I call Deputy McCoy. He has some 17 minutes left. May we have order for the Deputy, please?
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).
I shall continue my observations on the Estimates for Agriculture as discussed last night. I see no provision in those Estimates for an extension of the disadvantaged areas scheme. Last year and the year before this was promised and as the Minister knows, many applications have been sent to the Department of Agriculture and Food. The Minister has met many groups throughout the country and promised an extension of this scheme and that the Government would make the necessary provisions to meet the pound for pound funding. Notwithstanding that the EC has offered a 70-30 funding arrangement, there is still no provision in the Estimate to take advantage of that generous offer.
There are many calls in this House for full negotiation of the regional and structural policies as they relate to rural Ireland. Nevertheless, the disadvantaged areas programme as it stands is now being reduced in the Estimates of this year. It shows a lack of commitment to our agricultural sector and, in particular, to the poor sections in the more disadvantaged areas where we should be trying to keep people on the land and away from the dole queues with resultant pressure on the social welfare budget.
Also, there is no provision for any extension of the drainage scheme under the western package. As the Minister knows, this scheme is set to conclude this month. There is a 70 per cent funding in it from the EC and because of the bad weather we have experienced and the very many programmes which have not been concluded throughout the country, I cannot understand how we could not get an extension of this scheme.
We are getting an extension.
I understand that it is a two year extension at the moment but do not see why we could not get a further extension. After all, very little money is involved in terms of the total budget. Many schemes have not been concluded and grant aid will not now be forthcoming for them.
This is an example of the lack of commitment in these Estimates to the smaller farmer. One can see that there is no commitment to smaller family-type farms. I draw the attention of the House to the operation of the milk restructuring scheme for this year, brought in and operated by the co-operatives, which was supposed to be to the advantage of those with lower quotas. The reality is they have not been able to make any headway in the purchase of these quotas because they have not available the disposable income to do so. What is happening is that the scheme is concentrating the quota holdings in the hands of fewer people. It is also a very dangerous marker for the future to look at the EC Commissioner Mr. Andriessen's recent statement in relation to milk quotas that he would like to see them moving across all boundaries and not tied to land after 1992. It stands to reason, therefore, that where there will be large, concentrated volumes of milk under the quota system, these will become tradeable assets and will move far more easily than if the quotas were divided out among many farmers whose livelihoods depended on them, with the quotas being subsequently tied to the land. I ask the Minister to look into this matter.
We were told in this House during the year that there was no crisis in the beef industry, that things were under control. Figures now prove that the slaughterings are down 20 per cent as compared with this time last year. With the great commitment this Government are supposed to have to agriculture, it is hard to understand why we could not have had some type of practical aid, not alone from this Government but back as far as 1984 when the quota system was put in place. It was manifestly obvious then that cow numbers would have to fall if quotas were to be observed. This was bound to have a knock-on effect on foundation stock but nothing was done about it. We now have a 20 per cent reduction in the throughput in cattle slaughterings notwithstanding that many millions of pounds are being invested in upgrading and increasing slaughtering facilities. It is hard to understand with such a financial commitment to this industry why paltry sums of £200,000 to £300,000 could not be found by the Minister six to eight months ago to put a beef supply scheme in place. That was because he could not get agreement with the banks and other members of the industry. It is hard to understand why such a small amount of money could not have been found at that time to ensure a continuing supply of raw material in this most important industry.
It is also hard to understand why in times of shortage we are allowing 20 per cent of our meat exports still to go out in the form of live cattle. Most of this is going to the North of Ireland. Many people, and those who are operating meat processing plants in the South, cannot understand how the Northern Ireland buyers can pay more for cattle which are being brought under the same triggering intervention system. There seems to be something there which cannot be explained and which the Minister should investigate. It is depriving the southern factories of very important sources of raw material. It is bad enough to have the actual foundation stock numbers down but to export 20 per cent of meat commodities in the form of live animals is hard to justify.
It is no harm to say here that the grant-in-aid to CBF, the marketing arm of the beef industry, has been halved this year. While I am all for self-funding and the funding of CBF through the levies which the Minister introduced this year in the CBF Bill, nevertheless if the Government want to withdraw from CBF in terms of funding I do not see why the Minister should control and retain the power of appointment of all the members of the board. He should either tell CBF to form themselves into a body like Bord Bainne and get on with the job or if he is going to control it from within his own Department he should give them the necessary funding.
The marketing of beef is very important. As we move towards 1992 we must make more progress in establishing factories which will have the capacity to provide a range of products which the consumers of mainland Europe require. There has been a lot of talk about brands and the national image. I congratulate the beef processing industry for doubling their added value exports of beef in the last 12 months but a lot more needs to be done in this area.
There has been much debate and many seminars have been held on the way in which the agriculture and food industry should be going. We should have a closer look at the area of branding products. This is a high risk area in that it costs millions of pounds to launch a product properly. If we look at the success of the world brand name leader in the Irish food industry, Baileys Irish Cream, we find that in the last 13 years they have had a promotional budget in excess of £150 million. In the same time CBF have not had a cumulative budget in excess of £20 million. This is the kind of difficulty we face if we want to be in the leader brand industry.
We have an ecologically pure country and we have products which are free from hormones and all types of additives. We do not have a brand name but the Department of Agriculture and Food are to be congratulated for projecting the image of fresh food from Ireland. However, it takes more than just processing the food here in order to be successful in the fresh food market. Products have to be delivered virtually on a daily basis and it is not as if one can supply for a warehouse in the country of destination. We must look at our system of transport and at our roads. We must be competitive. It may not be well understood but to be in the fresh food business at present costs Irish manufacturers about 20 per cent of the invoice price of their goods.
In the added value business the raw material value of the product diminishes and a lot of other values and costs come into play. If we are to be in a position to take advantage of the market which will present itself to us there are many aspects of the food industry we must look at. A lot of the grants that are given to the food industry to upgrade plant and equipment actually go out of the country because the hardware associated with food processing is imported. The position will arise in the future, expecially in the case of the fresh food industry, where in order to be successful in mainland Europe Irish companies will have to have plants adjacent to the market to put the finishing touches to goods. They will have to respond to regional and ethnic tastes within their area of distribution. The Government should not be adverse to grant aiding companies in order to help them establish extensions of their manufacturing companies overseas.
I intervene to advise the Deputy that he has three minutes remaining.
If we are to give a return to the primary producer in the future we have no other choice but to be in the value added business. The Common Agricultural Policy which has served Europe very well is now under threat from all sides. The pressures which will be put on by our world trading partners to diminish the Common Agricultural Policy by not depressing the world prices of our surplus will have a tremendous effect on the support price that farmers here have enjoyed. It might be said that the Common Agricultural Policy has made food too dear relative to the consumer price index and to the earning capacity of people. In fact the cost of living index shows that the cost of food has come down greatly over a number of years. Not only that but the industry is bearing greater production and refining costs than it did 25 years ago. The CAP has been good in that it has brought about rationalisation and certainty of supply.
I ask the Minister to consider the special plight of Irish farmers and the dependence of the economy on agriculture as its mainstay and to ensure that whatever alterations there may be in the CAP in the future they will not be to the detriment of this country or its economy.
I listened with care to what Deputy McCoy had to say in regard to our food industry. I have no doubt but that all of us welcome the great strides being taken in our food industry. I agree with Deputy McCoy totally that its future lies in more and more added value. However, he will realise that it is the Minister for Agriculture and Food who deals with that aspect. I have no doubt that that Minister will be contributing to the debate and taking on board some of the comments he has made.
Turning to the Estimate for my Department, I should say that, since this Government assumed office, the steps we have taken have had a dramatic effect in improving the business climate here. For example, inflation is now running at an annual rate of 2 per cent — its lowest level for 25 years — so that we are now among the low inflation countries in Europe. The financial institutions generally — pension fund managers and others — who used to look to the dollar or sterling now view our punt as a hard currency. Interest rates have fallen by some 6 percentage points and now stand at some 4 per cent to 5 per cent below the United Kingdom rate which constitutes a watershed in our economic history. Not alone are our interest rates below those in the United Kingdom but they are holding at that level. At the same time funds continue to flow into our economy, one of the best illustrations of the confidence now obtaining in the management of our economy. Electricity prices for industrial users are now down to a level lower than that in many of the countries with which we compete on international markets. Many other aspects of industrial costs have also been reduced.
The 1989 Estimates must be viewed against this background and in the context of the Programme for National Recovery which the Government have agreed with the social partners. That programme, agreed a year ago, clearly recognises that we could not continue to accept a situation in which the national debt and its servicing were allowed to grow at a rate beyond the capacity of the economy to sustain them. For this reason we embarked upon a dual approach in which we undertook a root and branch evaluation of public expenditure programmes together with the identification of policies, programmes and projects which would add to economic growth and employment creation.
It was the failure to undertake such radical reviews of policies and programmes which undermined previous attempts to bring public expenditure under control. The result was the undermining of confidence in the future of economic development in Ireland and the imposition of a cost structure and administrative culture inimical to business development and job creation.
In the case of my Department, the Estimates provide adequate funding for the regulatory and promotional activities of the Department and the various State bodies under my aegis. There is a close relationship between these activities and the climate for investment here. That is why I was so concerned to improve the investment climate from the appalling state that prevailed two years ago. The 1989 Estimate allocations must be seen, therefore, in the context of the essential need to make further progress in controlling public expenditure and the substantial progress already achieved in improving the climate for investment. In these circumstances, I am satisfied that we have got the balance right in the allocations to my Department and to associated agencies.
The Estimate shows a reduction of £9 million on the IDA capital budget. Over the past three years Exchequer expenditure on industrial promotion has been reduced by over 20 per cent in real terms as part of the major drive to secure greater value for public money in this area. In line with Government requirements the promotional agencies have adopted an approach of greater selectivity in the types of projects which are assisted, with an emphasis on measures directly aimed at meeting the structural weakness of Irish industry. Grants paid by the promotion agencies are now related to the achievement of specific employment targets. In other words, we are paying for jobs on the ground, not jobs that are projected. We are looking for better value for money and what we are now seeing coming through are more jobs for less money.
It is relevant to point out also that while the Exchequer element has been reduced by £9 million, the IDA will be permitted to retain an additional £2.9 million of own resources, as compared with 1988. This will be spent on the grants and building areas. The approach provides an incentive to agencies to adopt measures to increase the financial resources they can generate from operational activities and, in this way, reduce the need for Exchequer financing.
In the case of SFADCo, the Estimate shows reductions of 25 per cent and 13 per cent on non-capital and capital expenditure respectively. However, these figures should not be looked at in isolation. The bulk of SFADCo's budget is accounted for by own resources so that the net effect, when these are taken into account, is that overall expenditure by SFADCo will fall by less than 5 per cent in 1989.
The Exchequer grant for the administration and general expenses of the National Development Corporation will be reduced by £100,000 in 1989. This also takes account of NADCORP's increasing ability to generate additional earnings from fees and dividends. The corporation is well on course to achieving self-sufficiency on operating costs by the second half of 1991 as provided in its legislation. The continuation of Government support for the investment activities of the corporation is reflected in the provision of £5 million under the Public Capital Programme. While this is £1 million less than in 1988, it will bring to a significant level of £2.5 million the total Exchequer capital made available for NADCORP since its establishment in June 1986.
The grant-in-aid for CTT will be reduced by £1.2 million. The impact of this reduction will be partially offset by an increase in CTT's fee income arising from its introduction of a range of streamlined services to exporters. CTT will also place special emphasis on the achievement of savings through reduced administration costs. Available resources will be concentrated by CTT on the area of greatest need — indigenous firms, particularly those small firms which require assistance to realise their full export potential.
The special trading house scheme is a further assistance to indigenous firms seeking entry to export markets. Already six trading houses have been launched with projected exports of £100 million over the next three years.
The success of the approach which this Government have adopted can be seen in the fact that we are on target to achieving the creation of 20,000 extra manufacturing jobs on average per year — the objective set in the Programme for National Recovery. The achievement of this level of job creation was regarded as unrealistic by many at the time the programme was agreed with the social partners. This scepticism may have been justified in the light of the outcome for the previous five years but it failed to take account of the fundamental improvements in the climate for investment here that the Government were putting into place. The progress achieved over the past year shows that the reservations expressed at the time the programme was agreed were unfounded.
The latest labour force survey shows that in the year to April last employment in the economy increased by 6,000 — the first significant increase in employment since 1980. This outturn has been far better than most commentators had anticipated and is a further endorsement of Government policies.
Reference has been made in recent days by some commentators to redundancies notified to the Department of Labour in the first nine months of this year and which amount to some 18,000. Attempts have been made to link these redundancies with the target of 20,000 additional manufacturing jobs which we are well on the way to achieving this year under the Programme for National Recovery. The facts of the matter are that the notified redundancies include only 7,700 in the manufacturing sector which are well below trends in recent years. It is important to compare like with like. The comparison to be drawn here is 14,900 jobs created in the first three quarters of this year and 7,700 lost through redundancies. We want to see the redundancy figure reduced. However, the actual position is much different from the impression being given by certain commentators — that 14,000 jobs were created and 20,000 lost. Those are not the facts of life and is not comparing like with like.
In September, exports reached an alltime high. On a yearly basis to end-September exports amounted to almost £12 billion with a record trade surplus of over £2 billion. Within these very satisfactory figures was the particularly pleasing fact that exports from indigenous industry in 1988 are estimated to be up 16 per cent. The more selective and targeted approach being adopted by CTT is contributing to this excellent performance.
While 1989 will see a cutback in many areas of expenditure right across the public sector, a significant increase of 165 per cent has been provided for in the science and technology development programme. This is fully consistent with the Government's concern to build up the long term development potential of the economy.
While Ireland may not have the financial resources of wealthier countries to devote to technological development, we do have a growing community of highly qualified people in scientific and hightechnology disciplines who possess the initiative, ideas and enthusiasm to put their expertise to work in Ireland. The Government's aim is to harness the significant human resources we have in this area to ensure that we do not lose out on the effective application of science and technology to industry in activities such as the design of new products, the planning of new processes and research into new development opportunities.
The science and technology development programme has made significant progress since it was established in June 1987. The additional funding will enable existing programmes to be continued and expanded, and a number of new initiatives to be developed.
One example is the imaginative project to deal with the Lough Sheelin pig slurry problem which I announced earlier this week. The pollution of the lake in recent years had undermined, in the midlands regions, a once thriving tourist resource which was of national importance. Lough Sheelin was a national tourist asset for fishing holidays and must be made so again. What was allowed to happen to Lough Sheelin provides a classical case study on the need for a comprehensive and integrated approach to environmental protection, tourist promotion and farm development.
Last February, EOLAS were asked to carry out an evaluation of slurry digestion technology with the objective of coming up with a solution to the pig slurry problems in the Lough Sheelin area. As I announced recently, EOLAS have now come forward with a project proposal for the establishment of a number of anaerobic digestion units and a centralised organic fertiliser company.
The first phase of the project involves the setting up of an anaerobic digestion unit at one of the largest pig farms in the region and I expect that this unit will be in place in the spring of 1989. The digestion unit will produce biogas which can be used directly for heating or converted into electricity for use on the farm. The unit will also produce a raw fibre which can be composted and sold as a soil conditioner and fertiliser.
This proposal is very attractive. Not only is it an industrial project in its own right but it develops a significant business opportunity out of a major problem. It will have very valuable and positive spin off effects for Irish angling and tourism and it will improve the environment and quality of life for those who live close to the area. It will also provide a stable and long-term solution to the problems of pig fattening in the area and problems in relation to slatted sheds because the digestive unit will also handle cattle slurry as easily and readily as pig slurry. It is an example of how a problem can be solved by creating another opportunity.
When I addressed this House in June on the Estimate for my Department, I referred to the completion of the internal market in 1992 and indicated that I would shortly be starting a nationwide campaign to make every firm in the country aware of the major implications which the programme already under way had for Irish business.
