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Dáil Éireann debate -
Wednesday, 7 Feb 1990

Vol. 395 No. 4

Financial Resolutions 1990. - Financial Resolution No. 9: 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.
—(The Taoiseach.)

We will now resume on the budget debate. Deputy John Bruton is in possession with some thirty-three minutes left.

Before we adjourned I was making the point that in comparing our tax system with other countries, the most relevant comparison is not between, for instance, the tax situation here and in Sweden or the tax situation here and in Luxembourg or Austria, because the average Irish person who is contemplating relocation — either to work in another industry or of their money — does not think of Sweden, Austria or the Nordic countries, the relevant comparison is with the English-speaking world. As I said, taking an average income of £15,000, the single Irish person has a significantly less take home pay — perhaps as much as £1,500 less — than the person on the same salary in the UK. Indeed, the Irish person earning that salary has about £3,000 less than his counterpart in the United States or Australia.

When calls are made for a greater tax on the corporate sector or property, one must bear in mind that, with the exception of certain types of real property, that is, land and buildings, which cannot be moved to another tax jurisdiction, it is increasingly easy for people to move other forms of property and corporations to different jurisdictions. If our corporation tax is significantly higher in terms of the rate or in terms of the absence of allowances from the tax that applies in Northern Ireland, it is quite possible to envisage companies relocating their warehouses and operations in Newry and trading freely across the open EC boundary throughout this island.

The same applies to people who, as a result of the removal of exchange controls, can move their financial assets to a jurisdiction where the taxes are less. Rather than setting our sights in terms of taxation on the basis of comparisons with GDP in Scandinavian countries, the relevant consideration in regard to corporation tax, income tax and — although not to the same extent — taxes on wealth, we must consider the comparative tax level in other jurisdictions to which the person, his corporation or his assets could readily be moved. If our tax levels are significantly higher or more onerous than in the competing jurisdiction, the system simply will not work. There will be a flight of individuals, assets and corporations to other jurisdictions.

Those who think that there is an unlimited availability of tax revenue to fund all sorts of suggested schemes — usually good, sensible and worthy schemes — should bear in mind that in the Europe of 1992, all these things can be readily moved to avoid tax.

Interest rates being charged to people on mortgages and to those borrowing money from the bank in this country are 2 to 3 percentage points higher than they need be. In some cases, they are 4 or 5 percentage points higher than necessary. There are a number of reasons for this. There have been four increases in interest rates in 1989, the first two were necessary in order to keep our interest rates in line with the Deutsche Mark interest rates, which we must do as long as we are in the EMS because, essentially the Deutsche Mark runs the EMS. However, in the latter half of 1989 there were two further unnecessary increases in interest rates which did not occur in Germany. They were justified on the grounds of loss of reserves but that loss could easily have been replenished by the Central Bank if they had borrowed German Deutsche Marks.

In view of the obvious and sustainable determination of the Irish authorities to maintain the relationship between the IR£ and the Deutsche Mark there would have been no risk involved as far as the Central Bank were concerned. Having done that, they could have replenished the reserves without any need to increase interest rates. A mistaken interest rate policy in the second half of 1989 is responsible for the fact that interest rates currently being paid by people on a mortgage are 2 percentage points higher than they need be. This is borne out by the fact that the gap between Irish and German interest rates expanded by two points during 1989 over and above what it was at the beginning of the year.

I know it will be said that the Minister has no direct responsibility for this, that interest rates policy is a matter for the Central Bank. It is the case, however, that the Central Bank consult on a daily basis the Department of Finance in regard to the interest rate policy. The Central Bank would not take a decision on the interest rate policy which was contrary to the Minister's wishes. While the Minister may not have been the initiator of the extra loaded interest rates in the latter half of 1989, I believe he was a willing participant in the extra interest rate hike which was unnecessary and which can be reversed.

Interest rates in this country are too high for another reason, because of the inefficiency of our financial sector. Overheads in the Irish banking system represent 4 per cent of their total activity whereas overheads in the system of the building societies represent only 2 per cent of their activity. In other words, the building societies, which are able to provide more or less the same services as the bank, have only half the overheads. Furthermore, overheads in our banking system — and indeed in the system of the building societies — are significantly higher in proportion than the overheads of the competing banking and building society systems in the United Kingdom. This means in essence that the Irish borrower and/or depositor is paying more than he needs because of inefficiency in what has been in the past a protected financial services industry, a protection which will soon disappear.

There is considerable evidence that the banks are in a position to determine their own prices in the absence of competition. I understand one bank has spent a huge sum of money — figures of many millions have been quoted — on launching a new logo. Any company that can spend such a huge sum of money on changing their brand image and on advertising is clearly not in the position of being buffeted regularly by price competition. They obviously have a captive market and can afford to spend such large sums of money on promotion.

I also believe that the rules which apply to access for new participants to the clearing banks system for cheques is unduly restrictive and that new entrants, for example, building societies who wish to become participants in clearing systems find difficulty in doing so. There is a fear on the part of some that, in the absence of their participation, by having to use other people's services information will pass from the building society to a competing bank whose clearing facilities they are using. They are also worried that the fact that a particular client has moved money from the bank to the building society will perhaps become known to the banks because the building society have to use the clearing house system at secondhand.

When one adds the extra overheads and costs of the relative inefficiencies of our banking system to the unnecessary increase of 2 per cent in interest rates in the second half of last year, one can see that interest rates being paid by mortgage holders are 2, 3 or 4 per cent higher than they need be. It is important to put that in context and compare it with the small increases which have occurred in income tax relief in the budget. A married couple with an income of £16,000 will, according to the Minister, gain £216 per year under the budget. If they have a recent mortgage of £35,000 the additional increases in interest rates last year will cost them somewhere in the region of £100 per month or £1,200 per year in extra interest, as against a gain of a mere £216 as a result of the fall in income tax. Deficiencies in interest rates policy are a good deal more important than many of the concessions about which so much noise was made in the budget debate.

There are other areas which require rigorous scrutiny. In other debates in the House evidence has been produced indicating that we could have a better health service for the same amount of money if we were to have one national health board rather than the large number of duplicating boards we have at present. We would have a better service if we were to have proper internal management with one person in charge rather than a multifarious number of people in charge of each hospital, and if we were to use private nursing homes rather than acute hospital beds for elderly people, many of whom are retained in hospital because they cannot be accommodated elsewhere. In that way they are costing everybody, including their families, a good deal more money than they would if they could be accommodated in nursing homes.

Relatively simple changes could be made to get better value for money and a better health service, such as by the administrative changes I have mentioned. The Government are not taking the necessary structural decisions to reform the delivery of the service that they should be taking. They have pruned money off the top and are trying to avoid offending people so that they will get a wage agreement. They are trying to leave things as they are for as long as possible and that is a mistaken policy.

There is evidence of substantial waste of money in road building. Under the present system national primary roads are paid for by the taxpayer nationally but decisions in regard to stretches of roads are carried through by the engineering departments of the county councils. I am advised that that has led to certain stretches of our national primary routes costing 50 or 100 per cent more than they would cost if we had a single national roads authority. The Department of the Environment are trying to kill the National Roads Authority. They do not want that body to have statutory power to take over the national direction of road building. The Department, local authority engineers and county managers want to preserve an inefficient system because it retains a measure of power for them. That will cost the country a huge and unnecessary amount of money.

There is considerable pressure from all sides of the House to spend more money on housing. There is no doubt that the waiting list for local authority houses is extremely long but I must ask whether a resumption of local authority housing as conventionally understood is the right answer to the housing crisis. If we have highly subsidised housing provided — if we have 100 units provided with 1,000 on the waiting list — there will be a huge queue because if we subsidise enough the waiting lists will get longer and longer. It would be more sensible if instead of giving the subsidy to the local authority to build a house to be allocated to an individual we gave that subsidy to the individual to pay for his own housing needs. We should give that person the freedom to use that subsidy in the form of a housing credit to buy a house, rent a dwelling or make the arrangement he or she wishes to make.

