Deputy O'Hanlon to resume on the Estimates debate. The Minister has some 23 minutes left.
1988 Estimates for Public Services and the 1988 Public Capital Programme: Motion (Resumed).
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.
"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.)
Last night before the debate was adjourned, I stated that the non-capital provisional figures take account of the full year effect of the 1987 budget measures. Those measures involved significant reductions in pay and non-pay expenditure and have been implemented throughout this year. The savings made by the health agencies will obviously reflect on their real needs in 1988 and the allocations have taken note of that fact. The agencies are continuing to cut costs and this process will continue up to the end of the year and beyond into 1988.
In 1988 the health services will account for about 6.7 per cent of GNP. As I mentioned in my statement on the 1987 Estimates, we have seen a big rise in health spending since 1973-74 when it was 5.2 per cent of gross national product reaching a peak of 7.9 per cent in 1982. The reasons for these increases are well known. Inflation both in pay and non-pay, new technology and improvements of services are among the main causes. It is necessary when public expenditure is being curtailed to curtail expenditure on health because this accounted for almost 19 per cent of total Government non-capital expenditure last year.
The resolution demonstrated by the Government in their overall approach to reducing expenditure has shown itself in a new realism generally which accepts that a job needed to be done and that tight discipline on spending is and will be necessary. There is a much greater appreciation by all groups that tough decisions have to be taken if we are to be successful in bringing a better balance between what we earn and what we spend. The health services are no exception to this new realism and here I must congratulate the health boards, voluntary hospitals and other agencies for their work this year. They have had to live within new restraints, a situation which most of them would not have wanted but, in general, has been accepted as unavoidable. I very much appreciate the work that has been done by all the agencies in 1987 to control their expenditure within the required limits. Management and staff have perhaps become accustomed to an environment of developments and growth to meet demands created by, for example, technology and peoples' expectations. Those expectations have been reduced as people learn that the old assumptions of continual increases or any increases in allocations are no longer valid.
I will be meeting in the near future, as I did earlier this year, with the chairmen and chief executive officers of the health boards to set out their allocations for the coming year. Similarly I will be meeting with the chairmen and secretary/ managers of all the voluntary hospitals. This will allow agencies to plan their service strategy over a longer period than was possible this year. It must be of great assistance to know their allocations two months before the start of 1988. This is the earliest that allocations have been made available to agencies.
One of the major reasons for the difficulties this year in the health services was the lateness of the 1987 allocations which were not available, for obvious reasons, until last April. This meant that health boards and hospitals had to make their savings in a very compressed timescale, and it was mid-year before some of them were in a position to implement decisions on savings. In any event officials of my Department will be closely monitoring the situation for 1988 with the agencies, as we have done throughout this year. All of the parties concerned have a common interest in ensuring that our targets on controlling expenditure are met and that we get maximum benefit from the State's investment in the health services.
Before going into more detail on the 1988 Estimates and other associated matters, I would like to comment on a number of Government decisions that have recently created a considerable degree of public comment. I refer specifically to the abolition of the Health Education Bureau and particularly to the National Social Services Board. I have seen a number of references to the abolition of these organisations, arguing that they should be retained as the services provided by them would be discontinued. I am particularly interested to read such comments by individuals who are apparently in favour of the Government's broad strategy in curbing the growth in public expenditure but who are, at the same time, not prepared to accept that the Government must often take unpopular decisions in order to implement that strategy. It seems to me that such people want the best of all possible worlds.
In regard to the Health Education Bureau for example, the fact is that the Health Promotions Unit to be set up in my Department, and which will be largely staffed by staff at present in the bureau, will have a wider role than the bureau. Health promotion is a wider concept than health education as it involves multi-sectoral activity and can have a greater impact if directed from a Department rather than an agency of that Department. I am confident the new arrangements will work to everybody's advantage and, while the bureau did much good work, I believe that the modern requirements of an effective health promotions policy demand that a central Department of State bring together the other strands of public sector activity and responsibilities which influence the health of our society.
Similarly, in regard to the National Social Services Board, it has been stated that abolition will mean the end of the Community Information Centres among other services now provided under the aegis of the board. Nothing of course could be further from the truth and my statements last week on the matter underlined my commitment and the Government's commitment to the continuance of the board's important work. In regard to the Community Information Centres for example, I will ensure that the health boards support the centres in a more visible form than heretofore and that in general the centres work closely with other Government Departments and agencies who are heavily involved in the information-giving area. Essentially, therefore, the centres will have a more prominent role than they have had up to now. Also, the National Council for the Aged who are funded now through the Social Service's Board will continue to advise me, among its other functions, on issues as they affect the elderly. As regards the staff of the board, officials of my Department have begun discussions with the union involved in accordance with agreed procedures.
In the case of the bureau and the social service's board, the Government were not primarily concerned with cutting costs but rather with re-organising the services in a more effective manner so that the best use is made of available resources. Their closure, therefore, is a reflection of the overall need in the public sector to rationalise services where necessary and avoid any duplication that may be present in the system.
The same process is at work in the general hospital sector which takes up over 50 per cent of the allocation for the health services. We are substantially over-provided with hospital beds in this country and the need has been present for some time to take those steps necessary to rectify this over-provision. During 1986 we had available, in both the public and private facilities, almost 14,600 consultant covered acute hospital beds. However, the current planning norms of bed provision would suggest that we can cope with 13,000 such beds. It is hoped that over the next year or so the over-provision of beds will have been largely eliminated.
Last August, I met with the chairmen and chief executive officers of the health boards to discuss the rationalisation of acute hospital services. I discussed with them my proposals for rationalisation and exchanged views with them on the need for more intensive use of hospital resources. The plan for rationalisation of the acute hospitals involves taking out of the system beds which are no longer required, but it also involves encouraging closer co-operation between all hospitals in each area and between those hospitals and other services in those areas; the development of a small number of services where at present there are long waiting lists; improving the management of hospitals; planning for self-sufficiency at regional level in regard to certain specialities and giving priority to critical support services in hospitals, for example, out-patient facilities and other facilities which can promote five day wards and day surgery.
All of these will have to be implemented within the limits of whatever allocations are decided upon for the health services and its agencies, but an effective rationalisation plan should be able to concentrate resources so that there is more flexibility in the system. We simply cannot afford as a society to maintain services in the same way as before, particularly where there is duplication of services, or where another hospital for different reasons could provide those services more effectively. I believe that this year has seen the first important changes in the hospital system for some time as hospitals change their role, in some cases quite radically, and in other instances adopt areas of activity on a more intensive level than before.
As I have mentioned, the 1988 individual allocations for the acute general hospitals, whether they be voluntary or health board, have not yet been decided upon. However, with the follow-on effects of this year savings into 1988 and the general rationalisation measures hospitals will continue providing an adequate level of service. I can state that categorically. I do not wish in any way to minimise the problems that management may face but, as I mentioned earlier, the early notification of next year's figures to them will unquestionably be of considerable assistance to them in planning for the next 14 months. Indeed, despite the financial situation, it will also be possible to proceed with the opening of the new hospital at Beaumont in late November and sufficient resources are being made available to the management of the new hospital to ensure that it can begin to provide a service for the public from next month.
In regard to the estimates for community care and in line with my desire to increase the share of overall health resources for this area of service, I have provided for a 5 per cent increase in the allocation for the general medical services. The general practitioner service is, of course, a fundamental part of the primary health care structure and it is vital that it continue to provide an optimal level of service for the population covered by medical cards. The allocation also provides for payment of pharmacists' fees and the reimbursement to pharmacists of the ingredient costs of medicines supplied under the scheme. However, as I mentioned in my Estimates statement earlier this year, there has been a disturbing on-going trend of increased costs in real terms in the GMS over recent years. This trend simply must be addressed. As the House is aware, negotiations are at present in progress with the Irish Medical Organisation about the GMS scheme.
Arising from the exchanges at our meeting on 7 October with the IMO, I feel confident that these negotiations can be progressed expeditiously to a satisfactory conclusion over the coming months. It is my intention that the discussions should not be unduly prolonged.
A major element in expenditure on the general medical services scheme is the cost of the drugs and medicines dispensed under the scheme. I indicated to the House in my Estimates speech earlier this year that we have an agreement with the Federation of Irish Chemical Industries on the terms of supply of drugs to the health services generally. I am pleased to say that there were positive results from negotiations with the FICI including a voluntary absolute price freeze imposed by the industry on pharmaceuticals up to end of October, 1988. The new revised agreement closely links manufacturers' selling prices to the comparable manufacturers' selling price on the Irish market.
My Department are currently seeking other means of further reducing the cost of drugs and medicines to the Exchequer and, in that regard, are at present discussing the question of profit margins with wholesalers here.
On the question of community care services generally it remains my policy to regard those services as having a particular priority. The rationalisation of hospital services that I have already mentioned is but one element in the objective of transferring resources as far as possible from the institutions to community care.
Unless there is a strong community health care system there will be limits to what a general hospital rationalisation programme can achieve. In the letters of allocation which issued to health boards earlier this year, they were asked to protect community care services and, in particular, services for the handicapped, children at risk, etc. It can be reasonably said that community care has, when compared with the problems faced by the general hospital programme this year, been less affected by the measures which were taken by agencies to live within their allocations. There have, or course, been problems for some organisations and services in the community care sector.
In 1988, I intend to again ask health boards to make every effort to maintain services in community care, particularly for the most vulnerable groups like the handicapped. I am also very conscious of the fact that there are particular services which are vital for the health of the weaker elements in society, services like home helps, public health nursing, meals on wheels, etc. Those particular services provide considerable benefits from even a cost benefit aspect as they help to keep the elderly and disabled out of costly institutional care. Again, I would like the health boards to maintain those services as far as possible.
There can, however, be little prospect of protecting key community care services or transferring resources from hospitals or, indeed, supplementing a rationalisation of the general hospital programme if we do not control our costs. In that context I have set up a cost containment and efficiency unit in the Department to co-ordinate information between health boards and hospitals on prices and cost saving practices generally. The Department's role in this area is to support the agencies by promoting cost consciousness generally and also by providing information or co-ordinating it between agencies. The initial work of the Department in cost containment has been in medical and surgical consumables. This area accounts for an estimated £125 million per annum and there can be no serious attempt to control costs if we do not attempt to manage expenditure on those consumables. A liasion system with the agencies has been established to create a free flow of information on prices and this should help to bring a further competitive edge to tendering and contractual arrangements made by the agencies. Again, the cost containment unit will be examining the whole area of product evaluation to see what improvements can be brought about in the approach of agencies to their purchasing. The unit will be receiving different brands of a a particular product type in order to determine which of the brands provides the best value for money and yet retains what can be described as fitness for purchase. Given the scale of purchasing in the health services, a consistently determined search for value for money is critical if costs are not to escalate and run out of control.
I have indicated what the Department's role is in the promotion of efficiency and cost control throughout the health services. However, such an approach will come to nothing at the end of the day if there is not a corresponding desire on the part of the agencies who are receiving the information to act on it. I am pleased to say that the agencies have co-operated fully in the implementation of the new arrangements for transferring information and good practices.
Ultimately the ability of those agencies to control expenditure will depend to a significant extent on the management information they have in place. Development of management information systems will continue in 1988 in selected centres, covering a range of systems that are critical in the managing of a modern hospital. These systems will include the areas of patient administration, finance and pharmacy.
I am concerned that the information now being produced by such systems would be more directly related to the allocation process in the future. I am thinking here particularly of the need to move away from the traditional method of allocations for health boards and hospitals and use the data that is, or will be, in our possession to fully assess the real needs of agencies. The new approach will seek, for example, to define and determine more accurately than was possible in the past the unit costs related to specific areas of activity that are treated in an acute general hospital.
This should reward hospitals which are at present providing a good quality and cost effective service. My Department have already started work in examining the potential of this new method of resource distribution. We will make a start in 1988 by requiring that for the major acute hospitals budgets will be broken down to identify the quantum of service provision departmentally and progress ultimately to a standardisation of unit costs.
I have also established the Commission on Health Funding, under the Chairmanship of Dr. Miriam Hederman O'Brien, to examine the extent and source of future funding required to provide an equitable, comprehensive and cost effective public health service. The commission have also been asked to make recommendations on any associated changes in administration which might be necessary. The commission have already met on a number of occasions and their report will be, I am sure, of considerable interest when it is completed, particularly in view of the need to obtain the maximum out of the system and look at alternatives generally to the present system.
Apart from the problem of funding the health services, there are other areas of concern to me as Minister for Health which require detailed examination. One area is the future of health services for the mentally handicapped. On both fronts there are working groups considering how these services should develop in line with modern thinking on the need to move away from institutionally based services and into community care. Reports should be available from both groups to me in the not too distant future.
In short, there is a continual re-evaluation of services by my Department on what needs to be done in the health services in the future. Financial restrictions should not be an excuse for ignoring the necessity for re-evaluation and indeed it is precisely at a time of difficulty for services that we should be planning, no matter what may come in terms of future funding. The Government have been accused of making cuts in an unplanned manner without any concern for services. This is totally untrue and I have indicated in regard to the hospital rationalisation programme, the abolition of the Health Education Bureau and the National Social Services Board, there is a structure to what we are doing. I have also explained that the reduction in Exchequer support for the health services in 1988 does not mean that the services are being correspondingly reduced but rather that the savings which were made by agencies during this year will reduce their needs in 1988. While there will be a need for further savings next year, I believe that the 1988 allocations will be sufficient to allow the agencies to provide an adequate level of services both in the hospitals and community care.
Finally, as many Deputies will know, there was a major conference in Beaumont this week on the health services. The conference was productive in its overall tone and imbued with a sense of realism on all sides. It provided an excellent opportunity to all of us to be aware of the different views on the future of those services, taking account of what happened this year and what needs to be done. I was also very pleased to see that the conference reached a consensus in agreeing with the broad thrust of the future direction of the health services. I also believe the conference may help agencies to plan their delivery of services in the future and will be of considerable benefit to my Department in making decisions on the future priorities of the health services. As I said at that conference, the future of the health services must be concerned with better management and with a greater concentration on the planning of services. I believe that this year has seen the beginning of that process and that next year will see the benefits of a new and realistic approach to the management of the resources available to us.
I listened to the Minister's speech, with quite a bit of interest. The truth behind the figures provided for health in the Estimates before us is that there has been a reduction of £72 million. The reality is that people have died, people are dying and people are suffering as a result of these health cuts. There are longer waiting lists and because of the actions of the Minister this year and the actions that will ensue because of the cuts proposed for 1988 people are and will be unable to receive certain kinds of treatment. The Minister spoke about controlling costs, about cost consciousness and cost containment but, unfortunately and sadly, we heard very little about the person who will be most affected by these cuts — the patient.
The Minister referred to the recent Beaumont conference and the consensus which was reached there. I must say I am very disappointed that the professional bodies who were well represented at that conference said very little about the suffering which has taken place throughout the country and the suffering which has been inflicted upon the poorest and most vulnerable section of our community as a result of these cuts.
The reality is that the health services are in chaos. Some of our health boards are in very serious trouble and it is obvious that as a result of the cutbacks for next year they will be in deeper trouble. Some health boards have such serious cash flow problems at present they cannot make cheque payments to their suppliers as those cheques would bounce if they made the payments which were outstanding.
The Minister in his speech said very little about the scandals and the doublestandards in relation to certain specialities which exist in our health services. For example, in my own area if you have insurance you can get your child admitted for a tonsillectomy within two weeks whereas if you are dependent on the public service you will have to wait for two years. In the orthopaedic hospital in Cork which is a public hospital, 42 per cent of all hip transplants are being done for private profit using public facilities and public staff. That is only the tip of the iceberg. The Minister did not even refer to the common contract and the scandal operating within it. He said nothing about the long waiting lists, the closure of public beds or the inadequate dental service where no service is available for many medical card holders in many of our regions. He did not address himself to these problems. The health services are in chaos and I am unhappy that some of the professional bodies who are administering them are not reflecting the fears of their individual members who are seeing the suffering and hardship which is being caused to the public.
My party accept the concept of the overall level of spending in the health services but we demand that rationalisation must take place in an organised and well thought out manner, thus enabling us to reduce the national debt and restore confidence in the economy. What my party totally reject is the indiscriminate, unstructured and inexplicable manner in which the Government are dismembering the infrastructure of the health services. Not alone is the Government strategy in relation to health cuts endangering the immediate safety and well-being of the most vulnerable and impoverished sections of our community, but the long-term consequences of the Government's management of this crisis will inevitably destroy all hope of having an acceptable level of health services in the future.
It is apparent from recent developments in this area that the Minister for Health intends to continue to implement these indiscriminate and insensitive cuts which have now become synonymous with his tenure of office. It must be accepted, and it is accepted by most people, that the Minister has brought about a serious deterioration in the health services in recent months, the same health services that he had previously while in Opposition guaranteed he would protect with all his might and power. Is this the better way the Minister promised the old, the sick and the needy during the last general election campaign? Fianna Fáil's actions on health cannot and will not remain unchallenged by my party. That party and the Minister for Health himself have continuously evaded the real issues affecting our health services. Indeed the Minister evaded some again to day in the course of his remarks. These issues must be tackled in order to render the services more cost effective. A cost effective health service need not necessarily be second rate. The implementation of this type of service should not involve random and unplanned cuts in expenditure, as has been the case this year. The Minister's line this morning that the abolition of the National Social Service Board and the Health Education Bureau is not a cost-saving exercise but a way of reorganising the service goes beyond comprehension or belief.
I have been very disturbed by some information I have received in recent weeks in relation to the health cuts and the effect they have had on standards of medical care and accessibility thereto. There have been a number of cases highlighted in the media recently of the way in which people have been affected by these health cuts. I might add that in recent weeks I have been approached by senior medical personnel working in the health services who told me that they are deeply upset by the effects of these recent cuts. Two very senior medical personnel have spoken to me confidentially and informed me that deaths have already occurred on account of the recent decisions of the Minister and his Government. I have asked these people to express their views in public but their fears of not alone civil litigation against their health boards but themselves personally has ensured that they will not break their silence. I am disappointed that to date their professional bodies have not represented their views in public in a general way. I want to know how many more lives must be lost before the Government recognise the recklessness of their actions in recent times.
A cost effective health service need not be second rate but rather one in which planning systems, good management and budgeting are implemented to provide effective services at a reasonable cost. This can be done if the political will exists. Amost £1,300 million is being spent on the health services this year, of which £717 million is being spent on the general hospital services. One might well ask: why is it that the Minister is only now — having spent four and a half years in Opposition — examining the performance of the hospital services, having imposed random cuts throughout those same hospital services?
Everybody realises that the development of the community care service is essential to the maintenance of general health care from a humanitarian as well as an economic standpoint. Surely there cannot be any further reductions in the level of hospital admissions until a comprehensive community care service is implemented? The Minister's line — and he has used it quite often — is that we are over supplied with acute hospital beds compared with other European countries. I note that the Confederation of Irish Industry support that line. I do not really think it stands up because the Minister is comparing our service with that in other European countries where there is a comprehensive community care service to complement the hosptial services. Here we have a primitive, disorganised community care service. Therefore, the argument that we are over supplied with acute hospital beds cannot be upheld.
Some commentators have suggested that we are over supplied with acute hospital beds and concern has been expressed about their high cost. My information is that, following closures of recent months, the supply of public beds in our public hospitals is now lower than the demand for them and that the number of acute hospital beds is now well below the numbers laid down by the planning department of the Department of Health. My information is that the bed closure programme effected to date this year was aimed directly at public beds and that the number of private beds in public hospitals is still well up. My conclusion is that the supply of acute beds in public hospitals in the future will not constitute any significant inducement to high referral rates but rather that the distribution between public and private beds will be likely to act as an inducement for more people to opt for private treatment.
Such indications exist already. For example, there is the opening of a private hospital in Galway and another planned for the Cork region in an area where there is imminent the closure of a 200 year old hospital that provided a basic community service, with public wards. Therefore we are not comparing like with like when we compare our services with those in countries like Germany and France because we do not have a comprehensive general practice system, it is mostly a single-handed service. Granted there are a number of group practices but, generally speaking, we do not have the highly skilled general practitioner service available in continental European countries.
Our priorities should be in the area of modernising and updating our general practitioner services and community care services. Much lip service has been paid to these areas by successive Governments but, until such time as some Government makes an initial investment in this area, there will continue to be an over reliance on hospital services and we will still be spending in the region of the £700 million we are spending at present.
Not only have we not maintained the standard of community services — which is of a low standard at present — but there has been a serious deterioration in the level of community care services since this Government assumed office. The Minister appears to have done little or no homework in his four and a half years as opposition spokesman on the structural funding of our health services. Why is it that there has been no attempt to eliminate the many inefficiencies and cost overruns in the capital programmes? Surely there should be an attempt to examine the cost overruns which have occurred and the explanations given for them?
In relation to the general medical services I am glad to note that the Minister has told the House that negotiations have recommenced with the Irish Medical Organisation on the general medical services. I hope that, at long last, progress will be made in this area because that service is expensive, inefficient and in need of tightening up at all levels. The Minister would be doing a good day's work if he reached agreement to ensure a tightening up of that system at present open to abuse on the part of all concerned.
I referred briefly at the outset to the scandalous level of private practice in one area in the Southern Health Board region, with 42 per cent of private practice in one particular public hospital there. I am disappointed that the Minister has given no indication of whether he has commenced negotiations with the Irish Medical Organisation with regard to the common contract which constitutes a significant drain on the Exchequer. That common contract has been open to review since 1986. Admittedly, the Minister's predecessor did not succeed in getting the IMO to the conference table. But, when such savage cutbacks are being made at present, the IMO must be forced to the negotiating table in order to renegotiate this common contract which is being abused left, right and centre. As I said, 42 per cent of hip implants in the Orthopaedic Hospital in Cork are being done for private profit. This is the tip of the iceberg in regard to the level of private practice in public hospitals. Private and public practice must co-exist in public hospitals but in a controlled way. If we separate private and public, we will have a deterioration in our public hospital services which would not be healthy.
Public and private medicine must co-exist but the private element of that service must be monitored and controlled under the terms of a new contract. At a time when such severe cutbacks are bringing suffering to the most disadvantaged, it is incumbent on the Minister and the representatives of the IMO to resolve the problems surrounding the common contract. The problems which adversely affect the quality of service offered to public health patients can only result in increasing the pressure on such people to seek treatment through the private health care system, a trend which puts even greater pressure on the VHI.
I ask the Minister why there has been little or no attempt during his period in office to tackle the problem of reducing the cost of administering the health services, as against the cost of the health services themselves. Is it necessary to have eight health boards when we have a population of only three million people? Should the health boards be abolished or reduced in number to two or three? Has the Minister closed his mind to reducing the number of health boards? Has he addressed the appalling standard of management within the health boards, which I believe to be one of the reasons for such high administrative costs?
