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Dáil Éireann debate -
Thursday, 22 Oct 1987

Vol. 374 No. 5

1988 Estimates for Public Services and 1988 Public Capital Programme: Motion.

The following motion was moved by the Taoiseach on Tuesday, 20 October 1987:
That Dáil Éireann takes note of the 1988 Estimates for the Public Services (Abridged Version) and of the 1988 Summary Public Capital Programme.
Debate resumed on amendment No. 3:
3. "After `Programme' to add `and Dáil Éireann notes in that under the terms of the Estimates, major reductions in the level of public services will occur, and will, therefore, undertake an in-depth examination of the Estimates as presented to it by the Government with a view to allowing those members objecting to individual proposals to put forward fully costed alternative proposals which will yield a similar saving in this and subsequent years, and for this purpose directs the Committee on Procedure and Privileges to immediately present amendments to Standing Orders governing Estimates debates to allow—
(a) amendments to subheads in individual estimates to reduce the amount provided,
(b) amendments to the subheads in individual estimates to increase the amount provided if the amendment contains within it a proposal to reduce another subhead, in the estimate, or in the same group of estimates, by the same amount thereby ensuring that the overall provisions of the estimate for this and subsequent years are not increased overall,
(c) amendments to increase provisions for particular subheads, as set out at subparagraph (b) above shall not have effect if, within two weeks of their being passed by the Dáil the Minister for Finance certifies, for reasons stated, to a Committee of Public Expenditure that the proposal designed to achieve savings to compensate for the proposed increase will not in fact achieve the savings claimed, and
(d) where the Minister for Finance makes a certification within the terms of subparagraph (c) above he shall, if requested, give oral evidence in public before a Committee of Public Expenditure to explain the reasons for his certification.'."
—(Deputy Noonan,Limerick East.)

When I concluded last evening I was referring to the depth of the economic crisis facing the Government and the steps being taken by them in a planned and pragmatic way. I was indicating the programme of initiatives being taken by the Government to deal with the crisis. The Government's aim at this time is to lift the national depression and despair and to restore confidence to all sectors of economic activity. The Estimates of realism before us are one of the principal items in the formula of recovery announced by the Government. We are aware of the increase in current expenditure as a percentage of GNP over the years. In 1950 it represented 18 per cent of GNP, in 1960 it represented 19 per cent, in 1970 it represented 26 per cent, in 1980 it represented 38 per cent and it is expected to be 52 per cent or in excess of that figure this year. We are all aware of the intolerable levels of taxation and borrowing as a direct consequence of this expenditure. The Government have declared war on debt and they must succeed if living standards, services and future prospects for employment are to be protected.

We see as the central problem facing us now not just the question of the management of the economy but also the control of public finances. The Government's response is to take decisions and to make choices. Some of those decisions are harsh and difficult but they are across the board and are distributed fairly, affecting every Department, local authority and all the agencies of the State. Savings made cannot be expended on new or enhanced activities and services; they must be used to reduce the deficit and borrowing. To achieve targets, economies must be made in the current and the capital expenditure programmes. All expenditure programmes are being subjected to the same close scrutiny and each programme must justify expenditure before the Government allow it to proceed.

We must be realistic in these matters. It took 15 years of borrowing to bring about the current position in the finances of the State and it cannot be reversed overnight. However, this should not be an excuse for delaying the start of the process. There is no painless solution to the problem enunciated by the Government. We must recognise that the full compensation for efforts made now may take some little time to produce the results we require but we cannot delay the start of the process any longer. We must also recognise that borrowing is taxation and that our priority must be to reduce it. Departments and agencies must now plan for decremental spending until we restore solvency to the public finances.

We must also recognise that other international agencies, the EC or the IMF, cannot solve our problems. We can only do that ourselves. It is easy at this time to be pessimistic but it is also a time for challenge to overcome our difficulties and improve the future prospects for all our citizens. Irish people, whether in the business or sporting world have demonstrated that they can succeed at the highest levels. Therefore, I am optimistic that we as a nation can unite to overcome our economic problems and build a brighter future.

There are definite positive indicators, apart from the public finances and the level of unemployment, that the economy is in a position to respond to Government action. I refer to the low level of inflation, the reduction in bank interest rates — five times since the Government took office — record levels of exports, a favourable balance of payments and a growth in imports of capital goods which is consistent with the expectation of stronger growth in machinery and equipment investment this year. These positive factors along with the recent Programme for National Recovery will assist in the regeneration of the economy.

The Environment area, as one of the largest expenditure areas, could not isolate itself from Government expenditure reductions. When one considers the extent of expenditure incurred by the Department and local authorities — about £1,800 million approximately in 1987 — it was natural that the reductions would be substantial. However, the reductions will be implemented in a manner to ensure that essential services are not affected. I might add at this stage that some reductions would have taken place in any event next year as a result of a reduction in demand in certain areas, past expenditure and following decisions taken in the March budget. For instance, £61 million of the reduction in capital spending relates to the two terminated grant schemes or a quarter of the total reduction in the public capital programme for 1988.

There has been considerable reaction to the 1988 rates support grants allocation of £225 million which I announced recently, some of which has been exaggerated and unduly alarmist. It must first of all be put in perspective against the overall background of both central and local financial resources.

The rates support grants provided by the Exchequer in general amount to less than one fifth of current revenue accruing to authorities. This means, for instance, that the reduction in grants for next year amounts to less than 3 per cent of the estimated current account receipts of local authorities in 1987. Accordingly, talk of draconian cuts and of the survival of councils being in jeopardy is, quite frankly, not correct. Equally, I must reject the contention that cutbacks should have been avoided in this area. In the context of the overall budgetary situation, there is a very large measure of agreement within this House on the necessity for reduced Exchequer spending, and it is simply wishful thinking for any Deputy to expect that local authority expenditure should somehow be immune from this process or that rate support grants, which represent such a large element of current Government expenditure, should have been inviolate.

I have undertaken two initiatives which will help considerably in this regard. Firstly, local authorities were notified some time ago of their individual allocations for the year, the earliest this has been achieved in at least a decade. At the same time, the prescribed periods for deciding annual estimates in all authorities were brought forward and the process is now under way. The authorities have been given ample time to consider and to develop co-ordinated budget strategies for next year, which can be spread over the full 12 month period. Revenue collection can begin from the start of January, thereby greatly improving cashflow compared with recent years.

The second development involves direct assistance to authorities. I have already announced details of a new local authority voluntary redundancy scheme under which additional finance will be provided to authorities where reductions in expenditure lead to voluntary redundancy or early retirement of staff. This further aid will cover the full cost of all lump sum severance payments under the scheme. However there is an onus on the authorities to maximise savings on manpower costs next year through measures such as natural wastage, redeployment, nonreplacement of staff taking career breaks and economies on expenditure such as travel costs and overtime.

In summary therefore, it is now up to each elected authority to determine their priorities having regard to the funds available to them and they must allocate the available resources accordingly. Before leaving this area, I want to make it clear that I am neither complacent about nor satisfied with the present system of funding local authority current expenditure. Deputies will be aware that some time ago I initiated an in-depth review of local finances within my Department with a view to developing proposals for long term reform of the system. The review is almost completed and once I have considered the outcome, I will put proposals to Government involving changes designed to assure authorities of an adequate and stable level of funding. I might mention that the future of service charges is being considered in the context of this review and will be decided upon in due course.

The construction industry has experienced major difficulties in recent years caused by declining levels of private investment. Despite this it is our largest industry, with the exception of agriculture, directly employing over 70,000 persons. Construction output in 1987 will exceed £1.7 billion and account for almost 10 per cent of GNP.

Government policy in relation to construction must be dictated by the realities of the marketplace, the scope for action offered by the state of the public finances and the need for public investment. Public investment without regard to need is counterproductive and wasteful. Expenditure and investment programmes must be subject to careful examination and appraisal. The curtailment and termination of programmes, some of which impact directly or indirectly on the construction industry, are largely related to progress already achieved and changing levels of needs as well as the need to reduce the Exchequer borrowing requirement. Clearly, the constraints on Exchequer finances have necessitated radical economies in many investment areas. While economic considerations are a factor in social infrastructural investment, the need for such investment is also dictated by demographic and social trends. Major structural adjustments in our population profile necessitate a re-appraisal of capital expenditure over the whole range of the Public Capital Programme.

I am confident that Government economic policy will boost business confidence and create the conditions necessary for a revival of private investment in construction. This policy has already produced results. Interest rates and mortgage rates have declined significantly and growth forecasts for the economy as a whole have been revised upwards. Output in the commercial and retail sectors of construction in 1987, which is a key indicator of private confidence in the industry, will record its first increase in volume since 1981 and a further rise is forecast for 1988. Development on the Custom House Docks site, which will commence in the near future, will provide a major boost to the industry as a whole over the next three to five years.

In recognition of the key developmental role of the construction industry in the economy and the priority of achieving higher levels of private investment in the industry, I established in July 1987 a Construction Industry Development Board representative of a broad range of interests in the industry. The function of the board is to advise and make recommendations to the Government in order to encourage development, improve efficiency and competitiveness and enable the industry to contribute effectively to national economic and social policies. The Government value highly the work of the board and will consider all recommendations addressed to them by the board.

Demand for housing has been in decline for a number of years now. This depressed demand is reflected in the demand for house purchase loans. Having regard to the latest trends in house purchase and improvement loans advanced by local authorities I am satisfied that the 1987 provision of £175 million for this purpose will be more than adequate and that, in fact, some savings in this provision are likely to arise this year. Furthermore the number of local authority house purchase loan applications on hand at the end of 1987 is expected to be lower than the 1986 figure of 11,000. The 1988 provision of £155 million is, therefore, a realistic assessment of the likely requirement for local authority house purchase and improvement loans for next year.

It is not generally appreciated that local authorities provide one in four of all house purchase loans advanced in this country. This is a very large market share either by historical standards in this country or by international norms. Local authorities were empowered under the Small Dwellings Acquisitions Acts to provide loans for house purchase since late in the last century. It must be said that these house purchase loans, or SDA loans as they are still commonly referred to, have played and continue to play a vital role in the national housing programme. Annuity loans remain the preferred choice of the vast majority of these borrowers and, in fact, in recent times there has been a shift away from the income related loans. However, we must recognise the fundamental changes that have occurred in recent years in the housing finance market, particularly since the emergence of the commercial banks as major providers of house purchase loans. In the first six months of this year the commercial banks advanced mortgage loans valued at over £126 million compared to only £20 million in a full year in 1983.

Housing mortgage finance is now more freely available from commercial lending agencies than it has been for many years and the cost of this finance in terms of interest rates has fallen significantly since the 1987 budget. Information available in my Department shows clearly that building societies already advance a considerable proportion of their mortgage loans to applicants who would otherwise qualify for local authority house purchase loans. At present bank loans tend to be concentrated in the upper income groups. However, I believe that both banks and building societies have considerable scope for providing loans to many applicants who would otherwise consider they had no alternative but to approach their local authority for a house purchase loan. Deputies will be aware that my Department have initiated discussions with the commercial lending agencies in order to encourage these agencies to make additional mortgage finance available to low income house purchasers. In recent years there has been a marked trend in other European countries towards greater reliance on private sector funding of the mortgage market, and we must recognise the scope that now exists for positive developments in this direction in this country.

I am confident that the outcome to these discussions will allow a significant reduction in Exchequer expenditure on house purchase loans in the coming years and, at the same time, secure an adequate supply of mortgages for all income groups in all areas. I would also be concerned to ensure that any new arrangements do not reduce the capacity of any potential house purchasers to secure home ownership or lead to increased pressure on the local authority housing programme. I hope to be in a position to make a detailed announcement on this matter within the next week or so.

Notwithstanding public expenditure constraints, the Government are committed, as indicated in the Programme for National Recovery, to give special emphasis to the housing needs of disadvantaged groups. Recognising the appalling conditions under which travellers sometimes live, the 1988 provision for residential caravan parks for travellers will be maintained at the same level as 1987. This will enable about 20 parks to be provided in 1988.

Voluntary housing organisations play a significant role in providing housing for the elderly and disadvantaged people. Between 1984 and the end of 1987 voluntary organisations will have provided around 350 units of accommodation with a total of £5.5 million in assistance under the scheme of assistance operated by my Department for such bodies. The Government recognise the special contribution which voluntary organisations can make and intend to facilitate the development of that role. I have, therefore, considerably increased the capital available for the provision of housing by voluntary groups. The original 1987 provision for voluntary bodies was increased from £1 million to £2.5 million during the year and a sum of £3 million is provided for 1988.

During the past few months I have had discussions and correspondence with a number of voluntary and representative organisations concerned with homelessness on legislative proposals for the accommodation of the homeless. I intend to introduce a new housing Bill in the present session which will, for the first time in housing legislation, provide statutory recognition for the homeless and will ensure that the needs of the homeless will be recognised by housing authorities in the allocation of dwellings in future years. A provision of £400,000 is also made in the Estimates in anticipation of the enactment of the Bill for the recoupment to local authorities of expenditure incurred by them in securing accommodation for homeless persons by voluntary organisations and other means.

Over the past few months, I have carried out a comprehensive review of the road development programme. Arising from the review, I have decided to publish within the next few months a blueprint for road development over the next 20 years. The blueprint will contain:

(1) an outline of the assessment of medium/long-term needs relating to national, regional, urban and county roads:

(2) an outline of the proposed long-term strategy, including the funding from the State, local authorities, the EC and the private sector: and

(3) a tentative list of major improvement schemes to be commenced between now and 1997.

I recently announced my intention to set up a new body which will be responsible for the improvement of the national road network. The blueprint will provide the benchmark for this body in formulating its plan for future national road development.

The provision for road improvement and maintenance works in 1988 is £150 million, £120 million for improvement works and £30 million for maintenance. This is a substantial sum especially next year when in order to improve the public finances reductions have had to be made in most public expenditure areas. However, progress will be maintained in 1988 at a reasonably satisfactory level on several major improvement schemes including:

Tallaght Road/Galway Road section of the Dublin Ring Road and the Lucan and Chapelizod by-passes in Dublin;

Glanmire by-pass and Southern Ring Road in Cork,

by-passes of Athlone, Bunratty, Cahir, Killarney and Newtownmountkennedy and

bridges in Limerick and Sligo.

In addition to state funded projects, construction will also start early next year on the Galway Road/Navan Road section of the Dublin ring road which has a rolled up cost of £30 million and which will be fully funded by the private sector at no cost or risk to the State. In June last, I gave my approval in principle to Dublin County Council's proposal to enter into an agreement with West Link Toll Bridge Limited for the construction of this project. This agreement was signed by both parties on Friday last and I expect to be giving my formal consent to the agreement within a matter of days. This partnership between the State and the private sector marks the beginning of a new era in public road construction. I am hopeful that private funds will be forthcoming for other projects in the future especially with low inflation and reduced interest rates as a result of Government policies.

The national roads authority, the details of which I will be announcing shortly will have as part of its brief the attraction not just of further private finance and investment but it will also seek further funding from the EC and further funding from tolls and any other method they can find particularly in order to inject further investment into the building of national primary and secondary roads. It is my intention that we will meet the deadline to accommodate the EC requirements over a limited number of years. That will be the task of the national roads authority and I expect that initiative to be welcomed by all concerned.

Hear, hear.

Within the improvement provision, I have also decided that the county road strengthening grant to each county council will be maintained at the 1987 level, totalling £15 million. I have also decided that the block grant for roads allocated to each local authority will also remain at the 1987 level, totalling £20.2 million. I am sure that all the rural Deputies will give a cheer because that decision has been taken. For the first time this year, and to be continued next year, we will get a suitable level of funding to maintain the infrastructure of 92 per cent of county roads and other regional roads in an appropriate state of maintenance and repair.

My decisions to maintain the level of these grants at their 1987 level were influenced by the deterioration in the condition of county and regional roads and by my concern for employment. Heavy commercial traffic has taken its toll on these roads which were not built to cope with such traffic. Local authorities have already made a good start with the county road improvement programme this year and I expect considerable progress to be made on this programme in 1988. The roadworks undertaken with the assistance of these grants also provide significant employment potential in the roads area. This is the area where the biggest number of road workers are employed. That was one of the significant factors in my making the decision to maintain the level of funding which was increased this year and will be maintained at that level for next year.

The provision for the local improvements scheme in 1988 is also being maintained at the 1987 level of £4 million. This provision will permit the further acceleration of the programme of works on non-public roads in the less favoured areas of the west of Ireland where many small holdings have no proper access to a public road. This increase in funding was welcomed by all shades of political comment last year and I am satisfied that it will get the same kind of reception this year at the estimates meetings that will take place in local authorities between now and 16 November this year.

