Dáil Éireann debate -
Thursday, 22 Feb 1990

Vol. 396 No. 2

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.)

Mr. G. Reynolds

Before the debate adjourned I was making the point that the Minister of State, Deputy Kirk, made a statement to the effect that the Minister for Finance said in this year's Budget Statement that the inflation rate by the end of the year would supposedly be down to 2.5 per cent. We can all remember the Minister's Budget Statement last year when he said the mortgage interest rates would be down quite substantially. The headings in all this evening's papers are to the effect that interest rates have increased by another 1 per cent. Since last year's budget, therefore, the increase in interest rates has been of the magnitude of 5 per cent.

The Minister of State also talked about unemployment figures in County Louth. I cannot say I am an expert on what is happening in County Louth, but the figures he gave for 1987 and 1989 are interesting. Unemployment figures decreased by 1,000, but I did not hear the Minister mention anything about emigration, which is the main reason for the drop in unemployment in County Louth. Most of the young people in the constituency are not finding work there but in London, New York and elsewhere.

The budget was a non-event as far as most people were concerned. It had a little bit for everyone. The Government and the Minister for Finance had a great opportunity which they did not take. They could have used a Fianna Fáil slogan, "The Way Forward". The opportunity for that sort of declaration was immense. Unfortunately, the Minister decided to play safe and introduce a very static budget with no great vision. It was very unlike his recent speech in Kanturk, the Kanturk Declaration, where his vision for the next couple of years seemed very far-reaching, in line with his other aspirations which have nothing to do with the financial position.

I do not intend to be negative about the budget. There are some positive points, like the increase in weekly welfare payments, concern for the welfare of emigrants abroad, the new carer's allowance, the expansion of the social employment scheme, the increase in third level intake and changes in indirect taxation, VAT and excise duties. I will deal more specifically with these points later.

The Minister in his budget speech made no reference to interest rates, which affect the vast majority of our population. This budget is linked very much to current interest rates. Unfortunately events in Eastern Europe have not been taken into consideration and I foresee an increase in interest rates in the next few months. An increase has already taken place today, regardless of events in Eastern Europe. German economic union is being pursued at a great pace and when eventually the East German mark is withdrawn and the Deutsche Mark is the currency for both Germanys, that will have a great effect on the EMS, which will result in increased interest rates. Not only will housebuyers, farmers and business people suffer but the general thrust of this budget will be greatly affected. Our still very high national debt will be increased, putting a great strain on the economy.

We need buoyancy in the market place and a return to full mortgage interest relief would have helped enormously. The housing market was booming this time last year and in his 1988 budget speech the Minister stated that interest rates would not increase; in fact, there has been an increase of five percentage points during the past 12 months. The cost of an average mortgage has increased by £100 per month, which is very tough for a young couple or anyone who is finding it difficult to make ends meet. If such increases occur again this year the effect will be disastrous. The buoyancy which has been experienced in the market place during the past 12 or 18 months has disappeared and the market is now static.

It was with some amazement that I listened to the Minister's shoddy reference to agriculture. We are all aware of the importance of agriculture in our economy. It is still the backbone of rural areas and when the agriculture sector is going well all the service industries in rural Ireland experience growth. Every Deputy would agree with this. It is amazing that the Minister devoted about three lines of his budget speech to the agricultural industry.

During the last election campaign Fianna Fáil promised that the income limit for headage payments would be abolished and that extra areas would be included in the disadvantaged areas scheme. This has not happened as yet. The Minister of State, Deputy Kirk, stated that it would happen soon. As a first time Deputy I am beginning to realise that "soon" can mean anything. I always thought it would be a matter of days or weeks but in this context it could be years. I hope I am incorrect and that "soon" will be before Easter.

I come from a constituency which is already included in the disadvantaged areas. People outside these areas think that all their Christmases will come together if their areas are included in the scheme, but many anomalies exist. The income limit for headage payments is having a harsh effect on a number of farmers, and I appeal to the Government to fulfil their election promise. Double headage payments were also promised but this has not been implemented. Farmers in the disadvantaged areas are certainly entitled to double headage payments and there would be no great cost to the Exchequer.

Problems have been experienced because of the undue delay in the payment of headage grants. For the first time since the scheme was introduced payments were made before Christmas but they amounted to only 70 per cent of the amount due and farmers are still awaiting the balance. These payments relate to 1988 and they have not yet started to receive the 1989 payments. It is ludicrous that payments are almost two years behind.

I am glad to hear that the Minister for Agriculture and Food is recuperating well and I hope that he will be back in the House in the near future in good health. In his absence, I call on the Government to make the outstanding payments within the next couple of weeks.

