Adjournment of Dáil: Motion.

I move:

That Dáil Éireann at its rising on 16th December, 1988, do adjourn for the Christmas Recess.

1988 was a year of exceptional economic progress. In many ways it exceeded our expectations. As a result there is a much greater feeling of confidence in the country's future and a belief that we can overcome our problems. This does not mean that there is any room for complacency about the present situation. We have a long way to go before we secure acceptable levels of employment, safe public finances, a tolerable level of taxation and adequate living standards for every section. But at least we are moving steadily in the right direction, and there are results to show for the restraint and discipline that have been accepted. But there can be no premature relaxation of effort, if we are not to put at risk all the gains that have so far been made.

The success achieved to date should not mislead anyone into believing that the time is ripe to start pushing for sectoral advantage. The limited margin of manoeuvre that we have won must be consolidated and extended, not squandered. Our major problem of unemployment, the excessive burden of taxation or the elimination of social deprivation will not be solved overnight. We have a great deal still to do and must clearly identify both our priorities and what we can afford.

TheProgramme for National Recovery has in many ways been the key to success. The programme is unique in that it represents a realistic consensus on the principal aims of economic policy. The balanced strategy agreed between the Government and the social partners is working. Valuable contributions are made in the Central Review Committee by the participants. The committee have in many instances stimulated the further development of policy as well as providing a forum in which difficulties and misunderstandings can be resolved.

TheProgramme for National Recovery has worked well because it is based both on realism and the participation of the major representative groups in our society. It has been clearly shown to be by far the most satisfactory way to manage our affairs. In fact, the approach we have adopted is advocated by the European Commission as an essential element in the implementation of the Delors plan for economic and social cohesion.

The programme has helped to give us the best year for industrial peace since the early sixties and to maintain the lowest inflation rate since 1960. At 2 per cent our inflation is below the UK and the EC and OECD average. Low inflation has reduced energy, telecommunications and other costs, contributed to competitive buoyant exports, a growing surplus in the balance of payments, increased industrial production and substantial positive economic growth.

It was, of course, inevitable as the financial situation improved that a number of voices would start to seek concessions, press demands and exert pressures. At the very first sign of improvement, no matter how tentative, there were bound to be demands from different quarters for concessions and reliefs regardless of the consequences.

This is a situation about which we must be very firm and extremely careful. Otherwise everything that has been achieved by sacrifice and discipline could be very quickly lost again, and we would be back in to the old appalling situation where we had to borrow just to keep going.

To understand this it is only necessary to look around the world today and to see how unstable and changeable the whole financial scene is. We can see clearly at first hand the recent British experience and the problems that have arisen there. A new administration is about to take over in the US. It is against the background of these very uncertain world financial conditions that we have to frame our policies. Everyone can see that we had a major success in 1988 in collecting a large volume of arrears of taxes which had been outstanding for a considerable period of time.

The collection of these arrears had been called for frequently in this House and outside it. The success of this major collection effort greatly eased our internal budgetary and borrowing situation, but it is absolutely critical both for the good of the country and for the proper management of our financial affairs that everyone clearly understands the exact significance of this major once-off receipt of revenue by the Exchequer. Its effect and its implications must be clearly understood.

A large amount of arrears of taxes which were due to the State and which in many cases had been outstanding for some time were paid during 1988. The amount was somewhere in the region of £500 million. The effect on the 1988 financial outcome was dramatic. But it must be emphasised again and again these were not recurring taxes; they were taxes which were owed and once they were paid were no longer due. While the effect on the 1988 budget was entirely beneficial, it must be fully accepted that this great benefit was of a once-off nature and will not be repeated. These taxes having been paid are no longer due. There will be no similar bonus next year.

In order that there should be no false expectations or any hopes raised which cannot be subsequently met, the Government must emphasise again and again and ensure acceptance of the fact that the exceptional improvement in the receipts and therefore in the budgetary position in 1988 cannot be repeated in 1989, and that the budget of 1989 will have to rely primarily on the normal sources of revenue. Furthermore, it will have to take account of a number of additional items of expenditure which will arise. To maintain and sustain the very definite feeling of realism and discipline which has prevailed throughout the national community for the past two years it is essential that we all keep in mind exactly what our basic realistic financial position in this country is.

I want to make clear what the state of the public finances is as we end 1988 and face into 1989 and the January budget. The public finances are the pivotal factor in our economic and social development, and the public should be told exactly how they stand and not be misled by wildly exaggerated statements of the kind that have been made recently.

The total national debt is still in the region of £25 billion. It costs us approximately £2 billion every year to pay the interest on that debt. This huge annual interest payment is equivalent to nearly £2,500 annually per taxpayer. It is a major constraint on our ability to allocate resources for social services and economic development. In so far as the national debt in relation to the output of goods and services by the community is concerned there is, in fact, hardly any change in the situation. In 1987 the national debt amounted to approximately 133 per cent of gross national product and this basic position is relatively unchanged. These are still the basic stubborn facts of our national financial situation and it is grossly irresponsible to pretend or to lead others to believe that the situation is otherwise.

Our objective on coming into office — and clearly spelled out in our election programme — was to prevent the burden of debt growing faster than our resources, as had happened throughout the eighties. TheProgramme for National Recovery set a specific target of stabilising our national debt relative to output by 1990. On the basis of our present performance this will be achieved. Developments in 1988, however, have been particularly favourable in this regard because of the tax amnesty. This brought us unexpectedly nearer to our goal. It carries the implication, however, that some tax arrears that would normally be collected next year have in fact come in this year, and may affect normal revenue targets in 1989. We must be clear, therefore, as to what the underlying deficit was in 1988, if the once-off bonus were abstracted from the figures.

The simple reality of our financial position as a nation is that strict discipline must still be maintained over the public finances. Government expenditures must still be scrupulously examined and carefully controlled. We can only incur those expenditures which we can afford to pay for out of the level of goods and services that we produce.

In order to assess properly the prospects for 1989 and plan accordingly, we must look carefully at what happened to the financial returns in 1988 and measure what exactly the position would have been had there not been the exceptional tax receipts. This will enable us to see what the underlying position is and what the borrowing requirement would normally have been so that we can decide the correct opening borrowing position for 1989. This is the only valid basis on which to plan the 1989 budget. An unrealistic opening position would totally invalidate the basis of the 1989 budget and cause serious problems later in the year. Applying the normal budgetary criteria it appears that at the end of the current year, 1988, the Exchequer borrowing requirement would have been half what it was in 1986.

To halve the annual Exchequer borrowing requirement in two years must be regarded as a good performance in financial management, particularly as we achieved at the same time faster economic growth, improved social equity and substantial tax reform. All the community shared in this achievement in supporting or accepting the measures taken.

At the same time we must fully accept that we are only making the necessary arrangements and laying the foundations for future progress. We must achieve economic progress and development in order to tackle the problem of unemployment. The core of our problem is to maintain fiscal control and discipline while at the same time promoting within the constraints of that control the highest possible level of development and employment. I believe that 1989 can be a significant year in this regard.

We have a responsibility also to improve the circumstances of the poorer sections of our community and to make further progress in tax reform. These are the commitments we made in theProgramme for National Recovery and these are the commitments we will continue to honour fully and effectively.

It is theProgramme for National Recovery which has provided the background against which it has been possible to go a long way towards bringing the public finances under control.

The first essential for the economic activity which provides employment is sound public finances. This was clearly recognised in the NESC report of November 1986, which stated that the stabilisation of the debt — GNP ratio was imperative. Even though the last Government had made limited progress in reducing the Exchequer borrowing requirement from 16 per cent to 13 per cent of GNP, nevertheless over a four-year period to the end of 1986 it was quite insufficient to prevent a rise in the national debt — GNP ratio from 94 to 130 per cent of national income. Real interest rates were, accordingly, at an all time high at the time of the 1987 budget. This Government had no alternative but to substantially reduce the borrowing requirement which then stood at over £2 billion by making substantial economies across the entire area of Government expenditure. This process had to be deepened and extended in the 1988 and 1989 Book of Estimates.

But we must all realise that the debt-GNP ratio at the end of 1988 will have changed only marginally. We cannot, therefore, deviate from the strategy of reducing borrowing further though there is a limit to the pace at which borrowing can be reduced if essential services are to be maintained in current circumstances of high unemployment which both increases demand on the Exchequer and depresses its tax revenue. The room for manoeuvre in the 1989 budget is, therefore, strictly limited.

The improvement in the public finances has contributed to perhaps the most dramatic achievement of the year, the opening up and maintenance of a 4 per cent-5 per cent interest rate gapvis-á-vis sterling. Lower interest and mortgage rates have been of great benefit to every sector of the economy and to most individuals and families as well. This development has also allowed us to relax exchange controls as part of the preparation for 1992, with the minimum of disruption. It has also made the conditions for investment in Ireland infinitely more attractive.

Favourable international conditions have created an opportunity to promote foreign investment and there is a significant up turn in this area. It would, however, be imprudent to speculate on future developments in the international economy, although the present outlook is reasonably good. But the lesson of the last 15 years is clear. There is always some degree of turbulence in the international economy and we will be far less vulnerable to adverse developments abroad, if we have made every effort to put our own house in order when conditions are favourable.

This Government fully understand that a policy of concentrating exclusively on fiscal rectitude would be both unsuccessful and unsustainable, as previous experience had proved, and that such policies must serve as the basis for the promotion of economic growth and social improvement. In theProgramme for National Recovery agreed with the social partners last October a balanced set of four objectives were adopted, relating to the public finances, tax reform, social equity and employment, with an emphasis also on the European dimension, which is the key to the next stage of development. I would like to comment on progress made on each of these objectives, and to point out that we have fulfilled our commitments and have made good progress so far.

The effect of our policies over the past two years has been that, given the low rate of inflation, the income tax concessions, the pay increases, the social welfare increases and the lower mortgage rates most families and individuals have experienced a modest improvement in their standard of living. With regard to greater social equity the Government have adhered to the key clause of theProgramme for National Recovery which reads:

The Government will maintain the overall value of social welfare benefits and, within the resources available, will consider special provision for greater increases for those receiving the lowest payments.

These commitments were met. There was a general 3 per cent increase in social welfare payments in the budget, significantly in excess both of general inflation and wage increases under the programme. There was a 6 per cent increase in child dependant allowances and an 11 per cent increase in payments to the long term unemployed. This is entirely in keeping with Fianna Fáil's caring social philosophy. In the three years from 1980 to 1982 when resources were available, Fianna Fáil increased social welfare benefits by between 20 per cent and 25 per cent which, in particular, permanently improved the lot of pensioners.

The philosophy behind the Commission on Social Welfare report is sound, but it is a basic fact of life that only national economic recovery can provide us with the means to deal with poverty in an effective and lasting way. The reverse is also true. In times of falling economic growth and rising inflation it is the poorer and weaker sections of the community who inevitably carry the heaviest burden.

The Government are fully committed to reducing the personal tax burden in an equitable way. We have also embarked on a major programme of tax reform and here I would like to make the point that probably the most important element in tax equity is to ensure that all taxpayers pay what they legitimately owe. It is not possible to have tax equity if a large section of the tax-paying community simply does not pay up. It is in this particular regard that this Government have made a really significant advance.

TheProgramme for National Recovery reaffirmed the Government's commitment to tax reform, and set out specific cumulative tax reductions over a three-year period amounting to £225 million. The reliefs provided in the 1988 budget will in fact amount cumulatively to more than £400 million. We are very close to having two-thirds of taxpayers on the standard rate as we undertook to do.

The Government have enormously improved the tax system in respect of establishing greater equity between the PAYE sector and the self-employed. The two initiatives introduced this year, the tax amnesty and the introduction of self-assessment for the self-employed, both proved extremely successful. Around £500 million in arrears was collected and early indications are also that the yield under the self-assessment system will be well ahead of that in previous years.

The Government are determined that this improvement will be maintained and built upon. Self-assessment enables the Revenue Commissioners to concentrate more resources on detecting tax evasion. We are determined to establish a fairer and more efficient system. The success of the Revenue Commissioners in collecting outstanding arrears this year clearly indicates that the Government and the Revenue Commissioners are determined that tax default or evasion will no longer be tolerated.

There is clear evidence of a positive improvement in employment. The increase in employment by 6,000 in the year to April 1988 is the first significant increase since 1980 after a fall of 77,000 in the first half of the decade. Unemployment has been running significantly below last year's figures, and there was an encouraging fall of nearly 2,000 in the seasonally adjusted November figure. Indeed, it was the largest fall since the present series of statistics commenced in 1967, and the underlying trend has shown a downward trend for the past four months and is now at the lowest level in over two years. Our aim must be a significant recovery in employment.

A report on progress in job creation under theProgramme for National Recovery was issued in the past week by the committee set up to monitor progress on the programme. They reported progress on job creation in all the sectors targeted by the programme. It is clear from the report that the programme is on target and that the ambitious objectives set for job creation will be achieved.

Positive and sustained economic growth is essential to the creation of increased employment and the stemming of emigration. Following years of stagnation, Ireland experienced 5 per cent economic growth in 1987, and this is likely to be followed by growth of up to 2 per cent in 1988. The ESRI have independently predicted 3 per cent growth in 1989. The figures for industrial production published yesterday show that the strong improvement in output is continuing. This growth has been very obviously export-led.

In 1987 our exports increased by 14 per cent to £10.7 billion, the first time the £10 billion barrier had been broken. We also enjoyed a balance of trade surplus of some £1.5 billion. This momentum has been maintained through 1988. In the first ten months to October our exports have already exceeded £10 billion and we have every confidence that exports for 1988 as a whole will reach the £12 billion mark. We have also generated a balance of trade surplus of £1.7 billion already this year and we expect this figure to rise even further by the year's end. A particularly satisfactory aspect of our export performance is the fact that while exports overall are up 14 per cent, exports from indigenous companies are actually up 16 per cent.

At the beginning of 1988 following a major review the industrial development agencies were allocated the objective of creating 20,000 extra jobs each year for the next ten years. There is every indication from results provided by the IDA, SFADCo and Udarás na Gaeltachta for the first nine months of the year that this target is being met.

On the small business front there is an extensive upsurge in job creation. New start-ups are happening at an impressive pace and a strong commitment is reported in the small firm sector to growth through international markets.

There is a continuing and significant flow of substantial new foreign investment in targeted sectors such as electronics, software development, pharmaceuticals and health care products. In addition, 1988 has seen extensive reinvestment in expansions by overseas companies operating in Ireland, reflecting their confidence in the general economic environment.

The overall position is that Irish industry is beginning to respond to the positive economic climate with a number of strategic investments announced by major aggressive, developing Irish concerns.

A significant job creation impact is already apparent in 1988 in sectors such as mushrooms, furniture, Irish-owned electronics, printing and software. The foundations have been established for firm development in food and natural resources and clothing with ongoing growth in the development of linkages which provide significant opportunity for Irish companies. There is also evidence of a resurgence of investment proposals emerging from the commercial State companies, especially Aer Lingus and Aer Rianta.

We are determined, and with good grounds for confidence, that the job creation targets established in theProgramme for National Recovery will continue to be met, and the development work undertaken in the past 12 months by the agencies in small business, Irish industry and overseas industry will have a positive impact on job creation in 1989.

The establishment of the International Financial Services Centre in the Custom House Docks area is being successfully realised. Within the short period of some 20 months since the centre was launched, 43 projects have been approved by the Minister for Finance for the centre, including some extremely large and well-known international companies. Already 23 of these companies have commenced operations. The others are at various stages of setting up business. Companies are currently operating in premises outside the centre but will move into the centre as soon as the accommodation is ready.

Progress with the construction of the centre is there for all to see. Employment commitments by companies approved for the centre already amount to 1,300 and there are some 200 engaged on the construction work. Construction employment will build up quickly in 1989 as work on further buildings get under way.

What about Shannon?

As Deputies know, the Government, Bord Fáilte, the carriers and the industry launched a major campaign to develop the tourism industry this year. A combination of demand-orientated product development plans and aggressive new marketing and promotion strategies, especially lower access fares, have injected a new sense of mission to the industry.

The Government have invested scarce resources in tourism. This investment has brought forth a committed response from the tourism industry. The number of new hotels that are being built or that have been opened both round the country and in Dublin is encouraging.

We have set targets of a doubling of visitors and a £500 million increase in revenue over a five-year period. Already, it is clear that those targets can be reached. In 1987 alone a 12 per cent increase in tourist numbers was achieved. A further increase in excess of 13 per cent on top of that is expected when returns for 1988 are complete. A sustained effort to develop tourism is one of the cornerstones of the policy of this Government.

The full-scale development of our natural resources to provide employment is a key element of the economic philosophy of this Government also. The rationalisation of processing facilities is proceeding. The food industry is producing an increasing quantity of high quality products for export, with 2,000 new jobs created in the food industry over the past year. An Bord Glas has published a five-year development plan for horticulture, the forestry and timber industry is being re-organised and there has been a phenomenal increase in private planting of forestry.

The Government have approved a development strategy for Bord Iascaigh Mhara, covering the period to 1992, which sets out ambitious targets for the industry, 4,400 new jobs in sea fishing, aquaculture and processing — and the programmes by which these targets will be attained. The strategy, while conforming with the EC Common Fisheries Policy — which limits by quotas the amount of fish which may be caught — also envisages the increased exploitation of non-quota species and currently under-exploited fishing grounds. New jobs are being provided in fishing, processing and aquaculture.

The construction industry has been through a very difficult period over the last seven years but is now showing signs of recovery. The industrial, commercial and retail sectors of the industry last year recorded the first increase in output since 1981. A more substantial increase is expected this year.

The recovery of the industry, at a time when reductions in the publicly funded provision for construction are unavoidable, is a clear indication of the degree of confidence which investors now have in the Government's management of the overall economy. Our low inflation and interest rates are just two factors which are benefiting the construction industry. Increases in cement sales and improvements in other leading indicators directly affecting the industry point to an upturn in activity and augur well for a healthier future. The situation has now arrived where, for the first time since 1981, output in the industry is forecast to increase next year.

The completion of the EC Internal Market by 1992 represents both a great opportunity and a major challenge for the Irish economy in general but particularly for the construction industry. The industry should prepare to grasp the opportunities, meet the challenges, and to maximise the benefits of the Single Market. It is to that I now wish to turn.

The doubling of the European Community Structural Funds between now and 1993 represents a major opportunity in partnership with the Community to ensure more rapid growth of economic activity and employment in Ireland and will give a stronger thrust to the employment policies in theProgramme for National Recovery. Because of the new conditions for use of the funds, up to 75 per cent Community support in certain cases and the eligibility of private participation in public sector projects, the possibility for accelerating essential programmes of infrastructural improvement will be specifically increased. Following the visit of President Delors structures have been put in place for the closest coordination and consultation between the Government and the Commission through special arrangements which we have established in conjunction with the Commission.

At this stage I should like to mention that our former colleague, Deputy Ray MacSharry, has been confirmed as Commissioner for Agriculture and Rural Development in Brussels today. The Government are determined to avail of the unique opportunity presented by the Delors plan to make a major and dramatic improvement in the economic and social infrastructure of this country during the next four years.

The immediate task is the completion of an overall plan which will accommodate operational programmes at national and regional level and indicate how we propose to utilise the resources of the funds over the period 1989 to 1993. Together, they will amount to a comprehensive economic infrastructure strategy within the context of theProgramme for National Recovery.

These plans are being drawn up with the guidance of the Commission, and will be submitted before the end of March. There will, of course, be an entirely new approach by the Commission. Rather than provide funds for specific projects as heretofore, the new role of the Commission will be to agree a development strategy with us, which will be enshrined in a document called theCommunity Support Framework. The co-operation will continue through the implementation of the plans so that adjustments found necessary can be made as the need arises.