We see in the Estimate for the Minister's Department provision for a 12 per cent increase in salaries and other expenses at a time when the amount of money being allocated to direct services is being reduced by between 4 per cent and 6 per cent. Something must be done about the proposed 12 per cent increase for the Department of Health. The Minister had many bright ideas when in Opposition but we have seen very few bright actions since he took office. Managerial systems are suspect in the health boards. The standard of management in the hospitals also leaves a lot to be desired. Greater efficiency in the running of our hospitals by the appointment of professionally trained hospital managers with knowledge of up-to-date methods of cost control would be a decided advance.
The Minister referred in his speech to the renegotiation of the contract between his Department and the FICI and he informed the House that prices are being frozen until October 1988. That is not going far enough. The gap between the cost of drugs in this country and the cost in continental European countries is too wide and needs further explanation. It is not enough to compare our prices with those obtaining in Britain. The Minister has not dealt with the matter of generic drugs, which I believe could lead to appreciable savings.
We have seen a number of articles recently relating to the over-prescribing of drugs. My party put forward proposals which would control this problem in the health services, but the Minister has not addressed himself to the matter. He said his Department were looking at the question of the purchase of equipment and consumables. Health agencies purchase £150 million worth of consumables every year. Having discussed this matter with a number of people, I believe a saving of at least 10 per cent — £15 million — could be made by proper management and proper purchase controls.
The whole question of the dental services needs investigation. A scandalous situation has existed for some time whereby medical card holders and the most disadvantaged do not have a dental care service. Huge savings could be made by the training and appointment of dental auxilliaries. This could be done in our dental schools and hospitals but it would need some flexibility on the part of the Irish Dental Association. By this means we could provide a comprehensive and efficient dental care service for very little money, with considerable subsequent saving to the State. It is incumbent on all of us to look at the injustice of the means test system. The whole range of means test must be reviewed by the Minister.
I do not have the answers to many of the questions I have raised but we all have a responsibility to consider carefully our whole health care system. So many questions have been left unanswered by the Government that we can only conclude that the Government party came into office without any health policy. They are now drafting that policy as they proceed with the planning of further cuts. We cannot solve the problem of an over-expensive health service simply by closing hospitals, forcing people out of jobs and imposing unrealistic levels of spending on health authorities. It is a requirement of acceptable Government that health services be provided for all our citizens and it is up to the Minister to identify how this can be done within certain budgetary constraints. The Minister spent four years in Opposition and had adequate time to gather his thoughts and formulate policies, but it is obvious that he failed to do so. The health services and the country generally are now suffering from the effects of his inactivity while in Opposition. The poor, the old and the handicapped are vulnerable to the consequences of this Government's lack of health policies. I ask the Minister to acknowledge today that the suffering caused by his own failures with regard to the health services cannot continue. Of course a review of the health services must take place and there must be rationalisation but this should be part of a comprehensive overall health strategy, not a substitute for such a strategy.
When I examined the Estimates for the Department of Health I sought to find out what lay behind the figures. What we see here is a Minister proposing a 12 per cent increase in the level of salaries, allowances and expenses for his Department while cutting a whole range of service — a 4 per cent cut for health boards and voluntary hospitals and other organisations dealing with the most deprived sector of the community. The Minister has already contributed to this debate but he has not yet told us how many more hospitals he intends to close. Will the Roscommon hospital be on the Minister's hit list? Will Nenagh hospital or Ennis General Hospital go? Some of these hospitals must go because of the level of cuts being made in the service areas next year. The Minister should clarify the position.
Is he afraid to tell us that he intends to cut back further, despite his lip service to the community health service, or that the health boards will be forced to cut back further on the provision of community services? Will there be further cuts in special hospital programmes? Will he be cutting back on the grants to the bodies on which we depend for an efficient community health service? Will the groups and organisations dealing with the elderly and the mentally handicapped be affected once again by the cuts proposed by the Minister? The Minister has set out the effects the cutbacks and the capital expenditure will have and I am sorry I will not have time to deal with them but I am asking him in fairness, to spell out what plans he has for the voluntary hospitals which will be directly affected by his cutbacks?
I want to say a few words about the Minister's decision to abolish the National Social Service Board, a decision he tried to justify this morning by saying it was in the cause of efficiency and reorganisation.
I am sorry Deputy but because of pressure of time you will not be able to go into very great detail.
One of the worst blows of all was the elimination of the budget of £580,000 for the National Social Service Board in 1987. This board is now being abolished despite the fact that they have a lease on a premises until 1995 which will have to be paid. I believe the National Social Service Board are being eliminated because of their independent stand when the Taoiseach was Minister for Health and they clashed — and I know, from a magazine article, that the present Minister clashed with them. It is important that we retain a service which gives an independent advisory and development service to the community. This is one of the most socially regressive decisions made by a Minister for Health for a long time.
The pressure on TDs and public representatives for community information affects our jobs as legislators. The development of the National Social Service Board was one way of eliminating this pressure because it gave an independent service to the community. Yet here we have the Minister chopping this service for the sake of £500,000, which in fact will not be saved because he says the staff will be retained, and 52 per cent of the budget is for staff. He said too that the service will be provided by his Department but that it will not be an independent service. That decision and the decision to reduce the role of the Ombudsman under another Estimate are senseless and must be reconsidered.
My party have given broad agreement to the level of spending in health and other Estimates but having given that agreement, there is a responsibility on the Government to be flexible with Opposition parties when they put forward proposals which I believe are genuine. I am asking the Minister and the Government to be flexible now because I sincerely believe that the role played to date by the National Social Service Board and by the Ombudsman——
You must conclude. You are poaching on other people's time.
I am sorry. I will conclude. These organisations are the voice of the voiceless and they are being silenced by the Minister's and the Government's decision. I ask the Minister to reconsider the role of the National Social Service Board and to allow them continue.
In this debate I will attempt to answer all the questions which have been raised in relation to the Estimate for my Department and my involvement in the Programme for National Recovery. I hope I will not hear any more charges about unanswered questions in relation to the Estimate for my Department.
On returning to office last March the Government faced a daunting prospect. There was no growth in the economy, unemployment was steadily increasing and the public finances were out of control. We faced up to the situation in our first budget in March 1987. Three fundamental principles identified in that Budget were: that public finance targets must be consistent with the good management of the economy; that there must be a special focus on productive economic activity and on employment; and that borrowing and the cost of servicing the national debt must be progressively reduced. The thinking behind that budget was perfectly straightforward — wealth must be created before it can be spent.
The Government's determination in this regard has been made abundantly clear since last March. Cutbacks have had to be made, in the national interest, in all areas of expenditure in health, education and, indeed, in my own area of industry. No one section should have to bear the brunt of expenditure reductions but neither should any area be exempted. In the final analysis the economy and the community as a whole will benefit from the distasteful but necessary medicine now being prescribed.
The measures we have taken are already beginning to pay off. These are: budget targets for the year will be achieved, Exchequer borrowing has been sharply reduced, interest rates have fallen dramatically, the outflow of funds from the country has slowed and inflow of funds from abroad has increased while the level of growth in the economy will reach 1½ to 1¾ per cent this year compared with the economic forecast of 1 per cent at the time of the budget.
The rate of inflation will remain at approximately 3 per cent for the year. This will improve our cost competitiveness. We already see significant improvements in exports. In the 12 month period to August our exports exceeded the £10 billion mark for the first time ever. Our balance of trade is also showing a record surplus.
When drawing up the 1988 Estimate for my Department, my main concern was to ensure that any cutbacks would be made in such a way as to minimise any adverse effects on the development of industry in Ireland. We have been successful in this. The 1988 Estimates represents a 9 per cent reduction on that for 1987. The most significant cut is on the IDA capital budget which has been reduced by 12 per cent to £117.8 million. This cut has to be viewed against the fact that in the first half of the year the pipeline of new investment projects was very slim. This I am happy to say has improved considerably in the last few months. We are determined to be more cost effective in applying scarce resources and to get better value for taxpayers' money. I guarantee that not one worthwhile project will be lost as a result of these measures.
We are introducing performance clauses linking grant-aid to actual job creation. We are implementing policies shifting State support away from fixed assets. Instead, State assistance will focus on weaknesses in marketing, technology and management.
The IDA have a land bank of almost 6,000 acres. They have almost 2 million square feet of empty factory space. I regard the size of the IDA land bank and the empty factory space as being excessive. Too much State money is tied up in non-performing assets. The Government share my view. I have accordingly instructed the Authority that in 1988 a sum of £5 million must be found for the Exchequer from the disposal of land and factory space. I am awaiting the Authority's specific proposals in this regard. While the IDA's administration grant has been cut by 16 per cent to £13.36 million the Authority have accepted that the financing, while tight, is sufficient to meet anticipated needs after the appropriate action has been taken to meet the revised allocation.
The grant-in-aid for CTT for administration shows a decrease of £3 million in 1988 over the 1987 allocation of £23.022 million. However, this limited cut of £3 million is not as severe as might appear. CTT are carrying out a Government instruction to increase their own earnings by £1.3 million in 1988. The net effective cut is therefore only £1.7 million. CTT will earn the additional income by charging for a range of services from market investigation through field assistance and use of office facilities to PR advisory assistance, most of which have been free to date. No reduction has been applied to the amount provided for CTT's market entry and development scheme. This will allow for the continuation of the scheme in 1988 with new firms replacing earlier participants.
The provision for the IIRS and NBST shows a reduction of £1.5 million compared with that provided for the two bodies in 1987. The Government have already taken the decision, to combine, in one organisation, the functions of the IIRS and those of the NBST.
The merger will provide a unified support mechanism for science and technology development in industry and services and in the higher education sector. I see the merger as a very important step in that it will provide a strong basis for the development of an enhanced national science and technology strategy.
Other agencies coming under my aegis have also had their allocations reduced. In the case of NADCORP, the reduction of £300,000 in their grant-in-aid for administration reflects largely an increase in its own resources for 1988 arising from fees and income on its present investments.
Similarly reductions of 25 per cent have been made in the allocations for Kilkenny Design Workshops Ltd. and the Irish Productivity Centre. Exchequer funding for these bodies will be phased out over the next three years.
All in all the overall reduction in my Department's allocation is modest in the light of the difficult financial situation facing the Government. Since 1980 Ireland has in employment terms suffered from a relatively poor industrial performance with employment in manufacturing industry declining by over 40,000. Irish industry lost competitiveness as the growth in labour, utility, interest and energy costs outstripped those of our key competitors.
Recent economic indicators suggest that we are now reaching a stabilisation in the industrial employment situation. This gives good grounds for hope that with the right policies in place and with a concerted effort by all interests we can now look forward to achieving real and sustained growth in employment.
One of the most important elements underlying the Government's strategy for national recovery is the creation of a suitable environment for employment and the development of business and enterprise both in the State and private sectors. This involves taking positive measures to provide a framework for development through legislation and otherwise, and tackling the areas of high costs which affect our international competitiveness.
The Government have an extensive legislative programme on hands and I have already brought a number of Bills before this House and the Seanad which will contribute to a more satisfactory business environment and hence to national recovery.
The Companies (No. 2) Bill, 1987 which has completed its Second Stage in the Seanad contains the most comprehensive reform of company law since 1963. One of the major innovations in the Bill is a novel scheme for the rescue, under the supervision of the court, of ailing but potentialy viable companies. The scheme, better known as Chapter 11, will, I believe, represent a valuable and substantial contribution to the environment for the operation of companies.
The Restrictive Practices (Amendment) Bill, which has already been passed by the Seanad will, I hope shortly be discussed in this House. The Bill will open up for review by a new Fair Trade Commission areas such as banks, electricity, transport, posts and telecommunications charges which have up to now been excluded from scrutiny, in relation to competition and restrictive practices.
I have already made known to the House my views on concentration and unfair trading practices in the grocery trade. I have made an Order banning below cost selling and "hello" money and I will be seeking confirmation of that order from this House next week when the Restrictive Practices (Confirmation of Orders) Bill will receive its Second Reading.
The most effective way to promote efficiency in all areas of the economy is through competition. For too long there has been an acceptance of high costs, as inevitable. The service sector especially needs to be looked at closely in this regard. Areas such as distribution, transport, energy, communications, insurance and various professional services have all been identified by me as areas where our costs are out of line with those of our competitors. I have already taken action in a number of these areas.
I have brought about a significant reduction in the price of petrol and autodiesel. I took this step to bring Irish prices more into line with those in other European countries, because it was clear that unjustifiable divergences from prices obtaining in other countries should not be tolerated here. There is no increase in postal and telecommunication charges this year and there will be no increase in ESB charges this year or next year.
In the area of grocery prices, I am looking critically at the margins of importers and distributors in the light of evidence of price differences for similar products between here and Northern Ireland and the UK generally. I have asked the Examiner of Restrictive Practices to examine the terms and conditions under which importers of grocery products place products on the market here, and I will be taking action where that is warranted.
Moving to a further area of costs, I am acutely aware of the major disadvantage which employer liability insurance rates place on many Irish firms. The Government are committed to moving quickly to facilitate a reduction in costs by proceeding with legislation to abolish juries in personal injury cases, and by proceeding with the main recommendations of the Commission of Inquiry on Safety, Health and Welfare at Work.
It is intended also to proceed with other measures such as the establishment of a book of quantum of damages, introducing more satisfactory pretrial procedures and dealing with the issue of legal representation and costs. Insurance industry representatives have given assurances that reductions in insurance premia will follow the introduction of an improved framework. The Restrictive Practices Commission are conducting studies on a number of the professions and I expect to be publishing the first of their reports on this subject shortly.
All of the measures I have outlined are designed to contribute to the development of an efficient and internationally competitive economy here. I am, in effect, creating a competitive climate and getting a better deal for the consumer. These are essential ingredients in the task of national recovery on which we have embarked. The Government have already shown their commitment to marketing through the creation of the Office of Trade and Marketing within my Department.
Ireland's exports are performing strongly for the year to date with a whole range of records being set over recent months. The latest figures to September, which were released on Friday last, show that Ireland's exports for the first nine months of 1987 amounted to £7,746.9 million while imports were £6,695.9 million giving a record trade surplus of £1,051 million. Compared with the same period last year our exports are up by 12 per cent and imports are up 5 per cent while the trade surplus is up by 95 per cent.
On the domestic front, marketing is equally important if Irish firms are to successfully compete with the high level of imports coming into the domestic market. With an import penetration level of 53.4 per cent compared with an EC average of 28.5 per cent there is considerable scope for improvements in this area. The Government are conscious of the urgent need for Irish firms to develop their domestic markets. This viewpoint is reflected in the fact that no reduction has been made in the allocation to the Irish Goods Council for 1988. They will be playing a stronger role in a whole series of import substitution measures which I hope to bring before the Government within the next couple of weeks.
I feel sure that industry as a whole will welcome these initiatives and play its part in generating the additional exports necessary for growth. It will also recognise that the steps being taken in cutting Government spending will do much to assist the competitive position of Irish industry in world markets.
The turnaround in the economy and the creation of increased employment presents a challenge to all of the parties involved — industry, trade unions, the industrial promotion agencies and the Government — and it requires a commitment from all of us to work towards the goal of national renewal. This was the basis for the Government's determination to achieve a national consensus as set out in the Programme for National Recovery. The Government's strategy is not based solely on principles of financial rectitude. We realise that an appropriate budget strategy must also involve developmental measures in order to reduce the high rate of unemployment we have suffered in recent years.
Our strategy for industrial job creation is set out in the Programme for National Recovery. The objective is the creation of approximately 20,000 gross extra jobs in manufacturing industry on average each year over the next ten years with the actual provision accelerating as the programme policies take effect.
The strategy for employment creation is being developed primarily on a sector by sector basis and will build upon the more competitive environment generated by the Government's fiscal and monetary policies. Because available resources are strictly limited, the Government intend to concentrate them on those sectors where we have the best hope of generating real sustainable jobs and where we can make the best use of our indigenous skills and resources.
As far as my own Department are concerned work in relation to the development of sectoral strategies for certain key sectors of manufacturing industry is well in hands. Strategies are at an advanced stage of preparation in the electronics, chemicals and pharmaceuticals, textiles and clothing, plastics and mechanical engineering sectors.
There is now a general consensus on what needs to be done to expand our manufacturing base and, in particular, on the need to concentrate our resources on those areas which will have the greatest potential. That is why the Government are promoting a radical reorganisation and simplification of the industrial promotion agencies to provide a combined approach to the growth of the indigenous manufacturing sector. The initial measures taken are the amalgamation of the IIRS and the NBST and the concentration in SFADCo of responsibility for the promotion and integrated development of all industry and tourism in the mid-west, west and south-west regions. Deputy Desmond mentioned before the summer recess that he would welcome the amalgamation of the IIRS and the NBST but he expressed the fear that bureaucratic obstinacy would get in the way. I am glad to be able to tell him we are proceeding with the amalgamation as quickly as possible.
Earlier this year I announced the establishment of a task force in my Department to carry out an urgent indepth review of the IDA's small industries programme. I wanted the task force to look at the sector to determine ways of stimulating the potential growth among the pool of existing companies and of encouraging new start-ups by entrepreneurs capable of producing sophisticated products and services for international markets. I will announce the conclusion of the task force report before the end of the year.
While the Government will give greater attention to the indigenous sector, the structure of our industrial base is such that we need to continue to offer direct support to overseas firms locating in Ireland. We will ensure, however, that these firms are much more linked to the domestic economy and thus directly and indirectly help to create new jobs. While the competition for overseas projects has intensified in recent years, I believe that the sound fiscal and monetary climate being created by this Government will further encourage foreign firms to locate in Ireland and provide an inducement to those firms located here to expand their operations.
On a short visit to Galway recently I was deeply impressed by the linkage between the multinational companies which have set up there and small companies, especially in the engineering sector. It is quite clear that there is potential in this country for more and more direct liaison between small and large industries. When one considers that less than 30 per cent of the requirements of goods and services by large multinational investment in this country is supplied by the indigenous industries sector, it is obvious that there is plenty of room for improvement in that area.
RTE did us proud.
I am glad they did because they knew I was about my business and that it was worth speaking about. The Taoiseach has already mentioned the principal aspect of our new approach to science and technology including a new national programme in biotechnology; a new national programme in advanced manufacturing technology; a new "teaching companies" programme and a pilot programme in the south-east region on the application of science and technology to regional development.
The biotechnology programme is giving a new dimension to the already developing area of higher education-industry co-operation. State agencies such as the IDA and the National Board for Science and Technology are already making their own contributions to the enhancement of this co-operation. These and other supports have created a good environment for industrial exploitation of biotechnology in Ireland and the establishment of centres of excellence will greatly enhance this environment.
I see manufacturing operations involving biotechnology being boosted by the centres of excellence in three ways, (1) through the stimulation of new indigenous Irish enterprises; (2) through the creation of an even more favourable climate for the attraction of new overseas investment and (3) through involvement with the centres of, for example, Irish subsidiaries of major pharmaceutical companies, leading to greater R and D activity in Ireland by such companies.
In this connection, Ireland missed the opportunity by delaying for so long in putting a proper infrastructure in place to sustain and develop a biotechnological industry. Over the past two or three years we have lost opportunities to Holland and Belgium because, unfortunately, the previous Government did not seize the opportunity to develop proper infrastructures.
What about the demolition of Oak Park, County Carlow?
I am talking about biotechnology about which the previous Government did nothing. They talked about it for four years and allowed four good biotechnological projects to go to Holland. They woke up when it was too late.
I hope to bring before the House in the next few weeks the Bill to enable the amalgamation of the National Board for Science and Technology and the Institute for Industrial Research and Standards. Other new legislation measures on which my Department are at present working include a product safety Bill and a Bill on software copyright.
The Bill on software coypright is designed to provide explicit protection for software copyright instead of relying on the general provisions of the Copyright Act. The absence up to now of explicit protection for software copyright is sometimes perceived by international companies as a potential deterrent to the establishment of software operations here. One can understand that business cannot plan and operate in an uncertain legislative framework.
The imaginative and creative approach being taken by the Government to new job creation is best exemplified by the initiative we have taken to create an international financial services centre in the Custom House Dock site, an initiative I might add which has captured the imagination of both the domestic and international financial community.
The Minister hijacked that idea from Shannon.
I am surprised that a man from the mid-west region does not have enough confidence in the Shannon Development Company to look after Shannon and mid-west development, as they have done successfully for so many years.
The Government hijacked the whole idea from Shannon.
We did not. The previous Government knew only half the game, they did not understand the opportunities that existed for development. Shannon and Dublin will develop side by side. This initiative evolved from our recognition of the tremendous growth of the financial services industry over the past ten years, its future growth potential and the locational and infrastructual advantages we have in Ireland to benefit from participation in financial services worldwide. The Government's huge investment in telecommunications in Ireland means that we now enjoy a state-of-the art technology better than that which exists in most other European locations. The financial services centre will generate around 7,500 jobs over the next three to four years while the development of the docks site itself will involve construction valued at about £250 million with peak employment in construction of 1,500:
The growth in industrial employment towards which the Government are actively working will not be achieved unless substantially greater investment is made in industry. In the past, industry has looked to the State to provide to a large extent the capital required by way of grants with much of the balance being made up by way of loan finance, often giving rise to an unhealthy and unstable financial structure in firms.
In recent times there have been clear signs of fundamental change of attitude among many of our newer, younger companies who see the particular advantages in attracting outside equity capital investment into their companies. They have recognised that adequate funding is crucial to success and that it is better to own 60 per cent of a growing company than 100 per cent of a stagnating one. The development of the venture capital industry, which has now reached a highly sophisticated level, has done much to achieve this change in attitudes.
The availability of substantial equity finance and the accompanying "hands on" advice and assistance which expert venture capital companies individually give their clients has proved to be of immense benefit to many small Irish companies. Of course, venture capitalists do not invest in Irish companies on the basis of charity. They adopt a hard nosed commercial approach and are in the business of picking winners, companies which are hungry for growth. Success breeds success.
Accelerated interest in the business expansion scheme since April of this year is an additional indicator of renewed confidence on the part of the ordinary investor. A sum of £5.3 million has been invested since April in 45 companies, almost equalling the investment of £6.4 million in the last tax year. To date, £17 million has been invested in 170 companies, whose activities include engineering, computer software and film production. These figures do not take account of over 100 companies which are currently awaiting clearance from the Revenue Commissioners.
A deepening of the investment ethos is largely dependent on the existence of investor confidence in the economy. Funding sources such as the venture capital companies, the institutions and the private investor are reluctant to put risk capital into industry in the absence of the right economic environment.
While the events of the past few days on the international markets have caused considerable anxiety it must be remembered that internationally traded stocks suffered most. The shares of smaller Irish companies have remained relatively unscathed. It has been generally accepted that international markets have been overheated for a considerable time and we can but hope that they will now settle down to a more stable, realistic level.