The housing subsidy or credit should be based on the housing needs of the applicant, such as the size of the family, the income of the family and such factors. A housing credit system would be sensible, more efficient and would not create waiting lists. It would allow a mix of private and public provision competing with one another for the most efficient provision of appropriate housing. It would avoid the creation of huge local authority ghettos and, indeed, private sector ghettos which exist in some of our surburbs. In places like Foxrock, where there is the one type of housing, the people never meet in their area people from a different social background. Likewise, people in large local authority housing estates do not mix with people from a different social background. That is unhealthy, divisive and unnecessary. It is a direct result of a commitment to local authority housing being provided by county councils rather than by means of a housing credit to individuals. I have not worked out the details of such a scheme and I am sure other Members could point to difficulties that would arise. However, one must recognise that the present housing policy is not a good one. It is leading to huge waiting lists, to expensive provision for the few rather than large scale provision for the many. People have to live in dreadful conditions for five or six years waiting to be housed. A different policy, costing the same amount of money, could get them a house quicker. I urge the Government to consider such a scheme.

I am disappointed that the Minister, after all the talk about employees' PRSI being a tax on work and preventing the creation of jobs, announced in the budget that he intends this year to carry out a detailed inter-Departmental study on the operation of the PRSI system. What has he been doing for the last two years? He has known about the problem. The Minister should have abolished employees' PRSI and incorporated it in income tax. Then we would have automatic personal allowances against employees' PRSI and incorporated it in continue with employers' PRSI if he considered it necessary to establish it as a means of title to various benefits. However, there is no need to have a separate system of employees' PRSI with a system of income tax. I do not see why the Minister did not abolish it and incorporate it in income tax. We do not need another examination to produce such a simple and sensible solution.

I should like to refer to social policy issues. It will not surprise Members to hear me suggest that we should have a recognition of children in the tax code. If a person has a dependent spouse he or she gets a substantial tax allowance. In my view it should be a tax credit because in that case there would not be extra benefits for those on a high income. There is a tax allowance also for any other dependent individual and it is known as a dependent relative allowance. However, we do not have an allowance for a dependent child. The only species of person for whom a taxpayer does not get an allowance is a child. That does not make sense. The only argument against such an allowance is that if we were to reintroduce child tax allowances the people with large incomes would gain most because they would be paying more tax than the person on low income. I accept that but that is also an argument against tax allowances for a spouse. If that argument is valid it should lead to the abolition of the spouse tax allowance as well and, indeed, the individual's own tax allowance. There is no justification, in my view, for the discrimination which exists against children in the tax code at present. Let me anticipate the Minister of State. It is a situation which has existed for many years and which was not improved in any way by the Government of which I was a member, so I will concede my disarmed status in regard to that matter. I will not, as I have not published my book yet, say what I said about capitalists.

Is the Deputy writing a book?

No, I have better things to do.

We must be the only two in the House who are not writing books.

It will not be for a very long time. Perhaps sometime in the middle of the next century Deputy Lawlor and I will get together and we will do a joint study. I regret very much that the Minister has not taken advice from this side of the House and gone for a graduated medical card. The position is that when one reaches a certain level of income one loses the medical card in its entirety. I believe there should be a graduated loss of medical card entitlements with, perhaps, a small charge at one level and so on. At present the loss of the medical card is a disincentive to taking up employment. There is no doubt about that. A simple thing to do would be to graduate the loss of benefit in an easier way and it would not cause great administrative difficulties to introduce a stepwise reduction. That is another matter that relates to the poverty trap.

I want to refer now to the office of the management of the national debt. I know this is a most unfashionable thing to say but I have the gravest reservations about setting up a special office in the Department of Finance in order to give one category of the officers of the Department of Finance higher salaries while the rest of the staff do not get the same increase in salaries. In my view the officers who work in the public expenditure division in the Department of Finance are just as valuable to the State as those who work in the finance division borrowing money. The people who work in the finance division can save only a margin on the interest rate by good negotiation. Good work in the public expenditure division of the Department can save a net sum of money by eliminating a programme altogether or recasting that programme. Why should one section of the Civil Service who deal regularly with bankers wearing upmarket suits by a rather high fashion tailor have twice the salary of those who are dealing with people who wear perhaps off the peg suits and who are doing equally valuable work on behalf of the State? I do not think it is fair or that it is good for morale in the Department of Finance. I am very conscious — and I say this with some strength of feeling — of the high quality of all the people working in all areas of the Department of Finance and we should not make fish of one and flesh of the other. I am very doubtful about the saving of £35 million extra which the Minister said would be achieved because of the setting up of this office. He will either save that money in any event or he will not; I do not think it has anything to do with paying these officers more.

I am not happy about the fact that the Government will receive the money for the increase in VAT from the ESB's own coffers. We have been hearing from this Government, and particularly from the Minister for Finance, Deputy Reynolds, long sermons about the need to promote enterprise and independent thinking in the semi-State sector, an enterprise culture, marketing and so on. Yet he comes along to the ESB which owes something of the order of £400 million, every penny of which is guaranteed by the taxpayer, and says to them: "You must carry the cost of an increase in electricity; you must pay the VAT, without any increase in the price to the consumer". This is a body who are already deeply in debt — all of which is guaranteed by the State — and who are being asked to pay up another £11 million on top of their debt. They will probably borrow that money, thereby adding to their existing borrowings. Therefore, this is essentially a book-keeping transaction, transferring from the debts of the State to the debts of the ESB — which are guaranteed chiefly by the State — a sum of £11 million. It is fraudulent budgeting. It is a rerun of the sort of approach that was so characteristic of Fianna Fáil in Government in the early part of the eighties and it was something I had hoped I would never see again.

I want to refer to the grave crisis that occurs in agriculture at present. I am glad to see three Deputies facing me from rural constituencies who are familiar with this situation. It is well known that those who are engaged in dry stock, so far as agriculture is concerned, are in grave difficulties at present. Those who are engaged in winter fattening, the people who provide the essential outlet for those in the store cattle production system, are losing money again for the fourth year running. They will not continue. The cost of making silage, the cost of borrowing money to carry cattle over the winter makes it prohibitive to continue winter fattening at present prices. That is aggravated by the fact that the system of EC support is skewed in favour of summer production and is artificially depressing the price available for those who engage in the most expensive form of production, that is, winter production without which there would be no outlet for the summer production and without which the cattle economy would collapse. The failure to achieve — I realise it is not of the Government's doing — a readjustment in the system of support for beef will have grave national consequences. This is not a problem that is faced by other European countries because wintering cattle is not as expensive, relatively speaking, in those countries as in Ireland for a variety of climatic reasons to which I will not refer. It is a specific and grave Irish national interest.

The crisis now developing in agricultural incomes will be aggravated by the fall in milk prices and further aggravated by the results of the GATT talks which must soon come to a conclusion, and which will involve further diminution of agricultural support. The consequent extra cost to the State in social welfare for poverty-stricken farmers not only in the west but in every part of Ireland is incalculable. This whole budget does not sufficiently take into account the major losses that are down the road for the Irish economy as a result of the difficulties now facing Irish agriculture. I hope we will see some action on that point during the Irish Presidency. During the Irish Presidency, we have the ball at our feet. I hope we will see something better than the pathetic agenda for the Presidency set out by the Minister for Foreign Affairs in his Strasbourg speech when he might not have been an Irish Minister at all, he could have been a Portuguese Minister, a French Minister or an Italian Minister for all the relevance or input there was from what he had to say concerning the needs of this country.

A major priority for the Irish Presidency must be to have something done to protect the long-term interests of small and medium-sized farmers in Ireland because they are facing a crisis on an unprecedented scale.

Another priority — which I know will be one of interest to the present occupant of the Chair — is to get the EC to accept some responsibility for funding Irish education. The Irish taxpayer is subsidising the British economy by providing them with ready-educated, highly skilled graduates, virtually all of whose education has been paid for by the Irish taxpayer and all of whose earning and all of whose tax paying will be taking place in Britain or in some other EC country. That is a straight subsidy by the Irish taxpayer to the British economy or to the economies of the other countries to which young people emigrate. Clearly there is a Community responsibility as a result of that if we are to promote free movement of labour. That is the reason I say there should be Community support for the education budget.

I have sat here and listened, ultra interestedly, to Deputy Bruton's contribution to the budget debate. Deputy Bruton is not known to me personally but he is a man for whom I have tremendous respect and whose political career I have followed carefully over the years. He occupies the No. 2 position on the Opposition benches. Perhaps it would be better for this country as one of the Twelve of the European Community if he were in the No. 1 position, or if anybody other than the man who is in that position at the moment were there. I may be naive, a mere backbencher who is hardly the proverbial wet day in the Dáil, but I would have expected that when we had an unprecedented opportunity to put ourselves on the European map, figuratively speaking, it would be welcomed.