Committees have been established at local level to draw up sub-national regional programmes. These programmes which will be aligned to the national plan will elaborate in detail how the development strategies established in the national plan will be put into effect at local level.

These development strategies will concentrate on the following objectives: to ensure that industrial and service activities are built up, particularly in the sectors most suited to Irish skills and resources; to ensure that adequate training and employment opportunities are available; to ensure that agricultural structures are adapted to modern market conditions; to ensure that alternatives to agricultural employment — such as agri-tourism and forestry — are provided in rural areas; to ensure that adequate infrastructure is provided where needed throughout the country; and to ensure that the protection of the environment is taken fully into account in all developments.

There has been some misdirected criticism about these arrangements but I wish to state categorically that the preparations, arrangements, and mechanisms that we have put in place to handle this vitally important development are as detailed and effective as they could possibly be. My colleagues and I give detailed attention to every aspect of this situation.

With regard to the arrangements for the seven planning regions the working groups comprise the county and city managers and often regionally based representatives of the appropriate Government Departments. The advisory groups include the chairmen of local authorities and a wide range of representative groups with an interest in development such as CII, CIF, chambers of commerce, FUE, ICTU and the farm organisations. There will, of course, be close liaison between the two sets of groups.

The Government's decision that the Department of Finance should provide the chairmanship and secretariat for each group reflects the requirement in EC legislation, which will remain under the new regime, that the Governments of the member states should submit all plans and programmes to the Commission. It also reflects the need to ensure consistency as between sub-national programmes and between each of them and the national development plan, and takes account of the predominant role of the Exchequer in funding the public expenditure which will be involved in the programmes and the necessary alignment with the Public Capital Programme. The entire process is closely supervised by the Committee of Ministers and Departmental Secretaries.

The Government are committed to the social dimension of the internal market. I devoted part of my address at the launch of the campaign on 4 July last to the questions of social rights and social dialogue. I stressed the importance of employers keeping their employees informed of developments which are likely to affect their firms and therefore their job security. This theme has been repeated by Ministers throughout the country, and they have also urged employers to inform and involve their employees in the steps taken to prepare for the single market.

Furthermore on 28 October, the Tánaiste, on my behalf, gave an address to the ICTU Conference launching their campaign on 1992. Congress are represented on the Public-Private Sector Coordination Committee on the awareness campaign, and information leaflet No. 4 on the social dimension is the fullest and most detailed of the information leaflets published by the Government.

We are planning that the 1989 phase of the campaign will be oriented more towards assessments of the effects on individual sectors and towards action by State agencies and Departments to advise and assist in respect of the preparation efforts of the sectors and of firms.

The Government have recognised the vital importance of science and technology in national development, and a major increase has been provided in the 1989 budget for the science and technology development programme.

The Government are committed to developing an efficiency strategy for the public service, and the efficiency audit group, which we set up earlier this year, has been developing proposals in relation to key elements in this strategy. One of the main elements will, of course, be efficiency scrutinies designed to bring about — in co-operation with managements in Departments and in other public service agencies — improvements in management and administrative procedures. The aim is greater efficiency through these scrutinies and reflected in savings to the taxpayer or in improvements in the quality or effectiveness of services to the public.

In June, I attended the United Nations to speak at the Third Special Session on disarmament. The United Nations has assumed more importance once again as a forum for settling international disputes, and we have given full support, when requested, to UN peacekeeping operations. Indeed, we were very proud that the contribution that peacekeeping makes received international recognition through the award of the Nobel Peace Prize and we would like to congratulate our soldiers on that event. We warmly applaud recent disarmament initiatives which could help create a new era of peaceful co-operation between nations.

It has in many ways been a difficult year in Anglo-Irish relations and for the people of Northern Ireland. The Government have endeavoured at all times to act with restraint and moderation, and have consistently reiterated our conviction that the rule of law must be upheld if confidence in the administration of justice and security is to be built up.

The Anglo-Irish Conference, which has met regularly, has been used to exchange views on difficulties that have arisen, but also to press forward with significant economic and social reforms, such as fair employment legislation, which we have welcomed, assistance for West Belfast and proposals for a more concentrated use of the International Fund. The review of the working of the Agreement is under way, and we expect it to give particular consideration to the implications in 1992 for both parts of the island.

I have on a number of occasions invited dialogue with the political leadership of the Northern Unionist Community, without prior conditions of any kind and gladly repeat that invitation here today.

Looking to the overall prospects for 1989 there are grounds for hope and confidence and that we can further strengthen the economy, both in its output and capacity. The international economic scene which is of prime importance to us continues to offer reasonable prospects. Forecasts by the EC Commission and other international agencies indicate a further significant expansion of world trade next year and GDP growth in our major trading partners only a little lower than in 1987 and 1988. TheProgramme for National Recovery provides us with the basis on which to contain costs and improve Ireland's international competitive position.

Taking account of this positive outlook for both domestic demand and exports, there is every reason why we can achieve growth in 1989 on a par with, if not somewhat better than, that in prospect this year.

As we near the end of 1988 and look back on the considerable progress we have made in a short space of time, all of us can feel some legitimate satisfaction and pride. We have moved some distance in the right direction, but we have to consolidate and build on our achievements, if they are to be of lasting value. The forthcoming budget will be co-ordinated with the work of the Commission in developing the economic and social cohesion of Europe and will be, within the fiscal constraints imposed upon us, directed towards development and employment to the greatest extent possible.

By a combination of reductions in Government spending and the effective collection of taxes outstanding we have greatly improved the financial base. On that base and with assistance from the expanded European Structural Funds, and private sector investment, the 1989 budget strategy will be to develop economic activity and employment in every possible sector.

The political picture of 1988 as we look at it today has at least as many dark patches as highlights and, indeed, any highlights there are have been put there because, contrary to their basic inclinations, this Government have had the sense to accept the democratically expressed wishes and advice of a majority in this House, and have been occasionally obliged to do so.

There are undoubtedly highlights on the economic front. Our inflation rate is among the lowest in the European Community. Our balance of payments position is strong. The Government's financial position is strong and interest rates are at levels which are bearable for the productive sectors, although we would all wish to see them even lower. Government expenditure and borrowing have continued along the same path set out by the last Government. That has not been achieved without difficulty. It required an unprecedented consensus in this House and my party have played a central, indeed crucial role in bringing about that consensus. I recognise that frequently, although not always, we have been assisted by another party in Opposition in bringing this about. I acknowledge also that their voices of reason and sanity, plus a few in the Government party, have assisted in maintaining a steady and sensible course.

The Taoiseach has under-sold the value of the preparations that had been made before he took office. He referred to the previous Government having reduced the Exchequer borrowing requirement from 16 per cent to 13 per cent. Of course, they did a great deal more than that. It was reduced from around 23 per cent which would have resulted from Fianna Fáil policies when we first took office to 10 per cent as proposed in our 1987 budget proposals. As a general rule areas where the Government's economic policies have been favourably received have been areas where they have accepted advice from this side of the House. Stabilisation of the debt to GNP ratio is only one step in a much longer process.

Indications would suggest that the Government will be looking at an Exchequer borrowing requirement for 1989 of somewhere in the region of 5½ per cent to 6½ per cent. We will have to wait a little longer to hear that. That is being welcomed in some sectors and I am quite sure that it will be presented by the Minister for Finance on budget day as being a very substantial step forward. In relative terms, that may well be. The fact of the matter is, however, that if we have been running a series of deficits over a period of years, that must inevitably be replaced by a period during which we run a series of surpluses. Otherwise we would never get away from the problem the Taoiseach rightly identified here, the burden of repayment.

Of course, there are some very black spots in the political history of 1988 and Anglo-Irish relations would be one of those black spots. I do not know, Sir, if it is of any significance that the question of Anglo-Irish relations got three paragraphs in a 20 page, 40 minute speech from the Taoiseach. The fact is that we end this year with Anglo-Irish relations just as bad and just as strained as they were at the beginning. Neither of the two Governments concerned come out of this year without blame. At the beginning of this year, we had the Stalker-Sampson affair and an extraordinary succession of other problems following hard upon it. An insensitive British Government took a series of steps which a careless Irish Government had failed to anticipate by not using to the full the mechanisms of the Agreement. As we come to the end of this year, we have a row about extradition — a row which flamed up because Government sources here indicated that an extradition request would be refused even before it could have been properly considered.

In the event, the Attorney General went beyond his proper role. In doing so he has, in my view, created a whole new area of uncertainty in our law. If he had allowed the courts to carry out their function under the Constitution, that uncertainty would not now exist. I am worried about the range of possible interpretations which can be put on this episode, both abroad and here. Anybody who watched last night's RTE's 9 o'clock television news must share my concern.

We must be clear about one thing. There is no room for ambivalence or equivocation about bombers and murderers. I would like to know when the Taoiseach is going to say unambiguously that there is no quarter in this country for the Provisional IRA or for their fellow-travellers, under any of their guises.

When are the Fianna Fáil backbenchers going to say it?

I want to know when we are going to see real action that clearly recognises and identifies the immorality and the obscenity of the Provisional IRA and that protects decent citizens.

Another year has passed without any visible signs of progress in the political reconstruction of Northern Ireland. This Government have shown no sign of appreciating the fact that the next step towards sanity, peace and reconciliation in Northern Ireland must take the form of responsibilities being developed to the community in Northern Ireland. Throughout this year, this Government have consistently refused to recognise that fact.

There is deprivation in Irish society. Whatever definition we use, whatever yardstick we apply, nobody in this House can be in any doubt about this. Deprivation and poverty are to be found in every city, in every town and throughout rural Ireland. It is impossible to spend a day moving around in our community and not find families and individuals who are unable to provide for their basic needs, whose needs are not properly catered for by our public services, no matter how narrowly we might define the State's obligation to provide those services.

Unemployment and emigration cast monstrous shadows over the picture of 1988. The positive trends in the main economic indicators have, so far, failed to produce the growth in employment that we need to get almost a quarter of a million people back to work and to staunch the haemorrhage of emigration. The Taoiseach referred to progress in employment during the course of the year. He referred to an increase of 6,000 in the numbers of people employed. I would like to know which measure the Taoiseach is using. He knows perfectly well that there are two measures of the change in total employment in this country which show a totally different picture. One shows an increase of 6,000, the other shows a reduction.

The Taoiseach also mentioned, to underline his point about employment, the report on progress on job creation drawn up by the Central Review Committee under theProgramme for National Recovery. That report speaks of an increase in employment in manufacturing and international services of 20,000 during the course of 1988. It does not say anywhere in the report that this is, in fact, gross job creation, but that is what it is. I wonder is it, in fact, gross job creation? Looking through the report my attention was caught by Table 6 — estimated job creation in tourism, 1988. Direct — 3,000; indirect — 2,000; total — 5,000. That looks like a substantial proportion of the 20,000. Then we look at estimated breakdown of direct employment creation — this is of the 3,000. That gives accommodation — 1,300; food and drink — 300; transport — 600; entertainment — 200; and this is the one that really caught my eye — clothing retail outlets — 200; other — 400.

Is it the case that, even with an increase in employment in tourism, none of our retail traders all around the country had any spare capacity that none of them could deal with extra tourists without getting in extra staff? We all know that is not the case. So I made some inquiries and talked to some of the people who had been involved in putting this report together. I have been told that these are not actually firm figures; they are estimates. It is suggested that if you have 3,000 people directly employed in tourism, you get another 2,000 on average, using an average multiplier. That is what that is. So 3,000 of these 5,000 jobs are expected to be there without anybody being all that sure.

Then I wonder, if 3,000 direct jobs have been manufactured by that process, how reliable is this figure of 2,000 indirect jobs? I find again what is being done is that it has been estimated on a rule of thumb that X amount of money spent in tourism gives rise to X number of direct jobs. You push the argument a little further and say that if there are X number of direct jobs then, on average, normally you have X number of indirect jobs. It assumes that all of it is extra, that there is no spare capacity in our economy. We all know, without the slightest shadow of a doubt that, if there is any part of our service sector where there is spare capacity, it is in the tourism sector. I am not sure the Taoiseach should be claiming much credit for progress on job creation, certainly not anything like what he was claiming this morning.

A rational, clear-headed and long overdue political consensus has been the key to getting us on course towards resolving the financial side of our problem. It must surely be clear that a similar approach is needed to overcome the human tragedies of unemployment and emigration. An economic consensus, painfully brought about, has made the productive sectors of our economy increasingly more competitive, and has allowed us to strengthen our trading position. We must push it further so that it can get our people back to work and bring our sons and daughters, brothers and sisters back home to work, which most of them want to do.

Some of the things that will help us to do this can be very readily identified. One of these areas is tax reform. We must reform our tax system to take out the obstacles that it creates to employment. We must replace those parts of our system which discourage employment by measures which raise the necessary revenue in ways that do not keep people out of work. We must replace those parts of the system which discourage enterprise and initiative by measures which produce the same overall revenue but which leave workers and investors in all sectors, not just with a reward for their effort, but also with a positive reward for extra effort, innovation and initiative.

I deeply regret the fact that we have not seen progress in this direction during the course of this year. My colleagues and I have made it clear that we are prepared to enter into discussions with the other parties in this House — all the other parties — to find together ways in which we can successfully reform our tax system. It is no easy task. It will demand imagination and it will require very difficult decisions, but it must be done.

The Government have shown no sign of appreciating the need for this. I am given to understand, from what we hear from financial establishments, that we will see, in next year's budget, the achievement of one of the Government's objectives in the area of taxation, indeed, the Taoiseach mentioned it this morning, that two-thirds of all taxpayers will pay tax at no more than the standard rate of taxation. When we realise that the total cost of this move will be no more than £30 million, we can see clearly what a modest ambition this is. That is not a reform of taxation, it is no more than a minor adjustment.

I recognise that fact that two other parties in Opposition have shown that they, too, recognise the need for tax reform. They have published proposals. Up to a point, I applaud them but they have failed to recognise that real reform needs real support on all sides of this House. The tax proposals made by the Labour Party and by the Progressive Democrats have faded from the political consciousness of this country, not because of any intrinsic lack of merit, and not because of any lack of commitment on the part of their authors, but because of the failure of those two parties to recognise the necessity for joint action in the House. Most of all, they have sunk because this Government have failed to appreciate the need to apply the collective wisdom of this House to tax reform. Reform is not simply a question of taxation policy, but a much more fundamental social and economic issue.

To be realistic about it, I would have to recognise that the opportunity of putting anything concrete in place for 1989 has now been lost. However, it is never too late for common sense: I reiterate the willingness of my party to enter openly and constructively into a real all-party debate on tax reform in this House with real targets and real objectives. I again invite the other parties in this House to participate in that work and, in that way, to make this House an instrument of social and economic progress.

There are many other dark areas in the canvas of 1988. The Taoiseach spoke this morning about the structures which have been put in place to plan our participation in the expanded role of the Community Structural Funds. He referred to certain misdirected criticism. From where I stand, the criticisms are extremely well directed. I am aware of all the Taoiseach has said; I am aware of all the structures that are there; I am aware of all the objectives that he set out in some detail today, but the people who are involved in the system, making the decisions, and the people involved on the consultative side are not saying the same thing as the Taoiseach is saying. They have a totally different view and they agree with me that there is no real level of involvement by the private sector or by the Community in these plans. That is a serious lack and one which I am afraid will work to our disadvantage because we need to have involved in that planning process the people who will make those plans turn into jobs.

The Government this year have ignored the need to modernise the management of our health services along the lines set out by my party in this House a few weeks ago. Whatever the level of total health expenditure, it must surely be beyond argument that we need to get from every million pounds spent the maximum possible level of service for the sick and the needy. The only comment that the Government seem to be able to make about this is to say that in the two years before they took office the health boards over-spent. We all know that and the reasons for it. The health boards over-spent because they were dominated by Fianna Fáil members and appointees.

Deputies

Hear, hear.

Their main concern was in opposing any constructive plans rather than using the available resources to provide a health service that would meet the real needs of our people. To be fair, I recognise that the Government have, on occasions, attempted some innovations. They have, from time to time, tried to exercise some imagination and the results generally have been bad.

We have before us a Planning Bill which is, in very large measure, a speculators' charter. That is not the kind of imagination we need and that Bill will need extensive amendment. The Government adopted a very inventive approach to the review of constituency boundaries. In that case, the Minister for the Environment allowed his imagination to run away with him and he has been reminded of that by a great many of his colleagues on that side of the House.

The Government have adopted a truly imaginative approach to the disbursement of national lottery funds. Indeed, the imagination has often bordered on fantasy. The result has been to bring the Government and the national lottery into disrepute. I am glad to see that moves are afoot to rectify that situation.

How is the committee going?

In contrast to all that misguided innovation and fevered imagination, the Government have displayed a most remarkable coyness in answering questions in this House. Time after time, questions which should have been answered by the Taoiseach have been transferred to other Ministers, to receive totally unsatisfactory answers.

Hear, hear.

Time after time, perfectly reasonable questions on matters of fact have been refused on the grounds of lack of ministerial competence. That lack is indeed noticeable and the plea is invoked so often that it makes a sham of parliamentary questions.

There are other areas where the Government have shown greater reluctance — or an inability — to arrive at decisions where the issues are quite straightforward. We have waited far too long for a decision on Army pay. It is time to stop the prevarication and announce a decision.

It has been rumoured for months that a decision on the relocation of search and rescue services was imminent, yet nothing has happened. How many more people will have to drown before we see a decision on that? We need decisions that will simplify our social welfare systems. The anomalies are well documented. There is no arguing with the fact that we have far too many different kinds of means tests in our system. Here too it is time for action.

We need decisive Government action to secure European Community decisions that will live up to the promise of the Single European Act. We need decisions about the Agricultural Guidance Funds and the Social Fund. A couple of weeks ago the Tánaiste and Minister for Foreign Affairs expressed some satisfaction at the fact that in 1989 the rate of Community funding under the regional fund would be 75 per cent. That is grand as far as it goes. We had also expected that in 1989 the rate of Community funding under the agricultural fund and the social fund would be 75 per cent. No reference is made to that and I would like to know when we will see action there and when we can expect that part of the promise of the Single European Act to be put into effect.

We need decisions on the agricultural guidance fund so that the work of modernising Irish agriculture and equipping our farmers to diversify can proceed. There has been too much uncertainty about this and about the ability of Teagasc to play the role which they should play in developing our farm resources. We need Community decisions on the future course of the social fund so that we can get on with the job of equipping our people for employment in an expanding Irish economy.

Finally, we need this Government to realise that there has been a major change in Irish politics and that this House can be much more than a forum for debate — it can be the place where the political energies of the Irish people can be properly harnessed to the task of social and economic development.

It is a tragedy for this country and a boon for this Government that public attention is necessarily diverted at the moment on to something as relatively unimportant as Fr. Patrick Ryan and his activities. Anglo-Irish relations, on the health of which so much depends and so many lives depend, are put in jeopardy by the attention given to the activities of this man. Emotions are raised and racial hatred is spewed out by people like Labhras Ó Murchú whom we heard on RTE yesterday morning giving vent to his spleen in a venomous fashion.

The real extradition about which all the Irish people should be genuinely concerned is what I call the EEE, the enforced economic extradition of 40,000 or more young Irish people from their own country every year. That is the crime that should really concern the whole Irish people. That is a crime for which the Government must at least in major part be held responsible. That is the crime for which they should be returned for trial.

Notwithstanding this enforced economic extradition, and in addition to it, within the country nearly a quarter of a million of our people are extradited into the internal exile of unemployment. The Government shrug their shoulders as if there were something normal about this and get away with it.