I am pleased to say there is good news on the financial front for the local authority fire service. I am allocating £6.5 million for the development of the service in 1988, an increase of £1.8 million or 38 per cent on 1987. This substantial increase highlights the Government's commitment to this vitally important service, particularly in these difficult economic times. The funds will be used to finance existing projects under construction and to start a number of new projects. It will also enable fire authorities to purchase fire appliances, together with other fire-fighting, telecommunications and rescue equipment. It is not the intention of the Minister for the Environment to see a rundown on the emergency services under his control.

The Estimates include a provision of £600,000 by way of grant-in-aid to the Customs House Docks Development Authority for current expenditure which will cover all administrative and running expenses. The public capital programme includes a further £2 million to meet the costs of capital works on the site.

I am pleased that, as a result of the Government's economic policies and their positive approach towards creating a climate which will stimulate investment confidence, the development of proposals for the Customs House Dock site is on target. The Authority are now evaluating a number of development proposals for the re-development of the site and an announcement will be made shortly on the successful proposal. Construction work valued at about £250 million is expected to commence early in 1988——

The Minister's time is nearly up. He has a minute left.

——and will provide peak construction employment for about 1,500. This will be a tremendous boost to the construction industry. In addition, the international and national support for the international financial services centre at the site is very encouraging. It is an indication of the success of Government policies in promoting confidence in the economy. The development of the site is important as it is anticipated that it has the potential for the generation of some 7,500 jobs there over the next three to four years.

I am very concerned about the problem of dereliction in our urban areas. Derelict buildings and derelict sites detract enormously from the appearance and attractiveness of our towns and cities in the eyes of inhabitants, tourists and potential industrials alike. Positive and aggressive action is required if the problem is to be tackled and resolved in the foreseeable future. The existing Derelict Sites Act has proved inadequate and I believe, therefore, that a new and comprehensive legislative framework is needed. Work on the preparation of the new legislation is nearing completion and I hope to be in a position to introduce the measure in the near future.

Finally, my Department, local authorities and the semi-State and other corporate bodies under the aegis of the Department will be preparing their work programmes in accordance with the Estimates before the House. Every effort will be made to ensure that all essential services are maintained at a high level and that other services will be provided in the most efficient and cost effective manner. In the circumstances, I have no hesitation in commending the Government motion to the House.

I would like to congratulate the Minister for the Environment on his assertion that we have 92 per cent of the county roads looked after this year. I will give him the address of my own road before I leave this weekend and hope he will be able to include it in the 92 per cent.

That is good local representation.

While the Minister for the Environment is in the House I would like to draw his attention to a few of the points he made. I agree with him on the dereliction but that extends far more to the countryside now and the Minister must know that coming from the west; I come from the mid-west. I ask him to consider putting more money into rural housing in the future. I know the Minister made the case that there is sufficient housing stock in the country now, but I can assure him that there are far from adequate funds available to most local authorities for the provision of rural housing for those who would like to continue to live in the country, who can provide their own sites and their own water supply and who would be responsible for maintenance afterwards. Many of these people have been facilitated by being given houses in towns which would otherwise have gone to townspeople but within a short few years those very people want to move out to the country again. I earnestly ask the Minister to consider this point. I have made very little progress on the number of representations I have received and I am delighted to have the opportunity to address this problem to the Minister this morning.

As Progressive Democrat spokesman on Food and Agriculture, I agree with the Minister that one cannot be for cuts and against them at the same time. One cannot have the best of both worlds. I, and my party, are generally in favour of the thrust of the cuts in Government spending. I do not accept that the Government have stolen our clothes. I believe they were left with no alternative when they took office. What has been done up to now can be compared to a farmer who borrows money for development, buys a motorcar, has a holiday and keeps the rest of the money to meet the initial repayments. This sums up what we have had in general Government policy over a long number of years. When difficulties came in terms of repayments we sold the productive assets — just as the farmer sells a few cows — to keep up the standard of living and put a brave face on foolish policies embarked on earlier. We cannot any more afford to have Government by auction, with the public faced with a total bill of £2,400 million a year in annual repayments to pay for so-called development.

I was appalled when I came into this House to find that at least £1,500 million will have to be paid to financial institutions in the country annually, that is almost 40 per cent of all taxes. The policies were intended to raise the standard of living for all but at the end of the day they have made the rich richer and the poor poorer. Those in the workplace have to work harder, be more productive and pay more taxes for those that are in the position of being able to manipulate finances and control financial resources. Indeed Deputy Mac Giolla surprised me yesterday when he suggested that the way out of capitalism is to borrow more money. The borrowing of money is what sustains capitalism.

The Taoiseach said he would like to see Ireland at the forefront, not a depressed nation on the periphery of Europe. I fully subscribe to those sentiments, but we must examine our own conscience when we make statments like that. In reality we are treating part of our own country in the same way as Europe is treating us. We are now looking at the poorer agricultural areas, at the western counties in particular, the way that Europe looks at us generally. We are trying to keep all the resources for development within the Pale. We are denuding the countryside of population and resources that would sustain and make viable a rural economy.

The Taoiseach says that essential services will be maintained. If that is so, what has been happening over many years? If we are able now to maintain expanding essential services with virtually half the staff, what an indictment of us that we have been running the country with twice as many staff for a long number of years. The shake-out in industry came ten years ago. The increased cost of Government utilities because of the labour content in the services which the State was offering meant that those who were self-employed or in industry had to do away with employment to meet these increased costs.

I would have to challenge the Taoiseach on his assertion that it is untrue that administration has been protected at the expense of services, particularly in relation to agriculture. While our exports have been showing a favourable trend, agricultural exports as a percentage overall have been declining, and those of the multinationals have been expanding. There is a danger of not striking a balance and the figures do not tell the whole story. I suppose the best substitute for working for a foreign company abroad is working for a foreign company in Ireland. One can get home every night but there is not very much difference in terms of the value of such jobs to the economy.

The figures do not reflect the true position. It is the position that you make the most profit in the country where you pay the least tax. There is a large element of that in the figures now being used to try to explain to the public at large, who know differently, that things are improving, that the imports bill is falling and the exports bill rising. The fall in the level of imports is a great guide to the actual fall in the level of consumerism which we have had here over a number of years. False assumptions have been built into it. I know that in my area the number of houses that will be connected this year to the electricity grid in the mid-west region is half what it was five years ago. I know from statistics that the sale of new cars is half what it was five or six years ago. That, in itself, deflects more money in the short term into the consumer non-durable market and gives the false impression that things are picking up. It is only a switching of resources from more costly goods to cheaper goods and has a short term effect which gives the lie to the belief that things are much better then they really are.

In the United States 90 per cent of the market depends on internal consumerism. There must be some stimulus to consumer spending in Ireland. We cannot continue to be in a position in which we pay more tax while those in multinational companies have tax holidays. Those of us who work at home in Irish companies or, generally speaking, in any job, whether in the Civil Service, the goods and services industry or the manufacturing industry, are now in a position where we cannot stimulate the economy about us because we have no spending power.

The Taoiseach, speaking on the motion noting the Estimates, said that schemes that have outlived their usefulness or are not serving purposes that are identified as affordable could now be counted as unaffordable luxuries. In this situation I should like to address myself to agriculture. The Estimate for Agriculture this year showed a reduction of 18 per cent. It is more like 25 per cent because within those figures there is a £10 million takeover to pay in 1988 for certain schemes such as the farm modernisation scheme and the scheme for installation aid for young farmers. In fact, the Minister in a circular letter actually admits that and I admire him for it. In reality, it takes £10 million more out of circulation and the real reduction in the agriculture vote based on those figures is more like 25 per cent.

There is no doubt the Government and the EC are withdrawing their support relentlessly from agriculture. One has only to look at the figures to see that in 1970 some 15.5 per cent of Exchequer spending was spent on agriculture. This year we have the lowest Exchequer Estimate expenditure of 2 per cent. I cannot understand how an industry that relates to 40 per cent of our people in terms of direct or indirect incomes should now stand for such a poor Exchequer return.

For clarity, did the Deputy say 1970?

Yes, 1970. Our EC partners and, in particular, our friends in Brussels who see this country as having a very high dependence on agriculture— seven times more, I believe, than any of our EC partners in terms especially of the products which are now subject to quota restriction — would find it incomprehensible that at a time when we should be supporting our agriculture we are actually cutting Exchequer support for it. I have heard many examples from all sides in this House in relation to Dutch agriculture of how tremendous an industry it is, but that industry is recognised for the contribution it makes to that nation. It is recognised also in the contribution that that state makes to agriculture by way of finance, encouragement and many aids, mostly hidden from view. They recognise that agriculture must have a high level of investment if there is to be a high level of return. Their incomes, based on 1986 figures, are about five times our income per farm before taxation.

If we are serious, there is no point in retreating from an industry which we have in place, which is traditional, in which we have a huge investment as a nation and, at the same time, scouring the world looking for multinational companies to come here. We are quite prepared to put money behind them to create jobs for many people who have been thrown off the land because we have failed or are unwilling to create policies and Exchequer support to bring these people through these difficult times and to develop an industry which will give them alternative employment in a national context.

I turn now to the ACOT-AFT merger. The Minister knows the figures and has been honest enough in his circular to spell out the position. I put it to him that some months ago we were talking about a 10 per cent cut and in the context of his meetings with the people involved 500 people or about a 25 per cent cut was mentioned. Now it has gone up to a 43 per cent cut. If we are in the position to cut 43 per cent, or take 1,000 people out of 2,200 in an employment that we are saying is going to be an engine for growth and a future part of our economy, are we then saying that Government policy over a number of years has created a position where we had two people doing one man's job? I cannot find any other explanation as to why we should cut back at this time. If, on the one hand, we are saying we are supporting agriculture — I accept that and I accept the Government's intent in supporting agriculture — why are we saying on the other hand that we are going to get rid of 1,000 people out of 2,200 on the education and research side? Are we saying that for every job available it was Government policy to have two men doing it?

On the ACOT-AFT merger, and I am sure that the Minister knows much more about that than I do, I put it to him that it is very difficult to merge a research branch and an essentially teaching branch. They are absolutely different things. In terms of economy and in difficult times I accept his point in having to look for savings in overheads, but to merge totally the identity of ACOT and AFT is to discard the research side of the merger. If you have to have research you must have it as distinct from education. AFT could play a far more positive role. We must involve them far more at the coal face, which is a euphemism or a buzz word in this House. We must involve them far more in industry, in solving real problems. We must get them into a position where they can justify their retention, where they will be part of the economy and will contribute directly to the creation of new products and the solving of technical problems.

The Minister, through the Minister for Agriculture and Food, has avowed it as Government policy to create 10,000 new jobs to make Ireland the food provider of Europe in a clean environment. I accept that all of those things amount to the best aspirations for the future of agriculture. On the other hand, if you say that, are you saying that we will have no new products, that we will maintain our slaughter house mentality and that there will be no added value for our products? The only added value I see in the foreseeable future for agricultural produce is the added value which the farmer can gain by spending less. Saying that we will put added value on products that will give the farmer a better return for primary produce is a pious aspiration especially when we consider that we have thrown those with initiative, those who would be a help to the industry, on the ash pit, forgotten them and consigned them to getting out of an industry to which many of them have given their life's work, whether in an experimental or professional capacity.

I would now like to deal with disadvantaged areas. Undertakings were given in this House during the past seven to eight months that disadvantaged areas would be reclassified. The farmer organisations were misled into thinking that our special circumstances in respect of quotas were now being fully recognised in Brussels. I was appalled to see that there is to be an 8 per cent cut in funding this year. I am inclined to the view that all the debates and negotiations which were supposed to have been got out of the way never took place. The Minister's Department have made no provision for any additions. As regards reclassification, one thing I have learned from this House is that if you talk long enough about something it will eventually go away.

I ask the Minister to reconsider the position in regard to the Euro-loans. The provision in the Estimates is to cover outstanding commitments. Efforts are being made to reduce interest rates and I welcome these fervently. High interest rates have proved to be a great disincentive for investment within farming. I also ask the Minister to have another look at the levies which now amount to 5 per cent of turnover. They amount to a 5 per cent tax on production. Following the doing away of the funding for CBF, the intention is now to increase these levies. No matter what form of accounts is used the levies amount to about a 25 per cent tax on gross income, that is before income tax. State bodies should do the work they are supposed to be doing in a professional manner and achieve results. If they fail to do so let us disband the organisations and withdraw the levies and say to the food manufacturers that the task of selling is solely their responsibility. The Minister cannot continue to take £50 million to £60 million in levies out of agriculture each year and merely provide an intervention type sales outlet.

I would now like to deal with the tuberculosis eradication scheme. The Minister asserts that there will be no further charges this year in respect of this scheme. I am glad to hear that but I am disheartened and dismayed to hear that certain offices had little or no funds remaining in August to continue with the two monthly rounds of testing. This happened despite the amount of money which was collected in milk and beef levies this year. The Minister gave me an undertaking in this House some months ago that there would be a full round of testing and that the problem of tuberculosis would be got under control once and for all. I accept that the Minister plans a rejig of the management and a different playing of the cards but they only amount to things on paper and what matters most to those who are paying the piper is that they can call the tune, that what they want is that we get rid of the tuberculosis menace which has cost this country so much in terms of exports and which has caused so many problems for farmers.

I am disappointed to see that there is no mention of regional policy in the Estimates. Regional policy is being promoted to the Minister and his Department as being important for the future development of rural Ireland in terms of supplementing incomes and providing job opportunities for an industry which is in decline, for areas that are affected by quotas, particularly milk quotas. A recent Government announcement, with no explanation whatsoever given, said that the Regional policy provision, which has doubled in size this year precisely because of the factors I have mentioned would be used exclusively in Dublin this year and next year. I realise that Dublin has many problems and I am not one to drive a divide between rural and urban communities. I am all for bringing them together. This divide has been cultivated by certain sections for their own ends and has amounted to a blight on our primary industry. I ask the Minister to have another look at the regional policy in terms of how it affects agriculture.

The Minister has said that marketing is most important and that he intends making agriculture an engine of growth but in the Estimates he has provided very little fuel for that engine in 1988. I accept the constraints within which he finds himself. I find it hard to explain to those people in agriculture who ask me how it is that our major industry, an industry that embraces 40 per cent of our people, now receives the smallest contribution from the Exchequer, particularly at a time when things are very difficult for the industry generally.

I would ask the Minister to remember the undertakings he gave at the time the Estimates were being discussed last year. I might revert to the innovative side of the industry, which is where most money is made, and ask the Minister to bear that in mind in terms of An Foras Talúntais. Indeed I would ask him to realise that advice and innovation are poles apart.

The growth of public expenditure in recent years could not be allowed to continue. As a consequence our inflation and interest rates were way out of line with those of our competitors. This meant we were losing out on valuable export markets. No sector of our economy suffered more from these disadvantages and burdens than the agricultural sector. No sector stands to gain more from the Government's policy to reduce public expenditure than the farming community.

The positive action we are taking will restore order to the public finances and put the economy — particularly the vital agricultural and food sector — on the road to expansion and development. Our strategy is to reduce the country's enormous dependence on borrowing by curtailing public expenditure.

One of the main aims of our first budget last spring was to substantially reduce interest rates. We have made considerable progress. The benefits of lower interest rates are of crucial importance to our economy in general and to agriculture in particular. Every 1 per cent cut in interest rates is worth £20 million to Irish farmers. We are now in the rather strange position that all of the domestic influences promoted by Government policy are for downward interest rates while the external influences, to a considerable extent, are for upward interest rates. The House might contrast that with the position over the last four and a half years when the external influences were benign and for downward interest rates and when domestic pressure, through Government policies, was for upward interest rates. The House will see, therefore, that there has been a dramatic change in the impact, particularly on the vital agricultural sector, of Government policies.

There is general acceptance among the farming community that, as a Government, we must pursue our strategy until order is fully restored to the public finances. I am greatly encouraged that farming interests recognise and acknowledge that this Government are pursuing the correct approach. Indeed it has to be said that the farming organisations were among the first, if not the first, to advocate a policy of clear and decisive action on public expenditure.

Lower interest rates, a stable exchange rate, lower inflation, stabilisation of the national debt/GNP ratio and its subsequent reduction to a sustainable level, halting and reversing the flow of capital out of the economy, lower and more equitable personal taxation, all of these constitute the fiscal and monetary policy of the Government under the Programme for National Recovery. Already significant results have been achieved in many sectors. The greatly improved fiscal and monetary climate will stimulate investment confidence and greater economic activity, maintain existing and create new employment.

Together the Programme for National Recovery and the 1988 Estimates reflect the single-minded determination on the part of the Government to rebuild our economy. We have already restored confidence at home and abroad. With this new confidence we can and must confront the enormous task of job creation essential in ensuing years. In particular we must create jobs in the productive sector, in this instance especially, the agriculture and food sector.

