Deputy Mitchell is in possession and has 52 minutes left.
Financial Resolutions, 1987. - Financial Resolution No. 3: General (Resumed).
Before moving the Adjournment I was making the point that our economy is becalmed. It is not particularly in crisis because we have very significant strengths which are an assurance to international lenders as was evidenced by the significant loan acquired in the past week from Japan. We have low inflation and a balance of trade surplus for the first time in 40 years, but we have an enormous budget deficit and very high unemployment. A conventional wisdom has arisen — almost an all-party wisdom — that the right thing to do is to cut the tripes out of public expenditure. I made the point that there is wide justification for the pruning of public expenditure in many areas but I strongly challenge the view that cuts in public expenditure across the board are economically or socially good.
What has happened in the health services over the past few weeks is ample evidence of the way not to cut public expenditure. We are seeking to achieve equilibrium in the economy at about 45 per cent performance whereas we really need to achieve equilibrium in the economy at 100 per cent performance to take up all the slack and spare capacity which exists rather than pursuing a deflationary policy which is reducing the percentage economic performance and increasing unemployment, precisely the effect of the cuts in the health services. We must be much more selective and determined in relation to cuts in public expenditure but that should only be the second bow of our economic policy, the first being to get the economy to grow. This will not happen by the deflationary economic strategy which is being followed at present.
I will highlight some of the areas of public expenditure which could be cut with much less adverse effects than those in the health services. I also want to highlight areas where there might be cuts which would result in social benefits. I had responsibility for the Department of Communications over the past four years and it may be immodest of me to claim that there were more cuts in that Department than in any other without socially adverse effects. It was done by the planned approach to the State companies for which the Department were responsible, every one of which is now profitable with the exception of B & I. None of these companies, with the exception of Aer Rianta, was profitable in 1982 and indeed Aer Rianta made a very small profit. It has reduced the call on the Exchequer from the Estimate for Communications. The previous ten years in CIE show a history of escalating deficits, loss-making in Aer Lingus, a deficit in B & I, losses in RTE, telecommunications and the postal service. All that has been turned around by good management and planned, prudent pruning of expenditure. Today, the postal service reported their first profit.
I will give a further illustration by taking CIE as an example. They lost £2.5 million in 1969 and £109.2 million in 1982. Allowing for inflation, the deficit should have been £12.5 million in 1982; in other words, the outturn for 1982 compared to 1969 was seven times worse than if the deficit had been contained within the limits of already high inflation. Since 1982, in each successive year that has declined, not as a result of massive reductions in employment or by redundancies — there have not been any forced redundancies — not by massive cuts in services but by a planned approach to the finances of CIE and a relentless pursuit of efficiency and exploitation of the extensive assets which the company own. We now have a much more efficient group of companies, costing the Exchequer and the taxpayer a great deal less. There is clearly a social and economic benefit in that turn around. That was achieved because we said in May 1983 that the old way of telling CIE two weeks before the beginning of the financial year the targets within which they had to live was nonsense. In each of the preceding 15 years that method had been adopted and in every year the target set was greatly exceeded; in other words, it was ignored.
In 1983 we instituted a five year financial arrangement whereby CIE were told in advance their financial parameters. It was based on a formula whereby they would be paid one-third of their expenditure but that expenditure would have to reduce by at least 2.5 per cent per annum in each of those years. They had time to plan to reduce their expenditure. It has worked dramatically well because not only have they met their targets for each year, they have exceeded them without pickets or massive redundancy.
I am sure it occurs to many Members that a similar approach in relation to the health services would be more in order than the present ad hoc and pernicious attack on the health services which is doomed to failure. Society cannot sustain the proposed cuts overnight. It is true that our health services are grossly over-used compared to other countries, that we spend a much higher percentage of GNP on health services compared to other countries, that the percentage of GNP on the health services has doubled in real terms in ten years, that we go to doctors more frequently than people in other countries, especially if we have medical cards, and that we spend more time in hospital than do people in other countries. Obviously, within our health services there are habits or practices which are conducive to this over use and they are costing the taxpayer and the Exchequer a fortune. It is also true that we are throwing out the baby with the bath water by trying to solve the problem overnight.
That will not happen. What will happen is that we will throw out of work thousands more medics and paramedics and we will put them onto the unemployment register which is already at an all time high. We will have to pay them unemployment benefit and we will not have their PRSI and tax contributions. At the same time we will lengthen the queues for very necessary medical services. Five hundred people are awaiting in pain orthopaedic operations in Cappagh Hospital in my own constituency. Now, there will be 600 or 700 and they will have to wait another two or three years in pain. Yet, the inefficiencies, over uses and the over prescribing of drugs will continue. The conventional wisdom which seems to have developed in this House about cutting public expenditure, that it is the in thing, that any cut in public expenditure is good, is false wisdom and false economy. We have got to be much more selective, sensible and planned in our approach to cutting public expenditure. I want to emphasise that I see many other areas of public expenditure which ought to be cut. What we are doing is inducing socially adverse consequences.
I will now turn to the area for which I am shadow spokesman, that is, social welfare. How can we continue to pay Christmas bonuses across the board? Of course, we should pay, if we can, Christmas bonuses to the very needy. Because we adopt an across the board and an unselective approach we also pay a Christmas bonus to people who perhaps have two, three or four pensions. As I said in the debate on the Social Welfare Bill I know of a retired bank director who is in receipt of a pension of £30,000 and a contributory old age pension from the State who is receiving a Christmas bonus. Yet, this State is in crisis and we are closing hospitals all over the place. We are also paying children's allowance to the Tony O'Reillys of this world, to the Michael Smurfits of this world and to the Jim Mitchells of this world.
The Chair would prefer if personalities outside of this House were not referred to.
I may have implied that I was in the same financial bracket as the two first mentioned gentlemen, but I want to assure the House that I am not.
The point is that by being non-selective we are paying out millions and millions of pounds to people who do not need it. What is more, we then have to go and collect it from them and pay a huge administrative charge for collecting it. That is why taxes are gone mad. This is crazy. At the same time we are cutting areas of public expenditure where the services which are being rendered are crucial and socially needed. Can we cry a halt to this approach? Can we not say that public expenditure has to be reduced relentlessly but that it has to be done in a planned way and in a way which removes the economic disadvantages of some of our current public expenditure, in a way which removes some of the adverse social consequences of some of our existing public expenditure and in a way which avoids unfairness or unnecessary hardships?
We are paying children's allowances across the board. We are paying Christmas bonuses across the board regardless of need. We are paying unmarried mother's allowance to people who are no more unmarried — with six or seven children. Meanwhile, we close down hospitals and schools and we cancel many other things such as housing grants and community grants which not only generate employment but which also provide very necessary social amenities.
I am not particularly attacking this budget and I am not particularly attacking the Minister for Finance because the Minister and the Government deserve support and credit, at least, for their courage notwithstanding all they said over the past four and a half years. If anything undermines them today it is their reckless irresponsibility for four and a half years when they opposed every single prudent step to reduce public expenditure.
And they demanded increased expenditure every single week.
They were not on their own. They were also helped by the PDs over the past year. That is what the public feel most cross about today. For four and a half years they were reckless, foolish, silly and deceitful and they did anything they could to embarrass the then Government. Now, they find themselves not yet two months in office and they are doing incredibly harsh things which the last Government, despite all the attacks visited upon them, would not entertain. For instance, hospital ward charges were specifically rejected by the last Government not once but many times. Instead, we preferred to impose a prescription charge because of the gross over prescribing of drugs. That would have meant no hardship on anyone because there would have been a limit of £5 per family per month. That would have avoided much of the present outrageous chopping of staff in the health boards and hospitals, closure of wards and loss of beds.
Therefore, we say yes to relentless planned reduction of public expenditure but it must be selective and well thought out. People must have time to plan. That is the way it is done in industry. The only place I ever worked outside of politics was in Guinness Ireland Limited. In my time with them they had two five year plans to reduce costs which were extremely successful. They did not try to cut expenditure overnight. As any good businessman knows, if you try to cut expenditure overnight you will face serious disruption, so serious that you are unlikely to meet your objectives in the end. In any event, by that over speedy approach you are almost certain to have much higher initial costs. There are many costs in reducing staff initially. It may be profitable in the long term, but there will be redundancy costs etc., and usually when replacing staff you replace them with technology which also costs money initially.
No business would approach its finances or its future in the way in which the Government are trying to do it at present. That is why in the Department of Communications in December 1982 I decided on a five year approach and it has worked extremely well, most notably in CIE but also in all the other State companies. We did not go for a 20 per cent reduction in one year; we went for it in five years which has been achieved without disruption. I say to the Government and in particular to the Minister for Finance that that is the better way.
I talked about the attempt to achieve equilibrium in our economy. However, we are trying to do that at 45 or 50 per cent performance rather than 100 per cent, with enormous slack in the economy. This will be added to by the inflationary budget we are today debating. There will be more empty hospital wards and empty hospital beds; more skilled people unemployed; fewer people paying taxes; fewer people using our public transport services and fewer people buying the products of our factories. So the slack in the economy grows when we should be seeking to devise policies which have the opposite effect.
We should be using the infrastructure, the capital resources and the skills that are there — the public transport services, communications services, roads, hospitals and the various skills. That must be the thrust of economic policy for the future. Unfortunately, this budget would seem to be going in precisely the opposite direction. It is no surprise to find that the latest unemployment figures have gone over the 250,000 mark at a time when unemployment should be falling. Every year, unemployment falls in the month of April but this year it has gone up. Is it not absolutely evident that the policies we are pursuing are not the right ones? We must encourage major winds of economic change to get our economy out of the doldrums. It is lying there listlessly, without any economic wind behind it to get it moving again.
Many are greatly depressed by what they see as the state of the economy. I am not surprised at that. I said that as Minister for Communications and I repeat it now. All day, every day, people have to listen to our national broadcasting services to a negative tirade. We get this from 8 a.m. to 9 a.m. on "Morning Ireland", from 9.15 a.m. to 11 a.m. on "The Gay Byrne Show", from 11 a.m. to 12 noon on "Here and Now", from 1.30 p.m. to 2 p.m. on the midday news programme, from 2 p.m. to 3 p.m. on "Liveline", from 5 p.m. to 6 p.m. on "Today at Five" and again from 6.30 p.m. to 7 p.m. on the evening news programme. It is not balanced news and I am not talking about balance as between political parties. There is a constant stream of critics running down this, that and the other aspect of our national life. The vast majority of these people never have to justify their statements, unlike a Minister of State. They can make all sorts of outrageous claims, they can be selective in picking on tiny aspects of a broader picture for criticism. On the other hand, if somebody comes along to praise policy, that is not news and it is not broadcast.
It depresses me greatly to hear our country being run down, banjaxed as Gay Byrne says but he forgets to tell his listeners that we have the best housing in the world, that we have very low inflation, that we have a balance of trade surpluses, that we have the most modern telecommunications system in the world, that we have a very viable and successful State sector now, that we have marvellous parks, very good schools, excellent hospitals and that we have the purest of water coming from our taps. Is it any wonder that people are depressed? The media are not to be criticised because they will say that the politicians are blaming the media for everything. However, they can criticise politicians as much as they like.
Because we have a severe problem in the budget deficit leading to a severe problem in unemployment, everything is seen as black. We hear that there is nothing in this country whereas there is a great deal. However, that is not to say that we should be in the least complacent about our problems. Of course, there are problems but there are also great attributes in our society. We have had some excellent achievements which cannot be attributed to any one Government or party. They have come about over a number of years. Having criticised this continuous emission of depression from RTE radio day in, day out, let me say that RTE are one of the achievements. In general, they do a superb job with fairly confined resources. They, too, are back in profit.
There is a great deal of good in our society. It must be said that politicians have to accept responsibility for our financial problems, although one cannot blame all politicians for these. The problems of the financial shortfall in the Exchequer and the resultant unemployment are compounded by the depression and general malaise caused by thinking that things are even much worse than they are. Many of the excellent attributes of our society are ignored. I say that because it needs to be said. One of the things we need most to get us out of our economic problems is confidence. There is room for much confidence if we can be sure that we have a political establishment which will pursue relentlessly and diligently the compelling financial goals over the next, not just few months, but five years. We have a solid foundation, a balance-of trade surpluses, low inflation and excellent telecommunications infrastructure. By the end of the decade we will have a very good road infrastructure.
There is a very sound foundation for economic growth in the future but first we must instil the confidence that the compelling financial goals will be pursued and achieved. I do not think that confidence will come about this year, at least not until people can see that the 6.9 per cent budget deficit will be achieved. There must be a very major question mark over that. If there is, I would urge the Minister and the Government to redouble their efforts, to make further steps to ensure that that target is achieved. Then it would be seen that the political establishment was not baulking at the task. That would mark the beginning of confidence in the political establishment as well as helping to restore confidence in our society, confidence that has been undermined much more than has been necessary.
Confidence will not be brought about merely by the achievement of the 6.9 per cent target this year. It will have to be clear that in succeeding years there will be a significant annual reduction in the budget deficit. We have to think in terms of less than 5½ per cent in 1988, perhaps 4 per cent in 1989 and 2½ per cent in 1990. It will have to be clear that those are compelling goals which will be pursued through thick and thin. I admit that it will not be easy for a minority Government to achieve this. It will be very difficult. It was almost impossible for us to achieve this when we were in Government but being a two-party Government made the task for us more difficult.