What were the safeguards negotiated or volunteered by the present Irish Government for those Irish people in Britain or in the United States? What public meetings were held in the past 14 days to examine the problems besetting those people? What motions were tabled or considered at any parliamentary party meeting in the past fortnight?

That is the real perspective in which the political convulsions of the past 14 days need to be set. Remember, Irish people are being economically extradited at the rate of nearly 800 each week from this Republic, and they receive very little attention, and certainly no safeguards whatsoever. The absence of safeguards is borne out by the fact that last year a single Irish emigrant welfare centre, that at Camden in London, helped a staggering 2,500 Irish children and teenagers who were in difficulties because they had to face economic extradition from Ireland, and because they enjoyed no economic safeguards whatsoever when they reached Britain. Only this morning I heard one of those people on his return under a scheme generously and imaginatively put together by a Tipperary man, Mr. Maguire, describe how he had lived in the part of London they now describe as the cardboard city for the past number of months.

That is not to overlook the fact that serious issues of human rights and appropriate legal safeguards are raised by the Ryan affair — they are and I will return to them in some detail shortly — but there are parallel issues affecting the welfare of far more Irish people which turn on the total failure in human terms of the economic policies of this Government. They are scarcely the subject of saturation media attention or any convulsions in public opinion. They should be because the greatest problem besetting this country today is its failure to provide the economic opportunity for its people to realise a living in their own land, the chance to rear a family and to provide for their economic wellbeing.

Since 1986, the sole annual allocation for emigrant welfare overseas has been £250,000, and no further increase in that figure is proposed for 1989, this, despite renewed pleas from the Episcopal Commission on Emigrant Welfare for added funds. That paltry £250,000 is hardly adequate to meet the needs of the welfare centres in London alone. Remember, last year, in that city 6,000 Irish people had to be helped, and the numbers are increasing all the time. I have no doubt that providing reasonable funds for these marvellous welfare centres is a far more worthy cause than allocating national lottery funds to various leisure activities and things like helipads around the country.

In the United States, no welfare financial aid is provided and much essential welfare work, which our Government are ignoring, is being done exclusively by the Catholic Church. This, too, is a betrayal of those who have to face enforced economic extradition from their own land because of its failure to provide reasonable economic opportunity.

The full scale of the emigration crisis will be graphically evidenced over the Christmas period when thousands of our emigrants will be returning home. Every street and parish will witness the phenomenon, people grabbing a rare opportunity to be with their families again, and then in the week after Christmas, and without any economic safeguards negotiated by our Government, their enforced economic extradition will resume. The only interest this Government will show in them is a further levy of another £5 tax on each of them at ports and airports as they leave once more.

The Government are making the most appalling mess of the health services. They are failing to reduce our spending on health and, at the same time, through their incompetence, condemning tens of thousands of people to intense suffering and delay, depriving the less well off in particular of treatment that would be regarded as the norm in any civilised country.

Only yesterday the Higher Education Authority published figures for graduates from our universities showing fewer and fewer of them getting work in Ireland, more and more of them getting work abroad and fewer and fewer of them in a position to make any return to the taxpayers who have largely paid for them. Nearly all our emigrants, both graduates and others, are going to Britain and North America because of their lack of linguistic ability. What an appalling indictment of an unbalanced educational system that we have these thousands of brilliant graduates, heartily welcomed in other countries, unable to speak any language other than English. Their equivalents in other European countries are often fluent in two, three or even four European languages.

What, I ask, is being achieved by improvements in some of our macro-economic indicators if none of this improvement translates itself on to the ground for the benefit of the people? Of all the factors causing the misery of unemployment and emigration today, the greatest single cause is the crazy system of taxation which we insist on maintaining in this country. This Government no longer have any excuse for maintaining that situation from the January budget onwards. The Progressive Democrats have spelt out in a detailed document of 60 pages within the past few weeks exactly how this problem of excessive personal taxation and the highest tax wedge in the world between the take home pay of an employee and the labour costs incurred by an employer, can be rectified. If this work would only start and the public could be confident that it had started, the fact that it will take five years would not matter that much. Personal confidence which is now absent would be restored and people would see a light at the end of the tunnel which is searched for in vain today.

This Government may numerically be a minority Government but they are in fact in parliamentary terms the most privileged and cosseted Government since the foundation of the State. No other Government ever got such support and encouragement from those who are supposed to be its parliamentary and political antagonists. This Government have been treated with a generosity which they never extended to any of their predecessors when in Opposition. They have therefore, a duty that far exceeds that of a normal Government. That duty is compounded by the wretched economic and social state of this country and in particular by the atmosphere of disincentive and penalisation of effort which is endemic here.

This Government have their opportunity next month. If they fail to grasp it then those of us who sit on the Opposition benches might do well to reconsider our attitude. No Government have ever got or will again get the tacit parliamentary support that Fianna Fáil have today.

In this House we are subjected to lectures because we object to the personal and political abuse of public moneys like the national lottery funds or to the reintroduction of constituency gerrymandering here after its absence for nine years. It is time we turned the tables on that Government who do such lecturing and inform them that collectively as an Opposition, even if we are not in ideological agreement among ourselves, we are not prepared to tolerate the continued debilitation of our country and people by a Government who uniquely have the opportunity to take the steps that are necessary to turn it around.

Some at least of what the Government are doing to-day is what they derided us for suggesting was essential three years ago and which they solemnly undertook to the Irish people never to do. I am prepared to forgive them their lies in that regard if they will go ahead now and steal some more of our clothes. The most comprehensive and best argued method of attacking our economic and social difficulties has been put before this country within the last few weeks by Deputy Michael McDowell on behalf of the Progressive Democrats. It is coherent, practical and sensible. It cries out for implementation. It is politically courageous. It takes the risks and shows the leadership. It is unique in Irish political history and it demands adoption and support from anyone who is sincere about the wellbeing of our people.

I notice that the Taoiseach devoted his speech almost exclusively to economic matters and that in particular he did not deal with the sense of fear that exists so widely and deeply today. I had a brief look before I came in atThe Irish Times of today and I saw on page 10 three juxtaposed news reports that I think are interesting. They are all relatively small and all in the relative obscurity of page 10. On the left in a few paragraphs The Irish Times reports that in this city yesterday there were three armed robberies, and that a total of £118,000 was taken in three different places. This news item merits only a few paragraphs on an obscure inside page. This is because we are led to believe that such crimes are the norm. I must watch that space tomorrow and see how many armed robberies there were in Dublin and in other parts of Ireland today. The average will probably be maintained anyway. In one of those robberies a sub postmaster and his family were held in their own home at gunpoint all night. That was terrifying for them but the story was told in a few paragraphs. I am not criticising The Irish Times. They reflect the reality of life here today. RTE hardly mention these things now; if they do, it is in one sentence.

Beside that short report is a report of a case in the Special Criminal Court yesterday. Three men were jailed for armed robbery at, of all places, the Limerick Greyhound Stadium, a place with which I once had an association. A description is given of robbery by four men who were heavily armed. They were convicted of possession of fire-arms and ammunition with intent to endanger life and of robbing £7,900. At the time of the robbery they were disarmed and arrested by two gardaí, an act described by Mr. Justice Barrington as one of extraordinary courage on the part of the officers concerned, as indeed it was. When these men were sentenced to relatively mild terms of imprisonment they shouted, "tiocfaidh ár lá" to cheers and applause from the public gallery. Ní thiocfaidh so far as I am concerned. The superintendent at Henry Street station in Limerick told the court that the robbery at the stadium was planned and carried out by the Limerick IRA assisted by the IRA from Listowel. Was that not nice of them to come up and help?

True patriots.

These are the people who love our country so deeply they have to engage in this kind of activity, and this sort of thing is tolerated and taken as normal. Right beside that is a report of a County Cavan man jailed for four years yesterday in the Special Criminal Court for unlawful possession of eight mortar bombs, eight launching tubes, a four bomb launch rack and other explosive substances within a few hundred yards of the Border last July. That gets a very small piece because it is not, apparently, regarded as abnormal.

We will regret Patrick Ryan yet.

At present members of the Defence Forces are leaving in their hundreds. There is no doubt they would be leaving in their thousands if they had anywhere to go, but they have not and that is why they are only leaving in their hundreds. Within the last few weeks we had the extraordinary event, for the first time in 65 years or more of the proud history of the Defence Forces, of a High Court action taken by an officer of the rank of commandant to get out of the Air Corps. The court heard his case for two days and said to him that the Defence Acts make it clear that, whether it is just or not, the Minister for Defence has the power legally to refuse him the right to leave the Army no matter how justified he might be in wanting to do so. Consequently, his application was refused and the court took the unprecedented step, in circumstances in which a plaintiff had entirely lost a case, of awarding him his costs in full against the Minister for Defence because in the view of the court the man was more than entitled to take the case to court.

The security of this country is a cause of grave concern. I could not help noticing over the last year that a great deal of the energy, and it is undoubtedly considerable, of the two men within the Government pledged to look after security in particular is expended on running around Limerick West on the distribution of moneys that do not have anything to do with their jobs.

I have had the opportunity, since the Attorney General's statement in the Patrick Ryan case was issued last Tuesday, to consider it in some more detail than was possible in trying to react to it that afternoon. I find that the views I expressed then still stand. However, I want to take the opportunity this morning to amplify those views somewhat and in particular to express my reservations about the functions which the Attorney General has now taken on himself without any statutory authority or specific expressed constitutional authority.

The first point that should be noted, and which I think has not been at all properly adverted to, is that the Attorney General has not given a "direction" as he is empowered to under the Extradition (Amendment) Act, 1987, not to execute the warrants in this case. Rather he has given what he calls "advice" to the Commissioner of the Garda Síochána. This is of fundamental importance.

A great many Members of this House, including myself, had enormous reservations last December that the Attorney General should be given any power of decision in these matters because it was constitutionally doubtful and would also inevitably politicise extradition, as, of course, it unquestionably has. The House finally decided last year to give him such a power by a majority vote and decided earlier this month to make that power a part of the law indefinitely. The power so conferred on the Attorney General was confined to two specific points, namely that he should be of the opinion that there is a clear intention on the part of the requesting State to prosecute and that such intention is founded on the existence of sufficient evidence.

This House did not attempt to confer on the Attorney General any power to make a decision in these matters outside of the two specific points. On reading through the three Extradition Acts now in force, that of 1965 and the two Acts of 1987, it appears that there is no reference whatever to the Attorney General in the Extradition (European Convention on the Suppression of Terrorism) Act, 1987, and there are only two minor passing references in the Extradition Act, 1965, to the Attorney General, each of which is quite clearly a reference to him in his then capacity as the Public Prosecutor, which functions are now performed by the Director of Public Prosecutions. Therefore, he had been given no functions whatever by statute in relation to extradition in his current capacity as Attorney General until the second Act of 1987. Article 30 of the Constitution confers no powers on the Attorney General relating to extradition and it is not at all clear that he has any powers in relation to extradition, or related matters, of the nature referred to by the Taoiseach on Tuesday last at Question Time, when he referred to the Attorney General as "the public forensic defendant".

If the Supreme Court decided that it could be inferred from the Constitution that the Attorney General had such powers, then no doubt one would accept that. But in his statement of 13 December, he appears unilaterally to have conferred these powers on himself. Of their nature, they have all the appearance of judicial powers. He is arrogating to himself the right to vindicate the constitutional and fundamental rights of an individual citizen. That is a function of the courts on the application of the citizen. The Constitution confers that duty and right on the courts. It does not confer it on the Attorney General nor is it one of the duties which has subsequently been conferred on him by statute.

It follows from this that it can be very strongly argued that the Attorney General's refusal to issue a direction under the Extradition (Amendment) Act, 1987 and his insistence instead on "advising" the Commissioner not to endorse the warrants, purports to arise from some vague residual constitutional power which the Attorney General feels he has. I fundamentally question its existence. I do not accept that it exists in a matter such as this until it is either conferred by statute or held by the Supreme Court to exist. Neither has happened. He is, therefore, effectively substituting conclusions of his own for judgments which might or might not have been made by a court. With the greatest respect to the Attorney, I do not think that he can do so.

Since when have Attorneys General run around trying to vindicate the rights of individual citizens? Did the Attorney of the day do anything to vindicate the constitutional right of Deputy Kennedy when her telephone was illegally tapped by order of at least one member of the Government? He did not. On the contrary, he advised the Government on how to try to resist her claim. The High Court vindicated her, on her own application.

The Progressive Democrats have always argued that the proper place for safeguards to operate is in the judicial domain. Time and again in the debate on the 1987 Bill, we argued that it was inappropriate to give a power of decision of this kind to somebody other than a judge. Now that he has exercised his purported power in this particular manner, the Attorney's own actions have underlined the validity of our concern because he has gone way beyond the scope of the specific statutory powers that were given to him. And remember too, that in the past year not one single case under this Act even got to the High Court, let alone the Supreme Court, to have its validity tested.

This is all the more remarkable when one remembers that in the course of his statement, the Attorney has made it clear that, on two of the warrants at least, he is satisfied that the matter should proceed on the basis of the considerations which he was required to take into account under the 1987 Act.

It may well be that a court in this country would come to the same conclusion as the Attorney did in regard to the whole question of a fair trial having been prejudiced. However, it was and is a matter for a court to come to such a conclusion, not a matter for the Attorney. It is particularly not a matter for him when he is of necessity operating in private and when his lengthy statement does not even refer to the nature of the four charges on which Mr. Ryan is wanted, let alone to the nature of the evidence on which the application for the warrants is based. This is the very thing we warned against a year ago — effectively, it is the administration of justice in private. The Constitution specifically forbids that in Article 34.

It is a chilling thought that this sort of decision is made in this way by a non-judge whose term of office is at the whim of a whimsical Taoiseach who might find the Attorney's conduct unbecoming at the drop of a hat. Some other office holder could just as easily have been designated in the 1987 Act to perform these functions, for example, the Director of Public Prosecutions, the Chairman of the Bar Council, the Dean of the Faculty of Law at UCD and so on.

If one of these was so designated, would it be argued that he had all the residual constitutional powers that the Attorney now arrogates to himself? Clearly it would not. How, therefore, can these powers reside in the Attorney when fortuitously he just happens to be the person so designated? Remember, too that an amendment to designate the DPP was seriously considered last year.

It is also interesting to note in the Attorney's statement that he refers on no fewer than seven occasions to a jury and to jurors. It is quite clear, if the proposed defendant in this case was sought to be extradited to a jurisdiction where criminal jury trials in terrorist type cases are not the norm, that the Attorney would not have prevented it or advised the Commissioner against endorsement. Therefore, if it had been sought to extradite Fr. Ryan to Northern Ireland it is clear from the Attorney General's statement that he would not have prevented it because he would have been tried there by one judge without a jury. This is rather extraordinary.

The Attorney General's findings in respect of at least two of the offences which must relate to serious explosives offences that there is an intention to prosecute and that there is sufficient evidence against Fr. Ryan, backed up by his statement that the charges "are of a most serious kind, and they should be investigated by a Court", cannot now be ignored. These facts raise this fundamental question which must now be faced: will justice be done and be seen to be done in this case if Fr. Ryan does not stand trial anywhere? If he does not, will justice have been achieved? Aprima facie case exists against him, not in my opinion, but in the opinion of the Attorney General, on serious explosives charges for which the prescribed penalty is a maximum of 20 years imprisonment or life in certain instances. Are defendants the only people who have rights? Perhaps we might ponder on these questions and also a bit more than we do on the deaths of innocent people in Northern Ireland, Brighton, London, Belgium, Germany and elsewhere.

The whole unsatisfactory affair leaves further questions to be answered, and in conclusion I will sum them up in four: (1) is it not now more obvious than ever that the law on extradition needs radical review and a systematic restatement? (2) Is it not now obvious that in the interests of coping with international terrorism a European Community institution is necessary along the lines I proposed here last week where people are given up for trial in a Community court in Luxembourg in matters of this kind rather than handed over from one specific national jurisdiction to another with all the attendant emotional and political problems? (3) Does the Attorney General's function, as now interpreted for him by himself and not by the courts, whatever the merits of his decision, not amount to a form of star chamber justice always vulnerable to charges of secrecy and arbitrariness? (4) How can the Attorney General issue a lengthy statement seeking to justify his decision when he does not even specify the charges he was considering or make any reference to the nature of the evidence on which they were based? Does this not lead unnecessarily to a deeper sense of mystery and misunderstanding which could so easily have been avoided by the use of the courts?

At the outset let me say that I agree with a great deal of what Deputy O'Malley said this morning and, in particular, with what he said about what one might broadly call the security situation. In saying that, I refer Deputies to the Taoiseach's reference to the fact that on a number of occasions he has requested dialogue with the political leadership of the Northern Unionist community without prior conditions of any kind and he gladly repeated that invitation today. The reiteration of that invitation is of particular importance at this point in time. I equally believe that both the Taoiseach and the Tánaiste find themselves in a unique positionvis-à-vis their own party in that they have unparalleled control over their party on this issue, far more control than the Taoiseach's predecessor ever had over his party and who was never given the opportunity to enjoy such control. It is of crucial importance that progress should be made and made rapidly. Two wasted years have passed in which the status quo remained and during which we waited for something to happen, but nothing at Governmental level has happened to date.

The Labour Party on occasions have made major efforts to try to make progress and the leader of my party, Deputy Spring, at great personal cost, took a number of initiatives in the middle of this year. When he went to America last July and addressed the American European Community Association he pointed out that one of the worst features of recent months has been the diminution of trust not only between the two communities in Northern Ireland but also between the Governments of Dublin and London. In many ways these were prophetic words on the part of Deputy Spring as we now know that the trust between the Dublin and London Governments has been further diminished and this is a matter of great concern.

At that time Deputy Spring tried to open up thinking in regard to the Secretariat and, as Deputies will recall, there was much misrepresentation of and unfortunate reaction to the comments he made at that time. At least he made an effort to open up minds to the prospect of change and in doing so he courageously raised fundamental issues. I urge the Taoiseach and the Tánaiste very strongly to start afresh and to endeavour to begin dialogue of an effective nature with the Unionist community in particular. I believe this can be done and I am glad that the Taoiseach has issued an invitation for talks with no prior conditions of any kind. That is of signal importance.

The Taoiseach has been the prisoner of his party's past and of his own statements. We are all the prisoners of our own perceived prejudices and of the way in which we emerged as leaders of our parties. They must now be shed and I believe that the Taoiseach and the Tánaiste have the strength to bring documents and initiatives forward from the Taoiseach's office and the Department of Foreign Affairs on a joint basis and to move forward. An opportunity exists. The Taoiseach could emerge in the middle of 1989 with a framework which will make a lasting contribution, which will continue the work began with the Forum, carried on following the signing of the Hillsborough Agreement by the Secretariat and which is desperately in need of a push forward. There has been a side-tracking of the issues and we have had to face many problems, the most recent of which related to extradition but these problems are transient and by and large have existed in the history of our relationship with Britain. These problems are secondary and whether or not relations with the British Prime Minister are tense this, too, is a matter of historical relevance in our efforts to resolve the major problems we face in that regard. The Leader of my party was unable to attend this morning due to a family bereavement but I have no doubt that like me he would share in that opportunity with the Taoiseach and the Tánaiste so that we would see major changes in this area in the New Year. I believe this can be done and the Taoiseach showed that he is totally in control of the situation when he rightly removed a rather obnoxious streak of greenery from his party at their national executive in terms of his endeavour to heighten reactionary elements and traditions within his party which are unconducive to a move forward in this area. I believe the Unionist leadership in Northern Ireland, fragmented as at times they might appear to be, are ready and willing and need support from the Taoiseach and the Tánaiste to move in the right direction. I think that both the Taoiseach and the Tánaiste know of our desire to be constructive in that regard.