From some of the comments made over the past week one might imagine that total expenditure on agriculture and food in 1988 would be confined to the net provision in the Book of Estimates, a figure of £149 million. The reality is that in 1988 my Department will spend a total of the order of £1,600 million. The fact that the net Exchequer contribution is now less than 10 per cent of the total is simply a reflection of some of the benefits of membership of the EC and of the priority which this Government attach, and will continue to attach, to that membership. I acknowledge that each successive Government have done so, but I want to reiterate at this point that it is, of course, crucial to our whole development role in agriculture and food.

Deputy McCoy made an objective and reasoned analysis in the course of which he made some fair comment and perhaps some fair criticism also. But I would be entitled to say that it is not reasonable to compare the actual Exchequer Estimate for agriculture in 1970, at 15 per cent, with that — as he puts it now — at 2 per cent of total in 1987, the big difference being, of course, that in 1970 we were not members of the EC and were not benefiting from the very major contributions under the FEOGA guarantee scheme. The Deputy himself will recognise that, to say the least, the comparison is not quite valid.

The fact that the net Exchequer contribution is now less than 10 per cent of the total is simply a reflection of some of the benefits of membership of the EC. But the huge spending by my Department in connection with the EC cannot be ignored. That expenditure is incurred to benefit the agriculture and food industry, including Irish farmers. The expansion of the agriculture and food industry, of course, is a central element of the Government's economic policy. The substantial expenditure to which I have referred will contribute to the achievement of that objective.

It is fundamental to the Government's strategy for recovery that public finances be placed on a sound footing as a prerequisite for economic expansion and job creation. We simply cannot afford the level of public services that has prevailed to date. For as long as public expenditure and, in consequence, taxation and borrowing, remain at their present levels, productive activity in the economy will be stifled and we will not achieve the recovery in output and employment this Government are determined to bring about. A full and thorough review of all items of public expenditure has been undertaken by the Government with a view to establishing priorities in the allocation of financial resources and providing cost-effective services which will give maximum returns to our economy. As part of this process the Government are taking steps to rationalise all State services in order to ensure that there is an elimination of duplication or overlapping and that no resources are absorbed in unnecessary administration.

In line with those aims the Government decided to amalgamate An Foras Talúntais and ACOT into a single body. This step is designed to ensure better co-ordination and cost effectiveness of research, advisory and educational services in agriculture. For 1988 a single allocation of £20 million has been made for agricultural research, advisory and educational services in place of the former separate provisions for An Foras Talúntais and ACOT. That represents a reduction of approximately £15 million, or some 40 per cent of the total amount, provided by the Exchequer to these bodies in 1987 by way of grant in aid. The new authority — and I suggest it is that and its priorities on which we should focus henceforth — will be created by the amalgamation of An Foras Talúntais and ACOT and will provide for services in agricultural research, education and advice.

Priorities in these areas of activity will be subject to approval by the Minister. The new body will be required to secure outside funding by way of charges for services, to the maximum degree possible, following up on what was already agreed in any event in relation to ACOT and indeed by my predecessor and myself in relation to charges for services, where possible. The aim will be to ensure that services will be geared to the essential development needs of the agriculture and food industry, including the application of the latest technological advances. Priority in the allocation of resources will be given to training of young entrants to farming and to research activities related to post-farm gate operations. The special priority being given to entrants to agriculture will not be to the exclusion of the advisory services as some suggest but rather will ensure that this advice will be put to best effect by better trained farmers. Knowledge is as vital to agriculture as to any other sector in this era of rapid technological change and the new authority will focus particularly on that aspect.

Because of the constraints on agricultural production in the European Community the main focus of research activity by the new body will be directed to the post-farm stage, especially in the food sector. This reflects the Government's recognition of the enormous potential which exists for the development of the food industry. The National Food Centre which is being established at Dunsinea will bring together the relevant staff and resources of An Foras Talúntais and the IIRS with a view to providing a cost-effective service to the food industry funded to a substantial degree by the industry itself. The new body will be required to develop fully commercial consultancy services for a range of farming and agri-business activities.

The establishment of the single new body will require legislation. This is being prepared as a matter of priority and I hope to introduce it shortly so that the new body can be in operation at the beginning of 1988. The severe financial constraints limit the financial resources that can be made available to the new body and, as a result, it will be necessary to bring about a substantial reduction in staff. I regret that such a reduction has to be made but if we are to succeed in our efforts to reduce borrowing and taxation and put the economy on the road to sound expansion and progress certain decisions cannot be avoided. Any staff becoming redundant can, of course, avail of the special redundancy early retirement package recently announced by the Government. The ultimate aim is to set in place a smaller organisation geared to provide the services which the developing and expanding agricultural and food industry will require.

There seems to be some misapprehension concerning some public statements that I was apparently understood to have made. I never indicated in any statement any figure of the order of 500 redundancies as being projected for the new authority. Others may have anticipated that figure but I deliberately and prudently avoided any confirmation of it. I regret that an interpretation of my lack of confirmation may have given rise to a misunderstanding.

What is the figure?

I am engaged constantly in discussions with the directors of both existing organisations and the joint chairman. I want to record my appreciation of their approach and their readiness to face some of the difficult methods of reorganisation that have to be implemented. Much more important is their determination to make a success of the new authority. I realise that for some of the staff concerned difficult decisions have to be faced. I, as Minister for Agriculture and Food, and the Government generally, in line with the reality of the Estimates and taking account of the arrangements for redundancy in the Programme for National Recovery, will take every effective action to minimise any personal impact on the staff concerned.

Will the number be substantially less than 500?

Some of the comments about the staff reductions that will be necessary in An Foras Talúntais and ACOT have referred as well to the levels and costs of staff in my Department. I welcome constructive suggestions on how manning levels in the Department can be reduced but these must be considered against the background of the whole range of departmental functions. The role of the Department is not simply confined to passing out cheques to any sector. If that were the role of the officials and advisers in the Department of Agriculture and Food I could discharge that role by recruiting young kids, even without the benefit of second level education. My Department deal with an area where there is urgent need to be in line with rapid technological change and play an important role in the European Community. It is wrong to construe the role of that Department as representing a channel for passing through funds. It is much more than that; if it were not, it could not justify itself.

It takes 15 signatures to get a farm improvement grant.

It may have taken 15 signatures previously but I assure the Deputy it takes a lot less now. I hope by the time I am finished it will take only one signature, which is all that is ever required. I have not had any previous indication on that matter. I welcome constructive suggestions in how manning levels in the Department can be reduced but these must be considered against the background of the whole range of the departmental functions. This covers not only the payment of grants and the provision of services but also a broad variety of regulatory functions and the maintenance of adequate controls on Exchequer and European expenditure. Some of the comments have ignored those functions and simply failed to give the total picture. For example, it is incorrect to say that staff numbers in the Department have not been reduced. Staffing levels have, in fact, been reduced by about one-fifth since 1982. The number serving has fallen from 5,164 at 30 April 1982 to 4,338 at 30 April 1987 and to 4,210 at the end of last month.

The drop of 954, or some 19 per cent, has been spread across all grades up to and including senior management, and contrary to the suggestion that the administrative and clerical grades have not been affected the fact is that these grades have contributed their fair share. The downward trend continues under the current restrictions on recruitment and the Department have already identified some further posts as surplus to requirements. The recently announced early retirement package has been offered to the staff concerned. The 1988 pay provision takes into account a reduction of over 1,000 since 1982. The tailoring of staff to work needs is a policy I intend to continue in line with overall Government policy.

As regards the statement that the Department's pay and travelling expenses bill is more than one-third of the Vote, I must point out that the comparison relates to the net Estimate only and ignores completely gross expenditure, expenditure which is fully funded by the EC and expenditure in the purchase of intervention products which is funded out of borrowings. Indeed, the net Estimate of £149 million for 1988 represents less than 10 per cent of the total departmental expenditure for next year, which as I have already said is expected to be as much as £1,600 million.

It will be my priority to maximise the contribution to agricultural and farm development from the European Community, both in terms of FEOGA guarantees and FEOGA guidance and structure funds. I think I can claim that many of the actions I have taken and some of the schemes I have announced relating to pigmeat investment, meat industry investment and structures, apart from the price support structure for the dairy sector, have contributed significantly to the improvement in farm incomes in the past year. It will be my intention to continue in that direction.

In the context of a total expenditure for my Department of £1,600 million, staffing costs will represent about 4 per cent and even that has to be considered against the background of the Department's wide range of developmental control and regulatory functions.

A substantial item in the Estimate is the allocation of £31.6 million for disease eradication. This will allow a full programme of testing to be carried out next year. There will be a comprehensive monitor test of the national herd, supplemented by special programmes in badly affected areas. These latter programmes will be concentrated in the midlands where the TB problem is most acute but will include also other areas where TB gives cause for concern.

The national herd will also be monitored for brucellosis and the policy of depopulating infected herds will continue. As far as brucellosis is concerned, we have some 40 herds in Munster still infected and, while fresh outbreaks tend to occur, the situation is fully under control.

The TB situation is more complex, with considerable progress being recorded in many counties and some setbacks in others. The overall situation at present with some 5,000 herds "locked up", or an average of less than three reactors being recorded for every 1,000 animals tested, is more favourable than had been anticipated, especially in the aftermath of the limited programme operated in 1986. The situation gives cause for some degree of optimism about what might be achieved over the next few years and confirms the need to put in place sound arrangements that will give a major boost to the eradication effort in the medium term.

I look forward to a more positive outlook generally. Rather than having an essentially sterile debate about why TB has not been eradicated in the past, I believe we must draw together the energies, skills and experience of farmers, vets and officials in a combined effort to resume the aggressive drive against the disease which was abruptly halted in 1986. This is the motivation behind my positive response to the farming organisations for changes in the eradication measures. As I proposed to the bodies concerned some weeks ago, farmers' and vets' representatives would be given a greater role in the schemes by way of their membership of a new management structure and greater flexibility of decision-making would be facilitated by the establishment of an executive office and the appointment of a national manager for the schemes. The approach I proposed would not require new legislation and is founded on the conviction that each party concerned, farmer, vet and official, can work together in a common cause while, at the same time, recognising the rights and obligations of the other. In the final analysis, the central role of the schemes in safeguarding animal and human health and in preserving our substantial export interests requires that the Minister has the final say and the proposed arrangements will provide for this in an effective and orderly way.

I have had constructive discussions with the organisations concerned. We are in a period of major and rapid change. They are considering my proposals and I am hopeful of having the new arrangements in place by the start of the 1988 programme next April.

Another substantial item in the Estimate for Agriculture and Food is the provision of £20 million being made to cover expenditure under the farm improvement programme, the farm modernisation scheme, the scheme of installation aid for young farmers and the western measures. This capital provision represents an increase of 37 per cent on the provision of these measures in 1987. I hope the House takes note of that.

There was a carryover of £10 million from last year.

I acknowledge what Deputy McCoy said but when that money runs out that will end the payments for 1988. Of course the delayed payments will be carried forward into 1989; they will not be terminated. I want to state publicly that because of financial constraints, I had to take this decision and if there is a delay in payments in 1987 it will be because of those financial constraints. We cannot resume the normal rhythm until 1988.

Do those delayed payments relate to the TB scheme?

No. As regards grant payments under these schemes this year, Deputies will be aware that some delays are occurring in making such payments. That is because the level of take-up of these schemes has been higher than expected and this puts some strain on the limited resources available. However, I would like to assure all farmers who are awaiting grant payments that they will receive their grants with the minimum delay possible. In the interests of fairness, I have arranged that claims for payment under each scheme will be dealt with strictly in order of receipt of the certified claims in the Department's headquarters.

The farm improvement programme has been proved remarkably successful in encouraging farmers to carry out necessary investment with a view to increasing the efficiency of their farming operations. To date, over 17,000 farmers have been admitted to the programme and over 10,000 investment projects have been approved involving grant aid of over £15 million. This is quite a remarkable achievement bearing in mind that the programme has been operational for only 20 months and in view of the production constraints such as the quotas on milk.

While the farm modernisation scheme ended in September 1986, grants continue to be payable on investment included in plans which were approved prior to that. Expenditure can be expected to tail off over the next few years as plans expire. The scheme of installation aid for young farmers was terminated on 31 March 1987 but applications received up to that date will be processed. Proposals for the reintroduction of the aid have been put to the Government by the farm organisations — particularly by Macra na Feirme, and, as indicated in the Programme for National Recovery, these are being examined sympathetically in the context of the forthcoming budget.

As I have said, £20 million is being provided for these various investment schemes for 1988. That is the maximum that could be made available. The Government have decided that, if and when it is exhausted during 1988, payments under the schemes will cease and will have to await the provision of funds for the following year.

While the amount of £63.6 million allocated to the disadvantaged areas scheme next year shows a reduction of some £5 million on 1987, this is largely because special weather payments were made this year under the 1986 scheme. A further reduction of £1 million arises from the lowering of the off-farm income limit of an applicant and/or spouse from £6,400 to £5,200. This will apply in 1988. This was the fairest way to achieve saving as the payments made under the schemes are essentially income supplements designed to keep farmers in the disadvantaged areas. Farmers with off-farm incomes over £5,200 need these income supplements less than those with no off-farm income at all or with off-farm incomes below that level. In other words, the money available is being concentrated on the more deserving farmers. In connection with the disadvantaged areas, I should also say that we are pursuing with the EC Commission the question of securing an increase in the rate of FEOGA contribution to the cost of the headage grants and more rapid payment. On that basis, providing for improved rates of grants in the different areas and for extending the areas will be possible if the outcome is successful.

Turning now to CBF, the Government have decided that in the present climate of financial stringency the grant-in-aid to CBF will be phased out over two years. The allocation for 1988 is £515,000 and no grant-in-aid will be paid in the following years. I would like to pay tribute to the excellent work which CBF are doing in promoting beef and lamb exports. Considerable successes have been achieved particularly in the area of marketing value-added products direct to retail outlets. This is especially true of the UK and German markets but, while a start has been made, much remains to be done. It is important that CBF's promotional work should continue in the years ahead as we try to increase our foothold in Community markets. CBF already obtain the bulk of their financing from the meat and livestock industry and I think most people would accept that in the straitened budgetary situation in which we find ourselves it is not unreasonable to ask the meat and livestock industry which profits from the CBF activities to fully finance those activities.

In my remarks I have concentrated on a few items in the Estimate for my Department which have been the subject of some comments in recent days. Thus, I have not dealt with some of the broader developments in the agricultural sector. In this connection I might point out that at the present time intensive negotiations are taking place at EC level on proposals for adjustments to the Common Agricultural Policy.

Arising out of the Community's critical budgetary situation, the Commission have put forward wide-ranging proposals for modifications to the support arrangements for most products. The aim of the measures proposed — the agricultural stabilisers as they are called — is to control expenditure and the effect will be to limit support and make the agricultural industry more responsive to market conditions. The outcome of the negotiations will have major implications for the future operation of the Common Agricultural Policy and so the ongoing discussions are of the utmost importance to this country. Another important EC aspect is the efforts we are making to secure improved levels of EC financing for our various structural measures which I have mentioned, including the western package and drainage programmes, and the integrated rural programme which is of vital importance. The maximisation of EC receipts is of particular importance in enabling us to expand the scope and range of structural investment.

Finally, I should like to refer to the outturn of the agricultural industry this year. The year has, on the whole, been a good one for the industry by comparison with previous years, but I will make no further comment on that. Livestock prices have been well maintained and the harvest has been the best for some years. The food industry has continued to develop and more and more of our agricultural output is being processed into added-value products. Farm income will be well up — probably by about 15 per cent according to the latest estimates. Feed supplies for the winter are the best for many years and this will give a good start for 1988.

The agriculture and food industry is a major beneficiary of the steps the Government are taking to put the economy on a sound footing. The basic approach being followed has already been of special benefit to the farming community and they have everything to gain from its continuation.

I am satisfied that because of our natural advantages, because of the capacity of our farmers and those engaged in the agri-food sector and particularly because of the knowledge base of our young farmers, the direction we are following will enable us not just to react any more, or complain constantly or point to what is happening elsewhere but to demonstrate more by action, a co-ordinated approach and a degree of confidence and co-operation which I am glad to acknowledge is available to me as Minister for Agriculture and Food here and to the farming organisations, but to compete with and beat the best. The Estimates in their proper context are a very important step in that direction.

