Dáil Éireann debate -
Thursday, 18 Feb 1988

Vol. 378 No. 2

Financial Resolutions, 1988: Financial Resolution No. 4: General (Resumed).

Debate resumed on the following motion:

That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.

—(Minister for Finance.)

Mr. Flood

When I moved the adjournment of the debate on this motion last week I was about to turn to the question of financial management as expounded through budgetary measures. I should like to refer to the decision of the Minister for Labour, Deputy Ahern, to amalgamate three training organisations with effect from 1 January. The Minister succeeded in amalgamating the Youth Employment Agency, AnCO and the National Manpower Service into one organisation FÁS. It was correct to bring those three organisations together because over the years, while they developed in their own way and their personnel acquired great skills, it became evident that there was a duplication of resources. Often those organisations operated in the same area. There was a duplication of effort by the officials with organisations pursuing the same issues on many occasions. There was a waste of resources and a duplication of experience. That move, which was in keeping with our Programme for National Recovery had been discussed and agreed on with the social partners.

I hope the amalgamation will mean that we will have a more effective streamlined organisation capable of dealing with the needs of those who require training or retraining. I hope it can assist those endeavouring to set up a small business and that the expertise in FÁS, with its exceptional management board, will enhance opportunities for people to start their own business and improve training facilities. I hope the new body will be able to assist those who are searching for jobs. I wish all concerned with the new body success in the years ahead. We will be relying on that body to carry out an effective job.

I should like to refer to the Government's decision to establish an interdepartmental committee to examine the various issues arising from the introduction of a statutory sick pay scheme under which employers will be responsible for the pay of employees for the first 13 weeks of illness. A critical examination of that area is long overdue and I am delighted that the Government are taking the first tentative steps to inquire into that issue. Workers who invest their time and skills in their jobs are entitled to a better return from their employers in terms of support during illness. It is not correct that if a worker has been sick for two or three days the State should pay him or her sick benefit. It is right that employers should be asked to provide help for their employees who are sick. In many cases people spend all their working life with one company. I hope the Government will be able to produce a set of proposals which, in consultation with employers and the trade unions, will prove beneficial to employers and employees. Those proposals should be more cost effective in terms of the subvention by the State to people who fall ill at work. I hope we will hear more about that issue in the near future.

I should like to refer to the Government's decision in the budget not to reduce mortgage interest relief. In the 1987 budget the Minister reduced that relief by 10 per cent. I accept that there was a 3 per cent fall in interest rates in 1987 which benefited mortgage holders considerably. On the average mortgage of £20,000 the reduction in interest rates last year has meant a saving of £530 in a full year. I accept that the saving is considerable but it is only right to point out that the taking out of a mortgage is the biggest investment a family will be involved in. Mortgage repayments represent a considerable drain on the resources of families and, for that reason, I was pleased to learn there will not be a further deduction in the mortgage interest relief. I look forward to a further reduction in interest rates which will result in more savings to mortgage holders.

Much has been said and written about the vexed issues of tax administration. We are often bombarded with figures for unpaid tax, uncollected tax and so on. We should bear in mind that many of the figures quoted relate to assessments but we must accept that the administration of our tax system leaves a lot to be desired. If we embarked on a radical overhaul of our tax collection system the nation's finances, and our taxpayers, would benefit. It is fair to point out that all businesses are inundated with letters from the Revenue Commissioners about PRSI, PAYE, VAT, corporation tax and so on. It is a great burden on any enterprise to keep up with the payment of all taxes. It is true to say that in the case of PAYE and PRSI the money is deducted from employees but employers must meet other taxes such as VAT. It is difficult for most small industries to meet VAT payments on a bi-monthly basis. It is often the case that the remittance for VAT to the Revenue Commissioners is the biggest single payment made by small industries. Many of them have great difficulty accumulating that money in these difficult financial times.

