survey should be done by the Department of the Environment to point out the regions which are making an impact in job creation and in developing natural resources so that extra funds can be made available to maintain the roads in these areas so that progress is not restricted because of bad roads. The use of heavier trucks and the increased cost of raw materials for road repairs as well as the decrease in the allocation for roads have brought about this situation where the local authorities are unable to repair the roads. In Monaghan when we held an Estimates meeting we found that in effect we had £174,000 less to spend on roads than in the previous year.
Deputy Bell mentioned the importation of shoes. We will have to have a different approach in relation to import substitution. When I came into the Dáil 13 years ago I was asking questions about finance for tanneries as there were two in operation in the county at the time. There was a problem with warbles and there was a certain treatment to ensure better quality hides at that time. The scheme was very successful. Now we do not use the same number of hides at all. In October 1984 I asked the Minister the percentage of bovine hides exported unprocessed in 1983 and I was told that 87 per cent of the hides of the estimated slaughtered animals were exported and that imports of leather in 1983 amounted to 1,226 tonnes with a value of £8.1 million. That was when the numbers employed in the tanneries had dropped by over 50 per cent over the previous few years. It is a very small number now. The quality of the hides we were providing was first class and the people who were bringing the hides out of our country were enjoying an export subsidy. The number employed between 1974 and 1983 dropped from 1,500 to 700 and it has dropped further since then. That is what we face at present and it is inexcusable that such a situation should exist.
In June last year I asked the Taoiseach the value of footwear imported in 1984 and if he would express this as a percentage of the Irish market. Imports of footwear at that time were £100.1 million. Based on the quantities involved it was estimated that the import share of the domestic footwear market for the same year was about 92 per cent. No wonder a Deputy here who was a secretary of the Leather Workers Union was critical of how that area collapsed. Relating it back to the number of people in the country, for every man, woman and child you would be talking about £20 per head for footwear alone imported into this country. It is a figure that we cannot continue to justify.
Another matter which I have raised a number of times in this House is the amount of money we are spending on drugs. I have been a member of a health board for many years and I am satisfied from investigations we have done in different areas, including the federation of health boards, that we could make extensive savings if generic drugs were used rather than those under a brand name. I have given instances in this House of the savings we could make if we were to adopt that practice. In many cases drugs supplied under a brand name cost double or treble the price they would cost as generic drugs. Only last year the British Minister of Health issued a directive that the lowest priced generic drugs would be used if the quality was all right. A notice in an American periodical lately indicated that action in America was been taken to ensure that generic drugs would be used as against brand name drugs. In the last couple of weeks we have been talking in this House about closures of hospitals and reductions in the numbers of hospital beds and the general fall-off in services which we are providing. I am not being critical. I am a member of a health board and I realise the amount of money we are getting, the work we have to do with it and the demand people make for services to which they think they are entitled. The Irish Press of 13 February contained an article by their consumer affairs correspondent, Tim Hayes, entitled “Irish Drugs Dearest”. He stated that Irish prices for a shopping basket of 84 top drugs were 81 per cent higher than French prices, according to a drug survey which found that many of the most trusted painkillers were basically the same. He said that Irish prices for painkillers were 70 per cent higher than British prices and our prices for nerve drugs were 54 per cent higher than Italy's. We have the highest prices for five products which he mentioned in medical terms, and they are all pain killers and sedatives. A report in the current issue of the consumer association magazine Consumer Choice, highlights how different information on the packaging can result in patients in different countries having significantly different instructions and guidelines for product use. The association examined over 30 non-prescription products on the market for relief of pain and concluded that, while they are likely to be much the same in terms of effectiveness, they are considerably different in terms of price. With the restrictions under which we are operating in all areas it is inexcusable that something is not done about that. The heavy hand will have to be applied and generic drugs used in our institutions and in the GMS rather than the very expensive brand named drugs.
I mentioned the western package today. In 1981, under Deputy MacSharry, the western package was introduced with a provision of £300 million over a ten year period. For the first five years the take-up of it was £103 million instead of £150 million. An element in that was private afforestation. Here is an area of great opportunity for development and for building for the future. Timber is one product that we can say without fear of contradiction will be scarce and very scarce before the end of our lifetime. With so much surplus production in the EC, timber is one product which is insufficient in the EC member states and it will continue to be in short supply in the years ahead. It is estimated that there will be a world shortfall of timber by the year 2000 and a 32 per cent shortfall in the year 2025. That is 40 years ahead but still a comparatively short time in the life of a nation. The UK imports 90 per cent of its wood requirements at present and can supply only one-tenth of its needs to the end of the century. Today we are talking about the long haul we have with our beef products, etc., into the EC market, and here we have a product that we can grow. It is accepted generally that especially in the drumlin soils of Cavan, Leitrim and part of County Monaghan to the west, afforestation has a high rate of growth, four times higher than in some other EC countries. We have only 6 per cent of our land under timber as against 25 per cent in some other nations. We should utilise our advantages. We have the soil, the climate and the annual growth rate. The growth rate for spruce and pine is 15 cu.m. per hectare as against 11 in the UK and two to five in the rest of Europe. Home grown timber supplies 25 per cent of the demand for construction softwoods of which we import £50 million worth per year. Total wood and wood products imported here per year amount to £400 million to £500 million. Recently I was in a builder's yard and I went into a shed in which there were a dozen different types of chipboard. Not one of those bales of chipboard was manufactured in this country. I thought it really serious to see that, in an area where we had a plentiful supply of it and more coming on stream. We will have to examine this closely.