This has been a relatively unpartisan debate so far. Certainly, the parts of it I have heard have been free of party invective, or almost entirely free and I do not want to spoil the happy party atmosphere by saying anything disagreeable. Nevertheless, in case those who come after us, outside commentators or the historians of later ages, think that some kind of ceo draíochta has engulfed the House, has blotted out from memory events of the recent past, I cannot let the occasion go without drawing attention to a remarkable political act. It is the amnesty awarded by the Government to themselves. It is the first amnesty in the history of the world awarded to criminals by the delinquents themselves rather than by those who had them soundly under lock and key.

They have given themselves a clean slate; and I must hand it to them, despite all the whinging they indulged in when they were in Opposition about the "slick public relations" which the Coalition were supposed to have at their disposal, that they have succeeded in creating an atmosphere in the country such that one feels it is almost bad manners to draw attention to the degree to which their own behaviour in Opposition contributed to the very environment and the public atmosphere which underlies all our difficulties. They did anything they could to soup up public resentment against the economy, to goad the people into indiscipline, to awaken and encourage among them the idea that if they shouted long enough and demonstrated hard enough they would get anything, however unreasonable. Nothing on those lines was left undone. Every advantage of a short-term cheap kind which the party opposite were able to draw out of — I will not say the Government's difficulties — the national difficulties, they recklessly and remorselessly drew.

Memories are short; but short though they are, I know that every Member, and people outside, will recall the general burden of the criticism which the Fine Gael and Labour Coalition had to face for the last four and a half years before the change of Government. They were described as monetarist, Thatcherite and said to be only interested in keeping the accounts; that a well-ruled ledger was more important to them than the happiness of the school leavers, than the prospects for the economy. That was the song which was being sung. In case any Member wants chapter and verse or thinks I am inventing this, or in case their own memory is getting a bit dulled and needs to be reminded about what was being said, I should like to go back no further than the budget debate of 1986, the last occasion on which the National Coalition produced a real budget rather than a proposed one, and quote what the party leader said. I will only quote a little of his speech, on the subject of the then Government's general policy, as reported at column 1631, volume 363 of the Official Report. He said:

Monetarist policies have been tried and found wanting. They have not worked.

Later he said:

We see this Government's preoccupation with the financial difficulties and a blind refusal to look beyond them as the principal intellectual constraint on any attempt to initiate economic revival. The obsession with budgetary arithmetic to the exclusion of everything else is preventing positive thinking. It is an intellectual straitjacket. The pluses and the minuses of the budget arithmetic have become the reality, not the economy, but we must break out of this strait-jacket.

In fact, it is not civil war politics that this country needs to get away from but Victorian economics and financial precepts.

Members will agree that I am not choosing out of context a completely unrepresentative sample of what was then Fianna Fáil thinking. That was the message which they proclaimed up and down the country whenever they got the chance, going for the soft touch, trying to awaken that side of the people's reactions, making out that the people led by the last Taoiseach, Dr. Fitzgerald, were academic economists who never looked outside their windows, who mostly lived in Dublin 4 or, if they lived in the country, lived in large mansions of gentleman farmers and were out of touch with the people.

That message was echoed by what I may call the glue-sniffer school of political commentators, the people who are ready at all stages with intoxicating narcotic raiméis about how poor Dr. Fitzgerald was only trying to run an economy, but that if Deputy Haughey was let in he would run a country, build a nation, shape and mould it. That was the message that was coming from the glue-sniffers in the media who were not interested in and, perhaps, could not understand the concrete realities of economic and political life. However, they were glad to hype up the kind of atmosphere in which tyranny has often thrived, which underlay the rise in western Europe of ferocious tyrannies 50 years ago; get the crowd cheering, raise a cheap cheer with some simple phrase or simple glittering idea, no matter how childish or cheap, and everything would be swept aside that stood in their way.

That was the general picture over the last five years, and I should like to contrast it, if I am not being too abrasive, with what we heard in the House less than 48 hours ago. What I am about to quote is material with which I absolutely agree. It comes from the contribution of the Taoiseach on Tuesday afternoon. Almost at the outset of his speech he said:

It is that millstone, the enormous cost of servicing the national debt, that is at the heart of our economic and financial difficulties.

It might have been Deputy Bruton, or Deputy Dukes when he was Minister for Finance, or former Taoiseach Liam Cosgrave or Willie Cosgrave talking; but those were the words which Deputy Haughey quite rightly used in the House two days ago, and I agree with them. Later the Taoiseach said:

The things we all want, good incomes and employment, high quality public services, a caring system of social welfare and health; all depend vitally on our maintaining sound public finances.

If that is not Thatcherism or monetarism what is? It is a view with which I completely agree; but we are supposed to acquiesce in this self-awarded amnesty and to be too well-mannered to draw attention to the contrast I have put before the House.

It will probably amaze you to learn that I do not particularly resent the chagrin which many people on my side of the political fence must feel at seeing the message which we sweated to put across — not just during the term of the previous Government but since the first oil crisis — being implemented by Fianna Fáil. The Fine Gael Party richly earned the disappointments which we now have to live through. No doubt we will put this period behind us but we cannot complain because our disappointments were largely brought on by our foolishness in entering Coalition Government at a very difficult recessionary time with a party, an adequate representative spokesman of which on economic affairs might be Deputy Michael D. Higgins. I know he will not take that remark in a disparaging personal sense, it is not meant like that. You cannot run a Government in difficult times with an element in it — which naturally has the whip-hand in determining whether you have a majority — represented by the position Deputy Higgins, I know, sincerely upholds. It cannot be done and we should not have attempted it.

I know all the arguments in favour of having a shot at Coalition. The strongest argument was that there had been three general elections in a period of 18 months and the people would have gone stone mad if they had been asked to vote a fourth time. Nevertheless, we should not have entered into that arrangement. I do not know to what extent the sheer ambition of a certain number of my colleagues played a part in the mad rush to get into Government at all costs with the Labour Party. Perhaps they saw themselves sitting behind ministerial desks being photographed with their ear to a telephone, having subordinates reminding them that the press were waiting for them, that their car was ready, or that their wife had rung up. A role may also have been played by fond memories, which I share and am glad to avow, of the much happier Coalition in Brendan Corish's time which was not so strong on ideology. That would have been understandable, but even so, we should not have done it and we are now paying the price. I acknowledge that, and I admit that it lessens the resentment I would otherwise feel at what I can only think of as a hypocritical performance on the part of the party opposite.

Having got in under those unfavourable Coalition conditions we made matters worse by allowing ourselves to be dictated to by the Labour Party in areas where we would have done better to say no, to leave Government and to abandon the Coalition experiment. Other acts of foolishness, not necessarily in the economic or Coalition sphere, all played their part in leaving us on this side of the House. I am willing to take my medicine — it is not as severe for me as it was for an office-holder — and I will grin and bear the sight of the Fianna Fáil Party awarding themselves a clean slate with the very same insouciance as the Emperor Bokassa might have pinned a couple of stars on himself, for their behaviour over the past five years, when they contributed very substantially, not to taking votes from Fine Gael — we probably would have lost them anyway — but to building up the public attitudes and psychology which will be the Government's big obstacle to overcome in the years that lie ahead of them.

The Estimates which are the product of the development I described cannot be quarrelled with in their global dimensions. I will not nit-pick with them either, although I might have done them a bit differently. In the past I have often advocated a special State board with no remit other than to wrap up State boards, "An Bord um Threascairt Bord". I am glad to see that without the panoply of a new board the Government are getting to grips with the unnecessary multiplicity of agencies. Nevertheless, I regret the passing of the Irish Film Board, which I had the honour of setting up. I also regret the passing of the Dublin Streets Commission; God knows it is needed. However, I do not want to chop straws in regard to the Estimates. These are rather small matters compared to the general picture of economy, discipline and of reducing the burden of State involvement.

I must draw attention to the contrast between what is happening now and what has been said by the party opposite, particularly their leader, over recent years. Let me say before I mention this contrast, in case it is said I am the same old bitter pill I have been down the years, that I am impressed by one quite important dimension of the new Government's functioning; they have learned some lessons from their years in the wilderness, and I like their modest, businesslike approach with the minimum of flim-flam, to their problems. If they had always been like that they might not have raised up the enemies which they did raise against themselves and which left them so long in Opposition.

When they were in Opposition in the past five years we were always hearing that we needed a "developmental" approach. That is a darling word which might have been invented by Deputy Lenihan; perhaps it was. We were told we should get away from the slide rule and the bookkeeping. If that "developmental" approach is supposed to be incorporated in the Programme for National Recovery, I am sorry that I cannot see it. This beautifully printed document written in English, which is more than can be said for others in the past, is simply one in a long series of such global new starts on paper. I have been in Leinster House for more than 18 years and this must be the eighth or tenth such document I have seen. Programme for National Recovery, The Way Ahead, Programme for Progress, Building on Reality have all flown overhead so fast that one is inclined to look up and say “is that one of ours”? On my oath, in a couple of weeks I will not be able to remember. They are all the same, all containing targets and global envisagements about the number of jobs which are perceived as possible to be attained in this or in that sector. That is not a “developmental” approach and it falls far short of anything I imagine Deputy Haughey or his colleagues would have wished to be understood by the word “developmental” when they were in Opposition.

Of course, things need to be done but they cannot be done overnight or in the term of a single Government. Some things will be unspectacular and disagreeable and will mean imposing discipline on the people. I am not speaking about compulsion, but discipline in the sense of directing and alluring the people into certain patterns of thought and activity. It will have to start very far back, because the lead-in time, in order to get results from the sort of deep-ploughing which I have always advocated here, is long; it may be 20 or 30 years.

All the areas mentioned in this document are ones in which the real problems lie far beneath the surface. There is a paragraph in it about tourism. I have no fault to find with it except that it does not really get to grips with the things which the Price Waterhouse report is said to have exhibited as the main obstacles to our flourishing as a tourist country, and the reasons people do not come back here a second time, which include the poor level of service in many hotels and other establishments, and the poor level of courtesy, which has declined in shops and hotels since I was a student. It compares unfavourably with that which one takes for granted in many other European countries. The squalor, litter and dereliction around the country makes it disagreeable for tourists. Their impression of Ireland is something they do not wish to remember and they cannot advise their friends to come here. Until these things are changed, which depend not just on taxation measures or incentives but on turning around public psychology and inviting public participation, we will not make the breakthrough in tourism for which we had hoped.

A typically Irish — I say that as someone without a drop of any other kind of blood in my veins — operation is going on at present in regard to the preparation for the "Dublin Millennium." A millennium I understand as the celebration of a thousand years starting from year one. Dublin was not founded in the year 988. They chose arbitrarily to use a nonevent as the starting point for this "millennium;" but what is the point of having a "millennium" when the city is such a reproach to us? We are having this festival to invite in the neighbours to admire our rags and our rubbish. The right thing to do, but a very un-Irish thing, would be to get the place cleaned up first, so that we can drive on the north side of the Liffey from Butt Bridge to Kingsbridge and back again on the south side without being pained to the heart at what we see around us. How dare anybody think of inviting the world in here to celebrate our "millennium" when the condition of the place is so disastrous?

I know there are people who will say that I am letting the side down, that I am harping about and criticising something which is an effort. People who believe in this are indeed making an effort; but I point to it as an example of why we do not really get our act together in all kinds of different fields. A millennium, or any sort of a party, is easily thought of and organised. We can have festivals and invite in troops of Ukrainian dancers, Norwegian cyclists and the devil knows what, but it will not change the perceptions of the ordinary common or garden tourist who is induced to spend three or four days in a Dublin hotel and walk around the Dublin streets.

I am far less fitted to talk about agriculture than most other Deputies in the House. All my life I have been hearing about how the main problem in agricultural life is land structure and the need of land structure reform. How long is it since that was first said? How many interdepartmental committees have sat on that matter and how many reports have been produced on it? What has happened? There were a few voluntary schemes of which very little use has been made, in order to induce the retirement of elderly and, in the technical sense, under-educated farmers from their holdings, and to throw land on to the market so as to be available for people who are, in the technical sense, better educated and more likely to be able to make use of it. What is radically happening in that field? The answer is "nothing that I am aware of". Until something radical happens we will have an agricultural productivity level remaining at a small fraction of that which the Dutch, the Belgians and the Danes have, and we will be still whinging about structural reform in ten or 20 years' time.

Local government is not mentioned here at all. As I have said in various settings this is a very important area of potential for our economy. The party I belonged to promised in 1982 that they would deliver local government reform. We never delivered it. We did indeed deliver an increase in the number of begowned, bedizened councillors here and there, and we upgraded the first citizen of Galway from Mayor to Lord Mayor but otherwise we did nothing in local government reform that I am aware of. The entire system given to us by the British in 1898 — for the purpose of killing Home Rule with kindness — should be scrapped root and branch, and replaced with what I would call a real local government with no trips and no travel expenses, none of the top dressing which brings people into local government nowadays. I am not saying that there are not many who come in out of a genuine motive of public service; there are. However, all the things which make the thing an expensive and farcical structure should be scrapped, and instead the local government structure should be redesigned around economic development. The local authorities should be economic development authorities, put there to mobilise local sentiment, local pride, local initiative in areas which are small enough for them to know everyone in their area. That form of local government would be worth having, instead of the kind which, in some counties, does scarcely any business except passing section 4 resolutions in order to interfere with the planning process.

Education is the last of the matters I want to talk about. It scarcely rates a mention of any substance in this programme, but it is the most essential of the lot. We are an isolated people, tending to live by our own standards or, if we ever look at other people's standards, those of the British or Americans, because those two nations present no linguistic barrier to us. They are racially akin to us to the extent that many of our people live there, and most of us have relations in one of those countries or the other, and are familiar with the cultural element of those two societies, not by accident because we played some part in erecting them in the first instance. Otherwise we are as isolated as the Turks were before Ataturk, or the Japanese were before the 1850s. We do not know what it is to work, to deliver, to think to the standards of the continental EC on which we depend absolutely. Until we take measures far more drastic in the educational field than have been thought of so far, we will never get out of the isolation which really underlies all the other problems. Tourism is weak, the land structure is weak, and the industrial development which relies on indigenous investment — as report after report indicates — is weak; our marketing is laughable, because the average Irish young man or woman has no clue about the outside world except what is transmitted by the English-speaking media from the other side of the Atlantic or the other side of the Irish sea.

We will have to smash this fetish about migration. One reason I was delighted to see Deputy Lenihan making a first stab at it last week was that migration, let it be the cyclical migration which he and I have in mind, will bring young Irish people face to face with other cultures and standards. They would understand what other people mean when they talk about varieties of food, of clothing, of the kind of products which we could perhaps make and sell. That is the reason for reforming our educational system and syllabus so as to intensify the emphasis on areas which up to now have been neglected; some of them have no emphasis at all placed on them. It is a reason for making mastery of a Continental or at any rate a non-English or non-Irish language compulsory for the award of a leaving certificate, and I mean competence in the spoken as well as the written language. It is painful to find young continentals who, when they speak good English and receive my compliments on it, say self-deprecatingly, "I had eight or nine years' English at school". They regard each year as a quantum which will correspond almost infallibly to a certain level of competence at the end of the day. We all had 12 years' Irish at school, every man and woman in this House. How many of us can with certainty speak a correct Irish sentence, take part in an Irish conversation in which not a single mistake is made? We are not in the ball-park, to use the kind of expression which the glue-sniffing school of commentators would be at ease with, when it comes to being on the same level of competence, comprehension and understanding of what the world around us is like, as the people with whom we have to compete in Belgian, Holland and Denmark. Until we take those problems, which require deep educational and structural ploughing, by the throat, and reconcile ourselves to a long lead-in time, perhaps 20 years before the results show through, we will never produce the results which Deputy Brennan, I and everybody else in the House would like to see. It does not matter how many natty little "programmes" fly across the sky between now and when we die, this country will always be a poor relation until we realise our difficulties, understand our disadvantages and understand the weaknesses which we, perhaps genetically, are burdened with, and take some radical, positive action to combat them. Putting a few pounds into this or that scheme or incentive will not do it. The only thing that will do it is understanding our situation and soberly coming to grips with measures which in the long run will tend to ameliorate it.

Having said that, I wish the Government success with their operations. I hope that they have not absolutely sunk the ship with the severity of their cuts, but I will not be jeering at them if they run into difficulties with them. Notwithstanding what I said about their self-awarded amnesty, their sense of realism and the businesslike modesty they have been displaying in the last six months, may mark the turning-over of a new leaf in Irish politics generally, and may even open up possibilities of a kind which would be important to me, of trying to see whether the similarities which stare us in the face between various interests in the House might not one day come through in support of the same Government, rather than in battling one another trying to replace one another in the useless repetition of the mistakes made by our predecessors.