The inordinate delay in the payment of reactor grants is also causing much hardship in my area and elsewhere. People whose herds have been locked up have to wait between six and ten months for reactor grants. This can only be described as disgraceful. If these people are full-time farmers they have no other income and they and their families are put in a very difficult financial position. There is no excuse for such a long delay and I call on the Government to rectify this problem as a matter of urgency.

I do not want to deal at length with the health problems; they were dealt with quite adequately in the Dáil over the last couple of weeks. All of us have listened to the various health problems regarding the waiting lists for hip replacements, eye tests, the dental service, angiograms and such matters. I am in the presence of an Independent Deputy for Roscommon and unfortunately all constituencies cannot have somebody of the calibre of Deputy Foxe who can get extra money for health facilities. I would call on the Minister to immediately review the health service. If he can sort out the problems in Roscommon I see no reason why he cannot sort them out in the rest of Ireland.

Social Welfare is another area in which there are a lot of anomalies. There was no mention in the budget speech of any measure to correct these anomalies. As I said at the outset of my speech, I welcome the increase in the carer's allowance; it is very worthwhile. An anomaly which exists, especially in rural Ireland, is that people who are entitled to a carer's allowance find it very difficult to be accepted by the Department of Social Welfare. Many Deputies are aware of the position whereby elderly people who are living at home — maybe a husband and wife — in a small farmhouse need full-time care and attention but fortunately due to the fact that they have some property in their name, anyone looking after them is not entitled to a carer's allowance. This is an anomaly which should be corrected. The problem does not arise in urban areas but it certainly arises in rural Ireland and is victimising the rural community.

Another problem arises in regard to people on unemployment assistance. They are assessed by the Department of Social Welfare and the assessment takes into consideration the price of cattle in 1987-88 which was very high at that time. We are all quite aware of the drop in cattle prices over the last 12 to 18 months. It is totally unfair to assess people on the basis of a price for cattle which they are not receiving. The experience in my constituency is that many people who are genuinely entitled to unemployment assistance have been cut off because the Department of Social Welfare have not, in line with the decrease in cattle prices, decreased the level for assessment. This is very unfair and is something which the Minister for Social Welfare should consider.

I would like to deal with the problem of local authority housing. I will take my constituency of Sligo-Leitrim as an example. In County Leitrim in 1989, 28 house building projects were started and in 1990, 12 are being started, a decrease of 16. This does not seem a very large figure, but, a survey carried out by our local authority revealed that 337 people were in need of housing, 219 of whom were in need of acute housing accommodation. I must admire Leitrim County Council on the responsible approach they have taken to this matter. They have sent an application to the Department of the Environment for 52 housing units for this year: 18 rural houses, two family-type houses and 32 OPDs. I do not see great scope for the Minister for the Environment to provide for this amount of housing for County Leitrim because the housing allocation has not been increased dramatically. Unfortunately, I would envisage a decline in the number of houses to be built. In the long term this will cause unnecessary hassle and hardship for many people who cannot get local authority housing.

Last year in the Sligo Corporation area six houses were built. Since 1987 Sligo Corporation have been awaiting sanction from the Department of the Environment for a 100-house scheme for Magheraboy, phase 2. There is a big problem in this area. In 1988 and 1989 Sligo County Council built 24 houses and in 1990 they hope to build 16 family-type houses and ten rural houses, a total of 26 houses. As only 24 houses were built in the last two years, obviously, as far as the Department of the Environment are concerned, to build 26 in one year would be a dramatic increase. As I stated previously, there will be a major housing difficulty throughout Ireland in the not too distant future if we do not tackle the problem now.

I would like to deal with tourism. The Minister, in his budget speech, stated that he was "increasing the provision for Bord Fáilte promotional activities by £2 million, conditional on matching funds from the industry". I am not sure if the Minister is aware — and I would like to make him so aware — of a recent report about Bord Fáilte and their recent promotional tour of the USA. The chairman of Bord Fáilte stated that the promotional tour was tough work and that they were up against enormous competition, with 42 other countries also promoting tourism in their countries for the US market. Unfortunately, due to the large size of the USA, Bord Fáilte found that their promotional tour lacked the necessary amount of money needed in order to carry out proper promotional policy.

With the withdrawal of Pan Am from Shannon, as I have stated in the House before, there will be a reduction of 45,000 seats coming into the country next year. It is not good enough to take up the slack; we need to increase that number. The Government's projected growth in tourism from the US market is 100,000 for this year. Taking into account the promotional difficulties and the withdrawal of Pan Am from Shannon, at this early stage of the year — and I do not want to be pessimistic — it seems to be very difficult——

Minister of State at the Department of Finance (Mr. Daly)

The Deputy is being pessimistic.