I do not believe a move in that direction could be made if some other Government were in office and God knows, we went through much trauma in our efforts to bring about the Anglo-Irish Agreement in the first instance. However, I believe another leap forward can be taken but it must be a leap forward in which there is total openness and a determination to resolve the issue, even if it is within the framework which has so far not been acceptable to the Taoiseach or his party. This historic opportunity can and must be grasped — and even if Mrs. Thatcher has a jaundiced view about the exercise, her view is secondary in terms of our relationship with our fellow Irish men and women in Northern Ireland — because if it is not we will drift again in the intermittent genocide which has engulfed this island for the past 20 years. This intermittent genocide has coarsened our children and has lessened their respect for human life. When my children look at these events on television they blink in horror but they only blink for a short while and they regard them as part of our cultural ethos. Events which we would have regarded with absolute horror in the sixties are accepted as commonplace in the eighties. We do not want our children to grow up in a climate of ongoing genocide within Northern Ireland which could engulf this island as a whole. As both the Taoiseach and the Tánaiste know, with tonnes of explosives, arms and high velocity weaponry still at large within the 26 counties this danger is ever present and we have to be exceptionally careful in this regard.

I concur with the critical comments made by the Leader of the Fine Gael Party and the Leader of the Progressive Democrats in relation to the unfortunate role of the Attorney General. All of the reservations on this matter expressed by the Leader of the Labour Party and by Deputy Mervyn Taylor during the past 18 months, have, unfortunately, been borne out — reservations about the extraordinary role which was developed on the Attorney General under the Extradition (Amendment) Act. As a non-constitutional lawyer, as a non-lawyer at all, I have no doubt that the Attorney General in making his statement and giving the implied decision and advice which he finally promulgated probably exceeded his legal powers. Should a legal case arise as a result of this case — and I do not know how it can be referred for legal definition and adjudication, but it can happen — I have no doubt whatever that our views in this regard will be vindicated.

Lest the understandable reaction which people in this country rightly had to the appalling mishandling of the situation both by the British Prime Minister and some of her senior advisers, should in any way cloud the reality of the situation I must refer — and I thank the Taoiseach for reading this into the record — to the Attorney General's statement. That statement said that in respect of the charges in two of the warrants, the Attorney General having considered such information as he deemed appropriate had formed the opinion that there was, on the part of the relevant prosecuting authorities, a clear intention to prosecute and that such intention was founded on the existence of sufficient evidence. With due deliberation, the Attorney General has put in "sufficient evidence". It should be put on the record that the Belgian Prime Minister apparently stated that a Belgian court was of the view — a view upheld by the Belgian Appeal Court — that the warrants were valid under their jurisdiction and conveyed that view to the Belgian Cabinet.

Therefore, those who raise their fists at victory celebrations in Tipperary or who sing the partiotic songs of the Wolfe Tones should be under no illusion but that that statement in relation to the Father Patrick Ryan case is written into the record of this House. In the event that the advice given by the Attorney General to his counterpart in the United Kingdom is followed in relation to the Criminal Law (Jurisdiction) Act, 1976, I can assure the Taoiseach that in the event of the rigour of the law being applied he will have my support in any required Government action in the further prosecution of this matter. When there are several tonnes of Libyan explosives and weaponry of an extremely dangerous nature still at large, we cannot, under any circumstances have members of the Provisional IRA or their sympathisers and associates being given the slightest impression that we are soft, easy or ambivalent, or that we will tolerate in any way illegal subversive activities within the Irish Republic. That cannot be stated too often or brought home too frequently to these people. I put my strong view on record lest the slightest succour be sought either by Patrick Ryan or anybody else from the events in this House, from the understandable infuriation which Margaret Thatcher caused us in her handling of this matter or from the outbreak of anti-Irish sentiment, particularly in the United Kingdom media.

Next year I will be some 20 years in this House. Christmas is a time not just of joy but also of reflection. My reflection coming up to the twentieth anniversary of my first election to this House is that, except for a relatively small number of Deputies, the real hidden Ireland is not on the agenda of this House. Our emigrants are not on the agenda and there was not even a reference to them in the Taoiseach's speech. The appalling plight of the long-term unemployed and their children was outlined in the report of the Combat Poverty Agency and confirmed in the report of the ESRI. I understand it was the Taoiseach's decision to give them an increase of 11 per cent in this year's budget and I commend him on that. It is nevertheless appalling that many of them have to live on £40 or £50, while families have £60 or £70.

We must be conscious of the plight of people awaiting admission to public hospitals but who have no prospect of admission to hospital over Christmas and no prospect of care, having waited perhaps four hours in out-patient departments. Such matters are not on the agenda. They represent the hidden Ireland. Many of our public psychiatric patients are wandering the streets, having been put out of institutions without community care being provided.

I know of an elderly man suffering from an acute abscess under his arm and who went into a public hospital in the past few days. He was told to fast before coming in but the ward to which he was sent was locked. He was told it was being painted. He knew the ward was not being painted and that it had actually been closed. They told him to go home, stay fasting and come back the following day. That is the kind of thing which is going on. If this man had VHI membership he would be admitted in ten hours. That is the hidden Ireland.

A woman in Galway urgently needed the removal of two cataracts from her eyes. She was told to come back in two years, although she was going blind. That is indicative of the length of the waiting list at Galway Regional Hospital. They told her they would take her in privately next week if she could pay £2,000. That is the hidden Ireland which is not on the agenda.

In my constituency elderly people are selling their homes, investing their £60,000 or £70,000 and going into nursing homes where they pay £280 a week often for a bed in a room which they share with three or four others. There are no geriatric beds in St. Michael's Hospital. There were 140 beds but there are now 60; it will be 70 or 80 next January. They are more or less closing down for Christmas anyway, as is the case with St. Vincent's Hospital. I was involved in the case of an urgent referral from Waterford of a man who had an acute but nonmalignant liver condition. He was told last week to come back on 2 January because no more admissions were being taken until then. I put down a parliamentary question to the Minister for Health and within two days that man was admitted to St. Vincent's. The Minister for Health decided that he did not want to accept responsibility. If this man had not come to us and if we had not approached the Minister directly, he would not have been admitted. What about the people who cannot go to a Dáil Deputy? Their fears and needs are no longer on the agenda of this House. That is the hidden Ireland.

There is another hidden Ireland — the hidden Ireland which was so ingloriously exposed by the tax amnesty in the past 12 months. I spoke to a senior tax consultant in a major company who has handled hundreds of cases relating to the amnesty. He told me that one in every six actually paid up. The other five said they could not possibly manage and would go bankrupt if they had to pay what the Revenue Commissioners wanted. They decided to take their chance. The yield was £500 million and it was paid in such a mess that £250 million of it is only now being distributed under the various tax headings.

The Taoiseach has referred time and again to the Custom House Docks site. The situation there is totally crazy. I do not know what the State has invested so far in this site but it is certainly many millions. The employment projections are open to serious question, but time and again they have been advertised as virtually the one saving grace of the Government. A huge number of concessions has already been given to this centre. No less than 15 separate concessions are given to encourage people to locate there, including full remission of rates for ten years, 100 per cent capital allowances, double rent allowances for traders for the first ten years, and the cost of construction allowable against the lessors' Irish rental income from all sources. The requirement that the activity should be located in temporary accommodation was removed. A 10 per cent special CPT rate was extended to speculative commodity trading.

The interest on loans paid by a company in the centre to non-resident parent companies is allowable for tax purposes, interest payments made by the companies in the centre to lenders outside Ireland are exempted from DIRT and the investment income of life assurance companies is subject to 10 per cent CPT. In the past fortnight, a zero rating of CPT for unit trusts was introduced. I do not know what is happening with regard to this centre but I do know that it is now regarded as an exclusive tax haven for the financial sector. The cost to the Exchequer in tax foregone is very substantial. It is so great that one must question very strongly, after all the hype and all the public relations in regard to this centre, the true merits of the project. I favour very strongly the redevelopment of the city centre of Dublin and particularly the Custom House Docks site. As the Taoiseach knows, in October 1985 the then Government set up a statutory Authority to promote and control the development of this site. Virtually every concession that could possibly be thought of has been given to the financial companies involved with very little return and that opens up the whole matter to grave question.

Again, I want to question the extent to which the employment measures introduced by the Government are having any real effect on the overall level of employment. It is a matter of concern that the Taoiseach should come into the House and indicate that the figure for employment is running significantly below that for last year. He said there was an encouraging reduction of 2,000 in the seasonally adjusted November figure. Who is going to be prepared to accept that when, in the past 12 months, 34,000 people emigrated? Since this Government took office 63,000 people have emigrated. In a two year period of any other Government in the history of the State a comparable figure cannot be found. To talk, as the Government are constantly doing, about employment growth and new job opportunities is totally hollow because there is no national recovery of any consequences.

I want to stress the question of the other aspect of the hidden Ireland that I referred to this morning. In this House there is what might be called the consensus of the comfortable, those of us who have an income. We have a system of education which looks after our children. As the Clancy report has vividly confirmed it is the children of the better off who have the opportunity of third level education. In that regard our party have exposed time and again the total inequity in the education system.

In conclusion, the presence of the Labour Party is required in Dáil Éireann. The role of the Labour Party in this House will continue to be vigilant during the next budget and right throughout the period of office of this Government. Without Labour's influence in the recent past social welfare increases would have been well below the rate of inflation, there would be no Commission on Social Welfare, nor indeed would we have child benefit, the Combat Poverty Agency or a National Pensions Board which has brought in social insurance for the self-employed. Our work within the Dáil is valuable. A great deal remains to be done. The Labour Party will, between now and budget day, put forward major pre-budget proposals for the consideration of the Government and in that regard we will continue our constructive role in Dáil Éireann as an effective Opposition.

I am glad to have this opportunity today to report to the House on my responsibilities as Minister for Energy. Towards the end of my address I will comment on my old stomping ground, forestry, but it is appropriate that I should commence with energy-related matters and to briefly inform the House in the limited time available to me the aims and objectives which I hope to achieve in this new portfolio of mine.

In terms of staff numbers the Energy part of my portfolio ranks as a small Department with around 200 people on the payroll. That is in no sense, however, a gauge by which to measure its importance in our daily economic life and development and that is a point which has struck me quite forcibly since I assumed responsibility for this area just a matter of weeks ago. I do not think anybody would dispute the vital role which energy plays in economic development although I suppose there is a tendency or a general perception that energy is there at the proverbial flick of a switch with the result that the detailed work which is ongoing behind the scenes is quite often forgotten. The benefits of this ongoing work are only really understood or appreciated in times of supply emergencies.

The energy scene in this country at the moment is one of relative calm. We have ample and diverse sources of energy supply and the pricing regime is, I am happy to say, becoming increasingly competitive. The memories and the lessons learned from the oil crises in 1973 and 1979 should not, however, be forgotten. While the Government are very concerned about the cost of energy — and I will speak in a moment about the improvements we have managed to bring about — my basic priority will be to underpin the availability and security of energy supplies. Past experience has told us of the damage that can be caused to our economy when the supply of energy is disrupted. We must thus place security of supply at the top of the list.

There has been a lot of comment about energy price handicaps borne by energy consumers in this country. A few simple facts about the improvements which have taken place will demonstrate that a situation which did prevail in the past has now improved considerably. Our domestic and industrial electricity prices are now below the EC average, following the price reductions by the ESB in 1987 and 1988. Our natural gas prices for industrial and commercial users are the lowest in Europe. The EC Commission has studied prices in the European natural gas industry and that study shows that Ireland had the lowest average price per unit of natural gas in 1985 and 1986. Domestic coal, in so far as comparisons can be drawn, is significantly cheaper in Ireland than in other EC countries. Since January this year there has been a significant improvement in Irish prices for residual fuel oil compared with the EC average. There are fundamental difficulties, however, in conducting meaningful comparisons on fuel oil because lower prices are paid in Europe for deliveries to very large industrial consumers and those prices simply cannot be matched in Irish market conditions.

The Government are determined that this country will enjoy the lowest possible energy costs bearing in mind the natural disadvantages associated with being an island country and the fact that we are, relative to other EC countries, low-intensity energy users. Even allowing for these natural disadvantages it surely is a commendable state of affairs that I am in the position today to report these improvements to the House. The economy is benefiting and so is the task of sustaining and creating employment.

This Government will continue to strive for better price differentials. One need look no further for clear, unambiguous evidence of this intention than the announcement some two months ago of the setting up of an inquiry, to be undertaken by the Fair Trade Commission, into the supply and distribution of petrol and autodiesel. This is yet another example of the Government's determination to achieve the lowest possible energy costs for Irish consumers. The Irish consumer can be assured that his interests are those that count.

The lowering of oil product prices is a major priority of this Government. We have made some progress and aim to make more. My Department are examining possible arrangements with oil-producing countries which would better utilise the important infrastructural facilities at Whitegate and Whiddy. Major investment at those facilities would be required but the increased EC Structural Funds which Ireland can claim over the next few years is a relevant factor here given the diseconomy associated with being an island and not being integrated into the main European energy markets.

This whole issue of integration or interconnection — as it has come to be called — has been studied in detail by my Department. While immediate decisions are not yet required it is going to feature prominently in our strategic planning over the next few years.

The improvements which have taken place in the key economic indicators such as the public finances, inflation, interest rates, exports and so on, have been well documented by now. It is scarcely necessary to repeat them again here today. It is sufficient to say that however important it is that we continue to be successful on that front, that alone is not enough. TheProgramme for National Recovery recognises the importance of developing our natural resources and the encouragement of enterprise. This is not just another idle cliché. We have taken the necessary actions. We have allocated scarce financial and human resources and skills. It is as good a demonstration as any of this Government's commitment to realising the specific aims and targets in that programme. Bearing in mind that some of the largest semi-State bodies fall within my sphere of responsibility and the fact that energy itself is in the natural resource sector, energy must play a fundamental role in the context of the Programme for National Recovery. I intend to see that it does play that role.

I would like to outline for the House the actions which this Government have taken in order to foster development and enterprise. I will deal first with energy and later with forestry.

The introduction of new licensing terms just over a year ago for oil/gas exploration is an example of decisive Government action. The level of exploration activity is largely driven by the prevailing international oil climate which, in recent years, has seen exploration budgets severely curtailed. On taking office last year we could have sat back and waited — or rather, hoped — for things to improve while doing nothing about the factors within our control. Such an approach would rightly have been criticised as negative, negligent and nonsensical.

The introduction of revised terms just six months after this Administration took office indicates that we mean business on the oil exploration front. Were we right in what we did? Consider the fact that of the three wells drilled this year, two would not have commenced if the terms had not been revised. The case for doing what we did was compelling. I am under no doubt at all but that the right decision was made. While the results of the three wells this year were disappointing from a commercial development viewpoint, the search must go on. The recent agreement with Marathon — whereby up to ten wells will be drilled in the Celtic Sea by end 1991 — is a most welcome boost to the exploration effort. I will be pressing hard to ensure that there will be more wells drilled in every part of the Irish offshore.

A further achievement of the Government is the conclusion of an agreement with the United Kingdom concerning the delimitation of areas of the continental shelf between the two countries. This agreement was signed in Dublin on 7 November 1988 by the Tánaiste and the British Foreign Secretary. In practice, the agreement enlarges the area over which Ireland has jurisdiction, thereby increasing the area in which licensing for oil and gas exploration and exploitation can now take place. It removes doubts as to jurisdiction over areas of the continental shelf between Ireland and Britain in the Irish Sea, south and south-west areas and in the north-west area off the Donegal coast. We will be bringing forward designation orders to give concrete effect to the agreement as soon as possible.

It is also heartening to report a continuing upsurge in hard minerals exploration. Since this Government took office, my Department have issued over 400 new minerals prospecting licences. This is surely a positive sign. Indeed the number of prospecting areas now under licences is twice what we had at the beginning of 1987. With so much exploration activity in progress we can realistically hope that the day will soon be hastened when we can look forward to further commercial mineral discoveries.

In promoting enterprise and development the Government are encouraging the State agencies to use their skills and resources to create and develop new business opportunities. The Government are providing the necessary legislative framework and financial climate to foster this. The following specific measures have been initiated. First, the enactment of legislation earlier this year enabling the ESB to set up subsidiary companies in order to expand their activities at home and abroad in a variety of projects which are scheduled to provide over 600 jobs by 1992. We have also reduced the price of electricity; second, proposed new legislation for Bord na Móna. It will place Bord na Móna in a position whereby expansion and job creation opportunities can be quickly identified, undertaken and delivered. It will represent the most fundamental change to the remit of Bord na Móna since their foundation in 1946; third, the commissioning of a major consultancy study into the entire operation of Bord na Móna. This Government want improvements in the commercial performance of State Sponsored Bodies. I am very hopeful that the results of the study — which I hope to have early next year — together with the proposed new legislation will enable Bord na Móna to plan and develop new profitable products and services and, fourth, the affairs of BGE, Dublin Gas and other gas utilities, notably Cork and Limerick, have been put in order. Safety issues have been a major priority. The implementation of the Cremer & Warner recommendations and the production of 34 new gas standards have renewed people's confidence in the safety of natural gas. What better way to illustrate this confidence than to have a steadily increasing number of consumers in the premium Dublin market? The extension of the gas pipeline northwards to Drogheda and Dundalk is another major development of the natural gas grid. We can realistically look forward to the creation of more jobs along the route in key sectoral industries and particularly in horticulture.

It is appropriate that I should refer briefly to energy conservation. At the beginning of my address I mentioned the improvements which are taking place in energy pricing but, in such a situation, there tends to be the unfortunate side-effect of consumers down-grading energy conservation. The message of energy conservation is quite simple — conservation saves money. Economic competitiveness will increasingly be affected by energy conservation. I will be sparing no effort in getting that message across to individual enterprises and the public at large. Just because there are ample supplies of energy available is no reason whatsoever that energy should be wasted or inefficiently used. Indeed there is the further factor of energy conservation benefiting the environment. It is increasingly being recognised that energy conservation can play a significant role in helping to redress environmental damage. The concept of saving energy makes perfect sense on its own but the added benefit of helping the environment as well surely clinches the argument. A lot of work needs to be done in this whole area. I can assure the House that I will be giving it a very high priority rating.

Before concluding my remarks on Energy matters — which, because of time constraints, are necessarily brief — I want to reiterate the essence of Government policy on nuclear issues. Put simply, the health, safety and environmental requirements of the Irish people is the guiding force behind this policy. This Government will spare no effort to protect our people, our environment, our economy and trade and we will spare nobody's blushes in the process.

Legislation will be presented to this House in the next session for the setting up of a National Radiological Protection Institute and the initiation of a national radiological protection plan is another major development on the radiation protection front. This plan is now being implemented.

The year 1988 will be remembered as something of a watershed in the history of Irish forestry. This is the year in which public forestry has come of age and is being loosed of its moorings within the Civil Service structure in order that it may exploit its full potential in the commercial arena.

We can all recall with pride the record-breaking achievements in the forestry sector in 1987, but let us consider for a moment what we achieved in 1988.

I predicted that 1988 would be even better and a milestone for forestry. My prediction was right and my confidence fully justified as 1988 has proved to be one of the greatest ever in the history of forestry in Ireland. We have seen records tumble in almost every area of the business.