These Estimates are one part of an integrated economic strategy whose ultimate goal is to reduce unemployment and try to bring about a recovery in living standards. The policies of a Government have a dual thrust; on the one hand to put the nation's finances into order and, at the same time, to encourage productive growth. In searching for that growth in today's conditions we simply have no option but to look outside the borders of this small marketplace. We have to look outside this economy. We must find our growth abroad. The key to our economic well-being lies in our capacity to trade successfully in world markets. We must trade successfully in world markets or this country cannot and will not prosper. To do this we have to be competitive and provide the goods and services that the market wants rather than what we think it wants. We must provide the goods and services at the right price, not at the price we award ourselves but at the price the market will pay. This is essential if the Government are to be successful in bringing about some economic growth.

The central role of exporting and of more effective marketing on the home market is reflected in these Estimates. Two key areas of expenditure have been maintained at the same level as last year because of the importance of these areas. One area relates to the allocation to CTT of £1.5 million for the market entry and development scheme and the allocation of £1 million to the Irish Goods Council. The general allocation to CTT at £20.022 million under subhead G1 is a reduction of £3 million on the 1987 allocation. I have told CTT that this £3 million cut is not to mean entrenchment of their efforts and I have been assured by the board that it will not mean retrenchment. It will mean even greater efforts by them. That cut will be offset by an increase of £1.3 million in CTT's own resources, as a further step in their progress towards becoming increasingly self-financing.

I am pleased at the acceptance by the board of CTT of the guidelines which I have laid down for them that they should increasingly become self-financing and that they should increasingly share in the rewards of exporters whom they have helped. If CTT aid an exporter and the exporter is successful there is no reason why CTT should not share in the profit. CTT are about to become an unusual State agency in that they will largely pay their own way in the years ahead.

By focusing the efforts of CTT on the areas where they are needed most and can produce the most effective returns, I am confident that the net effect will be to increase the effectiveness of our export promotion in the immediate future. Like all State activities CTT must share the impact of a reduced allocation of resources but there is no reduction in the Government's commitment to export-led growth. There is no slackening in our determination to let more indigenous companies into exporting and to remove the obstacles that stand in the way of substantial growth in our foreign trade.

I will detail to the House some of the initiatives being taken by the Office of Trade and Marketing to bring about that export growth and to increase the effectiveness of Irish firms on the home market where we have been losing ground in recent years, but first I will look at the overall economic background into which these fit. The goal of the Estimates is to improve living standards, correct the public finances and, through that, to do something about unemployment. Living standards have been falling here by an average of 10 per cent a year in recent years. Unemployment in 1983 was 14 per cent and it is now at over 19 per cent.

We should also remind ourselves of the critical dangers involved in not doing anything about public finance and unemployment. In 1983 the debt-GNP ratio was 100 per cent. This year it is 150 per cent. The national debt has come from £12 billion to £25 billion, taking up one-third of total tax revenue and virtually all of the tax generated from the PAYE sector. The figure recently put before the House showing that the national debt amounts to about £28,000 for every household in the country speaks for itself. Something had to happen.

The strategy being pursued is based on producing the Book of Estimates early so that we can have a real debate on those Estimates. This marks a radical departure from what outside commentators have called the farce in previous years where outturns in the Book of Estimates were grossed up when the book was produced and then slightly trimmed back to produce artificial cutbacks. This is the first time since 1958 that the Estimates for the public capital programme published before the budget show a fall in planned expenditure compared to previous years. Can it really have taken since 1958 for this country to have reached the stage of maturity to publish the Estimates in that way?

The strategy being followed is having some success. The Exchequer returns for the third quarter show that the 1987 budget is on target. The current deficit and the Exchequer borrowing requirement will fall to their lowest level in over half a decade. In 1983 the current budget deficit was 8.1 per cent. This year it is heading for 6.9 per cent. The Exchequer borrowing requirement in 1983 was 13.9 per cent and this year it is heading for 10.7 per cent. The prime lending rate has fallen by 4 per cent since last March and recommended mortgage rates have also fallen and are scheduled to fall again. In January 1987 the prime overdraft rate stood at 14 per cent and the latest figure is 10.2 per cent. The recommended mortgage rate in January was 12½ per cent and it now stands at 11½ per cent and is predicted to fall. Most importantly, the capital outflows from the country appear to have fallen dramatically. In 1986 the residual, so far as I can calculate it, was £1,566 million. The estimated residual for 1987 seems to be about £300 million less. I stress these are my calculations but it appears that capital outflows from the economy have been reduced by £300 million. If one compares that to the massive capital outflows of a year or two ago, this is one magnificent vote of confidence in what we in this House are trying to do, which is to get the finances into shape. I look forward to double checking those figures, but they are not easy to quantify. Economists will know the difficulties of being precise about them.

As has been obvious in recent days, the financial markets do not do anybody, most of all governments, any favours. They have a mind of their own. Still, interest rates are falling and the capital outflows seem to be reducing. That can only mean one thing, that the financial markets have some confidence in the direction of policy. The real economy seems to be stabilising.

I am amazed to see, and I must inquire as to the real reason for it, that cement sales are now 2 per cent higher in 1987 than in 1986. Frankly I do not perceive an upturn in the building industry, but cement sales have increased by 2 per cent. That would seem to indicate that there is some movement in this area. For the first time since 1981, two successive quarters have shown an increase year on year. Finally, the growth prediction of about 2 per cent is well in excess of what was forecast last year.

The allocation on Exchequer returns is being reduced by £485 million. I want to put something to the House and to the country in as simple a form as I can. If one looks at the Book of Estimates and reads through the cuts on the current side, it will be seen that we spent £6.6 billion last year running this country, and that this year we are proposing to spend £6.4 billion. That is a reduction of 5 per cent. It is unnecessary to get into a total flap. It is unnecessary to have screaming headlines about cuts. It is unnecessary to have dramatic gestures. With expenditure increasing since 1958, a sudden cut back of 5 per cent cannot in any way cause the kind of dramatics that are going on throughout the country. If 5 per cent, which is the minimum any Government could do, does that then I shudder to think of the kind of outcry we would have if we attempted any larger cuts, and larger cuts — more than 5 per cent — are probably needed. Let us put it in perspective; 95 per cent of what was spent in 1986 will be spent in 1987. There is no need for some of the dramatics that we have seen around the country. There is no need for the protests and the marches. Any household, any individual and most certainly any country, can manage a 5 per cent notch on its belt, and that is what we are asking for. It is important to put it in context.

It has been suggested that we should not have cut the capital budget. The capital budget cut is 15 per cent. Let us be honest about it. That is a lot and it could damage future investment, but most of that has come in a few small areas, in hospitals and schools. Is there anybody left in this country at this stage who thinks we should build more schools or hospitals while we are waiting for the recession to pass over? That is not an option. On those two fronts there is no need for dramatics on the current side because of the 5 per cent cut which, I know, will be tough on some people. But it is not as severe as it is made out to be by some vested interests who insist on portraying it as being much deeper and more serious.

Let me turn, in the few minutes I have left, to my own Office of Trade and Marketing. Exports to September are 12 per cent higher than in 1986. The trade surplus for 9 months has exceeded £.9 billion. That is twice that for 1986. Exports have exceeded £10 billion for the first time and we are forecasting growth for the year of 11 per cent compared with an average of 7 per cent in 1981 and 1982. I am not, as has been suggested by some people, claiming credit for the increase in exports. We are working to underpin it and to help it. I compliment the Irish exporters for achieving this magnificent target of giving us a £1 billion trade surplus, exporting £1 billion more than we import in the 12 month period to September. That is a tremendous breakthrough and it should be a boost to everybody in industry that it can be done.

The Irish export board's allocation for 1988 is £20.022 million compared to £23.022 million in 1987. That is a cut of £3 million. As I said, they will raise an extra £1.3 million in charges so that the net real cut is £1.7 million. I have explained to the House that the market entry and development scheme will be largely untouched.

The Irish Goods Council, for which I also have responsibility, had an allocation in 1987 of £1 million. It will retain that £1 million for 1988. Again it has been suggested that should have been cut like every other area. An important point to bear in mind here, and I say this in the strongest possible way, is that the Irish Goods Council tell me that we import £9 billion worth of products every year. They tell me that £1 billion of that are immediately substitutable — they could be manufactured here. Over £1 billion worth of goods which could be manufactured here are being imported. We have left the Irish Goods Council that £1 million to go out and try to organise that in a strong way. The Irish Goods Council will have my full support in getting that job done. There is £1 billion worth of business and I would invite business people, investors, the banks, people who are throwing their hands in the air and looking for visas, to go down to the Irish Goods Council and have a look at that list before getting on the boat. They are not all highly sophisticated products. Some are very simple, very easily manufacturable by a handful of people with a bit of support from the banking system. There is business here if people will go out and look for it. There is £1 billion's worth on offer in the Irish Goods Council.

I invite Irish manufacturers, business people and investors, before advocating that people should get on boats, to go down to the Irish Goods Council to see if they can help us to replace that £1 billion worth of goods that we are importing with Irish made products. The business is there and the Irish Goods Council repeatedly tell me that there are many business opportunities if we can encourage people to look at them. I say to young people, before they look at the American visa, before they look at the advertisements for Australia, that they should look at the Irish Goods Council brochure, at the list of products we are importing, at the fact that it adds up to £1 billion. If £1 billion of Irish people's money is handed over to import those goods, somebody should get his act together and start to manufacture. The IDA, the CTT and the Irish Goods Council are working to make sure this happens. One of my major objectives is to make sure that the £1 billion worth of goods is manufactured here.

The first commitment to do something about the state of marketing and trade in the country was the decision of the Taoiseach and the Government to establish, for the first time an Office of Trade and Marketing. It is the first time in the history of the State that the title "marketing" has been attached to any office or any Minister. That has been generally welcomed as an attempt to realise that if we do not export and trade we will not survive and the follow on from that is to ask a particular office to focus on it.

In the few moments left to me I will just tell the House what I have been trying to do in that office and what I hope to do in the period ahead. First of all, we passed through this Dáil the Finance Act and the Export Act, including sections which establish a new animal called a special trading house. Special trading houses are private sector companies where if one exports Irish goods one gets a 10 per cent tax break and can avail of the business expansion scheme money. This is the first time that we have had specialised service companies which will buy Irish manufactured goods, particularly from smaller companies, and will export them for them, and in return for this will get this tax break. It is an idea which we unashamedly admit has been swiped from the Japanese model of a trading house whereby people concentrate on the idea of getting their exports through a private sector trading house. The EC Commission are at present processing that and I hope to have something further to say about it in a few weeks.

The second matter on which we have moved is to give new guidelines to the CTT, whereby we have not accepted that a State agency to support exports should be looking for State money as a continuous process. I am delighted with the response to that and CTT now say that they can earn a substantial portion of their funds without affecting Irish exports. To an extent, the growth of CTT and its dominance in world markets on behalf of our exporters is now limited not by State funds but by what they themselves can generate in world markets. That is a major turn around in guidelines given to any State company and I am delighted with the board's enthusiastic response to it.

The new national programme gave me two additional responsibilities on which to commence work. One is the drafting of a national marketing plan to try to do something about duplication and the plethora of approaches which we have to the business of marketing. Ireland Limited, or Ireland Inc. to use the modern expression, is too small a country not to have its marketing focused, tightly organised and spotlighted in certain areas abroad. We cannot be all over the place, with many agencies all trying to market Ireland through different channels with different funds. That will not work. I have been given the job of trying to put together a national marketing plan which will pull together Ireland's marketing efforts abroad, so that when people see Ireland abroad they see a crisp, clean image. They will mainly get the message that this is not an island of saints and scholars, green people, green country and green money, but that this is a modern industrial State which is open to business and wants to do business with every other country.

I am also at present chairing a task force under the plan to try to win some consultancy abroad. I estimate that there is about £200 million worth of consultancy work which Irish firms can get if we get our act together. I have seen abroad many times, in our attempt to win such work, not just one Irish suitcase in the waiting room of the managing director, or the people in Lomé, or the World Bank but three and four, all queuing for a little bit of consultancy work. The Germans, French and others are much smarter. They sort out their difficulties before they let that suitcase go abroad. They are thus able to get the support of State, embassies, agencies and Government. Some of that consultancy work abroad consists of multi-million pound projects. We will not win this work if we encourage every second firm here to go chasing it. The other competitiors have their Ambassadors on the phone and their Ministers talking to each other. They have Government support for their bid. They usually win ahead of us. I am very determined that as from now Ireland, both in the public and the private sector, will win that consultancy work by co-ordinating our act at home rather than asking somebody else who is not interested to knock our heads together.

I reiterate what the Taoiseach said in his address to the Marketing Institute, in his two announcements on which the recent Office of Trade and Marketing are now working. One is that in future our efforts abroad will come from one centre, that is our CTT representation, IDA, embassies and so on, that instead of being all over the place, where economically possible they will operate from one centre so that we get a co-ordinated focused effort. That is a big break through. For years we have been talking about doing this, now it is time we did it.

Secondly, the Taoiseach quite crisply said — and we are working on it — to turn the eyes of our embassies more on to trade. This small country cannot afford a plethora of embassies all over the world which are not first and foremost interested in trade. Our country will survive only by trade, not by the quality of its political footwork abroad, trying to impress major nations. It will only survive and progress if we trade successfully. I welcome the interest of the embassies in increasingly helping us with that trade effort. There will be precise proposals on that later on, as to how we can marry the CTT and IDA efforts abroad with the embassies' efforts so that we are all singing out of the one hymn book, the Irish hymn book, that Ireland is open for business, engaged in business and not in useless turf wars between various sections of the same country abroad, which is very unseemly indeed.

The question of marketing education and marketing training is something that I have been asked to address. If we are to do something about exporting we must do something about the quality of the people whom we train to export, that means doing something about marketing education. It is not acceptable to me at this stage that we have a plethora of courses run by various institutions all over the place who have no clear co-ordination or clear direction on locking the efforts into what the market really wants. I shall have something to say about that later on.

That is what is happening in the Office of Trade and Marketing; it is exciting, it is heading up the export efforts and focusing our national will, I hope, on to the simple equation that as a small country we must trade. We here are much more dependent on exports than the United States, Japan or the UK are proportionally. That means that if we do not trade, we die. It has worried me increasingly that two-thirds of our exports come from multi-national companies, that in the remaining one-third there are about 5,000 firms and of those there are about 2,000 which actually export.

I say to Irish manufacturing that we cannot leave it to the fine and welcome international companies alone. We are extremely vulnerable in the long term if we do that. While exports are climbing and we are proud of it, I want to caution that Irish owned industry is not playing its full part in that growth. That makes us very vulnerable. I invite Irish industry to look to the Irish Goods Council, to the opportunities abroad and try to play a fuller part in that exporting effort. That is not said often enough because when exports rise we think that across the board every section of industry is playing its part. Irish industry is not yet playing its full part. It has only a very small share of total exports. It is urgent that the Irish firms, firms based here with largely Irish management, play their part.

I want finally to deal with the insurance area for which I have responsibility. Insurance costs are too high, both public liability and employers' liability. Motor insurance is too high. We are told that many of our firms now do not carry some insurance because they cannot afford it. They prefer to go into liquidation. This has been estimated at perhaps 10 per cent to 15 per cent of Irish companies. If that continues it will narrow the base and if that happens the cost gets higher. We cannot tolerate that. I do not have to tell the House how the cost of motor insurance is escalating and how unacceptable that is. We have been doing a number of things in the last few months to try to get a grip on that. First, I have asked the Bar Council on a voluntary basis to consider making a gesture with regard to the eight legal persons involved, possibly, in an insurance case. Given present circumstances, I do not believe that the Bar Council would want to continue that situation. They are considering my request and I hope for a favourable response.

The Minister for Justice, Deputy Collins, has announced that a Courts Bill is coming in which will abolish juries. That will help considerably to get costs down. I have just negotiated a deal with the Insurance Federation whereby, once the Courts Bill is in place, they will give a 10 per cent to 20 per cent reduction in motor insurance for young drivers who have been named drivers on the policies of their parents or guardians for a period before that. I have also entered into a partnership with the insurance industry to work further on getting insurance costs down. We are looking at the introduction of a book of quantam and safety audits for insurance companies. There is a whole programme which in the end will have the net effect of reducing insurance costs, I am convinced, in the months and years ahead.

I thank the House for giving me this time. The strategy of the Estimates is quite clear. We have been having it good since 1958, with increasing expenditure. It is time to call a halt and we have done so. The Office of Trade and Marketing looks forward to playing its role in achieving that economic growth by encouraging exports and by planning and managing them.

