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. Leonard

Before the Adjournment last Thursday I was outlining the progress made since the 1987 election and the confidence which has been restored since then. I complimented the Minister on the wide area he covered in the budget, the special attention he gave to the less well off and the old in the measures he introduced, the measures he proposed to prepare us for 1992 and the Single European Act and the removal of many anomalies which have been brought to the notice of various Ministers over a number of years.

I welcome the provision of £600,000 for agricultural training. This, added to the £1.1 million from the European fund under Teagasc will ensure that agricultural students in residential training in horticultural and agricultural colleges will be on equal terms with vocational students. It will remove an anomaly which has caused much concern to Macra na Feirme and many other bodies, and will encourage more students to undertake courses in agriculture and horticulture. If the family farm is to be retained we must adopt a more structured approach to farming be it in livestock, tillage or intense pig and poultry production. The day of inefficiency is gone.

There have been many announcements and much discussion regarding alternative farm enterprises in view of the decline in many of the traditional areas of production, such as milk and beef. Milk production is curtailed and profitability on beef cattle has reduced. Mention has been made of alternatives, such as rabbit, deer and goats for milk and angora wool, but it is recognised now that these are not alternatives, and it is time for us to look at some other areas. While what I have referred to may well be all right as sidelines and may produce a reasonable return, they cannot be really regarded as alternatives. We will have to look to areas such as flax production and seed potatoes as alternatives.

Ray MacSharry, EC Commisioner for Agriculture and Rural Development, put forward plans for rural areas and alternative enterprises. He mentioned forestry, craft industries and small food processing industries. In my constituency food processing has developed in the last few years and has given good employment but there is still room for progress.

The Minister referred in the budget to the disease eradication programme. I welcome the extension of the period for restocking before the clawback for stock relief. TB in cattle is the most serious problem facing farmers. An area in my constituency which at one time was clear of TB now sees many serious outbreaks and in some cases entire herds have had to be eliminated. Despite all the surveys we do not seem to have made any advance in identifying the cause of this disease.

A strong lobby has been mounted by the Green Party and others against the slaughter of badgers. It has been established that in areas where there is a high incidence of TB in cattle, slaughtered badgers were found to have a high incidence of it also. I do not see how anyone can claim that badgers should not be slaughtered if they are TB carriers. We must face facts. For years the number of cattle found to be affected by TB was small but now the incidence has increased greatly in many herds. I do not know whether more intensive tests have brought this to light. Last week the director of ERAD said that TB levels vary from country to country. There is serious concern about the fact that animal movement takes place between five and seven times a year. In most other countries animals do not leave the farm on which they are born until they are to be slaughtered. Had the calf-to-beef system been developed as proposed for the 12 western counties some years ago it might have solved many problems in regard to the movement of animals. Obviously there is a serious danger of infection when animals are moved.

In Northern Ireland movement permits are required. It is expected to be two years before we can introduce such permits because the system would have to be computerised along with cattle headage and various other payment systems. The director of ERAD also drew attention to the reliability of the test, which is about 80 per cent or 85 per cent and can be as low as 66 per cent in cows.

The benefits of the budget in other areas are such that the trade unions have again agreed to enter into an agreement with the Government and employers. Union leaders are hard-headed negotiators and they know the benefits of a Government giving steady and sustained progress as against a free-for-all situation. Such sustained progress with a high level of industrial peace is one of the best weapons in tackling our difficult unemployment problem. While there would be short-term benefits from putting money into unsustainable jobs, there would be no long-term advantage. No country in Europe has found a shortcut to job creation. Sustained and steady growth is the only viable road.

I welcome the reduction in excise duties on a range of items and the fact that there was no increase in the old reliables. I come from an area where trade has been devastated by smugglers exploiting the price differential between this country and the North of Ireland and this aspect is of particular concern. The former Minister for Finance, Mr. Ray MacSharry, introduced the 48-hour residence clause which succeeded in stopping the bus tours and shopping expeditions across the Border. However, towns in the immediate vacinity of the Border continue to suffer trading problems.