As one looks at what is happening in Wall Street and the sponsored action by the Democrats in the Houses of Parliament one can see that out of that adversity may well come opportunities for Ireland. I can detect that the action now being proposed by the Democrats in the US will create the uncertain climate and business uncertainty which will open up new opportunities for this country if we are quick enough to avail ourselves of them, and I have been addressing those possible opportunities in the last couple of days. Another aspect to that is that the problems in Wall Street have also dampened down this new rage that is taking place over there of leverage management buyers which, as any of us who have studied it knows full well, can be a very dangerous proposition especially for subsidiary companies in Ireland who are leverage buyers in the States. We have seen some examples in the past two years of the result of that type of policy being pursued over there. If the problems in Wall Street do nothing more they will certainly dampen down that rage and present us with a few opportunities that did not exist before now. In so far as the Irish stock market is concerned, there seems no justification for any serious continuing fall given the positive economic factors such as falling interest rates and a stable inflation rate.
In recognition of the positive role which NADCORP are undertaking in relation to the development of our industrial policy £6 million has been allocated to the corporation's capital budget for 1988, a level of finance which we believe will be adequate to enable the corporation to build upon and expand the substantial work they have carried out to date. NADCORP's investment portfolio as detailed in their annual report, shows that they are fulfilling the active, innovative and developmental role envisaged in the legislation and in the Government's Programme for National Recovery.
The corporation have invested over £5 million this year alone in 14 companies covering such diverse areas as computer cabinetry, veterinary products and ultra sound instrumentation. By the end of 1987 they will on present trends hold a portfolio of over 40 investments. The corporation are developing particular sectoral niches for investment opportunities and are actively seeking out projects of national and strategic importance. Amongst the priority areas which they have designated, following a sectoral economic analysis, are advanced engineering, aquaculture, food processing and biotechnology. These sectoral priorities do not, of course, preclude good individual projects in other sectors which meet the profitability, growth and employment criteria of NADCORP.
There is now a clear realism that we will have to look to our own efforts to overcome the serious obstacles which at present exist to our economic and social development. The world does not owe us a living. There is general recognition that the limits of Government expenditure have long been reached and that personal taxation levels have become a serious disincentive to work, and contribute to the brain drain from this country. Consequently, both expenditure and taxation must be reduced over the next few years. At the same time I want to re-emphasise that the Government are committed to looking after those less well off sections of our society and will continue to do that. That has been the hallmark of this and other Fianna Fáil Governments.
The Estimates for 1988 illustrate clearly the Government's determination to get the public finances back into order. The Programme for National Recovery provides the framework under which economic progress will be made. The strategy to overcome our difficulties has been set and will now be pursued resolutely by this Government. Condemning this or that expenditure reduction in the way we have heard throughout this debate without putting forward realistic alternatives, smacks of political cowardice and unbridled hypocrisy in our nation's time of need.
As we debate this motion our country is in crisis with a live register peak of 262,000 projected for 1988. Hardly a family is untouched by the trauma of unemployment. We know that 30,000 of our citizens, mostly young, will emigrate this year. One in every three or our people now lives on social welfare and our industrial situation is, to say the least, grim with, as the Minister has just admitted, almost two million square feet of empty IDA factory space. A grave scandal is being perpetuated in our society about how to meet and overcome this crisis. A very inward looking, mean, individualistic consensus has emerged about the basis of what we now call national recovery. We have a rampant, materialistic, personalised selfishness stretching across the spectrum from the IFA to the PD's, from CII to Fianna Fáil and, regrettably, from a number of sections in Fine Gael to Fianna Fáil.
The incessant demand for more and more public expenditure reductions at any cost, no matter what social dislocation may develop, comes from middle income politicians, middle income commentators and quite a number of middle income public servants, and it continues unabated. It does not come from the 135,000 persons who this week got what? They got, on average, £53.45 unemployment assistance. As if that was not bad enough there are 85,500 persons on unemployment benefit on top of that and their average is £71 a week. These are insured workers who have to feed, clothe, educate, pay rent and look after a family on £53 on average on unemployment assistance and £71 on average on unemployment benefit. These are the realities in terms of economic recovery.
What do they get in return? They get a glib answer that there is no alternative to the cuts, and phrases saying repeatedly, "It must be used for the betterment, the future of our country". They are the political catchcries largely from those who want their money, or what they perceive to be their money, in their pockets and care nothing for those who have far less or who have nothing at all, such as an unemployed person on UA of £36 per week living in a flat. What did the Minister for Social Welfare do to him yesterday? He said "If you are in receipt of a rent supplement, in future you will be responsible for twice the amount for yourself, from £1.50 up to £3." He doubled it. It was a mean, petty and vicious cut in the lowest level of social welfare payments.
A profile for the 1988 budget is now emerging from these Estimates. It is vital that the electorate should be alerted to the full implications of this major change in social and political attitudes. It is necessary to do so because we have to remind people that they voted overwhelmingly for the parties who are now espousing these Estimates. People must be asked if they voted for this and if it was in the manifestos of those parties. These Estimates will bring into Ireland a new poor law mentality which will impose great hardship on young families, those at school, the sick, the elderly and the unemployed. These Estimates must be rejected by us.
I have a personal admiration for the Minister for Industry and Commerce. I think he is an outstanding Minister. However, I do not think much of his party's general approach. It is not that Fianna Fáil are repentant for the 1977 to 1981 period; it is not that Fianna Fáil are now a monetarist party — if they were, at least we would know what they were — and it is not that Fianna Fáil are republican in their social outlook. It is simply Fianna Fáil and their Leader have no political principles left. They stand for nothing except power. They are the supreme political pragmatists. Power means everything to them, even in terms of allocating the contract for the Custom House Docks site. They cannot make up their minds on that because of the pressures by one group or another and because there might be a political killing on it later. Effectively the country is being run, not by Fianna Fáil and the major political parties, but by an inately conservative establishment — the Department of Finance which is now buttered over by the newly found stockbroker advisers of the Taoiseach who have breakfast with him every few weeks. He loves it and they love him. Those are the people who are running the country.
The Department of Finance totally opposed the introduction of DIRT tax. Working parties and everybody in the Department were against it. We brought it in in spite of them. It has brought in £286 million in a year. Fianna Fáil have now endorsed and incorporated it into the 1987-88 Estimates. It is now an established part of their approach.
I very much regret that I have one fundamental criticism to make of the ICTU approach to the Programme for National Recovery and the 1988 Estimates. Even the most uninformed observer knew that the Book of Estimates was going to be published on Tuesday, 13 October. Even the most optimistic trade unionist knew that there were going to be major cuts in public expenditure in the Estimates. Hence my incredulous reaction and that of most members of my party and very many trade unionists that such a programme could be recommended for adoption on the Friday before the Book of Estimates was even given the light of day. Without even sight of the Book of Estimates there was a helter skelter rush to recommend a programme for recovery. For the Taoiseach it was game, set and match. Of course for the workers of Ireland it means five years stamps if they want to go on long term disability benefit.
There were a lot of unhidden cuts in the speeches made in the past day or so in the debate on the Estimates. The children of the workers of Ireland will now be in larger classes. One thousand primary teachers and 1,200 post-primary teachers will lose their jobs. That is what this programme for recovery means. It means also the closure of more public beds. As was admitted by the Minister for Health this morning, 2,500 public beds must close and there are more closures on the way. It means the introduction of out-patient and in-patient charges and that the so-called voluntary redundancies in the public service are not voluntary but enforced. Anybody in An Foras Talúntais will tell you that there are no options in Wexford or anywhere else. We are going to have dirtier roads and rivers as a result of cuts in the Department of the Environment and the abolition of An Foras Forbartha. I have had families approach me because they have to mortgage their homes to pay for hospital bills incurred by having to go to the Mater and Blackrock private clinics as a result of not being able to get into public voluntary hospitals. There were 800 hip joint replacement operations carried out in Cappagh hospital last year. How many will there be this year? There have been 350 so far this year and the figure will hardly reach 400 by the end of the year. This is a public voluntary hospital with no private beds which has been halved in terms of its output for the elderly, those on medical cards, those in pain. That is the reality of what is happening in our community.
Training schemes for the unemployed have been cut in half. Social welfare, health and education services through the National Social Service Board and the HEB have been effectively disbanded. Subsuming them into a Department is a bit of a joke because the subsumption will not give any sense of independence or any real throughput to those bodies: they will be absorbed into the maw of a general administrative budget. On top of that, as admitted by the Minister of the Environment, there will be only a handful of local authority houses for families and the elderly who are on low incomes.
Even more disturbing is the fact that in the midst of those negotiations the Minister for Energy announced, on behalf of the Government, that he proposed to literally give away whatever oil and gas resources our country might happen to possess. Apparently that fundamental issue regarding national resources did not feature in the discussions between the social partners and, more particularly, between the ICTU and the Government of the day. I understand that it was not even discussed and even if it was insult was added to injury because the Minister for Energy announced it ten days before the negotiations ended.
This proposed programme is for an exceptional three year period — the most optimistic lifetime of this Government. The 1988 Estimates are inextricably interlocked with the programme for Government whether the ICTU like it or not. The programme states:
This will involve reducing the Exchequer borrowing requirement to between 5 per cent and 7 per cent of GNP, depending on developments in economic growth and interest rates. To that end——
and this is the important sentence
——the measures taken by the Government to control and curtail public expenditure will be continued.
The only jobs created as a result of this document are the ones for the printers who printed it.
The Minister for Industry and Commerce was against it.
It is written into that document and agreed. Despite all their caveats Congress have now agreed to this programme. Hence we had the appalling confirmation last evening by the Minister for Education of the cuts in education. The INTO and the ASTI are running for cover. No caveat can cover over the fact that they have agreed to this programme. It is inextricably binding on them. Having agreed it they have recommended it. There is no way out of it in that regard.
The Labour Party in a unique way and for the first time in the history of the party oppose this programme. We have been invariably in favour of programmes for national understanding and for consultation and consensus between the trade unions, employers and the Government but not at any price. Therefore, any programme for economic recovery which is based on the redundancy of 9,000 public service workers, the non-filling of 8,000 public service vacancies and the dismantling of public and social services provided by those workers is incompatible with Labour Party policy. That is why we do not support this programme because we reject those policies of deflation and mass unemployment. We must develop — I do not think there is much dispute about the matter in this House — a modern mixed economy based on growing private and public sectors with totally efficient public services. How we do so is a matter about which we have sharp disagreement in this House. We must have a broadly based level of Government revenue to underpin the structures of the economy.
We in the Labour Party hold that there are definitely two sides to the ledger of any economy and any budget. In this House there is an obsessive preoccupation with the public expenditure side and that has distorted, in our view, a sense of budget balancing. There has been an utter obsession with the expenditure side and virtually no thought given to the ordinary revenue side and this is endemic within Government. Therefore, I reject this programme because it is not even a programme for recovery or for a national understanding. It is an apologia for a three year public service pay increase for 1988-90 based on massive public expenditure cuts in the social and public services, both current and capital. That is what it is. As a member of a trade union for 30 years, and coming from a proud family who established my own union, I always remember the advice given by my father, advice which, a Leas-Cheann Comhairle, was shared by your father as well — never sell your brother's job for a pay rise from the bosses. That is what has happened in terms of this understanding or agreement.
When the redundancy costs are funded by raiding the reserve funds of the Central Bank, as disclosed by the Labour Party and dragged from the Taoiseach in his speech, that exercise becomes deplorable indeed. We recognise in the Labour Party, as we were in Government for four years, that there is an absolute need to reduce our overall level of national debt. We suffer from no illusions whatever in regard to that grave issue. We know that in the past four years this country has paid £7,800 million in interest charges on our national debt. If we did not have to pay that £7,800 million on interest charges we would have £200 million left over to spend on cutting taxes — which would be a priority down the road — but, more particularly, building up our country, preventing mass unemployment and tackling the many problems of the disadvantaged in our community which remain unsolved.
We acknowledge, therefore, that there is a crisis but that crisis is going to take the best part of a decade to stabilise and reduce. We have to have in that period carefully targeted increases in revenue for the Government of the day with control of public expenditure, as I did when I was in the Department of Health, but not the kind of brutality displayed under the present Government. The crisis must be shared; the target must not be the poor and the unemployed who are effectively bearing the burden at this stage.
There remains a very strong argument for a more equitable reduction in the current budget deficit preventing massive deflation in the economy and ever-increasing unemployment-related expenditure. The view is shared by many people that there needs to be a fundamental look at the direction in which this Government are going because otherwise we will finish up with a massive increase in unemployment, an emigration rate of 35,000 a year and a live register of 265,000 to 270,000 in 1988.
We need to reform the taxation system. We need a much wider and more broadly based taxation system where every section of the community pays its share to overcome the crisis. I hold the view that in order to safeguard essential public and social services there is not much scope at all — or very little scope indeed — to reduce the overall level of taxation borne by the community. There is, however, significant scope for redistributing the tax burden so that the whole community, and not just the PAYE sector, bears the cost. We strongly advocate a view in the Labour Party that we must shift the burden of taxation towards those who can afford to pay most. There are many people in our community who play the Stock Exchange; there are quite a number of self-employed people, professional people, farmers and quite a few business people — particularly those in the personal services area — who avoid or evade paying a reasonable proportion of taxation.
I hold the view that rather than indulging in the current major reductions in expenditure, as laid out in the Book of Estimates, we must broaden the tax base so that we have an increased yield from capital taxation to raise at least an extra £90 million a year. We must introduce full and effective social insurance for all the self-employed, including farmers, to yield at least £90 million a year. We need to increase by at least 25 per cent corporation profits tax by restricting capital allowances and tax-based lending schemes or by the imposition of, at least, a general 10 per cent minimum taxation on the gross income of all corporations. Corporation profits tax in this country is extremely low by European standards and even by the standards of the UK. Therefore, we could bring in at least £30 million or £40 million more in any one year from a revamping of CPT.
We must examine some of the taxation allowances. Taxation relief on voluntary health insurance is creating, cementing and developing a two-tier system of health care in Ireland. There was a time when I was in favour of giving taxation relief in relation to VHI. I have changed my mind because that £38 million is a direct subsidy to a two-tier system of health care which is manifesting itself rapidly in this country and is distorting health care. It will not make it cheaper because, as we know, in America they are spending 8 per cent to 9 per cent of GNP on health care and their system is even worse than ours. There is a strong case to be made for at least giving tax relief at the standard rate or reducing it altogether. Business companies put their managing directors on Plan E of the VHI scheme. The company involved pay the cost. If we pay it out of our own pockets we get tax relief. It must be questioned whether there should be a straight £38 million of tax relief in that regard because of the development of an appalling two-tier health system at present.
We must introduce a universal property tax to bring in about £150 million a year. Much work has been done in the Department of the Environment on it. In this country we have up to 900,000 houses and seven out of every ten houses are owned by people who are paying virtually nothing by way of charges or taxation on the property they own. If we did those things we would have sufficient money to finance essential public spending, to reduce gradually the budget deficit and our borrowing and to start on the basic priorities for income tax relief such as giving the PAYE sector some general relief on income tax.
I want to turn to the question of PRSI for the self-employed, including farmers. It is a fundamental reform favoured by the Labour Party but all the indications are that it will not happen. The Minister for Social Welfare said that the rate would be 5 per cent which would bring in about £90 million. The pensions board have said it would be 8 per cent and would bring in close to £100 million. The IFA stated that they want capital allowances and depreciation taken off income and they said there is no way they will pay that much money. Two hours before the papers were signed the Taoiseach told the Irish Congress of Trade Unions that he would charge the self-employed a higher rate on the net income and they agreed. Everybody knows that is unconstitutional and will be impossible to implement because PRSI for farmers and the self-employed would have to be not less than 17 per cent of net income. Therefore, the very basis of this agreement — PRSI for the self-employed — falls flat on its face. We spent 10 years trying to introduce PRSI for farmers and the self-employed but we were frustrated every time by the farmers and by political interests and it never came about. The situation has now reached the ludicrous level where the ICTU are writing to the Taoiseach asking what he has in mind and to clarify the position. It is quite ridiculous in that regard and therefore is a major flaw in this programme.
In regard to the Custom House Docks site, I ask the Government to revise this taxation give-away of £30 million to finance speculators in this city. It is a scandal. Deputy Collins, as the Minister, knows well that any bank or any stockbroker can pick up his belongings from one building in Dublin city and march down to the Custom House Docks site — he does not even have to go now, he could go in five years' time — and automatically his corporation profits tax will be reduced from 50 per cent to 10 per cent. So much for incentives under national recovery. It is disgraceful. It is a hand out for the new stockbroker friends of the Taoiseach and nothing more. I am in favour of developing the Custom House Docks site. We gave the people 10 years' rates remission, massive reductions in general liability and considerable allowances against corporation profits tax but we never told them we would charge them only 10 per cent if they went to the Custom House Docks site. It is a scandal and that decision should be rescinded because there is no justification for it.
It is proposed to privatise Irish Life. The managing director of Irish Life said that the company is worth about £200 million. We all know from Cabinet papers that it is worth at least twice that amount. We must disclose in the national interest that that company has no less than £300 million in hidden reserves which it will be obliged to disclose in the near future under EC monetary regulations. That money lies there and the vultures in the Stock Exchange are after it. Much money is to be made from the privatisation of Irish Life if it goes through on a basis which will be totally unacceptable to this House. I have the facts, as does the Minister for Finance and the Taoiseach. We are not going to allow this to happen on the basis of deliberately undervaluing Irish Life so that a kitty can be made by certain people in the business community, with the oblique approval of the Fianna Fáil Party. As far as I am concerned it will not happen and I declare my interest as a £3,000 mortgage holder in this company. We will certainly prevent it happening in that regard.
These Estimates are unbalanced and inequitable. The Minister for Education came into the House last night like a head prefect or the trainer of a camogie team bossing us around and trying to make a speech which, in my opinion, was the worst speech I have heard from any Minister for Education. It was a speech which epitomises the fact that the Fianna Fáil Party have forgotten their roots, above all else in the area of education, by imposing on 1,200 primary schools a loss of 1,000 staff and at second level a loss of 1,200 staff.
The Deputy's time is up.
It shows that the party are cynical and pragmatic in their retention of power at any cost. They are welcome to that ideology. Nobody knows better than I that when in Government you must act with a degree of independence, including independence in the Department of Finance.
Acting Chairman
The Deputy is using up somebody else's time.
I thank you for your indulgence in allowing me to overcome the occupational disease of politicians in being unable to finish my speech.
The Deputy should thank me since he has taken up about three minutes of my time, but I am glad to know that he is up to his——
He was talking about camogie.
——usual standards.
I am glad to have this opportunity to participate in this debate on the Estimates which were published last week. The Estimates represent a continuation of this Government's avowed determination to deal with the state of the public finances and the lack of growth in the economy.
I have responsibility for a group of six Votes —Office of the Minister for Justice, Garda Síochána, prisons, courts, land registry and registry of deeds and charitable donations and bequests. Taken as a group the allocations for 1988 are some £7 million down on those for 1987 or a reduction of approximately 2 per cent. The reduction on my group of Votes must be viewed in the context of the Government's overall financial policy. Adjustments of this nature are a necessary condition for securing economic growth. That objective must be borne in mind in considering the points I am going to refer to in the various Votes for which I am responsible.
The overall net Estimates provision for the Garda Síochána in 1988 is £273,153,000. Salaries, allowances and overtime account for over £205 million of this amount and the superannuation provision is £41.6 million. The other major items are £9.67 million for travelling, subsistence, compensation and miscellaneous expenses, £7.65 million for Garda transport, £5.93 million for the purchase, rental and leasing of radio, computer and other equipment, £5.62 million for postal and telecommunications services and £2.25 million for uniforms and accessories.
The provision for salaries and allowances takes account of the continued application to the Garda Síochána of the restrictions on recruitment to the public service generally which were announced in this year's budget. The provision for Garda overtime in 1988 is £8.3 million, as compared with an allocation of £10 million this year. The saving of £1.7 million will be achieved by the abolition of the 15 minute pre-duty "parading" or "briefing" time in operation in the Dublin metropolitan area and in the cities of Cork, Limerick and Waterford. This "parading" time is an operational arrangement involving overtime costs, which cannot be sustained in present circumstances, and the Garda authorities are satisfied that its abolition will not adversely affect the level of service to the community, having regard to the recent improvements in Garda radio communications and the overlapping rosters which have been operating over the past few years. The Garda authorities propose that a shorter briefing period will be incorporated in the normal eight hour tour of duty.
While the maximum economies have to be made in all areas of expenditure on the Garda Síochána, specific reductions have been made in the provisions for uniforms, transport and equipment. The provision of £2.25 million for uniforms shows a reduction of £.25 million over the 1987 allocation. Expenditure on uniforms has been exceptionally high in 1986 and 1987 because of the introduction of the new Garda uniform, which had been in the pipeline for a long time, but the overall cost of uniforms will be down in 1988. At this point — I am sure the House will agree with me — we should pay tribute to those involved in the implementation of the changeover to the new uniform. It is a very smart uniform and I think that the members of the Force can be justly proud of it.
The provision for the Garda transport requirements, £7.65 million, reflects a saving of £250,000 on the purchase of vehicles and there is a small reduction in the provision for maintenance and running expenses having regard to the reduced price of petrol. I am satisfied that these savings can be achieved without any serious effect on Garda transport resources.
The reduction in the provision for radio and other equipment in 1988 — £4.55 million as compared with £6.218 million — reflects reduced capital expenditure on the radio network, as well as a saving on the purchase of technical and other equipment for the Force.
£3.5 million is provided in the Estimate to continue the installation of the new national Garda communication network. That provision is sufficient to cover the amount of equipment that it is intended to acquire and install in 1988. The first phase of the network, covering all of the 18 Garda divisions outside of the Dublin metropolitan area, has been operating very effectively for the past year and a half. In the Dublin Metropolitan Area work on the installation of the new radio system is almost completed and the system will be operational before the end of the year. The new computerised command and control system, which will complement the Dublin metropolitan area radio system, should be operational late next year and will mean that the gardaí in Dublin will have available to them one of the most modern communications system in the world. Work is also under way on the provision of an independent nationwide communication system which will link, by a microwave system, all divisional headquarter stations with each other and with Garda headquarters.
The provision of £1.083 million for the Garda computer equipment is sufficient to allow further significant development of new systems. I believe that the amounts being provided for both communications and computer equipment demonstrate the Government's commitment to ensuring that the Garda will have the benefit of the most modern equipment and technology.
I would not like anyone to think that the reductions in expenditure on the Garda Síochána will mean a less efficient force or a less effective police service. In common with all areas of the public service, expenditure on the Garda Síochána has had to be reduced in some respects because of the compelling and urgent need to halt the deterioration in the public finances. However, reductions have been applied in such a way as to maintain essential policing services at the best possible level. While priority areas such as the Garda Síochána had to be protected, the critical state of the public finances dictated that no area could be immune from expenditure reductions. I want to emphasise however that the decisions taken by the Government in relation to expenditure reduction measures in so far as the Garda Síochána are concerned took account of the vital importance of the police service to the community and these decisions aim to spread the impact of the reductions as evenly as possible.