The system of paying VAT has not altered since it was first introduced. It is paid on a two-monthly basis where credit is given. Enterprises can sometimes find themselves in a position of having to pay tax to the Revenue Commissioners before they have been paid by their customers. In other words, they are lending money to the Revenue Commissioners. This area requires a complete and radical overhaul. In the case of the television licence or ESB bill, we are encouraged to pay small amounts over a period so that we will not be stretched by having to pay a large sum at any one time. In considering the reorganisation of tax administration we should try to make it easier for the taxpayer to pay on time. It is to the benefit of taxpayers to keep their tax payments up to date and it is certainly to the benefit of the nation's finances. A great deal of time and energy is spent by business enterprises to ensure they have the resources to pay their taxes on time. There are very substantial penalties for failure to do so. I would hope that the Government in looking at the whole question of tax arrears and administration would try to ensure that whatever system is devised next year or the year after will result from consultation with the representative organisations of employers and employees.

Any change in tax administration should not stop there but should move on to see if in certain areas employees could take more responsibility for ensuring that their taxes are paid on time, particularly where PRSI is deducted at source. With the co-operation of employees and employers we could introduce a system where there would be some type of self-regulation in relation to the payment of taxes. People would be able to see on a weekly basis that their taxes had been paid up to date, particularly where they had been deducted by employers from their wages and salaries. This would benefit both employees and employers because it would prevent them getting into the difficulty of having major payments outstanding, on which interest would accrue. I hope these matters will be addressed in the reorganisation of tax administration.

The Government's proposal to consider the question of attachment is very interesting. Having reorganised the tax administration, the Government will give to the Revenue Commissioners stronger powers in relation to outstanding taxes and introduce a system of attachment whereby if an individual or organisation fails to make payments on time the Government can be paid by a third party who owe money to the defaulting company or individual. This would be a very strong measure which would prove very effective but it cannot be introduced in an ad hoc way and must be part of a major reorganisation. There is much criticism about archaic methods of tax collection and it is time for a fundamental change. I welcome the Government's approach to this matter.

The Government have made considerable progress in stabilising the national finances. Much remains to be done. I am convinced that there is room in this House for political parties broadly to support the efforts of this Government to deal with the serious issues which confront our country, while at the same time leaving room for those parties to develop and adhere to their own philosophies. Would it not be far better for all parties to contribute to major national progress for all our people during the next few years and thereafter go before the electorate with their own ideas as to how this country can be taken into the twenty-first century?

Mr. McGahon

In reviewing this year's budget and supporting its broad thrust, I cannot help but reflect on how much better off this country would have been but for the negative and cynical opposition adopted for the past four and a half years by the Fianna Fáil Party in Opposition. They opposed every policy document introduced by the previous Government in a display of dog-in-the-manger tactics unequalled in Irish politics. The clarity with which Fianna Fáil saw and recognised the problems immediately on coming into office contrasted with the shoddy and blind opposition they produced in that four and a half year period. How many Irish emigrants might be at home today had the Fianna Fáil Party the courage to put Ireland first is a matter for conjecture. There is no doubt that the hardship being experienced by many Irish families might have been alleviated to some extent by a more honest and reasonable form of opposition. Their stance contrasts starkly with the honesty and courage displayed by Deputy Alan Dukes who has introduced a new style of politics. He is the leader of the party of responsibility in in Irish politics.

We accept that the measures in this year's budget are necessary if we are to survive the next decade. Every Government since 1969 have been turfed out by the electorate and this will be no exception. Perhaps then the political leaders will heed the call of the nation for a national Government for a period of years to rule in a strong but benevolent fashion without opposition from the street by every vested interest group, the various trade unions, the IFA, the Church and the school children who have been used in a very cynical fashion on more than one occasion. The present crisis in Irish politics, the question of whether we will have a fifth election in the eighties, illustrates the need for a national Government. If the Taoiseach goes to the country on the issue of the closure of a hospital it will be a sad day for Irish politics and for all of us who have the responsibility to sit here in Parliament.