The Minister reduced by 20 per cent the excise duty on table water and abolished duties on black and white televisions and on colour televisions with screens of up to 17 inches. The duty on sets having screens measuring between 17 inches and 24 inches was reduced from £49 to £30 and the duty on larger sets was reduced from £60 to £45. Excise duty was also abolished on records and compact discs. I understand the reduction in the price of gas for cars will be about 43p per gallon.

Prior to the budget all Deputies in the Border areas were pressed by electrical traders for a levelling off in the price differential between here and Northern Ireland. Since the budget announcement I have received letters from traders who are appreciative of the steps taken by the Minister. Many of these people had said prior to the budget that if some relief was not forthcoming they would be faced with a decision whether to continue trading. I welcome the fact that they have been given some relief.

Areas in the immediate vacinity of the Border still suffer on a political, social, cultural and economic level. This happens in the case of any partitioned country. The extra difficulties caused by the land frontier on this island have never been fully recognised and corrective measures have not been taken. I have stated continually that blame for this neglect of the Border areas must be placed on every Government who have held office since the foundation of the State. Adequate provision to offset the problem created by the drawing of an arbitrary line across the countryside, cutting off the natural hinterland from towns and cutting normal trading routes, has not been made. I speak in particular about towns like Belturbet, Clones and Dundalk which are immediate to the Border. Three quarters of Clones is surrounded by the Border and its natural trading hinterland has been lost. With the further loss of trade due to smuggling arising from the price differential in respect of many items, matters have been worsened.

The overall picture in the Border areas arising from the various causes I have mentioned is bad. It would be much worse were it not for the substantial local initiative in those areas. I have watched the rise of industrial development in my own area since I became a Deputy and played some part in assisting the development of broiler and egg production, mushroom growing and processing and turkey production and processing. These enterprises have helped to overcome many of the difficulties in the area. There is also furniture manufacturing and engineering. The people in that constituency did not sit on their behinds waiting for charity. We ask only for fair attention to problems arising from our proximity to the Border.

A number of surveys have clearly identified worthwhile projects and schemes for the Border areas. The EC portion of the necessary funding is available. Some years ago it was not available. However, local authority and private funding is very limited. The available funding must be matched pound for pound in the locality. The local authorities who have a very small budget and are under financial stress are not in a position to take up the allocations. The ball is clearly with the Governments on both sides of the Border. People in that area are entitled to additional funding. It would be a shame if the funding available from the EC and the IFI were not taken up because matching funding was not obtainable.

There is much talk about the action necessary to deal with problems in the North and there are signs of action on the political front. The Anglo-Irish Parliamentary group will hold their first meeting next week. The most constructive and non-political action which could be taken would be the securing of EC funds for the Border areas to the fullest possible extent. Over the years there has not been a constructive approach to the use of those funds. A coordinated effort has not been made in this regard.

Prior to the budget, the Opposition parties tried to raise expectations of major tax reforms to an unrealistic level. In the last two budgets they have been almost as dramatic. For example, they suggested that 63 per cent of those paying tax should be on the standard rate. The hard reality is that to change the tax structure in one fell swoop would not be practical. The steady progress made in the last two budgets is the best and most workable way forward. There can be no doubt that the Government targets will be achieved in the time set. It is important that we all set ourselves targets and discipline ourselves.

I welcome the recent announcement by the Minister for Agriculture in regard to the allocation of 11 million gallons of milk for special categories of milk producers. There will be an allocation of eight million gallons to the small producers, two million gallons to young farmers and one million gallons to other special categories. This is in line with Government thinking and also Department of Agriculture and Food thinking. Special recognition is given to small producers to ensure that they can make a livelihood out of farming.

I mentioned earlier mushroom production in Monaghan, which is one of the main sources of employment — full-time and part-time — for many people in that county. On two occasions here I voiced a word of warning, that no area of development in agriculture or industry was increasing at such a pace as the mushroom industry, which has increased at a frightening pace over the last decade. I was involved in that industry when it was set up and when they were seeking grants and assistance. At present, with the differential in the punt-sterling, prices have been reduced and there seems to be more product on the British market at times than is required. A few weeks ago a Deputy from my constituency said there are unlimited markets, but that is not true. I would be very concerned about people who have invested substantial funds in this industry. From now on that area should be monitored very closely.