The public and private sector have achieved record planting of 15,000 hectares — 37,500 acres — an increase of 4,000 hectares or 10,000 acres on 1987's record achievement. The highest ever volume of timber, at just under 1.5 million cubic metres, has been sold. This represents an increase of 100,000 cubic metres on 1987. The top-grade sawmills are all achieving record throughputs. Irish timber now dominates the domestic market and holds an estimated 60 per cent share, which is 10 per cent up on last year. The State has achieved record receipts from timber sales of close to £22 million and this can be compared with 1986 when receipts amounted to £16 million.

In the timber industry, just as in other sectors of the economy, we have seen a remarkable increase in business confidence in less than two years. This is already translating into increased investment, output and employment. There is an increasing awareness of and confidence in the qualities of Irish timber and the huge import-substitution potential which exists in this area. There has existed in the past, amongst Irish people, the notion that the imported product must be superior to the home-produced one. This notion, I am glad to say, is being eroded in all areas and I am especially pleased that this is the case in relation to Irish timber.

Ireland currently spends £30 million per annum buying sawn timber from abroad which could be produced in this country. We have only to look at the massive amount of timber reaching maturity to realise the opportunities that exist for us to capitalise on this lucrative market. Over the next ten years, the volume of large sawlog available will increase by 178 per cent, palletwood will increase by 125 per cent and pulpwood by over 50 per cent.

From the beginning of 1989 all structural softwood timbers — both Irish and imported — will have to satisfy the requirements set down in the EOLAS Standard Recommendation — SR 11/88. This standard is the key to the further development of quality Irish structural timber and indeed the key to our drive to gain new markets in the UK and mainland Europe. Common EC standards for timber structures are being considered in the context of the completion of the single market. Ireland's objective is to ensure that the results of this process do not place Irish grown timber at a disadvantage for trade within the EC. The Department of Energy maintain contact with EOLAS, who, with the Department of the Environment, carry the main responsibility for protecting Ireland's interests in this area.

The essential element of all these strategies is to ensure that the future development of the Irish timber sector is focused sharply on the needs of the Irish and international market places. By putting the emphasis on market-driven development and by using all the resources of the State, including the IDA and their company development programme, CTT and their marketing programmes, EOLAS and their technology programmes, the Forest Service and their planting, silvicultural and marketing programmes, the industry as a whole can more easily prepare itself for the challenge and opportunities of 1992.

While the Government are pressing ahead with the expansion of public forestry, they are also taking positive steps to sustain the momentum which has built up in private forestry in recent years. I have on previous occasions outlined to this House the improvements in the EC assisted grant schemes which have been introduced in 1988. My expectation now is that these revised schemes will result in the highest ever planting level by the private sector in 1989 and I anticipate an increase from 5,000 hectares this year to at least 6,500 hectares in 1989.

It can be expected, therefore, that the private sector will assume an increasing proportion of national planting. At the same time, the public sector, which for many years has taken the lead in the implementation of Government planting policies, will also have a crucial role to play in the implementation of an accelerated forestry programme. It is also clear that such a programme must receive substantial EC funding. Forestry as an activity uniquely meets all the current major policy objectives of the EC in areas of regional and national development.

Heretofore, EC aid for Irish forestry has been limited in extent and confined in the main to private forestry — only some 1.2 per cent of Exchequer expenditure on forestry development since 1973 has been recouped by way of direct EC grants. Significant improvements in this position have now been achieved as a result of representations to the EC Commission and negotiations in the context of the reform of the Structural Funds.

A forestry action programme has now been published by the EC and this represents a major forestry initiative which provides Community funding for both public and private forestry.

Explicit acceptance of public and private forestry for aid under the Structural Funds will have a major impact on the development of Irish forestry. Given the level of land afforested in Ireland — 6 per cent compared with a Community average of 24 per cent — and the benefits which flow from forestry — increased employment, better living standards, improved regional development, production of alternative productive land use, etc. — it will be possible, with the increased availability of Community funds, to take the necessary action to increase still further the national planting levels.

The establishment of Coillte Teoranta which will come into operation on 1 January 1989 represents a major turning point in the history of forestry in this country. The objective of the Government in establishing the new company is to ensure that public forestry will be run on a commercial basis and with optimum efficiency. The new company will be expected to operate on the same lines and to the same criteria as a private company. This is the basis on which its performance will be judged. I will monitor the company's performance very closely and if it does not match our expectations of it, we will give it a very hard time.

Having said that, I am very confident that the company and its staff will meet the goals set for it and while Coillte Teoranta will face great tasks these will be coupled with great opportunities. I expect the company will respond in a positive way to the challenges which lie ahead.

These are exciting times for Irish forestry, both in the public and private areas. We can look forward with great confidence to maintaining the impetus which has recently been generated. Forestry is a priceless national asset. It is up to us to realise the potential of that asset, both for our sakes and for the benefit of future generations.

The Chair acknowledges Deputy Noonan's silent agreement to the Minister moving a little into extra time. Thank you, Deputy Noonan.

(Limerick East): I listened with interest this morning to the Taoiseach's speech. It is a speech in the tradition of these occasions where the Taoiseach claims successes for the Government over the previous 12 months. There have been some successes but the Taoiseach has been niggardly in his approach in not crediting the Opposition parties with some of the credit. I take issue with the Taoiseach in two respects. First, there is no acknowledgement in the Taoiseach's speech of the benefits of the consensus that has been maintained in this House over the last 12 months in helping the Government to achieve the targets where they have been successful. Secondly, there is the usual attempt from Government Ministers now to re-write the economic history of the State and pretend that all progress in the economy commenced with the change of Government in 1986.

This is a most unusual Dáil in that 85 per cent of the people here support the general thrust of the Government's economic process. That consensus is frequently misunderstood because people see it merely as the ability of Opposition Deputies to walk through the `Tá' lobbies and support the Government. That is not the benefit of the consensus. The real benefit is outlined in this House and it is in the fact that Fine Gael in particular have consistently refused to run with the latest interest group in opposing the policies which are being promulgated by the Government. That is markedly different from what happened when we were in Government. There is always the tendency for society to break down into competing pressure groups unless there is a major crisis, but when each and every competing pressure group is backed by the main Opposition party of the day then it is difficult for any Government, regardless of numbers here, to make decisions in a manner that will stick over the long term. That is the main benefit of the consensus approach. If the Taoiseach wants it to continue he should acknowledge it in a more fortnight manner.

I take issue also with the Taoiseach in relation to the pretence that the previous Government did not have major economic successes. It is always interesting to go back over documents issued by different administrations. Sometimes we get confused about names, because they all seem to have titles such asThe Way Forward and the way ahead and so on. The Way Forward was issued by the Fianna Fáil Government of the day in the autumn of 1982 and it is interesting to see the projections made there. The Way Forward says that with the trend of economic policies in the autumn of 1982, by 1987 the Exchequer borrowing requirement would be 22 per cent of GNP. That was Deputy Haughey's figure in 1982. When we left office there was a budget on his table which brought it down to 10 per cent of GNP. In paragraph 3, page 13 of The Way Forward the Taoiseach said:

Our unit wage costs in 1982 are expected to increase eight times faster than in the United Kingdom. This loss of wage-cost competitiveness will not only lose jobs in existing industry but it could adversely affect the foreign investment in export industry which has been the major source of new jobs.

We stopped the erosion of competitiveness and turned what was projected inThe Way Forward, a balance of payments deficit of 14 per cent of GNP by 1987, around to a balance of trade surplus in the first instance which has turned itself now into a balance of payment surplus. In The Way Forward there was a series of very strong pieces of advice given on wage inflation and again it is interesting to note them. The Exchequer pay bill — and I am quoting from page 19 — increased by 24 per cent in 1981. Further down it is said that it could have increased again by about 25 per cent in 1983, if certain action had not been taken and it was not taken. There were the pay increases built on the inflation rates in excess of 20 per cent when we took up office in 1982. Our Government systematically brought down the rate of inflation and the level of pay increases which are always connected to the rate of inflation of the day. The Taoiseach should have acknowledged that fact and not make more extravagant claims than the case justifies.

I was hoping that the Minister for Finance would have spoken before I got the opportunity to say these few words, because I am more interested in looking forward to 1989 than in looking back to 1982. I note that the Taoiseach has taken on board the warnings of the Central Bank in their quarterly report in autumn of 1988, where they give the kind of advice that the Central Bank are good at giving, that despite the progress that has been made there is not an opportunity to take the foot off the brake and put the other foot hard down on the accelerator. I agree with that.

There has been a significant movement which could lead to the stabilisation of the debt-GNP ratio in the course of 1989. The Taoiseach this morning was projecting that around 133 per cent of GNP would be the level of the debt at which we would stabilise. He said that it is around that figure now and that it will not alter much in 1989. It is worth noting that the debt rose last year, continues to rise this year and will rise again next year. Even if the debt is stabilised, it will still take most, if not all, of what is paid in PAYE to service that debt. The interest costs on the debt are in excess of £2 billion and stabilising the debt-GNP ratio will not change that because the debt when stabilised will still have to be serviced.

It is an appropriate time to lift our eyes from the short term and look at the medium term prospect. It seems that we need not only to reaffirm the old target of stabilising the debt-GNP ratio but to put firmly on the table a new target. That new target should be the target that was inThe Way Forward, which went out of fashion as the years went by. It is curious how economic fashions, like other fashions change. In terms of controlling the debt, it is all about the debt-GNP ratio now, but up to the middle of last year it was all about the Exchequer borrowing requirement. For most of the previous five years it was about the current budget deficit and I am suggesting that it is back to the current budget deficit that we should go now if we are looking for a medium term target.

I do not know what the current budget deficit will be in 1989, but I presume it will be somewhere around £.75 billion. If that is the case, it is feasible to suggest that it should be eliminated over three years. I should like to reiterate the point made by the Leader of Fine Gael this morning, that the other side of the coin of continuing deficit budget is that one must reach a point where one goes for a surplus budget. That should be in the back of our minds as well, when we are thinking of eliminating the current budget deficit.

There is some kind of feeling in the community that we will proceed to eliminate the whole debt of £27 billion in a series of increments of £300 million a year. It will take 90 years on that basis. That is not a target. It is not feasible and, anyway, it is foolish. We must get back to the normal budgetary position where borrowing for investment is proper and appropriate when properly evaluated. We must again make that distinction between borrowing for capital investment purposes and borrowing for current expenditure.

I would strongly suggest to the Minister that it should be put on the table, and pretty quickly, that we move now from the short term target of stabilisation of the debt to the elimination of the current budget deficit over a period of time. In that context, I should like to reiterate what I said on the debate on the Finance Estimate during the week. It seems that while real progress has been made in cutting public expenditure there is an expectation, not only among the public at large but among those people who deliver the services in the public sector, that the cuts are temporary. We frequently hear references in the House to the number of vacancies unfilled as a result of the embargo in one Department or other, or in one area of the public sector or other. The underlying logic of unfilled vacancies is that next year, or the year after, or the year after that, there will be resources there and that we will fill all those vacancies and appoint a couple of thousand more civil servants. That should be taken off the table as well.

There are no unfilled vacancies, in my opinion, in any Department of State and the Minister for Finance should say that. To be given the authority to say that, he needs some kind of Paper, whether it is White or Green, which sets down proper targets for the level of numbers of civil servants in all the Departments and for the numbers of public servants in the public sector, agency by agency, Department by Department. He must also go on to structure the ranks of civil servants. It is not a real position to pretend that there are vacancies in one Department for two assistant secretaries or for three principals, 14 assistant principals or 25 executive officers.

What I am really saying is that unless the public pay bill is controlled, and controlled by further reducing the numbers on the pay roll and keeping them down, there is a great danger that we can run back into the trouble out of which we are just coming. The way to do that is to have a view of how many people are necessary to run the public sector in this State and to have medium term and long term targets for that, too, and restructure public expenditure along those lines. There is a difference between cutting public expenditure and restructuring it and we must move from merely an attitude to cuts to an attitude to restructuring which will make the cuts permanent and the reductions in public expenditure permanent.

There is one theme that I should like to dwell on in the last two minutes of my contribution. It is that there are thousands of people in our economy who will not be helped by macro-economic solutions. All our concentration has been on the macro side up to now and it is the theory of the rising tide lifting all boats. However, it will not work when the boats have holes and an increasing number of people are outside solutions on the macro-economic side.

The Combat Poverty Agency report is well worth reading. I refer the Minister to page 2 of the introduction. The agency asks who the poor are and goes on to define them as households headed by the unemployed, families with several children and farming households. They stand out as the three main groups vulnerable to poverty. Those in low paid jobs, female single parents and the sick and disabled are also highly at risk to poverty. The Minister should read the full report. If there are other options opening up to the Minister for Finance rather than simply balancing the books and if he has any money to spare he should use it to relieve poverty because macro-economic approaches will not do so. I know the Minister will always have limited funds at his disposal but he should put them into child benefit because the greatest poverty exists in families where there are lots of children.

This land still flows with milk and honey. We are one of the greatest food producers in the world and it is an obscenity that several thousand children go to bed hungry every night. There are resources at the Minister's disposal, please direct them to child benefit.

The Minister for Finance has 15 minutes.

I should like to thank the Opposition spokesman for Finance for giving me some ideas as I look forward to 1989. I am glad he is reading the right sort of economic booklets, includingThe Way Forward, and our policies should not be a surprise to him or anyone else. Our last term in office was not long enough to implement these policies.

In opening the debate this morning, the Taoiseach has given a wide-ranging and accurate account of the performance of the economy and the context within which Government policy will operate in 1989 and beyond. I do not wish to cover the same ground. However, I feel that there are some important points which need to be emphasised.

The improvement in the public finances is central to the economic recovery in progress. We have de-fused the crisis in the public finances that obtained in 1986. This has required difficult decisions to bring public expenditure under control. The gains have been hard-won but the effort has been well worthwhile. Economic activity and employment are benefiting to a major extent, especially from the renewed confidence in our ability to manage our affairs in a responsible manner.

We have seen the start of recoveries before but they have been short-lived. What makes the situation now so different? Firstly, I know that the approach of the Government is very different from previous unsuccessful attempts to tackle our problems. The Government have clearly identified the public finances as the heart of our difficulties and they set a clear and unambiguous target — to halt the rise in the national debt/GNP ratio by 1990 before reducing it. This was the target set by NESC in autumn 1986 and agreed by all sections in NESC. I know, therefore, that we are tackling the problems of the public finances with the full support of all sectors in our society.

Secondly, the Government's approach is a medium term one. We recognise that the problems of the economy are deep-rooted and we cannot expect to turn the situation around in a short time. However, in the last two budgets we made very substantial progress and we will be following exactly the same strategy again next year. The Government's policy has been entirely clear, consistent and unwavering and I feel certain this is one of the main reasons we have seen the return of confidence in the handling of the economy among the business community here, among international observers and, indeed, among the general public.

There is one further reason the recovery is so deep-rooted. By taking courageous decisions to reduce public expenditure we have transformed the situation. The EBR — estimated borrowing requirement — was stubbornly stuck around 13 per cent of GNP in 1985 and 1986, only two years ago. This year, I expect the EBR to fall to an exceptionally low level. However, if we exclude the once off effects of the tax amnesty, the underlying EBR would still be equivalent to under 7 per cent of GNP, roughly half of what it was two years ago. This is a substantial advance in a very short time and has, come about because we were prepared to make difficult decisions about public expenditure.

These have been the ingredients of the recovery — a clear goal, a consistent strategy pursued over three budgets and the courage to make rapid progress in restoring balance to the public finances. I am convinced that the recovery this Government have brought about will bring lasting results, creating the kind of environment in which the economy can grow rapidly again, as it did in the sixties and seventies. The progress of the past two years puts us in a strong position now to benefit from external developments. I am happy to say that the global economic situation is very favourable at the moment and provides real opportunities for our export sector.

All the recent economic indicators show a good improvement. Non-residential investment has begun to pick up strongly. Last year, investment in plant and machinery rose by about 4 per cent in real terms and I expect similar growth or better again this year. Increased capital goods imports this year, cement sales and a pick up in sales of goods vehicles all point to strengthening investment. This kind of investment is not a temporary phenomenon. It adds to the productive capacity of the economy and so lays the ground for future increases in output.

One of the major positive effects of our policy has been the fall in interest rates which has taken place since last year's budget; they are now a full six percentage points below their level in spring last year and well below UK interest rates. This improvement would have been unthinkable in the absence of the strategy we have pursued. This is only the first pay-off from the Government's policies. I am sure we are now seeing the first down-stream effects on productive investment and on consumption and more will follow in the near future. Low interest rates are benefiting industry, business, farmers and mortgage holders.

Inflation has fallen substantially over recent years. The Consumer Price Index published yesterday showed that the average rate of inflation for 1988 was just over 2 per cent, the lowest inflation rate since 1960, while the annual rate at mid-November, while somewhat higher than in recent quarters, is still below the European average and substantially below the UK rate of nearly 6½ per cent in October.

The low inflation rate is important, not just for consumers and savers; it will make an important difference to the cost competitiveness of Irish products at home and abroad provided that costs fall into line with the lower trend of inflation. It is clear to everyone that this has been happening. The trend of wage increases has moved down in line with the fall in inflation and, indeed, fully in keeping with the provisions of theProgramme for National Recovery.

In the past two years, the fall in the rate of growth of industrial costs, combined with a stable exchange rate, has led to a considerable improvement in cost competitiveness. I am well aware that this is only one aspect of competitiveness. The fact that the trend of wage costs may be lower does not mean that we should not continue to work on the other non-cost dimensions such as marketing and design and so on. However, costs matter. Low inflation is setting the climate within which our costs and our competitiveness develop.

The widespread nature of the recovery is evident in all sectors of the economy. It is especially evident in industry, one of the main growth sectors of the economy. Output growth this year has been very buoyant; manufacturing output, the main component of industrial output, was 12½ per cent higher in the first three quarters of the year than in the first three quarters of last year, suggesting that we could see output growth for the whole of this year not much lower than that recorded last year, 11½ per cent. This year growth has also been widely spread and not confined to the "leading sectors" alone.

This year also agriculture has continued its rapid recovery after two very poor years in 1985 and 1986. Agricultural incomes are expected to rise by about 17 per cent this year following growth of 19½ per cent in 1987. I know that agriculture is very dependent on factors over which we have little or no control, especially the weather, of course, and decisions made in the European Community, where we often have to fight an uphill battle against the views of other member countries. Nevertheless the recovery in farm incomes is very welcome and it will make a real impact in many rural areas and small towns which depend on the prosperity of the agricultural sector.

The turnaround in the economy is being reflected in an improved employment performance which indicates that the recovery is spreading through the economy. The labour force survey for mid-April this year showed an increase in total employment following three years when employment was static. The survey showed an increase in total employment of 6,000 and that the decline in manufacturing employment had ceased. Also, on a very positive note, employment in the services sector expanded by 10,000 despite the impact of savings in the public sector.

The favourable economic indicators for output and exports this year suggest that the employment increase in the year to last April will be maintained for the rest of the year. I would confidently expect a further rate of job increase over the next year.

The improving job situation is being helped by theProgramme for National Recovery which is making a very important direct contribution to job creation. The programme target of 20,000 new jobs in manufacturing industry in 1988 will be achieved. Not only that, but 5,000 jobs have been created in tourism as well as 2,000 jobs in construction and a smaller number in other sectors. Next year the prospects are that the programme targets will also be met.

Given this fact, as well as the strengthening recovery in the economy and the increased labour intensity of growth, we can expect better employment performance in the future. Manufacturing employment should increase. This increase will be based on continued strong output and export growth. There are strong indications that the building and construction industry is set for liftoff in 1989.