I will refer specifically to the neglected county of Louth and I am renewing my plea for some recognition of the trauma suffered by the people of County Louth and of other Border counties over the past 20 years. I congratulate the people of County Louth, particularly the people of Dundalk and Ardee, for their forebearance and courage in the face of deprivation, hardship and neglect by all Governments over the past 20 years. They have suffered for two decades with sweet Fanny Adams being done for them. Dundalk has 31 per cent unemployment while the national average is 18 per cent. Ardee is a town virtually without hope. My Government did nothing for this region, but somehow their sin is only a venial sin when contrasted with the cynical neglect and indeed the three card trick employed by Fianna Fáil in the Border regions. When in Opposition they shed crocodile tears about the region. They started a Border committee which was dispanded immediately on entering Government. Michael O'Kennedy, one Saturday afternoon went on a PR mission to Newry and he had more photographers in his circus than Mr. Mikhail Gorbachev. Mr. O'Kennedy and Dr. O'Hanlon——

An Leas-Cheann Comhairle

Will the Deputy refer to the Minister for Agriculture. We always give politicians their titles.

Mr. McGahon

They and the Minister for Tourism and Transport, Deputy Wilson, took the trouble to ascertain the problems of the region. The Leas-Cheann Comhairle has been particularly sympathetic to our plight but, unfortunately, he has not been in a position to help us. Having ascertained the problems they did nothing. The people of County Louth sent two Fianna Fáil Deputies to Dáil Éireann to represent them on the basis of promises given for help in that region, the Minister for Health, Deputy O'Hanlon and the Minister for Tourism and Transport, Deputy Wilson. We also have a Minister of State in the region. They have all disregarded County Louth and have continued to throw the people of the region to the wolves. My colleague and friend Deputy Ahern referred to this caring Government in his contribution because they gave a social welfare increase of 3 per cent. I would remind him that the previous Government gave social welfare increases in the region of 25 per cent two years in a row. The Fianna Fáil Deputies from the Border region should have the courage, as I had, to attack their own Government for the lack of help and recognition, instead of staying mute. They should put the people above questionable party politics.

I have consistently called for the creation of an enterprise zone in the Border region, similar to the survival package produced by the British Government and set up in Belfast in the early seventies when they were in the grip of indiscriminate car bombings and the streets of Belfast were deserted. That helped the hard-pressed traders in Belfast to survive a very difficult time. We should have zones similar to that created in the Border regions. We should have the various grants, incentives and inducements that are available in the Gaeltacht areas. The IDA should give higher priority to the Border region. It is common knowledge in the Border region that visiting industrialists are in some cases not brought there but to the more glamorous parts of Ireland, such as Kerry, Cork and Galway and so on. Many industrialists are not brought to Dundalk, and if they are it is as an afterthought. There should be increased priority in the IDA for a region that has suffered more than any other region in this country as a result of the Ulster troubles. I want the IDA to produce something of a large-scale investment in an area where skills and qualities are as high as in any part of this country.

There is a huge burden imposed in protecting the Border and, as a Dundalk Deputy, I have had the opportunity to observe it at close quarters. A recent figure given was £296 million, an unbearable burden for a country of our size. The huge amounts spent in securing this country from the ravages of the IRA are undoubtedly, along with the social welfare burden, the two main problems confronting us. I have been consistent in denouncing the IRA as the enemies of Ireland. In conscience I must also deplore and denounce the atrocious, stupid, indefensible and contemptuous attitude of the British Government in suppressing the Stalker-Sampson report and refusing to prosecute members of the RUC for the public executions carried out on the highway in the Portadown region. The British say they did it in the national interest, but what about our national interest? I wonder what is the real story behind that unbelievable refusal to prosecute? I suspect that had the Stalker report been made public it would have opened a Pandora's box. It might have shown that the British Government, as they do in other countries, have their agents in this country. Perhaps it would have shown that they have highly paid agents in the Garda Síochána.

An Leas-Cheann Comhairle

I am assuming that the Deputy with his characteristic aspiration to remain in order all the time is treating this matter as a base for pursuing the economic and financial needs of that area?

Mr. McGahon

You have read me right as usual. I was just speaking of the economic cost of protecting the Border and I suggest that the suppression of the Stalker report was perhaps because the British did not want to open a Pandora's box. Their involvement in this country is quite strong. Both MI5 and the SAS know more than they should about the affairs of this country. I will leave it at that. However, as an out-and-out opponent of the IRA and as a person who regards them as the real enemies of this country, I was very disappointed in the British attitude. No matter what party we are in, there is no way we can accept the public executions that were carried out by the so-called forces of law and order in the North of Ireland. I must deplore them as equally I deplore tha activities of the IRA. This decision undoubtedly will serve as a recruiting drive for the IRA mobsters and will add to the continuing death and misery suffered by the Ulster people and to the decline of the Border area as an economic unit.