This campaign, which forms part of the Government information campaign launched by the Taoiseach last July, has been under way for the past five to six weeks. During this time, together with my colleagues, the Minister for Science and Technology, Deputy Seán McCarthy, and the Minister for Trade and Marketing, Deputy Seamus Brennan, I have presided over seminars at 14 separate locations throughout the country. At these seminars I have been accompanied by experts from my Department and State agencies and presentations have been made on the likely impact which the completion of the internal market will have in different sectors of business. An information pack providing more comprehensive information on these developments was distributed to those attending the seminars. A real and valuable dialogue developed between those attending the seminars and those on the Government side.
My colleagues and I were greatly heartened at the degree of interest expressed by the business sector through their attendance at the seminars which, when completed, will have attracted well over 3,000 participants.
One of the main messages we have attempted to get across has been that the completion of the internal market will bring about a fundamental change in the economic landscape of Europe over the next few years. As a country with the most open economy in the Community, and so utterly dependent on trade for economic survival and development, the liberalisation of trade which is the fundamental objective of the Commission's programme to complete the internal market is of profound importance for us. It is very much in our interest to fully support the programme and we have done so consistently.
The programme will provide a supply side shock to a more integrated Community economy and generate an increase in demand for traded goods and services. More importantly, this increased demand will occur in a situation where there will be far fewer non-tariff barriers to trade.
The opportunities for Irish firms to increase their sales in markets right across the Community will be very significant but success will have to be earned. There will be no divine right for any firm to a share of the increased market demand. Markets, both in Ireland and elsewhere in the Community, will become more competitive. This will necessitate, on the part of Irish firms, increased attention to product quality, innovation, design and development, to after sales services, to joint ventures with Community partners in the field of product development and distribution and to a greater sharpness of focus in marketing.
The Government will continue to provide the framework to enable firms prepare for the new market. We will continue to take steps to reduce business costs to achieve better value from the State support measures for business development by targeting incentives on those areas where the return in terms of output growth and employment creation is greatest.
In conclusion, I would like to revert briefly to a point I made when moving my Department's Estimate in the House in May 1987. I spoke of the role of Government in improving the industrial environment as being crucial. I pointed out, however, that it was not the only factor governing the approach to development. It is vital that people recognise that while the Government can take decisions which will result in improvements in the business climate, ultimately it is the people who work in business itself on whom we must rely for success.
Essentially, what is required to achieve business growth is a team effort with the total workforce in a company contributing towards its success. This will be all the more important, after 1992, when the internal market has been completed. I would hope that the success achieved over the past year in reducing the number of days lost through industrial action will show further improvement and that we see even greater co-operation between both sides of industry in availing of the opportunities for employment creation and improved living standards that a more integrated European Community will bring.
The Government over the past year have taken the first steps to put the economy into a strong position, reducing industrial costs and the cost of money and doing whatever we could to create a better business climate for further investment. That is essential for the long term health of the economy and equally essential for preparation for 1992. It is now up to the business sector to play their part in preparation for 1992. Seminars which we have conducted give full information on the 100 or so directives which have been agreed and we have also given any advance information available in relation to the other directives under discussion. It is only the start of an information awareness campaign which will continue as more and more directives are put in place so that Irish business and industry will be the best informed in the Community in relation to their preparation and the information which will be transmitted to them. They must get their act together, as the Government have, in preparation for 1992.
I disagree in two important respects with the industrial policy being pursued by the Minister. First, he has broken up unified responsibility for the implementation of industrial policy. When he became Minister, one body, the Industrial Development Authority, had responsibility for promoting Ireland abroad and bringing industry into this country. A single message was being presented about Ireland which contrasted very favourably with Britain where there was a number of divided responsibilities between the Scottish Development Authority, the Welsh Development Authority and regional authorities within England. The Minister broke that up and said that SFADCo would have responsibility for promoting one part of Ireland and that the IDA would have responsibility for promoting the rest. That is bound to create confusion overseas and is bad marketing practice. If you have a message and you want to get it across keep it simple and ensure that it is presented in a unified fashion. Quite unnecessarily, the Minister broke that up and, in doing so, he acted illegally because section 11 of the Industrial Development Act, 1986, says quite clearly that the IDA had national responsibility for the implementation of industrial development policies. The Minister has taken that national responsibility from the IDA and transferred part of the nation and of national responsibility to SFADCo. He has done that without the authority of this House and, in so doing, has breached the terms of section 11 of the Act——
The Deputy should again check the Act instead of making stupid statements.
My second criticism is that the Minister has failed to follow the industrial policy laid down and agreed in this House in regard to a transfer of resources to marketing and away from grants for industry and machinery; in other words, a transfer to helping software, helping people to sell what we produce and what we are capable of producing rather than installing more capacity. For instance, we see again in this year's Estimates evidence that the administration grant for the IDA is being increased while that for SFADCo is being cut. Furthermore, since the Minister came into office the amount of money available for the prime marketing agency, Coras Tráchtála, has been cut from £24 million to £19 million whereas the industrial policy of the country up to that said that there should be an increase in resources devoted to marketing and a reduction in the amount devoted to fixed assets and machinery. The Minister is boasting in this debate——
Rightly so.
——about spending more money on science and technology. I believe that is the wrong emphasis. The emphasis should be on selling. We have, of course, the capacity to produce a great deal in this country. Our problem is in selling what we produce and the Minister, foolishly in my view, is going along with the agencies who want more money for science and technology and industrial grants of various kinds and he is not providing the money the policy said he should provide for marketing. I disagree with those two elements in the Minister's policy.
Furthermore, let me say in answer to his rather complacent statements about the numbers of people employed in manufacturing here, the number employed in manufacturing since this Government came into office continues to fall.
Nonsense.
Total employment outside the area for which the Minister may have responsibility may be increasing——
Nonsense.
——but it is falling in the area for which he has responsibility.
Read the facts.
I return to my prepared remarks. Since 1980 Fine Gael have been the party who took the lead in getting our debt under control. In the 1987 general election this was what distinguished Fine Gael from the other parties. Fianna Fáil were then ignoring the problem and the PDs were proposing irresponsible and unfunded tax cuts. Now Fianna Fáil and the PDs accept that action must be taken to control the debt. In the previous Dáil only Fine Gael with 70 TDs supported debt control. All the remaining 96 TDs, Fianna Fáil, Labour and the PDs, were opposed in practice to spending cuts. This was very obvious to anyone sitting at the Cabinet table. In the present Dáil the situation is completely different, where 145 TDs support a policy of spending cuts to get the debt under control and barely 20 TDs are systematically opposed.
The present Government have massive room for manoeuvre. The previous Government had none. This is not an excuse for the previous Government. That argument is no longer relevant, but it is relevant to ask how the Government are using this historic, unprecedented and one-off opportunity to get our debt irrevocably under control. I stress the word "irrevocably". It is not good enough just to stabilise the debt GNP ratio. A new level must be established which will be immune to short term adverse movements.
The progress made so far could be derailed if international interest rates were to rise again. For example, if international interest rates were to rise by three points the Irish Government would have to spend £230 million a year extra servicing the existing debt. This would bring our annual borrowing back up again and quickly destabilise the debt-GNP ratio all over again.
Much is being made of the fact that we have raised up to £700 million from the tax amnesty, yet the money raised in the amnesty represents only one thirtieth of our total national debt. That statistic should remove any complacency there may be about our remaining problem. This is why the Government's Estimates for 1989 are so weak. They contain virtually no new policy decisions. They are just a set of figures based on existing policies and could have been drawn up and agreed in a few days' meetings between assistant principal officers in the various Civil Service Departments.
I believe that this Government are running out of steam. Let me illustrate this. Their campaign of preparation for 1992 is a tired PR effort based on State agencies. The methods and ideas of the seventies are being applied to the problems of the nineties. All the concentration is on manufacturing. Surely the Government should realise that the biggest threats we face in the single market are not in manufacturing but in the service sector. The Government exhort industry to make plans but cannot say what their own plans will be for VAT, excise duties or DIRT after 1992.
Emigration has become an active Government policy. It is not a safety valve any more. It is complacently accepted as a permanent channel for the evacuation of the most active and talented of a whole generation of Irish people. The Government have devised no structure, by means of selective tax relief, counselling or educational reform, to keep more of this talent in Ireland or even to get it back here at a future date.
The Northern Ireland issue is crucial to national regeneration. It saps our money, our morale and our self-image. It presents an image of Ireland throughout the world media as a medieval relic, obsessed with quarrels of times past. The fact that this image is partially untrue is irrelevant to its international effect. The Government are doing nothing about it. Their Northern Ireland policy is one of reaction — reaction to the British, reaction to their own backwoodsmen and reaction to the latest tragedy. They have no programme. There is talk about talks, but no talks. The Government are not leading Nationalist opinion, they are following it.
The Government have no policy on jobs either, other than measures that flow incidentally from the budget, like lower interest rates and lower industrial grants. These are good as far as they go but they go nowhere near being a response to the radical problem of joblessness in Ireland. Where is the Government's policy for the 100,000 Irish people, living here in our midst, who are out of work for a year or more? We have a plethora of schemes but where is the strategy?
I believe the unemployment problem in Ireland can be overcome if there is a combined and simultaneous policy of the following 11 elements: (1) tax and PRSI reform, especially for the lower paid, to make it easy for an employer to give someone his first job; (2) revamping the family income supplement; (3) relating all child benefit payments to income and not to status; (4) cutting job related charges, like employers' liability insurance, through radical court reform; (5) abolishing IDA capital grants for machines and replacing them with credits against the costs of employing the people to use the machines; (6) introducing special low rate PRSI for newly commencing part time workers who were previously unemployed; (7) tackling poverty through an active educational and reintegration programme, rather than by handouts; (8) transferring the value of tax breaks that are now enjoyed on houses and other types of property, to people on their work; (9) removing the dependency syndrome from our educational system, and promoting the idea of "Enterprise in Ireland" as the centrepiece of the entire curriculum; (10) encouraging mobility in every aspect of life, making it easier for people to move house and to move career; (11) extending the business expansion scheme to pension funds and corporate investors but confining its use to risky productive investment, like R and D and marketing, and raising any revenue lost thereby removing some of the privileges enjoyed by the same pension funds and corporations on their present investments in gilts and real property which do not generate wealth.
It is important, in a debate such as this on the Estimates to analyse where the money is actually going. Estimates figures show the Government's own political priorities and illustrate changes in society to which the Government are obliged to respond. I have set out some figures on two tables which were supposed to have been circulated. I asked that they be circulated but that has not been done. I provided them in time.
Is the Deputy in a position——
I do not want to read out the whole tables. That is why I wanted them circulated. These relate to selected shares of total spending by certain categories — and there is a list of categories — and selected shares of spending on social welfare again listed for 1981, 1986 and 1989. A number of features emerge from these tables.
The first is that inexorable growth in social welfare spending as a percentage of the total. Since 1981 it has gone from one-eighth to a quarter of total spending. Within social welfare spending itself, there has been a dramatic increase in the share of spending going on long term unemployment assistance, and social assistance.
These social welfare figures show the steady development since 1981, of a dependent group within our society, the long term unemployed who are living at the lowest level of income. This Government need to evaluate the implications of this for policy.
We must of course spend substantial amounts of money on promoting the social welfare of vulnerable families and preventing them falling into poverty. But should the basic schemes be so structured that the method of qualifying for help is to undertake to remain idle and "available for work?" Would we not be better introducing, as Fine Gael suggests, support for families in the form of a basic income, which does not require people who have low earning capacity, to remain idle or certifiably ill?
A second issue to be noted is the steady growth of the share of total spending going on policing. This points out the Government's lack of a Northern Ireland policy and the continuing crime problem. Meanwhile spending on productive activities, like labour training and agriculture, has shown a steady decline under this Government since 1986 both in absolute terms and in terms of the share of the total.
It is interesting to note that, despite the widespread concern about educational and health problems, there has actually been an increase in the share of total spending going on these areas. This emphasises the need for efficiency and better management of resources. The share devoted to higher education has actually doubled since 1986. We should ask how much of this Irish spending will be exported for the benefit of foreign economies.
It is also worth noting that, within education, salaries of teachers are absorbing an even bigger share of the total. In 1981, 71 per cent of the primary education Vote was devoted to teachers' pay. In 1986 the figure had risen to 77.9 per cent and in 1989 teachers' pay will absorb 82.7 per cent of the total. I would be interested to know how this compares with other countries. Is this trend really beneficial to primary school children?
There has been a general decline in the share of Government spending going to economic services, (industry, agriculture, fisheries and tourism). These are services on which some financial return to the Government might be expected. The "Economic Services" share of the total has fallen from 5 per cent of GNP in 1986, to 3.5 per cent in 1989. Does this indicate that the Government give a lower priority to economic development?
I believe the format of the Estimates must be improved. With the onset of 1992, we must accept that we are in direct economic competition with the other 11 countries of the EC. The form and financing of Government services have a huge impact on the competitiveness of an economy.
Therefore, I suggest that Tables 4, 5 and 6 of the Estimates' Volume, which give details of the share of our money going on particular activities, should be accompanied by comparative data from other EC countries so that we will know whether we are spending relatively more on health than other countries and vice versa. We could then see if we had a different emphasis to that of our competitors, and how this could be justified.
Some Estimates tables are far more informative than others. Health and Social Welfare account for 43p out of every £ spent by the Government. Yet the Book of Estimates devotes only four pages of a 63 page document to these spending areas. The Health Estimate is particularly uninformative and gives absolutely no indication of the Minister's priorities, or of where the money is really going. It is all allocated in a block form to other bodies over whose activities the Minister exercises hidden but unaccountable influence. This format should be changed. The Social Welfare Estimates should contain a breakdown of the spending by the Social Insurance Fund to which again a block allocation is made with no further information.
There is a further matter about which I am concerned. Ministers this year seem to be voting themselves huge amounts of extra money for consultancy services. Overall spending is to fall by 2 per cent but the Minister for Labour's and the Minister for Finance's consultancy budg-ets are going up by 100 per cent; the Minister for the Marine's consultancy budget by 195 per cent — one could spend the whole year at sea on that; and the Minister for Education's by 72 per cent; the Revenue Commissioners are increasing theirs by 150 per cent. Why is this necessary? Why can the Departments involved not do this themselves rather than hand the money over to outside consultants?
Is it the case that because of the embargo we do not have enough civil servants to do the work and are having to pay outsiders three or four times more for a given amount of work as it would cost us if we employed people in-house to do it? If that is not the explanation what do these Ministers use these consultancy moneys for? Have we any guarantee that the work is all bona fide for departmental purposes? It would be appropriate, in a debate like this, if we were vouchsafed an explanation for these very dramatic increases in consultancy budgets to particular Ministers. Incidentally, the Minister for Health has no increase in his consultancy budget this year as against last year. What are the others doing with all this money?
These are the main points I wanted to make. I hope it will be possible to circulate the tables I did not read into the record.
The tables do figure in the Deputy's circulated speech.
Deputy Bruton raised the position of the amount of money we are spending. What we are looking for is better value for that money. I am glad to say, on exports, that we are exporting more with less Government spending on grants — creating more jobs for less money.
In the health services, productivity has gone up with less money. In 1987 and 1988 the Government have been successful in helping to bring the financial situation under control, and we must continue on course in the national interest. The Opposition parties must recognise that if one is controlling public expenditure it does create the need for hard choices. I do not have to remind the House that we have a national debt of £24 billion and that it takes over £2,000 million in interest each year to pay off that national debt. The health services are a major consumer and, as such, they must bear their share of the financial constraints, but it is an indication of the Government's commitment to protecting the health services that in 1989 the Exchequer funding will amount to 19.8 per cent as against 18.8 per cent in 1988.
The problems in the health service are aggravated by the fact that we over spent by £55 million in the last two years of the Coalition Government. It is not sufficient for Deputies to come into the House and suggest that this was because Fianna Fáil had a majority on some of the health boards. The reality is that the Minister had the power to impose section 31 but he did not do so although his colleague, the Minister for Finance, would have wished him to.
If we compare the position in this country with other countries we will see that all developed countries are facing exactly the same problems as we are. The United States which spends 12 per cent of its GNP on its health service is experiencing exactly the same problems as we are in trying to decide where money should be spent in the health service. I think it is recognised by all parties that if we were to spend all of the Exchequer funding on the health service we still would not be able to meet all of the demands.