I want to refer to a basic problem in our political system over the last number of years one which has greatly accentuated our financial difficulties. This problem was highlighted by Fianna Fáil's performance during the past four-and-a-half years when they opposed everything, regardless. This is now a substantial albatross around their necks. The temptation for those in Opposition is always to oppose everything, regardless. Even if they do not and remain silent, the party in office, because of the nature of the measures that need to be taken, are going to be unpopular. This leads to pendulum politics — they are the baddies this time, we were the baddies the last time, we will be the goodies the next time and they will be goodies the time after, that is, if they pursue the compelling financial goals.
This competes with the political goal to be re-elected. Too often in the past, the political goal has won out. I do not think that should surprise anybody. It is human, not only for individuals, but for governments to want to be re-elected. They would not be worth their salt if they did not think they were the best people to run the country. Therefore, political goals tend to have top priority over financial goals.
In our present financial dilemma, we cannot afford this conflict between political goals and financial goals. It may not be fashionable to talk about it but I honestly believe that one of the ways to bring confidence back quickly to this country is to establish some form of national government. The former Tán-aiste and Leader of the Labour Party, Deputy Spring, spoke about the Government really being an unspoken Coalition between Fianna Fáil, Fine Gael and the Progressive Democrats. He said that in reality they have the biggest majority of any Government for years. Of course, that is not the case. Lurking over there, not only on the back benches of Fianna Fáil but also on the front benches, Deputies who are only eight weeks in office are wondering how they are going to be re-elected. They are asking when the rug is going to be pulled from under their feet.
That is what is in the minds of every Member on those benches opposite.
It is more over there than it is here.
That is no basis for not continuing to pursue compelling financial goals. The idea of a national government is anathema to the past, it is anathema to the people in my party and also to Fianna Fáil who are used to being a one party Government but we ought to be seriously thinking about some sort of national government for a limited period of five years to enable us to tackle these problems. This is the only way we are going to remove the political counterforce to compelling economic needs. That step would not only bring about political stability but would help greatly at this juncture in our history to bring about a major change in attitudes, a major change in the confidence of our people and in the financial institutions. It is time to reflect on this now that the Government are wondering every week, and perhaps twice and three times a week how they are going to survive the next crisis.
Other parts of our political arrangements are major contributors to our economic problems. The most notable of these is our electoral system. There is no doubt that the policies of 1977, which I think everyone will now accept were the beginning of a disastrous slide in our economic affairs, were induced by the need to protect the last seat in multi-seat constituencies having regard to the intense nature of the competition in those multi-seat constituencies. That competition exists not so much between parties, although that does exist, but within parties. Even if sitting TDs can come to arrangements about how they will approach pressure groups in their constituencies, those sitting TDs have no control whatever over the aspiring TDs who seek to replace them. Therefore, enormous competition for votes develops regardless of the consequences. This results in TDs demanding of Ministers that they pay another grant or that another airport be built regardless of any investment appraisal. Our economic and financial problems have rolled on, gathered an incredible amount of moss and are now weighing us down. It is clear that the electoral system has contributed a great deal to those difficulties and problems.
Talking about reform of the electoral system will automatically remind people that twice before when there were attempts to change this system, these attempts were rebuffed, and rightly so, by the electorate. They were asked to endorse a proposition which changed from a proportional system of representation to a first-past-the-post system like the one in Britain. That system is grossly undemocratic and grossly unfair. That is not what I have in mind. I have in mind a change to another form of proportional representation which removes the drawbacks of the multi-seat constituencies and at the same time maintains proportionality.
One such system I would favour, with some modifications, is the German list system. It is extremely fair, proportionate and is designed specifically to bring political stability. Apart from removing this blackmail pressure of the last seat and multi-seat constituency that system also allows Ministers, or shadow Ministers to concentrate solely on national affairs unhindered by local pressures. In today's economic climate, Ray MacSharry, John Wilson or Ray Burke should be free of the need to be in their constituencies trying by their efforts to compensate for the adverse effects of national policy. While they are in their constituencies in their efforts to secure their life in politics they are neglecting their Departments. They do not like doing that but they have to.
From the discussions I have heard in recent years, I believe there is a consensus among the parties for a change in the system. It would be one of the best changes we could make for the future because it would certainly improve the quality of political decision-making. However, that is not the only political change needed. At a time of economic crisis, we are discussing the budget eight weeks after it was introduced in the House. There are very few Members present and we go through this charade annually filling in time with very few listening. We ought to change the way politics work, not only the electoral system and the formation of Government but the way we carry on our business in the House. In Private Member's Time last night we learned that the Minister is resisting a Fine Gael Bill — although he agrees with its provision in principle — because he wants to bring in his own measure. The matter has been through the Department of Health and the Attorney General's Office but the political practice is that nobody can sponsor a Bill except the Government irrespective of what Government are in power.
We have got to change that and involve other people. There is a lot of talent on the back benches that is not likely to get an opportunity unless we change the system. We have a major contribution to make rather than coming here on Tuesdays, Wednesdays and Thursdays addressing empty benches. I accept that our colleagues are not away from the House enjoying themselves but are in their rooms engaged in constituency work or at committee meetings or parliamentary party meetings but it does not seem to me to make sense that a budget debate goes on for eight weeks for the sole purpose of giving Members time to let off steam. That may be of some value but most of us would prefer to be engaged in something more productive.
There is a great need for fundamental change in the political system and in the way we choose Governments and what we expect of the political system and our politicians not just for the sake of politics but because of the need to bring about economic recovery and avoid the economic pitfalls we have all endured in the past ten years. Of necessity, the budget was introduced very speedily after the Government came to office and, as a result, we ought to overlook some of the more cruel points. We should not be too critical of the Minister or the Government for the cruel cuts now emerging. In the past few weeks we have had them in the health services and we will have them in the education system next September. However, we must ask the Minister to carefully study those cuts while, at the same time, not deviating from the overall targets that must be met. The Minister must recognise the mistakes that have been made and accept it was never intended that there would be 3,000 redundancies in the health services, the closure of 15 or 20 hospitals and a further 100 wards. Those areas should be carefully considered but we strongly support the overall objective of the Government to reduce the deficit to 6.9 per cent. We see this as the first step in reducing that debt and we must continue to do so by significant steps in succeeding years. The Minister for Finance deserves praise for the courage he has shown. I only hope he has the tenacity needed.
The budget was primarily directed at bringing order into the public finances. The Minister for Finance has made it clear that difficult decisions have to be taken but that at the end of the day the result will be a more secure economic base for the country. I was interested to hear the valid comments of Deputy Mitchell on the difficulties that bedevil politicians in their efforts to achieve the best for our economy. There are three main objectives in the budget; to survive financially, to have some funds for development and to bring down interest rates. Any one of those objectives is difficult to achieve. It is worth noting that in recent weeks there has been considerable success in regard to two areas. I am satisfied, from information I got from informed sources, that the outflow of money from the country has stopped. That outflow was damaging our economy. We have also witnessed a great improvement for businesses in Border towns as a result of the decision by the Minister for Finance to ensure that crossing the Border is not used for shopping sprees to the detriment of local businesses. The trek of people across the Border to import groceries, electrical appliances and car accessories over a number of years caused serious damage to many towns in the Border regions. In every town and county adjoining the Border, as well as in many of the towns in the midlands and the west many jobs have been lost and businesses have closed down. That decision by the Minister has made a significant contribution to business in many of these towns and this is noticeable in many of the towns to which I have referred.
It is important to ensure that we have finance to invest in development projects in selected areas. One of the matters which has been damning us during the years has been our inability to do any more than collect taxation for the purpose of making repayments on our national debt. It is as simple as that. We found ourselves without the finance to invest in areas which all political parties have identified and spoken about publicly on a number of occasions. It is absolutely essential that we continue in the years ahead to seek to have more finance available for development projects which will eventually have the primary objective of giving employment on the one hand and ensuring that the economic base in our country will be raised to a level where prosperity will become the norm rather than something we are continually seeking.
It must be stated that the previous Government, and the major party in that Government, while they spoke publicly on many occasions about the desirability of ensuring that certain targets and objectives would be met and difficult decisions would be taken, never seemed able to do that for the simple reason that they had with them in Government another party whom they could never convince of their views or their aspirations. Consequently, on the departure of the Labour Party they produced a budget and we readily acknowledge that much of it is now contained in the budget of Deputy MacSharry this year.
It is important to mention that the people in the Twenty-Six Counties have enjoyed their independence for some considerable time. When we address ourselves to the budget it is important that we reflect on some of the enormous achievements and improvements which have occurred down through the years. Certainly there have been improvements in education: many more people are educated and enjoy the facility and opportunity to pursue their desired educational activity. They have the opportunity to travel with some security in the knowledge that they are an educated people. Nevertheless we have not improved in our attitudes either towards our political system or our State institutions. Our political system has often responded to the weaknesses of people rather than to what was necessarily good for our people. In the good days, at any opportunity and without any real planning, we gave the public what they demanded without taking into account on many occasions that what they were getting was not always the best for them in the long run. It is essential that the Government recognise that and carry the responsibility of leading, directing, managing and governing in a way that will ensure that the weaknesses of our society are not responded to for political reasons, or any other reasons, as a result of pressure from sectional interests or any other groupings.
We must take into account that the political system itself has certain weaknesses. People in this House are not necessarily adjudicated on by the public on the contributions they make in the House, in the Departments or in any committees on which they may sit, but rather on their performance vis-á-vis the electorate in their constituencies. That is unfortunate because it does not allow individual Deputies to play their proper and full role. At a time when everything is up for review and examination and when we are looking for a new and better way to achieve the proper structures and facilities in which we can develop and improve, it is worthwhile mentioning also the difficulties with which we have to contend which are so well known to each and every one of us.
We must take into account that during the years many people, perhaps for historical reasons, perceived the State and its Departments as areas of opportunity which could be milked, bled or required to deliver, whether under political direction or some other method, regardless of the necessity or the correctness of doing so. It is important we ensure that when decisions are taken which are right and proper they be implemented. We must ensure also that the people who introduce these important decisions will not suffer politically as a result. We are a sovereign country and we have our own Constitution. We have democratic freedom which we have enjoyed for many years and we should no longer feel we have an obligation to be subservient either in our mind or in our actions to our Government in the way we had to in other times. We should now feel an obligation, in whatever area of public or civic life in which we are involved, to change for the right reasons what needs to be changed. However, while contributing we should recognise that there are limitations on the capacity of Government to achieve all things in any one day or at any one time for all our people.
All the people have a moral obligation, regardless of what Government are in office, to understand and to recognise that there are limitations and that at certain times such as now sacrifices will have to be made. Many sacrifices will have to be made because during the years, the political system was unable to express itself other than by responding with measures that were not at the end of the day in the best interests of all our people. It is tragic to see Ministers involved in the economic area put at risk because of the courageous decisions they make and the action they take. If there is to be real reform of the political system it might be worth considering having Ministers involved in the economic area returned to the House without election. It would allow them to continue to act courageously in difficult times.
One of our difficulties is that we do not yet have a proper, planned programme for economic development. We cannot continue to handle the economy by making decisions and generating investment in certain areas without having a plan and knowing exactly where we are going. It might be worth considering setting up a division within the Department of Finance which would draw on the knowledge and talent of people both in the public and private sector and prepare an economic plan. It is difficult to see how we can achieve the type of improvements which must be made in one, two or three budgets having regard to the difficult political position we are in and the public attitude towards Governments and politics in general. Apart from seeking to change the political framework within which we operate, it is also necessary to have proper planning and to work towards a particular goal. This would enable us to identify key areas well in advance and set targets to be achieved.
It is fundamental to our economic future that interest rates should come down. Inflation must be kept under control and we must ensure an acceptable level of exchange rates. Banking and interest reductions have already occurred over the last few days. Hopefully they will continue. We are all impatient that it is not happening at a faster rate but nevertheless it has started. That, together with the fact that the massive outflow of moneys from the country has been halted, must mean an enormous turnaround in the economy. That is as a result of this budget in that it has achieved two very basic economic aims of the Government. All compliments must go to the Minister for Finance and the Government for the courageous way in which they took decisions.
Difficult decisions had to be taken in a number of areas and these were not easily sold to the public. It is not easy for a Deputy to tell his constituents that the traditional political system has been broken and that there is now a new order. Courage is needed to face up to reality and recognise that we have reached a crossroads. What has been achieved must not be lost by our failure to take major political decisions.
The abolition of the housing grants caused some public concern and disquiet. It was not due so much to the fact that the grants were being abolished as to a lack of understanding of the position. Once that was clarified everyone accepted the necessity to abolish the grants. The Government were quite modest—this would be my only criticism of them—when explaining to the public the massive increases in grants which occurred in the months preceding the departure of the previous Government. They were nothing short of immoral and deception in the knowledge that there was not sufficient money to meet the grants. There was a multiplicity of regulations attached to each and every grant. In some instances people had false expectations and believed that the grants would be paid shortly after the final inspection. Bank managers were told that the grant was something on which he could give additional bridging finance or other financial assistance to an applicant. The costs of materials were raised fictitiously by those providing materials and building houses. In many cases the grants worked more to the benefit of others rather than those for whom they were intended. It was proper that the Government decision should have been taken.
