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Dáil Éireann debate -
Wednesday, 1 Feb 1989

Vol. 386 No. 4

Financial Resolutions, 1989. - Financial Resolution No. 8: General (Resumed).

Debate resumed on the following motion:
That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.
—(Minister for Finance).

Before Private Members' Business I had just completed my remarks on the mineral exploration front. I shall now deal with the ESB. At the time of the completion of the Report of the Inquiry into Electricity Prices in May 1985 industrial electricity prices in Ireland were somewhere in the region of 20-30 per cent higher than the EC average.

In the intervening years since the publication of that report there has been a series of significant reductions in electricity prices to all sectors. The impact of these reductions is such that electricity prices to Irish industry are now in line with the EC average and domestic prices lie below the EC average. The intention is to at least hold electricity prices at their present level until 1992.

With the approach of 1992 the importance of improving the competitiveness of Irish industry cannot be emphasised strongly enough. The effect of electricity costs on this competitiveness is something which my Department are keenly aware of. Every effort is being made to help Irish industry through holding electricity prices at their present level or indeed reducing them even further if possible.

In accordance with the recently enacted Electricity (Supply) (Amendment) Act, 1988, the ESB are now allowed to set up subsidiary companies. This affords the ESB considerable opportunities in the ancillary aspects of their operations in which they have built up a wide degree of experience over the years. Already, I have given my approval to the setting up of a number of companies. The incorporation of these companies forms a major part of the board's contribution to the Programme for National Recovery. I am confident that they will meet the ambitious targets they have set themselves.

Bord na Mona's contribution to the national economic development of this country has been significant for more than four decades. However, in recent years major problems confroned the company. The board realises that in order to address their financial losses they must make the maximum return from the exploitation of their existing peat resources at an economic cost.

The Turf Development Bill, 1988, which I introduced recently in this House will, as Deputies are aware, allow Bord na Mona greater flexibility in their operations thus restoring their core business to a sound financial basis.

Last year the House will recall my predecessor commissioned consultants to undertake a study into all of Bord na Mona's operations. The onus will be on the consultants to address the latest peat development technology here and outside the State and to recommend the necessary changes that are required in order to restore the company to viability. Until this report is received and examined in my Department no break-up of the company will be contemplated.

The availability of natural gas has significantly improved Ireland's balance of payments. It is estimated that natural gas has resulted in cumulative savings of £1.6 billion on fuel imports since 1980. Natural gas now accounts for about 15 per cent of Ireland's primary energy requirements. Irish gas prices to industry are among the lowest in Europe and have significantly aided the competitiveness of that sector.

Kinsale Head is at present our sole supply of natural gas. This will begin to taper off towards the end of the century. Therefore, it is vital that every effort be made to seek and find additional deposits of natural gas to improve our security of supply. The Marathon exploration programme — which, as I said earlier, will be getting underway shortly — is a major development in this regard.

The matter of interconnection of gas and electricity with the UK or mainland Europe, in the long term, has been examined. It was found that a gas industry based on imported gas could be viable given certain favourable conditions, namely price, sales margins and volumes. But clearly, further indigenous supplies would be the best solution.

The establishment of Coillte Teoranta reflects the great importance which the Government attached to forestry in the Programme for National Recovery. That programme specified a firm action plan for forestry development which is being successfully implemented. The Programme for Economic Recovery was also very much concerned to achieve an upturn in the level of employment in the forestry sector.

The volume of timber now coming on stream and the increased planting rates generated by recent initiatives have provided a springboard for new employment in forestry. A great deal of this employment is, of course, in the private sector and in the establishment of new contracting firms engaged in planting, harvesting and, indeed, all aspects of forestry.

I have no doubt that the potential for future employment is great. It is worth noting that forestry in particular is one area which literally plants the seeds of employment for the next generation. The record planting levels of today will provide many jobs over the next 40 years and beyond in forestry and in downstream industries.

Coillte Teoranta are designed to meet the challenges of the future and to capitalise on the investment made by successive Governments since the establishment of the State. Coillte Teoranta have commenced operations with a vast asset resource in the shape of the forest estate transferred to it from the Forest Service. It will have both the freedom to commercially exploit this and a production schedule which practically guarantees a cash break-even point within the next decade. However that is the very least that will be expected of them. Indeed I will be setting them challenging targets and monitoring their progress closely. Coillte Teoranta will be expected to operate on the same lines, to the same criteria as a private company, and much will be achieved in the review of the structure of the present organisation, and a general reorientation of attitudes and procedures towards cost effective management and greater efficiency in operations. Their operation will be a challenge from the beginning, but one which I know is being tackled with enthusiasm by all concerned, and one with which I look forward to being involved.

Apart from the establishment of Coillte Teoranta, there have been other significant developments in forestry since this Government took office, all of which justify our emphasis on this sector as a key national development activity and an idea where further jobs can be created. In 1988, the records for both State and private planting were broken, with 10,000 and 5,000 hectares planted respectively. Production from State forests continued to increase, and the highest ever volume of timber, at just under 1.5 million cubic metres, was sold in 1988. The production from State forests can sustain indigenous wood industries with potential and capacity for growth in jobs, import substitution and exports. The top grade sawmills are all achieving record throughputs and increased business confidence is already translating into increased investment and employment.