In relation to the hospital service we have been particularly successful in a number of areas over the last 18 months. There has been a rationalisation of the services with a number of hospitals which were surplus to need being taken out of service and the resources available transferred to other major hospitals which needed to be developed. A classical example of this is in the mid west where, despite doubts, the future of Ennis and Nenagh Hospitals are now secure in conjunction with the Regional Hospital in Limerick which has been developed into a major hospital as it should have been years ago.
There has been much new development. There has been development at St. James's Hospital, development at Mullingar, Castlebar, Cavan, Sligo and Wexford. Therefore, there is ongoing development in the hospital service. Productivity in the hospital service has also gone up. The number of beds in St. James's Hospital was reduced by 25 per cent but the throughput has increased by 7 per cent and I should pay tribute for this to all of the doctors, nurses and staff working in that hospital. The throughput in the first nine months of this year at Beaumont Hospital is phenomenal. More than 15,000 patients have been admitted, more than 43,000 patients have been seen in the accident and emergency unit and more than 70,000 patients have attended the out-patient clinics.
I accept that there are gaps in the service, such as waiting lists. None of us like to see people on a waiting list if a service would be of benefit to them. It is important to realise that waiting lists are not new but have been part and parcel of the health service for as long as the health service has been in existence. This is true not alone of our own country but of all developed countries. It is essential to recognise that we have a first class quality hospital service which compares favourably with any hospital service anywhere else in Europe and this is something of which we should be justly proud.
There are difficulties in regard to the accident and emergency units in that quite large numbers of people are attending these units. This is having an impact on admission policy in that there are delays in the admission of people for procedures such as varicose veins treatment. Obviously we will have to address this problem to see whether there should be a greater number of consultants on duty and to look at the general practitioner service to see if it is adequate to ensure that people do not have to attend hospital if a general practitioner service is available to them. We should also look at the area of prevention. Many people find themselves in hospital where if a little more care and attention had been given it would have saved them the traumatic experience of having to be admitted to hospital. For example, a simple thing like the wearing of a seat belt could well prevent serious injury and somebody finding himself in hospital. This is an area which has to be addressed in conjunction with the other areas I have mentioned.
On the question of management, we hear a lot about the amount of money which is spent on administration, that there is too much spent on this area, but it is important to look at what this involves. It includes the telephonist in a hospital and the secretaries who type reports for consultants, X-ray reports and so on, who process applications for admissions into hospital, appointments for out-patient departments, applications for medical cards and disabled person's maintenance allowance. In addition there are child care workers, community welfare officers, house mothers and homes for the handicapped. I would like somebody in this House to tell me how we can remove one of those particular disciplines from this area and still run an effective service. They are essential in the delivery of services. If one takes all of these people out of the administrative category one is left with 2 per cent of the total who administer the service. That is a reasonable percentage. Even Deputy Yates admitted that a percentage of between 1 per cent and 3 per cent is acceptable.
Obviously there must be better cooperation and co-ordination between all of the hospitals, be they health board hospitals or voluntary hospitals. Over the last 18 months we have been doing quite a lot of work in this area. For example, in the south east Dublin and Wicklow area we have St. Vincent's Hospital, St. Michael's Hospital in Dún Laoghaire and St. Columcille's in Loughlinstown. It is important that those three hospitals would look at how they could provide the most efficient service for the people living in that particular catchment area. That is what the service is all about, providing an efficient service for those who need it. The same applies to Cork where we have the Regional Hospital, the Mercy Hospital, the South Infirmary and the Victoria Hospital. They must and are looking at how they might provide a more efficient service. The productivity rate in the MANCH group of hospitals in the city, comprising the Meath and Adelaide Hospitals and the National Childrens Hospital, has increased by 40 per cent. Both the Meath and Adelaide Hospitals experienced difficulties during the year and in my view we will not reach the ideal until the services they provide are transferred to the Tallaght hospital. In the short term it does not make sense to have three hospitals — the services which they provide will be transferred to Tallaght in a few years time — and to have three separate managements and administrations and I believe that there must be closer co-ordination and a unified approach adopted, particularly in terms of admission policy, to avoid some of the problems which have occurred during the last year.
On the question of management information, I would have to say that the officials in my Department have done very good work in bringing together the management information which is available but it would be far better if the health service was computerised. The dilemma for any Minister is to know how much of the resource he should spend on computerisation. My instinct tells me that the resources should be provided at the frontline so as to ensure that we have the maximum amount of services made available for the people but having said that it is important that we make some efforts to improve management information. With that in mind I set up a small working party comprising of officials of my Department and the health boards and an outside consultant in computers and they reported after about a month or six weeks. I am glad to say that they have produced what I believe to be an excellent report which recommends that the various agencies would have the right to purchase whatever computer equipment they think is required to suit their own circumstances provided it falls between certain guidelines laid down by my Department — guidelines based on common sense I might add.
I accept that there are gaps in the community care service, for example, in the dental service. There have been problems in the dental service for as long as I remember, and not always related to finance. For example, the number of dentists available to the public service was a problem. Deputies will remember about four years ago that five health boards advertised for orthodontists and only one board succeeded in filling the post. My colleague, the Minister of State, Deputy Leyden, chaired a group who looked at the dental service and presented a report to me, which we are examining with a view to implementing some of their recommendations.
As regards the General Medical Service, I am very pleased with the results of the negotiations which have taken place over the past 12 months. I believe the new structures will allow general practitioners to take a more active role as members of a team. They represent a pivotal role in the delivery of primary health care. Under the fee-for-service system they work too much in isolation because they have to carry out all procedures themselves in order to qualify for the fees. Under the new system of captitation they will have more time for individual patients and they will have more time to be available as members of the team, to the betterment of community care. We are looking at other ways community care might be developed through the new general practitioner scheme. It will also give the Department some indication of how much the scheme will cost each year. As Deputies know, in the past the GMS was an open-ended scheme and it was very difficult to estimate the cost.
I believe the revised package for the doctors represents a sound basis for general practitioners to realise their full potential. I have no intention of interfering with the agreement which has been negotiated with the Irish Medical Organisation and intensive work is ongoing to give effect to it from 1 January 1988.
The area of drugs is one we must be very concerned about because it represents about 9 per cent of the cost of administering the health service — about £110 million. I am glad an agreement, negotiated by my predecessor with the Federation of the Irish Chemical Industry, has been renegotiated by us because we were able to achieve a 5 per cent reduction in the price of drugs for the GMS. As part of the GMS negotiations it was agreed a drugs formulary would be available in 1989. I will be recommending that the doctors should look carefully at the drugs formulary and prescribe the drugs in that formulary, because it is much better for the patients and the doctors that, in a voluntary way, there should be responsible prescribing. We all accept that a patient is entitled to whatever drug the doctor believes is necessary, but doctors must be responsible in their prescribing. It would be better if they voluntarily looked at their prescribing habits rather than, as happened in the past here and in many other countries, have administrators decide what drugs may or may not be allowed.
Since coming into office we were able to protect the services for the mentally handicapped. We were able to allocate a 5 per cent increase in 1987 and to maintain the same level of allocation in 1988. It is my intention — and the Government's commitment is obvious — to protect the services for the mentally handicapped.
As regards the psychiatric services, despite the constraints on finance, there has been much development in bringing forward the recommendations of the working party on planning for the future. Many persons who were formerly in hospitals are now placed and happily living in the community. This is not a cheaper service. It is important to recognise that beds will be available in hospitals for those who need them. We will not have the same experience as the Italians and people in some parts of America where hospital beds were not available for these people.
Recently I published a report of the working party on care for the elderly. They produced a very good report which dealt with health, social welfare and housing and made recommendations which would improve the quality of life for the elderly. The Government have accepted the principles of that report and officials of my Department and the chief executive officers of the health boards met yesterday to see how we might start implementing some of those recommendations.
There have been criticisms of the number of committees which I have set up to look at various issues in the health service, but I defend the setting up of working parties and committees. The working parties and committees I have set up have worked diligently and most of them reported within weeks: for example, the committee on computers, the committee set up to look at the vital smear testing scheme, the committee which looked at the dental services and I recently set up a committee to look at the range of hearing aid services which are available with a view to seeing how they might be improved. I will be looking forward to the report of the committee on funding which, hopefully, I will receive before the end of the year.
The Health Promotion Unit, which took over the functions of the Health Education Bureau, are working very effectively. They have carried out some very successful campaigns — a Cleanwatch campaign and the measles/mumps/ rubella campaign which was launched this week is worthy of support.
I am satisfied the funding provided for my Department is being spent efficiently and effectively. Obviously we must always monitor the situation to see how there can be improvements but I believe all this is in hand.
Deputies will be aware that the Voluntary Health Insurance Board had underwriting losses in recent times. As Deputies are aware, in July I asked a firm of management consultants to look at the working of the VHI, their present position and what the position might be in 1992. The report was presented to me and I gave a copy to the Chairman of the Voluntary Health Insurance Board. The board, having considered the initial findings of the consultants' report and having regard to the underwriting losses incurred, have decided to appoint Mr. Noel Fox as recovery manager to produce and implement a viable recovery plan. The board have also asked Mr. Fox to prepare a strategic plan to restore their viability and to chart their future development.
I welcome the decision of the board and to facilitate the implementation of the decisions taken by them I have appointed Mr. Noel Fox to be a member of the board of VHI. I was anxious to give that information to the House before releasing it generally.
The economic consequences of the Book of Estimates are far from clear. This is, perhaps, the last opportunity responsible parliamentarians will have for stabilising the debt/GNP ratio or for reducing the Exchequer borrowing requirement at least to manageable proportions which I think is agreed at somewhere above or below 5 per cent of GNP. We must pose the question, recognising the difficulties in the country, if the Government are suffering from battle fatigue, or if they are running out of steam. A quick analysis of the purported cut of £311 million in the Book of Estimates raises some questions. We may get some answers from Ministers, or the Government, in due course or we may have to wait until the budget for the complete picture. I accept that that may be so because the gap between what it takes to run the country and what is raised in revenue is what we have to borrow and we will not know what that borrowing requirement will be for 1989 until we know what revenue will be raised and what the 1989 budget brings us. We will have to wait to see whether there will be real increases in taxation or if we will have some hidden increases as are evident in the programme before us.
I should like to analyse briefly the £311 million of purported cuts. As has been said on several occasions in the last two days that figure immediately reduces to £224 million when one abstracts from it cuts that the Government are claiming for again, cuts that have been made in the last few years but are in again and are part of the £311 million. Let us start from an agreed figure of £224 million and see where that figure comes from. It divides basically between the capital and the current side, £118 million on the current side and £106 million on the capital side. The cuts amounting to £118 million claimed on the current side include £55 million that is being claimed as benefit to the Exchequer because the Government will not be needing that money to service the voluntary retirement scheme for public servants to the same extent as they needed it last year. They have a figure of £25 million included for servicing that scheme. Last year the Government raided the reserves of the Central Bank to the tune of £80 million to fund that scheme, a very questionable practice. This may not be the occasion to go into an issue that was debated before but the Government did raid the Central Bank. However, because the Government are only now raiding it to the extent of £25 million they are claiming an Exchequer benefit of £55 million, a totally fallacious and false premise. Therefore, we can subtract immediately another £55 million from the £118 million on the cuts claimed on the current side.
We then look at the figure on the current side for the national lottery in the Estimate of the Department of Finance. That is being reduced from £60 million to £40 million. Again, there is no Exchequer benefit for that reduction and it will not resolve the problem in terms of helping our Exchequer borrowing requirement. When one subtracts the £55 million, and the £25 million, from £118 million one is down to a very small figure of £33 million in cuts on the current side. As my colleague, Deputy Noonan, mentioned on Tuesday, the plot thickens. Naturally, at this point we can only compare the 1989 Estimates figures with the 1988 Estimates figures because we do not yet have the outturn for 1988. The real cuts will only be evident when we know what the outturn is for 1988 and when we compare that with what is being offered in the Book of Estimates for 1989.
Already it has been agreed and accepted by economic analysts and economic commentators generally that the outturn generally on the current side for 1988 will be somewhere between £50 million and £100 million below what was provided for in the Book of Estimates. That possible outturn has not been allowed for in the Estimates being discussed by the House. When one takes a mean figure of £75 million as the best ‘guesstimate' one finds that there could be an increase in spending over the 1988 outturn rather than the decrease of £118 million that is being claimed on the current side.
We must be honest with the country and the Government must come clean and present Estimates factually and frankly. They must present all sides of the argument and give us the real picture. To claim that they do not know the final figures for the outturn for this year would pass in most schools but when economic analysts, commentators and officials in the various Departments can say at the end of October, with a plus or minus 5 per cent accuracy, what the outturn in the various Departments will be the Government must have a clear picture that Estimates presented as a decrease in public spending in the various sectors for 1989 are, when compared with the outturn for this year, an increase. An increase may be necessary in certain areas but the point I am making is that it is a dishonest presentation of the Estimates to claim the £311 million, which has been thrown out long ago, and even some of the lower figures we have been measuring the Book of Estimates off against.
Let us look briefly at the claims on the reduction on the capital side. The figure for the capital side of the £224 million would be about £106 million but again that figure on analysis disappears before us very quickly. There are reductions in what is in for the national lottery in that area but there is no corresponding Exchequer benefit for that reduction and that has to be subtracted immediately from the £106 million. Again, when we look at the outturn and what we know to date of the outturn on Estimates on the capital side we can see immediately that in most areas there is an increase in spending in the Estimates for 1989.
It is the dishonest presentation that I am complaining about. When we analyse the different areas and the subheads within the Votes there is a case in some instances for increasing spending but to pretend in the House that there is an overall decrease of £311 million in our Book of Estimates and in the public capital programme is dishonest. Once more it is an insult to the intelligence of the analysts and those who help us all make sense of what we are about. Reductions would not be necessary if it was not for the fact that we have lived beyond our means and budgeted beyond our means for many years. We have accepted the reality since 1982 when the Coalition's doctrine of a reduction in public spending and not mortgaging our children's future anymore than was necessary was finally accepted. Unfortunately, when we were preaching what was necessary we did not get support, the support that the Government are getting, to implement our doctrine.
Many times in the last two years we have looked back — many more on this side than on the Government side — and thought what might have been if responsible support had been forthcoming from all parliamentarians in this House who now recognise what needs to be done. If that support had been forthcoming in 1982, 1983 and 1984 think of how we could have been spending the revenue collected on those working hard in the provision of services for our children, for our elderly, for those who do not enjoy the best of health, on our county roads and in our industries to create more jobs. Think of the money we could be spending instead of having to use it to service the national debt because of the borrowings that were necessary over the years, due to the lack of support for what the Coalition Government knew was needed but did not get from responsible parliamentarians.
What the other side knew was needed too but were determined to sabotage.
Was it the Coalition Government or was it the Fine Gael Party who did not get the support?
I know it is an excuse but that is the truth of the matter.
The Deputy said the Government did not get the support. They did not get it from within the Government and the Deputy knows that well.
That is true but it argues the irrationality of the way parties are distributed in this House.
Allow Deputy Doyle to continue. You will get an opportunity after the Minister.
I thank Deputy Kelly for his valuable support. I am nodding in agreement with the sentiments he has been expressing. Be that as it may, the support was not given at a vital time. It was the Fine Gael Party, the Fine Gael Minister for Finance and a Fine Gael Taoiseach, if the Minister wants to get down to the nitty-gritty of it——
I am conceding that. I was talking not about parties but about Governments.
——who laid before this country what needed to be done.
What about the Dáil?
The template for the recovery was presented to this country but there were not sufficient responsible parliamentarians in this House to ensure that we did not have to prolong the medicine to this day when we could have had the cure many years ago. The Fine Gael Party told the Government what was needed and responsible people outside this House recognise what is needed. What my colleague, Deputy John Kelly, said some time ago is terribly true.
He is an honest man.
Spending on today's generation what has to be paid for by tomorrow's children is not caring; it is stealing. If we did not believe that, we would not be here today trying to ensure that we get the EBR down below 5 per cent of what this country earns or our GNP.
Nevertheless, the national debt was £12 billion when the Coalition came into office and it was £26 billion by the time they left office.