Mr. G. Reynolds

I was born an optimist and that is why I am here.

Mr. Daly

Stick with it. Do not let the House change you.

Mr. G. Reynolds

It is very difficult to see how the target of an extra 100,000 tourists from the USA will be reached. Another anomaly that is very much in evidence in the tourist industry is that there is no incentive for small family-run hotels to get grant aid. At present hotels with 45 bedrooms or more are entitled to grant aid from Bord Fáilte for accommodation and leisure facilities, while hotels with fewer are not entitled to grant aid. This goes against the grain if we are trying to promote the tourist industry. We are promoting Ireland as "Ireland of the Welcomes" and we assure people that they will get a homely and personal welcome in a small family hotel. However, it is difficult to maintain small family hotels in business without providing grant aid for accommodation and leisure facilities. The Minister for Tourism and Transport is well aware of the problem. The small business tourist industry is being victimised. We should remember that the tourist industry is very labour orientated. This victimisation should be eliminated rapidly.

I welcome the reduction in excise duty on electrical goods. However, there is a problem, especially in the Border areas, where people may have a lot of stock on hands which they will not now be able to sell at an economic price seeing that they will not be able to reclaim the old excise rate which they have already paid. Perhaps the Minister can do something to alleviate the problems in this area.

I welcome the expansion of the social employment scheme, which has been of great benefit in my constituency and throughout the country. To be eligible for the social employment scheme one must be unemployed for 12 months or be aged 25 years or over. Would the Minister consider reducing the age limit to 19, for instance? There are not many 25 year olds left in the country at this stage, but people aged from 19 to 25 are in a vacuum. Although they could have been long term unemployed, they cannot get on to this scheme. That is a great pity.

The budget has done nothing to create employment and it has not given any incentive to people to look for work. We have not taken the radical options that were open to us. One of the major disincentives to employers employing more people is the cost of employing people. Until we tackle that problem we will not tackle unemployment. Neither is there any incentive for our emigrants to return. My county has been devastated by emigration and I see nothing in the budget to encourage young people working in London, New York or Australia to come home and make a go of it here. Unemployment and emigration are the two plagues that have devastated rural Ireland and are now hitting urban areas. Unemployment was always a problem in urban areas, but emigration is fast becoming as serious a problem. The Minister for Finance missed a great opportunity to introduce a radical budget to develop the future of our country.

Mr. Wallace

I appreciate the difficulties of Members of the Opposition and I congratulate Deputy Reynolds for his more positive approach and recognition of many of the positive things in the budget. The Deputy's colleagues, particularly former Ministers, were very negative and lukewarm about the budget. These were the only people who were really dissatisfied with the budget. I am glad that Deputy Reynolds at least recognised that there were many good things in the budget and acknowledged the achievements that have been made over the last three years. These achievements were significant considering the situation we inherited from the Fine Gael/Labour coalition. Before we came to office, the people were very despondent about their future. Deputies mentioned emigration, interest rates, unemployment and so on. The legacy of the eighties, during which the Opposition parties were in Government most of the time, underlines the disadvantages we suffered as a result of Government policies.

The budget was one of the best and wisest budgets in 20 years. It is a tribute to the Minister and the Government that they achieved a sound balance between economic development and the needs of the less well off in society. It is widely accepted outside of this House that this is a good budget despite the concern expressed by Opposition Deputies. The budget is good for social welfare recipients. There have been significant real increases for a wide range of beneficiaries. The budget has also been good for people at work. People earning less than £60 per week are now exempt from PRSI while retaining full social welfare entitlements. Workers on low pay with families can benefit from the increased child related tax exemption schemes or from improvements in the FIS. Workers earning higher levels of pay will benefit from the reduction in the tax rates from 32 per cent to 30 per cent and from 56 per cent to 53 per cent. The reduction in tax liability will benefit single workers who we are frequently told would otherwise emigrate to countries with more favourable tax regimes.

Reading the newspapers prior to the budget one got the impression that commentators were trying to outdo each other in raising expectations in advance of the budget. This is in marked contrast to what prevailed through most of the eighties when the talk was about increasing taxation. There was a succession of commentators competing with each other to give ever higher estimates of how much the Government could afford to give away. Many of these commentators seemed to have forgotten that the poor economic conditions we experienced through most of the eighties were caused by excessive budget deficits and by borrowings to meet current expenditure. This approach is again being advocated by various commentators and pressure groups but we cannot afford to return to the policies of the mid-eighties. It is clear that Fianna Fáil's policies in Government over the last three years have proved to be successful. The central element of their strategy has been the Programme for National Recovery which, generally, has been a success, providing much needed stability to the economy, keeping inflation down, contributing to job creation, tax reduction and special increases in social welfare. All these things will prevent a return to the free for all in industrial relations a few years ago. All those who participate in the programme must be congratulated for their positive approach.