There is an increasing awareness of and confidence in the qualities of Irish timber and the huge import substitution potential of the Irish market. We currently import £30 million per annum of sawn timber, but the increasing amounts of mature timber scheduled to come onstream from now on will provide plenty of opportunity to capitalise on this lucrative market. It goes without saying that the production of quality timber is a major requirement, and to encourage this all structural timbers — both Irish and imported — now have to meet the requirements set down in the EOLAS Standard Recommendation SR11/88 from 1 January 1989. This initiative will of course also help in our drive to gain access to markets in the UK and mainland Europe, where common timber standards are being considered in the context of the completion of the single European market.

The essential element of timber marketing strategies is to ensure that the future development of the Irish timber sector is focused on the needs of the Irish and the international marketplace. By concentrating on market driven development, by using all the resources of the State, including the IDA and their company development programme, EOLAS and their technology programme, Coillte Teoranta and their planting, silvicultural and marketing programmes, the industry as a whole can more easily prepare themselves for the challenges and opportunities of 1992.

The expansion of private forestry is a further support to the timber industry and in this regard is a key element of our forestry programme. The various grant schemes available to support the private forestry sector were improved and expanded in 1988. The accelerated forestry programme will require substantial investment and an increase in EC funding is being sought, as forestry meets all the current major objectives of the EC in the areas of regional and national development. Up to now, EC aid for Irish forestry has been confined in the main to private forestry, but significant improvements have been achieved as a result of representations to the EC Commission, and negotiations in the context of the reform of the Structural Funds. The forestry action programme recently published by the EC is a major initiative which provides Community funding for both public and private forestry.

I am looking forward to forestry in 1989 maintaining the impetus of 1988 on all fronts, and in particular to the new ingredient which will be added by Coillte Teoranta. The faith in the potential of forestry which supported the long-term investment required in the last 50 years is now bearing fruit and I believe we can look forward to a satisfying development of this priceless national asset both for ourselves and for future generations.

I want to make a brief intervention on the budget and on the general performance of the Government. First, as it is my first time hearing Deputy Smith as Minister, I would like to wish him well in what is a fairly interesting scene. The last time I met him was at Killa at the drying up of a lake and on that occasion he said he was not the man with the money. Now he is the man with the money, so let us hope he will come back and restore that amenity which we do not have too much of; it is one of two lakes in the area. That is beside the point.

The Deputy will be glad to know we are making some progress there.

Thank you very much. In relation to agriculture I have to blame Teagasc nearly as much as anybody else. It is very dangerous to talk about percentages and averages. One could have one's nose in the furnace and one's feet in ice and so achieve an average body temperature, but that would not be satisfactory.

While the dairymen are certainly doing very well, and we do not begrudge them, the grim fact is that there are others who are going through a pretty thin time. They are still borrowing very heavily.

The tillage people in particular are having a very tough time. In all the EC negotiations we seem to have got the worst of both worlds. We have quotas in dairying where we would probably fare well in regard to prices. On the other hand, there are prices, and we would be better off being subject to quotas. We probably have enough grain acreage but we could not compete with the French in price. I am very much afraid that the super powers in Europe who are very substantial grain growers will try to persuade us to grow grain at £50 a tonne, and that is not on.

My suggestion is that as far as possible we should try to redress that. We are an island nation and we would be expected, in time of emergency, to be self-sufficient. We have people who cannot get milk quotas and the beef scene is so marginal that they would not even venture into it — and would not be financed to get into it anyway; we have substantial areas that are eminently suitable for grain, but unfortunately the margins are getting slimmer and slimmer.

It is with some horror that I notice we are now starting to chip away at our sugar beet acreage. We over-produced a few times and sooner or later we will arrive at a stage where it will not be worth talking about quotas. We need to keep making those points in the European Community.

The whole theory behind this much talked about regional plan is that the super powers say they will grant aid countries so that they will be in a position to help themselves; but I am very much afraid that that is just paying lip service. They might try to withhold grant aid from us if they thought we were not going down a particular road. They are quite ruthless when it comes to what I would consider a worthwhile concession to Ireland, that is, allowing us to work out our own tillage programme.

We hear a lot about the over-supply of food and agricultural produce. We are an agricultural nation and will never be anything else. We depend, by and large, on agri-exports of one sort or another. This whole surplus problem is a scandal and I often wonder why our MEPs do not make more of an issue of it. There are whole continents starving and we have to wait until it becomes a crisis before we move in to help. We hear stories from the various agencies that they do not have enough money to buy food. If the main participants in the EC withheld only 25 per cent of the money spent on armaments in any one year we could probably feed the bulk of the hungry nations in the third world. That is a frightening statistic if it is correct, and I am told it is. We would then be allowed to produce a lot more food which we could send to these continents. It is all very well talking about teaching people to fish so that they can fend for themselves but that is a long way off for most of these countries.

The advisory services are vital at present. A top class advisory service is needed in new areas such as flax, horticulture, onion growing and other worthy projects. It is a pity the advisory services are being decimated at present. I am glad the Government have woken up at last and are beginning to cop on. Talk of voluntary redundancies and so on sounds very smooth but it all adds up to a decimated service. I always remember Joe Rea when he was head of the IFA promising to lead everyone into the promised land but the only one who got there was himself.

I am very concerned about Teagasc. It is a great organisation and I fully agree with the amalgamation although I could quibble about the name. I have visited various stations, sheep breeding stations and so on, in the west where money was well spent. Some of the projects announced in the budget regarding embryo transplants and so on were being undertaken by An Foras Talúntais. That work was ongoing in Moorepark and also in the horse industry. Money should be put back into Teagasc. There were many good ideas in the budget but the one thing we are forgetting is that we still need a lot of guidance. Experiments need to be carried out but farmers cannot afford to experiment or to mess around with a particular variety of wheat or particular breeds of stock. That has to be done at a different level.