Private afforestation carries the highest grant aid rate in the EC for any development. It is as high as 85 per cent for private afforestation and 70 per cent for others. The take-up there has been hopeless. Out of £19 million allocated in 1981 for a ten year period about £640,000 has been taken up in the first five years to the end of December. That is a ridiculously poor take-up. Compare that with England where four main forestry management companies, encouraged by taxation incentives, employ 1,200 people with a turnover of £55 million. They are making a profit of £2.5 million. We cannot sit on the fence any longer as far as the afforestation of marginal land and private afforestation are concerned. There was a report from Wicklow that the men working in the sawmills there had gone on strike because of the flow of timber into the mills of Northern Ireland. Purchases of such imports 12 months in advance had accounted for 50,000 cubic metres of timber and the factories in Wicklow which would require 2,500 cubic metres per week to keep them in operation are working on short time; 25 workers have been laid off since Christmas and there are another 35 workers on notice.
On the other side of the coin, in the North there is a programme for private afforestation. They have not available the same amount of land that we have, or the same amount of Drumlin soil, but they have a target of 1,500 acres per year and will probably reach it. The sawmill industry there gives good employment. Last year in Waterford I saw a delivery of sawn timber being made from Ballycassidy Mills in County Fermanagh and that timber may have been clear felled in Wicklow, brought to Fermanagh and then returned. This whole economic jungle does not make sense. There are some matters that we will have to examine very closely and soon.
At present there are many local authorities, urban and county councils which buy a quantity of nursery stock. From discussions with those involved in the business, I learn that a substantial number of plants are imported in 1984 amounting to £3,500,000. Many of these plants could have been grown here in small nurseries around the country. There is also the area of brick imports, increasing in quantity as time goes by and we have the necessary quarry material here.
I want to dwell very briefly on the recent report presented to the Minister for Industry and Commerce by a supermarket group regarding import substitution, which gives a lot of encouragement. We have been talking in this House about many millions of pounds of frozen chips being imported. Over the past couple of years that supermarket group have reduced these imports by 62 per cent — £570,000 worth — which is a substantial amount of money for a not highly priced commodity. There was a long list of articles which had been almost 100 per cent imported. The report emphasises that import subsitution cannot be dealt with completely at Government or ministerial level, although a working party of Ministers of State were set up to examine the position and they did very good work. The work that the Government can do in this area is limited. It is up to those in the retail and wholesale outlets to promote import substitution and to purchase the commodities. It is just as important to sell Irish goods as to export them.
The Minister, Deputy Cooney, in the debate on the motion of no confidence in the Government referred to members on this side of the House using prepared scripts and I was a little annoyed at this. I have been a Member of this House for 13 years and nobody ever prepared a script for me. I was not given one iota of background information, but had to make my own inquiries. While that might be the Minister's belief, I do not operate using a supplied script and do not intend to do so.
I agree with Deputy Leonard. Most of us come in here under our own steam, having done our own research. We try to put our points as clearly as possible, as Deputy Leonard has done in the past three quarters of an hour.
This budget was presented against the background of trying to maintain levels of services which we could not afford. We have maintained them through borrowing on such a scale that that borrowing is now seriously undermining our economic growth and our living standards. We have a total national debt of approximately £20 billion. This level of debt is a good barometer of our desire for public funded goods and services and of how our appetite for these services has outweighed our willingness to work and apply ourselves to creating wealth. Taxation has ever increased but not sufficiently to finance the expansion and maintenance of these services. We have had to supplement taxation incomes by foreign borrowings, the funding of which at the moment is working out at £20,000 for each worker in the State.
Even if we do not set about cutting public spending, we are still adding £2 billion to our debt annually. If we continue to borrow at the present level the future of our children will be bleak. Our independence as a State will be under threat from the international banking institutions. As a nation we are living from day to day. We are living for today and forgetting about tomorrow. In the coming year we should resurrect efficiency and enterprise. Somebody in Government would do a great service to the State by declaring next year the Year of Efficiency and Enterprise. Both of those concepts appear to be dead. We are living in a country choked by bureaucracy, where initiative and adventure are stifled at birth.