I am tempted to begin by taking up the points made by the previous speaker, the Minister of State, Deputy Brennan. In fact, I find his repeated invitations to the private sector to look at the volume of imports for which substitution is possible, to prepare for selling abroad and to become more involved in investment, are only new in so far as they come from a relatively young mouth. It is an old story, it is an old sound which has gone on since the fifties and it will not delay my remarks for very long. All I want to say is that in 1985 the cost of business tax reliefs was £994.3 million. By 1986 that figure had risen to £1.2 billion. If you add the figure for tax reliefs of £994 million for 1985-86 to the figure for grants and services of £372 million, you will find that this flagging cow that refuses to give milk — the Irish private sector — received in 1986 some £1.366 billion. May the cow be electrified by the Minister of State's invitation and by the invitation of the Taoiseach. However, in his speech redolent with images of suitcases and invitations to visit the Goods Council before one heads for the boat or plane, as appropriate, I must confess to being somewhat sceptical about not only the advice but the use of language which has prevailed in this debate.

Every now and again people have slipped loosely from a description of the document which was published some weeks ago entitled Programme for National Recovery, to calling it a plan. It depends on which time of the day one listens to the debate. Towards night time it becomes a plan but in the harsh light of morning or in the forenoon it reduces itself back to being a programme. It is not, nor can it be taken in conjunction with the Estimates to be, what the Minister described as a part of an integrated economic package.

Listening to Deputy Kelly I was reminded of someone whose name he quoted. It was John A. Costello who, in the Constitution debate 50 years ago after Mr. de Valera had wheeled in three Irish language speakers in a row, said he hoped it would not be taken as yet another defect of the much despised legal profession if he spoke in the English tongue. Not only did that show us of the differences at the time between Risteard Ó Maolcathain and Mr. Costello but there is also a parable in it.

After this great consensus which has now emerged I feel somewhat in the position of Mr. Costello. I would like to begin by clearing the ground just a little. The debate has ranged from the exchange of acerbic tributes by Deputy Kelly to his opposite numbers to the more polite quiet tones of those who suggest that they are in agreement with the Government in principle but against them in detail, to other people who feel we should go further than that and adopt the full rhetoric of modern Rambo economics.

There are clarifications which need to be made. For a start, what is happening in this House, and I hope the public will be made aware of it, is not the emergence of a consensus on either social or economic policy. What is emerging is the politics of a consensus of interests. There is a very basic distinction between them. A consensus on the politics of interests will enable in an unequal society those who are suffering to sink further. It will enable the gaps and opportunities to widen and the consensus will not be disturbed. It is not a consensus of a social kind in so far as those most affected by, for example, the Book of Estimates have not been consulted and, where they might have participated in a discussion on their rights the very agencies which secured their participation such as the National Social Services Board, have been abolished. Let us have a plea for accuracy of language. The consensus is about the interests dominated by the market and by a particular version of economic strategy. It is no more than that. It is bogus, deceitful, misleading and damaging to suggest that it is a consensus which goes beyond such interests. Neither is it very original or new.

I have had the good fortune to lecture on social policy in one of the colleges of the National University. I remember the occasion when Richard Titmuss, a former Professor at the London School of Economics, and who died on 6 April 1973, gave a lecture on "Titmuss's contribution to English social policy and social philosophy." It was an extraordinary contribution. His last book which was edited and brought to publication by his wife after his death and entitled Social Policy was published in the spring of 1974. In it he drew attention to the assumptions which lie behind much of the economics we now hear of. He referred, for example, to the definition of social policy. At that time people were arguing as to whether employment or unemployment policy should be part of social policy. There were those who argued that it should only be about housing, basic health and so forth, but he argued for its extension because he saw the connection between unemployment and poverty. At that time a debate raged in England about the definition of social policy and its extent into nature. Others such as Professor Action who represented a different view on social policy built on the work and the contributions made in that period by Von Hayek.

It was a simple argument. It was about equality versus inequality. At the root of this consensus of interests — let me mark it in in so far as Deputy Kelly is interested in hearing the historical — this debate this week represents a consensus of interests in favour of a society deeply marked by inequalities. It represents a massive achievement of inegalitarianism, in the destruction of what egalitarian thrust there was in Irish society. I will now spell that out for those who would like to dismiss my remarks as being simply reflections. I mean by it an increase in the poverty statistics in terms of consumption and an increase in the gross inequalities measured in terms of income, expenditure, taxation, transfer payments, wealth and participation in society.

It does not surprise me that newspaper commentators can borrow from that great liberal, Ralf Dahrendorf, and even find themselves upset. I think the Leader of the Labour Party made a remark last Sunday about a columnist, Des Peelo, discovering the concept of under-class, suggesting that there were two classes emerging in Ireland, a class who participate and an under-class. Dahrendorf pioneered that view about a year and a half ago. But I am not interested in that kind of distinction. I am saying that even the most right wing people realise that what is taking place is the deepening of inequality and a major assault on welfareism, a major assault not only on that but on egalitarianism itself. It was described in the seventies, in terms of its implications for the role of the State, as the night watchman's State. That is what we are getting. Every now and again it creeps into the speeches. We will be watching out in the six monthly review for the worst casualties. We will sweep the people with the most blood on the streets in front of our noses from in front of the citizens who participate in this great coalition of interests.

It gives me no pleasure to say any of this but the values that lie behind it are very simple. In that book entitled Social Policy, on page 29, edited by Professor Titmuss's widow, this remark occurs:

The main spring of social policy may be said to be the desire to ensure that every member of the community has certain minimum standards and certain opportunities.

Professor Titmuss had his opponents at that time. I will read only one more quotation for the House, those are the last remarks written in his own hand by Richard Titmuss which were these:

For many consumers the social services that they consume are not essentially benefits at all; they represent partial compensations for disservices, for social costs and social insecurities which are the product of a rapidly changing industrial society. They are part of the price we pay to some people for bearing the part of the costs of other people's progress: the obsolescence of skills, redundancies, premature retirements, accidents, many categories of disease and handicap, urban blight and slum clearance, smoke pollution and a hundred and one other socially generated disservices.

That was his view in the seventies and that debate was taking place at that time. Of course, after his death, there was the rise of Thatcherism in Britain but Thatcherism was able to draw on Professor Richard Titmuss's greatest critic when he was alive. He was Professor Acton who had written:

... less Government, less public bureaucracy and a resurrection of the work ethic in the private workplace.

I wonder sometimes — no more than the previous speaker — is there ever anything original in anything that is happening in Ireland at policy level? Is everything to be borrowed slavishly? Is everything to be simply copied as if it was some kind of immutable script, something handed over, which could not ever be changed? I find it depressing to think that there is nothing original in these proposals before us.

Therefore, I want to concentrate my remarks on a few key areas. What I want to emphasise immediately is that it is time in this country we realised that what has been described as a programme or plan has at its base certain assumptions about the nature of Irish society and about the nature of participation in Irish society in particular. There is, in the introduction to the plan, an honest recognition of the volume of emigration at present. It is accepted that it will run at 30,000 per annum and more for practically the third time this century ignoring the beginning of the century. In the fifties there was an exodus from this country. We are sitting back and waiting for the next exodus. And we have the effrontery to write down in our official documents that we can live with 30,000 a year emigrating, that we can live with an unemployment rate that is probably described officially as somewhere approaching 19 per cent but which, in reality, is probably nearer to 20 per cent.

I find it very strange that we never ask ourselves: what kind of economy is it that is willing, for example, to live with such a high unemployment rate? For example, in 1986 we paid £273,470,000 on unemployment benefit including pay-related benefit. That is an estimated figure provided by way of written reply to a parliamentary question of mine on Wednesday, 14 October. The unemployment assistance in the same year amounted to £391,537,663. Redundancy fund payments were £27,043,194. This amounted in total to £692,050,857. In addition to the cost of servicing an unacceptably high level of unemployment, the loss of human intelligence and creativity represented in the emigration statistics, we must add the loss of direct taxation and the difference between the indirect taxation that would have been paid had such people been in receipt of an average wage and the amounts they actually receive by way of benefit. This is an appalling record.

I do appreciate if people want to say: well, the fault is not that of the Government. Let us not get involved in apportioning blame but I do want to question some of the assumptions made. I read the Taoiseach's speech with great interest. The Taoiseach sees himself as some kind of inspirational source at this point in our history. He is fond of using phrases such as, "creating an atmosphere of confidence". Indeed, in his second sentence, he told us that confidence was back. It is like when the children are terrified at night and worried, lest Mammy or Daddy should not return, the Taoiseach is back to console the Irish people and we are on our way again. As we go through the Taoiseach's speech we find that every single item of expenditure should be fully justified on its merits; because Mammy is cross we have to listen to this. I take it that the phrase "... every single item of expenditure could be fully justified on its merits" included an examination of the merits of abolishing the National Social Service Board, the Health Education Bureau and An Foras Forbartha. I will not talk about the corresponding aspirational allusion to 25,000 extra jobs in tourism while, at the same time, abolishing the very Department that had looked again and again at those very agencies, that had looked again and again at our environment and said: if we wanted an ecologically clean base for our tourist industry there were all the reports of An Foras Forbartha to be referred to. If we wanted to save a great deal of expenditure on the later effects of people abusing themselves by not eating properly, or through the intake of different kinds of addictive items, ranging from cigarettes to alcohol and beyond, the Health Education Bureau was there. If we wanted citizens to participate in decisions affecting their lives the National Social Service Board, with its 80 different advice agencies, was there. But they had to go in the review of the once benevolent, returning parent to this nation of upset children.

There are other more serious assumptions which I must say appal me and which have not been spelled out in the debate so far. There is an assumption that a reduction in interest rates will follow automatically from the fiscal measures being taken. I challenge that assumption. For example, anybody who is half literate in economics can see that the exposure of Irish interest rates to external pressures, in particular international interest rates, affected as they are by the beggar-my-neighbour economics of the United States, knows full well that that strategy could come unstuck. But it is one illusion built upon another illusion. The assumption is — and I have heard it again today — that a reduction in interest rates will lead to an increase in investment. Where is the evidence for that assumption in our economy? Where is the evidence even that there is a semblance of a credit policy that would lead in that direction?

While I am at it this is the appropriate time in my remarks to nail in another little point about who exactly is doing well out of the Irish national debt which everybody, my wife, myself, my dog and my cat are supposed to be carrying shares of around our necks in the crude way statistics are used in this country. The fact of the matter is that the Irish domestic banking sector is doing very nicely, thank you, out of the national debt. It is lending to all of the Government agencies. The kinds of sums it is lending are very interesting. Indeed, the kinds of interest payments it is getting are very interesting. It is drawing an enormous amount of money from what are effectively State guaranteed, no risk advances to different State and semi-State bodies. Time constraints prevent me giving all the details but at the end of the year 1986 good old RTE paid £921,000 in interest to their bank. I presume that the bank were taking a risk and had to consider whether RTE might go out of business altogether. Maybe it is shaky by their standards. Telecom Éireann, for which the taxpayers borrowed £100 million in 1974, paid £94,377,000 to the banks in 1986. The list goes on through AnCO, CERT, all the private hospitals and the health boards. AnCO paid interest amounting to £1,375,480 in 1986. I can circulate all these figures. If we take it that 40 per cent of the national debt is owed domestically, there are people who want to miss the point that Irish banking profits are being fuelled by the fact that they have been able to lend in cosy, non-risk situations to different semi-State bodies. Let us take a typical example. Since people want examples, let us lead by example. If all the health board bankers decided to give a 50 per cent reduction in interest rates for the next five years to the health boards with which they have been doing business, we could retain all of the primary care workers in the health board regions for those five years. But that sacrifice will not be asked for. The sacrifice that will be asked for will be paid for by the citizens who are watching their services being destroyed and being dismantled by illiterate economic thuggery, built on a consensus of interests that simply does not care and is committed to the values of an inegalitarian society. The people who will have to pay for the destruction of the health services are the people who have to wait longer for operations of an orthopaedic kind, such as the man who hopefully will not die before he goes to Merlin Park Hospital in Galway for his orthopaedic operation. There are children who will grow up without ever having been seen by an orthodontist. I must make reference to this integrated piece of economic planning for recovery fuelled by confidence from the Taoiseach, blessed by him and recommended to the public by the three major parties in this House.

I will say a few words about the areas for which I have special responsibility, namely education, which includes youth affairs, foreign affairs, encompassing overseas development aid, the Gaeltacht and the Irish language. Regarding the kind of cuts taking place in the basic level of primary education, the figure of 1,300 fewer teachers has been mentioned. There is a view somewhere that because the population of school children is projected to fall in the years immediately ahead we no longer need teachers. The recommendation made by successive educational reports over several decades has been that we should reduce the inequalities brought about by disadvantage by reducing the ratio of pupils to teachers. We should use the availability of more teachers to improve learning and to build in the possibility of therapeutic teachers to deal with special needs and so forth. That is not to happen. We will be looking at empty classrooms to which the emigrants can come back and say they were once taught there. Of course, far more than 1,300 teachers will go from the primary sector. The INTO are conducting a nationwide survey to look at the immediate impact on all their schools. A spokesperson for that organisation told me that it would be a conservative estimate to say that 2,000 teaching positions will be lost in the primary sector. Class sizes of over 40 will be the norm and class sizes of 45 will be quite common. The notion of an administrative principal is being done away with. Now the administrative principal will return to the classroom. What an incentive there will be to become a principal. I have not time to deal with the effect of class sizes in second level education.

I almost lose courage at times when I consider what happens to the research which has been initiated by the State or semi-State bodies like the Economic and Social Research Institute on education and disadvantage. The literature is there. If you want to make sure that people will be incapacitated in terms of participating in the economy, even if work is available, the thing to do is to increase the size of the classes. There has been a massive cut in funds for both the vocational and secondary sectors. Teachers are bringing in their own photostatic machines illegally and charging pupils for sheets of paper to be copied.

In the third level sector where I worked extensively for 17 years, I notice notes circulating to the effect that people are not to go on leave any more. I loved Deputy Brennan's notion on that matter. We will be expecting people to come to see us. Recently in Holland I told a scientist that we need his visits even more because we will not be able to travel abroad to attend conferences or exchange scientific ideas. There has been a decimation of services in education. I believe there will probably be 5,000 job losses. There has been a 20 per cent increase in transport costs in the primary sector.

Regarding the other areas for which I have responsibility, I would ask the Government to read the surveys that have been carried out in relation to the Irish commitment to overseas development aid. When another Government were in office and I was a Labour Deputy I made the point again and again that there was more support for our reaching the UN target in relation to overseas development aid than existed within Iveagh House. We were committed to reaching 0.7 per cent but we got as far as 0.25 per cent. I think we are back to 0.19 now. Can one imagine a more pathetic refutation of the Taoiseach's remark that every cut is carefully thought out than his decision to take 21 per cent off overseas development aid and international co-operation? The week before last the news from Ethiopia was that there were no rains in Tigre province and that there would be another famine. At that very time the Irish Government in their most niggardly cut of all reduced overseas development aid.

It used to be a fine refrain that Ireland is a great country full of young people. It is full of young people but now they are being allowed to go. I have met the youth organisations who have seen practically all their budget disappear. They tell me there has been a cut in the revised Estimates for youth services from £3.9 million to £2.1 million but they have been told they may get the money back from the National Lottery. May I throw a 20-second question to all these constitutionally accountable democrats who sit around me? It is for the press, too. How accountable is it to walk in here with a programme which is called a plan and a Book of Estimates from which money is being lopped off, while nodding outside to people that they may get the money back in the National Lottery? Take £1 million from the Arts Council, throw them £800,000 to shut them up, promise them £200,000 and hope it will work. Equally the youth services have been told that they may get the money back from the lottery. Will the money be in the Estimates next year? Will we ever debate in this House the disposal of revenue from the lottery? How accountable is that public expenditure? It is making a nonsense of political accountability for financial expenditure. It is as close to being illegal as I can envisage. I accuse the Government of not being willing to come into the House and say how they have planned the disposal of the lottery moneys. Are the cuts being replaced by lottery money to be made good in next year's Estimates? How will we ever debate it? This is King Santa Claus again constructing his national Christmas tree, with himself shining on top, handing out little bits of parcels around the country to the beggars who will come along.

Maidir leis an Ghaeilge agus an Ghaeltacht, cuireann sé imní orm an chaoi ina bhfuil gearradh siar san méid atá curtha ar fáil do Bhord na Gaeilge. Chomh maith leis sin, tá chuile eagras atá ag brath ar chúnamh Stáit i gcontúirt anois. Tá laghdú san méid airgid do fhoilseacháin i nGaeilge. Freisin, beidh sé an-deacair do Údarás na Gaeltachta jobanna a chrothadh sa Ghaeltacht.

I am not going to repeat that in English because I do not have the time. It was a notion of Mr. de Valera when speaking on the Treaty, having said he had not enough Irish to give his full speech in Irish to continue in English but when he spoke in English he said he would speak in English because Deputies did not have enough Irish. I do not intend to insult the House like that. I want to say about the Gaeltacht——

Tá an t-am istigh.