The reduction in support grants to certain local authorities will have a considerable effect and in some cases it could be damaging. The economic base of some authorities is much lower than others. There are regional factors which must be considered, when one considers the economic base of some of the local authorities in the west and some of the unusual conditions that have to be contended with. I do not think it is wise to treat all local authorities in this country equally. Counties in the west have, as I say a low economic base. We have a very small revenue coming from rates on business properties, as we have had a major decline in business in recent years. High emigration is returning to the west again, and the population is very scattered. Local authorities have difficulty in providing for the very minimum needs of their people if they are treated on equal terms with other counties.
It might be worthwhile therefore for the Government at some time to consider the regional implications of the reductions to local authorities. I recognise that local authorities will have to become more self-sufficient. They will have to be able to raise the revenue for services, and this has been the subject of considerable political debate and wrangle in recent years. At the end of the day I do not think that either parties have looked at what needs to be done, if anything, in relation to re-establishing local government as an important element of country life. I hope that we can resolve the difficulties that are causing so much political wrangle by recognising the function and role local authorities should have, what they should be doing, and what they should be supplying. It is a little unfortunate, that because of the lack of planning and the lack of serious examination of what local authorities should mean, we now find ourselves in a situation where many other agencies have grown up servicing the needs of our people at enormous cost and not necessarily doing a better job than the local authorities did on a smaller scale in days gone by. There are quite a number of areas where local authorities could rightfully and properly provide services and cater for the needs of the people in their individual counties. I would like to think that in future—and hopefully in the not too distant future — we would look at the role, function and purpose of local authorities, how their funding can be decided upon, what type of services they should be engaged in providing and what developmental role or function they should have. Unfortunately today they lack that developmental role because they do not have the finances to engage in this type of activity and the type of work that has the knock-on effect of giving economic benefit to the people of a country. What local authorities are doing is obtaining finance from the Department and in many instances being directed in advance as to how to spend it. There is a expectation by the public, perhaps based on historical conditions, that local authorities are more than they really are and are capable of giving more than they are really capable of giving. To me that is unfortunate and it certainly damages local government politics and the perception of local administration. I think it is unfortunate that a system that has stood the test of time and has been recognised as having a certain intimacy with the people would not in certain areas have greater autonomy, in providing certain services and developmental opportunities. We should seek to improve the developmental role of local authorities and to decentralise some Departmental functions. All of these areas are worth considering and we should ensure that local authorities who have not the economic base of others would be considered in a regional context or in a way that would recognise their difficulties.
We have also had a welcome reversal of the decision in the area of career guidance. I think that that is proof of the fact that Fianna Fáil, as a party in Government, have recognised the important role that education has played in the development of our people. Above all else the greatest proof of that is the number of Irish boys and girls who are being sought after by universities and third level education institutions outside this country. We are recognised as producing young people with a quality education and I feel it is to our credit that we have achieved that level of performance in that area. We must not now do anything which would damage or reverse that situation. It was a very costly exercise. It was achieved at considerable sacrifice to parents, on the one hand, to the Churches and to the Governments of this country in the past, and every town and rural community today have the pride of seeing good educational services, good schools, good third level educational centres, good universities, all in proximity. I recognise of course that we have to examine the cost, how money is expended and whether better value can be got and waste eliminated. All of these again, as in other Departments, must be under the eye of the Minister and must be closely examined and monitored and courageously tackled if found wanting in any area and above all else the equal opportunity for all people to avail of maximum education should be a central priority of the Minister for Education. I would like to think of course that in the difficult times we live in the Government will always put an emphasis on primary education. Primary education is basic and fundamental and in many respects forms and makes the person of quality for the future at that level and at that time. It is an area to which we must ensure that maximum support is given at all times.
One of the areas that has been spoken about considerably in recent years and has been given very significant recognition by the present Government is the area of tourism. The decision by the Taoiseach to appoint a Minister for Tourism is welcomed by all sections of the tourist industry. Tourism is recognised as a very important means of economic recovery and development. The Minister is to be complimented on his recent innovative and inventive approach to prices in certain areas of tourism and on his announcement of last Sunday which has been welcomed by all sections of the industry.
He is also to be complimented on the fact that within a few weeks he was able to pull the strands of semi-State and private enterprise together and to say, "Now lads, this is what I want. Are you in there to do a job? Do you recognise that it is essential? Can we cause volume traffic to come to this country by reducing your prices? What we lose on the swings we will make up on the roundabouts and at the end of the day we will have a greater opportunity for revenue in the best form we know and in the best form that it can be contributed, that is, through the service industry of tourism". In the very early days the Minister responded to the Taoiseach and the Government by a very significant contribution, and the fact that it has been welcomed by the Irish Hotels Federation, Aer Lingus, Bord Fáilte and other outside bodies endorses the Minister's action.
During the course of years we must ensure constantly at every opportunity that tourism is given the same level of recognition as agriculture and manufacturing industry. The fact that the Government and the Minister for Finance recognise the benefit of having the business expansion scheme as something that can be used by private enterprise and others in the tourism area is the first real step towards giving recognition to tourism as an industry. As I have said, tourism has been much talked about for its ability to create jobs and to improve the balance of payments. This new emphasis on tourism is to be greatly welcomed. People thought tourism just happened and many did not recognise that those involved in tourism worked very hard. It is money intensive and it needs a great deal of investment from the State and the private sector. It was never really treated as on a par with the job in the factory or with agriculture, but with new emphasis on leisure activity and health, and the fact that we are now becoming consciously more aware of our place in Europe and in the politics of Europe, and our role in the arena of communications, more and more people are recognising that tourism is the coming industry.
We have witnessed that in recent years even with the difficulties we have had to endure, particularly those arising from violence which has had the worst possible effect on tourism. When we hear of terrible atrocities being committed, such as that on a member of the Judiciary of Northern Ireland a few weeks ago, it is not good enough for our political leaders and our church leaders to condemn the violent people engaged in that activity. At whatever level we are involved, be it as members of local authorities, GAA clubs, voluntary organisations or whatever, we must at all times condemn the people who indulge in violence and tell them there is no place in our society for people who perpetrate such acts. Ordinary men and women feel no obligation to make that type of public comment in whatever group or organisation they belong; it can be presumed by our silence that ordinary people are acquiescent in these areas. We should take every opportunity to tell ourselves and the world that there is no ambivalence where the Irish people are concerned and thereby be seen to support our political and church leaders and any other leaders in our society who make such comments.
International tourism is now recognised as a major growth industry and the OECD forecast that by the year 2000 tourism will be the world's biggest industry. Europe will attract the greatest number of visitors, and that is very significant for us. This, in turn, will help to create more competition for Ireland and countries like Ireland. We must take into account also that we are in competition with Scotland because of similarities in both our countrysides and the type of tourism product we offer. For that reason we must ensure that we are up to a standard and in a position to compete effectively.
The Irish Hotels Federation recently published a report which gives an indication of the benefits that can be derived from tourism if we take certain steps. I am glad to say that report was adopted by the Government and formed a part of the Government's tourism policy. I am satisfied that recognition at this time will give considerable confidence to private enterprise in the advantages people can expect to derive from the industry. We are particularly well located. We have the opportunity to reduce air fares and with a reduction in taxation on restaurants and hotels and a low inflation rate we have a major opportunity to benefit. I hope we can find the type of State investment that will provide for an improvement in facilities and afford an opportunity to the private sector and to private enterprise to invest in the tourism industry and thereby have a product available to our visitors that is second to none.
It is interesting that a 15 per cent growth rate from countries like Germany, the US, Britain and France in the next five years would mean that an additional £307 million would be spent by visitors in this country. Certain decisions taken, some by the last Government, in relation to VAT on food and bedroom accommodation in hotels made a significant contribution to and were the first step towards making our holiday package prices attractive.
Several areas of activity need urgent attention if we are to increase significantly our tourist numbers. We must raise our standards as an absolute priority. We must ensure that our hotels, guest houses, caravan parks etc., and our public toilets are improved in every area where that is necessary. Our beauty spots and scenic areas must be maintained and protected and we must constantly invite the public, the community out there who are in close proximity every day of the week to these areas, to ensure that they are protected and not despoiled or damaged. We must remind people to be vigilant because, after all, they are protecting their own resource. They are protecting important features of the tourist trade, the facilities people enjoy when they come here. I am glad the National Monuments (Amendment) Bill is now before the House. It will give considerable impetus to cultural tourism which was never really appreciated as an enormous area of opportunity. Such a wealth of national monuments and historic monuments as we have represents an opportunity to offer wide cultural activities to our visitors. People from the US in particular travel all over the world to enjoy cultural type holidays and activities. We should protect our amenities, develop them and make them available to our visitors and to our own people as far as we can.
We must also take into account that we have a great opportunity to promote ourselves abroad by promoting our sporting personalities who have brought great credit to this country and by providing greater sporting facilities here. In this way we can minimise the ugly and offensive representation of us that occurs because of violence. Our sporting personalities, men like Eamon Coghlan, Ray Flynn and others in the area of cycling, athletics and boxing have contributed to our good image abroad. At a time when we have many internal difficulties it is wonderful that men and women have attained international success in sport and athletics. Their efforts should be maximised on behalf of this country. Organisations like the IDA and Bord Fáilte should ensure that we avail of the added value that these people can bring to tourism by advertising Ireland along-side them at every opportunity. I hope what the Minister of State seeks to achieve in this area will be recognised and that other State agencies will consult with him and seek his support so as to maximise the effect that can be gained from sporting personalities who travel abroad who also perform at home and who are shown on television or video abroad.
We should put greater emphasis on all-weather sporting activities and we should ensure that facilities cater for families as many families come to Ireland and should be able to enjoy certain types of sports where conditions do not allow for outdoor activity. Government finances should be directed to that area.
The GAA have contributed significantly to the promotion of games and many people enjoy themselves by active participation in the games. Millions of others enjoy the games as a spectator sport. Nonetheless, it is important that the GAA should consider widening the opportunity for non-GAA members to use their facilities. It would be to our economic advantage if their fine facilities could be made available to visitors without interfering with the priority which is the requirements of the club membership. Massive amounts of money have been made available by way of grant aid to the GAA for future development. Over the years, Deputy Tunney in his capacity as Minister of State has made an enormous contribution to sport by way of grant allocations to various clubs for the development of facilities. However, we might give greater recognition to one other area. Down through the years the GAA have been considered to be male oriented. In developing future facilities they should take into account that 50 per cent of the population are female and that nowadays they are more actively engaged in sport. The GAA should recognise their right to access to sporting facilities and their facilities should be such that women have an opportunity to participate in games. This would also be an essential ingredient in providing sporting opportunities for visitors to this country.
We must not forget the importance of our environment. The Air Pollution Bill currently going through the House is important, especially to the people living in Dublin or the major urban areas. We must take into account that after our people, a healthy environment is essential to the economic development and success of our country, especially in the area of tourism. We must not only pay lip service to our environment. We are in the shadow of Sellafield and it is not enough just to raise this problem in the House, in the national newspapers or on the television and then forget about it. The question must be raised every day. People now recognise that British atomic policy is having a detrimental effect on our country and there is prima facieevidence that the east coast has been affected by atomic fallout. We cannot afford to allow our environment to be damaged by our nearest neighbour with whom we want a constantly improving friendship and economic relationship. However, the policy of our nearest neighbours at Government level should not go unheeded. We must continue to make representations to the British Government to ensure that we are not damaged and that our tourist industry is not damaged by them. We might be at an economic disadvantage in some areas, but being an island off the west coast of Europe we can offer a very special quality to people in terms of a clean, natural environment.
The business expansion scheme has afforded people an opportunity to invest in tourism and I hope that scheme will be taken up. We have a long way to go in the development of some of the facilities we need. We should make greater use of local authorities and we should require local authorities where possible to contribute towards the development of amenities within their counties so that they will be in a position to offer the maximum comfort and opportunity to visitors when they come here.
On the question of agriculture and the budgetary proposal to abolish land tax, it is my opinion that we have taken a very important decision which has been well received. It is ridiculous to believe, and it is a stupid argument being advanced, that somehow or other we have been on the side of the farmer because we abolished land tax. It should be remembered that the revenue yield from land tax was ridiculous. Indeed Fine Gael, as a party, would never have introduced such a tax but for the fact that they had to set aside what they knew to be correct in order to appease the Labour Party in Government. That is further evidence only of the unfortunate position in which Fine Gael found themselves in recent years. To my mind that is the reason they had to misrepresent themselves by pretending to the public at large that there was real revenue emanating from land tax. As far as everybody is concerned, including the farmer, if one wants to pay one's fair share of tax there should not be different taxation systems for different categories or sections of the community. There should be the same approach to taxation, the same equitable requirement where taxation is meant to be paid by any interests or group. For that reason I hold the view that we must ensure that the taxation of our farming community is based on ability to pay. It must be levied in a way similar to that done in other areas where tax is collected. Equally it should be done in a manner that will ensure that people who can pay will not alone be seen to pay but will be made pay. The myth that we are being soft on the farmers, for one reason or another, should be scotched once and for all.
Another area of great potential development resulting from the Minister's budgetary announcement is the establishment of the Department of the Marine. That is an area affording considerable opportunity, particularly with regard to mariculture which, like tourism, has been recognised as one of major growth and importance to our economy. Unfortunately, we are somewhat behind some other countries that have gained extraordinary expertise in that area. Norway immediately comes to mind. There mariculture and fish farming constitute an enormous industry with a massive contribution to their economy. I understand that they have used the Scottish condition to their advantage to develop mariculture and fish farming in Scotland. We need to examine urgently what precisely we should be doing and where we should be doing it. Much concern has been expressed—more through lack of knowledge than anything else— about the fact that there are serious inherent disease and/or pollution risks. Many local and planning authorities and other agencies have expressed concern about the fact that it would appear that the west, from Donegal to Kerry, appears to contribute quite a lot in that direction by way of facility. However, it is held that there is a certain lack of knowledge leading to fears being held.