The Government, in the budget, allocated £6.5 million for education. How much of that will be spent in County Louth? Will the Government honour the approval given by the previous Government to Dundalk vocational school for a much needed extension? Will they provide money for the necessary extension for Dundalk grammar school? Will the school in Cooley, also approved and cruelly guillotined, be ignored too? Will the Christian Brothers in Sunday's Gate, Drogheda, who have provided education for generations of Drogheda people and need a new school badly, be ignored? The go-ahead for these schools has been approved and, in addition to increasing facilities for the pupils, will be a welcome oasis of employment to the building and construction industry in County Louth. Already the loss of the major contract in Dundalk in the vocational school has forced one of Dundalk's foremost builders out of business. Speaking of the building industry, now in the ashes in the Border region, I remind the Government of the clarion calls of the Fianna Fáil Party who always backed the building industry, or so it is claimed. I would like to ask the builders now whether the promises given to them were honoured.

I wish to refer to the smuggling industry and to remind the Minister that he has given the go-ahead to a continuation of Ireland's haemorrhage in the unascertainable loss of revenue on a horrendous scale to Margarget Thatcher. The petrol business in the region is lost and a diviner would be needed along the Border to find petrol on the southern side. The Tom and Jerry brothers across the Border have been turned virtually overnight into Irish Saudi Arabian tycoons. The Government have presented petrol retailers on the northern side with a bonanza similar to the Yukon gold find, and the law of diminishing returns surely exists here. I appeal to the Government to look at the question of reducing the price of petrol to a realistic figure similar to that in the North to prevent the inestimable amount of money escaping across the Border.

The road to Jonesboro on a Sunday has to be seen to be believed. Last year the Sunday Independent published an aerial picture showing the extent of the crocodile formed by the line of cars extending four or five miles. Smuggling of drink and spirits continues unabated with fortunes made by shady operators. The greatest tragedy of all in recent times is that of the hapless radio and television retailers who, having been led to believe that they would get relief, now have had their worst fears confirmed by the publication of this budget. In addition they have to suffer the indignity of mail drop by An Post, a State body, advertising to every home in Dundalk the undeniable attractions of a Newry TV firm and callously exhorting the people in the Republic to smuggle. They are acting as agents provocateurs and turning a blind eye to the fact that no retailer in the North will inform An Post that he has sold a TV or video, as retailers are obliged to do in this State. Therefore, each set sold can constitute a loss of a £52 licence fee to the State in addition to excise duty. This is hard for a retailer to take when added to the campaign of Ireland's agony aunt, Gay Byrne, telling Irish people where to go for bargains in the North and Liverpool.

This year saw the frequent appearance of sheriffs in the Border area which could be termed appropriately, in an economic sense, "Boot Hill". I am not suggesting that people should not pay taxes, but the businesses that have survived, many of them hard pressed family businesses, should be given medals for endurance and should be treated in a humane fashion and given sympathetic consideration by the Revenue Commissioners. Arrangements should be made for realistic phased payments of arrears. Trying to cram years of arrears into one year after a severe recession and depression in the Border area is crazy. Seizing a wife's clothing off the clothes line is insensitive as is seizing her car. Putting people on public assistance is indefensible when they should be helped over their difficulties. Why should a wife and children be made to pay for business failure? Many of these small businesses just keep going on pride. Their owners have not the cuteness of big business people who allow companies get into trouble and wind them up. Sympathetic consideration should be introduced by the Revenue Commissioners and I ask the Minister for Finance, Deputy Mac-Sharry, to ensure that that is so.

A major initiative should be introduced by the Government to help those businesses that have survived in the Border area. I suggest the Government pay the rates of business people right along the Border, otherwise a catastrophe will occur in that area. Such an initiative should have been introduced several years ago.

I want to draw the Minister's attention to the tragic sircumstances of the Ashbourne garage owner's untimely death and the circumstances leading to it. I ask him to ensure there will be no more similar occurrences in this country while he is Minister for Finance.