Overall, I am satisfied, that the Estimates' provisions for the Garda Síochána for 1988 will enable all essential policing services to be fully met. I accept that reductions in expenditure mean certain changes in the way operational needs are met and that it will be necessary for the Garda authorities and for each and every member of the force to take steps to ensure that resources are deployed as effectively as possible in meeting the police needs of the community. We are living in an environment where public expenditure reductions have had to be imposed and every public service has to respond to this challenge by providing the best possible service within the available resources.
Crime continues to be a major challenge to our community. The level of indictable crime in this country has shown marked reductions in the past few years — falling by over 10 per cent in the period 1984-85, by a further 5 per cent in 1986 and the indications are that the downward trend is continuing. While this is a welcome and encouraging development we must not underestimate for one moment the extent of the problem that remains to be tackled.
Crime today is being perpetrated by highly organised professionals, with a disturbing feature being the increase in armed raids and the emergence of increasing levels of violence. It is clear that the Garda response must be a professional and comprehensive one and that the crime prevention and detection strategies must be continually monitored, evaluated and adapted to meet the challenges posed by the criminal. I believe that the clear indications are that the Garda have achieved a marked degree of success in this area. The ability of the Garda Síochána to successfully take on the criminal is reflected not only in the decline in the general crime level over the past few years but also in the fact that special measures which have been taken to combat particular problems which emerge from time to time have met with a notable measure of success. In the current financial climate — when every element of public expenditure has to be carefully weighed and measured — it is heartening to see that the Government's financial investment in the battle against the criminal and for the maintenance of order is paying such dividends.
We should, of course, always bear in mind that this investment is made on behalf of, and out of the pocket of, every member of our society. It is important, therefore, that each of us by our efforts ensure that it is not squandered by our carelessness or lack of civic spirit on an individual or community level. It would be totally unrealistic to expect the Garda to combat crime if, for instance, we do not take the basic precautions to safeguard our own property. Relatively simple precautions for protection of property can be most effective for example making sure our houses are guarded by secure locks on windows and doors, never carrying large sums of money on our person, never leaving items of property visible in cars. We should not underestimate the role that we can individually play in ensuring that we do not become the victims of crime or, to put it another way, that we do not create the opportunity for the commission of a crime.
So too on a community level, there is a valuable role to be played by us all in safeguarding our houses, ourselves, our children and our community facilities. In this respect the neighbourhood watch scheme has been an encouraging and effective strategy and one which shows the willingness of ordinary members of the community to play their part. There are already 475 schemes in operation involving some 125,000 households throughout the country and a substantial number of further schemes are in the process of being implemented. Neighbourhood watch has brought about a situation where the community through its vigilance and awareness work with the Garda to combat crime. It is a little early yet to say conclusively what the effect of the neighbourhood watch scheme has been but the indications are that, apart from the overall decrease in crime, there has been a substantial reduction in the number of burglaries of private dwellings over the past two years. It is particularly heartening to see a reduction in this particular crime because burglary of its very nature induces a sense of loss, trauma and fear in its victims and affects them in a manner which, in many ways, bears little relevance to the actual financial loss involved. I want to assure the House that the Government will continue to take whatever measures are necessary to achieve further and continued improvement in the crime situation.
At this stage, a Cheann Comhairle, I would like to turn to a particularly dastardly crime which was perpetrated some ten days ago by a group of ruthless men, who obviously have little or no regard or respect for the basic human rights or the sanctity of the homes of the ordinary citizens of this State. I refer of course to the kidnapping of Mr. John O'Grady.
Kidnapping is, and always has been, recognised as an exceptionally reprehensible crime. The holding for ransom of helpless individuals by armed men whose sole selfish motivation is their insatiable greed for ill-gotten wealth is enough to shake our faith in human nature. No nation could afford to allow this type of criminality to take hold. Others who have failed to stop it have eventually succumbed to lawlessness and anarchy. We will combat it with every resource available to us. I totally abhor and condemn this type of crime as I am sure do Deputies on all sides of the House.
The Government's prime concern in this case is the safe return of Mr. O'Grady to his family. When this has been accomplished — and I am very hopeful given the record of Garda success against this type of crime in the past, that it soon will be — the next priority will be the detection and the bringing to trial of those responsible for this foul action.
Armed men who break down the frontdoor of a house to invade the privacy of a family going about their normal lawful daily lives, men who hide their faces behind the vile shapes of balaclavas, men who produce shotguns and other weapons to terrorise innocent citizens must be met with the full rigour of the law and, to do that, we as a society must be prepared to muster all the forces of law and order at our disposal. I am in daily contact with the Garda Commissioner to ensure that everything that can be done is done, and that the necessary resources are available to ensure that there is a successful outcome to this operation.
I feel constrained, as Minister for Justice, from saying much more than this at the present stage of proceedings, because I have at the back of my mind the almost certain knowledge that the perpetrators will at some stage come before the courts. It would be remiss of me to make any comment here which could, by any stretch of the imagination, be considered to be prejudicial to those person's right to a fair trial. Accordingly I will limit myself to a few remarks.
The full resources of the Garda Síochána are being deployed to detect the perpetrators of this foul crime. The Garda are one of the most experienced police forces in the world in the successful detection of this type of crime. The Government are determined to ensure that the perpetrators are brought to justice. This Government will not allow armed bodies of men to run wild through its jurisdiction, robbing and kidnapping and striking fear into our citizens. This type of criminal behaviour cannot and will not be tolerated. The Garda have been tasked to deal with the problem and I am confident they will succeed.
The Estimate for Prisons shows a reduction of £8.744 million over the 1987 allocation. This has been achieved primarily through decreases in Subhead D — Buildings and Equipment, and Subhead A — Salaries, Wages and Allowances.
In the overall context of achieving a reduction in public spending, the capital allocation for prisons and places of detention has been reduced to £6 million. This amount ensures continuity — even if at a slower pace — in ameliorating the shortage of custodial accommodation which has been presenting problems for some years now. The money being made available will fund completion of the new place of detention for 320 young male offenders at Wheatfield — the first phase of a project which I initiated when I was previously Minister for Justice. Construction is now virtually complete, is within budget and is expected to be finished early in 1988. Apart from Wheatfield, the allocation will enable capital work related to upgrading of security, services, and improvement of facilities generally to continue to be undertaken in several other prisons and places of detention. Some of these works are the final stages of developments which have been on hands in recent years. In other instances there are works which have had to be postponed for some time because funding was not available. They are quite overdue and it is important to overtake them now.
The allocations for prisons pay and overtime in 1988 provide for an increase of up to 200 in the authorised number of prison service staff and a reduction of £4.7 million in the provision for overtime.
For some years now, a major concern of successive Ministers, as well as the Prison Officers' Association and others, has been the amount of overtime being worked by prison officers. This overtime was an inevitable operational consequence of the increase in the number of offenders in custody since 1982, which was of the order of 50 per cent, and other associated problems which have been the subject of debate in this House on previous occasions. These difficulties were coped with by and large without additional staffing resources, the result being an increase in overtime working to the extent that in 1986 the overtime bill had reached almost £13.5 million. Recruitment of almost 200 additional staff in the latter part of 1986 and early 1987 and tight control of manning levels has enabled a reduction of the order of £3 million to be achieved in overtime expenditure this year.
Notwithstanding this considerable saving, if the situation remained as at present the overtime requirement next year would be about £11 million which would reflect a level of dependence on overtime working for the daily operation of the prisons and places of detention that could not be justified, especially in the light of the current state of the public finances.
It was clear to me that any further significant decrease in overtime dependence could only be realised through the provision of additional staff. Although the Government's policy against any increase in Public Service numbers was firm, I am glad to record that it was flexible enough to facilitate an exception where further recruitment would clearly contribute to an overall saving even allowing for the cost of the additional staff.
In these circumstances, the Government approved the appointment of up to 200 additional prison officers, to be recruited by 1 January 1988 on the basis that a net saving on the cost of overtime and additional staff of £2 million would be achieved in 1988. This additional staff will have the effect of reducing the dependence on overtime working in the service and the allocation for overtime next year, which is £6.3 million, shows a reduction of £4.7 million on the 1987 allocation. While this is a considerable reduction, the provision is reasonable given the current constraints on public expenditure. I am confident that it will contribute to the better management of the prison service and will ease the burden on prison staff who have a difficult enough job without the added pressures arising from continuous overtime working. I am also glad that the extra staff will contribute to on-going savings in following years. The overall Prisons Estimate reflects the very heavy demands which continue to be made on the prison system.
Imprisonment is clearly a very expensive sanction and at times of substantial reductions in public expenditure the question of whether the current prison population is excessive has to be addressed. From my experience daily in assessing candidates for release there seems little ground for believing that there is a significant number of offenders in custody for whom an alternative sanction would be more appropriate. The bleak reality is that a large proportion of the offender population are serving long sentences for very serious crimes and the public interest requires that these people serve to the greatest extent possible the sentences imposed by the courts.
What tends to be forgotten is that before deciding to imprison someone the courts have a wide range of alternative sanctions which they can consider imposing in particular cases. For example, courts may impose Probation Orders or Community Service Orders as an alternative to a sentence of imprisonment or detention. The Probation and Welfare Service of my Department currently supervises approximately 2,000 offenders who are the subject of probation orders. I am pleased to say that the Community Service Order scheme, which I instigated, is being widely used by the courts. More than 2,000 orders have been made since the scheme came into operation less than three years ago. If this scheme had not been available many offenders who have been given an opportunity to repay their debt to society in a worthwhile manner, would instead, have been required to serve terms of imprisonment or detention. A sum of £215,000 has been provided for community service.
The Government are committed, even in a period of financial constraint, to continuing support for projects in the community which are geared to providing support for offenders after release from custody. Probation hostels, workshops and day centres are operated throughout the country by voluntary committees in association with the Probation and Welfare Service of my Department. One hundred per cent grants were provided towards the capital cost of establishing those projects and up to 90 per cent in grants are provided annually towards their running costs. I am satisfied that expenditure on these projects is cost effective and beneficial to the community. The provision for these projects is £1,407,000.
Equally, the Government are committed to ensuring that services within the prisons are maintained to the greatest extent possible. This is reflected in the provision of over £800,000 for education and work training. The provision for Educational Services does not include staff costs as the teachers involved in prison education are provided and funded by the VECs.
I hope it will be clear to this House that while making sensible reductions in the Prisons Estimate to achieve savings in public expenditure the Government has adopted a balanced approach to ensure that an appropriate level of funding has been provided in this area.
The most significant feature of the Estimate for the Courts Vote is the reduction of over £1 million, or 52 per cent under subhead B.1. — Travelling and Incidental Expenses — compared with 1987. The bulk of this reduction will be achieved by going over to a system of direct cash/cheque payment of court and related fees instead of the present system of payment by adhesive stamps. Under the present system adhesive stamps are handled and sold by An Post and their charges for this service in 1987 will amount to £1 million. These charges will cease at the end of this year. The cost of the change-over in terms of staff and equipment is reflected in subheads A and B.2. The extra staff will be obtained by redeployment from outside my Department. Their cost will be borne on the Courts Vote and accounts for some 2 per cent of the increase shown under subhead A.
Subhead B.2. — Office Equipment — shows a reduction, even after allowing for the cost of this new scheme. The reduction is being achieved largely by reducing the purchase of computer equipment. I should like to emphasise that this does not mean an end to computer development in the courts system. Some equipment will be purchased and, of course, feasibility and planning studies will proceed. I regard the extension of information technology in the courts as not just desirable but essential in our efforts to improve the effectiveness and efficiency of the system and I intend to encourage it to the maximum extent that resources permit.
I am happy to be able to say that the 1988 Estimates provision for the Land Registry and Registry of Deeds shows a 6 per cent increase over the provision for 1987. When allowance is made for a transfer of expenditure in respect of energy and furniture and fittings from the Vote for the Office of Public Works, there is still an increase of 4 per cent in the 1988 provision. Strong arguments have been advanced in recent years as to why the Land Registry should be exempted from the staffing restrictions applicable to the Civil Service generally since the Registry is required by law to be self-supporting and is so. I have much sympathy with these arguments. However, I have to accept that there is a counter-argument to the effect that in the context of public service generally it would be inequitable that an organisation which charges fees for its services should be placed in a more favourable position than an organisation which does not, even though the services which it provides may be equally important to the public or even more so. In any case at this stage there is no real alternative for the Registry but to manage within the staff resources available to it under the same conditions as the Civil Service generally.
In recent years complaints about delays in the Land Registry had been mainly in respect of applications, usually known as section 49 applications, for establishment of title acquired by possession. As a result of a reorganisation involving a redistribution of work which was carried out earlier this year, delays in processing these applications have been appreciably reduced, as also has the number of complaints.
Extension of the use of modern technology in the operations of the Land Registry and Registry of Deeds assumes added importance because of the continuing staff losses. There is an ongoing programme of computerisation of the Land Registry's folios which to date has only been implemented in respect of the Dublin folios but which it is hoped will be extended to Galway soon and also, if possible, to other areas of the country. The setting up of a pilot scheme of computerisation of maps is being actively considered, as well as the computerisation of some of the Registry of Deeds documentation. The benefits of computerisation are obvious in organisations such as the two registries, which have a large annual throughput of documentation, but the amount of preparatory work involved in the process is daunting particularly when all the available staffing resources have to be employed in trying to maintain a reasonably satisfactory day-to-day public service. However, I am hopeful that significant progress can be made in the development and use of technology in the work of both registries during 1988 with the object of providing a more efficient service generally to the public.
The Estimates for the Office of the Minister for Justice include a provision of £1,975,000 for the scheme of compensation for personal injuries criminally inflicted, which is administered by the Criminal Injuries Compensation Tribunal. This provision is £1,225,000 or 38 per cent down on the provision in the Estimates for 1987. Between 1974 and 1986 approximately £21 million was paid out in compensation under the scheme. The number of applications for compensation had increased dramatically in the years immediately prior to 1986. Accordingly, it was decided in 1986 to amend the scheme by the elimination of compensation for "pain and suffering" and so to reduce the impact of the scheme on the Exchequer.
Claims under the new scheme are running at a much lower rate than under the old scheme and, indeed, liabilities in respect of claims which will be lodged in 1988 will be much less in toto than the £1,975,000 being provided. Accordingly, next year's provision will result in a reduction being made in the backlog of cases which has built up. The Estimates for my office also include provision for a grant of £8,000 to the Irish Association for Victim Support. The association is a voluntary organisation providing non-financial assistance to victims of crime. The grant proposed for 1988 is the same as that included in this year's Estimates.
In conclusion, I want to put on record my conviction that the financial policies being pursued by this Government are setting the country back on its feet. The task is a difficult one but it is being tackled resolutely. The 1988 Book of Estimates and the recently concluded Programme for National Recovery are two major steps towards securing a soundly-based economic recovery. They are deserving of the support of this House.
The expenditure proposals that are set out in the abridged volume of the Book of Estimates for 1988 represent a further acceleration of this Government's headlong gallop away from everything that was Fianna Fáil's public expenditure policy in the period from December 1982 to February of 1987. There is a strange new phenomenon on the political scene today, that is a Fianna Fáil Party who not only say they want to reduce the current budget deficit and the Exchequer borrowing requirement but are now actually prepared to believe that in order to do this it is necessary to reduce public expenditure.
Having faced two ways for so long, this two-headed dog of war, Janus, has now become an even more terrible Mars, and is going about its task with a furious energy, with ferocity, even with savagery. In its mad rush to conquer this problem, this monster is attacking the innocent as well as the enemy and exterminating the weak as well as the strong. This Government appear to be totally oblivious of the fact that the very magnitude of the problem they face is due in no small measure to their own previous opposition to sensible, phased steps. They appear to have forgotten that while in Opposition they pandered to every interest group and sectoral lobby. They made a great many vague promises and a good many not so vague promises. They fanned the flames of opposition, they created expectations and they whetted appetites without the slightest thought for the morrow and without the least consideration of the problem they were building up for the future.
This Government have now found that the problems do not change or go away simply because the two main political parties have switched sides in this House. The Ministers and the Deputies opposite have found that the policies which they resisted for so long are now essential. They are now making the same case, using the same arguments, the same justifications and the same logic which they so vilified while they were in Opposition.
The Taoiseach said last Tuesday, with as much conviction as he could muster: "Financial targets are being rigidly adhered to". Had my colleague, Deputy John Bruton, said that last year, or indeed had I said it at any time in the previous three years, the Taoiseach would have shouted "Monetarist".
Again, the Taoiseach said last Tuesday: that we are getting the public finances right. Had a Coalition Minister said that, the Taoiseach would have shouted "Bookkeeper". He went on to say:
The policies which we have adopted are dictated entirely by the fiscal and economic realities.
Had a Coalition Minister said that, the Taoiseach might have suggested that he throw away the slide rule. I could go on and on. The debates in this House over the last seven months are full of examples of such statements made by the Taoiseach and his Ministers. They have been recorded at dinner speeches, at openings, at festivals and at chat shows as the record of the previous four years was full of that mindless succession of cries of "That-cherism", of "Monetarism", "Bookkeepers", "Insensitivity" and all the rest of that tired old litany. Now things have changed. What was wrong last year is right this year. What was heresy last year is dogma this year. What was black is now white. In this House we are entitled to ask how long will that last? The Taoiseach said again last Tuesday — and this is a gem:
Fianna Fáil have never been a party of the right but a party of social progress.
Now I might be prepared to go a wee bit of the way with the Taoiseach on that, because he might reasonably claim not only that Fianna Fáil have never been a party of the right but that they have never been a party of anything much at all. Certainly, over the last four years there was no label that you could attach to Fianna Fáil because what it contained, what it was over that period was a kind of "own brand" party for any pressure group that shouted loudly enough or long enough. It appears that the Government and the Fianna Fáil Party are now going through a process of transformation. We shall observe that process very carefully. We shall have time to do that because we shall not be going through any such process of transformation.
We shall not be pretending that the reality of the world around us has changed because we now find ourselves temporarily on this side of the House. We shall build on the consensus that we have brought about, build on to that a bigger consensus on overall budgetary policy and seek to expand that consensus in ways which protect the weak, which provide for the under privileged and which use our resources to the maximum benefit of the Irish people. If the Government have the good sense to agree with us, we shall welcome that. If those elsewhere in the House whose stated policies indicate that they should support us decide instead to go for the quick, cheap, publicity grabbing trick, then we shall get on with the job on our own. If those who once shared the duties of office with us decide to gloss over or misrepresent our joint activity and then decide to head off into the wildernest, we are not going to fall over ourselves sending out the search parties.
The Taoiseach's conversion has been nothing short of spectacular. Listening to him last Tuesday, I was reminded of a print I saw some time ago of a most magnificent painting by, I think, Caravaggio called "The Conversion of Saul", a very powerful painting which shows the man being dashed from his horse by a thunder bolt. The Government, of course, have gone through the same conversion but the zeal of the convert can be a very dangerous thing and so, indeed, it has proved to be in this case. Having spent so much time and energy in unthinking Opposition, the Government now find themselves without any clear idea of where they are going. The much vaunted Programme for National Recovery, curiously enough published in a very socialist looking red cover, has no substance other than that of a draft public service pay agreement. It is naive beyond belief for the Taoiseach to have claimed that this document settles matters in the private sector.
He told this House last Tuesday:
In the private sector which is facing increasingly competitive trading conditions, certainty about the evolution of pay over three years in an atmosphere devoid of industrial disputes and unrest provides the best possible basis for investment in and the development of the individual enterprises. This firm planning basis coupled with lower interest rates now provides the best opportunity in a decade for investment decisions leading to greater output and efficiency and increased employment.
That is a ringing declaration. It is presumably intended to convey the impression that a document published with this so-called programme, that is, "Proposals for an Agreement between the ICTU, the FUE and the CIF", will bring about this certainty of which the Taoiseach spoke.
Paragraph 3 of that document reads as follows:
These increases shall be applied through existing industrial relations machinery, due regard being had to the economic and commercial circumstances of the particular firm or industry.
Let us have a look at that statement. Frankly, we could have that kind of real certainty about pay without ever going through an elaborate process of negotiation. All it means, if you read it carefully, is that we shall have these increases except in cases where we do not.
Paragraph 5 of the document then goes on to say:
Except where otherwise agreed at local level, these arrangements shall apply from the expiry date of current employer/union agreements.
In other words, the increases mentioned in the document will apply except where they do not, from the time when any other arrangements would have applied, anyway. So much for certainty, so much for a programme of recovery, so much for setting certainty into the operations of pay bargaining in the private sector.
In other ways, too, we can see the effects of a total lack of planning in the way in which the Estimates have been produced. We have seen this in the unnecessary chaos caused this year in the health services. It is ironic, to say the least, that a national conference on health policy should take place a week after the publication of the Book of Estimates. Heaven knows, there was enough debate about the health services over the four years up to last March for the present Government to have some idea of priorities and how to go about applying them.
The same thing can be said in relation to An Foras Forbartha. First, we are told of a decision to abolish the institute. Then we are told that a new special board of civil servants is being set up to examine how the functions of the institute can be carried out. Then an abridged Book of Estimates is produced which shows that these functions have to be carried out in an unspecified way by unspecified people with a budget of £1.750 million in 1988 compared with an allocation of £3.9 million in 1987. Where is the planning in that? We find that the Minister for the Environment is not in a position to say what functions should be retained, which functions should be carried out by local authorities, in what framework they could be carried out, or who is to carry them out. Yet all this is supposed to happen from 1 January next. In that case, the Government obviously have not given the slightest thought as to what the consequences of this change will be.
The Minister for Agriculture and Food is to merge ACOT and An Foras Talúntais. However this union is to be brought about, it has to be done within an Exchequer allocation of £20 million in 1988, compared with £35 million in 1987. It appears that 1,000 staff are to be shed in the process. There is no evidence of any planning here, either. That Fianna Fáil Party which bitterly opposed the concept of a single united farm training and research organisation just over ten years ago and which subsequently brought forward the legislation on which ACOT are founded have now decided to change their minds. Fair enough, everybody is entitled to change their mind after ten years or even after five but there is not the slightest evidence to suggest that this change of mind has anything to do with any concern about the efficiency of resource use in training and in agricultural research or that it has anything to do with the results we want to get from research activity and training.
There is no evidence in the record of this House over the last five years which would indicate the slightest enthusiasm in Fianna Fáil for such a move, yet they now put forward, without explanation, preparation or consultation with either of the two bodies that it must happen in January next. As far as I can ascertain neither ACOT or An Foras Talúntais have been asked to give any advice as to how these two essential functions might be combined together into one organisation. Neither have been asked to advise the Government as to how this might be done with a 45 per cent reduction in the Exchequer allocation. Neither have been asked to advise on what the balance should be in a unified organisation between research and training. Neither have been asked to give any view as to whether, if rationalisation is to be the order of the day, the activities of the farm development service might not be included in the remit of the new body.
