Dáil Éireann debate -
Wednesday, 26 Oct 1988

Vol. 383 No. 4

Estimates for Public Services, 1989, and Public Capital Programme, 1989: Motion (Resumed).

The following motion was moved by the Minister for Finance on Tuesday, 25 October 1988:

That Dáil Éireann takes note of the 1989 Estimates for the Public Services (Abridged Version) and of the 1989 Summary Public Capital Programme.

Debate resumed on amendment No. 4:

After "Programme" to add to the Motion:

"published by the Government on 18th October, 1988. In noting the publication of the 1989 Estimates Dáil Éireann draws attention to the fact that they present only one part of the budgetary and financial picture for 1989, and resolves to have a full debate on each estimate as amended, as soon as possible after the 1989 Budget."

—(Deputy Noonan,Limerick East.)

Mr. D. Ahern

Before the adjournment last evening I mentioned a number of matters, mainly tax amnesty has assessment. While the tax amnesty has been a tremendous success, borrowings by a number of people in order to meet the deadline may very well cause them financial problems in the coming year. I asked that the Revenue Commissioners adopt a commonsense approach in their dealings with people after the deadline. Because of the rush of documents submitted before 30 September some difficulty may arise. It may very well happen that some of these rushed documents may be incorrect and the Revenue Commissioners may feel that the people involved would not be entitled to the amnesty. I also made the point that the dovetailing of the tax amnesty and self-assessment may cause problems also, in that some may have had to borrow substantial amounts of money before the deadline and within a couple of months are obliged under the self-assessment rules to pay their own estimates of those amounts.

One issue regarding the Estimates which is fairly close to my heart is the subject of Army pay. This issue originated in my constituency. Most Deputies would be in agreement that the whole issue of Army pay should be looked into. I am glad that the Government saw fit, long before any public disquiet was voiced about this, to organise an interdepartmental committee to look into the matter and I am looking forward to the results. I note in the Estimates a 4 per cent increase in the amount allocated to the Defence Forces and it is hoped that some of this will go to increasing the pay and allowances of some Army personnel where that is rightly deserved.

Another area in which an increase of £2 million is shown is that of tourism. As a Border Deputy, I mention the recent celebration of the success of Carlingford, County Louth in the Tidy Towns Competition. Many Deputies feel that the efforts of Bord Fáilte are homed in on certain areas of the country to the detriment of others. A broader outlook embracing the whole country should be taken by that board.

In regard to education, I note that in most areas the Estimate has increased. One area, the third level, will obviously be a bone of contention with some. It will lead to increases in fees. The Department should look into the area of higher education also. My own county council will have a substantial pay-out this year in relation to higher education grants. One area which caused them difficulty in their estimates was that on interest. Nearly £100,000 in interest charges will be expended by the county council before recoupment from the Department.

A number of earlier Government speakers mentioned the areas of horticulture, industry and commerce and forestry. Over the past 18 months tremendous strides have been made here. It is an indication of the upturn and the positive approach of this Government.

In one of the recent bulletins from the Confederation of Irish Industry one of the headlines is: "Less borrowing leads to more jobs". There is no doubt about that; it is the reality. We have brought down the interest rates to such an extent that there is substantially less borrowing here. Ultimately, this will lead to more jobs. The bulletin lists the various areas that are affected. Since we came into power the monthly cement sales have increased, consumer prices have dropped and retail sales have increased. It is all good news these days. This is the result of the good policies of this Government. I would reiterate that these Estimates are another step, as the Minister for Finance has said, in the revitalisation of our economy.

Proinsias De Rossa

I was struck by a number of points made by the Minister for Finance in his contribution yesterday. He said: "There is now confidence in the will and the ability of the Government to take charge of events and in the future of the economy". I regard that statement as utter and total nonsense. Could he indicate where the confidence lies? I have no doubt there is confidence in the Stock Exchange and in the boardrooms of many private companies, but there is no confidence in this Government among the almost one million men, women and children of this State who are living in poverty. There is no confidence in this Government among the 240,000 men and women who are idle or, indeed, among the 120,000 or more young men and women — and indeed whole families — who have emigrated to Britain, the United States, Australia and Canada over the past five years. There is no confidence in those areas which badly need assistance from the Government by way of job creation.

There is a very clear message in these Estimates for the unemployed and for our emigrants. The message to the unemployed is that Fianna Fáil — supported, let it be said, by the Fine Gael and Progressive Democrats parties — have abandoned and forgotten them and that nothing will be done to create the jobs necessary to take them off the dole queues or bring them back home from the countries to which they have emigrated. The message for those leaving the country at the rate of 600 per week is that Fianna Fáil may do their best to get them visas for the United States but will do nothing to create the jobs to allow them a decent life at home.

Again, the Minister says: "The results of the labour force survey for April of this year were published recently. They show a rise in total employment of 6,000 in the year up to April 1988." Yet we are told in this morning's newspapers that the Minister for Labour has indicated that there will be something like 20,000 jobs lost in this economy during 1988, which will wipe out almost totally the projected job increases. In relation to that, the 6,000 increase in the workforce which the labour force survey indicated was shown before the redundancy scheme in the public sector took effect. I have no doubt that when we see the figures for that area far in excess of 6,000 jobs will have been lost in the public service.

Those who voted for Fianna Fáil in February 1987 in the hope that a Haughey Government would do what they promised to do — reduce unemployment and end emigration — must feel betrayed and bitterly disillusioned. The cutbacks of £311 million provided for in these Estimates, coming on top of cuts of £485 million last year, cannot be implemented without putting more people out of jobs and creating additional hardships for the poorest and weakest sections of society.

The Taoiseach may huff and puff about the attitude of the British Prime Minister, Mrs. Thatcher, to Ireland but these Estimates show that when it comes to economic matters there is no more enthusiastic follower of the British Prime Minister than this Fianna Fáil Administration.

It was very cynical of the Government to surreptitiously leak figures during the summer on the size of their proposed cuts in order to massage public opinion, distracting commentators so that they would not focus on the economic and social consequences of cuts of such magnitude, but would tell the people how lucky they were that they were not as large as the figures of £400 million which had been suggested. It is disturbing to see the Government being attacked by the so-called main Opposition Parties — Fine Gael and the Progressive Democrats — because they assert that the cuts are not severe enough. The first current account deficit was brought about in 1972 by a Fianna Fáil Government and the debt we have at present was run up in vote-buying by the various parties in government in the subsequent ten years. After 1982 we were taking more in tax than was being spent on the provision of goods and services but the debts were rising because of the size of interest payments and because interest rates rose. It is, therefore, nauseating to see the same people who ran up the debt vying with each other in feigning virtue on this issue.

It is a downright lie to pretend to the people that we must have these types of cuts, that they need to be of this magnitude. These massive cuts will hit hardest the poor and most vulnerable — those on low pay and those dependent on social welfare. Whether this is intentional it is not yet clear but the conservative ideology of the existing major parties in this House is restricting an economic analysis of the Right wing. The largest cuts have been in welfare, health and environment where spending could be of greatest benefit to those in need.

It seems clear to me and, I suspect, to many people outside this House, that these cuts are ill-conceived and regressive. Even conservative groups such as hospital matrons and consultants have had to speak out against them. The Government are getting others to do their dirty work. They have imposed responsibility without financial power on hospitals, health boards and local authorities and they sit back while each group argues as to where the cuts should take place instead of questioning the cuts in the first place. The Government are playing the old game of divide and conquer, letting others who are trying to do a difficult job get the blame for their own failure to manage the country's finances.

If there is to be a re-organisation of Government spending, and The Workers' Party hold that there is room for improving the effectiveness of public spending, there should be a review of aid to powerful economic interest groups such as industry or farmers but, of course, the Government are afraid of incurring the wrath of these economic elites.

More importantly, the other side to the spending coin is taxation and reform here would have dramatic effects on the economy in terms of revenue as we have seen recently in terms of equity and in fiscal policy. It is clear from the extent of these cuts that the only changes in taxation would be further reductions in the rates for the rich and the powerful and the extention of loopholes like the so-called business expansion scheme.

The recent ESRI-Combat Poverty Agency report on poverty confirmed what a lot of us already knew — and I include in that many conservative Deputies in this House — that is, that there is real poverty in our country. It is surely a savage indictment of almost 70 years of self government, under successive conservative governments, that so little progress has been made towards eliminating poverty and achieving social equity. Indeed, in many respects the situation seems to be getting worse. The ESRI-Combat Poverty Agency report found that more than 750,000 people are now living in some degree of poverty and that children currently make up a higher proportion of the poor than 15 years ago, that the top 20 per cent of Irish families enjoy 40 per cent of gross income while the bottom 20 per cent have to do with less than 5 per cent of gross income.

Poverty is more than simply the absence of adequate income. It also means, for the poor, the absence of access to adequate facilities, and this aspect of poverty has actually worsened in recent years due to the policies of cutbacks pursued by this Government. The Minister's statement yesterday that the intention is to avoid hurting those who need Government services is laughable.

The two-tier nature of our health system has never been more obvious, with those who can afford luxurious private hospitals receiving prompt and efficient treatment while all others must face longer and longer queues and rapidly deteriorating facilities. A startling statistic came to my attention last week when I was informed that in the Blanchardstown area there are 3,000 children waiting on dental care because there are not sufficient dentists employed by the health board as a result of the Government embargo. I am sure that is duplicated throughout the Eastern Health Board area and in other health board areas around the country.

The advances made in the sixties and in the seventies in first and second level education — and which were a potent force for progress towards social equity — have been whittled away by cutbacks. Third level education, and the universities in particular, have remained virtually inaccessible to children of low income families with only 1 per cent of children from the north Dublin inner city area making it to third level compared with as many as 44 per cent in some of the more affluent areas of Dublin. Again I would make the point which relates to my own area. We have a junior girls comprehensive school in the Ballymun area which has no home economics teacher and will not be provided with one by the Department. The Department very graciously appointed nine-tenths of a French teacher to the school in the current academic year. What kind of nonsense is that when we are being bombarded day in and day out by advertisements that we must get ready for 1992, that our children must have second languages. Here we have a Minister appointing nine-tenths of a French teacher to a school in an area which is one of the most disadvantaged in the country. It is totally nonsensical and cynical.

Job creation is the key to resolving the problem of poverty in Ireland. The Combat Poverty Agency-ESRI report confirmed this. It found that the largest single cause of poverty is unemployment. While that is the case it also found that low pay was an equally large cause of poverty. With such mass joblessness with officially registered unemployment at 241,200, with over 40,000 on schemes at any one time, with a missing 120,000 — those who emigrated in the past five years, most of them reluctantly — and with tens of thousands of discouraged workers, who would enter the labour force if they could get jobs, remaining in education or at home, it is no wonder that cynicism with our political system is rampant. A further effect of mass unemployment is the frustration of many of those at work — the square pegs in round holes — unable to move because of the stagnant labour market.

It is clear from these Estimates that this Government are not going to do anything about unemployment or emigration. In fact they will do less about unemployment than they did last year or even than was done eight years ago in 1980 when unemployment was 40 per cent of its present level and when emigration was very low. This is revealed by the shocking cuts in capital spending. I call them shocking because with capital spending you are able to directly reduce unemployment particularly for the most vulnerable, the less skilled, and because reductions in capital spending are extremely short-sighted. In 1989 the nominal amount of Exchequer funded capital spending will actually be less than in 1980. Unemployment was far lower then yet £660 million was invested by the State in the economy at that time compared with the mere £617 million planned for 1989, a year in which every economic indicator, except employment, is at its most favourable for decades. Surely this is the very time for those who believe in climates for enterprise, in atmospheres and environments and other nebulous concepts as the guiding entrails to be followed, to invest in jobs. If real capital spending in 1989 is to be maintained at the same level as in 1980, it should be £1,393 million, more than twice the level planned.

The Workers' Party do not believe that investment should be determined by climates but must be active and planned, particularly in a small, peripheral and late development economy such as we have. However, one cannot but be struck by the very favourable climate for investment in Ireland. It is further evidence of a two track economy — a tax and profit haven for the tiny number of rich elites and a tough place for the rest of us.