The Minister knows perfectly well that the vast majority of that increase in the national debt at the time unfortunately went to service the national debt because of the spiralling interest rates at the time. He knows exactly why it accrued. They were in Opposition, as we are now, and they chose not to support a policy that could have prevented that.
They demanded further expenditure every week in Private Members' time. It was not enough that the debt was that high.
Not only did they want more expenditure; they wanted to continue the crazy politics that they introduced in their budget of 1978. In their election manifesto of that time they wanted to continue that. Their irresponsible utterings in Opposition must be brought forward again so that the people realise that the only reason the Government are purporting to behave responsibly towards the economy is that we in Fine Gael are insisting that they do so for the sake of our country and our children's future.
Hear, hear.
We have to take the medicine. We cannot insist that our children, who will have enough problems if we do not get this act right, pay for our living standards as well.
The Deputy cannot recognise good government when she sees it.
We now have a figure before us for a Book of Estimates and a Public Capital Programme that is basically dishonest. Let us concentrate on what the real cuts are and let us present that to the country as the reduction in the Estimates for 1989 over the present year. Let us be honest about the outturn. Last year, thankfully perhaps, what was provided, for example, under the Department of Social Welfare headings was not needed in terms of the numbers unemployed. There are considerable savings in that area, which are now known to the Department of Social Welfare, but we are still comparing next year's Estimate against this year's Estimate instead of pointing out what the outturn should be.
I would like to refer to an area for which I have responsibility at present as Opposition spokesperson, that of agriculture. In that area there are two blatant problems. The Government purport to have their industrial and economic policy geared towards marketing which is the Cinderella end of Irish industry and our economic policy. I agree with that. We have fallen down on marketing. We are creative and we have a natural wealth in terms of value added in the natural resources area. For years, for different and historic reasons, we have been bad at distributing what we produce, and more especially at marketing it. Deputy Bruton mentioned the enormous cut in CTT. I would like to point out the savage cut that CBF, the Irish Livestock and Meat Exporting Board, have been asked to take, despite assurances from the Government last year that it would be otherwise and despite the fact that the Government had to come back with a Supplementary Estimate half-way through this year to give back to CBF what they took from them in last year's Book of Estimates.
Being an island country we have particular problems in terms of access to the main continental markets. There are added expenses and perhaps this has added to our historic weakness in marketing. Now is not the time to cut the lifeline as we approach 1992 when entry to the market of 320 million consumers and servicing their requirements, particularly in the food and agriculture area, will be essential to the success of the single market as far as Ireland is concerned. By wielding the pen the budget of CBF has been halved and yet we have given them responsibility for the marketing of the pig industry. I ask for a reasonable explanation to justify what is being done in this most important of areas.
If we look at the Agriculture Vote we see the audacity of the Department, the Minister for Finance or whoever is finally responsible for the figures before us, in claiming a 19 per cent increase for Teagasc. I will not go into this because we debated Teagasc at length for about eight months in this House in the past year. ACOT and AFT were amalgamated into this new agricultural research and training body. This body is essential if our farmers are to keep abreast with developments not only in the marketplace but in technology and in farming techniques generally and if they are to make the best of a difficult situation regarding the Common Agricultural Policy. It is essential for our farmers who will have to compete with the best in Europe and elsewhere as we approach the 21st century. The Estimate for last year was £23 million and the Estimate for 1989 is £27.5 million. That is claimed as a 19 per cent increase. The Minister knows that only a month ago there was an announcement of an extra £5.5 million for Teagasc. A Supplementary Estimate will be introduced which will bring this years outturn for Teagasc to well over £28.5 million while only £27.5 million is being provided for next year. Yet, that is claimed in the press and elsewhere to be a 19 per cent increase. This body essential to the agricultural world, are spancelled before they begin operations. Their hands are tied behind their back. They know before the year begins they have not enough money to cover overhead expenses and wages and yet we expect them to be to the forefront in research, development and education for our farmers.
It would be bad enough if the truth had been told and the Government had come in here to justify the butchering of Teagasc and the further spancelling of what should be the most essential body in the agricultural industry. They are claiming to give that body a 19 per cent increase and are giving no explanation in the House that it was the Estimate they were comparing and not the outturn. It is a con job again. They are giving a figure but are giving no explanation as to what it means.
Perhaps, as some of my other colleagues have said, the most disappointing aspect of the Estimates is the lack of policy direction. The knife has been wielded but there is no thinking on policy. If we look for a policy we do not find it. There is increased taxation on employment with an increase in the ceilings for PRSI. There are charges for valuations of properties. That did not happen to be included in the Estimate; it was just dropped from the Minister for Finance's lips. There is hidden taxation all the way through. What we need to know is what will be required to be borrowed next year to keep the ship afloat, to look after essential services and to look after those who are not in a position, through no fault of their own, to care for themselves. We need to know what the gap between revenue and spending will be. The full equation cannot be made until the budget is introduced but we want to know now if we are not going to borrow and there are no cuts in the Book of Estimates, will there be increased taxation?
There are many areas which I have not covered such as the spurious announcement recently by BIM of the introduction of 70 new vessels when they know they cannot get any further FEOGA funding until we reduce the GRT. We cannot licence any more boats until we sell the equivalent tonnage out of State. No explanation has been given on this. There has been a slaughter of the wildlife service budget in the Office of Public Works. The list is endless. We need honest answers in all these matters.
The expenditure proposals in this Book of Estimates must be seen against the broader canvas of the management of the national economy and how the Government through their programme for sectoral development intend to develop it to its full potential.
We have demonstrated a continuing capacity to control and reduce public expenditure which, when we took office was spiralling out of control. However, we are not merely flying on one wing. Our success in solving the myriad of other problems facing the economy has created a new and perceptible confidence in our trading sectors which in partnership with the Government are now getting us the dynamism and growth we need for more jobs in this country.
We are, and must be, a trading nation. To be effective as a trading nation we must ensure that our cost structures are right, that our competitiveness is of the keenest calibre and that the quality of our products is of the highest level. This is the philosophy which must guide, not only our commercial enterprise, but all our business whether it be in the public or private sectors.
It would be easy, but it would also be wrong, to sit back and bask in the glory of how well the economy is performing. Now that we have got the motor of economic development running we must improve its performance to the point where the benefits will flow increasingly in the form of more jobs.
Throughout the eighties the cancer of unemployment has eaten at our society. The primary objectives of Government economic and social policy are to achieve a substantial increase in sustainable employment opportunities and to generate the wealth and resources necessary to improve the material standards and the quality of life of our citizens.
The jobs we require must be underpinned by efficient, cost effective and competitive industries and services. As we move to 1992 and the completion of the internal market, with the tremendous opportunities which that offers, we must ensure that our cost structures, regulatory frameworks and quality of product are second to none.
In the transport and tourism sectors of the economy, for which I am responsible, my policy is to ensure that they have the flexibility and resources to adapt and capitalise on the new opportunities which are opening up as we move towards the completion of the internal market.
As I have mentioned on previous occasions the State has a twofold role in the transport sector, i.e. as the regulatory authority and as the sole shareholder of the biggest companies in it. In regulating the sector we must, above all, improve its competitiveness. We can do this by ensuring the most efficient possible use of existing resources and infrastructure. In addition, where opportunities exist, as for example in the case of the development of the smaller airfields, the Exchequer will play its part in fostering initial development.
Now, I would like to turn to the main items making up the Estimates for my Department.
The House is aware of the very high level of dependence by CIE on the Exchequer for the provision of a network of transport services for the general public. Where public finances have had to be tightly controlled it is reasonable to expect that CIE accept some reduction in State allocations.
The CIE subvention for 1989 is £109.9 million as compared with £113.6 million for 1988. The reduction reflects the continuing improvement in relation to interest payments on the DART. The House will be glad to learn that the outturn on the CIE subvention for 1988 is expected to be some £2 million less than the £113.6 million originally provided. The grant of £109.9 million for 1989 is comprised of £95.6 million for normal subvention plus £11.3 million for DART interest and £3 million for the annual instalment of principal on a £30 million loan raised by the board in 1985. By the end of 1989 CIE will have repaid half of the original loan. It is being paid, as the House knows at the rate of £3 million per year and CIE have to pay the interest charges on this sum.
The 1989 subvention represents a reduction of some 3.3 per cent on the figures for 1988 — though much of this reduction is due to lower interest rates rather than to a substantial improvement in CIE's overall performance.
The board are reducing costs, rationalising services, marketing their products aggressively and generally being more responsive to customer demands. As CIE adjust to meet those demands we should remember that their limited resources must be deployed to best advantage and it may not be possible to meet all demands on them.
On the capital side the 1989 allocation for CIE is £18 million which will allow the board to complete their push-pull rail carriage programme, carry on the normal bus replacement programme, continue the upgrading of rail signalling and communications as well as development work at Rosslare, which is generally agreed to have been a great success.
All major projects proposed by CIE are evaluated by the permanent capital committee in my Department. The latter committee, which includes representatives from CIE and the Department of Finance, also monitors the progress of projects which have been approved. As the House is aware this capital allocation is non-voted and must therefore be funded from the board's own resources.
Let me conclude on CIE by saying that 1989 will present new challenges to CIE and their subsidiaries. They are required to break even after taking account of the Exchequer subvention. This will not be an easy task but I believe that the total commitment of the CIE organisation could achieve the desired results.
Since coming into office I have consistently pursued a low air fares strategy and more capacity on all our major air routes. Significant reductions in air fares have been achieved, particularly in respect of the UK and continental markets and low fares were available throughout the summer and are continuing into the winter. Highly attractive promotional fares are also available from the US.
In order to meet the Government's targets for tourism growth it is essential that maximum capacity should be available at these low promotional fares. I am pleased to be able to say that Aer Lingus have played a major role in making unprecedented levels of capacity available at promotional fares, with very gratifying results in terms of high load factors and substantially increased passenger numbers.
Aer Lingus traffic on the Ireland-UK routes continued to show spectacular growth during the summer, with traffic growth at promotional fares substantially in excess of 20 per cent for each month between April and September. Continental traffic has also performed well with traffic growth of 20 per cent, although that is on a lower base. In a year when US tourist numbers travelling to Europe have decreased, Aer Lingus have maintained traffic from the USA at last year's levels, a performance which is substantially ahead of the level of US traffic to the UK. Traffic from the US to Europe in general was down 10 per cent in the last statistics I got, and the fact that we are holding our own in those circumstances is a worthwhile contribution to our economy.
Ryanair are also making a significant contribution to tourism growth, having doubled their capacity and commenced services on a number of new routes, with very attractive fares in 1988. Ryanair expect to carry 600,000 passengers this year, double the 1987 figure. Indeed, I understand that the company have recently carried their one millionth passenger. There can be no doubt that the competitive presence of Ryanair has played a significant part in generating attractive low fares into Ireland.
While the contribution of the air transport sector to the achievement of the Government's targets for the tourism industry this year has been substantial, there are no grounds for complacency. I shall therefore maintain the impetus of the low fares strategy both for the coming winter season, when fares from many UK and continental points will be down by as much as 30 per cent on last year's levels, and for summer, 1989 when I expect to see a further significant improvement on this year's achievements.
The availability of competitive air services to and from Ireland has been enhanced by the new opportunities for Irish Airlines which emerged following the December 1987 EC Air Transport Package and the very liberal bilateral arrangements between Ireland and the UK which I negotiated successfully and signed in March this year.
In particular, the increased availability to Irish carriers of fifth freedom rights in the Community has led to an important expansion of the network of air services in terms of routes and frequency of services between Ireland and other EC member states. Among the fifth rights are routes to Copenhagen, Zurich and Amsterdam via Manchester as well as a route via Birmingham to Brussels.
The EC has dedicated itself to a new regime in Europe and the December package is only the first deposit. Because there were various derogations and so on, Ireland and Portugal got some advantage out of it over the other member states but the next stage which comes up for consideration at the end of next year will advance substantially the new liberal regime.
Confidence in the future of the tourism industry is evident from the increased capacity being acquired by Aer Lingus. The company will be putting into service two new Fokker-50 aircraft in the spring of 1989. It will also take delivery of two new B737 400 aircraft. These are somewhat smaller than the 300's we already have, which Aer Lingus got at the end of last year, and are specially designed for the European market. Aer Lingus will be taking these in early 1989 and will be leasing in a Lockheed 1,011 Tri-star for additional capacity on trans-Atlantic routes in the summer of 1989.
The financial performance of Aer Lingus in the year ended 31 March, 1989 was a matter for considerable satisfaction. Record profits for the fifth successive year have placed the company in the happy position of being able to fund its ongoing fleet replacement programme without recourse to the Exchequer, while at the same time paying a dividend to the shareholder for the first time. For the coming year Aer Lingus look forward to the achievement of the Government's targets for tourism growth and to a continued strong financial performance.
I am pleased to learn from Aer Lingus that their marketing programme for the winter is producing results well ahead of target. I understand that, on some routes, the incoming traffic is up by a third on last year's carryings for the same period. The free car offer which Aer Lingus is marketing in all European countries, apart from France, is proving a particular success in stimulating this new traffic.
In the sectors for which I am responsible, there can be few such shining examples of what a change in policy can achieve as the strategy for the reduction of airfares. One of the beneficiaries is of course the ground based services. Traffic through the State airports is booming as a result of the Government's initiatives for tourism and lower airfares. Up to 6 million passengers are now expected to pass through the State airports in 1988. This represents an increase of up to 50 per cent or over 2 million passengers on the equivalent period in 1986.
The phenomenal upsurge in traffic has inevitably placed heavy demands on the airports and has given rise to the need for major investments in runway and passenger terminal facilities.
The Government are strongly committed to the development of the State airports and have responded to the requirements in these areas by reinvesting resources generated by the enormous growth in traffic. In this context expenditure of up to £18 million has been authorised for the State airports in 1989.
In the case of Dublin Airport, major investment projects include the completion of the new 8,650 foot runway together with associated facilities. It is expected that the new runway will be fully operational by early summer 1989. The total project, when completed, will have involved expenditure of up to £32 million.
At Shannon Airport the passenger terminal building and apron are being extended while a new hangar for the painting of Aeroflot aircraft has been constructed. Further projects planned for Shannon include more investments in passenger facilities and the construction of new facilities for the US Immigration pre-inspection service.
I recently opened a new cargo facility for Aer Lingus at Shannon Airport. This facility will improve the efficiency and streamline the operation of air freight through the airports. I have no doubt but that the facility will be of major assistance to our exporters in the export drive.
Cork Airport is also experiencing a boom in traffic and major investments at the airport include an extension of 1,000 feet to the main runway and improved passenger terminal facilities, including a lovely bar.
As the House is aware, one of the success stories has been Aer Rianta's involvement with the Soviet airline, Aeroflot. From the early days of a fuel supply contract Aer Rianta have now moved on. The board are now involved in operating the duty free shop at Moscow — which will be an important outlet for Irish goods and services and earlier this year won the contract for the provision of inflight duty free sales on the entire Aeroflot network. In March last Aer Rianta signed a five year aircraft painting contract with Aeroflot. This contract will, I am happy to say, result in direct employment of 100 plus its spin off effects in the area. The contract required the immediate construction of a suitable hangar to carry out the work. It is to the credit of all concerned that from a green field site to completion of the hangar to accommodate the largest Aeroflot trans-Atlantic planes took a mere 21 weeks. In passing I would pay tribute to the Irish workmen who completed the construction in Sheremetyevo airport of the duty free shop in such a short time that all the experts were confounded by their speed and efficiency.
I must also point out, of course, that the rate of return being earned by Aer Rianta on investments is very strong and this is reflected in the results being achieved by the company.
Concurrent with the development of passenger and landing facilities at the airports there is also a major programme aimed at the renewal of much of the navigational, communications and radar equipment which is very important. This is part of a five year programme under which it is estimated that approximately £30 million will be spent. In the context of increasing numbers of aeroplanes using the airport this is a very important area.
At the end of August last I announced a major development plan for regional airports involving a total investment of £4 million over the period 1988 and 1989.