Every party in this House has identified the major problems of the country as unemployment and high taxation. How do you reduce taxation without creating more unemployment? Most people conclude that we are in a vicious circle. Cut public spending in order to cut taxation and you create more unemployment and the circle goes around. We can break that vicious circle in a number of ways. We can do it, first, by being really ruthless about efficiency in our public spending. Secondly, we can create more wealth in our system and I will deal with that later. Thirdly, we can eliminate many of the restrictive practices in all avenues of the nation's affairs. These are choking the system and creating wealth for a minority. Until such time as we deal with these three matters simultaneously, we are just wasting time. By having more efficiency in the public sector we can cut spending. There are many areas in which inefficiency should be eliminated and this would not result in job losses. The elimination of inefficiency will always be opposed by the vested interests within the sector affected. Any attempts by a Government to achieve efficiency will be the writing of that Government's epitaph. They will be committing political suicide.
A person who will go down in history as one of the most courageous Ministers for decades is Deputy Barry Desmond who has tried his utmost to eliminate the many inefficiencies in our health service and who is being screwed to the wall by vested interests, as we have seen from month to month. Attempts made by him to eliminate inefficiencies in the health service, which are devouring £1.25 billion each year, have attracted a most vicious, vociferous and abusive reaction from some of the most privileged people in the country. We know as Members of the House that he is committing political suicide, but he is big enough and strong enough to take on these issues.
I am a member of the Committee on Public Expenditure, and recently we set about examining the health service. One of the first people we had to give evidence was a spokesperson for one of the most powerful groups in the country, the IMA. We asked him to give evidence as to how we could bring about efficiencies and savings in the scheme and we were treated to a session on what that organisation wanted from the system, not what it could put into the system. That small episode is an indication of what is wrong in Ireland.
Before I deal in detail with some of the problems confronting us I should like to note that it is sad to see the only two people here now are the Deputy opposite and myself. We have to look at our system here in the Oireachtas. I came here in 1981 thinking I could change the world, but we are dragged down and stifled by the system that operates. We were given a small outlet, one that is fulfilling in ways, the Oireachtas committee system, but committees can only go so far. The entire system needs radical reform and surgery. If the people knew what goes on here they would be amazed. We are discussing a budget five weeks after its presentation and I am doubtful about what effect my speech will have. At least I prepared what I have to say and am putting it on record. I do not suppose I am achieving anything. Until we revise our system here we cannot cast stones at other systems.
I will deal first of all with the major consumer of public money, the health service, which has become a major issue in recent times. A sum of £1.26 billion is being consumed, £680 million by the hospital services, and major questions that spring to mind are not being answered. For instance, health expenditure has increased by 64 per cent at constant prices in the past ten years, and possibly by several hundred per cent in actual levels.
Have our population become 64 per cent healthier? The demand on hospitals and outpatient clinics is growing by the day. Therefore, our system has become more inefficient and wasteful, but is still drawing and demanding more and more resources from the State. It is something that will have to be taken on in a major way. We must look at the factors that have contributed to these inefficiencies and we must consider what services have been added or taken out.
During the past ten years staff in the health service has increased by almost 50 per cent. What was the policy basis for this increase? Is there overmanning? We are trying to come to terms with those issues but we do not seem to be able to get straight answers. In outpatient clinics we see overcrowding, people being herded in and out without appointments, people waiting for hours and hours. This is a symptom of something that is very bad and inefficient in the health service but we do not seem to be taking any action on it.
Have we done anything about major capital cost overruns in the health service? For example, Tralee hospital started out at £6 million and the cost has gone up to £25 million. Public representatives have questioned it but we cannot get answers. We are getting professional reports from architects and surveyors giving reasons why a project should overrun to such an extent, but no real answers. When we attempt to get people before committees we find it very difficult to get them to talk. These things must be taken on and we must be given answers. The time has come to stop this.
There have been allegations of fraud, theft and abuse in the health service but there have not been any real answers. Questions have been asked about the manner in which professionals have abused the system by using staff and equipment in our hospitals without making any effort to compensate health boards or the Exchequer. I think the whole system is being utilised by powerful individuals to make themselves rich, and we must put a stop to it. There has to be an immediate review of the common contract in the case of consultants. If we do not take these things on, the health service will not survive and neither will the country.
We must look at the levels of payment made to other staffs in the health service, such as GPs and pharmacists. Should we change the system so that instead of paying so much per visit we pay capitation fees per patient? That should have been investigated in depth. It has not been done. We should look at the deployment of staff and facilities in the health boards. We have not done it.
I have spoken to health board officials in different areas and I have been told that financial control is not all it should be. In recent times the Department imposed on health boards a computer system which is ineffective in the control of finance and in the control of stocks and staff. Department of Health officials should be asked who decided on the computer system that has been imposed on health boards without any consultation with them.