I want to refer to the proposal in the budget to increase anglers' fees. It is difficult to believe the Government could even contemplate such an unjustifiable impost. The rivers always ran free and provided many a poor man's dinner. Thousands of young unemployed people spend hours on the river bank when perhaps many of them could be engaged in vandalism or could have turned to crime. The anglers have cared for rivers and provided young fish free of any cost to this State. The Government should do away with the involvement of the OPW and hand over care of the rivers and locks to the control of responsible anglers' clubs. Already this year many guest-houses, particularly in the south and west, have taken bookings from anglers from England and the continent and have advertised free fishing. Again they are hitting a very vulnerable section of the people. We are scraping the barrel when we charge anglers increased fees. I have made my points very quickly and said what I wanted to say.

Minister of State at the Department of Agriculture and Food (Mr. Smith)

As their first year in office draws towards a conclusion, the Government are entitled to derive considerable satisfaction from their achievements so far. The success of the co-ordinated actions undertaken last March is proof, if proof were needed, that given purposeful leadership and a resolute determination this country can reverse the headlong trend towards economic stagnation.

The cornerstone of the set of measures adopted by the Government on taking office was the commitment above all else to put a stop to the rapidly increasing level of State expenditure and Exchequer borrowing. The Government were under no illusion that this would be an easy task or that its execution would be painless. However, they recognised that this was an essential ingredient of any national programme that has as its aim the concept of national recovery. It is patently obvious that if the Government had shirked taking the steps necessary to put the national finances in order the country would not now be in the position where, as economic commentators agree, confidence in the future of the Irish economy both at home and abroad has been substantially restored.

It is heartening to record the achievements of the Government, and a minority Government at that, over such a short period of time. Already we can see a very significant fall in interest rates and inflation which has had the effect of boosting confidence in the commercial sector. These have fallen as a direct consequence of the Government's determination, implemented via the budget of March 1987, to impose strict discipline on State expenditure levels. The fall in interest rates in turn led, for the first time in many years, to a substantial growth in investment in plant and equipment, a rise of 10 per cent in manufacturing output and a significant improvement in the balance of payments.

In addition, aided by the Government's agreement with the social partners our industrial cost competitive climate has improved. The Government are totally committed to a continuation of this policy during 1988. Further substantial reductions in the level of Exchequer spending and, therefore, borrowing will take place in 1988 as well as further reductions in the current budget deficit. Improvements in the economic outlook are already beginning to show and there is every reason to be confident that at last the economy has turned the corner and that national recovery is in sight. With, as is confidently expected, further falls in interest rates and the rate of inflation resulting from a continued drive to improve the public finances, the steady growth in the economy will continue. This improvement is the confident prediction of the Government in spite of the slight depressive impact on the economy of the measures designed to put order on public expenditure.

Members opposite must, if they are realistic, find it difficult to seriously criticise the broad thrust and strategy of the budget, given the Government's successes in 1987 following the budget of last March. How can they realistically question this budget which sets out a comprehensive and integrated strategy designed to reduce current expenditure and Exchequer borrowings, to create a climate which will encourage the creation of sustained employment, to provide significant tax concessions to the hard pressed PAYE workers, to safeguard the position of those depending on social welfare assistance and to actively involve the participation of the social partners, farmers, trade unions and employers in the overall national strategy.

I believe there is a countrywide recognition that the Government had the insight to recognise the fundamental problems of the economy, that they know precisely what has to be done and they have the political will, the unity of purpose and the ability to remedy the matters. There is a very full acceptance that former policies adopted by Governments in regard to State spending simply had to be reversed if this nation was to survive a very real threat to its financial and economic sovereignty. The Government, in tackling the very worrying economic situation, have shown commendable courage, common sense and cohesiveness and displayed a sense of imaginative leadership and decisiveness which had not been very apparent in Irish politics in recent years.