There were 41 strikes last year and only two were concerned with basic pay increases. The number of days lost was 41,400 which, with the exception of 1944, was the lowest ever. The programme played a major part in contributing to a growth of 3.5 per cent in the economy over the last two years and an expected growth of 4 per cent in 1990. The targets set in the programme for job creation have been achieved. Private sector employment is now estimated to have grown, providing between 30,000 and 40,000 jobs over the last two years. This was partly offset by declining numbers in the public sector as part of the Government's necessary reduction in numbers there. There has also been a very welcome reduction in the number of job losses. The number of notifiable redundancies was 13,400, half that experienced in 1984.

All this progress further underlines the achievements we have made in co-operation with our social partners. We have all benefited from the provisions of the programme and workers have received a real increase in take-home pay. This budget continues the process begun last year by Fianna Fáil of reducing personal taxation. I should like to refer to media reports that Deputy Dukes is insisting on a commitment to low taxation as his price for participating in an all-party committee on the financing of local government. I call on Deputy Dukes to end this charade of concern for taxpayers. He should stop trying to hold the Government to ransom by setting out pre-conditions for the outcome of the deliberations on the whole area of local government reform and funding.

Deputy Dukes also seems to have discovered a new found concern for taxpayers but this is very much out of character with his record in Government. As Minister for Finance in the Fine Gael-Labour Coalition Government in the mid-eighties he presided over a period of unprecedented increases in taxation. This was achieved during a period when that Government, who were elected on a platform of fiscal rectitude, let the public finances go completely out of control. I remember hearing Deputy Dukes being very complimentary to himself because he has been the longest serving Minister for Finance in recent times. Let us look back at his record. The national debt doubled to £25 billion, the debt GNP ratio increased from 94 per cent to 130 per cent; borrowings reached £2,145 million in 1986, or 13 per cent of GNP, its highest ever. The budget deficit reached a record of 8.5 per cent while interest rates went to a high level; unemployment grew from 170,000 to 254,000 while the numbers at work fell by 60,000. The economy stagnated, the 25 per cent tax rate was abolished and the top rate raised to 65 per cent. VAT was increased to 35 per cent and there were no special increases above inflation for social welfare recipients. In the context of Mr. Duke's performance in Government his claims of concern for the taxpayer now ring very hollow. He should put aside this pretence and join an all-party committee to consider the situation. Our Programme for Government provides for the establishment of a select committee of the Oireachtas to examine and report on the whole question of local authority funding, structure and function.

As a member of Cork Corporation I consider it essential to undertake an examination and set local government on a firm footing. In the past Fine Gael were committed to reform of the Oireachtas and to provide structures whereby Members of the Dáil can make a positive contribution to the management of the affairs of the State. They are given an ideal opportunity here to participate in a committee which will review the whole area of local government. I call on Deputy Dukes and the Fine Gael Party to participate in this review in which they can express their views and work towards an agreed approach instead of trying to pre-empt the views of parties in the Dáil. Deputy Duke's colleagues in Cork Corporation — particularly one of them — wrote a full page article in The Cork Examiner outlining the need for urgent Government reform and calling on the Members of the Oireachtas to get on with the job of bringing in necessary legislation so that local government would continue and perform as it should on behalf of the people.

Fianna Fáil are committed to reducing taxation and increasing the numbers at work. In contrast with the last Fine Gael-Labour Coalition, Fianna Fáil have stabilised the national debt, reduced the debt-GNP ratio and reduced the budget deficit to about 2 per cent — or £449 million — the lowest for 40 years. They reduced the standard rate of tax from 35 per cent to 30 per cent in two years, reduced VAT from 25 per cent to 23 per cent and provided a substantial increase for a wide range of social welfare recipients, especially the long-term unemployed. We have not heard about any of these measures from the Opposition.

The reduction of VAT will affect a wide range of goods through its reduction of 2 per cent. Every item which a householder uses will benefit from the decrease. These include electrical, non-electrical, household, non-durable and consumer goods, goods for personal use and sports and recreational equipment which is very important as many people have been calling for the removal of VAT from hurleys, tennis racquets, fishing equipment, cameras and many other items. Educational goods such as copybooks, drawing paper, notebooks and pencils will also benefit from the reduction in VAT. The same applies to building materials, marine and medical goods, farm machinery and office equipment. People may not want to hear that but it is the reality of the budget. It will affect everybody and will certainly help employment throughout the community.