Growth is at 2 per cent, having been a minus figure for several years. Manufacturing output is soaring, productivity is high, exports are booming, imports are down and we have the highest balance of payment surplus in the EC. The national debt is, as we have always maintained, now recognised to be manageable, aided by the overdue payments of what can only be called the "tax parasites" from the so-called private entrepreneur class. Farmers' incomes are rising fast, interest rates are down and profits are booming. For example, Smurfits profits soared by 156 per cent to £154 million, AIB's by 23 per cent to £125 million, Cement Road-stone's profits went up by 27 per cent to £46 million, GPA's half year profits rose by 59 per cent to $72 million and will be over $100 million for the year, Clondalkin's half year's profits rose by 38 per cent and Power Corporation's by 100 per cent. Most industrial companies' earnings per share will rise by almost 50 per cent this year, when inflation is only 2 per cent. If workers were to get pay increases of 25 times the rate of inflation there would be warnings of gloom and doom and the unions would be accused of demanding too much from the economy. Yet economists are silent on these immoral profit rates particularly as most of the money which was made through the sacrifices of workers is flowing out of this country.

Surely when interest rates are low, profits are booming and the so-called climate is right for enterprise, it is then that the Government should be taking the lead in investment, particularly when so much needs to be done. You cannot have jobs with climates. You have to actually do something — you have to invest. The forecast level of private investment next year is up on this year when it was almost nil but it is far lower than the seventies when double digit percentage increases were the norm. The Government are making a grave mistake in making these savage cuts in the most job creating area of the economy. Furthermore much investment will have to take place eventually and these cuts are merely post-ponements. Roads, sewers, drainage and local authority houses will have to be built. My point is: why not build now when work is so desperately needed, when interest rates are low, when the debt is more manageable and when such building will boost the economy?

I am well aware that some public investments in the past did not yield good returns and that some of them were disasters.

An Ceann Comhairle

I intervene to advise the Deputy that one minute remains of the time allotted to him.

Proinsias De Rossa

It means I will have to speed up.

An Ceann Comhairle

I might have given you earlier warning, Deputy.

Proinsias De Rossa

Thank you, a Cheann Comhairle.

However, the great white elephant so beloved of the Right, the NET, returned profits faster than anyone expected, aided by the sacrifices of its workforce which was cut in half and, of course, supplied with cheap gas feedstock. Aer Lingus are doing very well. The problems of Irish Shipping were caused by bad management and not by its State ownership.

If there have been some poor public investments I would urge that the greatest blunder by the State has been its huge investments in the private sector on which there has been no financial return in interest, dividends or even in taxation. Every year the extraordinary sum of £1.3 billion goes to aid private industry in tax breaks, grants and other subsidies designed to encourage modernisation and employment. Yet the job losses have exceeded 40,000 since 1980, from a low base, and the untaxed profit outflows amount to £1.3 billion each year. The amount of corporation tax paid by this sector is zero. With such poor returns it is time to substantially redirect aid to private industry and the most effective way of doing this is to reduce the tax breaks. The aid available must be extended to include public enterprise and it must be effectively targeted to develop integrated industries in a planned drive for productive sustainable jobs. These are gross, particularly when the size of profits are seen, when no jobs are being created and when PAYE workers have to make up the shortfall and to pay for the businessmen's dole. Every capitalist who complains about the high marginal rates of personal taxation must be reminded that they are caused by the existence of the two track economy where those with capital are cosseted and those without are crippled.

An Ceann Comhairle

The Deputy might now bring his remarks to a close.

Proinsias De Rossa

It is time to reduce these tax breaks, to be more interventionist and demand value for money for Exchequer investment in the private sector. If there is really a budgetary crisis then all must contribute to its resolution, including the rich and the corporate sector. For too long the unfair burden of taxation and of the cuts have fallen on the heads of those——

An Ceann Comhairle

I must now call another speaker.

Proinsias De Rossa

——who cannot defend themselves. I would urge the Minister to reconsider his Estimates for 1989.

Minister for Social Welfare (Dr. Woods)

The Estimate for my Department preserves all social welfare services. There has been absolutely no reduction in social welfare schemes or programmes. The conditions of eligibility for all our schemes remain the same.

The taxpayer is being asked to provide £88.5 million less for social welfare in 1989 than in 1988. At the same time there have been substantial improvements in the rates of payments from July which are provided for the full year in 1989. The reduction in expenditure has been brought about in no small measure by effective management, intensified abuse control and a significant reduction in the numbers claiming unemployment payments and disability benefit. In summary, we have achieved significant savings to the taxpayer while preserving and improving all social welfare services.

On taking up office 19 months ago, I set myself the objective of introducing more effective management and control of the resources devoted to social welfare so that additional funds could be directed to those most in need.

The accumulated savings to the taxpayer in 1987 and 1988 to date from measures to control fraud, abuse and unwarranted claiming amount to £66 million. This has been achieved by introducing new and intensified control measures aimed at ensuring that social welfare payments go to those who are genuinely entitled.

The average level of weekly unemployment in the Estimate for 1989, is 236,000 which is 17,000 below the estimate of 253,000 on which the 1988 published Estimates are based. The actual outturn for 1988 will be 242,000 — some 11,000 below the Estimate. This is clear evidence of the Government's success in turning the tide on unemployment and controlling abuse. The recent labour force survey shows an increase of 6,000 in the numbers at work to April 1988. These trends are continuing and are reflected in the reduced live register figure for 1989.

I want to stress that emigration is not responsible for the expected reduction in the live register in 1989. The figures for 1988 do not allow for any increase in emigration as compared with the last few years. The indications are that the level of emigration will be reducing in 1989.

One of the tangible benefits from our success in controlling social welfare expenditure is that funds are available to the Government to provide a Christmas bonus again this year from within my existing allocation. The bonus will be paid to all long term social welfare recipients at the same rate as last year, that is, 65 per cent of the recipient's weekly payment. Like last year, it will be paid in the first week of December.

Almost 580,000 pensioners and long term unemployed persons will receive the bonus at a cost to the Exchequer of £21 million. Including the dependents of recipients, the number of people directly benefiting from this measure is 921,000. This reflects the Government's concern to protect those who are dependent on social welfare by recognising the extra financial pressures they have to bear coming up to Christmas time.

Let me give you a few examples of how the bonus will help people to cope. An elderly couple on old age contributory pension will qualify for a bonus of £60.45 bringing their total payment in the first week in December to £153.45. A couple with three children on long term unemployment assistance will receive a bonus of £64.22.

The Government have made major progress in achieving their objective of controlling the public finances. This success enables us to turn our attention now to a greater extent to the measures necessary to stimulate employment. We have every reason to be hopeful and confident about our future. A growing economy with a more effective public service will provide many new job opportunities. We need to have the confidence in ourselves and in our future to make the best advantage of these opportunities.

The general outline of economic developments this year is very encouraging. Growth is remaining quite broadly based with output increased in most areas compared with the first half of last year. Manufacturing output was up over 13 per cent year-on-year in the first six months. The trade balance continues to improve pointing to a further strengthening of the balance of payments surplus this year. Inflation remained close to the 2 per cent mark at mid-August, below the EC average of 3.25 per cent and well down on the equivalent UK figure of 5.75 per cent. The indications are that Irish inflation will remain in line with the EC average or better.

The profile of our economy in 1988 indicates a major improvement in most of our economic indicators — the budgetary position, the balance of payments, interest rates, inflation and international competitiveness. The improved pace of economic growth over the past two years confirms the economy's capacity to achieve growth in a period of budgetary restriction.

To provide an additional impetus in economic activity and the creation of new jobs, the Government announced earlier this month a series of measures under the Programme for National Recovery to finance projects and stimulate consumer spending in a number of areas including tourism, forestry and agriculture. These measures reflect the Government's commitment under the programme to create a good climate for growth and to exploit opportunities in key sectors.

The Government strategy has laid the foundation for sustainable growth in output and employment in the years ahead, although the task is not yet completed. We expect that 3,000 new jobs will be announced before the end of the year and that the 1988 target of 20,000 additional industrial jobs under the programme will be achieved.

If the economy is to realise its full potential, especially on the employment front, it is vital that the progress made to date in resolving the basic imbalances in the economy controlling public expenditure and strengthening overall competitiveness should be sustained. The control of spending on social welfare is of major importance in this context.

As I have alrady said control measures taken to date have saved £66 million. Further new measures that I am providing in the Estimate will save an additional £21 million in 1989. The reduction in the live register, together with a reduction in the numbers claiming disability benefit, will contribute £76 million towards the savings. There will be £35 million income from PRSI for the self-employed in 1989 — £20 million more than in 1988. This also contributes to a reduction in the Exchequer contribution to the Social Insurance Fund.

The Estimates for 1989 is the amount required to finance existing schemes and services. In accordance with normal practice it provides for increases in this year's budget but does not include any provision for increases in social welfare payments that the Government will grant next year as part of their budgetary measures.

During the past year, we honoured our pledge to maintain the overall value of social welfare payments and within the resources available to make special provision for greater increases for those on the lowest payments. This Estimate includes £54.5 million in respect of the carry-over costs of the substantial improvements that arose from the last budget. The Government increased all social welfare payments by 3 per cent from last July. In addition, the personal rates of unemployment assistance and supplementary welfare allowance, which were the lowest social welfare weekly payments, were increased by the significantly higher amount of 11 per cent. We also streamlined child dependant rates with a 3 per cent increase in rates generally and a 6 per cent increase for child dependants in the case of persons on the lowest payments. This represented a major improvement in income support for families, particularly in the case of large families.

Specific examples of developments provided and planned for in the coming year include the following. The extension of PRSI to the self-employed is a major development of our social welfare service now coming onstream. The registration and collection of PRSI from the self-employed is proceeding according to plan. Collection began last April and about 40,000 company directors currently paying income tax through the PAYE system are now paying PRSI as well. In addition, over 180,000 who pay income tax under Schedule D of the tax code will all by now have received a demand for their PRSI along with their tax demand at the end of this month. Overall, the extension of PRSI to the self-employed is expected to bring in about £15 million this year and £35 million in 1989.

It is customary to increase the earnings ceiling for PRSI contributions in line with increases in wage levels. From April 1989 the current PRSI ceiling of £16,200 will be increased. Employees, employers and the self-employed will pay PRSI contributions in respect of earnings up to £16,700. In addition, employers will continue to pay contributions up to a ceiling of £20,000 in respect of the 15 per cent of employees who have these higher earnings. The Estimate includes £5 million in respect of the higher ceiling for employers. There will be no increase in the rate of PRSI contribution.

Irish employers pay one of the lowest rates of PRSI in the European Community. In the United Kingdom there is no ceiling for employers on the amount of earnings in respect of which contributions are payable. This measure will reduce the burden on the general taxpayer of maintaining the Social Insurance Fund and will help to avoid the need to cut benefits paid to employees.

I understand that Deputy Noonan in the course of his contribution yesterday alleged that the increase in the ceiling for employers will lead to an increase in their costs of £70 million. That is not so. It arises from a mistake made by the CII in calculating, on day one, what might be the figure. That matter has been discussed with them and they now fully understand the position. As I have said, the increase in employers' ceiling to £20,000 will raise an extra £5 million in 1989. That is the actual figure.

Last month saw the publication of a very comprehensive report on poverty and the social welfare system here by the Economic and Social Research Institute. That report is an important document providing relevant information on the categories of people most at risk in our society. While the overall responsibility for this project now lies with the Combat Poverty Agency, my Department were responsible for making the initial arrangements to have the study carried out with assistance from the European Community poverty programme. The main value of the report is that it highlights the groups most at risk and indicates what should be the major concerns in social policy and where particular attention should be focused.

The report identifies the most vulnerable groups to be large families, families where the head of the household is either unemployed or employed on low earnings; young women bringing up children on their own; families where the head of household is sick or disabled and low income farming households. It also indicates that a lot of progress has been made since 1980 in certain areas. For example, the elderly generally are now in a low risk category. This is a finding of which our society can be proud.

The report shows that the policies adopted by the Government are properly directed. We had already recognised the special difficulties of those on the lowest social welfare payments. We provided extra increases for the long term unemployed, for those on supplementary welfare and for their children. We also extended the free fuel scheme to long term unemployed families.

Very significant progress has been made within the current financial constraints and my intention is to continue to direct resources to those in greatest need. In this regard the ESRI report is particularly useful in that it indicates priority areas of special need. These findings will be taken into account in the context of future developments in social welfare.

The family income supplement is directed to families whose breadwinner is at work on low pay. The review of the family income supplement is almost complete. I look forward to receiving the report which, together with the ESRI report, will be considered in the context of future policy developments.