One of the most important aims of the Government at present should be to provide jobs in every area possible. Our natural resources should be developed to the limit. One hobby horse of mine, which I haved mentioned consistently here over the years, is the tannery industry. When I came into this House in 1973 there were 100 people employed in two tanneries in County Monaghan. I think there were then between 1,500 and 2,000 people employed in the industry as a whole. At present there are better quality hides available due to the warble eradication scheme. The furniture industry is supplying high priced, up-market suites of furniture to the British market and there must be an opening for bovine hides for that purpose. Because of the export refunds a few years ago, semi-processed hides were transported to the North and to England to be processed. It is no credit to us that practically all the bovine hides from every slaughtering plant in the country are going across the Border and to England. That is something that will have to be rectified.

Another matter which I have mentioned consistently is the construction industry who have been wailing over the years about a fall-off in employment. In my constituency there are many poultry houses and the materials for the erection of these houses are being imported year after year. They are imported in sections and about two dozen people erect the houses during the summer. All the fibre-glass, alarm systems, temperature control systems, equipment for feeding and drinking, automatic equipment used in up-to-date poultry houses which could be manufactured here is being imported. I brought this to the attention of the IDA. It is a matter that should be considered immediately.

I would like to refer to financial incentives for designated areas. Up to now 20 centres have been selected for urban renewal and I find it hard to understand why this number has been selected. There are tax allowances, rent allowances and rates relief which are great incentives, but of the 20 centres in the Twenty-six Counties, there is not one in Cavan-Monaghan. There is still three years of this scheme to run and I would appeal to the Minister for the Environment and the Cabinet to be more even-handed and to give consideration to Cavan-Monaghan in the future.

With many of our State forests reaching maturity, serious consideration must be given to the setting up of timber processing and treatment plants. It is ridiculous to see timber being felled and transported long journeys, most of it to Ballycassidy in County Fermanagh, and being returned as fencing posts, pallets and in plank form. I made inquiries regarding the region in which I live, region No. 6, about the possibility of aid from the Structural Funds for the setting up of timber processing plants, but I was told it would be a private area of development and that in all probability this region would not be suitable. It is possible that the IDA are aiming too high in this regard. I travelled through Europe as a member of the Council of Europe for a number of years and the number of small plants, sawmills, de-barking plants and treatment plants in countries such as Germany and France is colossal. I cannot see why, when those countries can have those small family-type developments, we cannot have similar ones.

Great play has been made in recent times about the number of people repudiated to be living in poverty. There is no doubt that poverty exists but the actual level is a matter of dispute as it depends on where you draw the line. The bandying about of figures of those living in poverty serves no purpose.

Mr. Cotter

It certainly will not kill the hungry.

An Ceann Comhairle

The Deputy will now please bring his speech to a close.

Mr. Leonard

When the national cake is being divided everybody should get a fair share.

Mr. McGahon

I welcome the oppotunity of saying a few words on this year's budget. Although holes could be picked in it, as in every budget, I have to admit that overall it has been accepted as a reasonable budget. The Minister has given increases in the social welfare area in line with inflation but the budget fails to do much for the lower paid workers who are definitely losing out in comparsion with those on social welfare. Like Deputy Leonard, I have some doubts about the claims made in regard to the extent of poverty here. Last Easter I had the pleasure of visiting India with the Ceann Comhairle and I saw naked poverty there. I will never forget the scenes I witnessed, people lying on the streets, people who had been born into abject poverty. In that uncaring country, there is no social welfare system at all. From the cradle to the grave, they do not get a bowl of rice from the State.

Here we have a most caring system. This is one of the best countries in the world. Despite claims about poverty here, I sometimes believe that there are great abuses of the social welfare system. Many lower paid workers suffer very badly when contrasted with people who are well looked after by the State, people who get medical cards, free local authority services and who do nixers while many thousands of people in lower paid employment are exploited. Many people on low incomes are struggling with mortgages whereas others are given a bonus of a council house. The cost of a house is about £32,000. Young people struggling with a first mortgage do not get any facility from the State. Assessment of medical card eligibility is based on gross wages which rules out many hard pressed lower paid workers and their families. It is one section in the community who are paying for everything. Many people pay a high price for the doubtful privilege of being classed as employed. The system of calculating medical card eligiblity on gross wages is out of touch with reality and should be revised.