There has been no preparation, no consultation and no advice from an organisational point of view and no advice from a functional point of view. We have simply got the decision to reduce the budget from £35 million to £20 million and it appears that the Government will wait and see what happens after that.
God is good.
The National Social Services Board is to be abolished.
More redundancies.
It appears that in this case at least some very little thought has been given to what that might involve. I understand that it has been suggested that the functions carried out up to now by the board might be carried out by the health boards. That, Sir, is utter and absolute nonsense. Health board staff whether through lack of time, numbers or training cannot adequately perform the functions now allocated to them. Everybody in this House must know that genuine applicants for supplementary welfare allowance, people who are in distress and suffering hardship, are oppressed by the fact that they cannot properly provide for their families and are all too often humiliated in the simple process of making an application. Surely everybody in this House must know that there are people in our community who are entitled to assistance from the State in one form or another but who simply do not know what their entitlements are or how to go about claiming them. Are those people now to be thoughtlessly deprived of one of the channels through which they can secure access to their rights, a channel which most of us in this House would like to see expanded and a channel to which most of us in this House would attach very considerable value.
We then find that the staffing of the Office of the Ombudsman is to be reduced. If I am to believe the reports and hard information which I hear, which in spite of the fact that we have had four days of debate is very hard to come by in here, the reduction in the office of the Ombudsman is a matter of four heads of staff. For the office in question which is a small one that is a very serious reduction and will seriously curtail the scope of its operations.
That is the whole purpose of the exercise.
This reduction of four staff is being carried out by a Government which boasts of the fact that the reduction in the numbers of persons employed in the whole Exchequer financed public service this year will be 9,000. Compared to that number the proposed reduction in the Office of the Ombudsman cannot be presented just as attention to detail. God help us, it is not just petty, it is pernicious and it is pernicious because it deals another serious blow to one of the channels available to the ordinary citizen for ensuring access to his or her rights.
Dictatorship.
I cannot believe that there is any planning behind this. No sane Government would ever plan such stupidity. The Government have announced that the self-employed are to be brought into the social insurance net. One would think that that is something which would require a certain amount of planning. A Government intending to take such a step would surely construct the outline of a scheme, then seek views from the people affected and from outside experts and indeed from experts within the Public Service. There is no evidence of that here. Indeed, the Minister for Social Welfare had a meeting some weeks ago with the Irish Farmers' Association to discuss the matter and as far as I can determine the IFA representatives came away from the meeting no wiser than they were when they went into it. The Minister did not seem to have the slightest idea of what he was proposing or of how he would go about it.
Which Minister was that?
That was the Minister for Social Welfare. We see him in here occasionally when he is not being rapped over the knuckles over in Government Buildings. After the publication of the so-called Programme for National Recovery it emerged that there were at least two different perceptions of what the basis for the contributions by farmers would be. We had the spectacle of division emerging between the partners before the ink on the document was even dry. That is surely a lesson, an indication and a magnificent exposition of how to plan chaos in one easy step.
They cannot get away with it.
They have not got away with it yet. The provision for adult literacy programmes has been virtually annihilated by this Government. I wonder has the Taoiseach or the Minister for Education or any other member of the Government——
The Tánaiste.
——ever taken the trouble to talk to the people involved in this programme? Have they any idea of the trauma suffered by people who reach adulthood and find that they can neither read nor write? Have they any idea of the tension involved in the constant search for ways to avoid the simple business of filling up an application form? They clearly have no idea of what is involved in this, otherwise they could never have reversed the decision taken by my colleague, Deputy Gemma Hussey, to support in a realistic way the provision of adult literacy services. Those of us who take literacy for granted, whose children cope without difficulty with the written word, have to make a real effort of imagination to understand the feeling of achievement of a perfectly capable and able adult who succeeds for the first time in writing an essay. Such an effort of the imagination, apparently, is beyond the capacity of this Government. I could go on and on, Sir, with further examples but two things are clear.
Monetarists.
First, the Government have not thought out what they are doing and, second, that is no way to run the business of a Government. The Taoiseach has attempted, notwithstanding the obvious and admitted deflationary effects of these expenditure proposals — a deflationary effect which incidentally is exacerbated by the lack of balance between capital and current restrictions — to paint a bright picture. First, he has tried to claim that the action of this Government, unplanned and unco-ordinated as it has been, has over seven months lowered interest rates, substantially increased exports and greatly improved the balance of payments.
Listening to him making that claim last Tuesday I thought that his tongue must be so far in his cheek that it must surely be bitten off. The Taoiseach has been around for long enough to know that these things do not happen in the space of seven months. He knows but he will not acknowledge the fact that the improving trend in our trade balance goes back to 1985 and beyond. He knows that the steady and unremitting action of the previous Government who brought inflation down from over 20 per cent to 3 per cent, action which he and his colleagues bitterly opposed, is the fundamental cause of the improvements that he now claims.
Last week I listened to the Taoiseach give one of his very rare radio interviews. He sounded absolutely forlorn as he tried to pretend that his so-called development proposals, which have been gutted of all substance by these proposed Estimates would, in time — perhaps in the medium or long-term — make up for the deflationary effects of the policies he now proposes. Yet he came into this House two days later and said:
The Government have now clearly set down specific, well targeted development measures to improve the economic performance of the economy and to contribute in an important way to increased job creation.
It is almost impossible to believe it was the same person who said that as gave that radio interview last Sunday. Yet it was the same person. The Taoiseach also said on Tuesday last, and I quote:
...indeed it would seem that a strategy based on reduced expenditure rather than increased taxation can have these very positive indirect effects.
I must ask: does the Taoiseach really understand what he is doing? He pointed out on Tuesday last and again I quote:
In current circumstances all capital expenditure must be rigorously reviewed against its potential economic return.
That is another new departure for the Taoiseach and his colleagues.
As far back as June 1984 I spoke at a seminar organised by The Institution of Engineers of Ireland on the need for proper evaluation and control of public projects. I will send the Taoiseach a copy of the paper. I am happy to find a new disciple. I am sure he will endorse every word I said. But things were different in 1984. The measured statement of the doctrine now apparently espoused by the Taoiseach, through his then spokesman on Finance, became an absolute paroxysm of vituperation and indignation, no word was too strong to convey his indignation and his opposition to any questioning of capital expenditure or any examination of its potential economic return. I wonder how he is getting on now? He does not seem to be objecting to what the Taoiseach says. Perhaps his difficulty is that the present Minister for Agriculture reacts badly to taller men. He did in 1984 and appears to be doing so now, too.
(Interruptions.)
When he is dealing with a smaller man it may be easier to swallow.
(Interruptions.)
There are so many other examples we could give that we could spend the whole day on them.
We have put down an amendment to this Government's take-note motion. We want to give that motion a real meaning, a meaning that would be of some value to the people we represent. We want to give it a meaning beyond the Taoiseach's transparent objective, which is simply to be able to say to his backbenchers and his party that he has got his abridged Book of Estimates through the Dáil and have the opportunity, at a later date, of saying disingenuously to us on this side of the House that we have had a debate and a vote on his abridged Estimates. That will not wash and the Taoiseach might as well know it now.
The amendment down in the name of my colleague, Deputy Michael Noonan, seeks to provide the means for a real debate in this House on how we spend public money. It seeks to give this House a real function in ensuring that public expenditure policy responds to the real needs of our people, our social services, economy, unemployed and the community generally. Let not the Taoiseach, Minister for Finance or anybody else in this House — they are here sometimes; they are not here at present — not pretend to me that this amendment in any way exceeds the constitutional competence of this House. It does not. It requires the Government to take parliamentary debate and scrutiny of public expenditure policy seriously. It requires the Taoiseach to give effect to this by taking the same steps in relation to modifications to Estimates agreed by this House as he now takes in relation to the Government's own proposals. That must be the Government's and the Taoiseach's contribution to making a reality of the concern which the Taoiseach himself has expressed with regard to achieving co-operation, understanding and consensus in our community.
At the beginning of last month I made a clear statement of Fine Gael's approach to economic and social policy. I pointed out that the resolution of our public finance problems is the essential key to everything we want to do in the economic and social fields, to provide for our people the conditions in which they can live in the way we believe to be right. That simple truth surely must be obvious to all of us. It must be equally obvious that this simple truth has been abused and perverted by spurious claims that there is a better way, that somehow we can ignore the fundamental facts of economic life. That claim — that there is a better way — never believed by those of us with a responsible approach to public policy, has now been publicly and spectacularly disowned by those who invented it in the first place.
I said last month that if, in 1988, the Government produce a budget which conforms to four criteria relating to taxation, the current deficit, employment and debt servicing costs, I will not oppose its general thrust. I said no other policy of Opposition will conform to the real needs of our people. Any other policy simply would amount to a cynical exploitation of short term political opportunities for a political advantage which would inevitably prove to be equally short lived. I will not play that game because it would not produce any real or lasting advantage for our people, least of all, for those who currently have neither political nor economic advantage. God knows, and we all know, that there are far too many people now without work, far too many families suffering deprivation because of that kind of game playing in the past. I believe that that view, strongly held by Fine Gael, is shared by others on this side of the House but who so far, they have found themselves unable to say so, perhaps because, having broken one mould, they are now encased in a newer, cuter one, or perhaps the problem is simply that I said it first.
They are not here to hear it anyway.
Of course it is a cute political point to say that that statement was unwise or that it constituted a blank cheque. These are people who are going to break moulds. Are they now retreating from reality, or can we conclude that they do believe what they say in this House and will act accordingly and say, for once, with generosity: yes, we agree with Fine Gael? Of course, the Taoiseach has finally accepted this view. On Tuesday last he told the House and I quote:
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.
I want to welcome the Taoiseach on his return from the economic wonderland in which he has sojourned for the last five years. The Taoiseach went on to say on Tuesday last:
In this small country we must try to resolve our problems together in co-operation and understanding and not at each other's expense. We can achieve nothing by deeply dividing our society.
I am glad to find the Taoiseach echoing sentiments which I expressed on behalf of my party at the beginning of last month. My colleagues and I on this side of the House have acted accordingly, will continue to do so, will be consistent and will encourage others to be so. That is why we have said that the overall expenditure figure proposed in the Book of Estimates is correct but that the balance between capital and current expenditure is wrong and that the Estimates need substantial internal adjustment.
The final point I want to make briefly is this: the Taoiseach went on to speak about consultations with the social partners with a view to arriving at a consensus. I have three comments to make on that. First, it appears that there is less involved in that consensus as far as the private sector is concerned than had appeared. Second, it appears that even for those who are still on board the agreement means less than the Taoiseach claimed for it here. The third point I want to make is that the Taoiseach seems to see no role for this House in that process. I utterly reject that. It is in here that the democratic consensus must be arrived at on measures to bring about the welfare of our people. It is in this House, with the kind of amendment we have proposed to this motion, that we will make a reality of building consensus and agreements in favour of the people we represent.
We are here engaged in a debate on the Government's Book of Estimates for 1988. The contents of the contributions made so far in the course of the debate are of the utmost importance and significance to the present and future state of the country. I should like to acknowledge the positive elements in the speech by Deputy Dukes and, at the same time, to repudiate what I regard as negative aspects. I agree that this is the place to have the fullest possible debate on this whole matter. Of necessity, the nature of the debate demands that we on the Government side concentrate to a large extent on the economic and financial aspects. However, it would be both shortsighted and misleading to ignore the broader context of social, developmental and psychological factors which are-equally important to the well-being of the country and its people.
It is hardly necessary for me to remind this House once again of the gravity of the economic and financial situation which has faced the Government from the day they took up office or of the developments of recent years which led up to this situation. These aspects were studiously ignored by Deputy Dukes. They have already been mentioned particularly by the Taoiseach in his opening speech and also by other speakers. There are some fundamental points which have been made by Government speakers, including myself, in economic debates in this House since last March and I believe they merit reiteration.
The first of these is that this Government are not just running an economy but governing a country, with all that implies. The second point, which flows from the first, is that we are not only required to analyse correctly the problems facing the country and to identify the policies most likely to solve them but we are equally required to bring inspiration, credibility, determination and consistency to this task and to be seen to be doing so. The third and final point, and this has an immediate relevance to the question of the 1988 Estimates, is that the Government have never and do not now intend to cut public expenditure blindly across the board. The Government are determined to cut out all unnecessary expenditure and have submitted every item of expenditure, without exception, to rigorous scrutiny. There is clearly a level in certain areas beyond which reductions would cause hardship or injustice but short of that level we will regard no expenditure or interest as sacrosanct.
The study which the National Economic and Social Council published last year entitled A Strategy for Development was not only noteworthy for its analysis of the economic condition of the country, but also deserved particular attention because of the remarkable degree of consensus it revealed among the social partners. The integrated set of recommendations put forward in the NESC report to deal with our complex problems were welcomed and incorporated into our election programme, put before the people, backed by them and subsequently endorsed by the Taoiseach in this House on 10 March 1987.
The briefest of reviews of the Government's election programme shows that their promises in relation to mobilizing official resources in order to restore confidence and focus energies on developing untapped or under-utilized areas with growth potential have been carried out, and that the first steps along the road to recovery have been taken.
The recently agreed Programme for National Recovery not only provides further proof of the Government's credibility in the eyes of the social partners. It also demonstrates the determination of the Government to proceed along the lines which they had earlier set down and in a way that is compatible with their earlier promises and policy goals, thereby once more showing the consistency of their overall approach. I want to emphasise the importance of bringing our social partners along this road. That has been achieved. For the first time our social partners are fully involved in forward economic planning by the Government.
The Estimates we are now debating reflect in similar fashion the elements of credibility, determination and consistency to which I have just referred. I have no hesitation in saying that these Estimates contain unprecedented elements but the circumstances in which they are being presented are also unprecedented in their complexity and seriousness. These were ignored over the past five years by the previous Government because of their inherent incapacity to tackle the problem in this manner.
So far as my own Department are concerned, the Estimate has been curtailed, as in the case of all other Departments. The total amount agreed for the votes for Foreign Affairs and International Co-operation in 1988 represents a decrease of 9 per cent over the amount voted in 1987. That is practical evidence of applying the principles of which I have just spoken. Naturally this means that some desirable projects cannot be carried through in the coming year. However, I intend to ensure that Ireland will continue to be represented in the 66 countries with whom we have established diplomatic relations and that Ireland's voice is heard in international fora on the issues of continuing concern to us.
It will be necessary to reduce the level of activity in the field of development co-operation in Africa and elsewhere. I regret very much that Ireland's economic circumstances should have forced this step on us. We have been successful in building up a modest but worthwhile programme of aid to developing countries in recent years. I can assure the House that the Government remain committed to the maintenance and expansion of official development aid as soon as economic circumstances permit. Meanwhile, in 1988 the funds available will be sufficient to maintain a basic programme of assistance from Ireland to developing countries. Our commitments to existing projects will all be honoured, but it will not be possible to enter into new commitments. In line with this decision, there will also be a reduction in the level of our contributions to some international organisations engaged in development work. On the other hand, there will be a significant increase in our contribution to the European Development Fund operated through the Community.
As regards the organisation of my Department, there will be a contraction in our overseas representation. While I regret this, it is clear that the present situation requires us to streamline our operation and to concentrate our resources. Further economies will be effected in the administration of my Department by curtailing travel, reducing expenditure on official entertainment and on our information services and limiting the allowances paid to Irish diplomats abroad. The total number of staff will also be reduced, following the general policy on Civil Service numbers.
The priority must be the rationalization of many programmes and the replacement of others which have either outlived their usefulness or which we cannot now afford by activities which will concentrate energies on growth and development leading, in turn, to increased employment and the creation of wealth. All that makes common sense.
The Government's election programme and the recently agreed Programme for National Recovery clearly indicate areas with this potential. The realization of the potential requires the reorganisation of certain departmental and other functions in order to concentrate on areas such as food, fisheries, tourism, forestry, trade and marketing, science and technology, financial services, the promotion of investment, both indigenous and foreign and the building up of our industrial base in traditional and new fields for both the domestic and export markets. All of these areas present a broad and formidable challenge and represent the areas on which we have concentrated expenditure.
The results already in many of these areas are clearly visible. Interest rates and the rate of inflation have fallen dramatically and put us on a competitive basis with many of our trade competitors. The outward flow of investment funds has been reversed. This was a bedevilling factor during the period in office of the previous Government. Our trade balance is in record surplus. Tourism returns for this year are set to break previous records. The degree of interest shown by foreign and domestic companies in the financial services centre at the Custom House Docks site and the number of submissions made bear witness to the viability and vitality of this project and augurs well for its ultimate success.
These positive factors should not be interpreted as providing grounds for complacency. They do, however, indicate that Government policies are on the right lines and that we have our priorities right, which is important in the present climate. The point I would like to stress is that the areas of growth in employment have been identified and our resources will be committed in the most effective way to developing them, as well as to ensuring continued stability and harmony in the more general social and economic environment.
As Minister for Foreign Affairs I am particularly conscious also of the importance of a favourable external environment, particularly as our ability to continue economic growth is dependent to such an extent on export markets. Recent developments on the political and financial scene give ample notice that the interdependence of the world in such matters is an inescapable reality and that events taking place in one area can have direct and serious effects on matters closer to home. We are very aware of that at present when we see the volatility in the financial exchange markets.
Since this is the case, I and my Department will be making every effort, notwithstanding the reduction in our resources to which I referred earlier, to make sure that our contribution to the overall economic goals of the Government is fully maximised. There are a number of areas which will receive our particular attention.
This House will be aware of the special importance which our active and full participation in the activities and developments taking place in the European Community has at this time. The Programme for National Recovery clearly recognises the importance of the European Community dimension to the achievement of its aims. The basic policy outline of the Irish approach to the Community is not generally in dispute here. This will ensure that our objectives in the crucial negotiations facing the Government in the Community take full account of the aims of the programme. Equally, we aim to ensure that the outcome of these negotiations will help to underpin the aims of the programme, most importantly in the area of increasing employment opportunities.
This Government have already reaffirmed Ireland's commitment to the European Community and this has been supported by the majority of our people. We campaigned vigorously for the ratification of the Single European Act and our partners are aware of our commitment. Since taking office I have undertaken an intensive programme of contacts with our partners. So far I have visited three of the member states with whom we have excellent relations — Italy, Germany and Greece. I accompanied the President on his visit to the community institutions last week. I met the President of the European Parliament during his visit to Dublin and I will shortly receive the French Foreign Minister when he travels here. In my bilateral contacts and in my regular multilateral contacts with my colleagues in the Foreign Affairs Council, I have left them in no doubt as to the importance we attach to the community, both its future development and its contribution to the development of the Irish economy which is of vital interest to this country. We can help this vital interest by being Community-minded in a positive way as well as pursuing our national goals.
We regard the Delors Plan — initiated by the President of the Commission — and its aim of making a success of the Single European Act as one of the most important Community negotiations in recent years. The Community must have a stable and assured source of revenue if the ambitious objectives of the Single European Act are to be achieved. In its proposals the Commission has shown the Council very clearly the level of resources which will be required up to 1992 and the best means of mobilising that revenue.
At the Foreign Affairs Council on Monday I encouraged the Commission to persevere with its approach to developing what is called a fourth resource with an element of assessment of gross national product which will take into account the relative prosperity of member countries. I again stress how important it is that this approach should prevail because unless the capability of raising revenue in the community is widened there cannot be the required transfer of funds to areas such as Ireland which require a very real and positive increase in the allocation of structural funds under various mechanisms such as Regional and Social Funds.
As Deputies know, the Government attach primary importance to those aspects of the Delors Plan dealing with the reform of the Community's structural funds. These funds have a very significant role to play in the achievements of the aims of the Programme for National Recovery. Already by starting the process of moving to a programme basis for Irish applications for fund assistance, the Government have taken account of a fundamental aspect of the Delors Plan which is to get away from ad hoc decision-making in this area and to have a planned programme approach over a period of five years. This will indicate an overall strategy that can be implemented through the application of funds secured by a widening of the resources base to enable the Community to have the necessary revenue to provide for an expansion of the structural funds. Again, on Monday I emphasised that an increase in the financing of the funds on the scale proposed by the Commission, an increase in the amount the Community contributes to projects and a greater concentration of resources on regions such as Ireland, are vital components of new arrangements for the funds.
There are aspects of the Delors Plan which will require changes in elements of Community policy of interest to us. The Commission has proposed a greatly increased measure of control of spending. We are prepared to consider these proposals but only as part of an overall package — an indivisible whole as the conclusions of the last European Council said. It is important that implementation of the Single European Act under the Delors Plan be taken on an overall basis and that no one element is pursued to the detriment of another. It is important that account is taken of the implementation of this plan as an indivisible whole, including the creation of the internal market, allied to the transfer of funds and other positive aspects written into the Single European Act. We would not, as some of our partners appear to wish to do, regard this expenditure control objective as the exclusive aim of the current negotiations.
Another aspect is that there are basic social and economic aims that must be achieved within the overall framework of financial and budgetary disciplines. The outcome of the negotiations must, in our view, be a balanced one if there is to be a meaningful effort to make a success of the Single European Act. We are pursuing that course and, hopefully, we will prove successful at the Copenhagen Summit. For us that success will be measured by the contribution which the Delors Plan makes to the objectives of the Government as set out in the Programme for National Recovery.
For the Government it is essential that all aspects of policy contribute to the same end, the relaunching of the Irish economy on a new and confident path. We have faced up to the problems caused by the incoherence and the drift of the last five years. This has required hard decisions and we have not shirked those decisions, as the 1988 Estimates show. The European Community is a major factor in our overall policy framework. We have brought our approach to the Community into close alignment with our domestic policies and vice versa. From the new coherence which we have created will come a more relevant and productive relationship with the Community, our Community working to our benefit.
It is not my intention to go through all of the Government's other priorities in an exhaustive manner. That has been done by my colleagues. But there are one or two areas which I should like to elaborate on before concluding. The Custom House Docks Financial Services Centre will continue to be one of the items receiving my priority attention. The importance of this project, both in its own right and because of the scale of direct and indirect benefits which will flow from it across a number of employment, environmental and investment sectors, cannot be stressed too highly. I have already drawn its existence to the attention of potential German investors in Berlin and Bonn during my official visit to Germany at the beginning of the summer. More recently during my visit to the United States I had the opportunity of bringing it to the attention of substantial American investors in financial centres in Chicago, New York and Boston. I was encouraged by the degree of interest demonstrated in the project in both countries. I want to assure Deputies that I will continue to promote the financial services centre through the embassy network and at every suitable opportunity that presents itself.