Last December I announced in the House that I had asked the Combat Poverty Agency to carry out a detailed study of moneylending. I am particularly concerned at the effects of unscrupulous moneylenders on the less well off in our society. Moneylending has traditionally been regarded as a form of credit used almost exclusively by the poor. Until now there has been little concrete information about the extent and the effects of moneylending and indebtedness. The report will fill the void which exists not only in our knowledge of this form of credit but also in our understanding of the effects of indebtedness on low income families, particularly those who are long term dependent on social welfare. The report will be available in the next few weeks.

The Jobsearch programme, which Deputies will recall was introduced in April 1987, provides support and assistance to the unemployed, especially the long term unemployed, in their search for work. Under the programme the main State agencies dealing with the unemployed were directed by Government to actively assist the unemployed. Through Jobsearch, the unemployed are encouraged to avail of the professional service which FAS can provide in assessing their strengths as potential employees.

The programme provides a substantial number of placements in FÁS schemes and courses as a priority for the unemployed. Apart from the 8,500 who have so far this year attended the Jobsearch course, a further 24,000 have been placed in schemes and courses. In addition, jobs have been found for another 5,000 persons. Most of those who do not accept an invitation to participate in the programme leave the live register voluntarily. So far this year savings of over £15 million have accrued from persons who left the live register and did not avail of the opportunities which were being made available to them under the programme. The Government have decided that the programme will be continued next year as a special service of support and assistance to the unemployed. It is not expected that savings of the same magnitude will accrue under the programme next year. The Estimate allows for savings of £8.5 million in 1989.

The only long term solution to unemployment is increased job creation. However, it is vital that those currently unemployed are kept in touch with the labour force and do not become marginalised. It is for this reason that the Jobsearch programme was initiated and will continue now for its third year.

I have introduced flexibility into the unemployment payments system. I want to encourage the unemployed to exploit every opportunity of enhancing their job prospects. This we can do by allowing them, in certain circumstances, to take up part time work, to engage in voluntary work in their own community, or to pursue education courses, and still retain entitlement to a basic income maintenance payment. Provision for these schemes is made in the Estimates.

The part time job incentive allows long-term unemployed persons to take up a part-time job for up to 24 hours a week. The educational opportunities scheme is intended to give a second chance to older long-term unemployed persons over 23 years to study for a second level certificate. The courses are provided by various VECs around the country while my Department continue to pay their income maintenance entitlements to participants. After a very encouraging pilot period, during which I was very impressed by the motivation and achievements of participants, I was delighted to be able to announce the continuation of the scheme in the two pilot locations, Limerick city and Tallaght, County Dublin, and, with the support of my colleague the Minister for Education, its extension to a number of other locations around the country. Details of the new locations have not yet been finalised. However, it is expected that the scheme will be available in 12 large centres of population.

I am confident that the scheme will continue to be successful and I believe that it has a definite and permanent part to play in meeting the needs of the unemployed.

The part-time education initiative is intended to cater for those unemployed persons who would like to further their education but do not wish to undertake a full-time course. The initiative takes the form of guidelines to deciding officers of my Department. Essentially the guidelines suggest that while participating in part-time courses, for example, literacy or numeracy classes, night classes or courses aimed specifically at the unemployed, an unemployed person would be regarded as fulfilling the normal criteria of being available for work. I am examining what other options can be built into the system to allow for further educational opportunities. Legislation may be required to enable any further development in this direction.

The voluntary work option which I launched last July is intended to encourage unemployed persons to become involved in voluntary work in their local communities and to encourage voluntary organisations to create opportunities for this work and involve the unemployed as much as possible in their activities. Unemployed persons continue to receive their unemployment payments while undertaking the work although they are expected to be available should a full-time paying job turn up or a training place on a suitable course. In addition, to encourage the voluntary organisations to create opportunities for this work, I launched a pilot scheme in which I made £50,000 available in grants to help out with the costs. I have been very encouraged by the response from the organisations to date, with over 60 applications.

Two weeks ago I signed new regulations giving entitlement to pensions on a pro rata basis to certain persons affected by what has become known as the “pensions anomaly”. I was delighted to be able to do something for those concerned and to redress this anomaly. The Estimate includes the provision of £2 million for this purpose in 1989.

Over 1,200 elderly persons will benefit by the new provisions. Pensions will range from a minimum payment of £13.10 up to £39.30 for a single person. Full adult and child dependant allowances will be paid with the pensions.

In the course of my contribution today, I have discussed the cost of the range of services and schemes for which my Department are responsible. An important aspect of this is the quality of the administration of those schemes and services. We are concentrating on improving the quality and service of these schemes. I will be devoting any available resources to that end. As part of the ongoing work of my Department I am continuing to allocate resources to the combating of fraud and abuse. The Estimates for 1989 include provision for the extension of the joint investigation unit by the allocation of another 17 extra staff. This unit is a joint effort by my Department and the Revenue Commissioners. I have also increased the staffing of the external control unit by 13 extra staff to allow for a nationwide review of entitlement to unemployment payments.

In addition, legislation passed last year enables me to require employers to notify me of the date of commencement of the employment of any person in their employment and to furnish me with any details required to enable determination or review of a claim by a person in their employment. I will sign the new regulations bringing these provisions into effect within the next two weeks.

This month represents the first anniversary of what must be regarded as an historic achievement for the Government. I am referring to the extension of dental, optical and aural benefits to the dependent spouses of qualified insured persons from the beginning of October last year. Since the extended scheme was introduced, 176 dentists have signed new agreements to participate in the extended scheme. I would like to thank them for their participation.

In the twelve months that it has been in operation, almost 65,000 dependent spouses have availed of dental, optical or aural treatment — treatment which was not previously available to them. It is relevant to point out that of the 1.4 million persons who are eligible for treatment benefits some 62 per cent have earnings which are below the medical card guidelines. This new scheme, therefore, is clearly of great benefit to people in need.

The publication of the Book of Estimates for 1989 is a clear illustration that this Government are prepared to honour their commitments. We pledged that the public finances would be brought under control. We are well on the way to achieving this. This is the second year in which the Book of Estimates was published in October setting out the allocations within which each Minister and State agency must operate. We pledged that we would restore growth and confidence to our economy. We have achieved this. Our exports are booming and the trade surplus is set to break £2 billion this year and set an all-time record. Indications from our imports suggest that industry is gearing up for expansion.

We pledged to consult the social partners. We did, and the Programme for National Recovery has been a watershed in changing the economic outlook. It brought together the Government, unions, employers and farming interests in a common drive in the national interest.

This decisive approach is equally evident in the Estimates for 1989. We have shown that despite the overriding need to control expenditure it is possible to be a caring Government. This is clearly evident in the social welfare area where we have provided extra money for all recipients and special increases for those on the lowest payments, while reducing the overall cost to the taxpayer.

Mr. Shatter

It is correct to say that the Government have imposed specific financial controls in various areas of Government policy and it is also correct to say that we are now finally moving along and confronting the problem of our level of national debt. It is a problem that the Government, when in Opposition pretended did not exist and a problem that, when my party in Government sought to deal with, were lambasted by Fianna Fáil from the Opposition benches who sought at every turn and corner to create as many difficulties as possible in resolving our economic problems. Indeed, if a greater degree of economic reality and a greater degree of political and economic honesty had been shown by Fianna Fáil in Opposition some of the economic problems which are still with us would have been closer to being resolved. Fianna Fáil in Opposition sought to ensure that difficulties being experienced by the State were exacerbated in the economic area for no reason other than their own political advantage.

There has been a lesson in what happened during the months the Dáil has been closed that should not go unnoticed. If Fine Gael from the Opposition benches were not imposing the controls on this Government that are necessary to get the economy right, this Government would return to the type of policies they enunciated from the Opposition benches. What is increasingly clear, both in the area of my responsibility in the context of the Department of the Environment and in other areas of Government policy, is that when this Government are let off the hook of parliamentary control for any limited time they go seriously awry.

In the context of the Department of the Environment it is fair to say that there is a total lack of political direction or initiative in confronting many of the major issues that fall within the area of responsibility of that Department. The financial allocation to the Department of the Environment this year is reduced overall by some 11 per cent. The Minister for the Environment in accepting that reduction has failed to take the necessary policy initiative to ensure that the least well off in our community are the persons most protected from cutbacks. The Minister for the Environment has failed to take the necessary initiatives to ensure that basic local services are maintained. He has failed to take the necessary policy initiatives to ensure that our local authorities can function in a way that avoids the type of disaster experienced in Cork during the last couple of days.

It is worth pointing out that the Cork area has been discriminated against continuously by this Government in the context of financial allocations made by them to both Cork County Council and Cork Corporation. In the 1987 Estimates the rate support grant to Cork County Council was in the region of £21 million. In 1988, this year, it was reduced to £12 million. Next year it is reduced to £11 million. In Cork Corporation the rate support grant stood at £7 million in the year 1987. It will stand at just under £5 million for 1989.

The flood disaster that has hit the Munster area in the last two days is not just as the result of bad weather. It is the result of local authorities in the Munster area being starved of necessary funds to carry out basic drainage services to maintain the sewerage system. In effect the weather has been assisted by the lethargy of Government and possibily by the Fianna Fáil Party, as an act of political revenge on the region of Munster for not giving them the Dáil seats they sought from it in the last election, deliberately reducing the funding to the Munster area so as to curtail the level of services available to people in that area. Bearing in mind the reports in our media what has been happening in the Munster area in the last 24 hours even if the Minister has not visited Cork, even if he is not interested in the people of Cork, I find it extraordinary that he was not prepared to stand up on the Order of Business yesterday or today to announce the establishment of a special emergency flood relief fund to assist the people of Cork, both businessmen and domestic householders, who found their houses, shops and businesses flooded, to enable them to come to terms with the disaster that has hit them so that they are aware of what funding is available to make good the damage done.

I find it extraordinary that the Minister is not prepared to come into this House and state that special funding will be provided to Cork County Council and Cork Corporation to enable the necessary drainage works to be carried out to ensure we do not have a repetition this winter of the flood disaster. When the Munster area has been hit in this way I find it extraordinary that the Minister is supporting an Estimate which has in effect cut the financial allocation to Cork in half in two years, and he has done it in the context of providing no major alternative means for raising funds to enable local authorities to come to terms with the financial needs they have to provide basic services.

We have seen published in Aspect magazine the extraordinary confidential Cabinet memoranda showing documents swapped between the Minister for Finance and the Minister for the Environment about the introduction of a property tax. We have heard reports that some members of the Cabinet are in favour of property tax and some members are against it. This House is entitled to know what the Government's policy is in that area. Do the Government intend to introduce the property tax? Do they regard such a tax as a means of gaining funds for the central purse or is it a means of gaining funding to ensure that local authorities have a degree of independence and are in a position to meet local needs in their own areas? While the Minister sits on the fence, while this Government leak documents about rows going on, the local authority system as we have it is in chaos. While the Minister sits on the fence local democracy is being underlined, local services are being reduced, and the level of disaster we have seen in Cork and surrounding regions in the last 24 to 48 hours will be repeated in other parts of the country during this winter. I call on the Minister for Finance and the Minister for the Environment to clarify exactly what Government policy is in this area. Is it Government policy to so undermine local authorities as to lead to their abolition? Is it Government policy to punish portions of the country who do not give to Fianna Fáil the electoral support that party believe they deserve?

I have referred to the way in which the Munster region, and in particular Cork city and county, have been treated by this Government. Whereas the general overall allocation to local authorities under the terms of the Minister's Estimate is reduced by about 8 per cent, Dublin has been hit even worse than Cork. The reduction for Dublin is by some 11 per cent and the Dublin local authorities are faced in 1989 with a major crisis. I will predict that unless this Minister finds some means of ensuring that the local authorities in Dublin have proper financing, what we have seen in Cork today and yesterday will be repeated in Dublin, if not this year certainly next year, because the work necessary to ensure that our drainage systems are working properly and our rivers are dredged so that we do not have this type of flooding is not being undertaken by the local authorities in Dublin.