The Department of the Marine are afforded a great opportunity to recognise the importance of that industry and to gain the best possible advice, information and expertise. In the meantime that Department should arrange to inform the public, to have people understand what is involved, its importance and the fact that fears can be allayed in relation to any risks or potential damage to the environment through pollution. This affords us an opportunity to make another real injection into our economy but it must be done as a matter of urgency. On occasion many factors identified as affording our people opportunity may not prove to be of any real advantage for five to six years unless we are in a position to proceed to develop them immediately and in a manner which ensures that, above all else, the public are informed. At the end of the day the fact that the public have been well informed and are knowledgeable can contribute enormously to the success of such industries.
I might refer briefly to the hospitals situation and the proposed health cuts. We must face reality in this area ensuring, on the one hand, that the continuous growth of administrative costs within the health system is examined and curtailed. We would like to think we can do so with the minimum effect on medical and nursing services. One would imagine that nurses made redundant in certain health board areas were not going to impose any cost on the State whereas, if you like, they become employed in another way by another Department, that of Social Welfare. I wonder is there any possibility that Ministers, by way of consultation with each other, could ensure that the Department of Social Welfare would not be used by way of transference of funds where such posts are terminated as a result of cutbacks. They might ensure that this would not mean that such persons be transferred on to the payroll of another Department with all its attendant machinery and administrative costs to the State. It does not sound sensible or indeed something that cannot be tackled by Government but, where there are such difficulties, they should be explained and highlighted.
It is unfortunate that sacrifices may have to be made in the health area in order to come to grips with our responsibilities. For a number of years regional health boards have grown at enormous cost to the State, not always making the maximum services and facilities available to the public. I should like to think that the hospital, doctor and nursing services in the Western Health Board area will be maintained and that we would implement any necessary cutbacks in such areas as would minimise their effect in regard to those services.
Deputy Doherty's speech was fairly lengthy. I say that not to complain about it, but merely to express the regret, for his own sake, that its length might have distracted attention from its early passages, which were among the most remarkable I have ever heard in this House. I am not saying anything sarcastic — which may surprise Deputy Doherty — I am saying it entirely sincerely. The early part of his speech seemed to me to be a recantation, on his own behalf, on behalf of his party, or certainly that section of his party with which he stands identified in the public mind, of all the attitudes which have done this country so much damage and for which I, rightly or wrongly, have been inclined to blame the Fianna Fáil party all my life.
Deputy Doherty said—and, I repeat, it is a most remarkable passage which would repay study by other Deputies in the House and by those outside it — that the time had come when the old-fashioned form of politics, in which one flattered local interests, in which one constantly gave way, for political reasons, to local pressures, would have to be stopped, there would have to be a change, we would have to get away from all of that. I was so impressed listening to him say this — about the last Deputy in the House from whom I expected to hear such a sentiment expressed — that I will refrain from the recriminations in which I might have been tempted to indulge, in which I and other Deputies on this side of the House in other mood, might have indulged when they hear appeals to responsibility coming now from that party which has changed sides in this House.
It would be easy for us, easy for me, to sneer at the appeals of responsiblity, restraint, a change in public attitudes and a facing-up to reality coming from a party which a few months ago, when located on this side of the House, never let a day go by without deriding and belittling the efforts made — stumbling and hamfisted though they were, on account of the Coalition arrangement to which the Deputy referred — on the other side of the House by the then Government to save money, achieve economies and not to throw good money after bad. It would be easy for me to make fun of the steady, consistent and undeviating policy of the then Fianna Fáil Party of making demands on the Government week in and week out in Private Members' Time, by private notice questions, by ordinary questions, in Estimates debates and in every possible way to put not only straws but bundles on the back of a sagging camel.
If Deputy Doherty and his party have undergone a change of heart I will meet them half way, as I am sure my party will also. Let us all turn over a new leaf. Let there be an end to the carping, the begrudging, the belittling, the sniping and the unworthy cutting the ground from under people on the other side of the House, who have to carry burdens the nature of which the people on this side of the House know perfectly well, as they had to carry the same burdens. I hope I will not be behindhand in abstaining from the kind of political dialogue which I know I have been guilty of in the past and which most people in the House have from time to time been guilty of.
The Budget statement produced by the Minister for Finance, Deputy MacSharry, six weeks ago was a surprising one and one to which I accord a certain measure of respect. All my life I have watched the Fianna Fáil Party, and if there is one thing above all other I have had to fault them for during the years, it is their constant pandering to the very same weak side of the people about which Deputy Doherty was so eloquent. It was that side of the Fiann Fáil Party that Kevin O'Higgins on his death-bed warned his friends against. I was impressed that Deputy MacSharry, Minister for Finance, produced a budget in which there was no sign of playing down to any weakness. It is easy to say that he is dealing with a Dáil in which there are roughly 70 Deputies who are not under the discipline of Fianna Fáil and who do not share the Fianna Fáil allegiance, but who are willing, one way or another, to support his approach. He is in a happier position than any Fine Gael Minister when on that side of the House and it is a nice change.
We would now be in a better position if we could go back to the time of Richie Ryan and the outgoing Government of 1977, if we had the inflation figures, the unemployment figures, the balance of payment figures and the growth figures over which he then presided but for which he was belittled. We were told the figures were not good enough and that they would be quite different with the change of Government. When Fianna Fáil came to power in July 1977 they had a crushing overall majority. They had less to fear in the lobbies than they now have, because they did not have to depend on the goodwill of most Deputies on this side of the House, although they know they enjoy it as long as they behave sensibly. With an overall majority of 20 they had power in their hands and they did not have to be beholden to anyone. They could have laughed at Fine Gael who offered their support and their constructive and understanding acquiescence in sensible measures. Instead of that, they threw caution to the winds and went for popularity from day one, but they paid the price four years later. I welcome and salute the very welcome change. The Fianna Fáil Government, although not as strong in terms of their Dáil seats nevertheless enjoying a strong Dáil position, at the very outset of their term in office are not going for popularity or for what is easy and are not conducting their affairs in the way I have been used to watching them do ever since I took an interest in politics.
I do not often have reason to say this, but I appreciate the generosity of several of the references made by the Minister for Finance in his budget speech and by the Taoiseach, Deputy Haughey, in the first few days of the new Government to the efforts which had been made by the out-going Government. That, I hope, is another sign that we are all growing up and turning over a new leaf, some of us a bit late in life. I did not fail to notice it, as I am sure neither did other Deputies on this side of the House. I appreciate it because it is not easy when you get into Government to avoid a feeling of exultation and to avoid chortling over the discomfiture of opponents who are far less numerous than they were before the election. That temptation was resisted, and this contributes to a better atmosphere in the House. I value these things very much.
The Minister for Finance in his budget speech had the decency and the generosity to acknowledge that in the general overall picture of the economy there were some positive aspects such as a substantial improvement in the balance of payments, a reduction in inflation and a containment in the level of annual Exchequer borrowing. These were references to what the out-going Government in what Deputy Haughey acknowledged were very difficult years, had been able to achieve.
I want to list some of the aspects of the Budget Statement with which I am not so happy, although I respect the courage and the willingness to face unpopularity which it represents. The proposal to retain 35 per cent of professional fees as from 6 June, due by official and public bodies generally, is something about which every Deputy in the House has been very heavily lobbied. I do not recall such an intensive lobby since the wealth tax was first proposed in 1974 and I have not had so many letters about any single theme since that time. I mention this not because there are architects, surveyors, engineers and solicitors in my constituency who are anxious to have this proposal changed but because I have grave doubts about its fairness in general.
Although I do not want to raise an alarm, I even have some misgivings about whether it can constitutionally be done, at least in the crude form which the Budget Statement allows one to apprehend. It may be that when legislation surfaces, if the Minister intends that this should be done by legislation, it will be in a somewhat more refined form. I do not want to be positive about this matter but I am uneasy about the constitutionality of the provision especially if it is a retrospectively operating provision. For example, suppose I am a consulting engineer who has given advice to Carlow County Council about strengthening a bridge and they owe me £1,200. If I could activate instant litigation I would be able to produce a judgment or a declaration against them in the High Court to the effect that that money was owing to me. There is some doubt over the legitimacy of a provision, even one processed through an Act of the Oireachtas, which has the effect of saying to Carlow County Council: "You can only pay the consulting engineer 65 per cent of what you owe him and the reason is that we want the other 35 per cent, even though that 35 per cent would not be owed to us under the taxation code".
If not, it would be refunded.
As I said, I do not want to be positive about this, but if I do not say it people will say I did not notice it. These are the kind of things which will be revolving in the minds of architects, engineers and solicitors who find themselves at the receiving end of this provision. If it is to operate purely prospectively, in other words, only in regard to contracts given and to money earned as from 6 June, that may be different, although I suspect the effect will be that professional fees will go up. I suspect there will not be very much saving at the end of the day even on a prospectively operating system, because these consultants and professional people will find a way to increase their fees so as to repay themselves for the loss this system will involve them in.
Deputy Treacy interjected a moment ago to say something about a refund. I appreciate that there is a precedent for refunds in the case of PAYE——
The Minister of State.
I forgot. I beg your pardon. I appreciate there is a precedent in the case of PAYE, but what proportion of PAYE earners find themselves in the happy position of being able to seek a refund? Surely only an infinitesimal proportion? I have been paying PAYE since it was introduced and I have never been in the happy position of being able to claim a refund. On the contrary, I always have to pay something over and above what has been deducted, and many PAYE earners are in the same situation. The number of people to whom the PAYE system delivers a refund I would imagine is exceedingly small, because the PAYE earner is given, at the beginning of the year, a certificate of tax free allowances which, depending on his position and circumstances in life, list the factors which will reduce his tax liability. Therefore, to deduct tax from him at a particular rate is likely to be correct and he is not likely to be owed anything by the Revenue Commissioners at the end of the year.
There is no suggestion here that firms of architects and engineers will be given something corresponding to a certificate of tax free allowances in respect of their expenses and overheads. They will have 35p in the pound taken from them whether it represents tax on profits or merely on gross turnover, and irrespective of whether they are going to make a profit at the end of the year. That is a crude, blunt instrument of a taxation measure, and if it is to operate retrospectively in regard to fees already earned, owing and due on 6 June, I would have doubts whether it can legally be done, although I am not positive about this. I would like the State, even a State run by the Fianna Fáil Party, not to be put to the expense of having to litigate this point and lose it.
It would be more to the point if the State made sure that whenever it incurred professional fees it was incurring them properly and that it did not unnecessarily involve itself in the payment of professional fees. In the last Dáil I was a member of the Committee on Public Expenditure. I can recall — I do not want to be tied to absolute details — a couple of sessions of that committee in which it emerged that the State had incurred architectural fees of £12 million on prison projects of which not one brick had been laid upon another. The Minister of State was a member of the same committee and possibly he remembers those occasions. It would be the best of the State's play to avoid the sort of situation where £12 million goes out the window on something which has not yet risen one inch above the ground. That would be more to the point than trying to screw professional people, many of whom are put to the pin of their collar to survive, though I know many of them are well off, by a crude blunt revenue-raising instrument like this.
Another way the State could avoid incurring immense bills is by being less lavish in the setting up of tribunals of inquiry. There was a time when ten years would go by without a single tribunal of inquiry. I do not want to produce facetious examples off the top of my head but it seems that any sort of mysterious occurrence is material for an Opposition Deputy to shout for a public inquiry into it and for the Government to concede it. The moment the State sets up a public inquiry into a small local matter, which a properly conducted departmental or police inquiry should be sufficient to clear up, the State is letting itself in for money running into seven figures, that has been proved again and again in recent years. No inquiry involving two, three or four parties will be conducted without a battery of counsel and solicitors for each, and rightly so, because their good names are involved, and perhaps even more than that. Any sort of tribunal of inquiry means the State has kissed goodbye to £1 million, £1.5 million or possibly £2 million. The same happens when a referendum, an extra election or national poll is held. These things cost money.
These may seem contemptible sums but one of the things which sticks in my mind from the 1973-77 period was Mr. Richie Ryan — one of the two Ministers for Finance I had the pleasure of observing at close quarters at Government meetings and although with very different temperaments the two tended to react in much the same way to pressure from their colleagues for expenditure—saying in exasperation that we never sat down as a Government without spending £1 million. He said he was tired going into Government meetings knowing that when he came out he would have been committed to a further £1 million expenditure. One million pounds here and £1 million there does not sound an awful lot, but enough of that makes the public feel it is peanuts. Like many other Deputies I have listened many a time to somebody saying—and it is always done in a pitying tone of voice as though I am the one who is being old-fashioned — that "we are only talking about £1 million". That is the way many members of the public, particularly those with an interest in a project, look at £1 million. If we look at £1 million like that, it is not surprising we are in the present position. If the State is anxious to save money on the fees side, it should save it by not incurring fees unnecessarily in the first place rather than by this measure.