Geographically we are right out on the periphery of Europe, and that worries me at times in the context of my own area of expertise, if that is not a more than modest expression to use. I worry about what is ahead of us in the years to come in the European context. I thought, however, we had one wonderful opportunity to really set ourselves up in this year of the Presidency. It sickens me to see the trivia engaged in by the man in the No. 1 position over there since this House resumed.

I am not normally prone to making personalised attacks, and I do not particularly want to go down that road now or at any great length.

Under the previous administration we saw this Tallaght strategy that this man projected as being in the interests of the nation and for the overall good of the people. This was merely a facade; it was done merely for the optics, to cover up a situation in which this man was struggling for his political life within his own organisation. Statesman he is not.

There were a few other fellows struggling during these last few weeks as well.

The way this man has tried to disrupt what could be of massive benefit to this country, the launching pad of the Presidency, is quite despicable.

I will leave that. In regard to statesmen, thanks be to God we have Europe's best in this House in the person of Deputy Charles J. Haughey who is trying his damndest to override the situation as put by Deputy Dukes and get on with doing his job of leading this country through the Presidency and into Europe in a positive and efficient fashion. I have no doubt that he can do that.

I agree with much of what Deputy Bruton said; but there is a lot I would not agree with. He said it was easy to present a budget when good times are prevailing but he seems to forget that these good times did not just happen. Since 21 February 1987 that was worked for with great resolution by a great leader of a great party in a minority Government. Today, our Minister for Finance, Deputy Reynolds, can present this budget because of the work that was done in the period since February 1987.

Deputy Bruton said the Minister was currying popularity. There is no question of that. The Minister had addressed the macro-economic situation in a way that only he, with his own particular background, could. He is a man who is generally respected around the country as having great business acumen. He is a man who knows what economics are about. He is not one of those pseudointellectuals we have had here in the past. He has built his life in business and came to politics armed with that background. The favour does not have to be curried. This is an excellent budget which addresses the problems on a national basis in a futuristic way in the context of Europe. Any goodies available are going to the people who ought to get them, under a great Minister for Finance, a Fianna Fáil Minister for Finance.

In a PD Government.

I would ask Deputy Jacob to turn a deaf ear to the co-operation being offered from his colleague from the neighbouring constituency.

I will take that comment to heart. Before I leave Deputy Bruton's contribution there is one other point I would like to make. He spoke about housing and I would agree with much of what he had to say about ghetto creation. On the matter of roads, I would have thought that he or any member of the 1982 to 1987 Government would flee from the prospect of mentioning roads. In 1986 they put aside a paltry £8 million for county roads. An asset that taxpayers had built up over decades and put in place for future generations was allowed deteriorate. Nobody knows this better than my colleague from County Kildare because the roads in his constituency are in ribbons and I have to sympathise with the Deputy because of that.

Do not sympathise. Ask the Minister to send us more money.

In 1986 that is what that party laid aside for roads. In 1987 we came into power. In the context of trying to put the economy back into some kind of order, £15 million was provided. In 1988 there was a further £15 million, and in the three-year period, 1989 to 1991, £150 million is promised. That amount has been surpassed in the interim and it seems that in excess of £150 million will have been expended on our roads during that three-year period. I thought Deputy Bruton would have been more prudent and not have mentioned that topic, but as I have said he is an honest man about whom we will hear more in the future.

I should like to welcome the improvements in regard to agricultural education contained in the budget. There were anomalies in the education of agricultural students vis-à-vis the rest of the community and the Minister in his wisdom has corrected those anomalies. I know that our rural friends and colleagues in the agricultural industry will welcome this development.

There have been some very welcome changes in agriculture over the past couple of years. Some commonsense was applied in regard to the off-farm income, which is a hobbyhorse of mine, by the Minister for Agriculture and Food, Deputy O'Kennedy. I hope the Minister will be in good form tonight. Perhaps the best wishes of all Members of this House did not go to the Minister and I want to offer him my best wishes now and to congratualte him on the excellent work he has carried out and his commitment to his job, which, please God he can continue to do for many years to come.

The Minister for Agriculture and Food sought and achieved an increase in our milk quota of 11 million gallons. He has the right idea about the allocation of the 11 million gallons and has decided it will go to the people who ought to get it, that is, young farmers and small scale producers. During the lifetime of the previous administration we got an increase of 4½ per cent in our milk quota but it was totally mishandled, and that is appreciated by all those involved in agriculture today. I welcome the Minister's decision in this matter and I am sure it is welcomed also by the farmers in my constituency.

Some people referred to the application to Brussels for an extension and reclassification of the disadvantaged areas scheme. Once again I was surprised to hear these people refer to this issue and to the delay of a few days or so in the submission of the application to Brussels. This application was made in the most efficient way possible and there was an intense examination of 4½ million acres of land. Perhaps as I speak this application has already gone to Brussels and is being dealt with there.

I hope it comes back.

The previous submission to Brussels was hastily sent three weeks before the 1987 general election by the previous administration. That submission was thrown back in the faces of the Irish Government because it was ill timed, badly put together and done for political purposes on the eve of an election. A proper approach was adopted in regard to the application now being submitted to Brussels and, as indicated by the Taoiseach, we will have a response from there within the lifetime of the Irish Presidency. I look forward to a very positive response to our application because this is a very important issue to many people throughout the country.

I agree with Deputy Bruton that there are difficulties in agriculture. He referred to difficulties in the beef area and I could mention difficulties in other areas but I do not want to spend all my time talking about agriculture. There have been some innovations in the area of agri-tourism, etc., which needed to be approached in a very serious way by farmers and I believe the inclusion of additional areas in the disadvantaged area scheme will enable many farmers to get involved in these areas.

The tourism industry has never been approached as positively as it has been by this Government. This industry was taken by the scruff of the neck by the Taoiseach in 1987 and has already begun to pay dividends. The Taoiseach referred to this industry this morning and I am not going to go back over what he said.

We in County Wicklow have been totally laid back about tourism during the past couple of years but this will not be the case any more. We have taken our cue from the Taoiseach and the Government and we have undertaken major activities in the tourism industry in our county. We have an awful lot going for us, for example, beautiful scenery and a heritage we can be proud of. In modern terminology people talk about our heritage industry, an industry within the tourism industry which can be explored and developed. That is precisely what we are doing in County Wicklow. We have come to our senses and we are putting a major effort into this aspect of our economy. Next year is the centenary of the death of Charles Stewart Parnell and we in County Wicklow propose to make it a memorable year. We want the home of Charles Stewart Parnell, which is situated at Avondale in County Wicklow, to be made a place of pilgrimage for the 365 days of 1991 so that tribute can be paid to that man and at the same time the people of County Wicklow can avail of the tourism fall-out of such an initiative.

We have earmarked the setting up of a national park for County Wicklow and I think a sum of £1.3 million has been set aside by the Minister of State at the Department of Finance, Deputy Daly, for this park. This will be an extension of the park opened by the Taoiseach in the vale of Glendalough a couple of years ago and will be a very important asset to my constituency. I share the concerns which have been expressed by some farmers about this park. It is very important that proper consideration be given to the treatment of landowners, their animals and property and to how their families will cope after the establishment of the park. I regard the establishment of the park as a very positive development which will be of benefit to landowners and all the people of the community. I will be keeping a very close watch on the development of this park.

Perhaps the closest thing to my heart since the day I became a public representative has been the question of jobs. Unemployment has been a problem in this country for quite a while and it is something of a phenomenon that while the economy has improved dramatically — this is appreciated both at home and abroad — and our credibility in the eyes of the world has been restored the rate of job creation has been disappointingly low.