Local authority funding is in a shambles, local authority services are in a shambles and, of course, while they are in a shambles we have Deputy Flynn as Minister for the Environment engaged in a very peculiar exercise. I can recall being in this House when Deputy Flynn and his colleagues announced that they were opposed to local charges being imposed by local authorities throughout the country. Of course, at the moment we have a curious situation in which Fianna Fáil councillors are imposing local charges in local authorities throughout the entire country except in Dublin. On occasions I wonder how Deputy Flynn explained to the people in Castlebar that they must pay £90 per year by way of local charges when the people of Dublin have to pay no such charges. Deputy Flynn from the Opposition benches was opposed to the imposition of any charges of any nature whatsoever to allow local authorities any financial independence in the area of funding. Now we have the curious example of the Minister covertly directing a campaign by the city and county managers to recover some £30 million of arrears of charges that he and members of his own party told people they were opposed to and that people should not pay. The time has come for the Minister for the Environment to state what approach he intends to take and what policies he intends to implement to rationalise the whole area of local government finance.

In the area of priorities, it is quite clear that the Government are laying the foundations for a major housing crisis in 1989. The major reduction in the Estimates for the Department of the Environment by 20 per cent in the context of the building of new housing schemes will result in 1989 in the smallest number of new houses being built by local authorities since the commencement of this decade. This Government are deliberately embarked upon a policy which is designed to reconstitute and re-establish the type of housing crisis we had towards the end of the seventies and which was resolved by my party in Government in the period 1982 to 1987. That is an area which indicates where the Government have gone wrong in the context of their priorities.

I ask the Minister for the Environment if he is going to appear in this House on the Estimates debate? It is very difficult to get the Minister to respond publicly to criticisms that are voiced about the manner in which he runs his Department. If he is going to come to this House I challenge him to state how many new houses he believes the local authorities here will commence building next year; I challenge him to indicate how many people he believes will be on the waiting lists of local authorities by the end of 1989. I believe we will find that the housing lists have quadrupled by the end of 1989. We will again have people awaiting housing for three, four or five years and being told that unless they have three or four children and live in a bedsitter there is little real prospect of local authority housing being made available to them anywhere in the country. The Minister is presiding over a Department to which I believe he is giving no direction and in respect of which, in the context of some essential issues, he has lost control.

In the area of financing the Minister has suggested he is increasing funding to enable essential repairs to be carried out on county roads. That is untrue. The Minister has so reduced the level of funding for local authorities that it is quite clear that far less work will be carried out on the repair of county roads in 1989 than was carried out in 1988 and what was done in 1988 was less than what was done in 1987. We are very rapidly becoming a pothole Republic. The Minister who is so prone to attending at the openings of various community centres and who loves a public relations expose will no doubt by the end of this year start arranging to cut ribbons at the appropriate largest potholes in the country and put up plaques on the side of them to record his contribution to the destruction of the roads here.

We have seen a Minister who has abdicated responsibility in the area of the Structural and Regional Funds that are being provided by the EC. In effect, what has happened is that this Minister has handed over to the Department of Finance all control over the use of Structural and Regional Funds. This Minister has allowed the Minister for Finance to hijack the regional funding and has excluded any democratic input into the plans that are now being prepared by the Department of Finance to be submitted to the European Commission for this country to gain the benefit of Structural Funds in 1989. It appears from a response I received to a Dáil question to the Minister for Finance that the Government are clearly considerably off-target and running dangerously late in the preparation of the necessary plans to be submitted to the EC to ensure that regional and social funding will be made available for the seven designated regions for the year 1989. The Minister has clearly failed to live up to his responsibilities in this area.

The difficulty I have is that within the time allowed on an Estimates debate it is impossible to go through all of the areas it is necessary to cover. Suffice it to say that we have a Minister in the Department of the Environment who lacks any coherent policy direction in any particular area and whose main imput is to try to arrange natty public relations exposes for himself and to duck appearing in public to answer the hard questions that require a response.

We have something more serious; we have a Government who are now presiding over a lowering of standards in the area of government that I do not believe should be tolerated. There are a number of examples of this. In the course of the last few months we have seen, when this Government were freed from the controls of Dáil Éireann, the shoddy and scandalous abuse of lottery funds with Government Ministers rushing to functions holding cheques in the air and distributing the largesse from the public kitty as if it was a cheque written on their own bank account and looking for some public kudos for what they were doing.

The lottery funds are being distributed in a way that is bringing the entire national lottery and the political system into contempt. This is an area the Government are seeking to continue to abuse, resulting in politicians being held in disrepute. I call on the Minister for the Environment to indicate, in the context of the various projects to which he has allocated moneys, how many of these are of a permanent nature and what he has done to ensure that these funds are well spent. I call on him to state what criteria he applies to the distribution of funding.

We have had the story of the Taoiseach's jewels. At a time of financial stringency it is unacceptable that gifts of a substantial value, way beyond a token of esteem by one foreign leader to another, should be retained either by a Taoiseach or a Minister and that ministerial guidelines laid down as regards the receipt and retention of gifts be ignored. It is unacceptable that we have the Minister for Foreign Affairs coming into this House and stonewalling questions. I do not believe the people of Ireland think it is acceptable that the Taoiseach of the day or members of his family or other Government Ministers to be, as it is rumoured, are allowed to retain in their possession gifts that are alleged to be worth some hundreds of thousands of pounds provided by a foreign leader. These gifts should be handed over to the State. This issue should not be fudged or we will next have the spectacle of Ministers lining up at airports to show their appreciation and respect for visiting foreign dignatories in the hope that there might be dropped into their kitty some worthwhile gift they might rely on to assist them when finally they are put out to grass or leave this House to take up their pension.

We have had the dishonest claims made by this Government in the context of job creation. Published under the heading of the Government's job creation scheme there is the item on the payment of home improvement grants where it says the Government have decided to provide the Department of the Environment with an additional sum of £9 million this year for the payment of grants due to householders. That item should not have appeared in a job creation scheme. Every Government Minister knows that that £9 million will not create a single job in 1988 or 1989. That £9 million is designated to repay moneys for works done in 1987 and 1988 for which the Government have not yet provided moneys where such moneys were previously allocated. Why would the Government seek to mislead people by suggesting that that £9 million would create a new job? It will not create a single new job and the Minister for the Environment is well aware of that.

Finally, yesterday we had the extraordinary launch of the "Lets get the lead out" campaign by the Minister for the Environment to promote the use of unleaded petrol. It was little more than a public relations campaign to get the Minister two minutes exposure on the nine o'clock news, because the Minister, who is now wasting public funds on advertising on RTE to urge the general public to buy unleaded petrol, has not properly told the general public that most of them cannot buy it because most of the petrol companies are not selling it. We have 300,400 garages here, only 36 of which sell unleaded petrol.

Why is this Minister wasting public funds advertising on the airwaves? If the Minister is serious about tackling environmental pollution and about the Government living up to their obligations under the EC Directive relating to the reduction of lead in petrol what he should do and what the Minister for Finance should do is ensure that in the budget to be published next January there is a tax reduction on unleaded petrol so that that commodity would be cheaper than ordinary motor fuels by way of encouraging the general public to buy it and the petrol companies to sell it. In the meantime, the Minister should not waste public moneys on a self serving advertising campaign in our national media.

Minister for Labour (Mr. B. Ahern)

It is now just one year since the Programme for National Recovery was adopted. The programme has made and will continue to make a great contribution to the achievement of the Government's economic and social objectives.

As regards the economy in general, the climate for investment and, hence, employment prospects has improved dramatically. Interest rates are at their lowest level for many years, contrasting strongly with the situation in the UK. Inflation remains at 2 per cent and the economy is showing satisfactory growth. We are showing a substantial surplus on our balance of payments and our currency is strong. The growing confidence in the economy is reflected in substantial inflows of capital. I feel quite confident that this turnaround in the economy will lead to the generation of permanent employment opportunities. Preliminary results of the labour force survey show an increase of 6,000 in employment between April 1987 and August 1988. Surveys conducted by the IDA and Shannon Development at the end of the third quarter for this year show that 14,500 new jobs have been created so far this year, so we are on course to achieve the overall industrial job target set in the Programme for National Recovery. A further increase in employment is forecast for 1989 by the latest Economic Report of the European Community.

The pay agreement negotiated in conjunction with the programme will help to achieve long term wage stability. This helps the planning process of employers, including the State, and reduces the possibilities of industrial conflict.

An analysis by my Department of private sector pay settlements agreed during 1988 to date shows that the vast majority of agreements follow the terms of the national agreements. I see no reason to doubt that this will continue to be the case.

All the signs are that the programme will produce a period of industrial harmony unprecedented since the late fifties and early sixties. Our most recent strike statistics show that 1988 is likely to be the best year for industrial peace for 25 years.

The completion of the European internal market by 1992 will present us with a challenge to our competitiveness, but it will also create further new opportunities for development and progress. It is generally accepted that the completion of the internal market will bring the greatest benefits to the stronger industrialised countries at the centre of the Community and that without additional measures the benefits to the regions on the periphery, although significant, will be somewhat less.

This fact was recognised by the European Council when it agreed to double the resources of the Structural Funds for the less developed regions, including Ireland, by 1992. The purpose of the doubling of resources is to enable those regions to narrow the gap in development and GDP which separates them from the wealthier regions of the Community. In Irish money terms, in excess of seven billion pounds of the combined resources of the Regional Development Fund, the Social Fund and the FEOGA Guidance Fund will be devoted exclusively to the less developed regions by 1993.

The negotiation of the detailed regulations which will govern the working of the funds is still progressing in Brussels. The Government are doing everything possible to ensure that those regulations are framed in a way that ensures maximum opportunities for Ireland.

The European Council of Ministers has already agreed that a special effort be undertaken by the Commission to concentrate resources on the least developed regions and that Ireland shall be among those regions. Only last week, a top level team of Commission officials representing the three funds, and led by the Secretary-General of the Commission, visited Dublin for discussions on how the enlarged Structural Funds can best be used to help Ireland achieve its development objectives. Next Friday the President of the European Commission will pay a similar visit to this country.

My Department are participating in the preparation of the necessary comprehensive regional development plans, particularly in relation to plans for labour market services. Local interests will be consulted and involved in the preparation of the plans. The aim will be to combine the operations of the three Structural Funds, wherever possible, so as to achieve the maximum impact for development and to reduce unemployment.

In the area of the Social Fund, I hope to see an expansion of training programmes for young people, for the long term unemployed and for persons in new technology industries. I also propose to expand the scope of opportunities especially for the long term unemployed. There are other aspects of the internal market which will directly affect Ireland's ability to benefit from its completion. The importance of this wider "social dimension" is now fully accepted.

Within this dimension, measures to improve the working environment and protect the health and safety of workers have been given considerable prominence. The adoption of reasonable standards of safety and health at work and the prevention of unfair competition based on the exploitation of the safety and health conditions of workers are the principal objectives of an extensive programme in this area.

The Commission will also be taking measures in other areas of social policy. The Government's approach to these various proposals will be constructive, taking into account the legitimate needs of workers and the implications for employers, particularly in the small and medium sized enterprises which predominate here.

The completion of the internal market by 1992 will also result in the abolition of any remaining impediments to free movement of workers. Irish workers have equal access along with other EC nationals to all job vacancies arising within the Community. The range of jobs and volume of vacancies is likely to increase within the next few years and this, allied with labour shortages emerging in the more economically advanced member states, will provide a growing range of opportunities for Irish workers with the right skills and qualifications. The Government do not encourage emigration but, for those who choose to go, they will ensure that the best opportunities and conditions are available to them in other member states.

The Government are particularly concerned with the plight of those who fail to plan properly or feel forced to emigrate. However the main answer to this problem lies in increasing employment opportunities at home. The general economic improvement and new jobs now becoming evident will go a long way towards reducing the problem. Assistance through FÁS and the new Youthreach programme should also assist those prone to emigration without the necessary preparation. The sum of £250,000 was allocated in both 1987 and 1988 for grants which are paid by my Department, on the advice of DION, directly to voluntary organisations operating mainly in Britain. Despite the Exchequer constraints the Government will maintain the grant for next year at this level.

A key factor in the success of the Programme for National Recovery will be the provision of an effective, co-ordinated training and labour market service which will meet the needs of Irish industry during the coming years. The continuing influence of new technologies in the workplace, together with the completion of the single market, make it essential that high quality training is carried out in the most relevant and cost-effective way so that industry, and our workforce, can compete successfully in the new enlarged marketplace.

FÁS was established in January this year. It has already resulted in more co-ordinated and client-centred services to the unemployed. Integrated regional structures have been established to reduce duplication.

FÁS local offices have become "one stop shops" for manpower services. Regional planning mechanisms have been established and local plans drafted to improve the relevance of FÁS programmes to local circumstances.