The second point I want to mention is the national lottery. I do not think I have spoken on that subject before, but I want to state that I absolutely agree with every word former Deputy Liam Skelly said about the national lottery. I disagree radically with such a concept. I am completely against raising money by this means, because it exposes people who do not have a fully developed gambling instinct to the full play of that instinct. It brings up cases like the pathetic one we heard of the other day where a man spent £60 dole money on these wretched little cards and found himself committing an offence in order to indulge this unfortunate weakness further. I am sure that case could be replicated thousands of times all over the country. You cannot stop people's weaknesses, but the State should not go out in front and invite people into a gambling frame of mind. I realise there are precedents for this in other European States which we would all regard as respectable, but I have a bad feeling about this National Lottery. Either we can afford to subsidise certain things like sport, culture and so on or we cannot. Sport is in many respects a multi-million pound industry and should be able to fund itself — if I am wrong about that, and I may be wrong because this is an area of life I am very ignorant of, I am sorry. But if the State should wish to subsidise sport, it should do so out of its ordinary revenue. I am completely against putting certain objectives in a particular category and saying that if people want support for these objectives they will have to spin a coin, open casinos or gambling halls, run national lotteries and so on. I think the lottery should be closed because it is a sign of the times, a bad sign of the times.
The Minister also spoke about reductions in the size of the public service and, since I am trying to turn over a new leaf with Fianna Fáil, I will not go on too long about who is most to blame for the size of the public service. The Minister's admonitions on the subject are timely and well placed. There is something uncontrollable about the public service; the only analogue I can think of is something from the world of biology. There is something uncontrollable about the self-spawning capacity of a publicly funded institution in that there is no necessary limit to its power to breed subsections and sub-offices and to justify demands for more and more staff.
I will give an example and I hope I will not be misunderstood, because I can say with absolute sincerity that in the five years or so in which I was an office holder, I formed the highest regard for the standards of the public service from Department Secretaries to the most junior recruits. In no sense do I intend this as a reflection on any individual or Department; I mention it as an illustration from my own personal experience of how a single element or unit inside the Government service can balloon within a very short time. When you and I, Sir, first had the pleasure of making one another's acquaintance in 1973, I became Parliamentary Secretary to the Taoiseach, Deputy Liam Cosgrave, and I remained in that office for nearly four and a half years. I ran the office which Deputy Vincent Brady now runs and I was responsible for the attendance of enough Government Deputies to carry Government business, for the planning of the Government's Dáil programme and other miscellaneous jobs of that kind.
Sometimes the pressure was extremely severe. We had a very narrow majority and some of our Deputies were not easy to count on as they tended to be a law unto themselves. We are faced with an Opposition who were determined to destroy our health if they could not destroy our reason. The Government were obliged to carry, in the course of those four and a half years, nearly 400 Divisions. That is the number of times that you, Sir, occupied with the same distinction the Chair which I am glad to see you again occupy, rang the Division bell, presided over it and read the results. We won all of them except one, about which I do not need to remind the House. That, of course, meant a lot of high pressure work and stress for my office and myself at certain times during the week. However, at other times the work was fairly easy and during the recesses it was nearly non-existent.
That job was done by me and I also had another job in the Department of Foreign Affairs which imposed a certain, marginal stress on my office in the House because files were sent over here. I will not exaggerate the position but I am making the point that I did something over and above being Government Whip. I did that job with one private secretary and two very young girls, recent entrants to the public service, who did the secretarial work. I did that job with a staff of three for four and a half years and, as far as I remember, without feeling that I needed an extra person. That staff also did my constituency correspondence.
I have, wrongly, given the impression that I do not do constituency work. I do the very same kind of constituency work as any other Deputy. Moreover, in those days, I ran three clinics and I had a very substantial pile of constituency work to do. The three people in my office, who were excellent workers and about whom I could not speak highly enough, were able to help me to keep my constituency work in order, as well as doing the work of the Whip's office, organising the business and whatever work was involved in relation to the other Department.
A couple of years ago, I put down a question about the staffing levels under the new dispensation whereby parliamentary secretaries would be provided with additional staff. At that time the title of parliamentary secretary was not considered grand enough and it was felt that we would be regarded as little more than messenger boys in Europe. I was not there at that time — I was perfectly happy with the proud title of parliamentary secretary which had been there since the State was founded — but they were uptitled to "Ministers of State" so that Pat, when he arrived in Brussels or Luxembourg, would be recognised in his proper dignity and would not have to make excuses or explanations in regard to parliamentary secretaries in Ireland being just as good as a junior Minister somewhere else. It was to save Pat that mortification that the title was changed.
When I made an inquiry about the staff levels attached to Ministers of State, I found that the number of staff now attached to the person doing the job which I had done in the middle seventies with three people had increased to eight. I have spent a few minutes on that because it is a simple instance from my own experience and for which I can vouch of how, within a space of about seven years, a single, very small unit of a Government service can balloon and cost roughly five times as much in salaries.
The Minister, therefore, is right to try to take this problem by the throat. Until that is done and proper mobility established within the service so that the genuinely understaffed areas can receive an infusion of strength from overstaffed areas and until there can be proper control of staff needs — which should be decreasing in the era of computerisation — we are wasting time trying to trim expenditure by cutting threepenny-ha'penny schemes here and there. The big item of expenditure is the number of people on the State payroll and until that is tackled we are only wasting our time pruning other things here and there.
I am sorry, however, that one small element of the State structure has been scrapped, namely, the Dublin Streets Commission. The Government made a serious mistake in this regard. I know it is true that if Dublin Corporation were doing their job and had done their job down through the years there would be no need for such a commission but that is patently not the case. It is flagrantly the case that Dublin is the scruffiest capital in Europe and probably outside it. It has declined from a seedy but graceful city which is was when I was a child into something that you are ashamed to take a visitor through and you would certainly like to be spared his commiserations in regard to its state. Since the corporation have shown themselves not to be able to do anything about making sure that the city centre presents a decent appearance and if the commission could have done so I am extremely sorry that the Government felt it necessary to scrap them.
I compliment the Minister on his bold — I hope not piratical — efforts in regard to closing the Border to the bus traffic going there for no other purpose than to shop. I do not know whether he will get away with it at European level as, clearly, the last Government thought it could not be done for that reason. However, if the Minister can make a case that he is within his rights in doing so, he is entitled to take the credit and I will not begrudge it to him. He has already received credit from the Border towns for his action.
Usually at budget time I make an extra long speech — which I will forebear to do on this occasion — about how budgetary tinkering is not enough in dealing with the problems of the economy. I usually go on at length about how the spade needs to be struck into the soil a great deal deeper, how major reform in our structures of responsibility will be necessary, how in particular local government will have to be transformed from the expensive farce which it is at present into a system of local development co-operatives.
I also usually speak at length about the necessity to intensify technical and, in particular, linguistic education and to increase dramatically the number of graduates in third level institutions, possibly by means which have never been attempted before, by doubling up, by means of staggered cohorts, the number of people being put through appropriate faculties in the third level institutions which are in full session for roughly six months of the year and which could perhaps be adjusted to take a second stream.
Sometimes I make remarks about the necessity to do something about which we are always talking but never achieve, namely, reform industrial relations and the industrial structure by means of reducing, in a way which Seán McEntee tried to do in 1941, the number of trade unions to roughly one per trade. This would avoid the militant competition which is at the root of most industrial unrest and, therefore, so much disemployment and which has been at the bottom of so many closures and the throwing of people out of work.
In this connection I should say something about the need for institutional or constitutional reform of the Seanad which fulfils very little useful function in its present form. It could be converted, perhaps through a system of direct elections from vocational bodies such as unions and farmer organisations, to a useful second Chamber which might be the sphere in which the antagonisms which at present separate the self-employed and farmers on the one side from the unions and their members on the other might be eased and in which mutual understanding might grow. These are the things which are more or less conventional in my budget speeches and I do not want to repeat them all over again.
Let me say something about the atmosphere which has prevailed in politics during the past two months. Since the coming into office of this Government and since the production of Deputy MacSharry's budget I find a curious atmosphere. That sense of strangeness may reside more in my perceptions than in any objectively observable realities which are perceived by other people. I must admit that I feel a strange sense of disorientation, although this is not the first time I have changed sides in the House. I have a strange sense of weightlessness. I cannot compare it to anything. It is a very unusual experience; the competing forces of gravity which hold one, politically speaking, in position to a passionate partisan attachment to one's own side and a passionate aversion to the other — these forces certainly operated in this House up until recently, but suddenly they appear to have eased or weakened. I do not know whether any other Deputy on any side of the House feels that and is puzzled by it.
One of the factors in the creation of that sensation is what I mentioned at the outset, namely, the very surprising tone of the Fianna Fáil budget which, far from courting popularity and sneering and belittling the efforts of the last Government, took up the budget which the last Government in their final phase, when composed only of Fine Gael Ministers, had prepared and they are trying to build on it. It is, of course a disorienting experience for a politician when he finds that his efforts are not only not being criticised but are being recognised by his opponents. It is as though he thought he had a further step to descend on a stairs in the dark but finds he has already reached the bottom; or when he feels he needs to thrust hard at the door to open it finds the door has actually been open all the time. The atmosphere which the incoming Government have generated has been very conducive to this, and although it takes two to achieve it, they have succeeded in creating a certain air of consensus in this House.
Of course, that consensus is not shared by all of us. I cannot claim any regret over it; two weeks ago in this House I drove Deputies Mac Giolla and Higgins into a paroxysm of fury but that is what political debate should be about. I disagree with those two Deputies radically about a whole range of issues. That is where the gulf is fixed. No doubt, in time their numbers will enlarge, they will get the run of themselves better, they will understand better what the public need and they will drop the kind of tone which keeps them down very nearly in single figures.
I am not saying that debate has vanished from the House, but so far as I am concerned and I suspect so far as many other Deputies are concerned it seems to be between people who think like Deputy Treacy and I on the one hand and Deputies Higgins and Mac Giolla and their friends on the other. Therefore, it is not a total consensus but I do detect an air of general consensus over a wide range of issues between the major components of this House. I cannot expect that the Taoiseach is going to accept any advice from me in any frame of mind other than in one of fury, seeing that I have expressed hostility and disapproval of him so many times both inside and outside of this House.
He is a reasonable man.
Without on this occasion experiencing any sense of strong hostility I want to say to him, in genuinely wishing to advise him, that the thing which can wreck that air of consensus, and the only thing which can wreck it, is a return by the Fianna Fáil Party to their old ways and manners, the personality cults, the arrogance and the strokes.
It did seem to me the other day that the old unregererate village-community kind of Fianna Fáil was showing its head again when I read, much to my regret, of an episode in RTE said to involve a Minister — I have forgotten what he is a Minister for. It is not like Deputy Wilson to be self-important and I feel it was a lapse, if the report I read was correct, which I am sure he instantly regretted. We all can get a rush of blood to the head. I know the man well enough to realise that it is not characteristic of him to stand too much on his own dignity. I will let him off in this respect with a caution but that episode is the kind of old Fianna Fáil manner which the people hated. I hope we will not find ourselves slipping back into it because if we do, it will destroy consensus and the good atmosphere in this House and will quickly destroy the Government's chances of getting real support on this side of the House — I am not afraid of losing my seat on account of an election which might be called because I felt obliged to vote against Fianna Fáil. One thing which can destroy a genuine anxiety to co-operate in order that the country benefit is the rise of the old Fianna Fáil manner again.
It is against that background that I say I was so impressed — it was the first time I have said it about that Deputy — by the opening parts of Deputy Doherty's speech this morning. I could not repress a smile — I do not think, Sir, that you were in the Chair at that time so let me tell it to you as you will enjoy it. At one stage Deputy Doherty said that it was a pity — he is right of course — that Ministers with unpopular portfolios such as the Minister for Finance should have to bear the political punishment when they did the right thing for the right reasons and therefore did something unpopular. It is tough but Deputy Doherty's solution was that Ministers with unpopular portfolios should be given free passage back into the Dáil and put on a par with your good self.
I know you cannot expect a total conversion from a man literally in one jump and Deputy Doherty has come quite a distance in the speech he made this morning but I have to say to him that a Minister is a Minister in order to do the right thing, even if it is unpopular, and to carry the consequences. That is what he is there for. I do not remember any Minister for Finance ever losing his seat. Other Ministers have lost their seats for a different range of reasons but I do not ever recall a Minister for Finance being put out of office no matter how unpopular his budgets had been. The personality cult can destroy this. Let me illustrate what I mean by this publication, Ireland Today. I know it is written by the Department of Foreign Affairs and that there is an incoming Government. I make all allowance for these facts. I am perfectly certain the Taoiseach had not the faintest notion of the content of volume 1035. What is the content? This is a small leaflet, as one can see, but apart from this best opportunity of the front page there are six others of seeing what the Taoiseach looks like. There are no fewer than seven photographs of him in this slim leaflet issued monthly by the Department of Foreign Affairs. This is the sort of thing which the people hate.
That is for the international market.
I do not honestly know the Taoiseach well enough to predict anything about him, but I suppose that he will not believe that I, for once, mean this in a constructive way. He should make a positive effort to repress that side of his personality and of his party's manner and personality. I am a little worried when I see all kinds of projects which have nothing to do with the Taoiseach's Department being presented and being permitted to be presented as ones which have been personally sponsored, personally gestated and given birth to by this Taoiseach. "Money City for Dublin"— this admittedly is an article that I tore from an English paper, but it is from a resident correspondent no different from one you might see in an Irish paper. It is about a project to make Dublin a financial centre, which may be an excellent project, but it is one at the forefront of which I would have thought the Minister for Finance should be.