I would again like to refer to my own constituency, in particular to an area in the south-west of the county which was a hive of activity in the seventies, that is the Arklow and south Wicklow hinterland. Traditionally this was an industrial centre but with the run down of the pottery and fertiliser industries it has become a black spot. This problem is being addressed and here I wish to say a sincere word of thanks to the Government for recognising that a problem exists there. Deputy Reynolds, when Minister for Industry and Commerce, provided us with the designation instrument to ensure that it would receive priority and the right profile. I have been ultra-critical of the Industrial Development Authority and have said both in this House and elsewhere that they were not doing enough even though the designation instrument had been provided and given the facilities available within the county and the confidence which the Government of 1987-89 injected into the economy. Since then the Arklow and south Wicklow area has been allocated top priority by the Industrial Development Authority who have deemed that area as meriting attention more than any other area in the country. I welcome this and over coming months — I am talking in months rather than in years — I will be watching to see if improvements are being brought about.

Coming as I do from the county with most land planted I wish to refer to forestry. Since 1987, the Government have placed emphasis on this sector of the economy. The man mainly responsible for this, the former Minister for Energy, Deputy Smith, was present in the Chamber today. He took this portfolio by the scruff of the neck and brought new lateral and progressive thinking into this area with the result that in the interim period we have witnessed unprecedented planting.

The construction industry now have a new perception of the quality of Irish timber. However, I am concerned about small scale operators in the timber business. While I do not have statistics in front of me we are talking about 3,500 to 4,000 jobs in small, family-run sawmills. I am concerned that these people will be frozen out. In my constituency 700 people are employed in small family businesses which have been involved for generations in the timber industry in County Wicklow. While we must try to upgrade the product and look for quality and added value, which the new agency Coillte Teoranta are seeking to achieve — which I agree with — we must ensure that small businesses in existence long before most of us were born and which have been handed on from father to son down through the years, continue to operate well into the next century. This goes hand in hand with all the other things Coillte Teoranta are endeavouring to achieve. I wish them well in their efforts to upgrade the quality of the product, to achieve added value and to secure an increase in public and private sector planting and in their management of the commercial aspects of the forestry business. I hope my words will not fall on deaf ears when I call on everybody concerned to ensure that the small businessman working effectively, efficiently and within the law remains in business for further generations.

The Minister for the Environment recently launched the Environment Action Programme. This is a marvellous plan. He is responsible also for the construction industry in which there is a buzz at present. In recent years in the run-up to the presentation of a budget I would meet with builders. Invariably they were very disillusioned because since 1981, the construction industry had taken one hell of a battering. Many people went to the wall during that period. When I met those same people this year there was a different atmosphere in the room. Things were buzzing and moving. They also had confidence.

There are fewer in it.

Jobs are being created. The spin-offs are extraordinary and spread as far as the butcher, the baker and the candle-stick maker. I have noticed my people, during the past year when I would go into my own premises late at night, sweeping the floor and sweeping out the corporate products, which was a delight to see. This is due to the fact that the building workers are working again and when working, they spend.

Those who are left.

As I say, all sectors of the economy are benefiting from the increase in activity in that industry. Recently the Construction Industry Federation presented me with an excellent submission in which they outlined what they saw as the way forward for their industry and the economy. I wish to repeat that this industry is of vital importance to the economy. I forwarded this excellent submission to my colleague, the Minister for the Environment, with my comments and an indication that I would like to see many of the recommendations of that august body taken on board.

I understand that the Minister for Justice was to speak before me but there was a change in the agenda for the day. I look forward to hearing his speech as within my county at present some extraordinary and sad things are happening. We see an escalation in violent crime and deterioration in law and order. I have discussed this matter with the Minister and will discuss it again with him. It is countrywide; it is not confined to my constituency but it is prevalent there. In my home town of Rathdrum, a beautiful country town where I live and have raised my family, we have had some horrible experiences in recent times. We have problems there and also in the west of the county, in the Blessington and Baltinglass area and in the towns of Arklow and Wicklow. I want to have further discussions with the Minister and with senior gardaí to have those matters addressed with a view to the position being resolved satisfactorily.

I must express my thanks to another Member in the House today for an item in the budget. Coastal damage in my constituency was extreme and the Minister for the Marine, Deputy Wilson, had a sympathetic approach to the situation. He got into his car, came down and visited there, put his finger in the wound, so to speak, and saw for himself the damage done and the hardship suffered in Wicklow. He put into that budget almost £1 million for the town of Arklow. I thank him from the bottom of my heart on behalf of the people of Arklow and the people of the Wicklow constituency. We have other difficulties in Wicklow town, and in Bray the esplanade is ready to fall into the water. I will continue to talk to the Minister about that. For now I thank him most sincerely and ask him to have another look at the matter of the harbour in Arklow. He has looked after the north beach for us but I want him to look after the harbour which was much damaged by recent storms.

I will finish now as I see you, a Leas-Cheann Comhairle, looking at me with that glint in your eye.

I am reluctantly parting from the delights and disappointments of Wicklow but I am anticipating what is happening on the banks of the Lee when I hear Deputy O'Sullivan who is due to be called.

It has been a pleasure for me to contribute to this debate and to have the privilege, as a lowly backbencher, to talk about the budget and welcome it. It has been put together by a great Minister. I did not get into the area of tax because you, Sir, pulled the curtain on me.

What about the rod licence?

We did not succeed in extinguishing you.

The Minister for Finance, before his life in politics began, played about with showbands. In the last two years he has been playing around with bands of a different variety, tax bands, to great and efficient effect. The way he approached the PAYE section of his brief both in last year's budget and in this year's budget is to be welcomed by the taxpayers. I thank him and this Government for an excellent budget which is to be stood over and welcomed by all and sundry.

Anois an Teachta Gerry O'Sullivan. The Deputy can start with the Opera House and keep the music going.

You, Sir, mentioned the banks of the Lee. I must inform the House that the Lee has broken its banks and that we are now looking for money from the Minister for the Environment to repair the damage.

I noticed that the Budget Statement — the first I have been here for — was greeted by prolonged applause from Fianna Fáil and the Progressive Democrats. I suspect it was greeted with some relief by those Coalition parties because it ensured that their position with the electorate would not deteriorate further. The budget had an eye on forthcoming elections and was geared to give a little here and a little there, but it did nothing really to get to grips with the serious social problems which are escalating day by day and making this society of ours into a divided society of rich and very rich and poor and very poor. It is a society which is a million miles from the dreams and aspirations of the founders of this State. The present policies of the conservative parties show unsympathetic attitudes to the many thousands of our people who are forced to live below the poverty line. This budget does nothing for the many thousands who are struggling to pay mortgages or trying desperately to educate their children or for the vast numbers of people on local authority waiting lists waiting for decent accommodation. On health the budget does nothing to reduce the huge queues mounting at our hospitals throughout the country. Only this morning a constituent of mine phoned to ask me if I could do something about her young son who would be waiting 12 months for an appointment to see a specialist about his tonsils. God only knows how long he will be waiting for surgery.

While other speakers in the House have referred to these matters I think it important to emphasise again that this budget could have given real hope to the thousands of people caught in the poverty trap who have been forced to make sacrifices over the past number of years so that the accounts at national level could be rectified. For these people who made these sacrifices there is very little in the budget. It gives no real hope of reform. It gives no hope of equal distribution of the wealth of this country and I think it is calculated not to rock the boat in an election year.

In my constituency of Cork North-Central, judging from the comments of the people I represent, the budget was classed as a non-event because it did nothing to tackle the serious unemployment problem which affects the city and county of Cork. God knows, if every group of people know what unemployment and frustration are the people of Cork city and county can give lessons to other areas. Cork has seen its closures over the years, traditional industries going to the wall with huge loss of jobs. This budget has done nothing to give redundant workers forced on to the Live Register any real hope of a job. It is sad to see so many with skills and talent being wasted and destined for the human scrapheap.

It is a sad reflection on this Government that last year we had a total of one house completed by Cork Corporation, a local authority who have 1,200 on their waiting list. I consider that a disgraceful record and as Chairman of Cork Corporation's Housing Committee I think it is shameful that a corporation and local authority with so many people on the waiting list should produce one single house completion in 1989. While we welcome the allocation for refurbishment, long overdue, I think it would be a good exercise — and I may table a question in this regard — to see how much money was wasted by Government in trying to rectify the major problems that low cost housing was causing Cork City Council. I think the figure would be horrendous. I may ask the Minister to produce that figure at some future date?

At present Cork is facing a housing crisis with the result that Cork Corporation have requested an urgent meeting with the Minister for the Environment to discuss the serious implications of the allocation for housing in the city.