A central objective of Government policy over the last three years has been to create conditions for sustained economic growth. The growth rate, which was stagnant in the period 1980-86, was 1.6 per cent of GNP in 1988. It reached 3.25 per cent in 1989 and it is estimated that it will reach 3.75 per cent in 1990. This is clear evidence of the success of Government policy. Despite the strict financial pressures on the Government since 1987 they have strongly committed themselves to eliminating poverty and improving the position of the less well off in society.

The 1988 and 1989 budgets saw the position of all social welfare recipients maintained with special increases for those on the lowest payments. Unemployment assistance and supplementary welfare allowance beneficiaries received increases in real terms of some 20 per cent over the last two years. The budget takes that progress a big step forward. Apart from more than maintaining the position of all those in receipt of social welfare benefits with a 5 per cent increase, it introduced a wide range of special increases. They include an 11 per cent increase for the long term unemployed, an increase of up to 15 per cent for adult dependants with a new minimum payment of £13. There has been an increase of more than 10 per cent for people on disabled person's maintenance allowance and more than 8 per cent, to a minimum of £53, for widows and other lone parents.

I am pleased with the introduction of the new schemes and the extension of existing ones announced in the budget. The introduction of a new clothing allowance will help social welfare recipients to provide for their children's schools and winter clothing. A total of £3 million has been provided for this purpose. The scheme will come into operation in the autumn and, while the details have not yet been announced, it is my hope that it will provide for a fixed payment as a right rather than leaving it as a discretionary payment. It is important that those arrangements are in place as soon as possible. That should be done so that payment can be made in August, before the children return to school. I make the same suggestion in regard to the footwear scheme under which payments can be delayed until as late as November. Then it is too late for those who incur heavy costs with their children returning to school and it is too early for expenditure on food for Christmas.

I should like to congratulate the Minister for Social Welfare on listening to the views of his backbenchers and managing to convince his colleagues in Government of the need to deal with these problems. We are all aware of the problems poor families must contend with when their children are returning to school after the summer holidays. They are unable to meet the cost of school books, clothing and footwear. This is the first time a Government have recognised the importance of giving direct financial assistance to parents at a time when they have to face heavy costs. It is important that this should come in the form of a fixed payment. Many of us have seen queues of people at local community welfare offices applying for those benefits. It should not be necessary to do that and it is my hope that the Minister will accede to my request for a fixed payment. From past experiences I am confident that the Minister will ensure that the scheme is streamlined to the benefit of those people. They have many problems to face at that time of the year.

A lot has been said by some of the poverty lobby about the failure of the Government to implement the recommendations of the Commission on Social Welfare. The only specific reference made in this context was about the minimum payment, said to be £60 for a single person and £96 for a married couple. It appears that the substantial progress that has been made by Fianna Fáil in phasing in a wide range of recommendations in that report is being ignored. The first thing to note is that arising out of the budget all long term social welfare payments will be brought up to the interim priority rate set by the commission. At the time of the recommendation the rate was £45 and that is £53 in present day terms. The rate for an old age pensioner ranges from £53 to £65.50 for a contributory pensioner over 80 years of age. Long term unemployment assistance is being increased to £52, an increase of £15.20 from £36.80, which was the rate in June 1988. That represents a substantial increase and it will be of direct benefit to the long term unemployed. Widows, widowers and other lone parents receive from £53 to £60 for a contributory widow over 80 years of age.

Among the recommendations implemented are: the establishment of an independent appeals office; the extension of PRSI to the self-employed; a rationalisation of and an increase in the child dependant allowance and an extension of the free fuel scheme to the long term unemployed. The commission considered that, due to the cost of implementing those recommendations, there were four areas that warranted priority attention. They suggested a significant step to bring the minimum payments within reach of the recommended allowance. That has been done in the budget. They recommended improved child income support, and that has been done in the budget with the lowest payment now at £11 and the number of rates reduced from 36 to 16. We are all aware that with 36 rates the officials had to spend a lot of time calculating allowances. The decision in the budget will remove a major obstacle to streamlining the system. I welcome that move.

The commission also recommended a broadening of the social insurance base, and that has been done. They recommended that the self-employed should pay £60 million in PRSI this year. Those moves introduce greater equity in the financing of social welfare and benefit the self-employed and their families. With regard to the delivery of services, major progress has been made. Almost £4.7 million has been spent on the provision of six new buildings and the refurbishment of a further six buildings in the last two years. This year a further £4.1 million is being provided to speed up that programme. Members have had complaints from people about the conditions at employment exchanges. It is bad enough that they have to go to those buildings to collect their benefits but it is wrong that they should have to tolerate the poor conditions that exist in them. They are unacceptable in this day and age. I am pleased that the Minister has tackled this problem and that the Government have provided the necessary finance to improve many of the buildings. I should like to pay tribute to the Minister for sanctioning the building of a new employment exchange in Cork. It will provide services for the unemployed and a wide range of other facilities. The Minister has given it an appropriate title, a one stop shop.