Within the last month I have also seen stories to the effect that the Taoiseach has personally ordered the doubling of people to clean up the pollution from the Kowloon Bridge on the beaches of west County Cork. Is that the Taoiseach's business? Does the Minister for the Environment not feel that he is being upstaged by that sort of behaviour? I read that the Taoiseach had ordered to sea the Béal Trá, the marine investigation vessel. I thought I heard recently that that vessel had become unserviceable but, unserviceable or not, it has been ordered to sea, not by the Minister for the Marine — whose functions, by the way, have not yet quite settled down; when I saw him mentioned in the Order Paper of two weeks ago there was only one question addressed to him and that related to the bad state of the roads in County Kilkenny; the potholes were perhaps navigable? That may have been the point.
The Minister for the Marine, I would have thought, or the Minister for Fisheries, is the man to be seen to be ordering the Béal Trá to sea but, no, it is the Taoiseach, photographed swanning up the companion way, saluting the ensign and all the rest of it. If that atmosphere gets going again — the unveiling of the plaques to himself — it will wreck the good feeling here at present which I wish to express and which most of my colleagues share.
I beg the incoming Government to take to heart what I am saying, not to regard it as a cheap political gibe, I am trying not to present it as that. I beg them to understand it not just from the point of view of their own electoral interests, but for the hopes that they may genuinely and do genuinely entertain to do this country good, to put behind us the old chapter and old ways of doing things. They will have to drop the old manners, too.
One of the reasons for my joining Fine Gael, the greatest single emotional reason, was not the Just Society policy, or this or that, but that I felt so attached to the image — although it is a ridiculous word to use about him, because the man himself would never have used such a word if it had been current in his time or subscribed to the notion behind it — to the figure which William T. Cosgrave cut in the early days of the State and let me say also, the figure which his son, subsequently Taoiseach, cut here — modest, personally unassuming, not given to swaggering around, inviting people into their houses getting intimate shots of them chatting up their children, or ponies, or anything like that. That is the kind of man whom I admire and that is the kind of public figure that I would like to be. That is the thing which people warm to more readily than to a display of interest in one's own personality, the display of a man who never gets tired of himself.
I beg the Fianna Fáil Party, even if that is their nature, to submerge, to sink it. That is the way they will get consensus in here. If we find ourselves dealing with a political atmosphere coloured by those manners, I would not be too optimistic that the present good feeling will persist. The last thing that I wish to say will come as even more of a surprise to the Taoiseach if he ever discovers that I have said it. There was a photograph in some paper not long before the election showing him posing with a golden eagle. One was to understand that these were two creatures of the same type, that one might have been a symbol of the other. That was the implication which the human member of the duo was perfectly prepared to allow to come through to the public. If the Taoiseach genuinely wishes not merely to cut that kind of figure but to amaze people into themselves spontaneously making such a comparison — and that is the only kind of image which is worth anything, one which others spontaneously are willing to accord you — if he genuinely wishes to be remembered along lines or in forms for which an image of that kind would be appropriate, let him reshuffle his Government. If he finds in six months' or in a year's time that the atmosphere, the consensus in here, the ability to get along with tough decisions and for the Opposition to support them, if he finds that atmosphere persisting in six months' or a year's time let him reshuffle his Government, say goodbye regretfully to five or six of the members of that Government and invite five or six of the members of this party to join it instead.
First, I should like to comment on one or two of the points made by Deputy Kelly, my constituency colleague, and in particular to his final point and on some of his earlier remarks in which he referred to the fact that old fashion politics had stopped. I am aware that he has been for some time flying the National Government kite. I am one who believes that it is an non-starter because of the nature of Irish politics and for other reasons also. I suggest that he is witnessing right now the nearest thing to a National Government that he will ever experience. His final remarks suggest that we should invite others from across the way to join us. I believe that we will do it alone. This consensus approach both inside and outside the House is due to the atmosphere of realism inside and outside the House. I believe that this will be a good Government if we do hold firm against sectional interests. The public accept the approach being adopted. The people to whom I, and no doubt Deputy Kelly, speak accept it, as long as they can see the light at the end of the tunnel. That is the bottom line.
The Deputy made another point with regard to the retention of 35 per cent withholding tax, I accept that, like myself, he is no doubt snowed under with representations from constituents because we appear to have many consultants and architects in the Dublin South area. I might refer to a point made by the Minister, Deputy MacSharry with regard to this measure. I accept many of the things that Deputy Kelly has said, but there are specific measures, as Deputy Treacy has pointed out. I wish to repeat them here before I get down to the real business of my budget contribution. That is, that the scheme contains:
measures to mitigate the adverse consequences which have been adverted to. In particular there is provision for payment of interim refund of the tax deducted where the fees in question represent the bulk of the taxpayer's income and are expended mainly on operating costs and provided that the accounts of the taxpayer for the accounting period prior to the period in which the deductions at source are thereon paid. There is also provision in special circumstances for the Revenue Commissioners to waive any one or more of the conditions for an interim refund and to authorise payment of a refund. The Revenue Commissioners will pay interim refunds with all possible speed. The objective of the interim refund provisions is to prevent an inappropriate level of tax retention bearing in mind the final liabilities of the taxpayer. I would also point out that any tax deducted at source will, of course, be available for offset against the eventual liability of the taxpayer.
I appreciate that that is pretty complicated. The Minister is conscious of the problems of so many people who are obviously lobbying very hard at this point. It is a very difficult situation but the Minister has responded very sympathetically to the plight of these people.
I want to refer to Deputy Kelly's contribution which as usual was stimulating and witty. He referred to the pictures of the Taoiseach appearing in periodicals and newspapers. As a new Deputy I am very impressed with the management structure which exists in the Government. It is natural that the name, photograph and statements of the managing director will appear from time to time in periodicals and newspapers. I would not be too upset about this. Deputy Kelly obviously has some acceptance of the way the Government are going. He said he was impressed by this. I ask him to accept that the leader of any country will be prominent in the media. He referred specifically to a number of articles and periodicals. I do not believe that politicians should be upset by this. It is the nature of politics.
I am not upset about it. I simply described the effect it has on the public.
The public like it. He is a lucky man.
I do not believe the public are upset about it. The people of Ireland appear to like the personal approach which many politicians have, in particular, those in country areas. We seem to be very accessible compared with other countries, perhaps too much so at times. This is the way people of Ireland seem to like their politicians. This can be a good thing in the right context. I appreciate that there is an over indulgence at times in this personalised approach by politicians of all parties. From my experience — having been born in the West of Ireland and now being an elected representative for a Dublin constituency — I accept some of the points Deputy Kelly made. In general there is nothing wrong with it. It is important that the leader of the country should be very prominent especially when he is doing a good job.
The Deputy misunderstood me. Mr. Lemass was supposed to be one of the best Taoisigh ever.
Those were different days.
It does not run in the Liam Cosgrave tradition.
The correct approach procedurally and otherwise has been adopted. I want to refer to the historical background of the budget. It is not always easy to realise the importance of an event when it is happening or the significance of a time when it is being lived through. Often it is only with the benefit of hindsight that we are able to place an event in its proper context. Years later it may become apparent that a particular date was the point at which great changes began to happen.
With regard to our own recent history, who would have realised that the events taking place in the Middle East in the early seventies would have had such a profound and lasting impact on the way our economy would perform? At the time it was widely assumed that the general expansion and improvement which we experienced throughout the sixties would continue, albeit with a few temporary interruptions as we adjusted to the sharp increase in energy prices. There was almost universal agreement on all sides of the House that the expansion of the economy could and should be maintained by the simple expedient of deficit budgeting.
We decided, in a word, to borrow our way out of the difficulties ahead. We borrowed and then we borrowed some more. In the end we borrowed to repay the borrowing. We all thought it was the right thing to do. Perhaps it was the right thing to do at that time. We expected that the borrowings could be easily repaid out of the revenues which an expanding economy would produce. We looked forward to prosperity as a result of our own efforts and the support of our partners in the EC.
We had a growing population to cater for. More schools, better social services, improved roads and so on were needed. There was universal agreement that these facilities must be provided. Budget after budget sought to provide them. We paid scant regard to the need to earn those increased benefits. We all believed we could take care of the costs when the economy picked up. Now we know differently. We know that the course so readily followed by all of us in those years will not automatically lead us to that era of prosperity and ease.
The knowledge that things could not go on as before has taken some time to sink in. By the early eighties we had the uneasy feeling that we were not on the right path, but still we were reluctant to begin the painful process of correction. We still hoped that somehow things would sort themselves out. We were not yet ready to accept that painful and difficult choices would have to be made.
We did not want to interfere with the services which had so recently been given to the poor, the old and the deprived. We all wanted to treat the less fortunate in society with dignity. We were proud of our good housing and we rejoiced at the fine schools and colleges which had been provided for our children. We believed it was right to make the lot of our older people as easy as possible. We liked the new image of our Ireland which could take its place alongside its European partners as a country with a social conscience. The good years of the sixties had given us the chance to go some way towards achieving our goal of providing a good life for all our citizens.
We did not want to do anything which would be seen as in any way halting or even slowing down that process, so we borrowed. Now we have come to the point where we must slow down, or even halt, the progress. If we do not, we risk losing all the hard won advances and all the proud achievements of the past 25 years. It is in this context that I believe the budget speech of 1987 is an historic event in the history of the State. Now, at last, and for the first time, we are setting before ourselves a prescription which deals with the harsh realities of our condition as a nation.
The Minister correctly analyses the condition of the economy. He states that its performance over a long period has been disappointing. Who could disagree with him? He tells us that the level of national output for 1986 was lower than in 1980. That is bad enough but it is much worse when contrasted with the real growth and progress in almost every other economy in Europe. Yet that same economy — smaller than six years ago — is expected to provide the means out of which we seek to finance substantially increased public spending. Clearly it cannot do this without the most dire consequences for all of us.
As a first priority, the budget seeks to set in motion a return to growth in the economy. On 31 March the Minister for Finance stated his hope that interest rates would fall as a first and essential step towards breathing life back into the economy. Now, just five weeks later there are real signs that interest rates are beginning to come down — 1½ per cent for business so far, and hopefully by much more in the months ahead — so that we will soon be on a par with our trading partners. The value of reduced interest rates cannot be overstated. Aside altogether from the direct savings to industry and productive investors, there is the equally important fact that low interest rates on the so-called "safe" investment outlets — gilts, bank deposits, etc. — will surely encourage those who control investment funds to return to the riskier but far more productive areas of industrial and commercial investment.
No progress can be made in raising the performance of the economy unless a climate is created in which it is better and more profitable to use our scarce capital resources in the areas of industrial and commercial enterprise rather than keep it on deposit in a "safe" home. Our capital must be put back to work. The Minister is correct to accord such high priority to the reducing of interest rates. That is only a first step. He must continue down this road by taking every step available to him to create and foster a climate in which savers and investors, large and small, want to put their capital into real, enterprising, job creating projects. He must make it attractive and less complicated for all of us to risk what we have in the hope that, within a combination of care and hard work, we can create real jobs and real wealth for ourselves and for others.
I therefore ask the Minister to consider the whole area of participation by employees in the equity of their companies. The present limits on levels of participation on tax favourable conditions are restrictive and an increase in the limits to a more meaningful level would have a beneficial effect all round. The Minister proposes to make adjustments to the business expansion scheme which will result in a greater degree of flexibility in the way relief can be obtained and applied but he still proposes to retain an upper limit of £25,000 per annum which can qualify for set-off. If the purpose of the scheme is to provide a means whereby the small to medium saver can take a direct stake in the promotion of manufacturing industry then it has merit. The figure of £25,000 is a reasonable one. It is worth remembering, however, that the IDA have in some cases in the past grant-aided new industries coming to this country to an extent in excess of this amount for every job created. I do not want to decry that scheme but I must point out its very limited potential to provide jobs. A sum of £25,000 in the hands of someone promoting his or her own business could help to create more than one job but that amount invested through the medium of a designated fund takes on the flavour and shape of institutional lending. Therefore, it loses a lot of its potency to the promoter of a new or expanding enterprise.
The Minister could with profit broaden the scheme so that substantial amounts of money that have been left dormant could be enticed out of the dusty vaults of the banks and building societies and into the real marketplace where jobs are created. The Minister proposes to increase the ceiling in the amount of dividends of a manufacturing company which may be exempted from income tax from £7,000 to £9,000 where the company in question has an approved profit-sharing scheme. That concession will have only a very slight effect in encouraging the kind of enterprise or risk-taking which must be encouraged if the economy is to expand. There is a strong case for extending this scheme in specifically designated areas so that people with enterprise and with international marketable skills, which we desperately need, can be encouraged to set up their business here rather than in the numerous and rapidly expanding money centres which are emerging all around us in Europe and elsewhere. The basis of any successful money market or market in internationally traded commodities in future lies almost totally in the talents and skills of the relatively few men and women who operate these markets. We do not stand a chance of attracting them to this country if they are not given the opportunity to retain a fair share of the wealth which their skills and expertise create.
No one in their right senses will settle for a halving of their income simply because we tell them that Ireland is a good place in which to live. If we are serious about setting up a viable centre for the international trading of money and commodities in Ireland, then we must address this problem and find acceptable solutions. I believe that an adjustment to the scheme for the exemption from income tax of certain types of dividends could go a long way to meeting this need and I would ask the Minister and his colleagues to consider this when they are finalising their plans in connection with the proposed enterprise centre at the Custom House site in Dublin.