A number of reviews of programmes have been or are being completed, to increase efficiency and effectiveness. For example, in the case of enterprise programmes FÁS has established a comprehensive pilot programme in the north east. I hope that this will results in simpler, more accessible assistance to individual entrepreneurs and community operations at all stages of enterprise start-up. I hope that FÁS will be able to make the new unified programme available nationwide next year.

In addition, FÁS is engaged in a major review of its services to industry and of apprenticeship training. As a result the Training Advisory Service has been streamlined and a revised craft apprenticeship system should emerge shortly. In particular I have asked FÁS to consider a system of apprenticeship based on standards achieved and to come up with proposals on financing which would minimise the currently substantial costs to the Exchequer.

In fulfilment of a commitment in the Programme for National Recovery FÁS last week established a Co-operative Development Council. The council will stimulate greater awareness of co-operatives, identify their needs and provide technical assistance, where appropriate, and will concentrate on worker co-operatives. I am confident that the potential of co-operatives for employment is considerable.

In the coming year I propose maintaining the principal employment schemes at their existing activity levels. Indeed, the Government have decided that the employment incentive scheme, for which demand was falling, should be made more flexible to attract additional employers.

Training programmes will also be maintained at the highest possible level consistent with proper targeting. In this, I have asked FÁS to target their resources at those who are least able to succeed in jobs without such assistance. I know that demand for schemes, in particular the social employment scheme, exceeds availability and that the schemes provide real work opportunities of benefit to the community and the economy as a whole. However, with limited resources, it is not possible to expand the programmes to satisfy all potential sponsors or participants at all times.

As regards CERT, in the Programme for National Recovery, the Government have recognised the contribution which the tourism sector can make to job creation and revenue. In my own area CERT will continue to provide training and support services to underpin the industry's growth. To attract the necessary foreign tourism, standards of quality, cost effectiveness and service must be brought to new levels. The very real approval given by the industry to CERT's operations is evidenced by the major increase in financial support which the industry have agreed to make. I am confident that the target I set of £0.5 million from the industry towards the annual cost of CERT's operations will be met.

Both FÁS and CERT have considerable potential for development of overseas consultancies. FÁS have just established their overseas subsidiary for profitable commercial work. The new company have taken over existing contract work by AnCO, worth up to £2 million annually, and are actively pursuing further opportunities. Discussions have taken place with other relevant Irish and international organisations in order to put together a package with a wider range of services. CERT, too, are satisfactorily developing their international consultancy work.

The recent labour force survey has indicated a welcome increase in overall employment in this country. However, I am concerned to ensure that special assistance is given to the more disadvantaged persons on the labour market who would not otherwise benefit from employment growth. The principal categories in need are early school leavers and the long-term unemployed.

Early school leavers are particularly at risk — 55 per cent of them are unemployed a year after leaving school. For them, a new programme, Youthreach, was introduced two weeks ago by my colleague, the Minister for Education, and myself. This is a two year education, training and work experience programme for young people who leave school with few or no qualifications. While the idea of special provision for this category is not new, there are important new elements. Firstly, it will cater for up to half the total number of early school leavers each year. Secondly, it offers a comprehensive, flexible and integrated approach on a nationwide basis. Thirdly, it will last for two years instead of the present six months. Fourthly, it will involve for unqualified school leavers a special vocational preparation and training programme with a regular weekly allowance, as well as programmes provided by FÁS. In the last analysis we want to reduce the incidence of early school leaving. My colleague, the Minister for Education, will be making additional efforts within the school system to dissuade young people from leaving without qualifications.

Meanwhile, the Youthreach programme is not merely remedial. It offers a real chance for young people to catch up on education and social skills development, and to acquire real vocational skills. I am confident that it will go a long way towards overcoming the disadvantages which would otherwise restrict early school leavers to a future of, at best, precarious, badly paid, unskilled jobs.

As regards long-term unemployment, I recognise that we must take additional steps to reduce its present appallingly high level — some 46 per cent of the unemployed have been out of work for more than a year. These numbers are unlikely to decline significantly without special help. In May this year I set up an interdepartmental committee to study the problems of the long-term unemployed, to assess the impact of current provision and to examine the prospects for the future. This committee will be reporting to me shortly.

The Government's commitment to management training is based on a conviction that the formation and development of managers is vital for the success of individual firms and of the economy as a whole. As a demonstration of that commitment, I appointed an advisory committee on management training in September of last year. I expect to receive the committee's report in a matter of weeks.

I hope that with the co-operation of all concerned, we will be able to focus all our efforts on the development of our managers to release the full energy and dynamism of our workforce in the pursuit of faster economic growth and expansion of employment. Particularly in the context of the completion of the internal market of the European Community, we must develop managers of the highest calibre if we are to compete effectively in international markets, respond to the challenges and seize the opportunities.

As regards my legislative programme, I have already piloted three important pieces of legislation onto the Statute Book. First, the legislation giving the statutory base for the amalgamation of the Manpower agencies has been enacted and FÁS has been established. Secondly, I have extended worker director arrangements to certain other State bodies and have provided for employee participation below board level in the vast majority of State-sponsored companies. Thirdly, I have put through legislation providing for minimum standards in regard to safety on oil rigs. The relevance of this legislation has become only too obvious as a result of recent events in the United Kingdom. Comprehensive safety regualtions to implement the legislation are at present being drafted.

As regards forthcoming legislation, I hope to introduce to the Oireachtas before Christmas two further substantial pieces of legislation on industrial relations and occupational safety and health. Following the commitment in the Programme for National Recovery, I am giving a high priority to a Bill to reform industrial relations, trade union and trade dispute law. For too long this necessary reform has not been tackled. I and my officials have had exhaustive discussions with the Federated Union of Employers and the Irish Congress of Trade Unions since early this year. The major elements in the reform package will deal with restrictions on picketing, particularly secondary picketing; immunities in disputes; a requirement for secret pre-strike ballots; and changes relative to the granting of injunctions.

My proposals will also include further measures to facilitate trade union amalgamtion and tighter conditions for licensing new unions. Finally, I will be proposing the establishment of a labour relations commission with a pro-active brief, and changes in the structure and operation of joint labour committees. I intend to put these proposals to Government very shortly with a view to introducing a Bill within two months.

On safety and health legislation, a fundamental review has been completed, looking in particular at the recommendations of the Barrington Commission of Inquiry on Safety Health and Welfare at Work. The Bill to make the necessary changes has now been drafted. I intend to introduce it in the Oireachtas in this session. The Bill represents a major extension of statutory safety and health protection to all employers, employees and the self-employed. Each of these groups will have statutory general duties of care. Each enterprise will have to assess their specific needs and risks and tailor a safety and health plan accordingly. I will also be providing for the establishment of a new national authority, again with a pro-active brief.

I am confident that these developments will help to reduce the still unacceptably high level of accidents and ill-health at work. Just to put it in context, reportable accidents have continued to exceed 3,000 per annum in recent years and these represent only part of the problem. Developments at European level are also becoming increasingly important in this field. It is essential for us that new European measures should be suited to our predominantly small and medium-sized industries. My Department will be doing their best to ensure this.

Apart from these two areas, I initiated a review of the Unfair Dismissals Act, the employment equality legislation and the Payment of Wages Act. I published a discussion document on this legislation in November of last year and I received a wide range of submissions. In each of these areas I intend to put proposals to Government in the near future with a view to introducing legislation in due course. In particular I hope that my proposals regarding payment of wages will enable full advantage to be taken of new technologies in order to reduce the security risks both to industry and individuals of cash payments.

I have recently raised with the FUE and the ICTU the relevance of the conditions of employment legislation of the thirties. I feel this legislation has become an embarrassment as it is so out of date. I have asked the FUE and the ICTU for their views on necessary measures to update this legislation. I am also concerned at the vulnerability of part-time workers and will be looking at their statutory position as part of the review of the conditions of employment legislation.

As I stated in the foreword to my discussion document on legislation, I am conscious in considering legislation of the need to strike the correct balance between the needs of employers and employees. It is important, on the one hand, that the incentive to create employment be not impaired. On the other hand, there remains the need to protect employees from abuses. I am confident that my proposals will, in fact, achieve that balance.

The various measures and developments to which I have referred give clear evidence of the more integrated and harmonised approach which this Government have been able to take. Within the short space of time remaining before 1992 it is vital that scarce resources be directed with precision at areas of real need. We cannot squander them on duplicated or contradictory measures.

The Programme for National Recovery, the preparation of integrated plans for use of the reformed Structural Funds, the establishment of FÁS, the development of new client centred interventions, such as Youthreach, all demonstrate the potential of this new integrated approach. I am confident that this will help to ensure that we get Ireland into the best position to take full advantage of the challenges ahead.

While the Exchequer allocation to FÁS has been reduced by some £8 million with some resulting reductions in ESF aid, the effects on activity for the priority client groups will be minimal. Participation in the principle employment schemes will be maintained at existing levels. Participation in training schemes will also be maintained for the priority client groups, the early school leavers and the long-term unemployed. Any drop in activity will primarily reflect this targetting, for instance a drop in programmes for graduates. This has been possible through tight control and the reduction of overheads through the establishment and streamlining of FÁS.

The Exchequer allocation to CERT has been marginally increased over the 1988 level. CERT will at least maintain existing activity levels and at present is assessing the possibility of additional recruitment to both school leaver and unemployed programmes. The allocation to the Department of Labour has been reduced by £450,000. Most of the individual elements relate to reductions in staff numbers and improved effectiveness. The grant for trade union amalgamations has been increased by two-thirds to meet the cost of additional arrangements in 1989. I understand that a large number of amalgamations is under consideration by trade unions and that the forthcoming industrial relations reform legislation will provide further encouragement for amalgamations. The grant for trade union education and advisory services, and for the Employment Equality Agency, has been increased slightly, mainly to meet higher salary costs.

I am sure Members of the House will wish to compliment the Government for early publication of the Book of Estimates, more than two months ahead of the new financial year, for the second year running. This represents an opportunity for those beneficiaries of Government aid to receive notification of the allocation in time to be able to plan in advance. Most Members have been critical of the fact that the Book of Estimates, and particularly the allocations to the different agencies, was not presented until April or May. Those agencies were then asked to try to prepare a plan for that year and often that was not possible. Agencies now have an opportunity to decide how best to spend their allocation. I hope that that will continue in the years ahead because, as Members will agree, it was appalling that agencies that depended on Government funds did not receive notification of their allocation until four or five months into the year. The Government have succeeded in changing a bad system. We heard a lot of talk about the need to do that for many years and this is the first time it has been achieved.

The Estimates represent a continuation of the Government's overall financial stragegy, the results of which are, as I have indicated, becoming increasingly obvious in all the relevant economic indicators. We all welcome that recovery. It is unfortunate that the Government cannot do everything today but it is good to see that job targets are being reached and that jobs are being maintained. I should like to call on those who have benefited from Government policies to see their way during 1989 when the slack has been taken up in manufacturing enterprises to do what they can to tackle the appalling statistics in relation to the long term unemployed. It is to the private sector that we must look to create jobs from the benefits they reap from the Government's policies.

Mr. M. Higgins

At the outset I should like to take up a point referred to by the Minister in his closing remarks. He reminded me of the time when the radio was referred to as the wireless, as it is by Deputy John Kelly. At the time a well known figure made a five minute appeal on Sunday evening for guide dogs for the blind or some other meritorious cause. When I listened to the Minister end his speech by making an appeal to the private sector to please be concerned in the coming year about the scandalous number on the long term unemployed list I thought of those appeals. His remarks have deepened my own sense of alienation and horror at the growing gap between what is being said here and the realities that surround us. Indeed, the language used has a funeral parlour ethos to it; where one is speaking about the corpse it does not matter what one says because the corpse does not speak back.

I should like to take up some of the points made in the three ministerial speeches we have had so far and in a number of the speeches from the Opposition. It should be remembered that the Department of Finance have jealously guarded the planning function in the history of administration in Ireland. I will go further and say that they have a unique hostility in the history of western European states to the planning process. In their day they looked with jaundiced and green eyes at the emergence of a new Department of economic and social planning. Like the deadly snake they waited until the kiss of death had been given to that Department but, now that it has only to deal with the defused functions between the rather mercurial and eccentric Department of the Taoiseach which has all power but operating it in an accountable way, they still retain the right to prepare the speech of the Minister for Finance for the opening of the debate on the Estimates.