The increase of 75p in children's allowance is unbelievable. The man who devised that derisory sum, less than 20p a week, which would not buy a packet of tissues, has to be a bachelor or a child hater or a woman hater. I will draw a comparison between a married lady with eight children who receives between £1,400 and £1,500 in children's allowance and a bachelor farmer living on a mountain with 300 sheep who receives between £8,000 and £9,000 in grants and subsidies, £180 a week. That is some difference. Is more thought about raising sheep in this country than about raising children? Once again in this area the Government are out of touch with reality. That 75p is an insult to every mother. It should be withdrawn and a more worthwhile sum produced.

I unreservedly welcome the increase from £28 to £45 in the carer's allowance. It is a long overdue recognition of the role many people play in looking after aged relatives sometimes sacrificing their lives and careers to do so. By doing this, they save the State a lot of money. That sum should be embellished with each passing budget. I hope the allowance will become a constant source of recognition for these people in successive budgets. The Government should look at the proposal by Deputy FitzGerald which was introduced in 1981 in relation to a State payment for the stay-at-home housewife. Many women in lower paid employment would gladly stay at home if a worthwhile allowance was provided. The Minister should give further consideration to that suggestion.

In relation to the Border, I share many of the views of Deputy Leonard. When we were in Government he was very understanding and fair in relation to the difficulties which confront all Governments when dealing with the Border area. I too, have been consistent in my condemnation of the lack of Government acceptance of the terrible tragedy that has evolved in the Border area over the last 20 years. We have been consigned to a modern-day "hell or to Connacht" and there has been complacency and a failure to grasp the difficulties which are unique in Border areas. Our difficulties cannot be paralleled in any other part of Ireland. After nearly eight years of continuing disillusion here, I believe one has to live in the Border area to appreciate the depth of the reagedy that Deputy Leonard, Deputy Cotter and myself have witnessed over the last 20 years. It is a shame that no Government, my own included, has accepted the fact that in the town of Dundalk there is 35 per cent unemployment, double the national average. I have seen the flower of manhood emigrate to cities like London, Birmingham and Manchester. While some people have murmured, people in high places in Government have gone through the formality of acknowledging what is happening but direct action has not been taken.

I indict the Fianna Fáil Party for their failure to improve on the poor record of my Government in that respect. Many leading Fianna Fáil politicians went on trips to the North on PR exercises and were clearly aware of the scale of the problem but they have failed to act. I acknowledge the effectiveness of the 48 hour rule although it did not help the Border area in so far as people coming on shopping expenditions from Kinsale were not coming specifically to Dundalk, Carrickmacross or Castleblayney. However, it kept money in the Irish economy and secured the jobs of people in this State.

I also welcome the reduction in VAT on TV sets and videos although I wonder if anybody buys a black and white set. However, the retailers who have survived the nightmare of seeing their businesses crumble as a result of Government policies must see a glimmer of hope, especially if there is a further reduction over the next two years. The need to harmonise VAT rates and excise duties, North and South, must remain the number one priority for public representatives in the Border region.

With the approach of 1992 it is disappointing to find so little preparedness or real progress being made in this regard. I have been asking for the last seven years for the creation of an incentive zone in Dundalk, Ardee and Drogheda, three towns crippled by unemployment who see their young folk drained by the spectre of emigration which has decimated my town of thousands of young boys and girls in recent years.

Something must be done to recognise the fact that there has been criminal neglect of my county and the neighbouring county of Monaghan. The creation of an incentive zone which was introduced with great success by the British Government in the early seventies when there were indiscriminate car bombings in Belfast kept the businesses alive in that city. It is now booming because of the number of people going across the Border and buying the undeniably attractive goods there. However, it was the business incentive zone and the availability of low cost finance that kept shopkeepers alive as many of them did not have customers for several months, indeed maybe years.

The creation of an incentive zone would provide derating of commercial property and provide low cost loans to keep business afloat in these regions, and it is the moral duty of the Government to do this.