I am also peeved about the disadvantaged areas. The files for those areas have been lying on the Minister's desk for a couple of years and the Minister has yet to tell us that he has made the next move. I would like to hear from him or from any Minister that something is being done in this regard. I am glad of the Minister's affirmative response pleases me. This is one area where a small amount of money would do a lot of good. For some extraordinary reason vast areas of the country were omitted. Mountainous areas in the Cork region, extending practically into Limerick, should have been included. Much preliminary work has been done, a small amount of which I was involved in. We had arrived at a stage where we were ready to present our case in Brussels and I am glad to hear now that we are moving into that arena.

In regard to horticulture, which is of particular interest to me, I compliment the Minister, Deputy Kirk, on doing a good job in a difficult scene. I would have to warn him about An Bord Glas. I am not sure that that board is properly set up as yet. The Minister gave an undertaking that the board would be structured properly and that has yet to be done. There are very strong vested interests in private companies on this board. It is my view that members of the board are not working in the best interests of horticulture. It is time the Minister should take my advice seriously in regard to the construction of the board.

As everybody in the House will know the EC is in favour of producer groups. If we are to get any grant aid in the future we must set up producer groups and I am in favour of that. I know equally well that it is almost impossible to persuade farmers to join producer groups. If they have a good year they do not want to know about producer groups and if they have a bad year they all rush to the Minister to know what he is going to do about it. The answer is producer groups. Basically they are an escape for the Minister because he can tell the farmers to set up producer groups and then he will appoint people to help them to sell their goods.

As regards horticulture Colm Warren and the IFA have done tremendous work. They are making great progress and I would like to see that continued. I am afraid that An Bord Glas who promised so much are, if anything, hindering the progress of our producer groups. There are many other new ventures in agriculture such as flax growing on which a small experiment is taking place at present. That programme will have to go on for another two years. It is taking place in conjunction with a Northern Ireland flax processing firm in Sion Mills. That can only prosper and succeed if it gets support, which I do not think it is getting.

The Minister has just spoken on forestry. We are making progress in this area but we could make much more progress if a few matters were put right. I have always said that private and co-operative planting has a lot to offer. The terrible expression "set aside" is used in this regard. If the EC are anxious that bad land be set aside, if the aim is to have less grassland, certain areas in the country could be legitimately planted if — and it is a big if — the land could be retained in the ownership of the people who already have it and if a decent income could be paid to these people while the forests are maturing. In other words, they would be paid to look after their own 70 or 80 acres of forest and when it came to cutting the trees the State, a finance company or a co-op, would be involved. That is being done on a large scale at present. Credit must be given to people such as those in the south-west Cork cattle breeding station who have already planted several thousands of acres along those lines.

We have heard a lot of talk in the last week or so about industry and jobs. Certainly there is a crisis as far as jobs are concerned. Nobody can see the problems better than I can. I tried many remedies when I was Minister, some of which succeeded and some of which did not. People should not criticise the IDA or anybody else. It is very hard to create even one job, because for every job we try to create we will lose another due to technology.

I can quote one instance not very far from where I live where an industry expanded creating 30 jobs but in another industry about five miles down the road a machine was purchased which resulted in the laying off of 30 people because the machine was able to do the job of 30 people. That is a pity because the amount being paid to the people involved would not even pay the interest on the cost of the machine. That machine was used in the food industry and if there was any change in people's tastes that machine would be useless whereas the talents and skills of the 30 people could be changed to cater for that.

When it comes to industry I believe small is beautiful. Deputy Colley said this evening it would take a lot to create the jobs that are needed in small industries. It should not be very difficult. Our major co-operatives which are coming together should break into small groupings and get into the manufacture of cheese or a whole range of horticultural products. A rabbit industry has been set up in my own constituency, a project which I helped to start. I do not see any magical solution. Most of the big industries coming into Ireland have a lot of equipment and very few people. They do not measure up to job targets. I am glad the IDA are switching their emphasis at present to grant-aiding jobs rather than equipment and factory costs. That is very important. At present a meeting of the captains of industry is taking place — there are a few that I would not put in even as subs — but by and large those meetings are useful. The comment I did not fancy was that they felt that after all the grants they got they were not able to create jobs. They said something to the effect that it was a happy coincidence we have a few jobs. They have a big responsibility to create jobs and to maintain them at a fairly high level. After all they have got a large amount of State money, taxpayers' money, and concessions of one kind or another.

Many Deputies on both sides of the House, devoted a fair portion of their time to environment matters and to housing schemes. It is a pity that the Government got rid of the reconstruction grants. They were the best grants ever introduced. If they were still in existence not half the amount of money would be needed for the infill of houses. More work was done in the villages and towns through the reconstruction grants than by any other means. Paying somebody £5,000 to get out of a local authority house and allowing good quality local authority houses to be purchased for £8,000 or £9,000 was a great idea. These are schemes which the Government should consider and perhaps re-introduce. There is no doubt that there is a shortage of houses. All of us are inundated with people calling to us seeking better houses or seeking to have their existing houses repaired but we have nothing to offer in that regard.