I want now to turn to State forestry which has passed the difficult development years of estate formation, planting and species experimentation, etc. and has reached the stage where its production can now sustain indigenous wood industries with the potential and capacity for growth, jobs, import substitution and exports, all of which greatly contribute to domestic and foreign currency earnings. Forestry is one of the great economic and social achievements of this country. Its success and achievements to date are reflected by the establishment of a scarce renewable resource on an estate of one million acres; the development of indigenous wood-using industries; employment levels in forestry, industry, harvesting and transport of the order of 6,500; the attainment of an import substitution level of 50 per cent of the constructional timber market with a potential to achieve 100 per cent substitution before the end of this century; the development of lucrative outlets; the creation of a national pool of considerable expertise in all aspects of silvaculture development and management; the development of private forestry and forestry management companies and the creation of some of the finest amenity forestry in Europe which consists of 12 forest parks, a forest chalet holiday complex and some 400 other open amenities for the enjoyment, education and appreciation of the public.

The Government attach great importance to maximising the potential of the country's resources, the greatest of which is our land. However, to achieve this we must ensure that our produce is geared to market needs. I mention this specifically because much of our agricultural production is now in over-supply and to some degree alternative forms of land use are now required in order to arrest this trend. Therefore, an obvious worthwhile alternative is forestry. The State has to by its initiative over the years shown that timber production is a real and practical commercial venture and an attractive alternative use particularly on marginal agricultural land. It is also a haven for a wider variety of wild life and an attraction to tourists for its walking and shooting. This is not to suggest that forestry should replace agriculture as the major industry of this country. However, it has a complimentary role to play in some areas in diverting land from subsistence farming to profitable timber production, and there is at least a further one million acres of marginal land producing precious little at this time which could be easily diverted to forest production.

When the Government took office they soon realised that the way forward lay in creating a national confidence in our ability to further develop this resource and thereby contribute to a resolution of our difficult economic and social problems. As part of this problem and in view of our strategic location, close to one of the world's great markets, namely Europe, I developed a broad strategy aimed at ensuring that the many advantages this country has for forestry development are exploited to the full so that the benefits of Irish forestry in terms of employment and wood industries are realised as soon as possible. This entailed the following measures.

It became clear to me that the enthusiasm for afforestation which formed much of the national development policy of the fifties and sixties and which saw annual acquisition and planting levels of 10,000 hectares achieved had dissipated to a point where little more than half of these levels were being achieved. This reflected a national disinterest in a resource which, if properly developed, could become the green gold of the country. I was determined to arrest this trend so as to ensure that the obvious benefits of forestry are secured for future generations. To achieve this estate planting was increased immediately from a mere 7,000 hectates to 8,000 hectares. This, together with private planting of 3,200 hectares, gave a national planting record in 1987 of 11,200 hectares, a figure never previously achieved in the history of this State. This record will be further increased this year by an additional 2,000 hectares of State planting to give us an overall national planting target for 1988 of over 13,000 hectares or almost 33,000 acres. This surely reflects the Government's zeal and commitment to forestry development and the importance they attach to their overall development programme. These targets are realistic and there is every indication that they will be met despite the financial constraints which exist. Forest extension and wood industry expansion are now an essential element of the Programme for National Recovery.

A striking aspect of forestry in Ireland, as compared with other European countries, is the dominant position of the State in forest development. The State planting programme has far exceeded that of the private sector for many years. As a matter of fact the percentage of forest in the country vis-à-vis State and private is 85 per cent in favour of the State. This is unique in the world and requires change. It is in direct contrast to developments in the UK at present, where the ratio is approximately one to one. The potential of forestry as an investment, however, is being recognised now by the private sector. The planting rate which averaged only 250 hectares per annum up to the early eighties exceeded 2,500 hectares in 1986 and 3,200 hectares last year. While the Government will be pressing ahead with the expansion of the State afforestation estate they will also be taking more positive steps to secure a significant and sizeable expansion of the private forestry sector.

There has been an expansion in this area in recent years but there is still considerable scope for further expansion. The Government will encourage expansion of the private forestry sector to the maximum extent possible in harmony with the State afforestation programme. For many years the high capital cost of afforestation has been a disincentive for those considering forestry as an investment. This, however, is no longer the case. The grants available under the forestry element of the western package, for example, are such that a forest crop can be established at a very much reduced cost, when allowance is made for the very sizeable grants. While these are available at present only in the western region, a proposal is now with the Commission in Brussels for the extension of the scheme to the disadvantaged areas of the eastern region and the Government are confident that these proposals will find favour with the Commission.