This programme will bring these airports up to the standard which would meet necessary operational requirements. Moreover the programme is designed to give these airports the opportunity to exploit the prospects for tourism growth in their respective areas. The proposed expenditure of £4 million will be allocated as follows:
|
£ |
|
|
Farranfore |
1.5million |
|
Waterford |
1.35million |
|
Carrickfin |
0.5million |
|
Sligo |
0.35million |
|
Carnmore |
0.25million |
|
Letterkenny |
0.5million |
|
Total |
4.0million |
Total Exchequer funding for the programme of £3 million will be involved with the balance of £1 million being financed from local resources. Proposals for the improvements are being prepared urgently by the regional airports and I anticipate that a major part of the investment programme will be completed this year.
Before concluding this brief review of transport policy and performance I should like to refer to the role that sea carriers play in providing competitive access transport to this country. The sea carriers have responded positively to the air competition and I commend them for the initiatives they have taken to achieve the reductions in sea fares from the UK and mainland Europe. I am particularly glad to see that while the traditional foot passengers have, to a certain extent, been won over by the air carriers, the ferry companies are exploiting that competitive advantage in the motoring and coach holiday sectors. We both acknowledge and appreciate the efforts of all of the sea carriers in promoting and developing Irish tourism. As Deputies will appreciate our policies on access transport are primarily geared to the development of Irish tourism.
Tourism is one of the sectors specially chosen by the Government for development as part of their integrated strategy for economic growth and job creation. Irish tourism had lost out on its share of the world tourism market through deficiencies in the areas of product development, competitiveness and marketing. We have reversed that trend and restored confidence within the industry through our range of programmes for tourism. These involved, among other things, a series of major innovative measures on access transport; more resources and a better use of these by a more aggressive and targeted marketing approach in our main markets.
In 1987 we had almost 2.1 million overseas visitors to Ireland, an increase of 11.6 per cent on the previous year. Overall tourism revenue increased by 17.6 per cent breaking the £1 billion barrier for the first time ever.
This year we are continuing to build on that success. The Programme for National Recovery has set ambitious targets for the sector, doubling foreign visitor numbers, increasing tourism revenue by £500 million and creating an extra 25,000 jobs. Central to our strategy for achieving these targets is the need for a much greater contribution by the industry itself, not only in resource allocation, but in developing the tourism product, and in marketing it abroad.
I am glad to say that this has been forthcoming. Following on the first ever national tourism forum last January, we got an additional £4 million. This was backed by the industry and £2 million on top of the State's expenditure was added on. This led to an increase of about 15 per cent in visitor numbers that year. In October the Government allocated an additional £5 million to be spent on marketing the product. I am glad to say that the industry has come up with backing of £5 million to that amount.
The upturn over the last two years in our tourism performance has prompted increased investment in developing and enhancing the Irish tourism product. I thank the Chair for its forbearance and I recommend the Estimate for the Department to the House.
I enjoyed in the script, although the House did not get the pleasure of hearing it, the closing part of the Minister's remarks. Since he did not reach it himself I may be allowed to give it to the House for him. In the last paragraph of his script he asks the House to note how we have succeeded, as he puts it, "in leavening the dry flour cutbacks with the yeast of policies designed to promote the type of growth and development that we require...". I am delighted to see a Minister who is willing to write at least one paragraph of his own speech, because that bears the authentic touch of John Wilson, TD. When he first came into the House we would be very lucky if he did not give us a sentiment in Spanish or Russian. At least he now sticks to one or other vernacular. I am glad he is contributing something to the composition of his ministerial speeches.
I wish he had seen fit to leaven the dry flour of departmental facts with the yeast of generosity when he came to speak about a "low air-fares policy" and about Ryanair's and Aer Lingus's achievement in providing for the public a cheaper service and improving their own performance. Although I am no expert in transport, that policy was initiated by the Minister's predecessor, Deputy Mitchell, in conditions which cannot have been particularly easy for him. He was a member of a Government, the smaller component of which believed in featherbedding State enterprises. It cannot have been easy for him to put to that Government the proposition that Aer Lingus should no longer be protected from competition, but should have to meet it on routes which, if they did not exactly correspond with their own, substantially competed with it.
I do not want to interrupt the Deputy but I put on the record of the House my appreciation of what my predecessor did.
Not in this instance. I know the Deputy is a big enough man to do it. It would have been no harm for him to say "I want to acknowledge with every possible justice to my predecessor that this policy was initiated by him". No one would have thought anything less of Deputy Wilson or his party if he had said that, but unfortunately generosity does not come easily to them.
I have already done that in this House.
I accept that the Minister did that, but it is quickly forgotten. The Minister now says that "since he arrived in office he has been devoted to low air fares" but it is very much as if some late successor of Mrs. Thatcher's in Britain were to say that he or she had been devoted to rolling back the frontiers of the State. That policy would have been inaugurated by someone else.
I do not want to spend my precious time in saying anything begrudging to the Minister. He knows I have a regard for him. However, I am a bit suspicious about some of the things he said about this year's tourism performance. It is always very hard to know, much like farming, what to make of the hotel industry or the tourism industry generally when they start to complain. Round about the beginning of the year, the Minister was getting notice for spending a lot of money on promoting tourism, which he said was going to have a record year; but at the end of the summer we heard exactly the opposite from the industry itself. They said they would be destroyed. It is very hard for the layman, particularly when the Minister's figures are only gross figures in regard to the number of visitors, rather than the number of hotel nights which people not ordinarily resident in the State have spent in the country, to form any proper conclusion about the degree to which inward tourism is flourishing. My own observations tell me that it is far below what it ought to be; and that is in spite of the low air fares.
Very many of these visitors are emigrants returning home, sometimes several times a year, to see their families. These people are included in the Minister's figures, and if they return several times a year they are counted on multiple occasions as separate visitors. Proper tourism figures ought to keep such visits quite distinct from the tourists we need to go out and attract. We do not have to attract sons or daughters back to see their families. They would come even if we never spent a halfpenny on tourism promotion. To rank them as achievements for the tourism industry is giving yourself credit for something you do not deserve any credit for. I should like to hear more about that from the Minister; I expect his figures would not be very encouraging.
Some of the effort which goes into tourism is failing to spot one of the components which, for me, makes a country attractive. It is something which is not easily put into words. It is the taste of the country, the feel of it, sometimes even the smell of it, as anyone who remembers France in the days when everyone smoked Gauloises cigarettes will recall. The more individual and unselfconscious it is, the more attractive it is likely to be. Unfortunately, these are a set of characteristics which this country is showing decreasingly. Anything which remains here which is individual is now becoming the subject of that awful selfconsciousness—the selfconscious parade of the singing pubs and so on — which destroys the country's charm. Once a thing becomes conscious of itself, its charm is largely gone. You cannot teach the tourism industry unselfconsciousness. I am not making any such idiotic point. What I am saying is that the total product which this country has to offer does not simply consist of empty beaches or large hearty breakfasts. It consists of many things some of which are inpalpable and some physical. One of them is the appearance of our towns, the urban face which Ireland offers to the world. That face is becoming less acceptable year by year.
I will not cause offence by naming particular instances, but it would break your heart to go through most country towns. One is much the same as another. In the days of relative poverty, when people could not afford to do up their premises or put expensive but quite unsuitable facades on their pub, shop or hotel, or could not afford to tear down some inoffensive, respectable, old building which had been there since 1800 and replace it with some ghastly monstrosity copied from their impressions of Dallas, Irish towns, even though down at heel, seedy and poor, were unique. They were individual. There was a reason someone might want to come here and breathe in the turf smoke, and see the simple, unaffected, unselfconscious street with the characteristic appearance which virtually every Irish provincial town had when I was a student in the fifties. That is rapidly going; and it is being helped on its way by slack planning control, and the unwillingness of anybody to stop anybody from doing anything. It is being helped by the unwillingness of any authority to say "we will prevent you from putting up that facade, not because it is obstructing the traffic, but because it is damned ugly". No one is willing to put himself in a position where he can be lampooned for setting himself up as a judge of what is ugly. There is, of course, no such thing as absolute unanimity of taste about anything, but there are such things as ugly developments which anyone can see. There are particularly incongruous developments in Irish streets, country towns and cities.
I have not said a word yet about the shameful dereliction which this city displays. I know the Chairman is a member of a Dublin local authority and I hope he will not feel provoked by what I say. Dublin is unique in presenting this fearful dereliction to the world. How can we expect tourists to spend time in this place? There is, of course, the official tourist who, if he and his retinue are well lubricated by official hospitality, can be rushed with drawn blinds from the Mansion House to Kilmainham and back again, brought out to the airport and sent off feeling that he has had a great time in Dublin. That kind of person does not count in my book. The ordinary tourist who might come and say "I'll go and have a look at that ancient city that is talking about itself, and I'll hole up in some simple hotel in Dublin for three or four days, walk around and look at the place", what confronts him if he walks along the quays eastwards from Kingsbridge to Butt Bridge and then westwards back again? What happens if he walks down any of the older streets in inner Dublin, like Charlemont Street? The scene there would make you weep. It would break the heart of anybody. I am not just talking about Dubliners, because somebody who comes from Ballydehob is entitled to regard Dublin as his capital the same as it is mine. Instead of something constructive being done about that, we have a bogus Millennium — because nobody really pretends that it is the city's 1,000th birthday; the city is a good deal older than 1,000 years. It is a case of "Have the party first, lads and we'll worry about what the place looks like afterwards". I am sorry to say, because there is not a drop of anything but Irish blood in me, that I have to recognise that as a typically Irish approach to life —"Let's celebrate first and clean the place up afterwards".
I recognise that a lot of well-meaning planning went into the Dublin Millennium and I suppose it is still going into it; but I want to know, what we are going to do for our next act? What will be left of it on New Year's Day 1989, except a headache and a litter of out-of-date stickers? What can the city show that has really changed, not during the Millennium year, because things always change, but because of the idea of a millennium? I admit I started out against the idea for the reasons I have explained, but to me it looks like a year-long festival of tat. I hope we will never again get such a loony idea in Dublin or any other Irish town. It would have been far more to the point had some humble project, let us say, the restoration of some house with historical associations within a stone's throw of O'Connell Bridge, been undertaken instead of allowing the situation to develop, within a stone's throw of O'Connell Bridge, where you have fine young trees and saplings growing out of the derelict gutters on the fourth storey of gutted houses.
How can we show our face to the world and expect people to visit this city, and take pleasure in spending night after night in it and walk around day after day in it, when it is like that? We think if we advertise a millennium, and tell the lie to the world that it is a birthday, and put up expensive posters wishing happy birthday to ourselves, they will suddenly flood into the place. Would we cop ourselves on?
I have not forgotten that the Department of the Environment made a very substantial grant towards that tat-fest. That tat-fest is almost over now. There are only two months of it left, but the money which was spent on it by the Department of the Environment would, all by itself, have restored some significant little strip of central Dublin. We would have had something to show for it.
I have only a few more moments left and want to come back to something more general.
I had not intended to say this, because it is another old theme of mine which Deputies are tired of hearing, I am sure. I heard a bit of an altercation, in which I took a little part, a few minutes ago between Deputy Avril Doyle, who was speaking, and the Minister who was then opposite her, Deputy Wilson. Deputy Doyle in very sober — far too sober — terms made the point that if the Government were now able to point to any substantial achievements in the field of reduced inflation and contraction in public expenditure it was because they were being faced across the House by a very large Opposition party which essentially supported them in the broad lines of what they were trying to do. Deputy Doyle made the point, which was perfectly correct, that this was very different from the opposition encountered by the unfortunate outgoing Coalition between 1982 and 1987, who were obstructed at every step by the then Fianna Fáil Opposition, which knew in their heart that the measures which the Fine Gael end of this Government were trying to put in place were correct. That did not stop them from doing their damnedest to wreck them.
Deputy Wilson mentioned the growth in the public debt between 1982 and 1987. He is quite right, although he slightly overstated it, but it is true that the national debt roughly doubled in that period under the aegis of a Government which had come into office determined to control it. That is a sad and tragic fact. But that expenditure was not enough for Deputy Wilson and his friends; because week in, week out, in successive Private Members' motions, in question after question, in debate after debate, they demanded more expenditure still, and lacerated Fine Gael and Labour Ministers for any little economy they were putting in place. They said that it was the malice of Fine Gael which was leaving people short of this or that, not just incompetence but malice, the That-cherite malice. That was what was to blame for any hardship that anybody in the country experienced.
Let bygones be bygones. I did not mean to harangue anybody about that, but I do want to ask Deputies Noonan and Kirk opposite if they are willing to revolve this in their minds. Suppose we have an election, as the experts think is not impossible, within the next while — six months or a year, or perhaps two years, I do not mind when. If an election were held tomorrow and there was not an intervening campaign — because things can go very wrong in the course of a campaign — without the exposure which a campaign would give to the party opposite and its Leader, they probably would just about squeeze in with an overall majority.
Things can go wrong in a campaign and they can go very wrong in a period of six months or a year. Even if I had no partisan feelings about it at all — and I honestly have not; I am concerned that the country will come out of this decade or the next decade better than it went in whoever are on the Government bench — I would not put any bets on the prospects of the party opposite getting an overall majority in 12 months' time. I cannot foresee how they will look in 12 months' time. God knows what kind of scandal might break out in their midst — I do not mean to insinuate that I have any suspicion myself because I have not. We do not know what the party opposite might look like. Suppose they went to the country and came back five or six seats shy of an overall majority, where in the name of God would we get a Government? Would we be expected, again with the Labour Party and The Workers' Party, with Deputy Gregory and Deputy Blaney perhaps, to patch something together?
A mishmash.
Where would we be then? Where would be the country be then? Would we be back to the situation of 1982 to 1987? Fianna Fáil Deputies have a duty to ask themselves that question, too. They must put out of their minds the idea that it is all or nothing, that it is only themselves in power or themselves out of power, that they have no duty to the Dáil — and the Dáil is the original public institution of this State, it pre-dates the State. It was set up as a revolutionary Assembly — they have a duty to the Dáil, and through that to the people who elected them to make common cause with people they can find around to agree with them.
Frankly, I confess I have no difficulty in identifying with people whom I know well on the opposite side, such as Deputies Lenihan and Collins, for example. I could see myself working happily with those two Ministers. However, all my experience tells me that they and the most of their party are conditioned always to refuse that simple consideration, always to oppose and wreck unless they can have the ball 100 per cent of the time to themselves. That way this country's destruction lies.
If we have a weather-window politically now, and if this Government have the ball at their feet and are not being hand-tripped, it is because this party are sinking the temptation, which I know plenty of my colleague Deputies have, to hand-trip them, to make difficulties for them, to make political capital on the ground in their constituencies out of the economies the Government are imposing. I beg Deputies opposite to ask themselves whether this must go on forever, whether when this weather-window ends we are going to get another mishmash Government over on the far side, with the very same cycle of doubling the national debt in four and a half years all over again.
I hope that the consideration that a general election might not work out as I believe it would tomorrow morning will induce in Deputies opposite, and in everybody in this House, a consideration of the duty which this House, the original institution of this State, the Dáil, owes to the people to throw up and, having thrown up, to sustain a Government of people who are like-minded; and not because of petty jealousies, tribal rivalries, recollections of what fathers and grandfathers may have told about events 65 or 70 years ago to obstruct the agreement, consensus and the co-operation on which the prosperity of this State and its people depend.
Limerick West): Economic growth and development is not something which is easily achieved. It can be accomplished only through realistic and sometimes necessary harsh economic policies the type which this Government have been implementing since early in 1987. In that period we have seen measures framed, the effects of which are to chart a course for Ireland which will bring it closer to the standards enjoyed by our European partners. The control of Government spending is a crucial element in the broad economic plan. It is an essential ingredient for reducing the unacceptable level of dependence on borrowing, for improving the environment for investment, thereby creating employment, and, ultimately, for breaking the vicious circle of high Government spending, high interest rates and a high level of taxation. The key to achieving such standards lies in creating a financial climate conducive to economic growth. The Estimates for 1989, now being noted by the House, will contribute towards that endeavour.
Since early last year many favourable developments have occurred. Exchequer borrowing has been reduced, interest rates and inflation are down, capital outflow has been reduced, exports have increased substantially and the balance of payments was in surplus last year for the first time in twenty years. The corresponding indicators as we near the end of this year are pointing to even more progress on all those fronts.