Enough has been said about roads but I would like to say that in our area they are bad. It was just as well we did not have too many tourists last year because we would have been embarrassed by the State of our roads. We had umbelliferae, hedge parsleys and so on. They were like the cedars of Lebanon meeting in the middle of the roads. Our cars were not designed to cut hedges, much as that is what seems to be expected of them. I would hope that this year we will have proper hedge cutting and at the very minimum the filling of potholes to make the country what it used to be, a place to be proud of it, and so that when tourists come we can take them around and show them the highways and byways.

There is the sensitive problem in my area of pharmaceutical pollution. Some of the local authorities are the worst pollutors of all. Until such time as we take the whole area of treatment plants seriously we have to talk out of the one side of our mouth on pollution. Human effluent is going into estuaries. I am glad that the Minister responsible for fisheries is present. Urban and city effluent is doing infinitely more harm than any pharmaceutical industry. This is causing very serious pollution in Cork Harbour.

Everywhere around the coast you will see increasing evidence of damage to fish stocks and so on. There are about 50 pharmaceutical chemical industries in this country. Independently set standards would stop all the talk about the damage they may or may not do. We need also independent monitoring and totally independent people in charge. I would put a special group of graduates on the job and give them the brief to nail down a particular industry if it was causing a problem. I would insist that every pharmaceutical industry would have a fund set aside, to pay without quibble, so that unfortunate farmers, or anybody else would not be dragged through the courts because they would not be able to fight their case due to insufficient funds. On the basis that an independent monitor found that crops or stocks were damaged, the responsible party would have to pay up. As well as that the industry itself would be brought before the courts and would have to pay a hefty fine. If they insisted on their misdemeanour the State would have the right to turn the key on it because nobody wants that pollution.

I was concerned about one point made by the Minister for Industry and Commerce about connecting to the European grid so far as the ESB are concerned. I hope he is not thinking about connecting us into Sellafield or one of the other clapped out nuclear plants around Europe because I feel very strongly on that issue. When I was on the other side of the House I took a barrage of criticism from this side of the House and rightly so. The present Taoiseach questioned me about becquerel levels. Quite honestly I did not know but I gave him the official reply that 300 becquerels were safe. That was the official reply but the question is, are they safe? We are in real danger in the northern hemisphere. The entire southern hemisphere tomorrow morning becquerels as they do not have any nuclear plants. If I was selling food in the southern hemisphere to morrow morning I would make that point. I do not think we should have hand, act or part in these power plants, whether in terms of taking electricity or of any other involvement.

It is a disgrace that a sovereign super power like Russia would be allowed to operate a clapped out nuclear plant, the fallout from which destroyed our sheep flocks in Wicklow and along the east coast, not to mention the damage it wrought in other parts of the world. For example, along the whole of the Finnish-Norwegian seaboard, most of those involved in the production of deer meat are out of business because that was their livelihood.

Our strongest line into Europe is that we have clean food. I am delighted that both the Minister of State at the Department of Agriculture and Food, Deputy Walsh, and the Minister, Deputy O'Kennedy, are sticking strictly to the idea of no hormones. That might be all right in cattle but if the German housewife says she want meat without added hormones and if she is prepared to pay £6 per lb for it, we must give it to her. We should not apologise to Americans or to anybody else because meat is something we can produce better than anybody else. That is where our future and out market lies and we should defend and guard it in so far as we can.

In relation to difficulties with the planning laws, we blame the planning officers but these people are merely working under the planning laws and these laws badly need a shake up. We hear a great deal about ribbon planning. It is almost impossible to get a house built now because of all the difficulties that are put in the way. You are told, for instance, that you are upsetting the skyline — what nonsense — or that there is a problem of a proliferation of septic tanks and so on. We could have a proliferation of many other problems if people are lumped together as in the case of Ballymun and many other such places. I would much prefer to see people living in the place of their choice and being given an opportunity to go out into suburbs, into the rural areas where sites are cheap, where farmers are delighted to sell. If you had 20 acres of furzeland it is grand to get rid of it, to get money for it and keep the bank manager quiet. We are prevented from doing that because of planning laws. It is high time we had a second look at those laws and to think in terms of, perhaps, communal septic tanks. There are various items that could be looked at but for God's sake let us ease up so far as building houses is concerned and then jobs will be created. A lot more houses could be built then than are being built today.

Regarding health I am worried about one or two items. There is a certain type of old folk I am very concerned about and they are the people who are being put out of welfare homes, where those places are being closed. Those concerned are being sent home to empty, cold houses. They are told they can go to private nursing homes or hospitals. They cannot afford to do so. Most private establishments charge in the region of £150 per week, but these people have only £80 to £90 per week. The Minister for Health should show some concern for those people and try to ensure that we are not making their lives miserable during their last days and that they have some comfort such as they were used to in the welfare homes. I ask the Minister to look specifically at this issue.

We have just had a debate on the VHI. I do not believe there should be a cut off point for PRSI. Whatever a man's income is, he should pay PRSI on it and qualify for full medical treatment. I will explain why I think this should be so. I know somebody who joined the VHI recently because his income had gone over the £16,000 limit due to working overtime. One of his children had a problem and the VHI told him that, because the child had the problem before the family joined the VHI, the child was not covered. The husband had dermatitis before he joined and again he was told that as he had dermatitis before he joined, this condition also was not covered. What good is the VHI to that family? I would like to see a single system in which everybody paid irrespective of income and was covered for every illness. After all, £16,000 might be worth only £14,000 the following year. Many people on an income of £16,000 are not very well off.