There has been very little recognition of the problems in the Border area in the past 20 years despite the fact that in 1984 the European Economic Council identified the Border region as one of the poorest in Europe. Despite the availability of immediate help the Government of the day refused to initiate real and meaningful help for those regions.

I should also like to remind the Taoiseach that in 1983 the Border region was clearly identified as a region crying out for help. The Taoiseach is now the European supremo and wields tremendous influence on the affairs of Europe. Why does he continue to neglect his own people in the most depressed region of this island?

In the coming year the Minister should address the question of double taxation in the Border area. Many people live in the Border region and go across to work in the Six Counties because of lack of employment on this side of the Border. These people are being asked to pay double taxation and in many cases they are being pursued by the sheriff. I am talking about ordinary, law-abiding people who pay their taxes at source in the country in which they work and are being asked to pay the same taxation here for the doubtful privilege of living in the State. This is an absurdity, indeed it is immoral. I have spoken privately to the Minister and made him aware of the situation and he should ensure that this crime is stopped as soon as possible.

In 1987 an announcement was made by the Government, with a fanfare of trumpets, that a Department would be decentralised to Dundalk. Three years later there has been no movement in that direction. I welcomed the announcement although I would have been happier if my Government had made it some years earlier. Nevertheless, I am big enough to recognise progress irrespective of who initiates it. It was a ray of hope that we would have a Department employing 200 or 300 people who would live and spend their money in the town. Departments have been located in Sligo and various other places but once again we in the Border area have been ignored.

The question of health and the provision of £10 million could be termed a sick joke if it was not so serious. While I believe that the recent `flu epidemic was hyped out of all proportion by the media for their own reasons, it is an outrage that poor elderly people cannot get a bed in which to die with dignity. A sum of £100 million was shelled out to the GAA, to rugby and golf clubs and art — a minority interest — all of which are self-financing; £60 million of that money should have been spent in the health area ensuring a better service for the poor who cannot go to the Blackrock Clinic or the Mater Private Nursing Home. Money of that magnitude should be made available to upgrade health facilities which have sadly fallen behind in recent years. I know that the health area was abused and that we had the highest bed occupancy in Western Europe in recent years, but there is no doubt that there is extreme difficulty in finding a bed for aged people who are usually poor. Deep concerns must be expressed about that area and the Minister for Health should address them in the coming years.

I now turn to a subject about which I possibly know too much, racing. Men go mad — and certainly go broke — following racing. I unreservedly welcome the decision of the Minister, Deputy Reynolds, to make £3.5 million available to the racing and greyhound industries both of which are useful contributors to our export industry. I must add that this money has not been given unconditionally. Every punter in the country, except a chosen few, mistrust Irish racing and not without cause. The racing industry should be the subject of a national inquiry. That mistrust is the reason attendances at race meetings all over Ireland are dwindling and why the man in the steet is gambling on English racing in SP offices. In some cases people are gambling on racing in Happy Valley in Hong Kong. "Fiddler on the Roof" was the name of a top musical produced some years ago. "Fiddler on the hoof" would be an apt description of the Irish racing scene today.

The final indignity for punters was the incredible "Redundant Pal" story at Christmas. On the Friday at Leopardstown an animal named "Finian's Law" was beaten three quarters of a length by "Scally Owen", a reversal of 24 lengths on their previous running. Twenty four hours later, "Redundant Pal", a top class race horse, a stable mate of "Scally Owen" and a vastly superior horse to "Scally Owen", was beaten at 1/5 by "Finian's Law". Three weeks later "Redundant Pal" won a £30,000 hurdle race with "Finian's Law" 42 lengths behind, almost two parishes away. In that race "Redundant Pal" arrived at the last hurdle with a double handful and a jockey swinging out of him. It was only a matter of what he would win by. "Finian's Law", the horse that beat him three weeks earlier was 42 lengths behind. Is it any wonder that people are staying away in such numbers from Irish racing?

Even if a punter had a hot line to heaven the Holy Ghost could not help him because he does not know what is happening in Irish racing. Nobody knows except a chosen few.

An Leas-Ceann Comhairle

It may be that the Deputy should get his inspiration from other sources?