Cork people were bittelry disappointed that there was no reference in the budget to the downstream river crossing. If the go-ahead was given to Cork Corporation, the harbour board and Cork County Council to proceed with the downstream river crossing, hundreds of jobs would have been created in an area that badly needs them. The construction industry, Irish Steel and other sectors of the economy would have benefited from that boost. I appeal to the Minister and to the Cabinet to make this decision without delay so that the local authorities and all those involved, especially and more importantly the unemployed of Cork city and county, will have the opportunity of getting a job for at least a number of months and, hopefully, for a number of years.

I would draw the attention of the House to the serious situation in my constituency where one of the last traditional industries is now under threat. The receiver has been called into Sunbeam and 500 jobs are now at risk. In the event of a package being put together, I would like the Minister for Finance to give an assurance to this House that money will be made available so that those vital jobs can be saved and the community, already hammered by unemployment, will be saved from the devasating effect of this closure. It is a fact that the breadwinner in many of these families is the mother or girl working in Sunbeam. I am sure the budget did nothing to lift the gloom over Blackpool, Farranree, Churchfield and the Gurranabraher area of Cork North Central.

Last July the Labour Party called for a commitment from Government to the funding of the Cork-Swansea ferry service. We felt that a company would need a certain time span to market and promote the service before it could be profitable. At present, the money has been allocated, but we still have no ship. It is unfair to ask any company to make a profit on the service in such a short space of time. I believe it is essential that a solid commitment should be given for a three-year period so that a proper marketing strategy can be devised, thus giving the service the opportunity to at least break even. A commitment was given to the Racing Board and Bord na gCon in the budget so I do not see any reason that the Cork-Swansea ferry service should not get the same treatment. They could then devise a strategy over a three- year period that would be fruitful. Not alone would Cork city and county benefit but the whole south-west region would derive a tremendous benefit from a service they knew would be provided for at least three years. It is very importhan that such a commitment be given in the budget and the vast majority of people in the south-west area were disappointed that this commitment was not given.

I will also refer briefly to another aspect of tourism which is very important. The Government have stressed over and over again that tourism is probably our greatest asset. We have a clean environment and a good natured people who would welcome tourists to their area, but yet over the past two years — I am glad to see the Minister for Tourism and Transport in the House — the rod licence dispute has cost this country millions of pounds. The Exchequer has lost quite a sum of money in taxes, and hotels, guesthouses and employment have also suffered. I think the legislation was ill-conceived but today's headlines tell us that a solution is imminent. As the spokesperson for the Marine, I hope that headline is true. If it is not true, the Labour Party will have no option but to put before the House an amendment to the Fisheries (Amendment) Act, 1988. We are confident that a majority of Members of this House will support it. The rod licence dispute has gone on for far too long but I recognise that the present Minister has done trojan work to bring it to a happy conclusion. I hope his work is fruitful and that he will make an announcement in the coming days. This is very important not alone for the people directly involved in fishing but for the thousands of people who depend on tourists visiting this country. Again I wish to state that this is the most ill-conceived legislation that has ever come before this House and I hope to see the end of it in the coming days.

I will not stay much longer on my feet as this is my first budget speech and I am sure that people with a great deal more experience are offering. The most damning part of the budget is that the Government have given £500,000 for emigrant services in Britain and £200,000 for emigrant services in the United States. We have heard the Minister outline policies for an upswing in the economy. He presented figures which show there has been an increase in investment and he stated that employment trends and prospects are the most favourable for decades. This is merely a repetition of what past Governments and Ministers have said and will do nothing to lighten the burden, dispel the disillusionment and restore the faith of young people forced to seek a living in New York, Boston, Birmingham and Camden Town.

At present we are experiencing an upsurge in the economy, principally benefiting a select few and the benefits have not trickled down to the people who are desperately searching for a job. There are thousands of young people in their twenties who have never known what it is to work, whose only prospect is to seek a living abroad. We have failed them before and unless there is a completely new approach we will fail them again and again. Young children having attended schools and colleges will have no alternative but to take the boat or plane to Britain, Europe or the United States in the hope that the education they have received will enable them to survive and prosper in a foreign land.

Like other Members of this House I have visited emigrants abroad and always the forceful message I received was, "for God's sake, stop playing political football with our lives." For that reason, the Labour Party tabled a motion calling for the establishment of an all party-committee once and for all to seek a solution to one of the greatest tragedies this country has experienced. We have noted all-party committees established to formulate certain aspects of foreign policy, another established on Women's Rights — these are very important issues — but I fail to understand why all parties in this Dáil cannot sit down and establish an all-party committee to tackle a problem that has affected every house and home in the country. It is disgraceful that that tide of emigration is allowed continue year in, year out, generation after generation.

The figures for emigration recently disclosed are horrific — in the region of 40,000 young people being forced to leave. However, these are mere statistics and do not illustrate the heartbreak, hopelessness, frustration and anger felt by many of our people. They conceal a very human problem which previous Governments failed to remedy or never had the will to tackle. Rather emigration constituted an easy way of solving the unemployment problem, a classic case of out of sight, out of mind.

In this morning's Cork Examiner there appears an article entitled “Dozens of emigrants stopped” which begins by saying:

Dozens of emigrant hopefuls bound for the United States were turned back at Shannon airport by Immigration agents over the last month or so. INS officials snared "several dozen" people heading for New York and Boston because of visa irregularities, the US Embassy in Dublin said. However, a whopping 13,610 people passed safely through the INS checkpoint at Shannon from December 25 to January 15.

Some may have been going to the United States on holiday, others with the hope of getting a job there. What an indictment of this country to see people slipping through the net in an endeavour to find work while we at home do nothing beyond giving various organisations £200,000 to get them out of trouble.

Another paragraph in that article reads:

We've been receiving an awful lot of calls about this at our hotline number — far more than last year, a spokesperson for the Irish Immigration Reform Movement stated.

Welcome and all as is that £200,000 — I do not deny that that money was needed — it constitutes merely a drop in the ocean. I contend that the problem does not exist in the United States, in Birmingham or in Camden Town but here. Until such time as elected representatives of all parties — and I say this deliberately and advisedly here this afternoon — sit down and say this is no longer good enough; we cannot continue to shed our young people abroad; we cannot continue to hunt them from this country, then we cannot sit in this Chamber with an easy conscience and applaud a Budget Statement that contains one small paragraph only on emigration. For those people who pass through Shannon, those on the housing waiting lists, those in hospital queues, those in queues at labour exchanges there was no applause; all there was for them was a deafening silence. That is why I have endeavoured to highlight their case in this House in the hope that somebody somewhere along the line will listen and say enough is enough.

Tá an-áthas orm faill bheith agam labhairt faoin cháinaisnéis sa díospóireacht seo agus mo thacaíocht a thaispeáint don Teachta Reynolds, Aire Airgeadais, mo chomharsa bhéal dorais, san obair atá ar siúl aige. Thaispeáin sé go soiléir go dtuigeann sé fadhbanna eacnamaíochta na tíre seo, agus ní amháin sin ach go bhfuil fuascailt na bhfadhbanna sin freisin ar eolas aige.

The fiscal framework for 1990 marks, in many respects, a return to financial stability. After almost two decades of gross instability, a certain degree of normality has returned. If we have learned well the hard lessons of recent years, then we should be set fair to continue on our present path for some years to come.

Short-term pressures, rising expectations and demands to pursue desirable objectives by inappropriate policies will, however, have to continue to be resisted. Tight financial and economic discipline are crucial to sustaining the recovery and, in particular, improving employment prospects.

Despite the apparent national consensus on fiscal objectives, there are many pent-up demands particularly for improved public services, enhanced public infrastructures and tax reductions as well as for increased social services. Conceding even a fraction of these emerging demands, if the concessions are not soundly based on sustainable improvements in economic performance, over a short period would threaten financial stability.

The greatest danger to sustained employment growth would be the adoption of policies to create jobs artificially. Sustainable employment will be created only by improvements in competitiveness in all its aspects. In this context, wage moderation is a key factor in the equation. Policies which do not improve competitiveness will undermine employment growth.

The Programme for Government, 1989-1993 has sustainable job creation as the major priority of this Government. The pursuit of this objective has, accordingly, strongly influenced the structure of the budget. The budget aims to promote more economic growth which will in turn generate jobs, an improved standard of living for those already in work and the basis for increased social services.