Another total waste of funds is what I call the disability benefit scandal. A patient goes to his doctor and is examined, is then referred to a specialist who further examines him and agrees that the patient is unfit for work. However, that patient has then to go before a departmental medical referee, and the departmental doctor may tell him that he is fit for work. This to-ing and fro-ing goes on and that system is a little bit unfair. Basically it is just tying the matter up in knots.

I would like to comment very briefly on fisheries. The rod licence issue will have to be sorted out. We have created a problem where none existed. The matter will have to be sorted out, and sorted out very quickly. As somebody who lives beside the sea I have a personal view on monofilament nets. Monofilament nets will have to be taken seriously. They are being used. To say that a fisherman can use any other sort of a net except a monofilament net is like telling a farmer to go out ploughing with horses. Ways and means can be found to regulate the amount of fish caught and we are doing this in the case of herring. This issue must be taken seriously. A helicopter should be put on a protection vessel and left there, because that is the place for it. The fishermen would be on our side if the helicopter were put to effective use. The helicopter is made for the job of keeping our waters safe from intrusion.

I hope that my speech was constructive. My main point is that there is not a better way, as the only way is the hard way. We have a long way to go before we can be complacent. This Parliament was set up so that everybody could work together for the betterment of the country. That has been my view always and I would like to think that in my lifetime we will see this country begin to prosper.

First, I would like to congratulate the Minister for Finance on his first budget. I believe that his contribution and that of the Government to the preparation of the budget will go down in the records of the country as one of the most imaginative contributions we have ever seen for many a year.

The Government and the Minister have been criticised on the basis that not enough was done in this field or that but I think it was a case of going out to play a match with one hand tied behind their back. This was due to the fact that we have a national debt which built up over the years and which has been strangling Governments down through the years. It had to be tackled. When Fianna Fáil came into power in 1987 the first real attempts to tackle the financial problems started. In doing this, the Government took many harsh decisions. The Opposition were wise enough to realise that those decisions had to be taken if "Ireland Limited" was to remain a sovereign State. We succeeded in that and I believe we are continuing to succeed. People are prepared to accept that the Government have to take harsh decisions every day. Nobody in politics likes to be other than popular but we have now reached a stage where Governments are not going to be popular in the years ahead. We have seen Governments fail to tackle the problems down through the years and now this Government have set about tackling the problems.

We have problems with unemployment, inflation and emigration.

Indeed, we can look back and say we have wasted many of the resources we have had down through the years. Our greatest resources was probably our youth. We had many well educated young people coming onstream and seeking employment who were unable to find a future here. They were forced to emigrate. Indeed the Taoiseach, like every Member of this House, admits that emigration and unemployment are probably the two greatest scourges of the eighties. However, if we had not tackled the problem, I believe the country would have been facing more serious difficulties by the nineties.

We are facing towards 1992. This will have a major bearing on the single market which is of great importance to us. It is important that we face that with confidence, determination and with a united front. There is no use in Members coming into the House to criticise Government decisions on seeking moneys from Europe. The Government have done well. Indeed, when we look back and see the actions the Government have taken in the past two budgets, we see that we are moving towards the type of economy that will be in a position to provide for our young people.

Let us compare the Exchequer borrowing requirements. In 1982 we borrowed £1,945 million or 15.6 per cent of GNP, while in 1989 we will borrow £1,057 million or 5.3 per cent of GNP. When you compare these figures you see that the problem is now being tackled. In 1986, the last year of the Coalition Government, £2,145 million or 12.9 per cent of GNP was borrowed. We have a duty as elected politicians to see to it that the country is put back on its feet, that problems are tackled and that our finances are put in order. The Government are to be complimented on the action they have taken in the past two years in dealing with the problem. When you consider that today Ireland has the lowest inflation rate of any member state in the EC, it makes you wonder what would have happened if the problems had not been tackled. Look at the actions taken by the previous Minister for Finance, Mr. Ray MacSharry, my former constituency colleague. I take this opportunity to wish him well in his appointment as European Commissioner with responsibility for agriculture. He knows the problems and I have no doubt that he will use his energies and ability at European level to see that Ireland gets a fair and equitable share of the European cake.

Our current budget deficit is unacceptable. In the coming years the Government will have to continue to cut the deficit if we are to remain competitive. If we are to retain an economic base for industry we will have to tackle the problems and continue to put in the boot, irrespective of whom it may hurt. It is hurting everybody from the poor to the wealthiest in the country. When we look at salaries and then at taxation levels, we see that taxation is penal. At least people are now prepared to give this a try and they are prepared to give the Government an opportunity to put the State finances right. They are prepared to pay their taxes at present but they will not continue to pay them indefinitely. If the medicine does not work, I believe we are heading towards anarchy.

We have the lowest interest rates for many years, approximately 5 to 6 per cent lower than those of our neighbours in the United Kingdom. Anybody who would have said that was possible four or five years ago would have been thought mad. That has happened because Government have been effective. They are setting about doing the job. The savings of people with regard to mortgages, and industrial savings on interest alone, lead us to believe that a new confidence in the Irish economy is being born. In 1988 our exports were the highest in the history of the State. We had the highest surplus of exports over imports ever. They have been increasing for the past two years, but can increase further in the years ahead. The growth rates are more than expected. A growth rate of 3 per cent is being forecast for this year.