While major progress is being made in the creation of conditions for economic growth leading to increased employment, we continue to face the problem of having 220,000 people in receipt of unemployment benefit. We should ensure that the resources of the State are directed towards helping the unemployed, particularly the long term unemployed. I should like to pay tribute to FÁS who are doing a tremendous job and to the Minister for Labour, Deputy Ahern, who had streamlined that service by bringing AnCO, YEA and National Manpower under one organisation. That move was a breath of fresh air and the new organisation is doing great work. However, like Deputy Reynolds, I should like to appeal to the Minister to look at the terms of reference of FÁS. There is no doubt that the over 25s have a problem. Many people under that age are in a position to avail of schemes that older people cannot.

I should like to refer to the serious problem that has occurred near my home since the Sunbeam plant was put into receivership. I am very concerned about the future for that industry which employs 475 people. It is unfortunate that it was external problems that led to the factory being put into receivership. It is acknowledged by the local people, the receiver, the IDA, the management of the factory and the unions representing the workers, that the workers have adopted a very responsible attitude since the receiver was appointed. I should like to ask the Minister for Industry and Commerce and Finance and those with an interest in Cork city to do everything possible to make the resources of the State available to protect that industry. There is no doubt that there is a future for the industry. It overcame the difficulties it faced in the past and the workers have shown what they are capable of. If one walked through that factory today one would not find any evidence that there is a threat to the jobs of the staff. I appeal to the Government to leave no stone unturned in their efforts to protect the jobs of those people. There are enough unemployment problems on the north side of Cork and if anything were to happen to Sunbeam Wolsey it would have devastating effects. I am making a strong appeal to the Minister to convey to his colleagues this serious situation.

In common with many other Members of this House I have had long involvement with various community and self-help groups in Cork. Local people are in a special position to identify the needs of their community, to take action to meet deficiencies and to develop and improve themselves for the benefit of the whole community. Because of this I was very pleased with the announcement in the budget that moneys are being provided to assist local community development initiatives. This is particularly so in the case of the north side of Cork. The project submitted to the EC for European funding under the poverty project failed to secure that funding. The Government have, however, decided to step in and provide co-funding. This Cork project was submitted by the Knocknaheeny support group and the Mayfield enterprise group. It seems to cover the whole of the north side of Cork including Farranree, Churchfield, the Glen and Gurranabraher.

I had sought a meeting with the Minister for Social Welfare to discuss how this money will be used and to press for the largest possible allocation for Cork. The north side has been particularly hit in recent years and needs to see a commitment to developing community based projects. This will provide a vital resource for a wide range of activities, with projects for the elderly, young families, the unemployed, single parents and other groups in need of help and support. Allied to this initiative is a special allocation for programmes for women. I would like to see the Minister give special consideration to the requirements of family resource centres. We have a number of such centres in Cork which provide essential services to the women of the area. Unfortunately, there is no regular or adequate source of funding to cover the cost of the excellent services they provide. I will be pressing to get funding for these five family centres, because having worked with them I realise — and it is well recognised in the community today — that we need local people to use their initiative; they are closest to the problem. I will be calling for full financial support for the family resource centres in the areas in Cork to which I have referred.

There have been wide-ranging and strongly articulated views to the effect that the public finances have been rectified at the expense of those on social welfare. There are equally strongly held views that this is not the case. There have, of course, been some reductions in a proportion of expenditure on certain services. However, expenditure is now being increased. In education additional money has been allocated to meet the needs of schools in disadvantaged areas, an extra £120 million has been allocated to the health services as compared with the Estimate for 1989, a reduction in the net amount required from the taxpayer for social welfare hides the increases in PRSI income from the self-employed and the increased numbers at work as well as the reduction in the number unemployed.

A National Economic and Social Council report published in 1988 found that real income from work fell between 1980 and 1987. During the same time the real value of social welfare payments increased, due mainly to the large increases given by Fianna Fáil Governments in 1980-81 and 1982. Since 1987 payments to those on lower social welfare payments — the long term unemployed — have been increased by over 25 per cent with other real increases for recipients. The position of workers, especially those on low pay, has improved in real terms, but not to the same extent as for people on social welfare.