While the long term decline in employment in the broad agricultural sector can be expected to continue, the extent of any fall will be limited by the success of the Government's job creation measures in areas such as horticulture and forestry under theProgramme for National Recovery. Although some further fall in public service numbers will take place next year, this fall will be only a fraction of the expected increase in sector services employment.

These improved job prospects are being reflected in the unemployment figures. The trend in registered unemployment began to improve in mid-1987, shortly after the Government came into office. This improvement has not only been sustained but it has strengthened. In each month since December 1987 there has been a year-on-year fall in the live register. The live register is now lower than it was two years ago. On average, unemployment this year will be about 6,000 lower than in 1987. This will be the first year since 1979 that average unemployment has fallen. The underlying trend in the live register in recent months has also been particularly encouraging. This strongly supports our current projection for a further substantial fall in unemployment in 1989.

Looking to 1989, the expenditure side of the budget has largely been agreed and voted on in the Dáil. In settling the expenditure allocations for 1989 the Government again adopted the approach of reviewing spending programmes in detail and determining where savings and economies could be made, and we will continue that strategy. In this context I want to stress that those legitimately in need of State support need have no fear but that their interests will be protected by this Government now as they have been in the past.

The Government's success at bringing expenditure under control must be acknowledged by all sides of this House. We have followed a clear strategy which required responsible and strict management of the public finances with a view to stabilising the debt/GNP ratio and creating the conditions necessary for sustainable growth in output and employment. This strategy is clearly working and will be continued in 1989.

This morning the Taoiseach described for the House in some detail the constraints that face us in drawing up next year's budget. I will not cover the same ground again but I would like to emphasise that we will continue to put the public finances in order so that the economy can sustain the growth which has now begun. We cannot yet deviate from this objective. We cannot afford to lose the new sense of direction we have gained. If our resolution were to falter we would land ourselves back with the same if not greater problems. Can anyone seriously suggest that we should now start increasing expenditure and borrowing? Some may be tempted to do so because of the buoyancy of revenue receipts this year, but for the reasons already explained by the Taoiseach this morning, these receipts are largely of a once-off nature — they are what would be called in business terms "an extraordinary item" and must be treated as such. Not alone will they give us a cash flow advantage this year, but they will inevitably reduce the revenue coming through to next year because much of it would have been tax arrears which would normally have come in next year's revenue.

The underlying rate of Exchequer borrowing in 1988 is still high and the national debt is still growing. The cost of servicing this debt is pre-empting a huge amount of tax payers' money that could otherwise be used for many worthy purposes. Thus, while the crisis of 1986 has been surmounted, the burden of borrowing and debt is still a major constraint on our progress towards achieving our economic and social objectives.

The Government are determined not to deviate from the targets for the public finances set in theProgramme for National Recovery. Subject to this we will push ahead with the tax reforms we have initiated under the programme, with specific measures to build up the economy and with our efforts to ensure that the poorer sections of the community are adequately catered for within the resources available to us.

Over the past two years we have managed successfully to achieve significant progress in the economy while at the same time pursuing a programme of severe fiscal adjustment. The success we have achieved has surprised many sceptics, especially those who said we were pursuing contradictory economic policies. They said it was not possible while pursuing fiscal adjustment to generate growth. We have laid that to rest. We will continue the same policies to ensure that the confidence we have created will be maintained. This will clearly show a "virtuous circle" in the economy. The reduction in interest rates and low inflation are the necessary ingredients to continue growth.

I do not share the Minister's rose tinted view of the economy and the country. However, 1989 will be a significant turning point in terms of the political and economic agenda in this country. The central objective of debt stabilisation will have been achieved. Now is the time for medium-term economic and social planning as to the type of society we aspire to in the nineties. Because Fianna Fáil have no medium-term political objectives, I fear major opportunities will be lost. This new agenda requires a comprehensive strategy on job creation, a clear programme to alleviate poverty, and a plan of action to put us on a competitive footing in the Europe of 1992.

Fine Gael believe tax and PRSI reform, especially for the lower paid, is critical to improving employment. The fact that it costs an employer over £2 of gross pay to provide £1 in net pay and £3 for every £1 overtime net pay is simply unsustainable. This has resulted in a huge incentive for employers to use more machines and employ fewer people or to operate through the black economy. Fine Gael have consistently believed that this trend has to be reversed. It is no coincidence that we have the highest tax rates on labour and the highest unemployment rate in Europe.

The relationship between investment and jobs is direct. The business expansion scheme has been a successful tax incentive towards job creation. This could be extended to pension funds and corporate investors to facilitate investments into productive areas of the economy as opposed to investments in Government gilts or property which are unproductive. Both of these areas of tax reform do not involve tax reductions but facilitate employment creation rather than penalising it.

Poverty in Ireland is reaching an unacceptable level. The Government's approach to cutting public expenditure has hit 20 per cent of the population with unfair severity. The family dependent on unemployment assistance, the widower with child dependants, the elderly who are in poor health and the disabled have suffered through unrelated different Departments. Our local authority housing programme has come to halt resulting in social misery for different families, in caravans, living in overcrowded conditions with in-laws, or in delapidated private rented accommodation. In County Wexford we have more than 700 families seeking local authority housing. Application lists for rehousing are now so long that some people have no realistic hope of being rehoused in the foreseeable future. Increased class sizes, especially in primary schools, affect the slow learner who requires special attention. Pensioners on meagre incomes are being denied free fuel vouchers which they got in previous years.

In the health service, our waiting lists are growing daily. A cheque book now decides how quickly you can get to a hospital bed for elective treatments. Yesterday we saw the publication of the figures for voluntary hospitals. While I am satisfied that the larger hospitals such as the major hospitals in Dublin, the Mater, Beaumont, St. Vincent's and Crumlin, have a 4 or 5 per cent increase which will just about make time for them, I am very disappointed with some aspects of the allocations. First, some hospitals which have lived within their budgets in 1988 have been penalised for that. I refer specifically to the Skin and Cancer Hospital at Hume Street. It is remarkable that there is a decrease in allocations in European Cancer Year to both St. Luke's and St. Anne's and to Hume Street hospital which deals with cancer patients. Until we have a fair system of clinical budgeting that allocates money on the basis of the number of patients treated on reasonably different levels and according to type of treatment we will not have a fair system of allocation. The current traditional block allocation takes no account of extra patient throughputs or need. It is particularly despicable that hospitals that have developed day hospitals and five day wards have been penalised as they have. Those hospitals which have to carry not only the pay increases of 2 or 2.5 per cent but also a special pay award of 6 per cent to general nursing staff will find it impossible to do anything other than increase their waiting lists. That is the most serious problem in the health service.

An unjustifiable unfairness has developed whereby those on the lowest incomes are being denied their statutory rights of dental and optical services. Each time it is the same families who comprise 20 per cent of the population who are hit in all of these areas. Without an effective political strategy to reverse this trend, these people will be destined to a poverty trap from which they will lack even the motivation to get out of. Their requirement is not a socialist doctrine or an ideological statist approach, but rather a caring attitude which results in a genuine political will for change.

This does not mean a flight from economic reality which promises a great deal in opposition and delivers little in government. We need to alter the structures of public expenditure so that we redesign and reorganise our public services more efficiently. This Government have found it easy to put a red pen of cuts into all programmes in an indiscriminate way. They have not had regard to need or efficiently. Much of our bureaucratic and outdated structures are still in place, all ready to be cranked up when resources become available again.

Fine Gael are committed to a just society which will restructure public expenditure to ensure greater efficiency and to target spending towards those in greatest need as opposed to transferring subsidies to the well off. This means in practical terms reviewing rates of social welfare payment, especially child benefit payments. It means, in the context of the health service, providing adequate resources to the frontline of health workers through tackling multinational drug companies and wasteful repetitious administration. In housing it means having a national programme of ensuring that every home has bathroom and toilet facilities as opposed to grants and subsidies regardless of income.

Unfortunately, we have seen from Fianna Fáil in recent months a recurrence of their old traits of stroke politics. We have seen incredible allocations of lottery funds, in some cases without applications being made, to constituencies of ministerial patronage while many worthy voluntary organisations in the health sector have been refused meagre funding to maintain facilities for the mentally handicapped and the disabled. Only yesterday I was speaking to the Coeliac Society of Ireland who require only £2,000 or £3,000 for publication of their bible document of gluten-free products. Their application for that amount from the national lottery funds was turned down. Yet we see very affluent organisations receiving generous support.

We have also seen in this Dáil term a proposed gerrymander of the constituencies to provide Fianna Fáil with an overall majority at the expense of dispensing with proportionality of election. We have seen a Planning and Development Bill which could safeguard in some instances the rights of speculators. Is it any wonder in these circumstances that the Taoiseach should get such a rivetting response at the recent Cáirde Fáil dinner? We in Fine Gael will oppose every attempt by Fianna Fáil to provide government for the friends of Fianna Fáil.

The most serious danger of this stroke mentality relates to the submission to the EC Commission of our national plan early next year. This will be the single greatest opportunity in this century to lift Ireland on to a competitive footing in Europe. It is vital that our plan is not a shopping list to garner votes in next year's European elections but rather will provide an infrastructure of facilities which will reduce our industrial costs and improve our structural inefficiencies.

I am particularly concerned about this Government's hasty decision to remove exchange controls on capital outflows from this country. At present a substantial differential occurs between interest rates in Ireland and the United Kingdom. There is a basic principle that money will follow the highest rate of return. I fear there is a possibility that substantial outflows will take place after 1 January. We have seen in the first half of this year capital outflows of some £600 million. This would have very serious repercussions for economic recovery. There are three main areas of investment in this country: deposits in banks, investment in equities, that is, stocks and shares, and property investment. Should these outflows take place we could see a reduction of liquidity in banks which would put up interest rates, also a shortage of working capital for Irish industry which is well recognised to be under capitalised and a lack of available resources for urban renewal construction.

It is not clear what level of discussion took place at Cabinet level in relation to these possibilities. I sincerely hope these fears will not be realised. At a minimum the Government must ensure there is an adequate promotional campaign abroad for investment opportunities in equities and property in this country. I note that President Mitterrand of France at the Rhodes Summit, raised questions about the 1990 deadline for free capital movements. He wanted an approximation of savings taxes across Europe and until that was achieved he would not agree to the deadline. It seems incredible that we should act in a unilateral way at this time on this matter without seeing what everybody else is going to do.

In this Dáil term we have seen one defeat of the Government by a unified Opposition. This related to the appallingly negative attitude by the present Fianna Fáil Government to the updating of family law in the area of separation and inheritance rights. Despite all-party agreement through the Oireachtas Joint Committee on Marriage Breakdown, they sought to deprive dependent women in the most tragic of circumstances of their property rights through inheritance. It seems quite obvious that any progressive social reform in terms of law and family reform in this country will depend on a change of Government.

In the agricultural area the reduction in interest rates and inflation — which has been the central objective of Fine Gael when in government and through the Tallaght strategy — has led to a marginal improvement in farmers' incomes this year and last year. This has disguised this Government's botched and failed efforts in two areas under their direct control. The establishment of Teageasc, through the amalgamation of ACOT and AFT, has been a virtual shambles, through inadequate financing, and reorganisation which has resulted in the shattered morale of the advisory and scientific services throughout the country. A threat is now hanging over Johnstown Castle and I call on the Minister for Agriculture and Food to give a firm commitment to the future development of that excellent research centre.

The incidence of bovine TB seems to be no nearer to control. Transparent public relations campaigns ring very hollow for farmers whose herds have been almost wiped out by this dreaded disease.

Our agricultural and food industry faces its most challenging decade in view of the recent GATT agreements. This Minister must urgently develop strong producer groups at farm gate level and a viable food industry which is well financed with competitive research and development resources for new product development. This is the only way we will have a viable agricultural industry in the nineties.

It is generally accepted that Anglo-Irish relations are at their lowest ebb for some years. Some people seem to think this is a good thing. One must ask what is to be gained by this futile approach to our nearest neighbour, our most significant trading partner, with whom we have an agreement to try to resolve the problems of Northern Ireland. Our objective must be reconciliation of people within Northern Ireland leading to a fair system of developed government. Replacing a judicial process by a political approach in the case of extradition may have short term popular gains due to the arrogance of the British Prime Minister. However, in the long term this may only result in solving one problem by creating many more. Fine Gael have a clear approach as to the steps that should be taken in this area in the path of peace and reconciliation in this country.

In conclusion I warn the Government that while they may bask in their self congratulatory style about their present opinion poll rating, the reality is that the promises on which they achieved power in the last election have in virtually every area been broken, some 34 in all.

This Christmas many will suffer hardship that they thought had not been possible. A divided society is increasingly the prospect of a continuing Fianna Fáil Administration. Next year, and specifically the budget, will give this House an opportunity to move in a different direction. They will have the support of Fine Gael if they move in this direction, in the same way as we used our parliamentry strength to resolve the national debt crisis. Continued failure in this area will simply be unacceptable.

I welcome the opportunity to speak in this debate. As we move towards the close of the year, it is natural to review performance over the past year or so, and to consider what our prospects might be for the year ahead. On entering Government we set about restoring confidence in the economy and stimulating growth in investment and output. We recognised from the start that the task of revitalising the economy could only succeed if we got our public finances in order.

The stabilisation of the ratio of national debt to national output, within the time-scale set out in theProgramme for National Recovery, was accepted as a target by Government for improving the public finances. In our first two budgets the Government have made great progress towards achieving the degree of stability that has been targeted. Indeed, it now seems that borrowing could fall below 5 per cent of Gross National Product this year. Admittedly, that percentage includes the benefits of the exceptional once-off proceeds of the incentive to clear tax arrears. However, when those proceeds are excluded, the underlying borrowing level comes to about 7 per cent of GNP. Not only is this a percentage point below the budget projection, but it is three percentage points below the 1987 outturn and some six percentage points below the 1986 outcome. By any standards these are significant reductions and mark a considerable slowing down in the rate of increase in the debt/GNP ratio.

As well as the improvement in the public finances there are many other positive signs that show how the Government's economic strategy is succeeding. I need only refer to four such signs. I refer to the fall in interest rates, the strengthening in our balance of payments position, the stability of our exchange rates and the increase in the real volume of our Gross Domestic Product of up to 2.5 per cent this year.

Our economy has also benefited from the substantially improved performance of the tourism sector. This has not happened by accident. As the House is aware, the Government selected tourism as a sector for special development, given its potential for wealth generation and sustainable job creation. TheProgramme for National Recovery, which has the support of the major social partners, set ambitious targets for tourism to achieve within a five year time-frame. The main objectives are to create an additional 25,000 jobs and to attract an additional £500 million of foreign tourist revenue. To achieve these objectives the number of foreign visitors has to be doubled over five years. The Programme for National Recovery pointed out that to realise the potential of Irish tourism we needed to become more inward-tourist oriented by having lower access fares; by the development of inward air charter traffic in place of outward charter traffic and by aggressive promotion of incentives for investment in the tourist industry, including business tourism under the business expansion scheme.

The targets set for tourism are ambitious — but they are achieveable. I want to emphasise that point because Deputy Pat O'Malley stated in this House on 9 December that:

...the chairman of the Irish Tourist Industry Confederation, a body comprised of everybody in the tourist business and who are highly respected, wrote to me on 25 November in relation to the growth and achievement of targets. He said that experience this year tends to confirm that, despite lower access fares and improved competitiveness of the product in Ireland, the significant growth rates required are not being achieved. That is the view of someone who has his finger on the pulse of the industry and knows what he is talking about. He does not accept the Minister's claims. We must listen to a factual comment like that instead of unsubstantiated points the Minister made in the House.

This is a very serious allegation that I cannot let go unchallenged. I want to put on the record of the House a direct extract from the address of the President of the Irish Tourism Industry Confederation to the annual dinner of his association on 5 December 1988. Whether there is a distinction between the chairman and the president of that organisation I do not know but Deputy O'Malley said the person he quoted had his finger on the pulse of the industry. I wonder if it was the same finger on the same pulse for 5 December 1988. The president said then:

We are now on the threshold of a new era for tourism development. Government have given us all targets for the next five years. Challenging objectives, but everyone in the industry believe they can be achieved if, and it is a big if, the industry puts in a supreme effort in terms of marketing and product development and if the Government directly or through their agency, Bord Fáilte, continue to invest in promotion and create an environment that is conducive for private investors to invest in new product development and enhancement of existing products.

If it is the same man we are talking about I find it hard to reconcile the two statements. The industry is committed to the development and so are the Government, and private investment is flowing in because of the high rate of the business expansion scheme. Let me repeat again what the president said: "Everyone in the industry believes that these objectives can be achieved". Apart from the extract I gave the whole tenor of the president's speech is supportive of what the Government are doing and will continue to do for the tourism sector which we have targeted for special development. I have a full copy of the president's speech and I am willing to let the Deputy see it.

Deputy Dukes has questioned the validity of employment creation in tourism. As a service sector, up-to-date data are not readily available for any of the components of tourism. Indeed, it must be stressed that the measurement of tourism employment presents a number of difficulties, particularly because tourism is not a homogeneous, distinct economic sector. The diverse industries and services which meet tourism demand are associated with other sectors as well as tourism. Measuring employment in tourism is not as straightforward as measuring employment in more clearly defined sectors of the economy, such as agriculture and manufacturing industry. Therefore, we must of necessity use a certain procedure to derive employment figures for tourism. Even where data are available from the labour force and other surveys, identifying employment directly related to tourism is not clear-cut.

Indeed, when I came into office it appeared to me that the estimates that were then available for tourism employment were on the high side. Accordingly I had a group of experts from the Central Statistics Office, CERT, Department of Finance, Department of Tourism and Transport and Bord Fáilte to review this very issue. This group examined the problems associated with tourism employment statistics and agreed a new methodology for providing employment estimates on an annual basis. In fact, it is true to say — I want to emphasise this — that this new approach is initially giving us a much lower estimate of the aggregate employment contribution of tourism than the estimate that had been used by the Coalition Government in their White Paper on Tourism Policy in September 1985. I am satisfied that this new methodology is providing us with more reliable and more verifiable employment estimates which can be updated on a consistent and systematic basis. I should point out that these new estimates have received acceptance by the major social partners in the context of implementing and monitoring theProgramme for National Recovery, a point I made yesterday.

We have been vigorously pursuing the targets and the strategies set out for tourism in theProgramme for National Recovery. In the first year of the Government, tourism set new records. For the first time, total tourism revenue topped the £1,000 million mark in 1987 — up 18 per cent on 1986. Out-of-State tourism revenue amounted to £723 million — up 12 per cent on 1986. Almost 2.1 million overseas visitors came to Ireland — an increase of 12 per cent over 1986. The domestic market which had recorded disappointing results in previous years, also improved dramatically in 1987 with revenue exceeding £290 million, a 34 per cent increase on 1986.

The momentum achieved in 1987 has been sustained this year. Indeed, estimates for the first nine months of 1988 show an increase of almost 13 per cent in visitor numbers compared with 1987. All the indications are that we will be very close to achieving our 15 per cent growth target for 1988 as a whole.

The increase in tourism revenue is having very positive effects, both direct and indirect, on other sectors of the economy. The positive impact on employment is particularly gratifying. The boost in tourism numbers and revenue over the past two years has generated an estimated 12,000 additional jobs in the economy. These increases are feeding through into the overall improvement in the level of employment in Ireland. The improvements which have been recorded to date more than confirm the validity of the Government's tourism strategy. The improvements also give us a confidence to push forward with renewed vigour. However, the progress we have made so far does not mean that we can now rest on our laurels. Continued success requires us to keep our tourism products cost competitive and of a high quality.