This morning the Taoiseach said that the Government had four priorities in framing the budget. The first was to continue the strict control on Government spending and borrowing. Everybody in this House is agreed that these had to be controlled. If you allow a car out on the road without brakes, it will eventually crash into a wall and this country had reached that stage. Politicians have a duty to attack poverty, because there is real poverty in this country whether people want to admit it or not.

This budget was an attempt to alleviate the poverty that we as public representatives see every day of the week. All of us have people coming into our political clinics who are hardship cases. We have a duty, where possible, to try to eliminate the poverty traps. People may say that we have not done enough, and we have had correspondence in our post in the past week from various lobby groups telling us this, but I ask those lobby groups where the resources are to come from to do any more. We cannot increase taxation because the country is already taxed out of existence. The Government have done quite well in this regard.

We also have the problem of personal taxation, which aggrieves everybody. When you realise the rates of tax in other countries which to us look unbelievable, you wonder why ours cannot be like them. The fact is that we have had to pay so much in repayments on Government borrowings down the years that, until such time as we are able to repay our foreign debts, we will not be in a position to do anything about taxation in general and personal taxation in particular. We hear people saying that company taxation is too high and is preventing us from attracting foreign industry. I do not believe that this is so. The 10 per cent tax rate is probably a little lower than it should be, but personal taxation is much higher than we can afford and much higher than it should be. It must be tackled in the years ahead.

The actions of the Government over the past two years have been of enormous proportions. They have made enormous strides in improving the state of the country. With the great growth that has occurred in industrial exports, we are now heading towards the position of being able to provide further work at home for many of those who have emigrated. Those people did not emigrate by choice. They were forced to emigrate because there was nothing at home for them. We have a duty to try to bring about circumstances which will make it possible for them to return and make a living here.

We are bound to take action with regard to taxation. The action taken by the Minister for Finance in the budget is the first move towards improving the personal taxation situation. It has been said that it is not enough, but this is the first time that we have seen the rate of tax reduced and we have seen the tax bands widened and other adjustments made which will benefit the people. There is the introduction of the child allowances with regard to taxation. The Government are committed to plug tax loopholes which have been exploited.

In the Finance Bill we will see action taken to deal with some of the problems that have been created. The reduction in the personal rate of tax is the first that we have had in 20 years. It is only 2 per cent, but at least it is a move in the right direction. Rather than allowing the taxation system to run riot, with the net result of prohibitive wage increases being sought, Government action on tax will mean that people will be prepared to accept, and will have to accept, very modest wage increases in the foreseeable future.

If we are to compete against our European partners by 1922, we must now realise that we have to take and seek minimal increases and see to it that there is the minimum of labour disruption and strikes. I welcome the recent action of the trade unions in coming together. It was ridiculous that this country had over 90 unions fighting for membership and each trying to be more militant than the other to create a climate that would attract new members. The trade unions, in their wisdom, having gone into the Programme for National Recovery, have decided that there is no future for militancy as far as our industry and workers are concerned.

This is the first time we have seen a net increase in employment. In 1988 there was a net increase of approximately 6,000 people; after a fall from 1982 to 1987 of 60,000 odd, it is welcome to see that the graph has risen. The growth is not fast enough for anybody but if Government policy continues as it is the benefits will come in the not too distant future.

There are some very welcome changes in the budget with regard to the social welfare code. Nobody here would begrudge the increases being given to the long term unemployed. They have been given increases in the past two years of approximately 25 per cent. This is an attempt by Government to take them out of the trap that they are in. With the tax changes, those who are on lower incomes will benefit greatly from this budget. I welcome the widower's and deserted husbands' allowances paid in cases where people are entitled to them.

But not until October.

If Deputy McGahon wants to distract me, he will well remember that he sat on the Government side of the House for four years, with partners who claimed to be socialists but who did nothing about the problem during their term of office except talk.

The present Government were nit-picking when on this side of the House all that time and the Minister Deputy Lyons knows that. He went to Germany——

This is a welcome move by the Minister for Social Welfare and the Government. The increases, while only 3 per cent to old age pensioners, are above the rate of inflation. They have also free electricity, free fuel allowance, free telephone and free television licence. These are major benefits in kind which they appreciate and they will not begrudge a higher rate of increase to the long term unemployed.

The social welfare problem is now being tackled and the action by the Government in this sphere will be long remembered. People in other countries envy the rates we pay to our old age pensioners, which are well ahead of those paid in the United Kingdom. We have a welfare system which is one of the best in the world. There is a certain amount of abuse but that problem is being tackled and major benefits will accrue to those who genuinely need to be looked after. The deterrents which have been put in place will prevent spurious claims.

The provision of extra money for our roads is of major importance. The road system has been allowed to deteriorate to an unbelievable extent. The Minister for the Environment has been called some nasty things in this House but we should consider what he inherited and what he has achieved since coming into office. The outgoing Coalition Government provided £6.5 million for county roads in 1987. This budget provides £47.4 million for them. People are entitled to a reasonable road to their house, farm or local town, regardless of whether they live one mile or 25 miles from a national primary road. This is the first attempt to bring our county roads up to standard. Probably the most important aspect of the budget for those living in rural areas is the provision of an extra £10 million on top of the Estimate provision for county and regional roads. Some of our national primary roads would be classed as third grade roads in many other European countries.

(Interruptions.)

I know that Deputy Boylan has the same problems in County Cavan. His party were in Government from 1982 to 1987.

We did not produce the 1977 manifesto.