Fianna Fáil have always cared for people in need and continue to do so. This budget is clear evidence of that concern. Deputy Noonan, Fine Gael spokesman, was critical that this budget did not do enough for the poor. He was a member of the Fine Gael-Labour Coalition Government which simply kept payments in line with inflation. He showed no initiative in making any special provision for social welfare recipients, something which Fianna Fáil have consistently done in the last three budgets. Likewise, Deputy Spring, Leader of the Labour Party, was critical of the budget for not creating additional jobs. Having listened to some of Deputy Spring's contribution here today, I was amused, because people who were in a position to do so at a particular time, when things were very difficult, made no effort. They did not think of the poor; they did not think of the problems of the people; they did not think of the unemployed or anybody else. They thought only of themselves. They stayed in power as long as they could, but certainly they did not think of the people out there which we have certainly done in the last three years. Deputy Spring would need to look into his own conscience and be a little more honest about his approach in knocking this budget.

An Leas-Cheann Comhairle

The Deputy has two minutes remaining.

Mr. Wallace

I would like to refer to one or two other points. I am delighted the Minister has recognised the need of the mentally handicapped by providing additional money. In relation to the dental services, which are so vital in my area, there are major problems with orthodontic treatment being needed by many. I should like to refer to my own constituency of Cork because some of my colleagues have been very negative. One would think there was a competition in the local press between Opposition Deputies to see who gets most publicity. The provision this year by the Government of money for the Cork-Swansea ferry is widely welcomed by the local people, yet all we get is a negative response from the Opposition. They never give credit for anything. This is a very positive move.

The development which is taking place at Cork Airport is unprecedented and certainly the future is looking bright for the region. No doubt there are problems with which we have to contend and we are tackling them. I appeal to my Opposition colleagues on behalf of the people, if not on their own behalf, to be a little more responsible in representing the people of Cork, because if we do not do it together we certainly will not do it at all. I congratulate the Minister and his colleagues in Government for the budget they have brought in which benefits the whole community both economically and socially.

Mr. Finucane

It would appear to me that Fianna Fáil and the Progressive Democrats have been in a state of false euphoria since the budget. I would like to remind them that it was the Government led by Deputy Garret FitzGerald that laid the foundations for our economic recovery. It is not too long ago that the exemplary attitude of Fine Gael contrasted very much with the irresponsible attitude of Fianna Fáil, who called us, at the time, monetarists, Thatcherites, bookkeepers, etc. It was Deputy Dukes, the Leader of Fine Gael, who launched us on the Tallaght strategy which guaranteed political stability as long as Fianna Fáil pursued the correct economic strategy for this country.

I often wonder what would have happened since 1987 if Fianna Fáil had the clear-cut overall majority which they had in the past. Would they have displayed the same economic prudence? However, I suppose one should give them a little credit for their belated Lazarus conversion to politics even if it was under duress by both Fianna Fáil and the Progressive Democrats. However, I would like to address a few points in the remainder of my speech to highlight many of the inadequacies of the budget and the areas which need to be redressed. I would like to dwell on a few points in relation to agriculture.

The area of agriculture is under siege. It is regarded as being a primary activity in this country and rightly so. Speaking at this stage about the disadvantaged areas sounds almost like a long-playing record because the saga has gone on since 1987 and we are still waiting for this famous submission to the European Commission. In relation to the activity in this area of disadvantage, it has often been stated by Fianna Fáil that they are pursuing the largest revision ever of over four million acres. I would like to remind them that in 1985 the Fine Gael-Labour Government achieved the most significant extension and reclassification of disadvantaged areas. It is significant that they surveyed 10,000 townlands, covering 600 district electoral divisions, and in the end added 425,000 acres which were included for the first time and 870,000 which were reclassified. That was significant. If Fianna Fáil can achieve the same success with this submission many people will be extremely happy, but the many farmers who are waiting quite some time tend to be apprehensive at this stage, because it would appear that many Ministers and Deputies have been absent from various political meetings around the country organised by the IFA and other farming bodies to discuss this issue. I often wonder whether they are serious in their intent for major inclusions in the disadvantaged area or for reclassification.

The Government addressed the issue of farm inheritance tax in the budget. This tax can cause terrible problems when farms are transferred from fathers to their sons, daughters or other relatives. The maximum amount which could be inherited tax free was £150,000 and, even though the Government have attempted to address this issue by increasing this provision by 4 per cent to £156,000, it will still remain a millstone around farmers' necks and be a deterrent to farmers who want to transfer their lands. I ask the Minister to consider revising this amount in order to make it more relevant.

I wish to refer to the farm improvement programmes. In many cases literature is printed about these programmes and farmers are promised a certain percentage. However, the costings are outdated and need to be urgently reviewed to bring them into line with present day values. The Minister should rectify the problems in this area.