A record trade surplus has been one of the most encouraging developments of recent times. The promotion of our exports which will help to build up our indigenous industries, and increase the numbers of people gainfully employed at home, will also be a priority for my Department. I propose to give that promotion a new economic thrust. I have already welcomed the greater emphasis that was envisaged in the election programme for our diplomatic missions in this regard, and I am happy to avail of this opportunity to do so again. The Department of Foreign Affairs, other Departments and State agencies concerned with employment and investment are carrying out a close examination to see how best our embassies can mesh into the economic development, export promotions and investment proposals. The embassies will contribute in different ways, depending on the countries where they represent Ireland, since the markets in which they operate offer varying potential and require different emphasis. The degree of interest by Irish exporters in relation to them can vary. We are carrying out an indepth examination covering every country where we are represented. The examination is being conducted in conjunction with other State agencies such as the IDA, CTT, other State bodies and private interests with a view to adopting a strategy particular to each country. Our ambassadors or consuls general will play their part with State, semi-State and private interests in promoting exports. The embassies can also help in the promotion of Ireland as an attractive and profitable location for foreign investment. Indeed, the retention of our preferential advantage in regard to exports within the Community offers the best inducement in this regard. The embassies are also helping, in conjunction with Bord Fáilte, to attract more tourists. They are highlighting our attractions as a tourist destination for European and American holidaymakers.
The evidence is that the realities of our economic situation have now sunk home and that the Government's firmness is creating the confidence that our problems can be resolved. Our people appreciate that they are getting positive leadership in the area of economic development and in the importance of the Government being firm in the pursuit of their economic aims. There is a confidence abroad that our economic aims can be achieved. There is a sense of purpose that the Government know where they are going. The agreement which has been worked out in negotiations with the social partners is both a reflection of this confidence and an important contribution to the shaping of our economic development in the coming years. It is based on the realities of our situation, of what we can afford to give ourselves, and is a signal to everyone interested in our economy that we are serious about tackling our problems, increasing our competitiveness and creating the basis on which the problem of unemployment can be attacked. The Estimates the Taoiseach has introduced are a realistic assessment of where we now stand, of what we can now do and of how we can begin to move forward towards our long term goals. It is for those reasons that we should welcome the Estimates and I invite the Dáil to approve them in that spirit.
Mr. Boland rose.
On a point of information, my clear understanding is that the next contribution to this debate should come from the PD benches. I am the speaker nominated by my party to fill that spot.
The Chair must advise the Deputy that she is completely out of order. I must ask her to resume her seat and allow Deputy Boland make his contribution.
Is it the Chair's ruling that the debate goes from the Government benches to the Fine Gael benches?
The Deputy is completely out of order. I am surprised at a Deputy who would normally be indicating regard for propriety in the House. The Chair is advising the Deputy that she is completely out of order and is asking her to resume her seat.
My regard for propriety is only exceeded by my regard for freedom of speech and for a system that was clearly worked out by the Whips in relation to the course of a debate in the House.
The Deputy's primary regard is not accommodated in the Standing Orders of the House and I ask her to resume her seat. Deputy Boland should proceed with his contribution.
I have no intention of resuming my seat. This debate has continued backwards and forwards, ping pong, from Government to main Opposition, from Fianna Fáil to the Tallaght branch of the Fianna Fáil Party. I have no intention of resuming my seat and allowing that to happen. My clear indication is that the seventh speaker in the debate today was to be a member of the Progressive Democrats' Party. I am seeking an explanation as to why that is not so. If I am given a satisfactory explanation I will certainly resume my seat without any further questions or comment. That is quite fair.
Will the Deputy kindly resume her seat? I am calling Deputy Boland.
I cannot repeat exactly the closing remarks made by the Tánaiste but they were to the effect that the Estimates before the House represent realism and an assessment of where we are and what we can achieve. I cannot help thinking that if one compares the utterances of the Tánaiste and Ministers this week and their remarks over the past number of weeks with their equivalent statements when they were in Opposition exactly a year ago, it is perhaps little wonder that the general public are cynical and disheartened about politics and politicians generally.
It seems to be an accepted way of political life that what one says in Opposition places no obligation on what one does in Government. It seems that the remarks and commitments made in Opposition are of no relevance to the conduct of those same people when they assume office. The attaining of office is all, the ultimate objective, and in achieving it, any promise, misrepresentation or straying from the truth can be taken to the ultimate degree as long as it achieves that aim. What one does having attained power need bear no relationship to what one proclaimed to be the truth in Opposition. That is the kind of Administration who are running the country. Is it any wonder that the public have become so cynical in regard to politicians? Many of the remarks made about politicians have been caused by the shameful abuse of politics and of what being a politician and a public representative ought to mean.
The Book of Estimates is another example because it is essentially flawed. There is an attempt at enormous deception at page V where various Votes reflect the pay savings in 1988 from expenditure reduction measures and the additional on going pension costs arising from redundancies. However, it does not include provision for the costs incurred as a result of redundancy payments on foot of the measures inherent in the Book of Estimates which could result in 25,000 public servants being invited to take voluntary redundancy or, perhaps, to have redundancy forced on them during 1988.
The Book of Estimates reflects the expected saving from public servants being taken off the payroll but it does not represent the genuine state of affairs. No matter what way the Government eventually manage to fund the cost of redundancy payments, whether through some special sweetheart deal with the Central Bank, the cost of that deal must be reflected ultimately in the national accounts. It cannot be reflected except through the current budget. Consequently, the claims being made that the current budget deficit figure is correct are flawed and inaccurate because they do not include the figure which is necessary for redundancy terms which could be in the region of £120 million; indeed it could well be £150 million. In a casual remark, the Government have removed that cost from the Book of Estimates while including the effect of the removal from the payroll of the people concerned.
The Estimates are essentially phoney figures because, although they include a provision for a reduction in staff through voluntary redundancy, they do not include the cost of that redundancy. It is a flawed Estimate containing phoney figures. I do not know why the Estimates were produced in this manner. Perhaps it was an attempt to impress the financial markets or to induce some form of confidence in the Government's attitude in financial centres. However, it will not have that effect because anyone who gives careful attention to these Estimates will realise their flawed nature. They will also worry about the fact that, if Estimates are prepared on that basis now, in what other way in their day-to-day operation will this Administration attempt to doctor the figures to present the best possible figures?
In many other respects the Estimates clearly show the unplanned, ill-thought-out and counterproductive nature of many of the reductions outlined and proposed. There has been much comment already on the fact that, in their effort to cut out dead wood, the Government will merely damage — or perhaps destroy — much of the healthy growth inherent in the public service which has the capacity to promote growth in the economy. Why is it necessary to have this debate? Why is the entire Book of Estimates being debated on a "take note" motion when there is still an obligation for the House to consider each Estimate and to adopt it seriatim during 1988? This is merely a public relations exercise by the Government, to have a debate on the publication of the Book of Estimates without inviting the House to adopt those Estimates.
There are many hidden messages in the Estimates which are not clear to backbenchers, Government supporters and the general public. The Government obviously hope that by conducting this phoney debate on phoney Estimates the discussion on the measures will be behind them when the awful implication of so many of the proposals is realised by the general public. Perhaps the Government think that this debate will help them to withstand the onslaught of criticism which is bound to emerge.
It is also clear from a perusal of the Book of Estimates that there is no vestige of hope, incentive or suggestion that recovery is in the offing. Indeed, it is a cynical manipulation of words to publish the Book of Estimates simultaneously with the Programme for National Recovery. In no way could recovery be further from the message that is spelled out starkly in the cold financial tables that run through this Book of Estimates. Again in a cynical manipulation of truth we hear extraordinary claims about improving trade balances, exports and interest rates, all apparently occurring in the last six months in a miraculous change about since the advent of the new Government, if one were to believe the Taoiseach.
It is clear to anybody who understands how these things work that what has happened over the last six months has been the steady progression of the trends that were put in place through the policies of the last Government which have been unfolding steadily since 1985. I do not think that the financial markets are going to be impressed by claims from the Government in relation to the inevitable consequence of the policies of their predecessors or in relation to interest rates which were in many ways the consequences of international trends and the trend of money rates on the British market which has such a dominant influence on our interest rates here at home.
I have been intrigued and not a little amused at the uncomfortable posture of some of those who would regard themselves as prominent trade union leaders, who have participated with the Government in the production of this sham Programme for National Recovery which is nothing more than a public service pay agreement dressed up not as lamb in sheep's clothing but rather as lamb in mutton's clothing. It is an extraordinary state of affairs when trade union leaders will trade away the jobs of 25,000 of their members in return for apparently securing a pay increase on behalf of the remainder. If a genuine programme for national recovery was being prepared and if the participants in the discussions for that programme were genuine in their aspirations, would it not have been more realistic, more in the national interest and better for all of those concerned if instead, a programme for pay moderation, for maintaining pay levels at their present rate over the period, had been negotiated in the interest of those 25,000 who are now to be invited to be thrown on the unemployment scrap heap?
The interest of the national finances, of saving the apparent pay increases which otherwise will emerge over the lifetime of the programme and of saving many of the costs which have not yet been identified in relation to the redundancy terms which will have to be offered, is what I would have thought brave, realistic trade union leaders and brave, realistic Government members in a Programme for National Recovery might have addressed rather than trading the jobs of tens of thousands in return for growing a sop of, in individual terms, minor increases but, in the global context of their effect upon the public finances, considerable cost-effective increases through the granting of these pay rounds. I am inclined to suspect that the time is not long away before there will be major upheavels within the trade union movement at the attitude and conduct of some of those who now apparently are the leaders of that movement because of their participation and because of what they sold out in the course of those discussions.
The effect of the agreement which they negotiated with the Government, apparently on the road to recovery, will cost in increased terms through its various provisions some £200 million during next year yet the total savings, will be a net £176 million next year, and consider the dreadful effect on the current budget. On the other side the cost of what was negotiated with the unions will be £200 million just to give pay increases and other small increases in various other services to those still in employment. Is that really going to improve the public finances? That does not include the £150 million cost of paying out the voluntary redundancy to those who are being thrown on the sacrificial altar for the sake of the publication of these documents.
I suspect that the remainder at work, especially the PAYE workers, will realise just how illusory the pay increases are and how illusory the undertakings about tax concessions apparently given are when they realise that there is no concession of indexation of tax bands during the time of the national programme. In effect the normal continuing clawback of tax will mean that these increases and whatever tax concessions are contained within the programme without indexation will leave each individual worse off in net terms. The 25,000 of their public service colleagues out of work will entail a continuing, ongoing cost on those at work to fund unemployment and social welfare payments to those who have been thrown on the scrap heap.
There are other nasty parts of the Book of Estimates that perhaps have not been given the attention they ought to receive. Naturally, the monumental, gigantic, gargantuan reductions in areas like education, health and the environment have received most of the attention. Other things have been done as well. I call it "the book within the book"; more than one book was written. There is more than one objective in this Book of Estimates. The book within the book was a rather cynical, nasty, razor blade splitting exercise, not a chopping or a swingeing cut with a multi-million pounds effect as in the other big spending Estimates. It related to small operations, to institutions which provided vital services for the public but which were independent in their operation. They were not within the direct ministerial control or the control of the Civil Service. They were not answerable to the Department of Finance and were a thorn in the side of the Administration. Cynically the opportunity has been taken in this book to damage or do away with those institutions. I would like to give a few examples.
One of the undoubted successes in recent years has been the operation of the Office of the Ombudsman established some three or four years ago. The Ombudsman has already shown clearly how there was a need for that office and how he has been able to redress wrongs, point to maladministration and remedy the grievances of very many members of the general public. He commenced his operations from a national office in Dublin and at the time of his appointment I encouraged him to endeavour as much as possible to establish regional offices, to visit the regions occasionally, to advertise his presence there and to make himself and his staff available to the general public at regional centres throughout the country. He has done all that so successfully that the Chairman of BTE admitted before a parliamentary committee here a short few weeks ago that had it not been for the report of the Ombudsman, after I had extended his writ to include Bord Telecom and An Post, Bord Telecom would not now be installing an itemised billing service. The force of the Ombudsman's report had persuaded Bord Telecom Éireann that that was what the public demanded. That office has been a resounding success in resolving large matters and in remedying the wrongs of the elderly pensioner, the small farmer in rural Ireland and the person of no substance who felt that they had no other way of seeing their deceit by the administration quashed.
It is not a costly operation. It cost £675,000 to run the office this year. Are we going to achieve national recovery by trying to save money on a Vote of that size? The cost cutting on that Vote was not to achieve national recovery; it was to settle scores. Some people and some parts of the administration never wanted an Ombudsman. They felt he would be a difficult fellow and could cause problems for them. He could show up that they can make mistakes, force them to remedy wrongs and they would have to admit that they are not always perfect and not answerable to the administration or the Department of Finance but answerable only to the Houses of the Oireachtas.
What did they do? They reduced by 16 per cent from £576,000 to £482,000 the money to provide the salaries for the investigators of the Ombudsman's office. They said: Look at it carefully lads and make sure to reduce it by just enough so that he will have to shed more than half his investigators. That will soften his cough and he will not be able to continue the ordinary operation of his office; he will not be able to send his investigators out to give comfort and justice to people throughout the length and breadth of the country and in case he has any aspirations to try to do it cut his very modest travel budget of £36,000 by £10,000 and give him £26,000 only this year. National recovery was the purpose for doing that.
In case he might advertise to explain to people the availability of his service they cut the £10,000 he had for doing that last year to £3,000. National recovery will not be achieved by saving £7,000 to stop the Ombudsman from advising people of his existence. He spent £9,000 this year on legal advice in very difficult cases to be sure of his ground and in complex cases when he needed to prove that he was right and had legal authority for continuing his battle with the administration. These were the cases that really embarrassed the administration so they cut his budget for his legal advice from £9,000 to £2,000. It was not cut from £900 million, £9 million, £900,000 or £90,000 but from £9,000. They felt that should settle him.
I do not think that that will either settle the Ombudsman or impress the public. It certainly will not lead to national recovery no more than will the abolition of the National Social Services Board lead to national recovery. That board funded and provided the myriad of information necessary for community advice centres to help people to prepare forms and applications to get their own justice and entitlements from the administration. That cost £580,000 only. It enabled the ordinary man or woman in the street or the person with no substance to claim their entitlements and to do so without having to visit a politician's clinic. They said: "Let us get them in this exercise as well; let us hide all of that underneath the umbrella of the need for fiscal rectitude; let us get rid of any independent body that could be a thorn in our side; let us scrap An Foras Forbartha because they are embarrassing us by advertising that there are increasing levels of pollution and worse again they are the reporting body to the EC on pollution levels in this country; let us have a go at them because they are not under direct ministerial control and we can get at them inside the broad umbrella of the need for cuts; let us scrap the Health Education Bureau because they advise people on how to have a healthier life style and claim their health entitlements; let us do away with anything that embarrasses the lads or the administration; for a paltry few million pounds let us do away with the various independent bodies that were set up by far sighted Governments to provide succour, comfort and justice to the ordinary man in the street; let us foul up the improved promotion system within the Civil Service by not scrapping the top level appointments commission but in future they will have to give us three names instead of one so that we will always be able to make sure that there is a lad in the Department who will always be amenable to our interests and we will not any longer be put upon by having to have the best name put forward and appointed; let us scrap the Dublin Streets Commission because it was set up too near to the memory of the last administration and had too many good ideas and perhaps the last administration might get some credit for what they did; and let us put two or three more directors into the Customs House Docks Authority to make sure that they do our will and bidding."
There are many other messages in the Book of Estimates in addition to the ones that have been spoken about here. Nevertheless they are important messages and should be debated by the Dáil. I guarantee that this House will discuss every Estimate that is a razor blade, score settling exercise that was cynically carried out in the book within the book.
What we are watching is the demise of the construction industry. The Government should stop blabbering about the Custom House Docks Authority. We set up the Custom House Docks Authority and we know it is a good idea. We know it is going to be very successful. They should stop telling the entire construction industry from Moville to Bunclody that their future lies in the jobs in the Custom House Docks area.
The overall capital budget has been reduced by 22 per cent for next year. We are witnessing the end of the construction industry and the prospect that a public stone will not be put upon a public stone next year. When we were in Government we worried whenever we had to reduce the public capital programme because we knew we were damaging social development and occasionally the provision of economic infrastructure. Sometimes constraints were placed upon us but we fought hard to maintain as high as possible the level of the capital programme. No such effort has been made this year by the Government. Enormous swingeing, unthought out cuts have run right across the capital programme. The Minister responsible bears a very heavy burden of guilt for not defending the interests of the capital programme and the social and economic infrastructure of this country. If reductions of that order were deemed necessary they should have fallen more heavily on the current side.
The national road building programme is in tatters. The Minister now proposes to replace a three year programme that expires at the end of this year with a 20 year blue print. He might as well have produced a 100 year blue print. A 20 year blue print means nothing. It is absolutely useless. If that is to be the approach to capital spending then we can understand why there is not any real planning for work to be done. There may be aspirational planning in the hope that that will appease some of the stronger critics.
Almost £100 million between current and capital spending, is to be taken out of the local government system. The rate support grant will be reduced by 11 per cent, plus 2 to 3 per cent which would be necessary to continue in real terms the scale of this year's spending. On the current side for the local authorities themselves the guts of £100 million is to be taken this year between current and capital out of the local government system. The rates support grant is reduced by 12 per cent plus the 2 per cent to 3 per cent which would be necessary to keep things in operation.
I want to make it clear that Fianna Fáil gained control of the vast majority of local authorities two years ago by a policy of deception. They promised people they would remove and abolish service charges and that they would maintain and increase services. They gained control of Government earlier this year largely on the same programme. They now have control of the local authorities and they have a Fianna Fáil Minister who is taking £100 million out of the local government system for next year. Those same Fianna Fáil councillors who have control of those authorities have the obligation now to prepare estimates which will guarantee the continuation of the essential services throughout the country. They have an undertaking from the Minister that he is satisfied they have the capacity to do that.
I regard it as being the obligation of those Fianna Fáil councillors to prepare those estimates. They need not expect, that the minority parties, or the Fine Gael councillors, should, as they have done in the past, work at the preparation and the adoption of the estimates. For too long Fianna Fáil local authority members wriggled out of their responsibilities, were missing from estimates meetings and left to the others the odious task of adopting the estimates if they contained anything but good news. This year the Fianna Fáil Party control all but a small handful of local authorities. This year the Fianna Fáil councillors will adopt the estimates based on the monetary provisions being made available by their Minister.
Will the Deputy please bring his remarks to a close as his time is up.
I conclude by making a brief reference to one other matter. The thrust of much of what has been said by the Government is to suggest to people that in these tough times the tough will get going, the healthy will stay living and the strong will survive. There is an unfortunate trend to lead people to the belief that it is every man for himself and to cast the weakest, the under-privileged, the poor and the sick to one side to fight their own corner. The attitude is that is the way the Government are doing it and that is the way you should do it in your own personal life. That is a recipe for the preparation of an uncaring society. The Government would do well in the interests of the development of society to think more carefully about their approach in that regard. If, instead of national recovery we have the development of an uncaring society, this House will have done the country a great disservice.
I am pleased to have the opportunity to speak on the Government's motion noting the 1988 Estimates. The Estimates for all the various Departments are before the House now in October for a full and detailed debate. The previous Coalition Government, promised that but it did not work out mainly, I suppose, because they could not agree among themselves. The position is that we have placed the Estimates before the House for a full debate.
However, before getting down to the details for my Department, I would like to refer to the overall background to the Estimates which must be seen as part of the Government's strategy for the restoration of the public finances to a sound base so that the country can develop at a steady speed for the benefit of everybody. When the Government took office in March of this year they found the public finances in a sorry state. After four and a half years of talking by the previous Government about the need to cut back public expenditure, we quickly learned that they had never grasped the nettle of dealing with the problem. The new Fianna Fáil Government immediately faced up to the stark realities of our economic difficulties and set about the task of reducing public expenditure, creating the conditions necessary to stimulate private investment and regenerating confidence. The revised 1987 Estimates and the Government's first budget made it clear to everybody that we would meet our problems head-on without fear of the possible effects on our popularity in the short term. Hence we ended schemes which the country could not afford and reduced expenditure on others by confining their scope to essential needs.
The general acceptance of the need for the reductions in expenditure signalled in this year's budget, coupled with the marked improvement in the climate for private investment in response to interest rate reductions, have assisted the Government in their determination to carry through the measures needed to put the economy back on its feet. The 1988 Estimates, which we are now debating, represent the second step in restoring order to the public finances and are the culmination of a process of reviewing all areas of public expenditure which began in May last. Of course, there are items in these Estimates which will not be universally accepted. The process of getting back to living within one's means, whether for a family, company or the State, is never painless. The Government were faced with some difficult choices in completing the Estimates now before the House and they made the necessary but hard decisions in the national interest.
Unfortunately the Labour Party still persist in thinking that the debt problem can be solved without some curtailment of expenditure, even if there is no urgent need for such expenditure. The other parties seem to be trying to have the best of both worlds, so to speak — agreeing in principle with the Government but, at the same time, trying to oppose sensible measures such as the Programme for National Recovery. They cannot have it both ways. I urge them to give the Government full support in the difficult task ahead.
The Government have secured general acceptance of the need to curtail public expenditure in the Programme for National Recovery agreed with the social parties. This programme represents a great achievement for all those concerned with its completion. It lays the ground work for industrial peace and stability in the public sector for the next three years. This is vital for economic planning in order to achieve the stabilisation of the debt-GNP ratio. Our next task is to demonstrate to the public that in reducing expenditure we can ensure that essential services are maintained and that the less privileged groups in our society are not adversely affected. A noteworthy part of the Programme for National Recovery is the undertaking by the Government to protect the most vulnerable sections of the population by maintaining the overall value of social benefits and, within the resources available, to consider special provision for greater increases for those receiving the lowest payments. I know from my experience that the reductions required are being done as fairly as possible.
A notable feature of the 1988 Estimates, which will help the various bodies involved with the implementation of Government policy, is the fact that the Estimates have been published very early this year. This is in sharp contrast to the failure of the Coalition Government to produce the Book of Estimates at an early date despite their declared intentions to do so. It was declared often enough in the House while they were in office but they failed to do so.
Many commentators have commented on the large reductions in the housing provision in the Public Capital Programme because they amount to some £116 million or about 47 per cent of the total reduction in the PCP and in particular their effects on the construction industry.
First of all let me say a few words about the construction industry. The decline in private investment in construction in recent years has reflected general economic difficulties and oversupply in the marketplace. One of the key objectives of Government economic policy is to create economic and financial conditions conducive to private investment in construction as well as other industries. An essential element of this strategy is a reduction in public expenditure in order to reduce the Exchequer borrowing requirement and free resources for more productive private sector investment. If there is any doubt about the wisdom of this strategy, it is worth remembering that the continual fall in construction output in recent years took place against the backdrop of historically high levels of public investment and grants schemes. Clearly, any long run improvement in the fortunes of the construction industry depends on prospects for private investment and these depend on economic conditions generally.