I will conclude with this. There are many things to which the Fianna Fáil Party have pledged loyalty and one of them is the Irish language but they can hardly do so any longer in terms of the cuts thay have announced in relation to the agencies dealing with the Irish language and with the propagation of industry in the Gaeltacht.

Having listened to Deputy Higgins one could be forgiven for forgetting that until very recently he was chairman of a Labour Party which, for four years, was a member of a Government who brought about the financial crisis which this Government are trying to tackle. He cries for various vested interests in this House and says the solution to our problems is to throw more public money at them, money which has to be borrowed or raised by way of taxation on an already over taxed public. The solution proposed by Deputy Higgins and his party is to borrow money for these interests, as they did, and which gave us a national debt of £25 billion. That is not the easy road we are going to take.

I am very glad to have this opportunity to participate in this debate on the Estimates published last week. The Estimates represent a continuation of this Government's consistent, integrated strategy which began with our first budget in March, to deal with the twin problems of the public finances and the lack of growth in the economy. These Estimates can strengthen the foundation already laid for long-term economic growth which has now been recognised by all the social partners as the only basis for secure progress in increasing employment and prosperity.

The problems of the economy and the public finances are closely related. This essential truth is now accepted by the vast majority of the Members of this House, by economic commentators and indeed by the general public although it has not got into the minds of the Labour Party. Sustained high levels of borrowing over many years brought the national debt to the point where it was causing major uncertainty and instability and a loss of confidence, both at home and abroad in our economic future. More directly it led to high interest rates and high taxation caused by the spiralling servicing costs of such a huge debt. This has dampened and smothered initiative, investment and growth which are essential for our economy. Thus, the solutions to the budgetary problems and our economic difficulties are the same, a reduction in borrowing by the State to a sustainable level and process of identifying and fostering a number of key sectors where there is potential for early and significant growth.

Adjustment on the lines set out in the Estimates for 1988 is a necessary condition for securing economic growth. To be successful, however, this Government recognised from the outset that it must be matched by active policies and strategies to get growth going in those key sectors of the economy which have undoubted potential for growth. This Government have identified areas where there are opportunities and these are being vigorously pursued.

In tandem with their management of the public purse, this Government have achieved, in the recently concluded Programme for National Recovery, a major breakthrough in the divisions which have historically separated the approach of trade unions, employers and farmers to economic advancement to the detriment of growth. We capitalised on the broad consensus between the social partners in terms of the analysis of our economic problems as published in the NESC Report, “ A Strategy for Development”, by securing a consensus as to how those problems would be tackled. The three year programme takes account of our inability to continue to provide the current level of services across the board; the need to stabilise and reduce the debt/GNP ratio; the need for pay moderation combined with tax equity and tax relief and the need to protect the position of the underprivileged in our society. Combined with the development and employment policies already being carried out by this Government, the Programme for National Recovery provides us all with the opportunity and responsibility to contribute towards the revitalisation of our nation.

It was an essential precondition to realising the economic and social goals in the recovery programme that we demonstrate emphatically our determination to improve the budgetary position and reduce spending and borrowing. We had commenced that process immediately on coming to office and I hope it is now patently obvious that we intend to continue doing so until our objectives are reached. Our approach, in its totality, will ensure that the priorities for national recovery which we have identified will be achieved.

The Estimates for next year show total reductions in Exchequer expenditure of £412 million in 1988 compared with 1987. In fact, if we were to continue to provide services in 1988 at their existing level, the Estimates involve reductions of £485 million. Apart from the unusual case of 1984 when expenditure fell following the establishment of Telecom Éireann and An Post, this is the first time in 30 years that the pre-budget Estimates and Public Capital Programme show a fall, compared with the previous year, in planned Exchequer expenditure. These Estimates follow a painstaking review of all aspects of public expenditure and are designed to ensure a more rational use of essential public services and that taxpayers get the best value for their money. These aspects take on an increased significance in the light of the fundamental reality that we cannot afford to continue to provide the current level of services across the board.

The progress achieved this year in reducing net non-capital supply services by almost 2 per cent of GNP and net Exchequer borrowing requirements for capital purposes by a further 1.5 per cent of GNP, making a total of about 3.5 per cent, generates considerable scope for a significant reduction in the overall borrowing requirement in 1988. We cannot be precise about the actual borrowing requirement in 1988 until the changes in tax revenue and any adjustments in the 1988 budget are taken into account. It could be said, however, that the reductions now achieved are sufficient to bring the national recovery programme target of 5 per cent to 7 per cent almost within reach in the first year of the programme. It is now therefore a realistic and attainable target.

Reducing public expenditure is not, however, a simple arithmetic process. It has to take account of today's needs and future prospects of the different sectors of the economy. Reductions in non-capital expenditure were carried out with the greatest possible sensitivity to the needs on the social services side. On the capital side, the Government minimised the reductions on economic and infrastructure investment which form the basis for sustaining future gainful employment.

The Government's approach has already boosted confidence in the economy and has been accepted by the financial markets. This has been brought about first and foremost by the sharp reduction in the level of Exchequer borrowing. The alarming drain of capital out of the economy has been cut and interest rates have fallen considerably. I am confident that the firm action we have already taken and continue to take, together with the climate for stability inherent in the Programme for National Recovery, will see a continuation of these favourable trends.

Despite the direct short-term impact of savings in public expenditure on domestic demand, the economic outlook for 1987 is very encouraging: manufacturing output for the first six months of the year and the trade surplus for the first nine months are considerably up on the same periods last year and I now think that the full year figures will be surprisingly good. Capital investment has recovered, inflation for the year will be about 3 per cent and, while the level of unemployment remains unacceptably high, employment in the key sectors, manufacturing and private sector services, has started to increase.

These favourable trends give us grounds for renewed optimism in the future of our economy and serve to illustrate that the Government's approach to solving our economic difficulties is the correct one and must be continued. Let me assure this House that our strategy will be continued and will create the conditions for faster, sustainable growth and higher employment in the future.

Net expenditure in the Energy, Forestry and Communications Votes has been reduced by 9 per cent as compared with 1987. This level of reduction is about twice that of the total reduction in supply services. On the capital side, reductions are being made on investment programmes in electricity production and distribution now that sufficient generating capacity is available for our foreseeable needs. It is necessary, however, to continue development of our gas resources, forestry potential and our telecommunications network. Overall, capital investment for the three areas for which I have responsibility will increase in 1988 by over 5 per cent.

This contrasts with an overall reduction of 15 per cent under the Public Capital Programme. The Government are firmly of the belief that investments in the areas I have mentioned are vital in order to attain the level of economic growth that is necessary to maintain and increase employment opportunities.

The foregoing is the context in which the recently published Estimates are set. I intend, a Cheann Comhairle, in the rest of my intervention today to discuss the impact of those Estimates on, and the direction in which I see progress in, the various areas of Government which have been entrusted to my care.

With regard to future developments in the Energy area, I am pursuing a programme to achieve as rapidly as possible:

(1) the re-establishment of Ireland as a prospective territory for further oil and gas exploration following on the recently announced amendments to the licensing terms;

(2) the exploitation of our natural gas resources by the extension of the natural gas grid northwards to Dundalk, so as to expand the benefits of natural gas supply to industry, commerce and domestic consumers;

(3) the lowest possible energy prices by ensuring that the full benefits of the relatively low and stable international oil price and the knock-on effects of these oil prices on other fuels, are passed on to consumers.

As already indicated to the House earlier this year, I have put in train the preparation of a White Paper on Energy Policy.

One of my primary objectives is to revitalise our oil and gas exploration programme. The omens for exploration, as I found them when I came into office, were not favourable. The price of crude oil had stabilised at a much lower level than applied a few years ago. There was still intense pressure on oil companies' exploration budgets and our drilling results in the previous couple of years were not encouraging.

Prior to the announcement of the new terms I was faced with a situation where deferment of the two obligations wells listed for 1987 was being sought on technical grounds and where there were only two firm drilling commitments for the next five years, one for 1988 and one for 1991. Our 1987 wells did not live up to expectations. There was a distinct possibility that exploration might simply dwindle away in the next few years. Once the exploration companies had left the Irish scene it might be impossible to attract them back. I decided that radical action was necessary to reverse the trend. This was only possible in the area under our direct control, i.e., the licensing terms.

The new terms have the important virtue of simplicity. Briefly, they provide for the elimination of royalties, free depreciation of exploration and development expenditure against corporation tax which remains at a rate of 50 per cent and no other State participation in profits except that, where production exceeds 100 million barrels of oil or equivalent gas, an additional levy will apply to bring the State take to 60 per cent of net revenues.

I cannot guarantee that the new terms will produce a new wave of exploration. Other factors apart from the financial régime will be taken into account by the oil companies. What I have done is to throw down a challenge to the oil companies. We have now gone as far as is realistically possible and it is up to them to respond. Already I have been able to announce an exciting new well in the Porcupine area to be drilled in 1988 by BP and I am fairly confident that a second well will also be drilled in that area.

These wells would not have happened if the terms had remained unchanged. I am vigorously pursuing with the oil companies the question of further expanding or accelerating drilling programmes in the light of the new terms. Some results in the way of early seismic programmes have already been achieved and negotiations on other possibilities, including the drilling of wells, are being actively pursued. The early response to the new terms is encouraging and companies are looking at Ireland again with interest and, indeed, certain large companies, which some years ago had taken conscious decisions to abandon the Irish offshore, have been in touch with us again since the new terms were announced. I expect, in the short term to 1989, that as a minimum the number of wells previously envisaged will be doubled.

While I am on the subject of exploration I would like to briefly mention minerals. I am pleased to report a buoyant situation with regard to minerals exploration. The increase in prospecting activity arises from the extension to Ireland of the renewed interest worldwide in the search for gold. Reports so far are encouraging but hard minerals prospecting is not something that achieves results overnight. I will ensure that applications for minerals prospecting licences will be processed by my Department as quickly as possible.

With successes in the past in the discovery and the bringing into production of base metal mines — zinc, lead and copper — coupled with the encouraging results in recent times of exploration at Galmoy, County Kilkenny, the minerals industry remain optimistic about Ireland's potential for further economic base metal mines and exploration for these is continuing.

I have been reviewing the present practice of leaving State mining lease terms for hard minerals for settlement at the time an ore body is fully delineated and its economics determined. In doing so I have had due regard to the concerns of industry as expressed in the submissions that have been made to me. I expect to complete my review of this matter in the near future.

The Electricity Supply Board's non-voted capital expenditure for 1988 will be of the order of £109 million. This represents a decrease of 14 per cent on the 1987 anticipated outturn of £127 million and reflects the continuing trend of reduced capital expenditure by the board following the completion of the Moneypoint project.

I am glad to note that the ESB do not envisage any price increase over the next few years and I will ensure that any possibility for further price reductions will be kept under continuing review.

The sum provided for the western package electrification scheme is £0.9 million. To date, 4,763 applications have been approved under this scheme at a cost of over £11 million and it is anticipated that a further 600 farms will benefit under this scheme in 1988.

Included in the Programme for National Recovery are a number of major expansion and development projects by the ESB of their external activities. Projects being actively pursued and examined cover overseas consultancies, commercial fisheries, small hydro-electric installations and transhipment facilities at Moneypoint. A special unit of top people within the ESB is being given the job of seeking new development opportunities on both the home and export markets. It is hoped that such expansion will provide up to 600 jobs. In this context I will shortly be circulating to Deputies a new Bill, the main purpose of which will be to allow the ESB greater commercial flexibility to expand in the areas which I have just mentioned.

The integration of the European energy infrastructure is an important step towards European cohesion in the Community. Internally the ESB and my Department continue to study the question of inter-connection between Ireland and either UK and/or mainland Europe. This is a major question with far-reaching policy considerations and very significant capital costs. Studies are not yet complete and, as Minister, it will be my task to ensure that all aspects of the validity of the case for a supply of electricity from this source will be exhaustively examined. Electricity is not, however, an end in itself, and the case for inter-connection of gas must also be kept in mind. It is not a question of rivalries; it is a question of optimum economic benefit and when one is tailoring one's cloth with care one endeavours to get the best value. Inter-connectors can operate in both directions and be of interest and benefit to both parties. The entire subject is one which this country cannot afford to ignore.

The work of gas mains replacement and network renewal in Dublin is continuing and is likely to continue at a high level for several years. A major part of the Bord Gáis Éireann allocation in the public capital programme will be on the distribution systems in Dublin and other areas. My Department will, of course, continue to monitor closely the implementation by BGE of the recommendations of the various safety reports which have been published this year.

Another major item for which funds have been allocated is the extension of the national gas grid northwards to Dundalk. This is in line with the Government policy which is to extend the benefits of natural gas supply to industry, commerce and domestic consumers in the area from Dublin to Dundalk. During the construction phase of the project, an average of 200 jobs will be created and I expect that up to 70 per cent of goods and services used on the project will be Irish. The estimated cost of the project is about £31 million. A proposal for funding for the project under the non-quota section of the European Regional Development Fund has been submitted to the EC, for inclusion as part of the EC programme for the economic and infrastructural development of the Border regions.

A number of major industries, including the horticultural industry are located in the vicinity of the proposed pipeline and access to a secure and efficient source of energy will ensure their continued development. The availability of natural gas in the region will, I hope, pave the way for the expansion and development of new industrial and commercial opportunities.

Energy conservation continues to be an important component of energy policy. I am anxious to get the message across to the public that saving energy saves money.

In so far as Bord na Móna are concerned, I am very happy to announce that following the two difficult years of 1985 and 1986 when, owing to adverse weather conditions the harvests were down and the board's finances were badly hit, the 1987 harvest is slightly above target. The House will note that in the 1988 Estimates an amount of £52,000 is provided for currency exchange loss on certain borrowings by Bord na Móna. This arises from a 25 million Eurocurrency loan taken up by Bord na Móna to deal with their financial difficulties from 1985 and 1986 and the exchange losses are borne by the Exchequer to help alleviate these difficulties.

The Valoren Programme will inject capital into the board's development activities. This, together with the Eurocurrency support, will help the board to complete elements in the third development programme which would otherwise have been postponed or abandoned, with very serious employment consequences, because of its recent financial problems.

These strategies are, of course, directed towards achieving the objectives of the Programme for National Recovery which aims for the development over five years of more than 8,600 hectares of additional bogland at a cost of £22 million which between new jobs and jobs which would otherwise be lost, accounts for almost 500 jobs.

The Government have placed strong emphasis on forestry as a means of job creation and to ensure an expanding programme of forestry development, have decided that the existing Bord na Móna cutaway bogs which are suitable for this purpose will be immediately transferred to the Forestry Service.

In the case of the Irish National Petroleum Corporation, two projects are proposed in the Programme for National Recovery. First, the upgrading of the jetty at Whitegate is being examined. The objective is to achieve savings in the areas of freighting costs and purchasing flexibility. At present the jetty is restricted to cargo sizes of 480,000 barrels of crude. Upgrading could increase this capacity to 600,000 barrels. The second proposal relates to fish farming at the Whiddy Island oil terminal. At present the INPC in conjunction with a Norwegian joint venture partner is conducting a pilot project on salmon farming utilising one of the dormant crude oil tanks. The pilot project will be completed by the end of 1988 and decisions on its continuation as a commercial project can be taken then. I should say here that the integrity of Whiddy as an oil terminal will be maintained irrespective of developments in relation to fish farming.

The Government's policy on nuclear matters is to ensure that nuclear plants do not pose a threat to the health of the people or pollute our environment. As Deputies will be aware, I have been using and will continue to use every opportunity at international level and in contacts with individual countries to seek support for such measures. I am encouraged by responses I am getting. To implement that policy I will shortly be introducing legislation to set up a new Radiological Protection Institute with the task of monitoring radioactivity and controlling the use of radioactive devices and advising the Government and the public on all measures necessary to protect health and safety.

Despite the very difficult financial situation, the Government attach such a high degree of priority to safeguarding the public that the funds available for radiological protection are increased in 1988. As I announced to the House recently, the Estimates include a provision of £250,000 to enable the commencement of the phasing-in of an emergency plan to deal with the effects of a nuclear accident. The plan is being finalised at present and I will shortly be putting my recommendations on the matter to the Government. I will announce the details of the plan when it has been fully worked out and approved.

Provision has been made in the Forestry Vote for the funds needed to develop and exploit our natural advantages in relation to the production of timber. Apart from the beneficial effects that increased production and utilisation of Irish-grown timber would have on our balance of payments through import substitution, there will be very firm export markets available for many years ahead for any surplus timber we may produce due to the forecast deficit in world timber production in relation to anticipated demand. The Government's confidence in the potential of our forestry and timber industry will be matched with appropriate policies to ensure that this potential is realised and exploited.