If Deputy Boylan and Deputy McGahon want to have a discourse on county roads in Louth and Cavan, I will explain what party are responsible for their condition. An attempt is being made to tackle the problem with the full commitment of the Government. The fact that Structural Funds money will be used to improve our infrastructure is of major importance. If we are to attract anybody to rural Ireland we will have to provide reasonable roads out of the cities. I live in a county which has only 26 miles of national primary road. Every other road is a county road. We need the extra money, as do other counties. For many years we had an inadequate telephone service but now we have probably the best telephone system in Europe.

(Interruptions.)

We need by-passes around many of our towns. One often spends half an hour trying to get through a town at certain times of the day. There is a need to upgrade some roads, especially in my county. I am refering particularly to the road from Dromod to Swanlinbar and Enniskillen and the road from Carrick-on-Shannon to Drumshanbo, Manorhamilton and Bundoran. The first of these roads has never been given its rightful status as a national primary or national secondary road. The second road to which I refer could, if developed, cut 25 or 30 miles off the journey from Dublin to Donegal. When one considers all the vehicles which take that route per year the saving in motor fuel alone would be considerable. We should pay a special tribute to the Minister for the Environment for his actions in regard to our roads.

This budget is the first attempt to create an environment which will encourage industrial development and thereby tackle the problem of unemployment. Approximately 240,000 people are unemployed, many of them highly skilled. Some have considered the possibility of emigrating but in many cases they have been forced to stay due to family circumstances and situations beyond their control. Even the Opposition are aware that it is not easy to create jobs.

It is when in Opposition. Fianna Fáil had all the answers four years ago.

If my friends find the pill hard to swallow, I cannot help it. At least under this Government real employment has increased.

Where are the jobs?

This is not a question and answer session.

I thought it was. The tourist industry is now being tackled, we have advantages in relation to tourism which have never been exploited. We have not used our natural resources to the best of our ability. Deputy Hegarty mentioned the rod licence earlier but his party, like all the other parties in the House, did not object to it when it was being debated.

We were misinformed.

I do not understand that coming from a man of Deputy Boylan's intelligence. I presume, like all Members of the House, he read the Bill prior to it being put before the House. There are people outside the House who are using the rod licence dispute as a way of creating political aggro and interfering with the tourist industry. Thankfully in my county we have had no problems, although people tried to import them by coming 50 and 60 miles to put up "no fishing" notices. However, the people of Leitrim dealt with this by removing them.

It is unfair to interfere with the livelihood of others in angling and tourism. Many of the people concerned should realise that the licence fees being sought are of a nominal nature. If people do not want to pay it directly they should pay it through their own angling club. Massive amounts of money are being lost in tourism revenue to people who badly need it. Small guest house owners, small publicans and businesses in the small towns and villages, especially in my area, are badly affected by the dispute. These people seem to think they are on some kind of crusade and it is time they abandoned it.

This is our first opportunity to improve the economic outlook. There is a new confidence in the economy and the biggest input as far as buying of Government stock is concerned was from the Germans——

Why are so many people emigrating?

Deputy Deenihan well knows that I will not fall for that one because he understands the position created by the mismanagement of the Coalition Government. The buck stopped with him and his party. The Deputy's party were in Government but they make the excuse that they had one hand tied behind their back because they were sort of a Coalition.

The Deputy's party is a minority Government.

The Deputy's party have — as has been the case for the past two years — an opportunity to bring down this Government if they want to but he, his party and his leader realise that the Government are doing the things that need to be done. They might be painful but we are all suffering manfully together.

I congratulate Deputy Ellis on an interesting fairy-tale. He really has a hard neck.

No offence taken.

Deputy Ellis certainly had a hard neck to mention potholes because in my county the potholes are craters. The reason is that the Government halved the allocation of money that the outgoing Government provided two years ago. Fianna Fáil should hang their heads at the mention of potholes.

In a fairly negative budget the most surprising omission to me as a Border Deputy was the lack of mention of 1992 and its implications for everyone. I would have thought that in 1989, the year 1992 would have been of paramount importance to the Government but it hardly merits a mention in the budget. The whole question of equalisation and harmonisation of VAT and excise duties has been ignored. The Government should have given very serious consideration to this matter as there must be preparation for the most important event of the century. If we do not prepare for 1992 we will be unable to take advantage of the tremendous opportunities which will present themselves. We must be able to maximise those opportunities but, as I said, it barely rates a mention in the budget, which is very disappointing. I will not slag the Government on the budget because it has been a fairly benevolent one, it gives a little and takes a little.

There have been impassioned cries from different parts of the country in relation to social welfare and the level of poverty. However, most of that poverty is self inflicted and emanates from unbelievable abuse of the national lottery. A country that can spend £100 million in 11 months belies the suggestion of widespread poverty. There will always be poor people because of an addiction to gambling or drinking, but a country that spends £1.5 million on drink per day is not poor.

I wish to express concern regarding very low paid workers who, in many cases, are working for less than people in comparable circumstances receive in social welfare. Indeed, the increase of 9 per cent to the long-term unemployed means that people in low paid work are now £3 per week worse off than those on welfare. The level of PRSI is a disincentive to firms to create work and many people have come to me and threatened to give up their jobs and live on social welfare. It concerns me that people are deliberately avoiding work.

There is an anomaly in the social welfare system to which I should like to refer — the plight of the widower and the deserted husband. A widower with three children receives £30 per week less than a widow in a comparable situation, which is deplorable. While the Minister had addressed this, he will keep them waiting until October for payment. I do not follow that logic because the plight of these people should be recognised and payment made before October.