The number of persons unemployed in the country remains too high We must get it down. There I agree with Deputy G. O'Sullivan who has just spoken. To that end, our policies are strongly coloured by a desire to increase employment. Our room for movement remains constrained by reason of our national debt interest burden — just £2 billion plus for 1989 — and the need to improve our competitiveness as we move towards 1992 — the completion of the internal market. With Monsieur Delors in full stride, we have economic and monetary union on the central agenda. In this context, financial discipline must remain a key characteristic of our general policy framework.

Our economic performance in 1989 has continued the recovery that commenced in 1987. Real GNP is estimated to have grown by 3.25 per cent with a reasonable balance between growth in domestic and external demand. The current account remains in surplus in spite of the growth in domestic demand — personal consumer spending grew by 5 per cent — and an upturn in the rate of profit expatriation which probably will have to be examined — £2,385 million for 1989 against £1,908 million for 1988. Inflation remains low, indeed, only half that of the UK rate.

Latest employment data indicate that non-agricultural employment is estimated to have grown by some 13,000 in 1989 while the numbers on the Live Register had declined by almost 12,000.

Much of economic policy has been dominated in the eighties by the need to reverse the rise in the debt-GNP ratio. Reduced levels of Exchequer borrowings in recent years have meant that the rise in the national debt has slowed markedly; not eliminated, slowed. At the same time, economic growth speeded up. Accordingly, the debt ratio has begun to fall. This is a remarkable story. Having peaked at 131.4 per cent of GNP in 1987, it fell to 123 per cent last year and is likely to be around 117 this year. Welcome though this development is, it still leaves Ireland's relative position substantially worse than in other industrialised economies — twice the EC average in relation to GNP. That continues to absorb a large amount of resources in interest payments — as I specified above — and leaves the economy and the public finances severely exposed to external pressures.

Where resources are scarce we must, in our policies, give the highest priority to ensuring that they are allocated efficiently. Given the inevitable conflict of interest between various groups in our society and between the welfare of some and the greater good, the process will continue to give rise to tensions and difficulties. We are not prepared to shirk such responsibilities in ensuring that Irish economic development continues and that all its citizens share in the rewards of its growth.

Confidence in our economy in 1990 must be maintained. We must strive to maintain our competitiveness against our trading partners — the difference between the punt and the £ sterling has to be balanced some way; the fact that inflation is kept in check is a help — in anticipation of a tougher trade regime when we reach 1992. This means ensuring that our inflation rate is kept low and continuous discipline of our public finances which should, in conjunction with international factors, exert downward pressure on interest rates. The Programme for National Recovery will continue to play a large part in achieving the requisite consensus between the social partners and Government essential to continuous harmonious economic development.

The EC annual economic report which we received recently in the post indicates — and it is always better to have an outside witness lest one be accused of ex parte pleading — that in 1990 investment in construction which is so prolific of jobs should have increased by 10½ per cent; total investment, by 10 per cent and total investment in equipment, by 10 per cent. When considering imports it is important to see what kind of items we are importing and whether they are aiming at productivity. The EC report shows that there is an incease in the employment figure and estimates an increase of 4½ per cent in GDP. This makes heartening reading from a body to which we belong but which has a kind of Olympian view and cannot be accused of arguing from a party political viewpoint.

The Programme for National Recovery has to date been very successful. With almost a year of the programme remaining the following are the achievements: targets for Exchequer borrowing reached; targets for stabilising Government debt-GNP ratio; commitment to tax concessions have been exceeded; commitment to the poorest sections of society has been delivered on, and pay provisions of the programme have been widely observed. This has contributed to an improvement in labour competitiveness and has helped moderate the rate of increase in the consumer price index. In the European Community report it is indicated that large wage increases not backed by productivity caused the Greek economy to have a heavy deficit.

I would like to reiterate the views of my colleague, the Minister for Finance, Deputy Albert Reynolds, as to the necessity to continue the consensus achieved in economic management by way of the Programme for National Recovery. To that end, a consensus approach, if it does not shrink from facing realities, can work to the benefit of us all. It is the Government's hope that when the current arrangement expires, we can evolve, in discussion with the social partners, a follow-up programme which reconciles the legitimate concerns and aspirations of the various interests with the requirements for sustained economic and social progress. This budget makes a significant contribution to creating the right environment for such future development and it is very important to achieve that consensus.

I am an amateur student of Spain where Prime Minister Felipe Gonzalez is doing a very good job for the Spanish economy but he has not been able to deliver on that consensus. He has had to carry on with his economic policies despite the fact that he came to power with the aid of Senores Redondo and Gutiérrez, the two great Labour leaders. He realised the importance of that consensus. I am very glad that the various participants in this country also realise its importance and I am sure they will deliver on it for the good of themselves and of the country generally.

Ireland is an island nation with consequent advantages and disadvantages which derive from its status. Roinn na Mara was established with a view to advancing the development of this sector. I believe that much work has been done in this regard and the marine area is now nicely poised to capitalise on opportunities provided by the more favourable economic conditions. This year will be yet another of investment, funding and commitment to the development of this sector.

The Government's central objective is the creation of lasting new employment. This requires selective development policies for key sectors such as the key fishing industry and aquaculture. The fishing industry plays a key role in sustaining the economies of coastal regions. This industry is thus of major regional significance not only in this country but in the Community as a whole. In these circumstances, I would like here and now to restate the Government's total commitment to the development of the fishing industry. The national plan recognises the considerable potential for the further development of this industry and the Government therefore have committed a significant level of Exchequer funding towards such development. In 1990 the Government are providing a total of £11.4 million in funding to Bord Iascaigh Mhara. This funding will be targeted at the following areas: fleet development and modernisation; exploratory and experimental fishing, which is very important when there are tight quotas; aquaculture and marketing as well as manpower training.

The development strategy for the fishing industry adopted by the Government in 1988 sets a target for the creation of 4,400 new and part-time jobs in the sea fish, aquaculture, processing and ancillary industries by 1991. It is an ambitious programme. The protection and enhancement of fish stocks as well as the discovery and exploitation of new stocks is vital. This has taken place to some extent particularly in the area of horse mackerel or scad, argentines and blue whiting. I am glad to say that our fleet caught 35,000 tonnes of horse mackerel last year. Whereas this is regarded as rough fish for fishmeal, the Japanese are paying a high price for it for human consumption. There is no quota on it yet but it is expected that a quota will be put on it. I hope our fishermen will continue to fish heavily in that area so that if a quota has to be decided we will be in line for a reasonably sized quota. Since 1980 total catches of stocks of major importance to the Community have dwindled, often substantially. Without proper controls and conservation policies fisheries will not survive. As President of the Council of Fisheries Ministers, I am making a major effort to have the research facilities co-ordinated and strengthened in the Community because they are very important with regard to the control and conservation of stocks.

It was against this backdrop that the 1990 fish quotas were negotiated and agreed at the December Fisheries Council. There were severe cutbacks in fishing activity generally within Community waters this year because of unfavourable scientific advice which indicated that stocks were not available. In this tough negotiating climate we succeeded in winning the best overall fisheries deal for Ireland. We obtained agreement to a complete reversal of the general trend in the Commission's initial quota package, as it affected Ireland, by turning a 12 per cent reduction into a net gain. This was most impressive when compared with the very sizeable reductions in quotas for most member states.

I am glad to say that the establishment of a new fleet register is well advanced and will give an accurate picture of fleet capacity. This exercise has made it possible to meet the 1989 EC capacity objectives set for Ireland and will make a significant contribution towards facilitives. I also expect to receive proposals shortly for a national boat licensing proposals for a national boat licensing policy which will further the aim of the official development of the fishery industry.

In recognition of progress on the GRT front, the Commission has recently approved EC grant aid towards the construction of eight new Irish fishing vessels. The owners of vessels wrecked during recent storms in the south-east will be accommodated in replacing their vessels within the new GRT arrangements. Such replacement vessels may be entitled to both EC and national grant assistance for boat construction. I am pleased to say in this regard that a total of £100,000 in increased provision to BIM was made in the budget for repair and replacement of damaged boats in the fishing fleet.

I am responsible for the regulation and development of the aquaculture industry in the State and my main objective is to maximise the industry's contribution to the economy in harmony with environmental excellence. The aquaculture sector remains on a strong growth path and we are now beginning to reap the rewards of jobs, exports and growth.