Of course, the demand for our tourism products also depends on the growth performance of overseas economies. Though our overseas markets may be less buoyant in 1989 than they were in 1988, and hence disposable incomes may not be as buoyant, we can still achieve a significant increase in tourism with the help of our improved cost competitiveness. Already, this Government have made great strides in reducing the rate of inflation in this country. As evidence of the marked reduction in inflation, I need only refer to the figures related by the Central Statistics Office last evening which show that inflation in 1988 was down to 2.1 per cent on average. This is the lowest average inflation rate for over a quarter of a century, well below the UK inflation rate and, of even more significance, also below the average inflation rate for EC member states in 1988.

If the growth potential of Irish tourism is to be realised, then there must be an increase in investment in the sector. To stimulate such an increase in investment the Government decided, under the 1987 budget, to extend the tax benefits of the business expansion scheme to the export tourism sector. The scheme covers most of the tourist accommodation sector as well as a wide range of tourist related facilities and amenities. In fact the extension of the business expansion scheme has been justified as it has been a significant success. I need only refer to the fact that already Bord Fáilte have approved marketing and development plans for 28 projects involving planned investment of over £23 million.

At this stage I should like to advert to some aspects of the other side of my portfolio — I refer to the transport sector. Since coming to office the Government have introduced a series of initiatives in the transport sector designed to improve our competitive position. These initiatives embrace all modes of transport, but particularly air and sea transport. In the case of air transport, the significant new opportunities for airlines and route options for travellers have been coupled with a steady reduction in fare levels. As evidence of the positive impact of our initiatives, I need only refer Deputies to the fact that, as a result of low fares in place since the summer, traffic numbers have increased considerably right into the autumn, particularly in respect of UK and Continental European markets. For the period April to September inbound traffic from Germany was up 30 per cent on last year while traffic from France and the UK was up by 25 per cent and 33 per cent respectively. It is also worth nothing that in this period both Aer Lingus and Ryanair increased their capacity to meet anticipated growth and their confidence in the market has been justified. On foot of the increase in air traffic carryings, Aer Rianta have also benefited. Indeed, a record level of over 6.1 million passengers are expected to pass through the State airports by the end of the year.

While most of the stimulus to inward-tourist movements has been taking place on the air side, the surface carriers have also played their part. The most significant change in the cross-Channel passenger market has been the transfer from the sea to the air mode of a large share of the foot passenger market. This has posed a serious challenge for the ferry operators in regard to the services, facilities and fares they offer. However, the ferry operators have shown a positive and vigorous response to the threat to their markets. They have introduced a series of fares and promotional initiatives in response to the challenge from the air carriers; developing successful packages for car parties in particular.

Before concluding I feel I should notify the House of some very significant developments in EC tourism policy that occured during the past year. In May the German Minister for Tourism, Mr. Bangemann, one of the new Commissioners, convened the first ever meeting, albeit an informal one, of Ministers of Tourism in the Community in Glucksburg. In September the Greek Minister, Mr. Skoulas, convened an informal meeting of Tourism Ministers and followed this up last Wednesday, I am glad to say, with the first formal meeting of Ministers of Tourism since the Community was founded.

At this historic meeting, I am glad to report that Ministers formally agreed to designate 1990 as European Tourism Year. We regard this as a welcome development not only because we shall hold the Presidency of the Community in the first half of 1990 but, more importantly, because it is the first formal decision taken by the Council of Tourism Ministers. It thus establishes a legal basis for the tourism sector in Europe. It demonstrates that member states now recognise the economic and social role of tourism at Community level in creating employment and reducing regional disparties.

The Ministers agreed to allocate five million ECUs, which is almost £4 million, to help finance projects to promote off-season travel and other forms of tourism such as cultural, rural and social tourism and travel by young people. Prize money will also be available for competitions. Most important of all, almost £2 million will be spent on an information and publicity campaign. The original proposal was that this campaign be confined to promoting tourism throughout the member states. However, I am glad to report that the Ministers accepted an earlier Irish amendment that it be extended to third countries such as the US, Japan and Australia, areas where there is so much potential to increase the numbers of tourists coming to Europe.

The Council also discussed a draft directive on package travel which is a measure aimed at increasing consumer protection for people taking package holidays. I reiterated my support for the overall aim of the directive but cautioned that the present draft, by placing too great a burden of liability on travel agents and tour operators, would not be in the best interests of consumers if it led, as it would, to increased holiday costs and a restricted choice of holidays. I am confident that with the goodwill exhibited by Ministers last Wednesday, we shall reach agreement on this directive over the coming year.

While I welcome these developments I must say I expressed my concern last Wednesday at the slow pace of progress on tourism measures in the Community. I emphasised the need to develop a Community tourism action programme, like we have in Ireland, for the development of the sector in an integrated way. This should have as a central theme the creation of productive and sustainable employment and encompass such areas as promotion, marketing, research and the development of tourism infrastructure.

To conclude, theProgramme for National Recovery, at an overall level, committed us to achieving high growth targets in the tourism industry. In a small open economy Government cannot, of themselves, achieve those targets. What Government can do and are doing is to create and maintain an environment within which competitive and quality tourism products can be stimulated and developed. While I am far from complacent, I believe we have achieved considerable progress over the past two years towards creating such a favourable environment. I am confident that the tourism industry can capture the market growth targets set for it within that favourable environment.

It is quite clear to most of those who oppose the Government at this time that the longer they remain in power the more it becomes obvious that what we are getting is government for the rich by the rich. If anyone has any doubts as to where Fianna Fáil's political heart now lies, or from where they draw their moral and financial support, they have only to look at who attended the recent Cairde Fáil dinner at the Burlington Hotel where the speculators, asset strippers and the so-called financial whizz kids turned out in their hundreds——

Media chat.

——spending more on their night out than what most of them pay their workers for a week's work, to lavish praise on the policies of the Government which are serving their selfish interests so well and no doubt to drop substantial donations into the Fianna Fáil election account.

The hands on the financial rudder of State are now those of the Taoiseach and the new Minister for Finance, Deputy Reynolds. They are, by all accounts, two men from reasonably modest backgrounds who have over the years accumulated vast personal fortunes. They are now members of that small privileged elite who are cossetted by the comforts that wealth can buy and shielded from the misery their policies inflict. They show no understanding of or compassion for the plight of those citizens who face a never ending struggle to survive and whose difficulties have been increased by almost every policy decision of this Government.

The Taoiseach may square up to Mrs. Thatcher over extradition to the cheers of his backbenchers but when it comes to financial policy he is one of her most unquestioning disciples shamefully duplicating in this country the excesses of Thatcherism. Just as the Thatcher nightmare in Britain has accentuated the gap between the rich and the rest so the Irish version has increased the divisions between the haves and the have-nots and, indeed, those who have very little. Almost two years into the life of this Government it is time to pause and seriously question where the policies of the Fianna Fáil administration are leading this country. The campaign to make respectable the vicious greed of monetarism by presenting it as pragmatism or responsibility has successfully duped too many people, including, it has to be said, too many workers.

I do not believe, however, that the majority of our people want the Government to pursue policies which allow the rich to get richer and the poor poorer, or that the majority of our people subscribe to the perverse philosophy which views a sweat shop entrepreneur as someone to be admired but an overworked night ward sister as little better than a social parasite to be ditched off the public payroll at the earliest possible opportunity, and which views a land speculator as somebody making a constructive contribution to society while our teachers are only good for the emigrant boat. I do not accept that the majority of people in this country believe that the quality of medical care and the speed and convenience with which one can see a specialist or get treatment should be determined by the number of £20 notes a person can press into the hand of a consultant nor do I believe that the majority of people consider it right or just that the Government should spend more than £20 million of taxpayers' money in subsidising private fee paying, fee charging schools open only to the children of the élite who can afford to pay thousands of pounds in school fees while schools in low income areas face collapse because of a lack of teaching staff and the most basic of facilities.

Over one third of our population now depend wholly or mainly on the social welfare system for income support, and the only reason the proportion is not higher is that strenuous efforts are being made to disqualify people from various benefits, to discourage them from applying, to keep them in ignorance of their entitlements and to encourage them to emigrate. If the same energy and ingenuity were put into tackling our basic economic and industrial problems and creating jobs through renewal and reform in both public and private enterprise we would be in a far healthier situation today.

There is no question but that poverty and misery are growing. If there is any one in any doubt about this they should read some of the recent reports produced by the Combat Poverty Agency and a number of Church groups. The poverty and misery is the other side of the "jobless growth" in the economy. Our exports of goods, services and indeed of people have boomed but the promised increase in employment — thequid pro quo for years of wage moderation — have not materialised and we are now being told the cuts in social spending, not just cuts in pay, are the key to jobs and prosperity.

There is no doubt that long term unemployment is the single biggest contributing factor to poverty. The Workers' Party have been making this point for years, as have the trade union movement. This view is now being increasingly accepted by a wide range of organisations and groups, including the Combat Poverty Agency and the St. Vincent de Paul Society. Indeed almost everyone, except the Government, Fine Gael and the Progressive Democrats, now seem to agree on this point. It logically follows that if unemployment is the main cause of poverty, massive job creation is the solution. If private enterprise has shown itself to be incapable of providing jobs for our people, and the evidence is there to prove this, only a massive job creation plan with public enterprise playing a central role can create the levels of employment necessary to end poverty and social deprivation. However, the Government seem to be content to let emigration be the "solution" to unemployment.

Some people will ask why, if the picture is as bleak as I have painted, there is not more evidence of public discontent with Government policies and why Fianna Fáil are apparently riding so high in the opinion polls. Any serious political observer will acknowledge that raising people's expectations of genuine social justice is a prerequisite for progress. They should also know that there are two central aims of the current well orchestrated right wing campaign, aided by a supportive and pliable media establishment. The first aim is to dash those expectations and shatter class consciousness and replace it with insecure, hopeless individuals and families trapped in want and hardship and too intent on their own struggle to survive to entertain expectations of social change. It is not that people approve of Government policies, and I am convinced that the majority do not, but that practically all the opinion formers — the media, commentators, economists and the three biggest parties in the Dáil — all tell them that there is no alternative, and these people are so preoccupied with their own soul destroying, morale crushing struggle to survive, that they do not have the time or the spirit to look seriously at the alternatives. The second part of the campaign is to encourage the rest to believe that the poor are parasites and that if belts are tightened a bit further everything will be fine under the leadership of the Taoiseach.

The challenge now facing those of us who disagree with the current right wing consensus is how to mobilise the underlying discontent and dissatisfaction that exists with Government policies into constructive, coherent political support for the alternative strategy. As one who has been critical of the Churches on various issues from time to time, I would acknowledge the work done in recent times by some Church groups, such as the St.Vincent de Paul Society, the Catholic Social Services Conference and the Conference of Major Religious Superiors, in identifying the extent of Irish poverty and in proposing possible alternatives.

Indeed there is now a considerable amount of common ground between the parties of the left, the trade union movement, poverty agencies and some Church groups, on both the main causes of poverty and the measures necessary to deal with it. What we need to do to successfully challenge the consensus of the right, is to create our own "Rainbow Coalition" made up of these groups, to create a climate for radical political change by campaigning for more caring social and economic policies. A coalition against poverty, with a number of limited objectives, such as the implementation of the Report of the Commission on Social Welfare, a major job creation programme, minimum pay legislation, protection for part time workers and guaranteed access to health and education could change the political face of this country in a short time. It could do so by restoring morale among all sections of the working class and recreating a belief in their own power and capacity to bring about political change. The reality is that unless we on the left rise to this challenge, the working class will face possibly many more decades of the type of policies now being pursued by Fianna Fáil.

In the few minutes left I want to refer to Northern Ireland. During the past few weeks most politicians and the media in particular have appeared totally preoccupied with the future of one man, Patrick Ryan. There has been much discussion in the House and elsewhere and endless articles and programmes devoted to him. The big concern was whether this man would receive a fair trial if extradited to Britain to face trial on serious offences involving explosives. The Attorney General spent two weeks carefully considering the case and after much deliberation decided that, despite his belief that there was "a sufficiency of evidence" on which to base charges, Patrick Ryan would not be extradited to Britain. The Attorney General's decision was based on a belief that the media and other comment in Britain on the case had been so prejudicial that his right to a fair trial, to which he was entitled as an Irish citizen under the Irish Constitution, could not be guaranteed. It was a decision that seemed to win general public approval, even if there were some of us who had doubts as to whether the Attorney General had exceeded his powers.

There was another Irishman whose constitutional rights were actually violated in a far more extreme way this week but which receive very little media attention. There was no "Today Tonight" programme devoted to it, no special debates in the Dáil and I doubt if the Attorney General, many members of the Cabinet, the Fianna Fáil Party of journalists could General, many members of the Cabinet, the Fianna Fáil Party or journalists could even put a name on him. His name was John Corry, a young man, with an 11 year old daughter, who had his brains blown out by a Provo murder gang last Tuesday as he went about his lawful business in his place of work in Portadown. John Corry was a Protestant and he was also an Irishman. He was entitled under the Irish Constitution to citizenship. He was surely as entitled to have his rights protected as was Patrick Ryan or anyone else. The denial of human rights involved in the murder of John Corry was far more serious than anything threatening Patrick Ryan, yet his death went virtually unnoticed in this part of the country. The Irish Anti-Extradition Committee had nothing to say on his murder and there were no mass meetings in Tipperary demanding justice for John Corry. When concern is expressed about the rights of people whose extradition is sought from this country we must never lose sight of the equally fundamental need to protect people from the Provos and the UVF who decide themselves on life and death, whose decisions are always made in secret, who act as judge, jury and executioner and who are never concerned as to whether there is a sufficiency of evidence as the verdict is always one of guilty and the sentence is always to kill or to maim. It is only when the Government and the people of the Republic show the same concern for the "John Corrys" of this island as is shown for the "Patrick Ryans" that we can truly say our concern is about justice and peace.

I should like to analyse 1988, its effects on my constituents and its successes and failures, as we head into 1989. When my party returned to Government they inherited a very complex and difficult situation. To be fair to the outgoing Government, they probably succeeded in identifying the problems early in their period of office but they lacked the capacity collectively to tackle them. The then Minister for Finance, Deputy Allen Dukes, had a major internal debate with the Coalition partners on the size of the suggested current budget deficit. It was the cause of great dissension and the difference which beset the two party Government made it impossible to grasp the nettle.

The current Opposition have given arm's length support to the Government.

Some of them.

A consensus has developed within the House such as we have not seen since the foundation of the State. The Labour Party and The Workers' Party will understandably take issue with the Government on certain fringe issues——

Like the health services.

—— but collectively the Opposition will not endeavour to force an election. We could all predict fairly accurately the outcome of such an election. There is a realistic consensus in the House and in the community generally that the great weight of borrowing must be brought under control. We are making substantial progress on that front and it is the cornerstone of the future growth and prosperity of the economy. I frequently tell party meetings that if we stop spending we can attempt to stop taxing and until we get borrowing under control we will not be able to make real progress on the economic front.

The scourge of unemployment weighs heavily and nowhere more than in my own constituency. The demographic structure causes greater problems there than most other constituencies experience. It is frustrating and aggravating that so many young people have had to emigrate during the past five or six years.

The Taoiseach has outlined the stabilisation of the financial position and we are now in a position to look forward. There are still, however, a number of difficulties challenging the Government. Deputy De Rossa's party will understandably have some objections to the policy we have been following. His former party leader represents my constituency. I attended seven or eight meetings in the constituency involving about 10,000 parents concerned about primary education. The more meetings one attended the more informed one became about the issues confronting teachers, parents and pupils. One also became aware that savings could be made while still providing a very good service. The great concern at most meetings was about class sizes, yet many schools were denied the services of some of the teachers who had gone on career breaks. The changes we have introduced, the guidelines, revisions and the early retirement scheme have brought about a more productive and efficient system. This is accepted by the parents. There is no great dissension and there is an agreed mechanism with the INTO whereby additional teachers will be appointed where the number of enrolments justifies it. Extra teachers have been appointed to various schools in my constituency. In other parts of the country there is a falling off in enrolments. Surely the system should be flexible enough to cope with the various class sizes. I can make a great case for more appointments and extra spending in my constituency because of the population growth.

Probably a lot more needs to be done with regard to the health cuts. I have to disagree with the decision taken by the late Erskine Childers, when Minister for Health, to set up health board structures throughout the country, involving a plethora of administrative costs and depriving the front-line health service of much needed funds. There must be cutbacks in administration and overheads to stabilise the nation's finances and provide the potential for tax relief and protection for the weaker sections of the community. This is the only option available to the Government. Having taken the initial steps in the past two years we must make modifications and adjustments to protect the less strong sectors.

An air of confidence is coming back into the business community but public representatives must consider how to turn this to the positive advantage of all. Economists and financiers may talk about lower interest rates but how do we as the guardians of the community turn that into effective reductions in the dole queue? As Chairman of an Oireachtas committee on State companies I am aware that this sector has become cumbersome and less dynamic. A number of opportunities have not been grasped. Because of a number of high profile failures there is a feeling that all semi-State activity is undesirable. That is not the case. There is a tremendous wealth of talent and financial muscle which must be directed towards job creation. Consecutive Governments share the blame for allowing excessive borrowings by these semi-State companies and they are now burdened with a debt which inhibits their potential for growth. These are some of the matters we must address from 1989 onwards. We have to identify areas where the State can, possibly on a joint venture basis, make dynamic progress. Never before has the ball been so positively in the court of the private sector. It will be very interesting to see if that sector will be capable of grasping the opportunity of creating the jobs that are so badly needed. The Government have done their best to provide the potential and now we will see if that potential will be realised.

One major issue that will provide an added ingredient for stability, economic growth and employment in the coming three to four years is the Taoiseach's achievement on 19 February 1988 when he attended the Heads of State summit in Brussels. He asked his colleagues in the European Community to recognise that we would have to get financial aid to compete with the countries of the European Community. That is a major challenge and one we must face very aggressively.

The Taoiseach outlined this morning in great detail the preparation and planning that is in progress with the intent that by the end of March 1989 we would have a broad comprehensive range of economic and socio-economic plans for this country. An infrastructural type programme would not be sufficient. The Community should be asked to consider the needs and demands of the satellite towns of Tallaght, Clondalkin, Lucan and Blanchardstown and some of the deprived inner city areas and rural communities that are isolated by lack of proper infrastructural investment. The financial muscle of the Commission and this Government should be used to tackle some of these issues.

One has to be an optimist when one is in public life, as Deputy Garret FitzGerald once said regarding a certain issue when he was Taoiseach. We must look to 1989 with quiet, firm optimism. I hope the bulk of the investment will be directed towards a number of major service-related projects that will provide employment, particularly in my constituency and also the Dublin South West constituency and Deputy De Rossa's constituency where there is a major unemployment problem. As public representatives, we should have an input to this major investment programme to make sure it is directed towards the areas that need it most. The Taoiseach achieved recognition for that programme in February. The Community should give a much broader based contribution to investment. Heretofore, national Governments regulated investment to suit their own programmes. We, in this House, want to make sure that by the end of March 1989 this comprehensive programme will be before the Commission for a speedy approval so that there will be more potential for job creation and investment as we approach the nineties. Hopefully it will result in the return of many of the young people who have had to leave the country in the last five or six years because of the scourge of unemployment.

To a very considerable extent the Dáil has found itself preoccupied during this session with the question of extradition. Indeed a feature of the lifetime of this Dáil has been the amount of time spent on that question. That we have found ourselves grappling with it reflects the discomfort with which the opposite side of the House approach the matter. On the one hand, they recognise that there are international legal obligations by which they are bound but they accept those obligations with considerable reluctance. There is no doubt that some of them find these obligations an onerous burden from which they would wish to escape. There should be no equivocation on this issue. We must be quite clear as to what we are saying. If we are prepared to countenance a situation where effective extradition is not available we might as well put up signposts at every port and Border crossing point saying: "fugitive offenders welcome". That is what is meant if one says one is not going to have effective extradition. The alternative is to put up signposts saying that the rules of international law will be observed.