While it has been found necessary, in line with other State activities, to reduce in these Estimates the funding available for the purchase of land for State afforestation, this does not, however, mean a curtailment in this Government's determination and commitment to increase the State forest base by record planting levels.

I have already mentioned the Government decision that the Bord na Móna cutaway bogs which are suitable for forestry will be transferred in future to the Forest Serivce of my Department. This will apply to any cutaway lands which are at present available for planting and also to those areas which will become available in the future as Bord Na Móna bogs are exhausted for turf production purposes. The mechanisms for the orderly transfer of these lands from Bord na Móna have now been established.

In 1988 the Forest Service will plant some 10,000 hectares. This will be achieved largely through the planting of lands in the Forest Service's own land reserve and the planting of 1,000 hectares of Bord na Móna cutaway. This, together with anticipated private sector planting of 3,000 hectares, will give an all-time national planting record of 13,000 hectares.

While the Government will be pressing ahead with the expansion of State afforestation, they will also be taking more positive steps to secure a significant sizeable expansion of the private forestry sector.

The grants available under the forestry element of the western package are such that a tree crop can be established at a very much reduced cost when the grants are taken into account. While these grants may be available at present only in the western region of the country, proposals are being examined in Brussels for the extension of the scheme to the disadvantaged areas of the eastern region. I am confident the proposals will be favourably considered by the European Commission because they make economic sense for Europe in the long term and fit in well with the "Delors Package" ideas for reform of the structural funds and greater economic cohesion within the Community.

The extension will cover an additional 635,000 hectares of land east of the Shannon which will qualify for much higher rates of afforestation grants than at present. Farmers in this region will benefit, as those at present in the western region, from grants amounting to 85 per cent of their afforestation costs subject to a maximum of £800 per hectare. Non-farmers will qualify for 70 per cent grants also subject to £800 maximum. Approval is also being sought from the European Commission for a scheme of afforestation grants for full time farmers outside the disadvantaged areas.

Effectively there will be considerably higher afforestation grants available throughout the country than heretofore. Farmers who afforest even part of their land will continue to be eligible for headage payments. A free technical advisory service will be available for all those considering the afforestation of all or part of their holdings.

It is very important that there be a substantial take-up of these grants as up to 50 per cent of the cost will be recoupable from the EC. EC funds will be available for publicising and promoting the schemes.

Preparation of the necessary legislation to give effect to the previously announced decision to create a new State company to manage State forestry along commercial lines is now well advanced and it is hoped that the new company will be ready for launching early in the New Year.

The Government, as the House is aware, decided to sell a small proportion of the State forests in 1987 in order to generate additional funding for an expanded planting programme. While the response to the initial advertisements was disappointing it has, nevertheless, given some hope for optimism in so far as where sales were successful the amounts tendered were in line with the Department's valuation expectations. There is a market for medium to long term investment of funds in forestry and, with the development of a greater awareness by fund managers of this investment medium, the feasibility of attracting a greater level of funding is worth pursuing further. For this reason I have decided in 1988 to again generate £3 million through the sale of immature forests as a means of financing ongoing forest development.

The 1988 public capital programme includes an amount of £135 million for Telecom Eireann, including £15 million from the European Regional Development Fund, compared to the 1987 Estimate of £120 million. All of BTE's capital expenditure will be met from non-Exchequer sources and there will be no drain on Exchequer funds. After taking into account the Regional Fund moneys of approximately £15 million, most of the capital expenditure will be met from the company's own resources rather than by borrowing.

It is likely also that funds will be available from the STAR Programme. This is a major new programme of advanced telecommunications developments which will be aided by the EC. The prime aim of this programme is to foster the economic development of the least favoured regions of the Community and to make them more attractive as locations for investment by improving access to advanced telecommunications services in line with the Community's objectives in this field. Under this programme, the European Regional Development Fund may aid the establishment of the basic infrastructure necessary for the provision of advanced telecommunications services and may also assist the promotion of measures to boost the supply of, and the demand for, these advanced services. The programme proposes to allocate approximately £39 million to Ireland over a period of five years from 1987 to 1991. I hope to be able to make a further statement about this programme before the end of the month.

After achieving static postage rates for letters and postcards since spring 1986, it is the objective of An Post to maintain current rates for another year. The success of An Post in the operation of the national lottery is an excellent example of the ability and professionalism of the company.

There is a need to improve, refurbish and extend post office accommodation in a number of post office areas. An allocation of £8 million has been provided in the 1988 public capital programme for An Post. As with Telecom Éireann, this expenditure will not represent a draw on the Exchequer.

To turn to broadcasting, the Estimate for Communications provides for payments of grants-in-aid to RTE of amounts equivalent to net receipts from television licence fees and cable licence fees, based on total receipts from the sale of television licences and receipts from cable licences minus an appropriate deduction for costs.

An Post has been delegated responsibility for the collection of television licence revenue and the detection of evaders. The Estimate provides for a payment to An Post to cover the costs involved. In the year to end September 1987 An Post managed to meet the target of licence sales set for the company.

Radio Telefís Éireann itself is, happily, in a fairly healthy financial position and results so far would indicate that the outturn this year will show an improvement over the very good results posted last year.

Still on broadcasting matters, I indicated in reply to a parliamentary question last week that I would be introducing necessary legislation in the current session to provide a legal framework for the development of local radio and thereby put an end to the present unsatisfactory situation. Concurrently, I will be reintroducing the Broadcasting and Wireless Telegraphy Bill which is designed to strengthen my powers to suppress illegal broadcasting and illegal wireless telegraphy activity generally.

I look forward to receiving the co-operation of the House in processing these two pieces of legislation speedily and thereby regularising what has been a most unsatisfactory situation for many years.

As I said at the outset, our priority in Government is to restore confidence in the economy quickly and open up new opportunities for employment. To achieve this objective we must improve investment, bring down interest rates and encourage flows of capital into the economy. An essential precondition was that we demonstrate emphatically our determination to improve the budget position and reduce spending. This we have done.

The Estimates for 1988, together with all the other initiatives, will in the lifetime of this Government bring about economic recovery and stability, providing employment for our people and hope for the future.

Deputy Kemmy, I know you are a patient man. Ordinarily it would be required of the Chair to call a speaker from Fine Gael. If Deputy Birmingham is happy to yield to your goodself then I will call you. Otherwise I would have to call Deputy Birmingham.

There should be a place in this debate for backbenchers and Independents.

Can I seek some help as to how generous I am expected to be? Is the Chair's intention that an Independent Deputy will be called at some stage during the course of the debate?

Yes. It has been stated by the Ceann Comhairle that an Independent would be called at some stage.

In those circumstances I have no desire to prolong Deputy Kemmy's wait.

I thank Deputy Birmingham and I will be as concise as I can. This debate is timely. It is only proper and right that the Dáil respond to the economic and national crisis which faces us and that people like me should have an opportunity of contributing to this debate. We are living at a time of crisis with more than 250,000 unemployed and emigration in full spate again, with young people especially running out of the country daily. Our national debt has reached £24 billion and all income tax paid and PRSI are servicing that debt and not the production of wealth and the creation of employment. Therefore, it is proper today to see if we can find some solution to the problems.

In this House we should not just fritter away our time with ephemeral arguments about the national malaise. Let us look back at the economic strategy that has been used mainly by Fianna Fáil Governments since we gained independence 65 years ago. At that time world trade markets were already tied up by the major economic powers and it was difficult for us to impinge on those markets to gain even a toehold. Then as now, agriculture was our main industry and we had to fight an economic war with Britain in the thirties to find some place in that market. There was decimation of employment then, not only in urban areas, farm labouring was wiped out in the twenties and thirties. Historians, including our Labour historians, have written little about that.

Fianna Fáil came into power in 1932 as the party of the small farmers and small businessmen, the economic champion of the small man. Fianna Fáil have spoken about a programme for national recovery and regenerating the national spirit. They brought a good deal of industrial expansion to Ireland in the thirties. Employment figures rose gradually throughout the thirties because Fianna Fáil were able to adopt protectionism as part of their economic policy. They gave aid in subsidies and grants to people who produced for the home market and they put tariff walls on outside goods. All that had a beneficial effect in the short term.

Unfortunately while they could protect native industry, they could not make it efficient in terms of world markets and world competition. That policy failed at the end of the thirties. It lasted for about eight years before it fizzled out. A new class arose then about whom Seán Ó Faolain wrote very eloquently as a "class of middle men who contribute nothing to the country but a distribution service at a high cost". They were unable to tackle the fundamental problems of our society. That legacy of a high cost is with us to this day. Fianna Fáil were caught as a Government with a strategy which had run out of steam then. We had very high unemployment throughout the forties and fifties.

Fianna Fáil then did something which at the time seemed miraculous. They were able to turn their back on the policy of protectionism and open the economy to free trade and to multinationals and still retain power. The historians have not written about that either. To turn a somersault on your entire basic policies, adopt reverse policies and still retain power was a miraculous achievement. Fianna Fáil then had no option because in 1957 — a year I remember well because I was one of the emigrants then — emigration was running very high with about 70,000 people leaving the country, the economy was stagnant and we were forced, as we are now, to do some fundamental thinking. Unfortunately we seem to be bereft of economists to do the fundamental thinking we need to find the way forward.

Dr. Ryan and Dr. Whitaker came forward and Deputy Seán Lemass was there to avail of the strategy of free trade in the First Programme for Economic Expansion which was formulated at that time. Again the effect was dramatic. We brought in the multinationals and we made changes in our education system. The body later known as AnCO were set up to train workers for the new system of industry where new skills were needed. We established RTCs throughout the country and we founded NIHEs in Limerick and Dublin. Other changes took place to facilitate the new drive in the economy such as foreign capital coming in. We brought in the Anglo-Irish Free Trade Agreement and in the seventies we joined Europe. The effect was dramatic. There was an increase in employment and in output as a result of industrial expansion.

Unfortunately we have run out of steam again. We are at another crossroads. That bubble has burst and we are left with the effects of it. Deputy Seán Lemass described the tide lifting all boats. The tide is no longer rising, it is receding and I am afraid the ship of State has been scuttled and no one is able to refloat it. The documents before us today offer little in the way of a new programme for economic expansion.

I listened carefully to many of the speakers in this debate, expecially the Minister for Defence, Deputy Noonan, who to some degree spoke about agriculture. The money we have got from the EC has been largely squandered. We have very poor results from it, and that was not mentioned by the speakers. What has happened in the EC was like throwing apples into an orchard. We exported beef and milk into that market which was already cluttered with beef and milk. That cannot go on. Whether we like it or not, there will be changes in the CAP which will be forced on us. Our farmers must meet them intelligently and efficiently. They must diversify in the production of food, otherwise they will face a great deal of trouble. There is no reference to that in the document. Farmers are an extremely strong lobby to this House and people are afraid to say what should be said relating to agriculture. Too often land has been seen not as a means of production but as a status symbol giving somebody status and security in the community, but that day is gone. Land will have to be used in the interests of all our people, not merely of a small élite. We must be interested in creating jobs inside and outside the factory gate if agriculture is to play a part in this so called national recovery.

The trade unions have been criticised in this debate for making a deal with the Government. I would not go down that road. The trade unions did the best they could in the circumstances and time will tell whether they were hoodwinked or gulled. I do not think it would be very fruitful for me to engage with the trade unions for taking part in this agreement. The trade unions are intelligent and practical enough to understand that this was the best deal they could get in the circumstances. There is no point in using that situation to settle old scores, although I am sure that some people have good reason to go down that road, but we must be objective about the whole question. I will not deal with that further today.

As Deputy Michael D. Higgins said, private enterprise has failed to solve our unemployment problems. We need State involvement in food processing so as to provide employment. That has been obvious for a long time.

The documents before us are very vague about the role of the banks and the role of society. The banks cannot just stand aside, because they have contributed a great deal to our problems. The Minister for Defence referred to the Wall Street crash. He mentioned people who were hiring hotel bedrooms at the time and no one knew whether they were using them to sleep in or as places from which to throw themselves out the windows. The Minister referred to sheep being led to the slaughter. That was an unfortunate analogy. The Minister did not really say why a crisis has occurred in the world money markets now. The crisis in the world money markets can be attributed to the greed of the people who manipulate the markets, who have used them to inflate the price of stocks and shares, to make killings on the market and who do not care about employment, production or anything else. They use the money markets in a negative way and without social responsibility. The Minister might reflect on that.

The banks must contribute to finding solutions to our problems. They cannot be let off the hook. They must pay more taxes and use their funds to fund productive enterprises, to create employment and to boost our export trade. The cutbacks themselves will do nothing to create employment. There is room for savings right across the board. The Minister for Labour knows that we have a whole plethora of bodies dealing with unemployment. We have AnCO, team work schemes, youth employment schemes and so on. I am not sure what role the Minister has in mind for the National Youth Council but certainly there is need for co-operation in the area of all these schemes and organisations. All these agencies have the same objective. Surely there is room for amalgamation, co-ordination and more efficiency in this area.

Deputy Higgins talked about the National Social Service Board. This body did excellent work and it was noted for its independence. The board served all politicians irrespective of party affiliations and it served independent bodies and voluntary organisations and groups. Some of the people from this board have come to see me and they have been devastated that that body has now been wiped out with the stroke of a pen. I would like the Minister to consider that, too.

If one has plenty of money and is not dependent on social welfare it is easy to talk about social welfare cuts and about social welfare abuses. One is looking at it from a different perspective. The people here who talk about social welfare cuts and abuses are well off and never had to draw social welfare. These people believe in the survival of the fittest, in jungle warfare. That is a narrow negative attitude.

The Minister Deputy Burke, spoke about local radio in his address to the House. The spread of illegal radio throughout Ireland is an indictment of this House. We pussyfooted about talking about introducing legislation to deal with it and only now is the Minister bringing a Bill in. It is to be welcomed although it is a decade too late. Our handling of this whole question reflects on the legislators. It was a disgrace.

Statements have been made to the effect that we have too many people living on this island. That is utter nonsense. Holland has 14 million people living in an area the size of Munster. They have full employment. They have good engineering and industrial capacity and they send their surplus food to Ireland, to Limerick. Every day in Limerick one can buy Dutch vegetables. It is silly to say that we have too many people living here. We have not enough people. We need our young people to generate employment and wealth. It would be like saying that we should give Australia back to the Aborigines because the immigrants in the settlements were overcrowded. It would be like saying that America should be returned to the Red Indians on the basis that the European settlements and the people who emigrated there overcrowd it. That is nonsense.

We should take advantage of the natural resources of our country. We are only scratching the surface in relation to tourism. Tourism has great potential and should be developed.

Anyone who thinks one can take £485 million out of a small economy like ours without causing distress and hardship does not know much about economics. The economists are very good at telling us about what went wrong about 20 years too late but they are not so good at finding solutions to the problems when they occur. The only economist I know of who has shown an interest in finding an alternative strategy is Eoin O'Malley of the ESRI. I do not know if the Minister or the House has seen the document called The Irish Engineering Industry: Strategic Analysis and Policy Recommendations. It is set out in eight different sections. One section which the Minister and his advisers might read is called, “Suitable Industries for Irish Indigenous Development”. That is an attempt to look at what is wrong with our society, how we have gone wrong and how we can pick ourselves up out of the morass. It is the best thing I have seen, far better than anything contained in the Programme for National Recovery or in the Estimates. Any document I have read in the last few years concerning the malaise in our society does not deal with the problem in a fundamental way as does this one. It is in the Dáil Library and is worth looking at. I would commend it to the Minister and his advisers. The Programme for National Recovery is a pie in the sky document. We are promised pie in the sky when all that is in this document has taken place. We are all to be trimmed down, lean, healthy and active again. That is nonsense. We must think of the people now, not at some date in the future. That is only wishful thinking, not economic forecasting with much to offer. There is nothing behind the document except the hope that something will turn up. We are hoping we will find oil or something like that. That attitude is no good. The Government should tackle the problems on the ground and use our resources and our people to create employment here. The Government should go after the tax evaders who are a disgrace to us. Then and only then will we find a programme for national recovery.

The Minister for Labour, Deputy Ahern is in possession. We shall be moving on to questions shortly. The Minister can proceed.

It is clear that this Government's success in negotiating a programme for national recovery with employers, unions and some farmers——

Does the Minister have a script? It would be nice to see it if he has.

What question is it?

We are not on questions.

I understood the Minister was moving into possession. Are you not commencing formally?

No, he is not.

I thought we might get a look at the script during Question Time.

It is clear that this Government's success in negotiating a programme for national recovery——

Can we have a quorum?

We are just about to start questions.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

A quorum being present, will the Minister for Labour please move the adjournment of the debate on the Estimates?

Debate adjourned.
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