What I find curious in this so-called republic of ours is how we can listen to one speech after another without any attempt to relate the financial or economic strategy we are supposed to be following. That strategy is derived from a unique consensus on this small island, shared by Members on my left who say that not enough is being done to get rid of public service jobs while others want to get rid of more people from the different services. In my view 90 per cent of Members agree on an approach towards the economy, or so we are told. The Minister's statement, and the reaction to it, is an attempt to judge what took place last year and what is proposed for next year. The realm of financial arrangements here is being tested against the hard ideological principles of the consensus that exists in the House at present. It is not being contested against the reality of those who wish to work but cannot, those who are emigrating, those who are sinking below the poverty line and so on. It is as if in a time when Dean Swift's creation, Gulliver, was being trooped through the streets of Dublin and Galway we had managed a type of unique dissociation with the people.

In one speech after another Members are talking about a de-peopled economy. I spent a lot of my time more than 20 years ago teaching the history of economic thought. At that time it was not referred to as political economy but as economics. Later I taught political science and sociology. I could understand in a university that has its own schizophrenic practices, where careers have to be carved, where Chairs have to be won and so on, having this type of divided version of the world.

It would be a type of harmless academic eccentricity but it gets to the level of acute danger when people discuss economics without any reference to people. In the speeches we have heard so far, those long tedious pieces of language all in the same vein — light at the end of the tunnel; prospects breaking out on all sides — I found it hard to understand the meaning of them. It would not be safe to make speeches like that in many pubs in Ireland. People would laugh at them, at least. Such speeches do not mean anything.

I should like to test some of the assumptions deriving from this 90 per cent ideological sunshine we have around the place. One fact, and it is one that my first year students 20 years ago could understand, is that there is no necessary connection between a rise in exports and job creation. In several speeches in this House I made the point that there was an increase in exports in the seventies. For a number of reasons such as the weak linkages in the economy, the fact that a great deal of the exports were inflated, transfer pricing and so on, you could not assume that an increase in exports or even an increase in favourable terms of trade would automatically result in job creation. Yet, that is precisely what the Government are doing again this year. Thankfully, people do not have to rely on my comments for this. In the book by the Economic and Social Research Institute, The Economic Development of Ireland in the Twentieth Century, written by Kieran A. Kennedy, Thomas Giblin and Deidre McHugh and published this week by Routledge, there are some interesting comments on this particular fallacy which has informed the Government's thinking which is shared by Fine Gael and which is uniquely developed by the Progressive Democrats.

Deputy McDowell last night had the idea that once all these incentives towards production has been set up, employment would result as surely as night follows day. Would that the history of economic performance fitted Deputy McDowell's version of reality. Tragically it does not. I quote from the volume I mentioned, which states on page 252:

There are darker shares in the picture, however. In particular the problem of labour surplus has never really been solved. Total employment is 12 per cent less than it was in the mid-1920s, while the unemployment rate never even in the best of times went much below 5 per cent of the labour force and is now over 18 per cent. In addition, net emigration since 1922 has amounted to over 1 million persons, and though checked in the 1960s and 1970s has resumed in the 1980s at a rate close to the natural increase in population. Despite the impressive overall progress of manufacturing production and exports, the indigenous industrial base remains perilously weak, while in agriculture the majority of farms are still below the threshold of viability. Furthermore, Irish economic development has been accompanied by an enormous increase in national debt, which now constitutes a major constraint on further development measures by government.

Indeed, it is striking that many of the areas in which progress has been made have serious negative dimensions.

It goes on to mention some very interesting points. I am not one for long quotations but there is one that is very important which is related to the point about exports, that is, the dramatic increase in what it describes as the pattern of the outflow of profits, dividends and royalties. These are referred to in that volume on pages 190 and 191. It states:

The other major factor responsible for the change in investment flows was the emergence of a large outflow of what are described as ‘profits, dividends, royalties'. They rose from £128 million (2½ per cent of GNP) in 1977 to £1,321 million in 1985 (10 per cent of GNP), and are mainly associated with the rapid development in the last decade of the so-called ‘sunrise' industries — notably pharmaceuticals and electronics. These industries are dominated by multi-national firms, export nearly all their output, and account for most of the rapid increase in Irish manufacturing exports since 1980.

The Minister, Deputy Brennan, when talking about trade figures, should bear in mind one of their comments on page 239 which is:

The new foreign enterprises were highly export-orientated. In 1983 exports of all foreign firms amounted to 82 per cent of their total sales, compared with 34 per cent in all Irish firms, and the latter figure was much less outside the food sector.

This is simple evidence that there is no necessary connection between increases in exports and a favourable balance of trade and the automatic creation of jobs. That fallacy is not addressed in the Minister's opening speech.

There are two fallacies, one about the relationship between export growth and employment and the second is in relation to what might be called — the language is dropping a little but the language of last year is still there — this essentially meteorological approach to economics, the idea that favourable conditions — weather, if you like — are getting better for the Irish economy. Before I came in this morning I was looking at the old newsletters of the Confederation of Irish Industry. They used to say if only we had the same costs as the rest of Europe, if only inflation was at the European average and if only there were opportunities and so on there would be an automatic expansion and we would make our contribution to the revitalisation of the Irish economy.

Now the inflation rate compares quite well with that in Europe, the export conditions are quite favourable, interest rates are lower than in Britain, labour productivity levels compare very favourably with every European country and still they have something else to say. They moan about increases in employers' costs and so on. That is what makes it particularly pathetic to listen to a Minister for Labour end his speech saying he would like to make an appeal to the Irish private sector to create jobs that might impact on unemployment. He did not mention the dirty word — never mentioned by Fianna Fáil now —"emigration".

Why are we asking people to believe in this subversive ignorance about the economy? Emigration is running at 35,000 per year at present. After 1992 it will run at 25,000. We are exporting people for the primary reason of our failure to provide them with economic and social opportunities at home. We have between 18 per cent and 19 per cent — I mention the 18 to 19 band so as not to get involved in arguments about decimal points — unemployment. There is evidence from several sources of people sinking below the poverty line. Are we not interested in these structural problems? Can we not compare the Government strategy for the coming year or the past year with these human realities? Instead, we are indulging in this deadly game, where the three parties of the Right compare the economic projections of the Government not with these human realities that are so important but with their own deeply-held Right-wing ideological prejudices. For example, there is this bogus notion that if you take the external constraints on the economy and get them right, automatically the economy will benefit in terms of employment creation, for which I challenge the Government to show any evidence whatsoever in the economic literature.

Now long regarded as unfashionable and totally neglected is any attempt to look at the pattern of distribution within this country. An ordinary person might be entitled to ask a rather simple question — is it efficient or is it necessarily productive to have a more unequal or a less unequal society? That question needs to be asked not only in terms of productivity and efficiency but even if you were Right-wing and you wanted to argue about where the burden of responsibility lay for the effects of what might have been overexpenditure in the past, you should be able to point to where that over-expenditure had occurred.

Can the Minister and his colleagues stand here and say that an elderly person who goes into the Regional Hospital in Galway or anywhere else for an operation must now, because of a change in economic strategy, be forked out of the hospital in three days and not allowed to recover? Are you entitled to say to some child who was not born at the time of the great O'Donoghue expansion scheme that he or she may not now repeat the leaving certificate, may not repeat a year at school or must pay an enormous fee? Is this part of the new ethic?

In economic theoretical terms what the Minister is spouting is gross ignorance and what he is being supported in is a kind of ribald, macho, careless attitude to whether people live or die. Every now and then we get that outbreak of Populist opportunism when people have supported the cuts and then speak out when their local school or hospital is being closed, as if there was no necessary connection between voting in favour of the Estimates here or sitting on your hands here and then whingeing later about your local school. That is part of the dishonesty that has degraded Irish politics and which is one of the unique contributions of the Right to Irish political life.

There are other points I want to make. The antiquarian section of the Right wing parties come in here and start spouting about the Left and their ideological approach to the economy. Let me lay it very clearly on the line. I do not believe in any ideology. I believe that politics derive from a certain set of values or beliefs about the nature of the political process. I think economics, if they are to be valid, have to refer to such a political vision and such an ideological view. What the Right are too cowardly to state is that their deeply held ideology is based on a retarded greedy individualism that will export one's neighbour in the emigration boat and does not necessarily care about the rising level of unemployment. It looks on at the destruction of the education and health services. Because of the dominance of the locations of thinking in this country it is able to produce all these great gunges of language with their blatant fallacious views, that if only you can lash yourself enough there is some healthy outcome at the end of the day. This is as sick as those perverse extreme versions of religion that used to advise such lashings in the monasteries long ago.

There is a contrast between the ideology of the Left and the Right. It is time that people had the guts to state the differences openly. The left believe in the location of politics and the economy in a view of inter-personal and mutual dependency and of the necessity for us to care about the shape of society and to constantly test economic measures against human values. The view of the Right is that the economy is dissociated from any social and political vision. Where we discern a political or social vision it is based on a revived radical individualism. Thus, they see nothing wrong that two citizens may be born in the same ward of a hospital and as they go through life one may be naturally entitled to pay an increment and thus be able to purchase private access to the health service, not because he or she has paid for it, but because they are able to top up that payment. They see nothing wrong with taking educational facilities developed by the State with taxpayers' money and making them available for private cramming sessions for people who will now be repeating the leaving certificate.

Acting Chairman (Mr. Wyse)

The Deputy has exactly one minute remaining.

Mr. M. Higgins

I believe I have only one minute to speak on the three areas for which I am spokesman. The last Minister who spoke said he hoped that with the co-operation of his colleague there will be a new deal for school leavers. However, I will have an opportunity to debate this when the Minister for Education's Estimate comes up but I would like to know what this new deal means. The capital costs were cut by £8 million. There was an 8½ per cent rise in college fees last year followed by a 9 per cent rise this year. The examination fees for the intermediate and leaving certificate examinations have been raised. The new theory on access to education is that it is good for people to struggle.

In the Estimate for the Department of Foreign Affairs there is a figure of £1,000 for disaster relief. We are recognised as an obscenity in the world community by taking money from the lottery that we refused to provide in Foreign Affairs and sending it to the Sudan.

May I conclude by referring to the Gaeltacht? A report out yesterday from Údarás na Gaeltachta establishes that despite all the promotional work to attract new industries they have not a penny to provide the space needed to allow the jobs to be performed. We are witnessing the annual exercise of hypocrisy, the annual degradation of language and the annual insult to the Irish people, particularly those who are suffering.

Mr. McCreevy

I understand there are 20 minutes available to each speaker but I would have enjoyed listening to Deputy Higgins for some time longer. Undoubtedly he approaches the problems in Ireland from a viewpoint different from mine but that does not mean that there is not a lot of justification in much of what he says.

Some progress has been made with regard to the Estimates for 1989. I just do not want to speak about the progress in the figures because as an accountant I know how easy it is to confuse people by spouting a great many statistics. I am afraid I have to agree with Deputy Higgins when he says that the people in the pubs talk about gross national product, debt ratios and current budget deficits. I remember, during the last number of elections, everybody speaking about this on the doorsteps but 99.9 per cent of people did not understand it and if a current budget deficit got up and ate them they would not know what it was.

I agree that some progress has been made in the national finances and I think I can claim some credit for this because of some of my utterings in the past. I think that some progress has been made regarding the stabilisation of the debt ratio. I readily recognise that the Estimates for 1989 are only one side of the story. However, the real progress that has been made in Irish society generally relates to the attitudes people have taken since the publication of the Estimates.

I have read that some people think that the Minister's cutting exercise has not gone far enough. I am long enough in this House — I am here since 1977 — to realise that this is a remarkable change in attitude. The politicians follow the lead of the people and unfortunately it has very seldom been the other way round. The politicians usually wait until the people have headed off in one direction before they decide to catch up with them and say: "there goes the mob, I must follow them." That is the reality of Irish political life. There has been a remarkable transformation in the 11 years I have been in this House when the media, the people and some of the politicians say that the cutting exercise does not go far enough. A few years ago if anyone proposed similar Estimates to those being proposed now for 1989 there would be uproar and consternation about the cuts. This shows that people are now able to face up to the reality of the position we are in. In my opinion that is the real progress that has been made over the past seven years and particularly in the past two years.