Production from the industry in 1989 was worth almost £30 million with 850 people employed full-time and 1,300 employed on a part-time basis in the industry. Our achievable target for 1991 is an output level of over 14,000 tonnes worth in excess of £71 million and some 3,500 jobs. There will also be sustainable indirect employment gains in related industries and services.

Unfortunately, the aquaculture industry and in particular salmon farming has been the subject of widespread and often ill-informed criticism in recent times particularly from an environmental point of view. I would like to state here and now that aquaculture is not a dirty industry. Indeed, no sustainable evidence exists to indicate that these farms impact adversely on the environment. It is my policy to make sure that developments will progress without damaging our environment which is a precious inheritance.

I would emphasise in the strongest possible terms that the Government are fully committed to the development of this industry and will continue to support environmentally sound developments. Those will create employment particularly in remote rural areas which otherwise have little opportunity of attracting alternative industries.

I acknowledge that the siting, the numbers and impact of salmon farms in particular have to be carefully researched and monitored in the interest of the environment and, not least, of the salmon farmers themselves, who pride themselves on their premium product. To achieve this, fin-fish farmers are now required to commission thorough environmental impact assessments in advance of licence approvals by my Department. The results of these assessments are made public by my Department. An additional sum of £200,000 was allocated in the budget to ensure adequate environmental monitoring of the industry and to regularise all existing operations. This allocation will enable us to put in place very quickly effective systems for assessing and monitoring all operations and will underpin the combined strong growth of the sector with additional jobs and at no cost to any other sector or the environment.

A very ambitious programme of fisheries research is planned for 1990 with an overall allocation of over one million pounds by the Exchequer. In particular, moneys have been set aside to carry out new surveys of the herring in the Celtic Sea, using special scientific echo sounders to obtain a direct count of the numbers of herring in the sea during the spawning season. These surveys are intended to protect those sectors of the industry which fish the Celtic Sea herring which had to close down a few years ago and ensure the best possible management of the resource. On top of this funding which is specifically for the fisheries sector, I recently announced that seven Irishled marine research projects are to receive EC funding of £1,700,000. A further six projects with Irish participation are among the 98 successful projects to be funded by the EC's Marine Science and Technology and Fisheries and Aquaculture Research Programme.

The 13 projects funded cover a wide range of marine scientific activities including aquaculture, oceanography, upgrading fishery products, coastal zone engineering, marine instrumentation, fisheries management and gene technology. The Irish beneficiaries include UCG, UCC, UCD, the College of Catering, my Department's Fisheries Research Centre and Bord Iascaigh Mhara.

Inland fisheries is widely acknowledged as one of our finest natural resources with potential to generate significant sustainable employment. This Government continue their commitment to developing and improving the resource and have provided a sum of £6.272 million in the 1990 Estimates for this purpose. In addition, £50,000 was made available in the budget for the monitoring of Lough Sheelin. The continued development and conservation of inland fisheries, however, can only be achieved through co-operation between interested parties and through full support for fisheries boards staff in their difficult task. The Environment Action Programme will be of considerable benefit to inland fisheries by reducing pollution of inland waterways. This should help create a basis for sustained long term expansion of the angling resource particularly as pollution has severely damaged fisheries in the past.

I recently launched 11 new fisheries patrol boats at Howth. The boats costing £400,000 were purchased by the Central Fisheries Board with grant aid from the European Community and with special funding from the Exchequer. The boats will be deployed by the seven regional fisheries boards at various locations to patrol coastal waters out to the 12 mile limit. While the main purpose of these boats is to combat illegal salmon fishing and the protection of salmon stocks, they come with the welcome bonus of being suitable for sea rescue operations, as well.

On the rod licence dispute, we are working very hard to bring this to an early resolution on a basis which should be reasonably satisfactory to most of those involved.

The advent of the internal market in 1992 and the opening of the Channel Tunnel in 1993 will result in Ireland being the only island European Community member state. Ireland's peripheral location at the edge of Europe puts us at a natural disadvantage vis-à-vis our EC partners. It is therefore imperative that we have appropriate port capacity, and quality port infrastructure, strategically located in relation to the main internal arteries.

Plans for the development of commercial harbours are, therefore, an integral part of the Government's broad development strategy to overcome the structural weaknesses in the Irish economy and to offset the effects of peripherality. Provision has been made in the National Development Plan for substantial expenditure between now and 1993 on developments at Irish commercial harbours. Expenditure will be concentrated particularly on Dublin, Rosslare, Waterford and Cork ports and will involve the following elements: berthing facilities; investment in improved facilities, including bulk cranes; and lift-on/lift-off equipment.

The objective is to make our ports cost efficient and to introduce the type of equipment which will facilitate the quick and economical loading and unloading of ships. These measures should of themselves make our ports more attractive to shipping lines and hopefully increase the tonnage of ships prepared to use our ports. We would want to pull up our socks on that one.

Subject to approval of the Peripherality Programme by the EC a total investment of approximately £60 million in commercial ports is proposed during the period of the plan. Capital expenditure by harbour authorities under the aegis of my Department will be in excess of £12 million in 1990 with a direct Exchequer contribution of £0.50 million.

In order to enhance the effectiveness and productivity of the fishing fleet I am committed to a programme of substantial investment to provide adequate infrastructure at strategically located harbours around our coast.

This programme for development of fishery harbours concentrates on: the Fishery Harbour Centres, owned and managed by the Department, at Killybegs, Rossaveal, Castletownbere, Dunmore East and Howth; a number of strategically placed secondary harbours such as Greencastle, County Donegal and Dingle, County Kerry; small harbours and piers which cater for needs which cannot be satisfied elsewhere and which require improvement works.

Of the allocation of £4.5 million for fishery harbour development in 1990 over £2.5 million will be used to continue major development projects at Rossaveal and Greencastle. In particular, I am pleased to state that my Department are paying Wexford County Council a 50 per cent grant amounting to £40,000 in respect of the reinstatement of the stormwall at Kilmore Quay Harbour, which was damaged in the recent storms. Provision is also made for the funding of surveys and investigations at a number of locations to enable detailed engineering assessments to be prepared.

Maintenance of Dún Laoghaire harbour together with a number of small piers, navigational lights and beacons around our coasts will require a sum estimated at £1.555 million in 1990. I recently announced the membership of the interim Dún Laoghaire Harbour Board and I am fully confident that, with the help of this board, Dún Laoghaire harbour can be managed and developed for the benefit of the people at Dún Laoghaire and for the country as a whole.

State funds, amounting to £150,000 for coast protection were transferred from the Office of Public Works to my Department from 1 January, 1990. The vast bulk of this money has already been earmarked for maintenance and direct protection works at Rosslare Strand and for studies of the erosion problem being undertaken by the Wallingford Research Institute.

However, following my examination of the emergency situation that has arisen at Arklow, County Wicklow, the Minister for Finance announced, in his budget speech, the further allocation of £950,000 to enable my Department to pay a 50 per cent grant to Wicklow County Council for coast protection works at the North Beach, Arklow. At the moment there are three business premises at risk, also a caravan park, major sports facilities, several private houses and local roads.

Deputies should understand that progress on coast protection is slow. It is a specialised engineering activity and the causes of any erosion problem can seldom be judged without close study and observation, often over a long period, while remedial measures sometimes involve trial and error. I shall try in the coming months to decide on an appropriate role for my Department to facilitate the implementation of permanent coast protection schemes, to prevent progressive erosion by the sea, where these are warranted.

The importance of Irish seaports to the economy is highlighted by the level of total trade in volume and value terms, 73 per cent and 64 per cent respectively, handled by seaports in 1988. More specifically, the commercial seaports handled over £14 billion of Ireland's total external trade of £22 billion in 1988 and almost £8 billion of Ireland's total export trade of £12 billion in the same year. Fast, efficient and inexpensive shipping is a pre-requisite for our success as a trading nation.

Funding of £1.34 million has been provided for in the 1990 Estimates for shipping investment grants. This compares with £0.515 million last year and together with the 10 per cent rate and continuing access to the business expansion scheme for companies engaged in shipping operations, services to underscore this Government's on-going commitment to the Irish shipping industry.