There is a proposal to extend the western package to areas outside the western area, to an area which will comprise approximately 635,000 hectares of land east of the Shannon. Hopefully these will qualify for much higher afforestation grants in the future. Farmers in this region will benefit, as those in the western region are eligible for grants of 85 per cent of their afforestation cost, subject to a maximum of £800 per hectare. Non-farmers will qualify for 70 per cent of the grants which will also be subject to £800 maximum per hectare. Approval is also being sought from the European Commission for a scheme of afforestation grants for full time farmers outside the disadvantaged areas. Effectively there will be considerably higher afforestation grants available throughout the country than heretofore. Farmers who afforest even part of the land will continue to be eligible for headage payments. A free technical advisory service will be available for all those who are considering afforestation of all or part of their holding. It is very important that there is a substantial take up of these grants as up to 50 per cent of the cost is recoupable from the EC. EC funds will be available for publicising and promoting these schemes. In addition to the foregoing, the Government have increased domestic grants for private conifer planting from £300 to £500 per hectare. In the hope of restoring hard woods to a more realistic level they have also increased the grants for broad leaf planting to £800 per hectare.

I would like to compliment the Tree Council of Ireland, organisations such as Crann, many local authorities, tidy town organisations and other voluntary groups throught the country who are promoting the re-establishment of broad leaf trees in their home areas. The establishment of broad leaf trees is an act of faith in the future. It also beautifies the environment and forms part of our heritage. In this connection, we are also anxious to promote and to encourage GAA clubs to become involved in the planting of ash trees. My Department, despite the limited resources of ash available, will try to have as even handed an approach as possible to meet the needs of the various hurley makers throughout the country. But it will be necessary and it is obviously clear at present that we have to expand this area if we are to maintain supplies for our great traditional games.

Any substantial increase in private afforestation will require the co-operation and involvement of the farming sector and need not, as I said earlier, be at the expense of agriculture. About 1 million hectares of marginal agricultural land, principally west mineral upland and blanket bog soils of low productivity and consequently low profit for agriculture is ideal for forestry. For example, Leitrim gives an average yield for forestry of 22 cubic metres per hectare compared with the national average of 16 cubic metres, although not all the marginal land would have such a spectacular yield. It is no harm to put that type of yield class into a European and world context. It is up to five times the yield class which would be possible in a country like Finland and two and a half times the potential yield class in the UK. This is an indication therefore of the capacity of marginal agricultural land in Ireland to produce much faster growing trees than in any other part of the world.

Forestry can also be considered as an alternative land use to the production of traditional commodities which are in over supply. This is not to say that forestry is the answer to agricultural problems, but rather that the land use can be devised so that both sectors will complement each other. In order that the private sector in forestry can develop it will be necessary that we would have a much more significant contribution from the farming community, from the dairy co-ops and the various agricultural interests. Already it is quite significant that co-ops in West Cork like Barryroe, the Western Forest Co-op in the western counties and the rural ventures which were organised by Macra na Feirme in the west Limerick and Kerry area are involved. The potential for private forestry development can be greatly enhanced by the involvement of co-operative movement. I would like to encourage this development as much as possible throughout the country.

As a first step to ensuring the maintenance of the expanded programme of forestry development the Government have decided that Bord na Móna cutaway bogs which are suitable for forestry will be transferred in future to the forest service. This will apply to any cutaway lands which are at present available for planting and also to those areas which will become available in the future as Bord na Móna bogs are exhausted for turf production purposes. The mechanism for the orderly transfer of these lands from Bord na Móna has now been established. This decision is designed to ensure that the increasing momentum in forestry development which is envisaged in the Government's Programme for National Recovery will be systematically achieved. It will also ensure that such lands no longer lie fallow, but are used to generate further wealth. This is a milestone in the lengthy discussions which had been going on for many years about the possible uses that might be identified for this resource. In the consideration of this matter the Government were conscious of the fact that the peat potential of these bogs is a wasting asset and that this has serious employment implications for the midlands and other areas in which Bord na Móna operate. The Government decision will ensure that replacement employment in forestry activities will now become available as peat production in the individual bogs approaches exhaustion.

Debate adjourned.