The improvements generally in the economy are being sensitively supported by the measures set out in the Estimates before the House and should help in the restoration of business confidence. Of course we are not yet at the end of the road and hard decisions will still have to be made. However, I believe there are few who would deny that the economic environment has improved considerably through better economic management by the Government and there is undoubtedly a far greater air of confidence then ever before.
The overall national picture is important, but it is also essential that consideration be given to boosting regional development. My Department, for example, are making a contribution to western development through their part of the Government's decentralisation programme. As part of that programme about 200 staff of my Department — approximately 40 per cent of the total — are to be transferred to Galway where they will occupy new offices at present being built on a State-owned site beside the military barracks at Renmore. The new building will be provided on a lease purchase arrangement over a period of 20 years. The building is due for completion early next year and should be ready for occupation by the autumn of 1989. The transfer of these 200 staff, who are moving on a voluntary basis, will bring an extra £2 million approximately each year, at today's rates, into circulation in the Galway area. The social and economic environment cannot but benefit therefrom on a permanent basis.
The Estimates for any Department cannot be examined in isolation. In the course of their financial planning, a prudent Government must take into account all of the economic consequences of their actions. For this reason, a responsible Government will often be forced to exercise considerable restraint in spending in areas where a deployment of economic resources would be of considerable benefit to many. The appropriate level of spending cannot be arrived at by asking how much should be spent under ideal circumstances. The first consideration must be: How much can the economy afford? As a nation we have allowed the national debt problem to build up over a number of years. The only way out is to cut spending and control borrowing. It is only after this has happened that improvements in the general standard of living can take place and expansion of State services be considered.
In considering these Estimates, one thing and one thing alone should be foremost in our thoughts: the Government cannot decide to do anything they like; they must select options from a menu largely influenced by factors outside of their control. A great number of competing demands must be balanced. The continuing need to provide essential services must be weighed against the state of the public finances. The demands of those who are bearing the burden of taxation must be reconciled with the needs of those who have no income other than that provided from that taxation. From the point of view of restoring the national economy to stable prosperity, the Estimates for 1989 represent the best possible choice in the circumstances.
Our Defence Forces contribute in many ways to the economy and to the State. Acting in aid of the civil power they carry out a wide range of duties which contribute towards creating the secure stable environment necessary for economic growth. They enhance the international status of the country as contingents of United Nations Peacekeeping Forces. They provide a valuable input to various emergency services, most frequently on search and rescue and air ambulance missions. They give most useful services in relation to the country's marine and coastal resources, particularly so as regards fishery protection but also in the event of threat of oil pollution at sea. Subject to Government direction, they provide many other ad hoc services which help to provide us with a better quality of life.
I have mentioned the important international role our Defence Forces play as contingents of United Nations Peace-keeping forces. This year has seen further indications of the esteem in which the Irish Defence Forces are held by the United Nations with requests to contribute personnel to two new and very difficult UN missions — the United Nations Good Offices Mission in Afghanistan and Pakistan and the United Nations Iran-Iraq Military Observer Group.
It was a source of great pride to me and to the Government that the 1988 Nobel Peace Prize was awarded to the United Nations peacekeeping forces which include personnel of our Permanent Defence Force. The consistent dedication to duty of our personnel in discharging the onerous tasks of the various missions in which they have been involved in the past 30 years did much to promote the peace-keeping efforts of the United Nations which have now resulted in this highly prestigious award.
I have also mentioned the particular contribution our Defence Forces make as regards fishery protection. My Department have recently acquired two Peacock class patrol craft as replacements for the minesweepers which had been taken out of service in 1987 because of their unseaworthiness. The vessels, which are in good condition, have an effective operational range of 3,000 nautical miles and have a maximum speed far in excess of our existing patrol vessels. They will facilitate improved monitoring and protection of a valuable asset, both national and European. The vessels are being taken over at present and will be operational with the Naval Service on fishery surveillance work next month.
In conjunction with the acquisition of these two craft, I have made arrangements for an intake of 100 recruits to offset wastage and to enable the Naval Service to meet the extra requirements arising from the purchase of these vessels.
At this point I would like to refer briefly to the campaign which has been conducted in certain sections of the media in recent months in regard to the levels of pay and allowances of members of the Depence Forces. This campaign has, at times, spawned extraordinarily intemperate comments in the media and, at its best, has revealed a considerable ignorance on the part of some commentators of the concern of Government for the welfare of all members of the forces through time. Some critics, whom I would not credit even with the description "do-gooders", give the impression that concern for the pay and conditions of service of members of our Defence Forces is a new phenomenon that has just been discovered. As Minister for Defence, I am acutely aware that pay and conditions are among the most important factors contributing towards a sense of well being and good morale among the members of the Defence Forces. This is the reason that procedures have been in place for many years to ensure that the benefits of all general increased pay and appropriate grade increases in pay which apply in the public service are passed on as a matter of course to members of the Defence Forces. These arrangements have ensured that the pay of the Defence Forces has, since I became Minister and indeed under previous Administrations, kept in step with that of the public service generally.
That is not to say that I am entirely happy about the situation. As Minister for Defence, I am naturally sensitive to the needs of the Defence Forces. Because of their special position in relation to conciliation and arbitration, the process of review must be an ongoing one and must be capable of reacting effectively to meet the needs of the forces at any given time. It was because of my concern in this area that early last June I obtained Government approval to set up an interdepartmental committee to examine and report on the pay, allowances and conditions of personnel of the Defence Forces. I should point out that the decision to set up the committee predated much of the publicity which has been generated in the media in recent times.
I would also like to remind Deputies that this is not the first time that Fianna Fáil have taken the initiative regarding the pay and conditions of the Defence Forces. Fianna Fáil were responsible for the last major review of Defence Forces pay and conditions carried out in 1979-80 and which resulted in substantial improvements in pay and allowances for members of the forces over and above those payable to the Civil Service. This is further evidence, if such were needed, of our constant concern for the welfare of our forces.
The interdepartmental committee have received comprehensive submissions from the military authorities who are being afforded every opportunitly to elaborate orally on the proposals. I am well aware that the report of the committee is eagerly awaited by all interested parties. However, it is not my intention to pressurise the committee into reporting at too early a date at the expense of a full examination of all facets of the proposals. Members can be assured that the members of the committee are aware of the desirability of having the examination brought to a conclusion at the earliest possible date so that their recommendations can be submitted to Government for decision. The Government, in their turn, will be concerned to reach a decision on the committee's recommendations with all possible speed.
Speaking as I am on the noting of the 1989 Estimates, I am acutely aware that the Government's economic policy is in the centre of people's minds. There would be nothing easier for a minority Government than to relax a little and buy some popularity. It would be easy but very wrong and for that reason it will not happen. Despite the expenditure restrictions imposed by this Government so far there is still a gap to be bridged. The 1989 Estimates are a further step towards eliminating the gap. If we are to succeed in restoring the economic health of our country, we must continue to limit public spending until such time as public sector borrowing is brought firmly under control. Reducing the national debt is not an end in itself. People who, like myself, publicly support the containment of public expenditure are criticised for being over concerned with book keeping. This is not the case. One of the purposes in reducing public borrowing is to reduce interest rates and, in the longer term, to reduce the burden of taxation.
(Interruptions.)
(Limerick West): Already, we have seen a reduction in interest rates which will bring relief to many businesses. If the Government's long term strategy is adhered to, employment will be generated and economic prosperity can be restored.
There are those who ask if the Government can hold course in the long term. The answer is "Yes". This Government will continue to take the necessary decisions. We will not be defeated by the temptation to win popularity among the short-sighted.
As no other Labour speaker has spoken this morning I call on Deputy Spring.
I will give way to Deputy Spring. He is a decent man.
I thank Deputy Kenny. After listening to the Minister for Defence I should only plead to be saved from poachers turned gamekeepers because the vehemence of that speech could have been delivered by a Fine Gael Minister at any time over the last number of years. Maybe it is the same person writing the speech anyway, but that is another day's work.
At the outset, let me say I am glad the Minister is interested in what I have to say as we in the Labour Party have difficulty presenting our point of view. This is because there is a fairly major consensus in this House in that 90 per cent of the representatives seem to be ad idem in relation to the management of the country's affairs and they are ably and well supported by both the radio and newspaper media in relation to the format of the approach they are taking. We have certain difficulties in the Labour Party, we have had them for the past 12 months, in trying to present our view on how to tackle the country's problems. On occasions when we have set out to highlight some of the major problems resulting from the decisions of this Government we have been attacked by various Ministers as being scaremongers trying to frighten people. I recall in particular when we in the Labour Party highlighted the intention of the Government to abolish the long term illness scheme. The Minister for Health on that occasion said that Deputies Spring, Howlin and Desmond were scaremongering and trying to arouse fears in people. Of course, the reality was that no money had been provided for that scheme in the 1988 Estimates and the Government had to come back and reverse that decision. I challenge anybody on behalf of the Government to say their original intention was not to abolish the long term illness scheme. It was, and, luckily for the people depending on that scheme, we in the Labour Party highlighted the plight that would have been upon them and the Government reversed their decision.
In the last 24 hours we have had a similar incident in relation to the actions of the management of Our Lady of Lourdes Hospital in Drogheda. Deputy Howlin highlighted this fact last night and he was virtually attacked by an interviewer on the "Morning Ireland" programme this morning. I trust the same interviewer will highlight the actual situation that exists and the fact that the management of that hospital have now made a public statement admitting they were acting illegally and outside the scope of the Health Acts and they are going to refund the pensioners from whom they had obtained money by virtue of taking their books from them for the last few weeks. I want to commend Deputy Howlin and Deputy Bell, the local Deputy, for raising this matter and I assure the House that the vigilance they have shown it will be shown by the other Labour Deputies in highlighting the difficulties imposed on the most vulnerable people in our community. That was the kind of vigilance we showed, too, in relation to, as I have mentioned, the long term illness scheme when the Government sought to abolish it and also the disabled drivers' scheme likewise, the prescription charges in the budget of 1987 and the occasion on which the Government set out to abolish the National Social Services Board. At least on those occasions, despite the fact that we were in small numbers in Opposition, we had those decisions reversed because they were not in the best interests of the population at large as, indeed, many of the decisions of the Government at present are not in the best interests of the people. It is hard to resist accusing the Government of being bookkeepers when we look at the way they are managing the country.
I warn the Government that in the politics of the last two years and the policies they are implementing, they are crying out for a social revolution. There is a scavenging Right-wing approach dictated by the 90 per cent majority in this House which demands the strongest possible response by all of us who are becoming increasingly concerned at the impact of these policies on the most defenceless sections of our community.
For the last two weeks, the entire preoccupation of Members of this House has been with a report that is not yet published, the report of the commission reviewing the constituency boundaries. It may be gratifying for some to note that whatever other instincts have died in this House, the instinct for self-preservation is still alive. Nothing appears to concentrate the minds of Members of this House more than a threat to our own livelihoods. The tragedy is that if a tenth of the energy devoted to this matter were devoted to the other people in this community whose livelihoods — and whose very lives — are threatened by the policies of this Government, we could bring about the revolution of attitudes and ideas that is needed.
This Government do not have a social or economic policy. They have a fiscal policy, and a political strategy. Their fiscal policy is centred on reducing the amount of money borrowed to meet day-to-day needs, and their political strategy is to do this by cutting public expenditure to the bone.
It is a very simple and crude approach. It has worked very well for the Fianna Fáil Government so far, because there is a consensus in the Dáil in favour of that approach, but it is a consensus that does not particularly care about social and economic policy. The priorities of that consensus have been described in the past as having no room for people, and I believe that is a fair description.
The policies that have devastated a great many of the things we all took for granted have had one good effect: the fallacy that all public spending is bad has been exposed for what it is.
It had become almost a cliché in Irish life, until about two years ago, that the only thing we needed to do to solve our problems was to cut public spending. If we could only cut spending, the argument ran, the climate for enterprise would be improved, the economy would start to grow, unemployment would drop rapidly, we would all have more money in our pockets. It was a simplistic notion from the start and all the more attractive on that account. Those who believed in it would have us all believe that public spending was the root of all evil. What they never told us was that public spending was the wages paid to teachers and nurses. They never told us that it was the pensions paid to old people, the allowances paid for children, the support systems provided for the unemployed or the handicapped or the ill. They never told us that cutting off public spending was like cutting off the water supply to a house — only when we had to do without did we realise how dependent we were on it in the first place. Most of the consequences of that two years are clearly visible. They can be seen every day in the media, and they can be seen with a much sharper focus at local level.
In the time since Fianna Fáil inherited their huge majority, I have been in contact with old people who have just been informed that they must now make their own way to a day-care centre, because the ambulance service on which they have relied is being withdrawn. I have been in contact with mothers who have to travel 40 miles to bring their children to a paediatrician, if they can get an appointment. I have met unemployed people who are trying to survive on less than £40 a week, and who have been told that some of their rent support is being done away with. And I have met women who are frantic at having to deal with huge bills for basic health treatments which were free up to two years ago. As I said at the start, by no stretch of the imagination could this be described as economic and social policy.
To make it even worse, many of the effects and consequences are invisible, and will remain invisible for some years. The effects are real, and frightening, nevertheless. For instance, the great housing crisis of the sixties was one of the huge social issues of that era. We prided ourselves as a society that that problem had been more or less dealt with, but we are now well on the way to resurrecting the housing crisis with all of the bitterness and family stress it caused in the past. By the end of 1989, there will be almost 25,000 families on housing waiting lists. These will be families who have passed the tests applied by local authorities. They will be in urgent need, but there will be no houses for them. Under this Minister for the Environment, there were only about 200 local authority housing starts in the whole country last year, and there may be even fewer next year. What a monument to national recovery that is going to be.
To give another example — the improvements in education that the last 15 years have brought have been wiped out almost at a stroke. The child-centred curriculum is in the process of being replaced by a system of overcrowded classrooms staffed by teachers under stress. None of us who was the recipient of that kind of education system in the past wants to see it back again. More important even than that, we cannot afford the consequences of that education system. We live in an era when for too many people the prospect of emigration is all too real. It is bad enough that compulsory emigration has become almost a feature of Government policy. We do not have the right, in my view, to send people abroad without even a basic standard of education to rely on. But that is the direction in which Government policy is taking us.
In all of this it is important to remember that the reason these things are happening has nothing whatever to do with any planned approach to the development of our economy. Our economy, and our society, is being directed and controlled on a hand-to-mouth basis. Every decision is taken in an ad hoc and arbitrary way.
Good government is concerned with consequences, and in a time of scarce resources, good Governments have to make choices. This Government is more like the person who backs a horse in the Grand National each year, and selects the favoured horse by sticking a pin in the list of runners. Many of the decisions of the last two years look as if they were made by a blindfolded Cabinet with a huge pin, and the consequences represent a threat to the fabric of our society.
I do not regard this as an exaggeration. Of all the consequences of the approach that I have mentioned, the most dangerous and reprehensible is the effect on society as a whole. A British commentator has written recently of the three new classes in Britain — the haves, the have-nots, and the have-lots. We seem to be well on the way to that kind of a society in Ireland, and the inevitable consequence will be alienation on a huge and dangerous scale. It may not be appreciated for instance that the quarter of a million people who are unemployed in this country are becoming angrier and angrier, and that anger is in real danger of spilling over. Of course the danger is compounded by the fact that the thin fabric of support that exists to provide some measure of dignity for those who are unemployed is steadily being ripped away, in the interests of saving money.
All of this is being done in the interests of politics. Its purpose is to preserve Fianna Fáil in Government, to ensure that they continue to enjoy the support of parties that are ideologically committed to cutting back on public spending. If Fianna Fall's only interest is the retention of office, what can one say about the Opposition parties who are determined to go to any lengths to keep them there. What is their motivation? We live today in a society which is informed and dominated by ideology. The same ideology that dictates the pace of activity in 10 and 11 Downing Street is the one which is dictating economic policy in Merrion Street in Dublin.
That ideology was well summed up by one of the reactions to Mr. Nigel Lawson's last Budget. The question was asked by the British Shadow Chancellor, John Smith, in his response to the budget. "How is it," he asked, "that when you want to entice enterprise from the rich, you give them more — but the only incentive you can think of for the poor is to give them less?" It is a pernicious and perverse ideology. It questions the right of the poor to free health care of a decent standard, but does not bat an eyelid at the tax relief given for the health care of the rich. It turns a blind eye to situations where young people are forced to emigrate because they have no future here, but encourages the better off to evade their taxes for years.