This is a remarkable transformation. It is remarkable when one sees opinion polls that show that 60 per cent or more of the people say that more cuts have to be made. I think it is remarkable what has happened in the past couple of years and just shows how things turn about. Ninety per cent of the politicians in this House are affecting the attitude of what is abroad rather than the other way round. In the past various Governments paid much lip service to the financial problems the State was facing. This has been a talking point since 1978-79 but all of the previous Governments only talked about it, and let on to be doing something about it while in reality we all kept going the other way and the situation became worse. It should go on record that the present attitude of the Fine Gael Party, particularly their Leader, Deputy Alan Dukes, has been a great help to the Government. It has helped the political realisation of the country and it has certainly helped the Government in pursuing their programme. Although some people might think that Deputy Dukes has been committing political suicide during the past year I have been on record as saying that in the long term there will be gains for his party because of the attitude he has adopted.

Perhaps I am bigheaded enough to think that I have a certain credibility because of my whole attitude to the public finances. I am a firm supporter of the line the Government have been taking during the past two years. Many years ago I got into difficulty with my own party for espousing some of the things that I now hear Ministers say they are doing. I remember losing the Whip for advocating the same things in public many years ago. I suppose it is progress of a sort when eight years later we have come to the point from which we should have started in the first place.

It might sound bigheaded but I could claim some of the responsibility for our pursuing the new rightwing economics we are now pursuing or that perhaps 90 per cent of the Members of this House are pursuing. These policies are based on reality. I said many years ago that if we continued on the road on which we had embarked at that time we would end up in financial ruin and would not be in a position as a State to provide health, education or any other services for any section of the population.

People approach our economy from different standpoints but my policy is based on pragmatism and realism. Our economic problems have been created because over the past 15 years successive Governments have failed to grasp the reality that we must live within our means. We aspired to living standards of other countries but we would not recognise that we do not have the wealth of other countries. We provided ourselves with a level of public services which, although necessary and desirable, we could not afford. Over the past 15 years in successive budgets we agreed to spend X on a current level of public services but we only proposed to collect Y in levels of taxation and to make up the difference in borrowing. We successfully borrowed for donkeys' years resulting in higher and higher levels of taxation while still not reaching a point where we could pay off the debts we had accumulated. As someone who has been to the forefront in this debate over a long number of years, I would maintain that the settling of the debt is not an end in itself.

The current level of political activity is fraught with dangers. It should not be an end in itself to have the books balanced. Until recently it was considered good politics for political parties to agree to provide an airport, a runway, a school or whatever during election time and to provide the money for these things. In 1980 and 1981 I said that this was ridiculous from a financial point of view and that it was bad politics. Nowadays it is considered good politics to promise more and more cuts. Everybody wants to get in on the act by offering to cut deeper and deeper because that seems to be the politics of today. It might be news to some people that I hold these views, but without any shadow of doubt I originated this type of debate on the Fianna Fáil side of the House, the debate about getting the economy back on the rails. I remember that members of the Opposition party spoke about this before me or around the same time but on this side of the House I was in the forefront for a long number of years in saying that we had to live within our means. It appears that today the way to get votes is to pile cutback upon cutback, to hit harder and harder, and to hell with the poor and the unemployed. That is the danger of the new politics. We should not regard the balancing of the books as an end in itself.

Deputies have referred to the light at the end of the tunnel but the reality is that we have not yet reached the point of equilibrium between the cost of public services and taxation. Until we do we will not improve the lot of many sectors of our society. We have still not reached a point where the level of taxation in any one year will equal the level of current expenditure and until we do we will not solve the problem. Comments from politicians and media people in the past couple of months seem to indicate that the debt problem has been solved and that we can now move onwards. The problem is not solved, there is a danger that we will build up a level of expectation and that we will crash down and go down the same road again.

There is a danger in suggesting that we have now solved the problem of the debt. Many times I have debated these issues with Deputy Higgins and I have always enjoyed the debates. I do not mind saying that I am a capitalist and of the right wing in Irish society. Deputy Higgins holds a different philosophy but at least I can always understand what he says although we approach things from a different point. Although Deputies may talk about the light at the end of the tunnel, before we reach that point of equilibrium there is a danger that parties will be vying with each other to make tax cuts. If we are going to make tax cuts surely they should apply at the lower end of the scale? I have heard that we are going to reduce the top rates of taxation. We should realise that the people who have suffered most from the economic measures we have taken over the past couple of years are the poor. The services that have been cut back have impinged on them although it is not the poor who have caused the problem. If we reach the point of equilibrium, surely at that stage we should restore some of the services to make things better for the poorer sections of society who have suffered most under the cutbacks. However, even though we have not yet reached the point of equilibrium we have started to talk about giving tax cuts to the wealthy, the people who have jobs, people like me who pay tax at 58p in the pound. Surely there is no moral justification for giving more to the haves than to the have nots? The danger is that it is electorally appealing because the poor do not vote in as large numbers as do the middle and upper classes. The politicians appeal at election time to the haves in society.

There would be no moral justification in engaging now in tax cuts for the better off in society without increasing the level of services. There is no economic validity in the suggestion that we can see the light at the end of the tunnel. Rubbish is being written by the politicians to the effect that these tax cuts would be the engine of new economic growth. That is a load of nonsense. We tried this before in 1977. We narrowed the tax base by giving effective tax cuts by way of reduced tax on motor cars and reduced rates to the people who have. The poorer people do not have cars so doing away with motor tax did not mean anything to them. Poor people did not pay huge rates on private houses because they did not have private houses, they were living in tenancies. Yet we are talking about giving the well off people tax cuts. We tried that philosophy before. There is no moral justification at all for doing it again. We must reach the point of equilibrium between the cost of public services and taxation. When that is achieved, then we can look at policy decisions. At that stage we have to decide that level of health service we want and whether we can improve it. We must wait until we get to that point.

I must profess an interest in the tax amnesty because I am a practising chartered accountant. I have heard rubbish from some politicians speaking on the radio about this matter. I have not heard one person congratulating the self-employed on the amount of money which has been coughed up. People seem to think that £500 million was in back pockets, building societies or banks but the reality is that the majority of the self-employed people, who are finding life as tough as everybody else, had to go to banks and institutions and borrow to the hilt. I know people who have had to mortgage their houses and put themselves into considerable debt. I will not gain any votes by speaking on behalf of the self-employed but I wish to congratulate them.

I would sound two warnings about the tax amnesty. I have great respect for the Department of Finance but they grossly underestimated the amount of money outstanding. This leads me to believe that they may not be great at estimating the real state of the economy. They also underestimated the amount of money expected to be raised by the national lottery. If an estimate of £30 million is out by £5 million that is not too bad, but when the estimated yield is £30 million and the amount raised is £500 million, that is a serious miscalculation. It is like backing a horse which was not even entered in a race. The fact that £500 million has been taken out of the economy will, in my opinion, restrict growth next year in the retail sector. The Department of Finance should be cautious in estimating figures for tax buoyancy and growth in the economy because of the impact of the tax amnesty. There will be a depression of sorts due to the amnesty and the moneys collected.

We have made some small progress during the past two years. If the Government can keep their nerve and do not go off on a tangent regarding tax cuts we will arrive at a situation of equilibrium. Then we can start making progress. Expenditure is only one side of the equation and I look forward to seeing the taxation side when the budget is announced. In general I welcome the Estimates.

Mr. Yates

I should like to say how much I enjoyed the contributions of the previous two speakers, which were well worth listening to. I will confine my remarks to the Health Estimate, which is my particular responsibility within Fine Gael.

The timing of this debate is somewhat premature in so far as only the total amounts of money in the Health Estimate are available. We do not know as yet the amount of money to be allocated to each individual health board and hospital. This, coupled with the lack of information about any increased charges in the budget next January, make it only possible for Fine Gael to defer any final approval of the level of the Health Estimate for 1989 until this information becomes available and the outturn for 1988 is known.

In overall terms we note a net increase of £26 million on the current side of the health budget and a reduction of £3 million on the capital side. Within these subheads there are various increases and decreases, the broad pattern of which we support in so far as highest priority in terms of percentage increases seem to have been given to health boards and hospitals as opposed to general administration and other expenditure. Fine Gael's priority is to ensure that the maximum amount of health expenditure actually goes into either preventing or curing illness. As this debate occurs in the same week as the Private Members' motion on the health services, I have decided to take this opportunity not to reiterate some of those topics but to outline what I feel are major care gaps in our health services that need to be given priority consideration in 1989 and beyond as our coherent action plan is evolved in each area. Unless we have such a clear focus on patient needs, as opposed necessarily to demands, we will not improve the quality or quantity of health in Ireland.

It is noticeable that at no stage has the Minister set out goals in terms of health policy of increased life expectancy or improved quality of life in terms of health care and thus the very goals of the health service have not been clearly laid out. This overall sense of direction must be an urgent priority.

My immediate priority is the area of waiting lists for hospital treatments. We must immediately recognise the extent of this problem and deal with it effectively. I am concerned about the lack of training in medical schools for consultants in terms of management of waiting lists to ensure that priority is given on the basis of clinical need alone. There are, I understand, some 3,400 public patients on waiting lists related to the Mater Hospital. There are some 23,000 people awaiting orthodontic services and there is a two and a half to three year wait for 1,000 children for some ENT operations in children's hospitals. The cardiac waiting list has grown from 20 to 100 in Crumlin since June. I believe the only solution to this problem is to allow a certain proportion of the total health budget to be issued to certain hospitals on a contract basis to deal with severe waiting lists. This would involve an independent evaluation of need and a set fee per operation paid to the particular hospital. Unless we move radically in this direction urgently what were elective admissions to hospital will become urgent admissions and the whole system will become self-defeating with a spiral of unplanned, more expensive health care. Through this contract system one can ensure the best value for money so that perhaps more routine treatments are not done in expensive teaching hospitals, principally in Dublin. Under these proposals chief executive officers of health boards would have a discretionary option to shop around for health services to meet particular needs of patients in their area. To ensure the maximum number of treatments for public patients I would ask the Minister to urgently review the current ratio of consultants to non-consultant hospital doctors, which I understand at the present time stands at 1 to 1.6. In my view this coupled with the loose terms of the common contract allow too much latitude for development to deal with private waiting lists as opposed to public ones. Also as part of the review of waiting lists we could assess, on a national basis, if we have too many of the wrong type of beds and too few of other types of needed acute beds.

The next area of priority in my view relates to the elderly. Between now and the year 2006 figures from the CSO show that there will be a 7 per cent increase in the number of persons over 65 years of age and a 20 per cent increase in the number of persons over 75 years of age. Fine Gael's priority is to ensure that elderly people live out their lives with dignity and independence. It is estimated that only 4 per cent of the elderly require institutional care. It has never been properly assessed what percentage of this requirement is hospice care.

The direction, therefore, that I would like to see policy for the elderly taking is: (a) Special positive discrimination for target groups of old age pensioners living alone and those over 75 years in all circumstances; (b) An effective community health programme which would provide sheltered housing for those in need with the necessary back-up of public health nurse visitations and an alarm system within; (c) To redefine the role of "carers", be they relatives or home helps, with special financial support for them other than the present restricted prescribed relatives allowance scheme and with the necessary back-up facilities by way of respite service for full time carers when they go on holidays and for weekends; (d) The provision within each community care area of a proper geriatric assessment unit involving co-ordination of all facets of health services, including consultant and general practitioner opinion, public health nurse and administrative personnel. Based on the work of these assessment units, the provision for geriatric patients of adequate beds especially in the winter other than in acute hospital, for example, through the development of private nursing homes with high standards of exclusive geriatric facilities at low cost; and (e) A national network of day care centres with the necessary back-up transport facilities and occupational therapists in the region to ensure that elderly people can have the minimum level of institutional care.

Our third area of care is the mentally handicapped. The first problem in this area is the lack of adequate statistics to gauge the extent of the problem. It is obvious, however, that the percentage of incidence of mental handicap in Ireland is higher than abroad. It is estimated that there are some 23,000 people having some level of handicap and that there is an additional need for a day service for some 2,000 persons, plus an additional 1,000 places for full time residential care and there are some 2,000 mentally handicapped patients who should not be but are currently in psychiatric hospitals. All the while, the excellent Robbin's report of 1974 is gathering dust in the Department of Health.

National lottery funds should be earmared for the capital and current needs of the mentally handicapped as a matter of priority. For this and other disabilities we must look at the area of greater genetic counselling on the preventative side because this is practically non-existent in the country at the present time. Another area where I feel there can be ample development, given such high levels of unemployment, is in the area of voluntary helpers. We need to bring some sort of structure and uniform remuneration especially for younger people providing back-up to residential or day care centres. There is adequate scope in existing schemes outside of the health care area such as the social employment scheme, Teamwork, etc., to provide badly needed assistance at reasonable cost to the State.