Let us recap on the various ways in which this House has been concerned with the extradition controversy in the last couple of years. The first major debate on this matter took place in December 1986, just before the change of Government, when the House gave its approval to the ratification of the European Convention on the Suppression of Terrorism. In summary, that legislation provided that certain heinous offences such as murder, firearms, explosives and so on are not to be regarded as political. The House took account of decisions of the Judiciary over a number of years.

A year later, during the lifetime of this Dáil, the issue came before us again. On that occasion the Government put before us a proposal for what they described as safeguards and those safeguards contemplated a role for the Attorney General. At the time we indicated our unhappiness with that proposal. We suggested that what was involved was undesirable, that it involved giving what were essentially judicial functions to an officer who has quasi-judicial functions but is also a political appointee. We indicated our disquiet with that and said it was very likely to give rise to difficulties.

Our concerns were to some extent taken on board by the Government when they said they were prepared to limit the lifetime of that legislation to 12 months and that during that time we could see how it worked out. Consequently, the matter was back before us in the last couple of weeks. On that occasion we voted against the measure and decided it should not become a permanent feature of our law. We did so not on the basis that there was any particular evidence to support our concerns at that stage but because there was no evidence either way. We said that if the House, 12 months ago, had been sufficiently cautious that it was not prepared to see this a permanent feature of our law, and if in the intervening 12 months nothing had happened to relieve those fears, it should not now be made a permanent feature of our law. Since then those anxieties have multiplied because of the role taken on to himself by the Attorney General in the Ryan case.

It is worth considering first what functions were given to the Attorney General by this House. The House, when it passed the Extradition (Amendment) Act, 1987, provided, for the first time, for a role for the Attorney General in the extradition process. What was provided was that warrants seeking someone's extradition should be executed by the Garda Síochána only if a direction came from the Attorney General. It was provided that the Attorney General should not give such a direction unless he was satisfied that there was a bona fide intention to prosecute and that that bona fide intention was granted on a sufficiency of evidence. We were anxious that even that limited role, considering two questions, the intention to prosecute and the sufficiency of evidence to ground that intention, would inevitably involve a politicisation of the extradition process. It is quite clear that the Attorney General contemplates expanding his role in the extradition process in a way in which nobody in this House contemplated 12 months ago and to which this House has never given its approval.

It was suggested by the Attorney General that he was acting not on the basis of his powers contained in the 1987 Act but on the basis of some residual powers that were available to him apparently either way back in 1965 or perhaps on the basis of residual powers that derive from his constitutional status. There can be no basis for any such claim. The 1965 Extradition Act does not contemplate the Attorney General playing any role whatsoever. The Constitution contemplates that the function of vindicating the personal rights of the citizen is a matter for the courts.

In his statement explaining his decision to give certain advices to the Commissioner of the Garda Síochána, the Attorney General made it clear that he believes that from now on he has a role in vetting all sorts of issues that traditionally have been a matter for the courts; issues such as the adequacy of the warrants; such as whether the identity of the person is established, such as whether the offence charged corresponds to an offence in Irish law. Historically those are matters which have been for the courts. The action of the Attorney General, in seeking to expand his function, is quite unwarranted.

It is worth pausing for a moment to consider exactly what it is that the Attorney General has done in this case. The 1987 Act contemplates and provides for circumstances in which the Attorney General gives a direction not to execute warrants to the Commissioner of the Garda Síochána if he is of the opinion that there is no bona fide intention to prosecute or that an intention to prosecute is not grounded on a sufficiency of evidence. The Attorney General has not done that in this case. What he purports to have done is offer advices to the Commissioner of the Garda Síochána. I do not know whether those advices are on paper but, if they are, they are not worth the paper on which they are written. I contend that the advices of the Attorney General on matters not contemplated by the 1987 Extradition Act are of no more value than the advices that the Commissioner might get from, say, Deputy De Rossa, from the Clerk of the Dáil, from you, a Cheann Comhairle, or from anybody else. The Attorney General's function under the 1987 Act is to give directions in relation to two matters only. The Attorney General has given no such direction in the Patrick Ryan case.

Before moving on from the Patrick Ryan case, I think it is worth considering the position which has now arisen because of the default on the part of two Governments, the British and Irish. The position is that Patrick Ryan is wanted to face a series of serious charges. In the view of the Belgian courts there was evidence against him which would justify him standing trial. In the view of the Irish Attorney General, who deliberated over a two week period, there was evidence to justify him facing trial on at least two of those counts, and the Attorney General did not conclude his deliberations on the other. As a result of the attitude taken by the Irish Attorney General and the extraordinary behaviour of the British political establishment and media it is quite clear that there is not going to be a satisfactory conclusion. If a satisfactory conclusion and a fair trial, about which we have all been talking, requires that Patrick Ryan face trial in Britain where he is wanted, the cumulative effect of the efforts of this Government and the performance of the British authorities is that that will not happen, and that means there cannot and will not be a fair trial of someone against whom substantial evidence exists. There remains the possibility of a prosecution here under the provisions of the Criminal Law (Jurisdiction) Act. On that I say only that I found the performance of the Attorney General more than a little curious. I sought to raise this with the Taoiseach at Question Time but I fell foul of you, Sir, when I failed, as I thought I had done, to catch your eye.

The Attorney General's statement says that he has considered two of the charges and, in his view, there is evidence against Patrick Ryan on which he should stand trial. He then goes on to say that he has raised with the British the desirability of now prosecuting him here on those charges, or on some charges in this jurisdiction under the provisions of the Criminal Law (Jurisdiction) Act. It seems to me to be a very curious departure from normal practice that one says to a suspect: "suspect, I have evidence against you; suspect, I am putting in train the necessary mechanism in order that the prosecution can take place". It seems to me that if the British decide that they do want to prosecute this gentleman under the provisions of the Criminal Law (Jurisdiction) Act and should it transpire that, as a result of the Attorney General's statement, Mr. Ryan decided to make himself scarce, the Attorney General's role in all of this would come very seriously into question.

However, enough of that controversy. As Deputy De Rossa indicated, the degree of attention focused on that individual, as against the many other people whose constitutional rights are an issue, sometimes seems quite disproportionate. One group whose constitutional rights certainly have not received the attention one might have expected from this Government are those pupils and students who find themselves within our educational system. Certainly they must feel that their concerns have received scant attention in comparison with that afforded Mr. Ryan.

As one of their early acts this Government decided to effect a deterioration in the pupil-teacher ratio in primary schools. They proposed that the pupil -teacher ratio in our primary schools would be disimproved by three units. The effect of that would have been that just about every school in the country would have lost teachers. It would not have meant just three extra pupils in each classroom, as some people seemed to have thought initially. It would have involved amalgamations of classes, mixed classes, children of different ages and standards. As a result of protests on the part of parents, also as a result of this House, by a majority decision, voting against the Government, the Government had second thoughts and an ameliorated proposal was presented. That proposal provided a reduction in the pupil-teacher ratio of one unit. At the time it was sufficient to secure peace and quiet. It is becoming clear only now that even that limited reduction is having very serious effects. Deputy Lawlor indicated that, in his constituency, the problems were being resolved on an individual basis. Certainly that is not the case right across the country because in just about every constituency I have heard complaints of individual schools having found themselves in anomalous positions, either because teachers who were not expected to leave had left, because there was a surprising turn in the enrolment figures, or for whatever reason.

I intervene to advise the Deputy that there are less than two minutes remaining of the time allotted to him.

One of the most disappointing features in the overall educational scene has not simply been the question of allocation, what has been regarded as priority and what has not, but rather the way in which essential decisions have been deferred and long-fingered. Procrastination is the name of the game. That is so in so many areas where no particular Exchequer implications arise. Since this Government assumed office the Minister for Education has had, sitting on her desk the proposal, which at some stage she must have passed over to the Taoiseach's desk, that the National Institutes of Higher Education at Glasnevin and at Limerick should receive university status. Their case is overwhelming. It has been vindicated by an international panel of experts but nothing has happened. Since the Minister came to office she has had proposals on her desk in relation to Carysfort which would ensure that an educational resource into which vast sums of public money have been paid over the years, would remain an asset for the educational system. At Question Time, time after time the Minister tells us, as she apparently told Ógra Fianna Fáil in Malahide, that she is about to make a decision, but still there is no news from the Minister. The Minister has also had before her proposals to afford autonomy to the regional technical colleges but there has been no legislation despite the fact that we were promised that legislation would be put through in this session and then that even if it could not be put through it would at least be circulated and published. The deadline continues to move further back although that legislation is particularly urgent, because the Estimates for next year propose substantial cuts in the budgets of the regional technical colleges.

I must now call another speaker.

That will cause major problems for the regional technical colleges. If they had the capacity to go out and earn by consultancies and so on, they could do something to ameliorate their problems. They cannot do that without the legislation, and still the Minister delays.

Listening to Deputy Birmingham I noted that he spent most of his time speaking about extradition and the recent application for the extradition of Fr. Ryan. It is not necessary for me to deal with that because the Taoiseach already dealt in a comprehensive way with the matter in the House on Tuesday, 13 December.

As the end of the year approaches one is naturally inclined to reflect on the past year and its successes, achievements and developments. It is also a time for looking forward to next year with a firm sense of purpose and commitment.

As regards my Department, as the House is aware because of the nation's financial difficulties the past few years have been difficult for the health services in line with the other public services. However, we have maintained a quality service for those in need of care. I pay tribute to the commitment, dedication and hard work of the medical, paramedical, nursing and administrative staff.

The problem of AIDS was one of a number of issues discussed at a meeting of the Council of Ministers for Health in Brussels which I attended yesterday. In the absence of an effective cure, the AIDS problem is one which continues to grow and pose challenges to both those involved in formulating AIDS prevention strategies and health care workers. To date there have been 30 deaths from AIDS in this country and a total of 68 cases of AIDS have been reported.

In this regard, I take this opportunity to voice my concern at recent media coverage of the problem which I felt attempted to politicise the whole issue. We must keep in mind, that AIDS is a public health issue and can only be addressed meaninfully in that context.

AIDS is a human tragedy and it is essential that we maintain a sense of balance in our approach. We must all be sensitive to the needs of victims of AIDS. AIDS patients who are also drug abusers are not as responsive to measures such as mass media and education campaigns. They need particular attention.

In view of this, we allocated £150,000 to the Eastern Health Board for an outreach programme on a pilot basis. The main thrust of this programme is one-to-one counselling of drug abusers. The counsellor will be working with the drug abuser on a one-to-one basis and in this pilot programme the counsellor may believe that a clean needle or a condom may be advisable in order to prevent infection to some other person, for example, a spouse.

This is a matter of judgment on the part of the counsellor but again I stress that counselling is the principal element in the outreach programme. We monitor the situation in other countries closely, and a more liberal distribution of needles and condoms has nothing to recommend it.

As I have said, we have a positive balanced approach to prevention, diagnosis, treatment and management of AIDS victims in line with the best programmes available anywhere in the world.

The provision outlined in the Book of Estimates for health services will allow expenditure of £1,368 million to be incurred in 1989. This figure includes the local income of health agencies. The Government have recognised the major contribution that the health services have made towards bringing the public finances under control. This is reflected in the fact that the health share of non-capital supply services expenditure has increased for 1989 compared with 1988 from 18.8 per cent to 19.8 per cent.

In their determination of the 1989 Health Vote the Government have decided that every effort should be made to achieve efficiency savings in the health services next year. Specifically, they have decided savings totalling £10 million should be achieved through additional cost containment measures and additional use of contract services. A target saving in this area has been reflected in each health agency's allocation for 1989.

My Department and I will continue to encourage innovative, practical and workable developments in the cost containment area, which will achieve worthwhile results in the short, medium or long terms. My Department's cost containment unit will continue to provide all necessary support and assistance and I have taken steps to implement another central recommendation of the Trident Report in relation to product evaluation.

The unit will also continue to assist agencies in assessing alternative arrangements in regard to more cost effective purchasing. As a reflection of my commitment in this area I have decided to strengthen the cost containment unit of my Department with a view to accelerating progress.

Earlier this year a review process of our acute hospital service was completed. My objective in initiating the review was positive. It is imperative to ensure that our hospital services are organised, resourced and integrated in such a way that they are in a position to respond to the genuine needs of the entire population.

Despite the critics, our hospital services have responded with efficiency, innovation and in a most positive way to the demands placed on them during the year. It remains a service we can be proud of, and one which services our people professionally and with quality. In 1987, for example, there were one and a half million attendances at out-patient departments while over a half million people were discharged from hospital.

The increased productivity in our acute hospital system has ensured that a hospital bed complement so frequently used in the past as the measure of service availability is no longer reliable.

The concentration of resources by most hospitals on day case treatment and out-patient services has also ensured that the services available within a hospital are accessed by a greater number of people. For example, although bed numbers in the Dublin area have been reduced by about 15 per cent since January 1987, the number of patients treated has increased overall. In the six major Dublin hospitals on the accident and emergency rota admissions in February to July 1987 were 14,266; in 1988, for the same period there were 17,430 admissions, an increase of 22 per cent.

As Deputies are aware, the 1989 allocation to health boards and to voluntary hospitals has been made. In apportioning the budget for hospitals generally for 1989, the first priority is to ensure that adequate provision is made to cater for those requiring treatment and care as a result of accident and/or emergencies. My Department are in touch with the major hospitals to co-ordinate the exercise countrywide to ensure that on the basis of existing and projected trends there are sufficient beds and support facilities to cater for the likely level of accident and emergency admissions during 1989. This exercise will be guided by the continuing role of other linked hospitals in the provision of hospital services. Conscious of the need for the targeting of resources to ensure proper developments in the non-elective areas, the allocations have ensured that sufficient resources will be made available to increase the bed stock and allow for the protection and restoration of services in certain areas. In addition, the bed stock will be increased in relation to orthopaedics, bone-marrow treatment and ear, nose and throat services.

Furthermore, commissioning of new units at Cavan, Castlebar, Mullingar and St. James's and the Mater hospital, Dublin, will take place during 1989.

The Government have accepted in principle the care of the elderly report. In addition, the Government have agreed legislation to register, licence and subvent nursing homes.

In the field of mental handicap, I have continued to encourage a community approach to the delivery of services. I have also asked the chief executive officers of all the health boards to reactivate the regional mental handicap coordinating committees. It is imperative that investment by the State, either by way of capital or revenue resources, should obtain the most productive return in the interests of patient care. This applies particularly when the patients in question are handicapped.

I and my Department have been endeavouring over recent weeks to seek a reasonable solution to the impasse which has developed between the board of Cheeverstown House for mentally handicapped persons and the Eastern Health Board. My essential concern is for the mentally handicapped persons whose interests are not being served by the current impasse. In order to resolve the difficulties I have made certain proposals to the Cheeverstown board which will facilitate an interim arrangement for the management of services at Cheeverstown in the best interests of the patients concerned. I am hopeful that my proposals will resolve the issue and allow an orderly and progressive use of the fine facility that exists at Cheeverstown.

The national lottery proceeds have played an important role in the development and implementation of health policy in the community area. A total of £6 million was made available from the national lottery proceeds for the provision of community health services. Following detailed and extensive consultations, a number of priority areas of expenditure were agreed on. They are as follows: the handicapped, the elderly, psychiatric services, community information and development-type services, AIDS prevention programmes and child services.

There has been £1.8 million used to provide community-based services for the physically and mentally handicapped and to encourage the development of resocialisation programmes with a view to transferring patients from institutional care to community care. Specifically, a grant of £300,000 has been made available for the purchase of houses to move mentally handicapped children into the community. The Irish Wheelchair Association also received a grant of £150,000 for a home care service and £1.2 million was allocated for the provision of community-based services for the elderly. Examples of projects under this heading include the conversion of former district hospitals to provide day services for the elderly, grants to social service councils, and care of the aged committees.

A total of £600,000 has been spent from the lottery on psychiatric services in respect of the provision of community-based facilities, with the particular objective of transferring long stay patients out of psychiatric hospitals. A number of psychiatric hostels, mental health centres and sector headquarters have also received grants.

Almost £1 million has been spent on community information and developments services. A number of smaller grants have issued to voluntary groups and organisations providing a range of services, marriage counselling, health information — promotion, community resource centres, etc.

There has been £550,000 spent on an AIDS prevention programme. Examples of grants are as follows: Eastern Health Board Pilot Outreach Programme £150,000, Ana Liffey Drugs Counselling Services £40,000, study on paediatric aids and drug abuse in the Coombe £15,000 and counselling for AIDS patients in St. James's hospital £15,000.

Almost £800,000 has been spent on child services, of which £500,000 has been used for the provision of improved services for the assessment of alleged cases of child sexual abuse. In addition, £100,000 has been provided for the treatment of bone tumours in children/young adults in Cappagh hospital.

I intervene to advice the Minister that some two and a half minutes now remain of the time allotted to him.

In view of the fact that Deputy Howlin is in the House, I would like to quote from something that he said during the debate on the Supplementary Estimates. It is as follows:

This evening, because I am firmly of the view, and may be it is part of my national school training, that illustration is far more forceful than talking in blunt global terms of millions of pounds, I want to mention one case history to the Minister which might spark his conscience, and that is to talk about another Dublin hospital, St. Vincent's. By way of anecdote I will tell of an experience I had last Thursday. I received a phone call from a patient in Waterford who is suffering from an abscess on the liver. He is a very sick man, as was attested to by his friends and his GP. His condition required urgent medical attention. His local hospital, Ardkeen in Waterford, was unable to provide the required treatment and he was referred to a specialist in St. Laurence's Ward, St. Vincent's Hospital, Dublin, one of the largest and most important of our national hospitals. He was anxious to get this treatment and asked if there was anything I could to to facilitate him...I telephoned the ward sister. I spoke to a very caring woman who told me that they had been instructed by the hospital administrator that there was to be no elective admissions into St. Vincent's Hospital until 2 January next at the earliest.

When I asked her what were the prospects of admission for this man from Waterford she pulled out his file and said that he was listed as an urgent case, that he was one of a 100 urgent cases listed for admission and that he would have to take his place in the queue, and that this was a scandal.

Yesterday, 15 December, I answered the following question from Deputy Howlin:

To ask the Minister for Health if his attention has been drawn to the fact that St. Vincent's Public Voluntary Hospital, Dublin 4 has had to cancel all elective admissions until after 2 January 1989; his view on the non-admission to date of a person (details supplied) in County Waterford who has been referred from Ardkeen General Hospital, Waterford to this hospital and who also attended the Cork Regional Hospital and who requires urgent treatment for a liver condition; and if he will make a statement on the matter.

The reply I gave was as follows:

Allegations about a change in the admissions procedure for elective patients to St. Vincent's Hospital were made during the course of the Health Supplementary Estimate Debate on Tuesday last, 13 December 1988.

The position is that the authorities of St. Vincent's Hospital have indicated that no decision has been taken to cancel any elective admissions.

The County Waterford patient referred to by the Deputy, who was referred from Ardkeen Hospital to St. Vincent's Hospital for treatment of an abscess on the liver, was admitted to St. Laurences Ward of St. Vincent's over the past weekend.

That was two days before the Deputy raised the matter in the House. In conclusion, we have a quality service of which I am proud and, indeed, I am proud to be a member of a Government who have been able to deal with the serious problem of the public finances and at the same time have shown care for those in need.

Debate adjourned.