However, the policies of the Right are really not very attractive, especially in a country where the republican ethos runs very deep. Spelled out in all their nakedness, the policies of greed and individualism purveyed by far too many of our politicians would turn people off rather than on. So the propagandists have had to devote a great deal of their time to convincing us all that they mean something entirely different. That is why we have seen the emergence of a whole new range of phrases and slogans, imported from Britain and the US, aimed at capturing the public imagination. The one thing all these phrases have in common is that they are a good deal more attractive than the ideas they are used to describe.
For instance, they talk a lot about confidence in the Economy, what they really mean is that financial speculators are making a killing; people with political pull are getting lots of tax breaks; the banks and financial institutions think “God's in his heaven.” They talk about creating the climate for industry, this means more grants and incentives for companies — the kind one has to pay for; getting rid of legislation that protects workers' rights — like the Unfair Dismissals Act; removing tiresome planning and environmental controls. They talk about getting the State off our backs, they really mean cutting expenditure by removing essential services.
They talk about removing the disincentive to work, what they are doing is cutting social welfare so that the unemployed can choose between starvation and the most menial jobs available. They talk about eliminating the poverty trap, when what they mean is that social welfare must always be kept lower than the lowest possible pay rates. People on social welfare sometimes find themselves in a position where they will lose money by taking a job — the Right always assume that that is because social welfare is too high. It never occurs to them that it might be because wages are too low. They talk about targeting the poor, this means taking money from the poor to give it to the very poor, and we have seen far too many examples of it in the past 18 months.
They talk about the politics of choice, this means that if you have the money to pay for it, you can have the best health care available, without having to queue. Your children can have every possible educational advantage you can afford, if you have not got the money — even if it was your taxes that educated the teachers, built the schools and hospitals, and subsidised the production of consultants — sure are you not lucky to live in a country where some of the people can make choices?
Finally, they talk about the politics of envy: this is a nice one. There are some of us who believe that health care should be seen as a right, available to all when they need it. We even believe that every citizen is entitled to maximise their potential through equal access to eduction. Such beliefs — and a range of others — are known as the politics of envy. If you think that is obscene that there are some in our society who are able to fiddle their taxes, while others have to do without, I am afraid that makes you, in common parlance a begrudger.
What has all this led us to? It has led us to a society that has a million poor — let me repeat that, because that one million people might not exist for all the mention that has been made of them in this debate. One family in every three is going to bed hungry, is at risk of health breakdown, is inadequately sheltered, is unlikely to achieve more than the most basic education. It is not their fault, despite what the propagandists would have us believe. The one million families in this country who are poor are not stupid, or lazy, or shiftless. They are not the victims of some divine plan. They are not the unfortunate outcome of irrepressible world economic forces outside our control. They are the victims of a political system which is dictated by political opportunism on the part of the Government, and a sinister ideology on the part of two of the Opposition parties.
That is why the politics of this country are crying out for the social revolution I mentioned at the start. We need fundamental change in this country, to give the poor and the dispossessed a voice. That is what the Labour Party will continue to do despite difficulties and despite lack of media understanding of what we are trying to achieve. We will certainly fight to bring about this fundamental change to give the poor and dispossessed a voice, because, without it they will remain under attack by people and politicians who prefer to turn a blind eye to reality.
I would like to say a few brief words in relation to the publication of the Estimates. It is a good thing to have an early publication of the Estimates because it gives people an opportunity to come in here to this House to discuss the Estimates and put forward suggestions for changes that could be included later on. I hope to put forward some of those suggestions myself in the next 15 or 20 minutes.
During the past 18 months this Government have made tremendous strides in tackling the major problems that have built up over many years. At last there is new hope and a new confidence on the part of the people that something is happening. As a result of the Government's decisions and initiatives interest rates are down 6 percentage points. Inflation is at the lowest level for the past 20 years. Exports are booming and borrowing has been substantially reduced. There is a new confidence amongst the business people. One hopes that the business people and industrialists are now prepared to invest and develop and create the jobs that are necessary for our young people here.
This House must call on the people who have the financial wherewithal to come forward and build on the economic climate that has been created in their interests by this Government. The Government and the unions have played their part. It is now up to such people to come forward and to invest and develop their industries and businesses and create the jobs that are necessary.
Tax reform has been talked about here for many years. The present Government have done more about tax reform in the past year than any previous Government did in the past 20 years. This should continue. I hope the Minister for Finance in the budget will introduce further reforms and announce further reductions in the rates of taxation being paid by the PAYE sector at present. There is an expectancy among PAYE sector that in the forthcoming budget the rates of taxation will be reduced and I hope that they will not be disappointed. This sector have to carry the major share of the burden of taxation for many years while other sectors which could have paid got away scot-free. I am glad the Minister for Finance initiated many new reforms during the past 18 months which has brought about a change in this respect. As a result of the tax amnesty over £500 million was paid into the coffers of the Exchequer. This shows that there are people who were not paying their fair share of taxation. They were encouraged to come forward to pay outstanding taxes and I hope they will continue to pay their fair share of taxation in the years ahead.
We have also seen the introduction of self-assessment, a radical change, under which people can assess their own liability and pay accordingly. I feel this was a good initiative. It is welcome and I have no doubt it will prove a great benefit to the self-employed in the years ahead.
The decision of the Government to have two-thirds of taxpayers into the lower rate is also welcome. This was a commitment given by the Fianna Fáil Party prior to the last election and it is a promise they have delivered on. I hope there will be further concessions in the next budget and that any moneys which are raised either through the amnesty or following people for payments will be used to ease the burden on the PAYE sector who for too long have had to carry the major share of the burden.
I listened with interest to the Minister for the Environment as he spoke in this House last night. Certainly some of the statements he made were welcome, particularly his statement that the county road allocation is to be increased from £15 million to £20 million. These roads are in a bad condition and this extra money is needed in order to bring them back up to an adequate standard. Indeed in some areas these roads have disintegrated into no more than dust tracks and dirt tracks. I appeal to the Minister to increase this figure even further.
Now that the National Roads Authority have been established it is important that the Authority do not focus their attention on Dublin and the other major cities. I am glad the Minister comes from a rural constituency as he can ensure that each area within the country will receive its fair share of development. At present the Minister is putting the finishing touches to a blueprint for road development. I hope that the Euro routes such as the road from Dublin to Rosslare along with bridges existing along such routes will be improved and that adequate resources will be made available. I have no doubt that the Minister will ensure that this will happen and that rural areas in particular will get their fair share of development.
Local authority housing was also referred to. Deputy Spring spoke of the substantial reduction in the number of new houses being built but in the present financial climate I believe the rate of construction of previous years could not continue. There are areas within the country where new housing is badly needed. I believe that new houses should be built in areas where it can be proved that housing is needed. The Department tell us that there are between 500 and 600 houses vacant in Dublin and between 300 and 400 houses vacant in Cork but I could point out to them that there are areas within the country, including my own county, where there is a demand for housing. I ask the Minister to ensure that in areas where there is such a demand that houses, particularly council cottages, be built. The Minister has a deep interest in the provision of council cottages. Moneys were provided for this scheme last year and I ask him to continue that scheme.
The Government's economic policy has resulted in the lowest mortgage interest rates for 20 years. There is healthy competition between the financial institutions. The banks and the building societies are queueing up to make moneys available to people either to purchase or build their own homes. I welcome this and I hope that interest rates will continue to decrease. The fact that interest rates remain low is a sign of the confidence which the financial institutions have in the Government, this despite the fact that in the UK interest rates have been rising for some time. We have always been told in the past that when interest rates rose in the United Kingdom they also had to go up here. I am glad to see that this is not happening in this case. It is nice to see that those who have mortgages are now able to avail of the low interest rates at present with a consequent reduction in their monthly mortgage repayments.
In relation to social welfare, the Minister for Social Welfare during the past 18 months has proved he is a very caring Minister despite some criticism from different quarters. He has managed to fight off all of the Government cutbacks and tough decisions and has been able to provide an annual increase for social welfare recipients. I welcome that. I also welcome the announcement by the Minister that the Christmas bonus is to be paid once again this year. I ask the Minister to take a look a number of areas where a number of modifications need to take place at present, in particular unemployment assistance. When a young son or daughter of a person in receipt of unemployment assistance reaches the age of 18, regardless of whether they are attending school or not, that person loses their allowance. This is totally unfair because if the young person remains on in school for another one, two or three years the parent has to provide for his or her schooling, clothing and upkeep. The Department say because that young person has reached the age of 18 he or she is no longer a dependant. The family could also find their free fuel allowance being withdrawn despite the fact that this young person remains on at school. That is a serious anomaly and I ask the Minister to examine it and at least to restore the free fuel allowance to those families who have children attending secondary school. Perhaps it would be too expensive to restore this allowance to families who have children attending regional technical colleges or universities but it certainly should be restored to families who have a child attending a secondary school.
I am also concerned about the attitude of social welfare officers. I think their attitude is appalling. Because of the way they treat people they frighten off people from making applications for allowances they are entitled to receive. They treat every applicant for unemployment assistance as if they were rogues, liars or criminals. They subject them to harassment and degrading treatment and this is not acceptable either to me, to politicians or others in this country. I am aware of many people who, because of this harassment, are not claiming their entitlements. They simply drop their claims. Welfare Officers keep files on their desks for week after week, delay in calling applicants for assessment and do not return files to Dublin until they have received three or four reminders.
While all this is going on, it is imposing hardship on these applicants. Many people are on unemployment benefit or unemployment assistance because of our serious unemployment problems, and not for any other reason. These people should be treated with respect and dignity. I ask the Minister to become aware of the attitude of the social welfare officers, even if it means giving them lessons in courtesy, manners and how to treat people. Their attitude is causing great concern to the people who are making applications for such benefits at present.
Over the past few years farmers' incomes have increased, but there are some agricultural developments the Minister introduced which are very welcome. The dairying sector has expanded and sheep farming is on the up and up. The farmers are availing of different subsidies to develop their farms and to encourage their sons to stay at home. The area causing most concern is the milk quota. I realise the Minister was not in office when the quota was introduced, but the small farmers with the low quota are suffering very badly. In many instance they are not being paid by the co-operatives, some of them have not been paid since last May or June and they will not be paid until next April when they see how the situation develops. The Minister, the co-operatives, and the EC officials should sit down together and see if these small farmers could be helped. The 100 per cent flexi-milk quota should be given to farmers whose output is less than 25,000 gallons, because at the moment some farmers are looking for financial help from different institutions until they are paid for their milk supplies.
We must encourage agri-tourism. I know a number of farmers who have converted their farms to golf, pitch and putt or other amenity projects. We should provide capital grants to encourage more farmers to develop in this area. It is essential that the Department of Tourism and Transport, the Department of Agriculture, with the Ministers concerned, should sit down and work out a system of grant aid which could help farmers develop in these areas. What is happening at present is that farmers' sons are moving away from the farms and looking for jobs that are not available. We should be giving them every help to encourage them to stay on the farm and branch out in the agri-tourism industry, mushroom growing, fruit growing and so on.
Horticultural development, food development and agri-tourism development go hand in hand. I compliment the Minister for Agriculture, Deputy O'Kennedy, the Minister for Horticulture, Deputy Kirk and the Minister for Food, Deputy Joe Walsh, for the effort and time they have spent on initiatives and development plans in this area. There are substantial grants available for the horticulture and food industry to develop new value added products. I hope people in the private and agriculture sectors with money to invest will help develop these areas.
The development of our natural resources is essential if we are to create jobs for the future. The days of the big companies setting up in Ireland are no longer with us and it is up to us as a Government, with the support of the other parties, to put forward projects and ideas that will develop our natural resources which in turn, will create jobs which are so essential.
Coming from a county which is noted for its fishery products, I welcome the Minister's announcement of the new Bord Iascaigh Mhara development programme. This natural resource has tremendous potential for development. We have seen major developments throughout the country — in my county, at Kilmore Quay and New Ross while a fish factory is planned for Gorey. This shows people are prepared to invest here with the backing of the Government. I compliment the Minister, Deputy Daly, for bringing forward this initiative and look forward to seeing the development of more fish products in the next few years. This is an ambitious plan, creating 4,500 new full time and part-time jobs in the next few years. I hope we can achieve all this.
In this debate, different people will be putting forward different ideas and I hope the Ministers, while remaining within the figures provided in the Estimates, will be able to take some of these suggestions on board and that a significant number of jobs can be created in the next year.
I would like to take this opportunity to wish the Taoiseach well. I hope he has a speedy recovery to full health. I hope also he will be back here soon to take control of his Ministers and party because he might have some matters to attend to there. The late Seán Lemass said 30 years ago that in times ahead it will be great to be alive, to be young and to be Irish. Now, 30 years on, I wonder if that is still true. Was his prediction right or was he forecasting that it would be great to be alive, to be young, to be Irish and to be at home?
These Estimates give Deputies an opportunity to air at least some of their views on the running of the country, the amount estimated that is needed to run various Departments and to bring forward their ideas and criticisms on various important matters. I listened with interest to the speeches of Government Ministers and backbenchers, and I speak as a backbencher from this side of the House. I regard employment, taxation, emigration, education, agriculture and other matters as being of paramount importance. It is interesting to note that Government ministerial speeches are all in the same vein. Naturally they portray in the best light possible all aspects of their individual Departments, and I suppose that is fair because they must put forward the best face they can. However, within the Fianna Fáil support group countrywide, there seems to be a powerful recognition that they must at all times obey Government diktats when they are in office, and particularly when they are in Government. It never ceases to amaze me that for the four years my party were in Government, they were like blood hounds baying at the crossroads. At every meeting and at every opportunity they blamed the Minister of the day irrespective of whether he was right or wrong. Now, when the same problems arise, these people have gone to ground and their heads are buried. If a Minister fails to appear at the protest meeting there are always plenty of supporters present to apologise for his absence and tell the audience that he is at a more important function somewhere up the road.
That is what I call teamwork.
Members of the Fianna Fáil Party have been criticised by Ministers for being every type of supporter under the sun but yet they continue to support Fianna Fáil, a blind allegiance to a cause unclear to themselves.
It must make the Deputy jealous.
The type of support makes me jealous. Our supporters are different. We have supported the Government in a general way on the economy but we got very little credit from the media or the public for that. On the one hand people say that the country is in a desperate state but on the other hand opinion polls show that almost 50 per cent are satisfied with the way the Government are running the country. Such polls also show that 70 per cent are dissatisfied with the way the Government spend the national lottery funds. It is difficult to determine the public mind.
From 7.30 in the morning to midnight our radio stations carry a series of current affairs programmes. For a country of 3,500,000 people we seem to have an inordinate number of topics for coverage on such programmes. We are left with radio presenters and public figures trying to determine sideline issues that in ordinary circumstances are worth a brief mention on the radio or a line in a newspaper. The veneer on the Government benches of all going well and the perception among Government supporters in the country that all is going well is wearing thin. It may be that the visit by the President of the EC Commission will give the Taoiseach, on his return to the House in full health, an opportunity to move the chairs around.
The Minister for Defence read a speech that obviously had been prepared by a civil servant in his Department and the issue of Army pay was given only a brief mention. It is significant that the wives of soldiers have been driven to making public protests about the pay of their husbands. When the Minister attended a ceremony to mark the departure of an Army battalion for Lebanon I was disturbed to see the wives and children of those soldiers standing in the pouring rain while the Minister reviewed the parade. Commonsense and a little courtesy dictate that the grievances of those people should be listened to and dealt with. Members of the Defence Forces occupy an important place in our Constitution but some of the personnel have been forced to go on television and be interviewed with their backs to the camera. That is an indication of how serious is this issue. Those people have done an outstanding job in appalling circumstances. They have been exposed to a lot of danger and some members lost their lives. The Minister should listen to the legitimate grievances of the members of the Defence Forces and deal with them as a matter or urgency.