Local authority housing is of concern to those of us who are local authority councillors and Deputies. We know of tragic situations where people will not be able to get houses because of the serious cutbacks over the past few years. Like other parts of the country, there is a serious housing need in County Limerick at present. It is worth mentioning how this housing need has developed. This housing need developed because of a lack of local authority funding for housing developments. I want to contrast this with the position during the early eighties when many imaginative proposals were introduced by the then Government. At that time local authority tenants received a grant of £5,000 to vacate their houses; there was the £2,000 new house grant and £2,000 mortgage subsidy. These grants made it attractive for people to vacate their houses and meant that local authorities had a housing stock which they could fall back on. The only grant available to a person building a new house nowadays is the £2,000 new house grant. There are no incentives for local authority tenants to vacate their houses. In addition, the very generous tenant purchase scheme, which has to be applauded, will further exacerbate this problem in the future and will give rise to a very serious housing crisis. The Government will have to address this issue, which they have not done for the past few years. As we are all aware, we have an increasing older population. Thank God, older people are living longer; but many of them look to local authorities to provide housing. We cannot meet their needs at present, nor are we seriously attempting to do so.

There has been much discussion about the health services. I want to refer specifically to the position in County Limerick. The problems being experienced in County Limerick are similar to those being experienced in other counties. There are long queues for urgent operations in the general hospital and there are delays of over two years in gaining access to orthopaedic hospitals. This surely lends credence to the allegations that we have developed a two-tier medical system. If somebody who has a medical card has to attend a public hospital he will have to wait a considerable length of time whereas a person who is fortunate enough to be able to afford it can attend a private hospital. It is wrong that this should be happening. The number of beds in the geriatric hospital in my home town of Newcastle West has been reduced from over 220 to 160. This is happening at a time when the number of older people in our population is increasing. This does not make sense.

It is time the Government redressed the problems in regard to the hospitals in County Limerick. It is wrong to make an exception for County Roscommon and not give the same priority to County Limerick. An investigation should be carried out into this matter. Our older people demand respect. In many cases they do not have representative organisations to articulate their views and they are often embarrassed to air their views to their public representatives. These people deserve and need attention.

I want to refer to industrial development. The people of County Limerick are fortunate that the Shannon Free Airport Development Company operate in that area. I am sure the Minister of State at the Department of Finance, who comes from County Clare and who was in the House earlier, appreciates the work done by the SFADCo. However, a black cloud is hanging over industrial development in Limerick city, County Limerick and the mid-west region. Local papers regularly report on the future of SFADCo and what the Government intend to do with the company. Any decision the Government make about this money should be clear cut. They should immediately give SFADCo an extended mandate for the entire mid-west region so that they can get on with their job and get rid of this uncertainty.

There are many unemployment black spots in County Limerick and SFADCo have a very hard job to do. My home town of Newcastle West is becoming an unemployment black spot, as is the town of Kilmallock and other small towns. I am disappointed at the lack of industrial development in those areas. There are modern advance factories in many of those towns which are not being filled with alternative industries. There is a tendency to concentrate industrial development in the larger industrial areas such as Limerick city and Shannon. We should endeavour to bring industries to rural towns so as to bring back the population to those areas. Indeed, many of those people who have emigrated would welcome the chance to return home if jobs were available for them.

The port of Foynes is the hub of activity in County Limerick. This port is situated in the Shannon Estuary which for a long time has been defined as the jewel of the western world. A special study has been commissioned into the role of the Shannon Estuary in the future. However, there appears to be a great cloak of silence and mystery surrounding this report. People who have a tremendous interest in this area have not been privy to the information in the report. This matter was raised recently with the Minister for Industry and Commerce, who said he did not intend to discuss it beyond Cabinet level at this stage and did not appear to have any immediate plans to do so.

I ask the Government to come clean about their plans for the estuary. As public representatives for the area we deserve to know what is likely to happen to the port in the future and the potential developments there. I serve on the Foynes Harbour Board. The port at Foynes, which has a throughput of over one million tonnes, has received only £570,000 in Government aid since it was founded 100 years ago this year. It is significant that the largest contribution ever made to the board was by Deputy Jim Mitchell, who gave them £500,000 in 1985. I hope that there will be good news in the EC peripheral programme, which has been long promised, for Foynes and that substantial grants will be provided so that the board can expand the port in order to accommodate the increased volume of business. The Government should provide moneys for this port which is vital to the industrial development of County Limerick. I call on the Minister and Minister of State from that constituency to remember where Foynes is when it comes to distributing funds from this peripheral programme. They should also try to expedite EC sanction for this programme. I believe there will be tremendous returns from any investments made in the port. The board are prepared to match whatever moneys are allocated in order to provide the stimulus for growth in Foynes.

The Government have not met the real requirements of the country in the budget. It is a budget of missed opportunities and is a complacent response to our current needs.

Debate adjourned.