Secondly, I would like to comment on the housing provisions for 1988. Informed commentators have noted that there would have been a large reduction in the PCP housing allocation in 1988 as a result of the March budget decision to terminate the house improvement grant and £5,000 grant scheme. In fact, the reduction for these two grants in 1988 as against the 1987 provision is £61 million or nearly 25 per cent of the total PCP reduction next year. Also the provisions for local authority housing and for the public house purchase loan schemes must reflect the position on the ground having regard to genuine need and demand.
The provision for new house grants in 1988 is £16 million which is an increase of £2 million over the 1987 provision. In addition to providing for payment of the £2,000 first time purchasers grants, the Estimate also includes provision for the £2,250 "builders" grant. The first instalments of these grants were due for payment on 1 October 1987 and the second and final instalments will fall due for payment throughout 1988.
The Government will, of course, also continue to make adequate provision for the payment of house improvement grants. The £100 million provided in 1987 to honour commitments in relation to the house improvement grant scheme will be adequate to meet payments arising this year. Payments of the grant are keeping pace with the certificates of payment being received in the Department and are up to date. Activity under this scheme will continue next year at a declining level and the provision of £43 million will be adequate to meet payments.
I would like to put on record before leaving the private housing side that the Government will be providing £23 million next year for payments arising under the mortgage subsidy scheme. This provision is a substantial sum in these times of scarce financial resources and it seems to have escaped media notice probably because it is current expenditure. Deputies will be aware that this scheme was terminated by the previous Government in October 1986 but the final date for receipt of applications was extended on a number of occasions with the final closing date on 6 March 1987.
Turning to local authority housing, the cost of which will be £259 million in 1988, £209 million is being provided to cover the cost of loan charges incurred by local authorities on their borrowings for the provision of houses for letting and reflects mainly long term commitments. Deputies will be aware that there will be changes in the method of dealing with this expenditure next year after the Local Loans Fund (Amendment) Bill, 1987, is enacted. In 1988 capital grants will be substituted for subsidisable local loans fund loans for local authority housing construction and other capital works. The capital provision for the 1988 local authority housing programme has been determined at £50 million to take account of the reduction in the demand for local authority housing in recent years. As in previous years this sum also includes provision for residential caravan parks for travellers and the special remedial works scheme for certain local authority housing estates.
Deputies are aware of the decline in the demand for local authority housing. Many applicants throughout the country can now pick and choose from many housing estates what house they will take. They can also wait until a house becomes available in another town or another area. In the early eighties the Fianna Fáil Government undertook a major housing programme. I was in the Department when we came to office in 1977 and we introduced a major local authority housing plan, bringing local authority housing to all parts of the country. I am glad that programme has been a great success and now we are in the position where many applicants can pick and choose their houses.
The total amount allocated for remedial works this year is £10 million, an increase of £3 million. That will enable the necessary repairs to be carried out to a number of houses so that they can be made habitable, and that is also to be welcomed. Another scheme introduced by the Fianna Fáil Government was housing aid for the elderly. It is an indication of the Government's thoughtful approach in framing these Estimates that this year's provision of £1.5 million for the task force providing housing aid for the elderly will be repeated in 1988. In an informal and enlightened manner, this task force has improved the housing conditions of over 7,000 elderly persons since it was set up in 1982.
Considerable progress has been made on the road programme this year. Several major schemes are in progress throughout the country and local authorities are also undertaking a big programme of improvement works on regional and county roads. Money is now needed to improve the county road network throughout the country and I hope the necessary resources will be provided. Local authorities will be informed early next month of their road allocations and they will be able to plan their overall road programme accordingly.
Will the Minister bring his remarks to a close? I am now obliged to call the Minister for Finance to reply to this debate.
I would like to refer to other matters but time does not allow it. I will conclude my remarks by referring to urban affairs, for which I have special responsibility. I shall announce very shortly proposals in that regard.
We have had four days of Dáil time to debate and discuss this very important motion pertaining to the 1988 Estimates. It has been a good, healthy debate with a wide exchange of views. I would venture to say it is one of the few debates in the history of this House in which the Taoiseach and all Cabinet Ministers have made a contribution and have given full and frank information on the expenditure for the year ahead, well in advance of the beginning of that financial year.
I welcome the acceptance by a majority in the House that the Government's fiscal policy is on the right lines, that public expenditure should be reduced and that the size of the savings announced is about right. I hope that this measure of agreement will be reflected in the approach of the parties to the debates on the individual Estimates and to the legislative and other steps that will be put before the Dáil by the Government in order to implement the decisions underlying the 1988 Estimates.
The high degree of consensus in the House is matched by that which the Government have reached with the social partners in the recent Programme for National Recovery. The two together show that the community generally accepts that we face major economic problems, that they have to be tackled now, necessarily by unpalatable steps, and that there is no easy way out. On the key economic questions, the Government, a majority of the Dáil, and the social partners, are in broad agreement, and this is highly important. It provides an essential basis for pressing on to face, as a united community, the further difficult choices which must be made over the coming months and years. No nation could hope to overcome problems of the scale we face without a large measure of agreement in the community on the nature of the problems, their causes and the ways to overcome them.
We set out in our pre-election programme our conviction that a consensus with the social partners is an essential element in the economic development of this country. We undertook to create a forum in which the social partners could negotiate the terms of a national plan for recovery. We believed, and still believe, that it is only by confronting economic problems together in this comprehensive way that lasting solutions can be found and made to work. The Programme for National Recovery negotiated with the social partners is the outcome of exhaustive consultations and it establishes a broad national consensus on how to deal with our pressing immediate problems and how to capitalise on the development opportunities which will present themselves as the economy is revitalised.
We realise, and I think all parties realise, that no Government acting alone can resolve the economic and social problems this country faces. Adverse external developments, excessive pay increases, or the pursuit by interest groups of their aims irrespective of the national interest can make unattainable the aims of the best designed economic policy. Part of the cause of our present difficulties has been exaggerated expectations of what a Government can do, leading to excessive commitments by Government, with appalling financial consequences.
Prudent financial management by Government is essential to further economic development, confidence and growth. No set of sectoral development initiatives no matter how well designed, can make up for Government financial mismanagement. Such mismanagement penetrates every part of the economic system. Its effects are felt on the competitiveness of the traded sectors of the economy, the tax bill of every taxpayer, personal or corporate, high interest rates and perhaps most important of all, the view which economic agents, here and abroad, take of the country's future. Unless Government finances are properly managed, lasting economic growth in this or any country cannot be achieved.
Before going any further, I would like to outline briefly the state of the public finances inherited by the Government when they took office last March.
In 1986, the current budget deficit had reached a record level in both cash terms — £1,395 million — and as a percentage of GNP — 8.6 per cent. This appalling performance in 1986 was the culmination of the progressive deterioration in the public finances under all Governments since 1973, the last year in which there was a balanced current budget.
Consider the strengths of the economy in 1972-73. Total non-capital expenditure-supply services and Central Fund — was 29 per cent of GNP. The national debt was 59 per cent of GNP and debt service costs were only 6 per cent of GNP. Most important of all, unemployment was under 70,000.
By 1986, total non-capital expenditure has reached 50 per cent of GNP. The national debt had increased to 150 per cent of GNP and debt service costs had risen to 12 per cent of GNP. Unemployment had reached almost a quarter of a million. A litany of misery is the only way that that could be described.
The enormous growth in the numbers out of work over the period shows that massively increased public expenditure failed to prevent unemployment rising. Indeed, in recent years, over-spending has been a major cause of the economic difficulties which have worsened our unemployment situation.
It is now generally accepted that the poor performance of the economy in recent years is largely the result of the ineffectiveness of the budgetary and economic policies pursued over a long period. While the balance of payments position on current account has improved considerably and inflation has been brought back to very low levels, our dismal record on economic growth and employment is clear evidence that the balance and make-up of policy has been inappropriate and generally deficient. The facts speak for themselves. The level of non-agricultural employment at mid-April 1986 was 46,000 below that at mid-April 1982. Over the same period, the number categorised as unemployed on a labour force survey basis increased by 80,000. The real level of GNP in Ireland fell in four out of the last five years. Overall, Ireland's GNP fell over the period 1982-86 by about 1 per cent per year.
By contrast, the economies in the OECD area as a whole — that is, in the industrial world generally — grew, on average, by over 2½ per cent per year during the period 1982-86 and they experienced an overall increase of 5 per cent or 16½ million people in the number at work. Clearly, while the international economic climate has not been wholly favourable, a prime cause of our economic stagnation is to be found in our own behaviour as a community and in our economic policies.
Our poor growth and employment performance might, in some sense, be excused if the budgetary situation had improved. However, as I have said, there was no such improvement, expenditure continued to increase and, as a result, the level of the national debt escalated. These developments led to a marked weakening of confidence in the economy, with adverse consequences for interest rates and investment.
This Government's priority, on coming into office, was to reverse this economic decline by making the changes which would enable Ireland to benefit from the opportunities for growth which exist.
To do so, we had to start at the root of the problem — excessive public expenditure. We did so knowing that most public services are, in themselves, beneficial to society. However, public expenditure is often a consumer, not a generator of wealth. We had reached the stage where, because of its effects on taxation and interest rates, the level of expenditure was choking off our capacity, as a nation, to create growth and wealth. To safeguard the future of our nation's public services we have no option but to make major savings in expenditure now.
The Government are committed to restoring budgetary stability, to efficient, cost-effective public expenditure, to improving competitiveness, maintaining the stability of the exchange rate within the European Monetary System and actively pursuing development opportunities throughout the economy.
The financial framework in the Government's pre-election programme indicated that the excessive size of the current budget deficit was the primary cause of unsustainable levels of borrowing and high interest rates, that the Government would slow down and in due course reverse the growth of national debt as a percentage of GNP, and that Government expenditure would be contained in real terms at or below the 1986 expenditure levels measured as a percentage of GNP.
The framework was consistent with the strategy and principles outlined by the National Economic and Social Council in their report entitled A Strategy for Development 1986-1990 which has been broadly accepted by the Government. The report was quite explicit on the need to curtail expenditure. I will quote from it.
Public spending reductions are therefore the most appropriate means of restoring order to the public finances if the encouragement of strong and sustainable growth is to be part of the medium term strategy. In the Council's view, the scale of the public spending reductions necessary is such that any savings arising from increased productivity, greater programme efficiency and better management will make only a partial contribution in the context of the overall adjustment that is likely to be required.
In other words, the council accepted that some spending programmes would have to be dropped, or significantly curtailed.
This strategy, the NESC agreed, offers the only realistic prospect of getting the economy onto a higher and sustainable growth path over the medium term.
I introduced the 1987 Budget on 31 March three weeks after the Government came into office. After making as searching as possible an examination of all Departmental spending, the Government reduced further the level of non-capital expenditure from the £210 million proposed in the 1987 abridged Estimates volume produced in January by the previous Government to almost £250 million. Capital expenditure allocations, too, were reduced by £80 million between January and March.
The budget's expenditure reductions, together with the strong and equitable measures taken to increase tax revenue, ensured that the 1987 budget was a milestone in our recent financial history.
Settling the Estimates for a year is only part of the task. The next, equally important step, is to stay within the allocations decided. I am glad that the 1987 budget is on target. The House may rest assured that I and the Government are absolutely determined that this will remain the position at the end of the year. This, too, is a departure from the all to frequent overruns of the past.
The House will be pleased to know that overall economic performance so far in 1987 is encouraging. In contrast to 1986 when GNP fell, real growth of about 1½ to 2 per cent is now in prospect this year as compared with the 1 per cent forecast at budget time. When we made that forecast in March of this year we were told that 1 per cent was too ambitious, that it would never be achieved and that there would be a decline in growth. Nevertheless now independent commentators are telling us that it could be not only 1 per cent, but 1½ per cent or 1¾ per cent.
The trend in agriculture, in tourism and in some sectors of industry has been encouraging. The economy as a whole has responded positively to Government policies. We have seen falling interest rates, lower inflation and improved competitiveness. Exports are buoyant, the trade surplus is increasing and there is a strengthening of investment in plant and machinery.
It was a crucial objective of the 1987 budget to convince all concerned of the Government's unshakeable resolve to reduce Exchequer borrowing, so as to bring about conditions in which the high interest rates of late 1986 and early 1987 could fall. This objective has been achieved: there has been a transformation of conditions in the financial markets. As a result of this new confidence the massive outflow of funds has been halted and substantial inflows of capital have occurred; the liquidity of the banking system has improved dramatically and the Central Bank has been able to unwind its support to the markets; the prime overdraft rate of the Associated Banks has fallen by almost five percentage points, bringing it to its lowest level for close on ten years and the 1987 Exchequer borrowing requirement was fully funded by the end of September.
Our interest rates are, of course, still too high in nominal and in real terms, but this is a problem we share to some extent with most of our main trading partners. I am convinced that, had it not been for the disturbances in international financial markets in recent weeks, a further fall in our domestic interest rates would have already taken place. As soon as the international climate improves — and I hope, in our interests and those of the world economy as a whole, that this will not be long delayed — we should be able to resume progress in getting our rates down.
Inflation has continued to moderate, from an average of almost 4 per cent in 1986 to a rate of 3 per cent for the first three quarters of this year. In contrast to the deterioration in competitiveness in 1986, an improvement in this area is expected this year.
The main impetus to growth this year is coming from the export sector. Exports have risen in volume terms by 13 per cent in the first nine months of the year compared with the corresponding period of 1986. There has been strong growth in industrial production which up to end-July had shown an increase of over 8 per cent. A particularly satisfactory feature of the export and industrial production performance is the improving trend in the indigenous sectors. Investment in plant and equipment, the basis of further advances in production and exports, has recovered strongly. The trade surplus will increase further to over £1,000 million, compared with £560 million in 1986. On foot of this, the current account deficit will come down to less than 1 per cent of GNP, compared with 2 per cent last year.
This year's solid economic performance is particularly noteworthy given the scale of the short term adverse impact on demand of the 1987 budgetary measures. It must be pointed out, however, that domestic demand remains weak and that it seems unlikely to recover in 1988 although personal consumption may continue to show some growth.
The Government last May initiated an indepth review of all spending programmes. It was carried out separately from the normal annual Estimates process in order to enable a coherent examination of overall expenditure priorities. The aim was to achieve the maximum level of savings while preserving an adequate level of key services. The success of the spending reviews meant that the 1988 Estimates could be published well in advance of the usual time. The Government decided, accordingly, to do so in order to emphasise their absolute commitment to their policy of restoring order to the public finances. Early publication was also designed to give this House an opportunity — indeed a unique opportunity — to examine the Government's public expenditure measures well before the budget. I appreciate the acknowledgment by many Deputies, notably Deputy McDowell, that this represents an important new departure in the management of our public finances.
Looking at the 1988 Estimates, it is clear that the Government have succeeded in their main objective of finally stopping the upward spiral in public expenditure and have reduced expenditure — in cash terms — for the first time in almost 30 years. We have managed to make major savings — £285 million non-capital and £200 million capital — while ensuring that an adequate level of services is maintained particularly for those dependent on social welfare.
The overall full-year effect of the non-capital reductions made in the 1987 budget and the 1988 Estimates combined has been to reduce the level of expenditure by about £650 million below what would have been required in 1988 to maintain services at their pre-reduction 1986 levels. These reductions are split roughly equally between the 1987 and 1988 measures. This represents a cut of 10 per cent in the real level of non-capital supply services expenditure over a two-year period and is thus a massive reversal of previous — unsustainable — trends. Few, if any other countries have succeeded in making savings of this magnitude in such a short term. But then, in few of them, was the budgetary imbalance as great as here.
Some Opposition speakers argue that the balance of the savings is wrong, that too much has been taken off capital expenditure. They must then mean that the non-capital reductions should be greater, since they accept that the overall spending figures are about right; 47½ per cent of non-capital expenditure in the 1988 Estimates Volume is for pay — at existing pay rates. To reduce that provision, we would have to cut pay rates or to cut public service numbers by more than the Government have decided. If they favour savings on pay rates, how will they square this with the desirability of a national consensus to solve our problems? If they favour cutting numbers even further, where would they cut them; in the health services, education, security forces, semi-State agencies, the Civil Service or where? We have not had answers to these questions.
Another way of reducing non-capital expenditure would be to cut non-pay expenditure further. In the 1988 Estimates, 64 per cent of non-pay expenditure is in the social welfare, health, and education areas. Do the opposition favour major economies in these areas and, if they do, how could they make major savings without harming those most in need? We have not had answers to these questions either.
The argument that too much has been lopped off capital must be based on the proposition that all State capital expenditure is necessarily productive. That is not so. Indeed Deputy Noonan, while arguing that the balance between current and capital savings is wrong, admitted that much of our capital spending has no economic return. More State capital expenditure means more public borrowing, which pushes up interest rates and thus depresses private investment. There is no reason to think that higher State investment would be any more effective in generating economic development than the private investment it would crowd out. In fact, in present conditions, more State capital expenditure would probably be less effective in generating development than the private investment it would displace.
When we were examining capital expenditure programmes, we looked carefully at their economic and social justification and based our decisions on our findings. We saved on the provision for local authority housing, for example, because a repeat of the 1987 provision would be too great, since waiting lists have fallen. We economised on the provision for health capital because we have had enough of the situation where new hospitals were built, but left unused, because the finance to run them was not available. We cut the provision for primary and secondary school building because the fall in the birth rate means that to keep on building as before would leave us, in a few years time, with a large stock of unwanted or under-utilised schools.
It is true that the Public Capital Programme has been reduced in volume terms since 1982. The NESC stated that great care should be taken in the design of fiscal policy to ensure that productive capital projects are not jettisoned in the process of restoring order to the public finances. But it also pointed to the need for the rigorous evaluation of capital projects in order to ensure that the rate of return on the investment exceeds the cost of servicing the corresponding debt. The NESC did not call for a general increase in capital spending, quite the reverse, nor for the exemption of the capital area from savings.
This Government's approach is in line with these views. If productive projects are put forward which have a sufficiently high rate of return, we will support them. As the Taoiseach said in this debate, the projects put forward by State companies, and listed in the Appendix to the Programme for National Recovery, are being evaluated at present with a view to supporting those which satisfy normal criteria of economic viability.
The argument is made that there should be more capital expenditure because it creates employment. This ignores two facts. First, reducing non-captial expenditure in order to increase capital expenditure would almost certainly have to mean that public services, and the employment that goes with them, would have to be curtailed further. Second, the employment creation effects of much capital expenditure are in many cases shortlived being confined to the construction phase. But the cost of servicing the debt incurred remains for years and diverts resources which would otherwise be available to support employment, for example, through the beneficial impact of lower taxation.
As the Taoiseach and other Ministers have explained in detail many of the measures underpinning the 1988 Estimates allocation, I intend to restrict my comments to measures which are my direct responsibility.
The Government are committed to bringing about a significant reduction in the number of public service employees. For example, in the Civil Service — for which I hold responsibility — the general embargo on recruitment which I introduced last March will be continued throughout 1988. This reduction in public service numbers is necessary to achieve the targets embodied in the 1988 Estimates, and in the Programme for National Recovery. It is intended to obtain the reduction on a voluntary basis by means of the package of measures which has already been announced and the implementation of which is under way in a number of public sector areas. The package provides for a more flexible approach to redeployment, job-sharing and career breaks, coupled with generous financial terms for voluntary redundancy.
It is difficult at this stage to provide a precise forecast of the reduction in staff numbers or of the costs involved, pending the take-up of the voluntary package. However it is estimated that, to reach the expenditure targets set in the Estimates, the public service workforce will have to fall by about 7,000 next year. A significant proportion of these will, of course, be retiring or otherwise leaving in the normal course of events, but several thousand redundancies will also be required if the targets are to be met.
The Estimates Volume takes account of both the savings from the fall in numbers employed and the cost of pensions payable to employees who accept the voluntary redundancy package. The cost of lump-sum redundancy payments is not however included. The volume, nature and timing of redundancies will, of course, influence the costs of these payments. The Government are discussing with the Central Bank arrangements for meeting these exceptional costs. When the total cost has been determined and the funding arrangements have been finalised, I will present the full details to the House.
Deputy Noonan's suggestion that the Government are trying to coerce the Central Bank about the funding of these payments is utter nonsense. Given the exceptional nature of the costs involved, the Government approached the Central Bank in the matter. The bank, against the background of the unprecedented measures being taken by the Government to deal with the imbalances in the public finances, is adopting a constructive attitude consistent with its statutory functions and responsibilities.
In the Estimates, the travelling and subsistence element of Departments' expenditures has been subjected to cuts of the order of 20 per cent. In order to stay within the reduced provisions, Departments will exercise rigorous control over their travelling and subsistence arrangements.
The 1988 Estimates, together with the Programme for National Recovery, are the opening moves in the 1988 budget process, which will be completed on Budget Day. While not all the elements in the budgetary equation have been revealed to date, it is clear that the 1988 budget will achieve a further significant reduction in Exchequer borrowing. It will be a continuation of the process initiated in the 1987 budget.
The Programme for National Recovery represents, as the Taoiseach said on the day the programme was agreed, a major achievement for all those involved. It also confounded those sceptics who doubted whether it would ever be possible for the participants to elaborate upon the broad strategy framework previously agreed by them in the NESC Report A Strategy for Development, 1986-1990. It clearly reflects the understanding of all the social partners of the need, if we are to achieve economic recovery, to put the national interest before sectional interests.
The 1988 Estimates are entirely consistent with the objectives of the Programme for National Recovery. The programme provides that the national debt/gross national product ratio will be stabilised over the next three years by reducing the Exchequer borrowing requirement to between 5 and 7 per cent of GNP, depending on developments on economic growth and interest rates. The social partners clearly agreed that a policy of reducing expenditure is the key to putting the economy back on the path to sustained economic growth. Achievement of the Government's 1988 expenditure profile is, therefore, critical to the pursuit of the budgetary and economic objectives of the programme.
It has been suggested that the Government's expenditure plans are inconsistent with the employment objectives of the programme. Nothing could be further from the truth. Excessive levels of employment in the public service impose a cost on the economy and reduce the overall level of employment in the rest of the economy. A proper balance must be restored. Such a balance is a key requirement for achieving sustainable long term employment.
Other criticisms that have been levelled at the programme by its detractors include:
—that it is simply a public service pay agreement;
—that, at one and the same time it is too generous, because of the pay and taxation provisions and not generous enough in relation to social policy aspects;
—that it contains ambitious job creation targets without specifying the policies to implement them.
I would like to take up these criticisms and first deal with pay.
Deputy Noonan and others have argued that the programme is a public service pay agreement dressed up to look like a national plan. That it is very much more than a public service pay deal is obvious from even a quick reading. It covers the key areas of economic and social policy, namely macro-economic policies, tax reform, the achievement of greater social equity and developmental policies. It sets out the progress which it is envisaged will be made in these four broad areas during the course of the programme. The agreement on pay which covers the entire workforce — in the private as well as the public sector — has major implications for competitiveness.