I note that the Minister did not refer to the air/sea rescue service. A series of tragedies off the west coast in the past two years have highlighted the need to locate that service in that region. The Fine Gael party this week proved the importance of basing an air/sea helicopter rescue service in Shannon or along the west coast. Such a craft could be on the scene of an accident within a matter of minutes. It is very Irish that we have had to rely on the RAF for many years to rescue hundreds of people. That work, carried out in appalling weather conditions and in darkness, did not cost the Exchequer one penny. Helicopters were flown from Britain to points off the west coast to carry out rescues in Atlantic storm conditions. Yet when such helicopters land the wounded the crew can see slogans like, "Brits out", "no extradition" and so on on public buildings. That shows an appalling lack of appreciation.
We also must consider that more than one million of our people living in England do not require work visas or passports and do not have to bow to the strict regimes that operate in other countries. Many of them, because of the inactivity of the Government, are forced to send money home to keep their families alive. Those who constantly decry that element of our relationship with our neighbour across the water should look into their own souls and consider the benefits people in their areas derive from the UK.
One of the appalling tragedies of the Government's term of office is the massive emigration that has taken place. Synge remarked on one occasion that they are all gone now and that is the case in rural areas. When I was attending primary school I read the late Eamon de Valera's "looking into his heart" quotation about seeing comely maidens and athletic youths at the crossroads but the comely maidens and athletic youths have gone. The Gaelic Athletic Association, and many sporting organisations, are unable to field a small number of teams in rural areas.
I do not think people appreciate the social implications of emigration. A whole generation is missing from the country and they are living in England, America and elsewhere. When Deputy O'Kennedy was Minister for Foreign Affairs he had contact with the Irish Centre in London but I am not sure if any Minister has stood on any street in Cricklewood at 7 o'clock in the morning to see the hundreds of young Irish people waiting for the contractors to arrive in their vans, a modern day version of An Spailpín Fánach. They are loaded up like animals to do shift work without any insurance cover or medical care. They are paid £10 on getting into the van and £12 when they return from work. There is no obligation on the contractor to reemploy those people the following day. If one visits centres in England one will find them packed to the doors with young Irish people. One will hear accents from Donegal, Mayo, Galway, Clare, Limerick, Kerry and the midland counties.
And Cork.
Yes, but they returned for the football match which Cork did not win. That is an appalling indictment of the Government. Those young people are forced to pay £5 for the privilege of leaving the country in search of work. Last week I spoke to a man who was forced to go to England in search of work and he told me that he, his two sons and his daughter had to pay £20 for the privilege of leaving the country. When they return at Christmas to see the remainder of the family they will be classed as tourists. I understand that 1.4 million people paid the £5 travel tax on leaving the country in 1987 and that 1.1 million have paid it so far this year. I understood that that tax was to be paid by those leaving the country on holidays but that does not seem to be the case. It is easy to determine whether a person is going to the Costa Brava for sunshine or heading to England or America in search of work.
In the course of his speech the Minister for Tourism and Transport did not mention one of the running sores in his Department. Mr. Dully is a capable person and proved that when working with Aer Rianta but he is caught in a dilemma in that the Government will not tell him and his agency what they intend doing in regard to the rod licence controversy. This is a national issue only in the sense that we lost £6 million in tourist revenue. The problem will not go away and it must be dealt with. The issues involved are not understood by many people, particularly by those living on the east coast many of whom seem to think that Connacht is a peculiar type of reservation where people have strange attitudes and perceptions. The real issue is that the waters are public and the historical element, which is not far from the surface, will not go away. Taking into account the Government's objective of preservation of the waters and promotion of proper angling facilities and, on the other hand, the angler's willingness to contribute, although not in the form of a licence, those twin objectives could be met by a little commonsense and thinking within the Department. I hope that is carried out in the immediate future. It would put to rest this issue which will not go away and which will be the cause of further controversy next year.
I listened to my colleague, the Minister for the Environment, yesterday. Far be it from me to criticise a constituency colleague, either at home or in the House. In relation to the constituency boundaries which seem to have been given quite an amount of media attention in the last few days, he was very authoritative in his statement that he had not read or seen the report but he did not say that he had not been briefed about it. I respect every member of that commission. It appears as if some people somewhere have very definite ideas about lines being drawn around the country.
I want to say to the Minister for the Environment that the road structures of rural Ireland are falling asunder. When we bring industrialists from the offices of the Minister for Industry and Commerce or the Minister for Agriculture, we have to show them the kind of ground they have to travel before they get to points west. The roads are as bad as they were pre-1950. They are falling asunder. If that structure is not maintained within the next three to five years it will be beyond repair altogether.
Recently I heard talk, of introducing a compulsory road test for motor vehicles, an MOT test as it is called in other countries. I would lay down a challenge to any motor company to produce a vehicle which, after six weeks of normal driving on any road from Donegal to Kerry, will stand up to an MOT test. It will not happen even under normal driving circumstances, because of the condition of the roads. Ministers who are cushioned with their Mercedes will tell us that some of these conditions are absolutely appalling and should be dealt with.
I want to refer to Údarás na Gaeltachta who published their report this week. I wish to say at the outset that the chief executive officer and some of his staff are very deeply committed to what they are doing. That company were financially castrated by the Government until quite recently when a further £3 million was given to them to tide them over to the end of the year. This would never happen with the IDA. If an industrialist wanted a site in the Gaeltacht areas, not alone would the application not be approved in principle to set up an industry but the industry could not be grant-aided to any extent. It is a load of nonsense and waffle. People who are very committed to their jobs are unable to deliver because of a Government regulation from the office of the Taoiseach who is Minister for the Gaeltacht.
I wish to refer to a company in Erris, Belmullet — the last substantial employer in that area which is the blackest of black spots for emigration. The company brought in by Údarás na Gaeltachta and opened by the Taoiseach 15 months ago have carried on a campaign of what I call industrial blackguardism. They have laid down unacceptable levels of demands that simply could not be met. The resources of the Department should be made available so that the area can be declared as a priority issue for Údarás na Gaeltachta. The resources of Údarás and the IDA could be used to find an alternative buyer for that area.
The Minister for Education announced in a Dáil reply to me yesterday that the inter-department committee, another of these quango operations, are still looking at the prospect of a regional technical college for Castlebar, County Mayo, along with others. She should tell the truth. The Department's capital building programme for third level institutions is down by 32 per cent, from £24.8 million to £16.7 million. That prospect seems to be dead and buried. It is another dereliction of duty and reneging upon a whole generation. As an addition to the west and an attraction for industry, that is a further nail in the coffin.
I want to refer to a matter which probably has not been mentioned already. I want to say to the Minister for Health that it has been brought to my attention that a particular group of between 600 and 1,000 people suffer from a very debilitating illness called Myalgic Encephalomyelitis, or ME for short, which appears to have a very significant effect on people in the workplace. Some of those people have been on sick benefit from the Department of Social Welfare but when they are examined by medical officers they are unable to find any reason for their illness. The Department should give recognition to this group of people and should do what they can to sort out some of their difficulties.
I listened with great interest to the contribution of the Minister for Finance. It seemed to be the kind of contribution that said: "I have done a reasonably good job here to date and if I am going to go to other lands, I hope the boys who are left behind can operate as well as I did". If the Minister is leaving then I want to wish him the very best of luck. I hope when the Taoiseach reshuffles the Cabinet they will direct themselves to the real issues of the day and give this party some scope for the ideas and the constructive criticisms that they are putting forward in the hope that we will build a better country in the times ahead.
It has long been recognised that the overall economic context within which agriculture operated is of vital importance to the sector. The current set of economic indicators are more favourable and hold more promise for the future than has been the case for many years. Inflation in 1988 is expected to be about 2 per cent which is the lowest rate for decades. Interest rates have fallen by about 6 per cent since the beginning of 1987 and this has made a major contribution to the improvement in farmers' income. The prospects for incomes in farming in 1988 are also very good. We can expect to see a futher substantial increase in farm incomes in 1988 over the record increase of 30 per cent achieved in 1987. I think that is something that everyone in the House would welcome, particularly people like Deputy Kenny who has such a commitment to the wellbeing of family farmers in rural Ireland.
We have not, at any time in recent memory, achieved income increases of the nature experienced in agriculture in 1987 and 1988. To maintain that income increase it is important that we recognise that we are faced with the continued imperative of striving to increase the quality and the value of production at farm and processor level. Improvements have been made in this area in recent times and further improvements will be necessary in the future. Such a strategy represents the real long-term insurance policy for the protection of and increase in farm incomes.
As Deputies will be aware, major decisions were taken by the European Council in February last affecting the broad range of Community activities. In relation to agriculture the decisions taken will necessitate a more market-orientated approach but at the same time ensure a satisfactory overall budget and growth rate into the nineties. Indeed present indications are that the market support requirements for agriculture will be subtantially lower than the guideline figure permitted under the European Council decisions for 1988 and 1989.
The agriculture sector and rural areas generally will also benefit from the decison to double the funds to be provided for structural development in the less well-off areas of the Community. Although the detailed rules and procedures for the operation of the reformed Structural Funds have not yet been finalised, my Department have as part of the Government's plan for national recovery, already embarked on a programme of integrated rural development in a number of pilot areas. At the end of the two year experimental period, we would hope to have gained experience which will assist the Government in drawing up a nationwide scheme.
As regards the specific proposals before the Council at present, beef, dairy and sheepmeat account for over 80 per cent of agricultural production in Ireland. Of all the member states, we have the biggest economic and political interest in the negotiations on the proposals for these sectors. Without going into the details, I can assure the House that the Commission's proposals in all cases are unacceptable to me. I will therefore be seeking to persuade my colleagues in the Council to modify them in ways which will ensure that effective support arrangements are maintained, that our special needs are taken into account and that third country producers bear an equitable share of the burden of correcting world imbalances.
In the international area, the outcome of the current worldwide negotiations under the General Agreement on Tariffs and Trade will have important implications for agricultural trade. Some participants in the negotiations have proposed the progressive elimination of all supports and import barriers. Such an outcome would have disastrous consequences for producers in the Community, but particularly for Irish producers. In the negotiations, the Community has made it clear that the preservation of rural economies is vital and that the Common Agricultural Policy double pricing system for farm products together with related mechanisms must be maintained. I fully support this approach in principle and will be reiterating my position at the November meeting of the Council. The progress made in the negotiations will be reviewed by the contracting parties at a mid-term review in December and the negotiations are due to be completed in 1990. My overall objective in the negotiations will be to seek a package of measures which takes equal account of the needs of importing and exporting countries in the developed and developing countries.
I have recently set up a review committee group representative of all the major agriculture and food interests. This will be the forum for keeping all the interested parties informed of developments and the organisations will also have the opportunity to put forward views on ongoing developments in the negotiations.
For 1989 my Department's net Vote provision amounts to £156.7 million. This is an increase of 2 per cent on the 1988 figure. I am glad to state that in the present period of essential budgetary constraint, it has been possible to maintain the Exchequer contribution to the future well being of Irish agriculture. The 1989 Estimates show a very significant fall in the provision for market intervention operations, from £96.37 million in 1988 to £69.5 million in 1989 and a comparable decrease in EC recoupment. This reduction reflects falls in intervention stocks, particularly of butter arising from EC market policy decisions and also reflects the vigorous market strategy I have been pursuing. The fact that we are now able to command top prices in the market and have reduced our reliance on intervention is reflected in the reduction of approximately £30 million in intervention costs to the Irish taxpayer. I am determined to pursue that direction over the next few years.
The Estimate for my Department is for a gross income of £313 million. I should stress, however, that this represents only a minor part of the total spending by my Department. AS part of ongoing support from the EC for Irish agriculture my Department oversee and supervise a large number of support measures and special aids which are fully funded by Brussels. These measures will result in expenditure of some £840 million being paid by my Department in 1988 to farmers and agri-business. In addition the Department this year will spend some £460 million funded from borrowings on the purchase of products into intervention.
I would now like to refer specifically to a number of items included in the Estimates which will be of interest to Deputies.
The Book of Estimates includes a provision of £27.5 million for TEAGASC — the Agriculture and Food Development Authority which I established last month. In setting up the new Authority, I was conscious of the need to respond to the dramatic changes taking place in the agriculture and food sectors. The priorities of TEAGASC, as provided in the legislation, are the provision of training for young farmers and research in the food sector. Thus, TEAGASC will make its vital contribution to the successful development of the agriculture and food industries.
Notwithstanding the decision of the Government last year to phase out grant aid to CBF over a two year period, I am happy to say that in the consideration of the 1989 Estimates the Government by agreeing to a grant-in-aid provision of £500,000 recognised the major role of CBF in identifying opportunities in export markets and in guiding the industry towards delivering our meat products directly to retail outlets. This has been one of the major developments in the industry in recent years. An effective marketing strategy carried out by CBF and my Department have guaranteed the record level of beef and lamb prices.
As we approach 1992, the food industry must develop added value products and become more consumer oriented. In the meat trade, as in others, getting new products onto supermarket shelves is a skilled and expensive business. I am confident that CBF through its promotional and marketing expertise will enable exporters to avail of the opportunities which will be presented.
Turning to farm development I am glad to say that investment in this area is continuing at a satisfactory level. The provision for investment under these schemes this year was £21.4 million. It was clear at an early stage that this provision would not be adequate. As a result there was some delay in the payment of grants. The Government were concerned about this delay and last month I decided to provide an additional £8 million to meet the demand. All outstanding grants are now being paid as quickly as possible and it is expected that the backlog will be cleared inside the next few weeks.
Taking this additional sum, which will be covered by a Supplementary Estimate, into account it is expected that grant aid for on farm investment this year will amount to £29 million. This represents a sizeable level of investment.
Winter housing for animals together with fodder accommodation and waste storage facilities are a pressing need particularly in the less favoured areas of the country. To help these farmers meet the cost, I pressed strongly at Community level for a special measure to help them overcome the problem. Under a Regulation which was introduced by the Council at my request, grants of 45 per cent to 55 per cent are available in all the less favoured areas for animal housing, fodder storage and the control of waste. The Community will refund 70 per cent of the cost. Higher grants will apply to plans taken out after 1 July 1988.
I am concerned about the problem of late inheritance. For that reason I have restored the installation aid for young farmers and have provided a grant programme of £5,600 for young farmers coming into inheritance. Such an attractive incentive should encourage older farmers to hand over their farms and for the younger men to take over the management responsibility for it. The expenditure on this scheme is expected to exceed £2 million this year.
I would now like to refer to three new schemes. The first of these is the set-aside of land scheme for which I have made provision in the Estimates. The scheme is to apply to all arable land which has been used for growing crops covered by a common market organisation. The beneficiary must withdraw at least 20 per cent of such land from production for a period of at least five years. Although the set-aside scheme is mandatory for the member state, it is optional for the farmers. I expect that the Agriculture Council will now acknowledge that all countries, including Ireland, have introduced this scheme.
The second scheme is of a similar nature and is being funded in this programme. This is a scheme for the extension and conversion of production. It involves a reduction of at least 20 per cent for a period of five years in the output of the product concerned, without any increase in other surplus production capacity. The participating farmer would be paid an annual premium based on the loss of income involved.
The third scheme relates to income aids. This scheme is currently under active discussion in Brussels. It is premature at this point to indicate what the final outcome may be. However, I expect it will be a positive programme of support for farmers on low incomes in certain parts of the country.
I hope it has been evident from the general increase in farm incomes and from the priority I have given to the disadvantaged areas, with the increase in headage payments, and the advance of ewe premiums, that not only have we an effective economic policy for development of the agriculture and food sector but that it is informed by an enlightened social programme.
The Minister has concluded his speech. May I ask another Deputy to move the adjournment of the debate?
I move the adjournment.
The Minister for Labour moved the adjournment. This would be an indication that the Member moving the adjournment would be prepared to resume after Question Time.
That will be no problem.
The Minister has already spoken. We will resume in the ordinary way after Questions and perhaps we shall have an offer at that stage.
Debate adjourned.
I wish to give notice of my intention to raise on the Adjournment the decision by the Department of Agriculture and the Department of Finance not to proceed with earlier commitments to St. Paul's special school on the basis that Thorndale would be acquired by them for use as a training centre.
I will communicate with Deputy Birmingham in respect of that matter.