The question of marine search and rescue is particularly topical at this time of year. I am awaiting the report of the Review Group on Air-Sea Rescue Services set up to examine the operation of air-sea rescue services and to make recommendations to ensure a cost effective and efficient service to meet national and international requirements. This report is expected within a fortnight. I should like, in the meantime, to assure the House that I am fully committed to securing whatever resources I consider necessary to implement the recommendations of the review group. I wish to pay a tribute to the sterling work of the men and women of our rescue services who risk their lives to save others.

I should like to comment on the summary in the ESRI quarterly commentary of December 1989. Emphasis was laid on the 5 per cent increase in GNP, the substantial reduction in the debt-GNP ratio and the comfortable surplus in our balance of payments despite the large increases in expatriation. The report is not infallible but, as far as 1990 is concerned, it pointed out that barring a recession in Britain — they are hoping for, at worst, stagnation — the real GNP will increase by 4 per cent. The report said that the rate of inflation will be 3.5 per cent and commentators have indicated that it might, with luck, fall further towards the end of the year.

The report also called for an improvement in public finances. There was special emphasis — which I also emphasised — on the Programme for National Recovery and the consensus of all the social partners is essential. This includes farmers, workers, industrialists, trade unions and everybody involved in the economic life of the country. This is a sine qua non of the kind of progress that all sides of the House desire. Confidence in economic activity will attract more investment and create more employment. I come from an area which has been very badly hit over the years by emigration — although we do not whine and whinge about it — and I know that that is our desideratum in this House.

The main thrust of the Government's policies continues to be the restoration and improvement of confidence in our economy, thus creating a climate conducive to the generation of employment. Continued attention, however, to the strict control and management of public expenditure is being accompanied, hand in hand, by a concentrated emphasis on sectors with development potential. The 1990 Estimates provision for the Marine Vote, with the additional provisions made available in the budget, reflect these policies. Tá áthas orm mo thacaíocht a thabhairt don bhuiséad seo.

I hesitated to interrupt the Minister because I have great respect for him but I am astonished that he could speak for half an hour without announcing a solution to the rod licence dispute.

You are out of order, Deputy, please sit down.

I have been out of order for two years in this regard.

Acting Chairman

Please resume your seat.

I hope the Minister will make an announcement shortly.

Acting Chairman

If you do not resume your seat I will have to ask you to leave the House.

I hope the Minister will make an announcement before he leaves the Chamber.

Acting Chairman

I told you to resume your seat.

The Deputy is trying to get mileage out of this situation.

The Minister knows I am genuine about this problem.

Acting Chairman

I am calling Deputy Durkan.

We are all disappointed that the Minister did not refer to the ongoing rod licence dispute.

The Deputy must not have been listening to me.

There was a very short, passing reference. In view of the goodwill that exists in sporting organisations throughout the country I make a special appeal to the Minister not to allow the coming season to fade into the sunset without a resolution of this dispute.

It will not.

The dispute has done considerable damage to tourism and the game fishing industry. Having listened to previous speakers, particularly Deputy Jacob, I could not let the occasion pass without reference to the refusal by my party Leader to allow pairing, under certain conditions, in the past week or so. I smiled when I heard the cries of anguish from the Government benches and saw the beating of breasts, the tearing of hair and the míle ulagón.

I was a deputy Whip for some time when my party were in Government and I recall that seriously ill people were brought into this House to vote. I did not agree with the practice and my party were not in favour of it but the majority Opposition party at that time saw fit to ensure that pairs were not available on certain occasions. The crocodile tears shed on the Fianna Fáil benches over the past week do not influence me. Having said that, I wish the Minister for Agriculture and Food, Deputy O'Kennedy, a very speedy recovery and return to business as soon as possible.

I also want to challenge the continued perception in some quarters — especially on the Fianna Fáil benches — that economic recovery started about three years ago. Economic recovery started in 1982 when the Government who took over found that the economy was in a shambles. The previous Government ran away from their responsibilities and refused to accept anything to which people might have some antipathy. Because of their lack of courage and commitment they allowed the country to slide into financial decay, the like of which had not been experienced since the foundation of the State. When I hear people say that economic recovery started in the last three years and that everything in the garden is rosy I smile to myself.

I should like to refer to local authorities and the environment. We heard a lot about them in the course of this debate. Where are our local authorities going? The last speaker referred to improvements in the workings of our local authorities but in my view there have been dramatic decreases in the last three years in the rates support grant, the fundamental hub of the funding of local authorities since domestic rates were abolished. Those who do not accept that are not facing facts. Those who have been members of local authorities in the last ten years must recognise that there has been a gradual erosion of the powers of local authorities as a result of the unwillingness of the Government to recognise their position. That process was speeded up in the last three years.

The Fine Gael-Labour Coalition Minister introduced a progressive system for the funding of local authorities.

He cut the rates support grant.

Under his system local authorities were responsible for raising money and were rewarded for their efforts. However, the new Minister, in order to protect his majority in Dublin changed the system. He did not want any cold winds of reality blowing through the corridors of power in Dublin city. There should not be any fudging on this issue because we are aware of how the Government stand in regard to giving power to local authorities. They are unwilling to assist them.

Government speakers were proud of the improvements to our roads but I would prefer if they did not mention the condition of roads in my company. It grieves me greatly to have to drive on the bad roads in my constituency. In the last three years, the period of the so-called economic revival, our roads have been allowed to deteriorate. I do not know any civilised country with roads in such a sorry state. Before Government Members praise themselves for the improvements in our roads they should look at the entire picture, warts and all, and accept that our roads have deteriorated. They should not try to hide the fact that when they were in Opposition and we were attempting to steer the national economy from the rocks of disaster and reverse the trends that were well established they did not give us much help. I do not think Members on the Government benches need to be reminded of the rate of inflation and interest rates when they left office. I will not go down that road because I know it will hurt Members on the Government side.

Interest rates were 19 per cent when the Fine Gael-Labour Coalition were in office.

The Government have claimed a lot of credit for the revival in the building industry. It was easy to revive it for the simple reason that those employed in the building industry between 1987 and 1989 had left the country. Every building site had closed down and local authority housing loans were virtually abolished. The Minister found new ways to build houses without the need to advance loans, according to himself. During that time building workers emigrated to London, Birmingham and elsewhere. I accept that the building industry has made some strides in the last eight months but if that revival had not taken place the industry would have disappeared. The building industry is important to the economy. It appears that nobody is providing houses for those in the lower income group, those with an income of £10,000 or less. There was much in the Minister's speech about the tax concessions to such people but I wonder what the Government are doing to provide them with houses. From what I have seen the Government have done little to advance loans to them or to encourage local authorities to build houses for them. If there is buoyancy in the building industry it is not because of the number of houses being built for those in that income bracket.

They are thanking me for the houses.

The buoyancy in the industry is because of the demand by those who can afford to move up in the market, those who can afford to pay between £90,00 and £120,000 for houses. One must conclude that the people in the lower income bracket no longer exist or do not matter. I appeal to the Government to accept their responsibilities to provide houses for the needy. They should not divide society. If they continue on the path they are travelling they will cater for one sector and the country will be a lot poorer for that.

The budget received a mixed reception from commentators. Some described it as a good budget, others said it was reasonable while others said it was a bad budget. One or two minor adjustments were positive. We all accept that we must have a harmonisation of taxes. That is progressive and the sooner it takes place the better but I would prefer to see the positive elements of harmonisation emerging. It is unfortunate that to date we have only seen the negative aspects of harmonisation. My description of the budget is that it was a less than middling budget. It was reasonable for those who were not old, young, sick, handicapped, poor, unemployed, homeless, a housewife, a farmer, a young child at school, a business person or a single person paying the high rate of tax. It was good for those who had not taken out life insurance policies in order to benefit under the taxation system. Those with a mortgage got very little recognition in the budget. The Minister did not restore the mortgage interest relief that was taken away in recent years although there was a sharp increase in interest rates last year.

The result is that we had a mish-mash, an excuse for a budget. It was introduced to smooth over the cracks and give the people a false sense of security. The Government hope that the masses will not raise their voices too loud, will go away quietly and peacefully and not bother them. The administration is now heading and targeting much higher plateaux and I suppose they will not want to hear very much about what we have to say in this House for the next six months. That is a a matter for another arena but it is something which is equally important.

Debate adjourned.
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