The Minister places great importance on the need to restore confidence to the economy. He states we must do more to encourage non-residents, and especially expatriates, to invest in the economy. People who have money to invest are very anxious to put that money to work provided they have a reasonable chance to get a return on it. Most of them will take measured risks in the hope of making a profit. They will not take unnecessary risks; they will not back losers. They will not invest unless there is a reasonable opportunity for them to make and retain a reasonable return on their money. We desperately need their investment in our economy. The Minister must not be deflected from his stated intention of providing the conditions and the confidence which will attract and retain this investment. He must create the climate in which investment is attracted to Ireland. If he does, then we all stand a chance of having a future in our own country. If he does not then we do not have even a remote chance of reversing the decline in our fortunes to which he referred at the outset of his budget speech.
Of course all the structural expansion in the world is of little use to us unless our industry and traded services are operating in a competitive way. We live or die as a nation by our ability to sell in the fiercely competitive markets of the world. It seems incredible that we in Ireland often find that our prices are higher than those of countries such as Germany, the USA and Britain. It is not just the low labour cost centres of the Far East that can undercut us. Of course, it is said that our input costs are too high. Transport costs are too high, energy costs are too high and labour costs are too high but our productivity is too low. We are remote from our main markets and the scale of our economy is too small to allow for the economies which size would bring.
Japan is remote from Europe and the USA and has to import all its energy and raw materials. Yet it consistently outsells its competitors. Why? It does so because it only tries to take out of its economy what it can afford. It does not decide the level of its income before it knows the amount available to it to pay that income. Its people know, as we do not know, that it must earn its wealth before it can spend it.
Many of our costs are difficult to control and are, to some extent, outside our control. I am referring to imported raw materials, oil prices and so on but many more are within our own control such as incomes. The Minister has clearly stated what must be plain to all of us who have eyes and ears, that pay increases in excess of what we can afford have contributed greatly to our economic difficulties. That is true whether we refer to the £2,700 million it costs to meet the public sector pay bill or the unrealistic amounts paid to people in small factories and other enterprises. We have it in our own hands to correct the imbalance between our high unit labour costs and the more realistic costs in other countries.
Generally we must increase productivity, get better value for money and not just in those industries which produce the actual nuts and bolts of our exports. Where money is expended in return for human endeavour we must seek to obtain a greater return in both quantity and quality and no sector can plead its case for more in isolation from the rest of the economy.
If a service is being produced at a profit, and especially if that service is essential to the life of the country, then the profit made must be passed on to those who pay for the service in the form of a reduction in the price charged. Electricity is a case in point. Our electricity costs to industry are 25 per cent higher than in Britain and yet we hear strident demands for an increase in pay from people who are already quite well paid. The Government and the country had no option but to resist such demands. Otherwise we would be making a mockery of our whole economic philosophy. No one has a right to extract from the economy what they consider right for themselves without having proper regard to the interests of the whole economy, of all the people, employed and unemployed.
In welcoming the ending of the ESB strike I should like to commend the Government on holding firm against such a strong power bloc. The business community and their employees are also to be complimented for not accepting defeat and carrying on regardless of the odds. Some had to invest at considerable cost in generators while others worked through the night. There is no support or sympathy from the people of Ireland for strike action. I hope that management and workers will maintain direct and realistic dialogue over the coming months to secure long-term industrial peace in this crucial area of the Irish economy. I hope the Minister and his colleagues will take all steps necessary to limit increases to those which are clearly self-financing and which in any case fall within the Minister's own guideline of being well below the rate of inflation.
Of course, there are two sides to any budget. It is proper that the main thrust of this budget should concern itself with the creation of wealth. Without that wealth, it would not be possible to fund the spending side of the budget. I am sure the Minister, with every Deputy, regrets it is not possible to maintain, let alone increase, all the spending programmes to which we have become accustomed over the years. Some reduction in expenditure has to take place if we are not to sink without trace under the burden of our debts. Of course every cut falls on someone's head; each person affected by a reduction in services may feel that the cut affecting him is unfair and even unnecessary. I suppose it is true that to some degree every cut is unfair, it involves taking away something which had previously been available. Since it was the Government who were giving, it became difficult to realise that Governments, too, have limits to their ability to pay and the limits of the Government are no more or no less than the combined limits of all the people who finance the Government. Since cuts in services usually involve reductions in transfers of services to people who are in some way deprived, it is essential that those same deprived people be shielded as far as is possible from the effects of the cuts. It would be less than candid to say that all poor, or old or deprived people will be shielded in total from the effects of all the cuts. Undoubtedly, all our people will feel their effects to some degree, but it is necessary for the Government to ensure in all cases where it is possible to do so that the burden falls most heavily on those who can best carry it. It would be outrageous if an employed person earning, say £20,000 a year, should, because of the essential nature of his work, force the Government to pay him an increase in salary, and that as a result an unemployed person would have to find extra money to meet his electricity bill.
The Government and the Minister have made a fair attempt to alleviate the plight of those who are at the bottom end of the social scale and it is possible to point to specific measures which will help the unemployed and the lower paid: the restoration of the rural dispensing scheme, the bringing forward by 15 weeks of the social welfare increases, the refusal to implement the prescription charges proposed by the outgoing Government, the restoration of unemployment benefit for 15 months instead of 12 months, and keeping the waiting period at three instead of six days. There is a genuine attempt to remove the more anti-social measures proposed by the last Government. Given that cuts in expenditure had to be made, I am reasonably satisfied that they will not fall too heavily on the poorer members of society.
I said earlier that I was impressed with the management structure and style of this new Government, in particular with regard to our natural resources — food, fishing, forestry and tourism. With regard to the food sector I am convinced that no serious attempt has been made to develop the unique natural resources of our country. I believe that is where the future wealth of our country lies. The ultimate objective should be to establish Ireland as a major food exporting country with emphasis on the product reaching the final stages of processing in this country. We must try to make Ireland the pure food capital of Europe, producing and marketing properly top shelf quality organic food. I welcome the fact that food now comes under one Department and that a Minister with special responsibility for food is assigned to the Department. I wish him well in his new role.
I welcome also the appointment of a Minister for the Marine, and I have no doubt this will lead to the realisation of the true potential of our fishing industry. I welcome also the appointment of the new Minister of State with special responsibility for Forestry. With only 5 per cent of our land under woodlands, it is imperative that a revamped forestry service seek out new ways to involve the private sector. One option would be a joint venture or co-financing arrangement between the State and private sector. State forestry must adopt a more aggressive marketing and promotional role. We have the best tree growing environment in Europe. We have a combination of ideal soil and climate for wood production. With the current demand for timber in the EC, we must produce more wood. This will give downstream employment when the trees mature, in sawmills, paper production etc.
The Agricultural Institute estimate that up to 3 million acres of land, especially the wet mineral grass, rush-type soil, would be more profitably utilised for tree growing than farmed for beef or milk. In the UK, an individual's forestry investment can be set against current income for tax purposes. This has been a key reason for the rapid expansion of private forestry there. Such an approach should be adopted in this country. I believe it would provide a major boost to our economy and many sustainable jobs. In general, with regard to the privatisation debate I feel that State investment should complement and not be in conflict with private industry.
With regard to tourism, another area with the new type of management, I believe that the Government and future Governments must place particular emphasis on the protection and development of our natural resources. I acknowledge the Taoiseach's particular interest in this area. While we expand industrially and economically, we must always maintain a caring vigil in regard to our unique environment, our rivers, landscape and clean air, well distant from the ever-expanding pollution of mainland Europe. As mentioned in the House yesterday, we must be vigilant, too, in regard to our historic monuments. I welcome the amalgamation of the Department of Tourism with Transport and the Minister's recent announcement concerning the reduction of transport costs into this country. No doubt this will lead to increased and badly needed tourist traffic in the current year.
In regard to education I believe that the newly appointed Minister is sitting on one of the hot seats in this Government. I welcome the fact that she is continuing to communicate and consult with the unions involved and is keeping them informed of future developments. I welcome the decision of the Minister regarding career guidance in our post-primary schools. I hope the Minister will address herself to the important issue of the cost of third level education. Many of my constituents, particularly PAYE workers, claim that they should be entitled to tax relief on loans for their sons or daughters. Many of these people, whose incomes stand fractionally above the qualifying parental income limit for higher education grants, simply cannot afford to borrow. In many respects they are the new poor. The Minister should consider such a course of tax relief on education loans when the economy improves and growth begins to take place. I ask the Minister to consider also a scheme of attractive education loans for students. I know she has expressed some viewpoints on this issue and I urge her to bring forward some proposal in that area.
I referred earlier to the need to put some confidence and hope back into the economy. People, and not just the economy, also need hope. Hope is something that is not easy to define. When it is present it is the invisible force which fuels and motivates people to achieve their potential to attain goals for themselves and their communities which in its absence would not be attained. The absence of hope becomes clearly visible in the decay of our industries, in the decline of our environment and in the flight of our people to other countries where opportunities and hope exist. People will never have confidence or hope if they see around them a country which is drifting without a sense of direction or without a clear goal in sight.
During the past four years we had a Government who were hell-bent on balancing the books. There was little evidence of any clear plan or any goal except to balance those books. I do not claim that the Minister has, at one stroke, cleared away all the confusion and mapped out a certain path to prosperity for all of us. Certainly he has not. He could not nor does his budget claim to do this. He has, however, made a clear analysis of our difficulties, something that had never been done heretofore. He has commenced the process through which we will, if we persevere, move towards greater prosperity and fair treatment for all our people. He has attempted to balance conflicting demands. He has set in motion a process which will enable us in the years ahead to reduce the crushing burden of taxation which is carried by those who contribute under the PAYE system.
Perhaps it will be possible to see that mysterious ingredient, hope, filter into our daily lives again. Maybe our young people will be able to say: "Yes, we have a Government who actually know what they are doing". We may yet be able to provide the career outlets for our brilliant and highly trained young men and women in an environment in which they would be justly rewarded for their own efforts. We have faced up to some hard and unpopular decisions. It is important that these decisions be implemented with compasion.
I know I speak for many people when I urge those concerned to avoid undue delay in processing housing grant applications which were made prior to the budget. Great distress was felt by many of those who had entered into legally binding arrangements and depended on housing grants to complete their contracts. We look to the Minister for the Environment to ensure that all outstanding matters are concluded in a fair and equitable manner. As one who has had some involvement with local authority housing matters, I look forward to a definite improvement in the community life of those living in corporation and county council housing estates.
The £5,000 scheme was welcomed but it had some unforeseen and unwelcome side effects, not least of which was a definite lowering of morale among those who could not or did not avail of the grant. Those who remained felt that their status had been damaged by the scheme. Very often those who were best suited to adopt a leadership role in their community were the ones who moved on. Once again, the element which was sapped from the community was hope and confidence.
I am grateful that a start has been made along the hard road towards recovery. Many people will undoubtedly suffer in the journey along that road. It is little consolation to them or to us that the alternative would have caused much more suffering. It is the duty of Government to govern in a fair manner and one which they judge most likely to lead to the greater happiness of the people. It is the duty of politicians to support that process. I look forward to participating in the move back to recovery and hope. The budget gives us a chance to start out in the right direction. My support for the budget is not blindly uncritical but it is nonetheless wholehearted.
Fine Gael broadly support the thrust of the budget. We have stressed that we are as anxious as any group to see that the finances of the State are put in good order. It is imperative that public spending is cut and it is essential that, as a result, interest rates show a considerable drop. Following on that we hope there will be considerable improvement in the climate for employment.
Some people see the Fianna Fáil budget merely as an imitation of the Fine Gael budget but with added severity. That may well be true. What we object to is the dishonest way in which the last general election was fought by making people believe that there was a better and easier way to solve our economic problems. That dishonesty sticks in my throat and I am sure it is also the case with my colleagues.
We told the people what had to be done to start the process of rectifying our financial difficulties. When I say "start" I mean start on the basis of a new Government. The process had already been in motion for four years. The Fianna Fáil Party led people to believe that our finances could be put in order without pain or hurt. Once elected, they turned turtle and brought in measures which were considerably more severe than those we advocated. At the end of the day the solution will not come about more quickly nor will it be any better than the one we outlined. Many of the targets which have been set are unattainable.
The Budget Statement contained a lot of waffle. The Minister spoke about diverting resources from administration to actual action and getting things done. That is easily said and we wait with interest to see if all the money which is allegedly being wasted on administration can be channelled into gainful activities such as the creation of employment. I anticipate that it cannot be done but I wish the Government the best of luck. Over the past few years, Governments have tried to eliminate wastage and divert money into activities which are meaningful and bring prosperity at the end of the day. Much of the slack in the public service has been eliminated particularly in recent years. There is not as much leeway as was stated in the budget for further savings. There is a certain amount but it is not as great as has been stated. There will be a considerable shortfall in the State finances at the end of the year.
The Minister stated that if he had to he would bring in a mini budget. I do not expect it to be that small. The deficiency in receipts will be considerable. I hope I am proved wrong in that because we all have the same objective, that is, to get the finances back into good shape. There are too many loose statements in the proposals that were put forward. They should be copperfastened and made more definite. I object to the dishonesty involved in making the people believe that the financial position can be rectified in a nice easy, soft manner. That is the impression Fianna Fáil gave prior to the election. Now that they are in power, they crucify certain sections of the community. Take, for instance, the health charges for people on low incomes who do not qualify for medical cards. They are hard working and are not in receipt of any benefits. Yet, they are asked to pay most and that is not playing the game. People's ability to pay should not be judged on their eligibility for a medical card. There is an element of hit and miss in that system. There are people in receipt of benefit who are considerably better off than those who are working and not in receipt of medical cards. There is the kind of inequity and injustice in the proposal.