My next area of priority is the disabled generally. In the early eighties there was much debate and expectation concerning developments for the disabled who form 10 per cent of our population. Unfortunately, the grasping of these issues was watered down subsequent to the publication of the Green Paper on the Disabled. There is an urgent need for a Bill of Rights for the disabled covering all ranges of disability. This would include such issues as: rights of income maintenance; a 2 per cent quota for the disabled for all employers employing over 30 people; access to public buildings; a programme with EC support for sheltered employment given that so many of our vocational training establishments such as Rehab and others are simply silted-up due to the lack of employment opportunities.

Unfortunately, this Minister has made no progress in these areas in spite of the fact that many of these issues do not necessarily involve extra resources, but rather a political priority.

My next area of concern relates to the dental services. A classic example of the negative health care effect of applying cash limits to health boards is the casualty of non-statutory services, such as optical and dental services for medical card holders. We see the effective abolition of the 1979ad hoc scheme whereby many medical card holders were referred to dental practitioners for various treatments. At the present time, there is simply no service for adult medical card holders other than tooth extractions related to levels of pain. This means that many old age pensioners are being asked to pay for the provision of dentures and for younger persons there is no immediate treatment of dental decay. It is estimated that some 20 per cent of the population of over 35 years of age require dentures and obviously, as the demographic pattern rises, the incidence of demand is greater. Our orthodontic service is virtually non-existent, with only one health board employing a salaried orthodontist and with exorbitant fees being charged for private patients. To date, the Minister has relied on reference to the Working Party Report on the Dental Service. I would call on him immediately to publish this report and to state what decisive measures he is going to take to implement some of the gaps that it recognises in our dental services.

Fine Gael will be shortly publishing a major policy document on our dental services which will address these major concerns. Included in these proposals will be a rationalisation of dental schemes between the Departments of Social Welfare and Health, a proper career structure for dental auxiliaries, such as denturists, dental technicians, DSAs, etc., in order to promote a more costeffective service and a comprehensive emphasis on prevention among other matters. I will freely acknowledge that this is one area that does require additional resources. It is obligatory for the Minister for Health to recognise this and to provide, within any reallocation or through the provision of extra resources, finance for this important area.

I turn now to the child care services. In any definition of quality of health, dealing with child abuse must be of top priority. It is estimated — and one must acknowledge that statistics are sketchy — that we have an abuse level of somewhere in the order of 50 per 100,000 children. Some of the necessary reforms will be dealt with in this Dáil session through the passage of the Child Care Bill. This will place additional burdens on our health boards, both in terms of extra skilled personnel, improved residential facilities and perhaps legal costs. Fine Gael will be setting out in the debate on the Bill our specific requirements in this area and how they should be financed. It is imporant that more and more services are not simply tacked on to an already overburdened health service without the necessary re-organisation and planning. If this is allowed to continue, it will only result in a further overall deterioration in all facets of the health service, as opposed to trying to deal with new special and social problems.

While referring to children, I am also concerned that some hospitals are not fully implementing the Department of Health's circular in relation to the welfare of children in hospital and would ask the Minister to carry out a review of this area through his Department to ensure that proper play areas are provided within hospitals and parents are given full and free access to their children.

The next area of concern is that of the voluntary organisations. Because of the changing and diverse health needs I believe the health services should retain the maximum flexibility in dealing with varied specialist problems. Therefore I favour a greater contracting out to voluntary organisations to meet these specialist needs. I am referring to such problems as autism, the needs of the deaf, the problem of arthritis, to name but two. Excellent work is being done by a myriad of organisations many of which are under the umbrellas of UVOH, NAMHI and the mental health assocations. I am aware that many individual organisations receive financial support under section 55 of the 1975 Health Act, in grants from health boards. I support strongly this concept within the health services and would hope at overall governmental level that greater consideration would be given to tax exemption on covenants and donations to health related charities and that a clearer policy of support in overall terms from the national lottery should be given to help generally, which is strongly supported in recent opinion poll surveys. It is remarkable to think that other facets of Irish life, such as sporting and cultural activities, receive more positive tax treatment than vital health care services. Moreover, in order to harness the work of voluntary fund-raising the question of VAT on equipment should be written off, if there is prior approval, on any item of medical plant or equipment. This would also ensure that such fund-raising would go into the most vital areas of need.

Within the 56,000 people employed in the health service, there are special and unique problems for the nursing profession. I am most concerned about the problems of this profession. I understand from An Bord Altranais that this year already the level of applications for emigration certification runs at 1,800. There is a well documented problem of full-time temporary nurses requiring permanent appointments and a proper career structure. Morale is very low among student nurses. In specialist hospital areas, for instance, cardiac surgery and some oncology work, there seems to be either a lack of organisation or adequate nursing staff to ensure that technicians are working at an optimum rate. To meet these problems, the Minister should first acknowledge that in the short term it is cheaper to have permanent nurses rather than full-time temporary ones simply because of the PRSI structure whereby for temporary nurses the employer's share is 12.4 per cent and the employee's share is 7.5 per cent. For permanent nurses the respective figures are 2.3 per cent of gross salary and 3.2 per cent of gross salary. This comes to a net difference of 14.2 per cent of gross pay that can be saved by appointing permanent nurses instead of temporary ones — a major saving in the short term.

I acknowledge due to the incremental pay scale of nurses that there are medium-term costs through permanent appointments. I also knowledge the Minister's recent appointment of 850 people generally in the health service, which proves that his embargo did not work and was totally unsuited to the health service with a high turnover of staff. This number is simply inadequate for the nursing profession. I call on the Minister immediately to carry out a national study into nurse-patient needs and ratios, especially for specialist areas, to ensure the basis for norms and subsequent adequate staffing levels. Such a study is a prerequisite to ensuring adequate staffing in the areas of operating theatres, intensive care units and casualty departments. Also, at ward sister level the managerial role has been underestimated in terms of level of stock control for supplies and personnel deployment. I would ask the Minister to urgently look at this area in terms of the necessary back-up training under An Bord Altranais. The greatest cost factor in nursing arises from the nature of requirements through a 168 hour week. The most effective way to get better nursing levels at the same level of cost is through the maximum level of the fiveday week and day surgery facilities. This is the way to ensure better care in terms of more nurses per patient at less cost. This policy direction is also the only way in my view to meet the difficulties in implementing the Labout Court decision relating to a maximum 65 hour week for junior doctors.

I wish to turn now to EC initiatives. I note that in 1988 the level of financial contributions from the EC for the health services is of the order of £26 million. Under new arrangements for the Structural Funds between now and 1992, I can see major opportunities in new finance for health infrastructure and I would call on the Minister to immediately integrate his Department's proposals with the Government's submissions in this regard and made a clear statement to the House on this topic. Specifically, I would like to see greater EC co-ordination and policy harmonisation in the following three areas.

Firstly, it seems to me nonsensical that in each member state there is our equivalent on the National Drugs Advisory Board carrying out expensive and detailed studies and testing on new drugs that become available. This work urgently needs to be co-ordinated and rationalised so that if approval is given in one country, such as France, it could apply commonly throughout the Community. Discussions should take place on a common approval system and we should initiate it immediately.

Secondly, there is no doubt that with technological developments the cost of certain treatments for very rare illnesses is so prohibitive as to prevent us from having such facilities in each EC member state. The orderly development of such high tech facilities should be done at Community level with subsequent common access for public patients.

Thirdly, I have referred earlier to the difficulties of the disabled in finding employment. It is illogical, and unfair, that European Social Funding is only available for vocational training as opposed to sheltered employment. I would call on the Minister to ensure at EC level that at least on a pilot basis initially ESF funding is extended to sheltered work as it is negativing excellent work being done in the vocational training area due to lack of turnover of participants.

These are but three examples of areas where an integrated EC approach can grapple more effectively with health care problems on a trans-national basis rather than each country individually finding it impossible to balance the equation of increased health care needs from static resources.

Finally, it is clear that this Estimate only seeks to meet at best the level of medical inflation pay accounts for 70 per cent of all health expenditure. Given the 2.5 per cent phase of the pay increase for 1989, the 3 per cent increase is only barely adequate, if adequate, to meet these needs. Given the overall budgetary situation and the fact that we have still some further progress to make before stabilising our debt-GNP ratio, I believe the best commitment that can be given to the health sector generally is to guarantee that increases in health expenditure will match increases in gross domestic product growth, thus being related to our level of ability to pay for these services. In order to meet the needs I have already outlined, and the overall difficulties of the 45 per cent of the population who are just over the income eligibility for a medical card and are in the lower section of Category 2 of our health entitlement, it will be necessary for those with responsibility for health policy to seek a reallocation of resources within the health budget to create greater effectiveness and efficiency leading to a situation whereby much of the inequality of access of our health services can be overcome.

I wish to conclude with some quotations from the Official Report of previous Dáil debates on Health Estimates. On 2 June 1983 as reported at column 570 Deputy O'Hanlon said:

I have never been over-enthusiastic about the way the staff embargo has been implemented.

On 1 March 1984 — column 1182 — the then Minister for Health, Deputy Desmond said:

It is no longer possible to cut back on the amount of finance being made available while expecting an adequate level of service.

On 3 July 1985 — column 517 — Deputy O'Hanlon called for a halt to the present dismantling of the health services and on 4 December — column 1594 — Deputy O'Hanlon said:

No health board has sufficient money to deliver the services that are their statutory obligation.

Also on 4 December 1986, Deputy O'Hanlon said:

Fianna Fáil in Government will provide ... a proper and adequate level of health care.

It is quite clear that these considered comments from the present Minister, Deputy O'Hanlon, were subsequently found in Government to be meaningless and hollow. Fine Gael believe that the reorganisation of the health services to provide better patient care and better value for money can no longer be postponed.

Mr. Flood

In considering the 1989 Estimates, as proposed by the Government, we cannot take them in isolation. They should be placed alongside the efforts of the Government to come to grips with the financial difficulties which this country found itself in over many years and taken in the context of the Government's proposals for the future and their efforts in regard to transforming the Irish economy. This is a fundamental part to be played by any Estimates which ultimately lead to the preparation and presentation of the budget. The Taoiseach has consistently said, since coming to office in 1987, that he wishes to preside over a Government that restores confidence. Part of the process is the need to restore confidence in the Irish economy. It is not necessarily a book-keeping exercise in order to balance the books, to meet our repayment requirements, to service the national debt and so on but it is a fundamental part of our policy that leads to the creation of lasting jobs. Any of us who has even a very small grasp of economics will understand that borrowing as we did in the past just to sustain day to day living is not an acceptable way forward if we want to create a sound economy which will provide the job opportunities that will keep our people at home and that will give our young people an opportunity to become involved in the employment field for the first time when they leave school. It is all a question of transforming the Irish economy.

I believe that this Government living up to the demands made by the Taoiseach has made substantial progress in that regard. We see that inflation is at its lowest for over 20 years and is kept down to 2 per cent, that interest rates have dropped by over 6 per cent since we came into office, that the balance of payments is now moving into a surplus position for the first time since 1967, and that our monthly reports regarding exports over imports show a continued and sustained surplus leading to a £2 billion expected surplus by the end of 1988. This is undoubtedly part of the transformation of the Irish economy. These items, even in themselves, have made a significant impact on those of us involved in the Irish economy and on people who would have a need to look at falling interest rates. One need go no further than the householder who, since Fianna Fáil came into office, has saved considerably by virtue of the fact that interest rates have fallen and, consequently mortgage repayments, by a sum of up to 6.5 per cent. This is a very substantial reduction that means a lot in the day to day financial affairs of ordinary families. If we can maintain this level of progress through devising and developing Estimates such as those we are now discussing, the Taoiseach's aim of restoring confidence in the economy will lead to substantial lasting job creation. That is the fundamental part of Fianna Fáil policy in the preparation of any set of Estimates this year, last year or next year and in the preparation of the budget which will be coming before this House in January.

The measures we have taken to date are what is required not only to balance the books but, more importantly, to create jobs throughout this country that are sustainable and which inevitably will lead to improving the economy, particularly in the area of exports.

There are certain critical elements in the Estimates that will involve savings of £311 million for next year.

An Leas-Cheann Comhairle

I must interrupt Deputy Flood and ask him to agree to the movement of the Adjournment of this debate. I advise him that on the resumption of th Debate he will have 15 minutes remaining.

Debate adjourned.

Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.