In the broad context in which pay was being discussed and the general objective that was being sought, it is unrealistic to suggest that particular groups should have been singled out and asked to forego pay increases over the three year period of the agreement. The fact that some Members of the House and some commentators have made that suggestion illustrates their failure to grasp what has been achieved. Putting it briefly, what has been achieved is that the parameters for pay have been set at generally acceptable levels for all sections of the economy from now until the end of 1990. The pay scene for the next three years has been set for all sectors and they now have scope to order their affairs in a much more planned way.
This situation is in sharp contrast to that obtaining in recent years. The Government of the day were unable to settle the Exchequer pay bill either at a satisfactory level, or for such a long time ahead, as the following figures for general pay increases show.
|
Agreement |
Duration (months) |
Annualised increase |
|
24th Round (June '84-December '85) |
19 |
3.8% |
|
25th Round (January '86-June '87) |
18 |
4.7% |
|
Programme for National Recovery (July '87-December '90) |
42 |
2.5% (1988-1990) |
One of the attractive features of our new draft agreement, from the Government's point of view, is the deferment of special pay increases until mid-1989 at the earliest and, even then, implementation is to be on a phased basis. In the past, the payment of special increases has created major difficulties for the planning of the Exchequer finances — the full cost, for example, of the recent teachers' special increase was £60 million, equivalent, in itself, to over 2 per cent of the Exchequer pay bill. The arrangements set out in the draft agreement seem to the Government to provide a reasonable compromise between the aspirations of public servants and the need of the Government to plan their finances.
Much of the credit for this must go to the realistic and workmanlike approach adopted by bodies such as ICTU and the FUE. The deal which has emerged is not, of course, perfect; in the real world in which we have to operate, agreements like this seldom, if ever, fully meet the needs and aspirations of all those involved. The best we can hope for is a reasonable outcome, which can command the support of those with whom it has been framed. I am satisfied that the goal has been achieved in the provisions of the programme and I look forward to their being formally ratified by the parties concerned.
In so far as the public sector is concerned, the terms of the draft agreement on pay in the public service which has emerged for consideration by the parties will also apply in the wider commercial public sector. In addition, it is the Government's hope that a complementary pay framework which has been agreed for the commercial public sector will enable outstanding 26th round issues in the State bodies to be resolved.
The recently published Estimates showed the opening 1988 figure for pay and pensions at £2,763 million. The cost to the Exchequer of the recently concluded pay deal in the public service is £70 million, which will bring the total Exchequer pay bill in 1988 to £2,833 million, that is, an identical figure to that estimated for the current year.
(Limerick East): One hundred and twenty million pounds for redundancies.
I would ask the House to compare this stabilisation of the Exchequer pay bill in 1988 — due to the moderate pay increase under the programme and the reduction in numbers provided for in the Estimates — with the rapid rises which were allowed by the last Government:
|
Exchequer pay bill |
Increase |
Inflation |
|
|
£ |
per cent |
per cent |
|
|
1984 |
2,335m. |
||
|
1985 |
2,500m. |
7.1 |
5.4 |
|
1986 |
2,670m. |
6.8 |
3.9 |
|
1987 |
2,833m. |
6.1 |
3 |
|
1988 |
2,833m. |
0 |
We did not ask the Central Bank to pay for it, that is the difference.
I might add that the original 1987 pay bill decided by our predecessors was almost £30 million higher than the figure which we decided in the 1987 budget.
(Limerick East): What about the piggybank?
In confirmation of their determination to ensure that the least well-off members of our society are protected to the greatest possible extent, the Government have stated their intention in the programme to maintain the overall value of social welfare benefits and, within the resources available, to consider special provision for greater increases for those receiving the lowest payments. This is a major commitment, particularly given the difficulties in the public finances. I believe that a fairminded observer will conclude that the programme strikes a reasonable balance in terms of what is possible within the financial realities, while ensuring that the vital interests of all sections of the community are protected.
On the employment aspects of the programme, I believe that job creation targets should be challenging, but realistic. The programme confronts all the major obstacles which have been identified as inhibiting job creation. Moreover, the sectoral development approach which has been adopted in identifying job creation opportunities means that the targets are more firmly grounded than in many previous exercises. What is more, the policies which will be adopted in pursuit of the targets in the main sectoral areas have been clearly set out. For example, as far as manufacturing and services are concerned, an intrinsic element will be the rationalisation and reorganisation of State agencies concerned with job promotion, while State aid will also be made more closely contingent on actual employment creation. The programme also envisages a targeting of Government support on areas where there are evident deficiencies, such as marketing, management and technology. Policies are also brought forward to ensure that the maximum employment gains can be realised in the areas based on the exploitation of our natural resources, such as food, horticulture, forestry and the marine.
(Limerick East): Research and technology.
Opponents and critics of the Programme for National Recovery are certainly not unified in their approach. Deputy Spring regards it as a “con trick” presumably pulled by the Government on the social partners. Deputy McDowell, on the other hand, says that the Public Service unions seemed to have pulled a “fast one” on the community at large. These contrasting views reinforce my belief and that of the Government that we achieved a reasonable middle course.
Deputies
Hear, hear.
Because of our high level of foreign debt, the views formed abroad on our economic policies must be given weight. It is encouraging therefore that the Government's efforts to restore balance to the public finances are supported by the independent assessment of the EC Commission.
In its recently published Annual Economic report, the Commission recommends that budgetary policy in 1988 should continue to be restrictive. It also sees wages moderation throughout the economy as crucial to improved competitiveness, investment and employment. This advice echoes that given by the OECD.
The Government's firm handling of the public finances has also been helpful to Ireland's credit-standing abroad. This is reflected in the improved ratings Ireland has recently obtained from international credit rating agencies and in the very fine terms on which we can now borrow abroad.
A number of the Opposition parties have put forward amendments to the Government motion. With regard to Deputy Noonan's proposed amendment to my motion, I would point out that the Government made time available for this debate, at Opposition request, in order, as we understood it, to enable the Opposition to express their views on the Estimates and the Public Capital Programme. Deputy Noonan proposed a major change in the respective responsibilities of the Government and of this House, in settling the Estimates. It is the function of the Government, under our constitutional system, to make proposals on these matters.
Under Deputy Noonan's proposal, individual Deputies would have the right to put forward amendments to reduce the amounts provided in the subheads of individual Estimates, and to increase them, by the same amounts in other subheads of the same Estimates. The Book of Estimates laid by the Government before the House would, in other words, become little more than a draft set of proposals, subject to unpredictable and possibly major change.
One of the reasons we tabled the Estimates early this year was to give spending Departments and agencies clear guidance on how much they will have to spend, on what the Government wishes them to spend it, and on the measures that must be implemented if they are to remain within the allocations decided. This major improvement in financial procedures would be greatly weakened if the amendment proposed by Deputy Noonan were accepted. For these reasons, I am unable to accept Deputy Noonan's amendment.
(Limerick East): Where is the national consensus now?
With regard to Deputy McDowell's amendment, I do not accept the link which he attempts to make between the pay increases provided for in the Programme for National Recovery and the level of public service employment.
Finally, I find it impossible to regard Deputy Spring's amendment as a serious proposal. What Deputy Spring is really saying is that the Estimates, and the measures that underpin them, are unjust and inequitable. I reject that charge. When the Government were deciding where expenditure was to be reduced we were guided, as the Taoiseach said in his opening address, by two principles, namely: the need to protect the most vulnerable sections of the community and the need to ensure fairness between different sections of the community. We conscientiously set out to pursue both justice and equity, within the financial constraints resulting from the appalling situation which we inherited from the Government of which Deputy Spring was Tánaiste. We aimed to spread the burden so that all sections of the community would be asked to make some contribution to the resolution of our difficulties.
Deputy Spring lives in a financially unreal world. To continue and improve the services for the disadvantaged, the public finances cannot be allowed to fall into disarray. If those from whom we borrow see our actions as financially irresponsible, their willingness to lend, and at a reasonable price, will diminish. The well off could no doubt pay for essential services out of their own pockets; the greatest suffering in a financially crippled State would fall on its poorest citizens. That, we are determined to avoid.
Finally, I would like to underline the Government's financial achievements in our short period of office to date. We have made major savings in public expenditure and nobody has died, regardless of what Deputy Allen has said. I challenge him to either put up or shut up in that regard. Interest rates have fallen dramatically. Inflation has fallen further. The economy is growing again after years of stagnation. Exports and industrial production are rising rapidly. The balance of payments has improved. Money is flowing into the country. Most important of all, we have restored confidence in our ability, as a nation, to solve our problems and make progress.
After the first successful steps which we have taken in 1987 to reverse our economic decline by rectifying the public finances, the Government are determined to proceed further in 1988 towards the objective in the Programme for National Recovery of stabilising the national debt-GNP ratio by 1990. The proposals in the 1988 abridged Estimates volume and summary capital programme are vital to the achievement of the progress which, as a nation, we must make next year towards this objective. It is appropriate that the House should take note of these important documents. Accordingly, I commend the motion in my name to the House.
Deputies
Hear, hear.
(Limerick East): Won out of trap six.
We come first to amendment No. 3 in the name of Deputy Michael Noonan. I am now putting that amendment.
Question put: "That the amendment be made."
On a point of order, why is this amendment being put before the Progressive Democrats amendment?
Because it was moved by Deputy Noonan at the commencement of this debate earlier in the week. The Deputy's amendment will be taken later.
The Dáil divided: Tá, 38; Níl, 70.
Tá
- Allen, Bernard.
- Barnes, Monica.
- Barrett, Seán.
- Birmingham, George.
- Boland, John.
- Boylan, Andrew.
- Bruton, John.
- Bruton, Richard.
- Burke, Liam.
- Carey, Donal.
- Connaughton, Paul.
- Cooney, Patrick Mark.
- Cosgrave, Michael Joe.
- Creed, Donal.
- Crotty, Kieran.
- Deasy, Austin.
- Doyle, Avril.
- Dukes, Alan.
- Durkan, Bernard.
- Enright, Thomas.
- Farrelly, John V.
- Fitzpatrick, Tom.
- Flanagan, Charles.
- Griffin, Brendan.
- Harte, Paddy.
- Hegarty, Paddy.
- Hussey, Gemma.
- Kenny, Enda.
- Lowry, Michael.
- McGahon, Brendan.
- McGinley, Dinny.
- Mitchell, Gay.
- Mitchell, Jim.
- Nealon, Ted.
- Noonan, Michael. (Limerick East).
- Shatter, Alan.
- Taylor-Quinn, Madeline.
- Yates, Ivan.
Níl
- Abbott, Henry.
- Ahern, Bertie.
- Ahern, Dermot.
- Ahern, Michael.
- Aylward, Liam.
- Barrett, Michael.
- Brady, Gerard.
- Brady, Vincent.
- Brennan, Matthew.
- Brennan, Séamus.
- Briscoe, Ben.
- Browne, John.
- Burke, Ray.
- Byrne, Hugh.
- Calleary, Seán.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Ger.
- Coughlan, Mary T.
- Cowen, Brian.
- Daly, Brendan.
- Davern, Noel.
- Dempsey, Noel.
- Dennehy, John.
- de Valera, Síle.
- Doherty, Seán.
- Ellis, John.
- Fahey, Frank.
- Fitzgerald, Liam.
- Fitzpatrick, Dermott.
- Flood, Chris.
- Flynn, Pádraig.
- Gallagher, Denis.
- Treacy, Noel.
- Tunney, Jim.
- Gallagher, Pat the Cope.
- Geoghegan-Quinn, Máire.
- Hilliard, Colm Michael.
- Hyland, Liam.
- Jacob, Joe.
- Kirk, Séamus.
- Kitt, Michael P.
- Kitt, Tom.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leyden, Terry.
- Lynch, Michael.
- MacSharry, Ray.
- Mooney Mary,
- Morley, P. J.
- Moynihan, Donal.
- Nolan, M. J.
- Noonan, Michael J. (Limerick West).
- O'Dea, William Gerard.
- O'Donoghue, John.
- O'Hanlon, Rory.
- O'Keeffe, Batt.
- O'Keeffe, Ned.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Rourke, Mary.
- Power, Paddy.
- Reynolds, Albert.
- Roche, Dick.
- Smith, Michael.
- Stafford, John.
- Swift, Brian.
- Walsh, Seán.
- Woods, Michael.
- Wright, G. V.
Tellers: Tá, Deputies Flanagan and Farrelly; Níl, Deputies V. Brady and Briscoe.
Question declared lost.
We now come to amendment No. 1 in the name of Deputy Dick Spring. Would Deputy Spring formally move the amendment.
I move amendment No. 1:
After "Programme" to add "and Dáil Éireann notes in particular that under the terms of the Estimates 16,000-20,000 public service jobs will be lost, which will seriously affect the extent and quality of the public services; the Live Register will rise to 256,000 monthly average in 1988; at least 1,200 more hospital beds will be closed and other essential health services will be dismantled; the pupil teacher ratio in primary schools will worsen dramatically; the vital services provided by the National Social Service Board, the Health Education Bureau and An Foras Forbartha will disappear; young people will be discriminated against in their access to training, education and welfare services; expectant mothers will be deprived of certain maternity payments to which they are now entitled; people suffering from disability will be deprived of long duration payments and will pay tax and PRSI on the first 13 weeks; child benefit will be cut; a new housing crisis will develop, with both public and private home construction halved; Ireland's contribution to the Third World, already small, will be cut by 28 per cent; the role of the Ombudsman will be greatly reduced; the ability of our largest industry, agriculture, to contribute to the development of our economy will be seriously weakened by the removal of essential advisory and research services; the capacity of our tourism industry to grow will be greatly inhibited; the contribution possible through State-led industrial development will be drastically reduced: Accordingly, Dáil Éireann, in noting the Estimates, declares also that it has no confidence in the Government, because these Estimates will promote deflation and further unemployment in our economy, give rise to inequality, injustice and poverty; and because they fail to address the fundamental issue of the provision of financial resources on an equitable basis to meet the cost of essential economic and social services".
I move amendment No. 1 to amendment No. 1:
To insert after "disappear" in line 7:
"local government will be decimated, undermining the whole system of local democracy, leading to job losses among Local Authority workers and pressure for increased local charges and the introduction of new charges".
We accept the amendment to amendment No. 1.
Amendment to amendment No. 1 agreed to.
Question put: "That amendment No. 1, as amended, be made".
The Dáil divided: Tá, 15; Níl, 70.
Tá
- De Rossa, Proinsias.
- Desmond, Barry.
- Gregory, Tony.
- Higgins, Michael D.
- Howlin, Brendan.
- Kavanagh, Liam.
- Kemmy, Jim.
- McCartan, Pat.
- Mac Giolla, Tomás.
- O'Sullivan, Toddy.
- Pattison, Séamus.
- Quinn, Ruairí.
- Sherlock, Joe.
- Stagg, Emmet.
- Taylor, Mervyn.
Níl
- Abbott, Henry.
- Ahern, Bertie.
- Ahern, Dermot.
- Ahern, Michael.
- Aylward, Liam.
- Barrett, Michael.
- Brady, Gerard.
- Brady, Vincent.
- Brennan, Matthew.
- Brennan, Séamus.
- Briscoe, Ben.
- Browne, John.
- Burke, Ray.
- Byrne, Hugh.
- Calleary, Seán.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Ger.
- Coughlan, Mary T.
- Cowen, Brian.
- Daly, Brendan.
- Davern, Noel.
- Dempsey, Noel.
- Dennehy, John.
- de Valera, Síle.
- Doherty, Seán.
- Ellis, John.
- Fahey, Frank.
- Fitzgerald, Liam.
- Fitzpatrick, Dermott.
- Flood, Chris.
- Flynn, Pádraig.
- Gallagher, Denis.
- Gallagher, Pat the Cope.
- Geoghegan-Quinn, Máire.
- Hilliard, Colm Michael.
- Hyland, Liam.
- Jacob, Joe.
- Kirk, Séamus.
- Kitt, Michael P.
- Kitt, Tom.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leyden, Terry.
- Lynch, Michael.
- MacSharry, Ray.
- Mooney, Mary.
- Morley, P. J.
- Moynihan, Donal.
- Nolan, M. J.
- Noonan, Michael J. (Limerick West).
- O'Dea, William Gerard.
- O'Donoghue, John.
- O'Hanlon, Rory.
- O'Keeffe, Batt.
- O'Keeffe, Ned.
- O'Leary, John.
- O'Rourke, Mary.
- Power, Paddy.
- Reynolds, Albert.
- Roche, Dick.
- Smith, Michael.
- Stafford, John.
- Swift, Brian.
- Treacy, Noel.
- Tunney, Jim.
- Walsh, Seán.
- Wilson, John P.
- Woods, Michael.
- Wright, G. V.
Tellers: Tá, Deputies Taylor and Howlin; Níl, Deputies V. Brady and Briscoe.
Question declared lost.
I move amendment No. 2:
After "Programme" to add "but condemns the recently agreed terms for increases in public pay on the grounds that they will entail further unnecessary curtailment of employment in, and delivery of, necessary social services".
Question put: "That the amendment be made".
The Dáil divided: Tá, 14; Níl, 84.
Tá
- Clohessy, Peadar.
- Colley, Anne.
- Cullen, Martin.
- Kennedy, Geraldine.
- McCoy, John S.
- McDowell, Michael.
- Molloy, Robert.
- Gibbons, Martin Patrick.
- Harney, Mary.
- Keating, Michael.
- O'Malley, Desmond J.
- O'Malley, Pat.
- Quill, Máirín.
- Wyse, Pearse.
Níl
- Abbott, Henry.
- Ahern, Bertie.
- Ahern, Dermot.
- Ahern, Michael.
- Aylward, Liam.
- Barrett, Michael.
- Brady, Gerard.
- Brady, Vincent.
- Brennan, Matthew.
- Brennan, Séamus.
- Briscoe, Ben.
- Browne, John.
- Burke, Ray.
- Byrne, Hugh.
- Calleary, Seán.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Ger.
- Coughlan, Mary T.
- Cowen, Brian.
- Daly, Brendan.
- Davern, Noel.
- Dempsey, Noel.
- Dennehy, John.
- De Rossa, Proinsias.
- Desmond, Barry.
- de Valera, Síle.
- Doherty, Seán.
- Ellis, John.
- Fahey, Frank.
- Fitzgerald, Liam.
- Fitzpatrick, Dermott.
- Flood, Chris.
- Flynn, Pádraig.
- Gallagher, Denis.
- Gallagher, Pat the Cope.
- Geoghegan-Quinn, Máire.
- Gregory, Tony.
- Higgins, Michael D.
- Hilliard, Colm Michael.
- Howlin, Brendan.
- Hyland, Liam.
- Jacob, Joe.
- Kavanagh, Liam.
- Kemmy, Jim.
- Kirk, Séamus.
- Kitt, Michael P.
- Kitt, Tom.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leyden, Terry.
- Lynch, Michael.
- McCartan, Pat.
- Mac Giolla, Tomás.
- MacSharry, Ray.
- Mooney Mary,
- Morley, P. J.
- Moynihan, Donal.
- Nolan, M. J.
- Noonan, Michael J. (Limerick West).
- O'Dea, William Gerard.
- O'Donoghue, John.
- O'Hanlon, Rory.
- O'Keeffe, Batt.
- O'Keeffe, Ned.
- O'Leary, John.
- O'Rourke, Mary.
- O'Sullivan, Toddy.
- Pattison, Séamus.
- Power, Paddy.
- Reynolds, Albert.
- Roche, Dick.
- Sherlock, Joe.
- Smith, Michael.
- Stafford, John.
- Stagg, Emmet.
- Swift, Brian.
- Taylor, Mervyn.
- Treacy, Noel.
- Tunney, Jim.
- Walsh, Seán.
- Wilson, John P.
- Woods, Michael.
- Wright, G. V.
Tellers: Tá, Deputies Harney and Kennedy; Níl, Deputies V. Brady and Briscoe.
Question declared lost.
We now come to item No. 16 on the Order Paper, the motion in the name of the Minister for Finance:
That Dáil Éireann takes note of the 1988 Estimates for the Public Services (Abridged Version) and of the 1988 Summary Public Capital Programme.
Question put: "That the motion in the name of the Minister for Finance be agreed".
The Dáil divided: Tá, 82; Níl, 15.
Tá
- Abbott, Henry.
- Ahern, Bertie.
- Ahern, Dermot.
- Ahern, Michael.
- Aylward, Liam.
- Barrett, Michael.
- Brady, Gerard.
- Brady, Vincent.
- Brennan, Matthew.
- Brennan, Séamus.
- Briscoe, Ben.
- Browne, John.
- Burke, Ray.
- Byrne, Hugh.
- Calleary, Seán.
- Clohessy, Peadar.
- Colley, Anne.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Ger.
- Coughlan, Mary T.
- Cowen, Brian.
- Cullen, Martin.
- Daly, Brendan.
- Davern, Noel.
- Dempsey, Noel.
- Dennehy, John.
- de Valera, Síle.
- Doherty, Seán.
- Ellis, John.
- Fahey, Frank.
- Fitzgerald, Liam.
- Fitzpatrick, Dermott.
- Flood, Chris.
- Flynn, Pádraig.
- Gallagher, Denis.
- Gallagher, Pat the Cope.
- Geoghegan-Quinn, Máire.
- Gibbons, Martin Patrick.
- Harney, Mary.
- Hilliard, Colm Michael.
- Hyland, Liam.
- Jacob, Joe.
- Keating, Michael.
- Kennedy, Geraldine.
- Kirk, Séamus.
- Kitt, Michael P.
- Kitt, Tom.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leyden, Terry.
- Lynch, Michael.
- McCoy, John S.
- McDowell, Michael.
- McSharry, Ray.
- Molloy, Robert.
- Mooney Mary,
- Morley, P.J.
- Moynihan, Donal.
- Nolan, M. J.
- Noonan, Michael J. (Limerick West).
- O'Dea, William Gerard.
- O'Donoghue, John.
- O'Hanlon, Rory.
- O'Keeffe, Batt.
- O'Keeffe, Ned.
- O'Leary, John.
- O'Malley, Desmond J.
- O'Malley, Pat.
- O'Rourke, Mary.
- Power, Paddy.
- Reynolds, Albert.
- Roche, Dick.
- Smith, Michael.
- Stafford, John.
- Swift, Brian.
- Treacy, Noel.
- Tunney, Jim.
- Walsh, Seán.
- Wilson, John P.
- Woods, Michael.
- Wright, G.V.
Tellers: Tá, Deputies V. Brady and Briscoe; Níl, Deputies Howlin and McCartan.
Question declared carried.
|
De Rossa, Proinsias.Desmond, Barry.Gregory, Tony.Higgins, Michael D.Howlin, Brendan.Kavanagh, Liam.Kemmy, Jim. |
McCartan, Pat.Mac Giolla, Tomás.O'Sullivan, Toddy.Pattison, Séamus.Quinn, Ruairí.Sherlock, Joe.Stagg, Emmet.Taylor, Mervyn. |
The Dáil adjourned at 4.50 p.m. until 10.30 a.m. on Wednesday, 28 October 1987.