Perhaps those on the Government benches would like to forget the slogans they had during the election. The obvious one said: "There is a better way". We have not discovered what the way is. The road ahead will not be easy. The slogan which was meant to damage Fine Gael in particular stated: "Health cuts hurt the old, the sick and the lonely". In the light of what has happened since the general election that slogan must be seen as about the most cynical exercise ever in Irish politics. We brought in cuts but they were moderate cuts. What have Fianna Fáil done since they came into power? They have brought in swingeing cuts in the health sector. Every Fianna Fáil Deputy, every Fianna Fáil activist, should be asked to explain himself and to explain the meaning of that slogan, the meaning of their subsequent policy in Government and how they can justify what they have done in the light of what they said prior to the election. It is one of the most cynical exercises I have ever seen in politics in this country or anywhere in the world for that matter. It reminds me a little bit of the French settlers in Algeria 25 years ago bringing De Gaulle back into power. When they succeeded in getting him back into power he went to town on them and handed Algeria back to the Algerians, as was only right and proper. That was an exercise in cynicism somewhat similar in degree to what we are seeing here at the moment.
We have seen hospitals threatened with closure all over the country. Virtually every county and city has at least one hospital at the moment under threat of closure. For instance, today in Kilkenny there is a meeting of the South Eastern Health Board and there is a proposal in front of that meeting to close five hospitals in the south east region. This morning on the Order of Business Deputy Madeline Taylor-Quinn cited a decision being made by the Mid-Western Health Board to close three hospitals in her own county, County Clare. The people who are doing this, the Fianna Fáil Government, basically are the people who accused and abused us because we brought in certain cuts in the health services. We did not close hospitals. We did nothing of that magnitude. We were prudent in our cutting of estimates.
We know there is wastage and that there must be rationalisation and savings, but for God's sake make them in a humanitarian manner. I hate to think of the trauma which people throughout the country, especially the old, the infirm and the sick referred to in the slogan I quoted, will go through in the coming weeks and months. If they fall sick they will not know whether they will be able to go to hospital even if they are living on their own. If they are in hospital they do not know where they are to go if the hospital closes. Will they be thrown out on the side of the road? This is a horrible thought.
I am worried about the hospitals in my region. Five of them are due for closure and that decision may have been taken already in Kilkenny today. The meeting was scheduled to start at 11 a.m. It is obvious that the Government party have issued instructions to their Deputies who are on that health board to be present and to vote to see that those cuts are implemented. There are four of them altogether on that health board. Only two of them were present at a previous meeting and one of them voted against the cuts. That was Deputy Nolan and we all know what happened to him last week. He was brought in and keelhauled by the Taoiseach for voting against the cuts. He will be sent in there today to bat on the Government's side and to vote for the closure of hospitals including one in his own town. That decision is up to Deputy Nolan. Maybe he has the courage of his convictions and will stick to his original decision.
On that board also are Deputy Swift from my constituency and Deputy McCarthy, a doctor, who is Minister of State with responsibility for Science and Technology. They were both absent from the last meeting but I have no doubt that they have been given in writing specific instructions to go and vote for the closure of these hospitals. It is dreadful that people are not allowed to use their own judgement as to what is right and wrong. They are elected representatives, mature people, who should be allowed to decide for themselves. I do not see that people should have decisions imposed on them. I applaud any politician on any side of the House who stands on his or her own two feet when difficult decisions like that have to be made.
Besides the five hospitals which are under consideration for closure we have a hospital in Waterford city, a voluntary hospital, the County and City Infirmary which has done magnificent work in that corner of the county for the past 500 years. Its origins go back to the 15th century. It is in its present location for approximately the past 100 years. That hospital has effected considerable savings in its operation over the past five or six years at the behest of the Department of Health. What recognition does it get from the Department of Health for the wonderful work it has done in surgical units as well as its cost cutting operations? I will tell you what it has got. It has got its estimate for 1987 cut by 24 per cent which means in essence that if that cut is maintained and carried out that hospital will be most unlikely to be able to continue to function. That is the sixth hospital the future of which is very much in doubt. This is under the Government who abused us and accused us at every turn in the past four and a half years for carrying out moderate cuts in the health service. I find that just too much to take.
I support the Government in their efforts to cut public expenditure but there is a limit and there are alternatives. What annoys me as well is that I do not believe that the alternatives have been considered seriously. What about the huge administrative machinery that is running these health boards? I have heard no talk whatsoever of any cutbacks in administration in that field. The cuts are deliberately designed to affect the patients and the staff of those institutions.
I quoted a figure here in the Adjournment debate on Tuesday evening which I believe is incorrect. I want to put on record that it has been pointed out to me that I said the health services are now costing three times as much in real terms as they were costing in 1973. I understand that figure should have been twice as much as in 1973 in real terms. That figure arose as far back as about 1983. Maybe the cost in real terms is more than twice now. Anyhow, it is a staggering increase when you think about it in real terms. Something must be done to bring that excessive spending under control and I believe it can be done in a more humane, more proper and fitting manner.
I would like to see health boards, the Department of Health and the Government getting down to the nitty-gritty and examining the area of expenditure in a nice, regular, studied manner. I do not believe that type of exercise is being carried out. I have been a member of the South Eastern Health Board for three and a half years. As a member of a number of local authorities, county councils, urban councils and associated committees, I have never experienced such dissatisfaction as I experienced as a member of a health board. It is a totally unsatisfactory position.
A board member is just what it says, a board member, a director of that organisation, one of the people who decides what that body does. I never felt I had any hand, act or part in running the health board. Any time I tried to elicit information as to how money was spent I met with a wall of silence and many colleagues who subsequently sought the same sort of information never really got it. It makes one wonder if health boards have any part to play in our society, if the elected representatives cannot find out how much and where money is being spent. That is probably the basic reason the health estimates and health expenditure generally got so sadly out of control. The public do not know where the money is going. If the members of the board do not know, then the ordinary punter can hardly be expected to know.
It is time there was a major examination of the health boards. Do we really need them? My answer to that is no. We would be considerably better off if we reverted to the old health authority system which was more locally based. Under that system one had the ability to draw comparisons between spending on local government and spending on health. People knew where the money was going and they could keep spending under control. If one does not know where the money is going from a personal bank account, it is hard to keep in the black. There is an urgent need for an indepth examination of the working and financing of health boards.
What the Government are intending to do at the moment is premature. There should not be closures or huge cuts until all aspects of the operations of these boards have been fully examined. the Cork Examiner in a leading article today said these cuts amount not just to surgery but to amputation, and everybody knows how hard it is to replace a limb that has been amputated. We should examine the structures to see if the money can be saved in other areas through rationalisation. What is at present taking place will do irreparable damage to this Government. I do not advocate that the Government should be brought down. We want to see them doing a good job in getting the nation's finances into shape, but the way the health cuts are being tackled is not helping the Government and it is not helping the old, the sick and the infirm. There will be considerable condemnation and recriminations because of what is being done. I ask the Government to think again before it is too late.
I was Minister for Agriculture. I am now spokesman for Tourism and Transport, but I have been speaking about health. In the present political climate I have to get my priorities right. I am not saying Deputy O'Kennedy has a lesser job than the Minister for Health and I will deal with agriculture in time.
I was pleased to see that the Minister responsible for tourism came out with a policy at the weekend which he hopes will attract 400,000 extra tourists in the current year. The Minister has projected the creation of 5,000 additional jobs in this area and I hope his projection is correct. In reply to a Dáil Question earlier in the week I obtained figures for the income from tourism in recent years, and they make depressing reading. The income from tourism to this time in 1984 was £591 million; in 1985 it was £654 million; and in 1986 it had dropped to £588 million. Our income from tourism last year was less than it was in 1984.
We always plan for expansion whether in agriculture, industry or tourism but here we have an actual drop in revenue from tourism. I can hardly be blamed if I am sceptical of the Minister's projections. He projects 400,000 extra tourists and 5,000 extra jobs. Foreign tourists are not coming here in the same numbers as in the seventies or even the early eighties. There are a number of reasons for this which we have not counteracted. We expect a booming tourist industry but one cannot have a booming industry in any sector without the right climate. When I say "climate" I do not mean the weather. Without the right structures tourism cannot be built up. Neither can it be built without the right attitudes.
A number of people are deliberately turning potential tourists away. We have Sinn Féin and the IRA conducting a hate campaign against the British people and everything connected with Britain for as long as I can remember and, in particular, since the troubles recommenced in Northern Ireland in the late sixties. They try to make the Irish people feel they must hate the British, as if it were a national quality that one has to hate the British. It is so perverted one would not believe that it could be correct. It is pure and absolute hatred and young, gullible people are liable to fall into this trap.
It should be remembered that always the British tourist was the backbone of our tourist industry. If our tourism has not done well since the early seventies it is easy to identify the main reason — the campaign of violence in Northern Ireland and the attempted campaign of hatred. It is a disgrace and anybody who does not speak out against it is a disgrace to this country. Far too many people are passive, they are afraid — of course that is probably the basis of the campaign — to stand up and speak out against these people who would like us all to drive anything British, or anything remotely related to Britain, out of this country. It is very difficult to attract tourists from Britain while there is that military campaign, that insidious propaganda going on.
The most important prerequisite where tourists are concerned is goodwill. People will only come and visit one if one is nice to them. There is an attempt being made to drive people in this country into a position in which they would spit at visitors from Britain, I say "an attempt" deliberately because, thankfully, it has not succeeded. Let us never forget that the British are our neighbours and friends. Like any friends or neighbours we shall have our differences at times but they remain our best customers as far as tourism is concerned, not merely in numbers but they were always the best spenders as well. We shall never have a really strong, buoyant tourist industry until we get English tourists back. Let us bear that in mind. I say to people: do not be mealymouthed in your condemnation of the IRA or their fellow travellers, the fellows who speak out of the side of their mouths, half admiring the IRA. These are the creeps who are destroying or undermining our tourist industry. What we need is outspoken condemnation of that type. They may amount to perhaps 5 per cent or 10 per cent only but there are far too many of them there. If their hatred is instilled into the young and gullible then it will do vast damage to this country, not merely from a tourist point of view but from an economic point of view generally. When we go to sell our goods, whether they be dairy products, meat or industrial goods in Europe or in Britain — and particularly in Britain — we shall meet resistance. We know what happens every time a bomb goes off in Birmingham, Guildford or London: there is an immediate drop in consumption of Irish dairy products, meat or whatever. Let us bear that in mind.
The second factor which has seriously affected our tourist industry, particularly in 1986, is the world political situation with particular reference to international terrorism. Some people might like to associate the fairly awful figures for 1986 with the dreadful weather we had last year. I do not think the weather had one iota to do with it. Nowadays people book their holidays so far in advance they will not be put off by four months of continuous rain; they will have to lump it or like it when the day comes. Primarily the reason for the fall-off in tourism to this country in 1986 was the international situation with particular reference to terrorism originating in Middle Eastern countries, probably particularly in Libya. The Americans appear to have fairly accurate information that it is from there a considerable amount of international terrorism emanates, international terrorism resulting in bombings and shootings at airports, aboard aircraft and ocean-going liners. That drove American tourists out of Europe in their tens of thousands in 1986. We suffered considerably in that backlash. If there is one single reason for the bad 1986 tourist figures probably it is due to that policy on the part of American tourists to spend their holidays at home in Miami, California or wherever. Certainly international terrorism had a considerable influence on the drop in tourist revenue here in 1986.
We should make it our business at all times, just as we should condemn the IRA for what they are doing to the economy, North and South, to condemn these terrorist groups abroad. We should dissociate ourselves from any country which has anything to do with that type of international terrorist activity. The Americans and the British are human the same as the rest of us, 40 per cent of Americans having some Irish connection. If one scratches them they bleed, if one tickles them they will laugh, and if one insults them, they will stay away, they will not want to know one and certainly they will not spend their money in this country. It behoves us to make them feel welcome. It behoves us to condemn the people and the countries that harbour terrorists, whose main objectives would appear to be to kill and maim as many Americans as possible. Let us say quite clearly that we are totally against any form of support for these groups. Let us say quite clearly that we are disappointed that the number of Americans tourists here has dropped, that we have nothing but good will towards America and its people. We may not agree fully with all of their foreign policy at times but, overall, they and we are part of Western society and probably we have stronger links with the United States than any other country in the world. We must get that tourist business back. Let us not be totally mercenary in our attitude in this regard. I am not saying what I have been saying purely to get a few extra dollars or bucks. As a people we must be responsible, we must be fairminded, we must express ourselves in the interests of mankind, not just in the interests of Americans, British or Irish.
Those were two major factors in the decline in our tourist trade — the anti-British campaign being launched by the IRA and their fellow travellers, the anti-American campaign being operated by certain Middle Eastern countries and associated terrorist groups. We have suffered as a result of both campaigns. In addition there appears to have been an undesirable trend where the continental tourist trade is concerned. One can only come to the conclusion that the decline in visitors from countries like France, Germany, Holland and elsewhere is due to the excessively high cost of living here. This has become a very expensive haven for tourists. The Government must be supported in their efforts to get costs down. We support the broad thrust of the budget to get interest rates and overall costs down, regarding Ireland a more attractive destination for tourists whatever their origin. The British and Americans may be put off by the campaigns to which I referred but the continental visitors will be put off by the cost of living and the overall expense in this country.