We must look at the areas of overlapping as between the Departments of Health and Agriculture in matters of food hygiene and general standards in our food industry. That is being done by two Departments. We should look at the control of accounts in relation to social welfare payments. That was raised recently but there were no answers. These are some of the things that have to be tackled fast if we are to get any real reduction in public expenditure.
There are three factors involved in reducing taxation and creating more employment. I will deal with the creation of wealth. We can create more wealth by concentrating on indigenous industries, such as food processing, because we are light years behind continental Europe. There is a huge market there for exporting our food unprocessed. If we processed it here, we could provide added value foods to the European market but we are not doing that.
There was a recent attempt to overlap the Departments of Agriculture and Industry but I am disappointed that we did not seem to be able to come to grips with this reservoir of resources. I look on this as a major failure. We have been told that there are gas and oil fields off our coasts but we failed to bring the oil ashore, although we brought some gas ashore. There are other gas fields but we are only utilising the Kinsale gas field and it has cost millions of pounds each year to keep pressure up. It is costing us millions to put in an infrastructure to take gas to Dublin, Limerick and further north, using only one gas field. Where are we going? Why can we not get more gas ashore? Why have we failed to tap into the huge gas reservoir which is available in continental Europe, from as far away as Turkey and Siberia? Why not invest in a gas link between Ireland and Britain which would enable us to tap into the European gas grid? These questions have not been addressed and it is about time they were.
The Government have updated and clarified the licensing terms and the taxation arrangements, but people in the oil and gas industries to whom I have spoken believe there is still major uncertainty as to the level of State participation in any discovery. I have no vested interest in any oil company, but I am concerned about the numbers of unemployed, which are growing by the day. This is an area with huge potential for growth. If we could get more gas and oil ashore the development across the south coast, from Kerry to Wexford, would be enormous and would create thousands of jobs. We are told the oil is there but we cannot get it ashore because of wrangling over taxation and other issues.
A new Government policy is vital to create the proper opinion and climate for increased oil exploration. The proof of this is the 1983 decision of the United Kingdom Government to revise their licensing terms. This decision was followed by a boom in oil fields which up to then were termed marginal. The most expert opinion we have about our oil fields is that they will be numerous, small, marginal fields and the companies would require attractive terms to bring the oil ashore. Anybody who risks his money exploring oil fields deserves a return for his money. As I said, I do not represent anybody when I say this. I believe we are not offering the oil companies a proper return for their risk investment. That is where the problem lies and that is why we are not creating jobs. It is jobs I am interested in.
The Government should immediately make the climate more favourable to oil exploration companies. If this is done a higher level of activity will follow thereby increasing the chances of a commercial discovery. If oil discoveries are made and oil is brought ashore the Government, in view of changing circumstances, could review the situation after a number of years. Surely in these times when there is a slump in the price of oil we should be making our terms more attractive even than Britain. Even though they have confirmed fields, British terms are more attractive than ours. Is there any sense in that?
It is vital for the future of this country that a re-think of this policy be brought about immediately. I welcome a suggestion made by a colleague in Cork in recent months that a petroleum development company be set up to develop this area. Our negotiators have at times been influenced by speculation on the stock exchange and their expectations were gauged by the response of the stock exchange rather than reality. The reality is that we can only hope to have small, marginal fields. Unless a very attractive package is offered to the multinationals, Ireland will be left dependent on foreign imports. We will not have the jobs which would arise from the development of the oil fields and the economy will not benefit in a major way. We will be doomed to high unemployment and high taxation in the years to come.
I would like some answers to the gas situation. We are ploughing ahead with massive investment in infrastructure but nobody seems to know or care what the situation is in relation to the Anglo-Irish gas deal, what is the situation in relation to the European gas grid, and what are the prospects for the future development of gas fields off our coast. Before any further investment is made in infrastructure these answers should be clearly spelled out. The time has come when a clearcut energy policy must be introduced without further delay.
Despite the bleak picture I have painted, there are positive features too. We have lower inflation, our competitiveness has improved and our exchange rate in the EMS in relation to the pound sterling and the dollar has improved. The Minister for Finance was faced with a dilemma in proposing the budget, and that was how to meet the demands for cuts in personal taxation, how to reduce our deficit budgeting and at the same time balance the budget in favour of job creation. I believe he has managed in no small degree to take positive steps towards job creation through selective cuts in VAT in labour intensive services.
Coming from an area which is very dependent on tourism, I welcome the reduction in VAT for certain services. I believe that, despite the setbacks we have had because of the absence of a car ferry — through no fault of the Government but because of a breakdown in negotiation between the company and others — the coming year will be very good for the Cork-Kerry area. The cut in personal taxation is welcome but we all agree that the level of personal taxation in recent years has been such that personal initiative was killed.
Debate adjourned.