This is my seventh budget contribution and I again want to call for help for the under-privileged people in the Border region who have been hung out to dry by successive Governments. I have criticised successive Governments for their lack of attention to the underprivileged who live in the Border region. In 1984 the European Economic and Social Council published a report which identified the Border region as being one of the most disadvantaged in Europe. Yet no attempt has been made to address the problems in my home county or in the adjacant counties of Cavan and Monaghan.

For 20 years I have been witnessing the steady decline of Dundalk, the biggest town in Ireland and a town which prospered in the past. The present unemployment rate in the town stands at 32 per cent compared with the national rate of 18 per cent. Just how high must this percentage become before the Government decide to do something about this sad statistic? Traditionally emigration has been highest along the western seaboard but now the pendulum has swung and emigration is highest in the counties of the north east, Counties Cavan, Monaghan and Louth. There has been a mass exodus of young people from my own area to the cities of London, Birmingham and Manchester as there is no prospect of help or industries being directed to the town of Dundalk which has a population of 30,000 people. It is absolutely appalling that successive Governments have failed to take any initiatives to address this problem over the past two decades. Those of us living in County Louth, the foremost Border county, believe that crimes have been committed against us and it seems that we are regarded as second class citizens. There seems to be no real desire on the part of the Government to help us.

Recently the Minister for Industry and Commerce, Deputy Burke, announced to a fanfare of trumpets that 20,000 new jobs had been created last year. He did not say, however, how many had been created in Dundalk and I can tell him that the answer is none. He was followed closely by Mr. Pádraic White of the IDA who also announced to a fanfare of trumpets that 12,000 new jobs had been created. I would like both the Minister and Mr. White to spell out where these new jobs have been created and Mr. White to explain why visiting industrialists are not brought to the Border region but rather to the more glamorous counties of Galway, Cork and Waterford. The town which has borne the brunt of the Ulster troubles for the past 20 years has been neglected and it is a disgrace that this should be so.

I now want to refer very briefly to the lack of any initiatives in the budget in regard to housing. The Government have refused for two years to grant permission for the building of local authority housing. The proud claim of Fianna Fáil over the years has been that when they are in Government the construction industry flourishes. However, figures recently published show that there are now 9 per cent fewer people employed in the building industry than there were last year. Many of the builders in the Border region have moved to London and last Sunday's editions of the Sunday Independent and Sunday Press carried an advertisement inserted by a prominent Dundalk firm who are at present carrying out contracts on the Isle of Man. So much for the much vaunted connection between Fianna Fáil and the building and construction industry and their claim about what they will do for it.

I have called consistently for special aid for the Border region. In particular I have been calling for the past seven years for the establishment of a special enterprise zone as part of a package to enable hard pressed businesses to survive. I take this opportunity to appeal once again for the drawing up of a special development plan for the Border region. In fact, I believe a Border Department should be established. If special aid, and not vague promises, is not provided for this region its economy will collapse.

I would now like to refer to the failure of the Government to take any initiatives to tackle the problems in County Louth and to contrast the initial allocation of £43,000 from the national lottery with that for Tipperary of £487,000. This exemplifies the points I have been making in regard to the failure of the Government to recognise the unique needs of the Border region. That amount of money made available from the national lottery is chicken-feed and is an indication of the level of the contempt in which the Government hold the people of County Louth. They also failed to recognise the need for a regional sports centre in the biggest town in Ireland which is uniquely placed, geographically, to cater for cross-Border participation in sport. I also wish to protest at the measly allocation of £200,000 which is in stark contrast with the allocation of £1 million for the building of a swimming pool in Sligo. Also, were the Government serious when they gave a commitment to decentralise a section of a Department to my home town?

I wish to protest at the attempt being made to downgrade Louth county hospital and in particular at the proposal to close the maternity and gynaecology sections along with 30 acute beds in that hospital. In conclusion, I wish to protest at the lack of funds made available in the budget for the Irish Olympic team. I deplore the absence of a message of hope from the Taoiseach to the Irish Olympic team who took part in the recent Olympic Games in Seoul. The Taoiseach was quick to get on his bicycle and go to Paris when Stephen Roche won the Tour de France; yet this team was sent away on a wing and a prayer. But for the intervention of a Dundalk businessman who donated £30,000 many members of the Irish team would not have been able to participate in the best and biggest sporting occasion in the world. Over the coming four years money should be provided for the Irish Olympic team.

I welcome this opportunity to make a contribution to this debate which enables us to review the public finances and the progress which has been made by the Government over the past 12 months. A number of Fianna Fáil Deputies have stated quite calmly that this is one of the finest budgets ever to be presented in this House. I certainly would not make such a claim but members of Fianna Fáil are given to making wild statements and are not shy in heaping praise on themselves. An opportunity has been missed to do something for the benefit of the people who were waiting eagerly for the Government to indicate in what direction we are headed. It seems, however, that they have lost their way and have no idea of where we are headed. They now find themselves at a crossroads.

To summarise the budget, the Fianna Fáil thinking is "What we cannot cure they must endure". They have tinkered with a number of problems and the one major problem affecting the people is personal taxation. The people were led to believe that relief was coming, and there is no better way of encouraging people — I am sure the Minister of State, Deputy Lyons, would agree with me — than to give them a decent reward at the end of the week for their week's work.

Debate adjourned.
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