Mr. McGahon

Possibly, but if I was as dapper as the Leas-Cheann Comhairle and wore a flower perhaps I would get more information. It is the lack of information that is my problem. I am aware that an owner does not pay expensive training fees for the benefit of the public but the Racing Board, and the Turf Club, do not seem to work in accord with each other. They must strike a balance if the image of Irish racing is to improve, indeed, if Irish racing is to survive. That is my concern. I wish to see Irish racing survive and improve.

It is my belief that much of the badly needed money that the Minister has provided should be given to National Hunt racing. I should like to ask the Minister to do what he can to ensure that National Hunt racing, the Cinderella of racing which is overshadowed by the more glamorous flat racing, gets a big slice of the allocation. They should be given that money to help them increase the minimum prize money to £2,000 for a maiden hurdle and to encourage the small breeders, the backbone of the game, to remain in racing. It is my hope that no money will be provided to build private boxes in Leopardstown or the Curragh for the international jet set or for Miss Joan Collins on her one day visits here. Joe Bloggs and Paddy Murphy must be catered for. They are the people who matter. It is absence of such people from race meetings, and their presence in SP offices, that is causing some of the problems that Irish racing is experiencing.

Courses must be helped and if that is not done many of them will not be in existence at the turn of the century, particularly country courses. By increasing the National Hunt prize money we will be helping the Irish racing industry to continue what we do best — breed, produce and race the best racehorses in the world. I regret that the Minister for Finance is not present for my contribution because he knows the racing scene. I am aware that he is concerned about what is happening in racing. I applaud his decision to make money available to the horse racing industry. However, I must express my grave concern about the cleanliness of Irish racing. One has only to read John Comyn in the Irish Independent to learn of the terrible irregularities that occur in Irish horse racing. There has been a tremendous influx of English bookmaking concerns such as Ladbrooks, Hills and Coral to this country because the masses are to be found not at the race tracks but in SP offices. Irish punters are happier to bet on English racing because they do not trust Irish racing. I could be classified as one of those people.

Another unhappy chapter in the saga of irregularities in Irish racing took place at Leopardstown last Saturday when "Scally Owen" won a race by six lengths. In his previous run — I believe it was at Navan — he was beaten by a distance of 52 lengths. That in racing parlance is equivalent to a distance from here to Edenderry. The horse led from start to finish; he could have won by two furlongs pulling a train. As a punter, and a redundant one after my experience last Saturday, I object to that. It appears that the same people are involved. There is a common denominator to all these appalling irregularities.

While I welcome the decision to make public money available to help the Irish racing scene, the Turf Club and the Racing Board should get their act together and clean up Irish racing. Otherwise, it will be like Luton Town football matches which are played behind locked gates with nobody in attendance. The only people who will attend race meetings will be the Joe Rogues, the needy and the greedy.

An Leas-Cheann Comhairle

I accept that the Deputy is trying all the way, but I must remind him that in the matter of time he is in the last furlong.

Mr. McGahon

As usual the Leas-Cheann Comhairle is very apt. The whips are out but I do not think I will respond to the pressure. I have a deep concern and, unfortunately, a love for Irish horse racing which has cost me a lot of money over the years. I am concerned about what has taken place. I applaud the Minister for his generosity. The help was badly needed because Irish racing is in a parlous state. Many Irish courses are in danger of going under but the real need is to clean up the game so that more people can be encouraged to attend race meetings.

An Leas-Cheann Comhairle

I should like to thank Deputy McGahon for the very interesting way he took us over that course.

Mr. Flood

After listening to that excellent contribution by Deputy McGahon it is obvious that Irish racing has need to fear that it is about to lose one of its greatest supporters and stoutest defenders. Irish racing had better get its act together if, as suggested by Deputy McGahon, it is to survive. I agree that a number of incidents in recent times have given rise to doubt in the minds of the ordinary punter. As a former punter I would not be encouraged to support the present set up. Deputy McGahon and I are in agreement on that issue.

The budget should not be considered by any Member, or anybody outside, in isolation. Essentially, it is a continuation of the Government's work and a continuation of the Programme for National Recovery as further developed by the Programme for Government. Therefore, it is a continuation of the excellent work of national reconstruction which was commenced in 1987 by the then Fianna Fáil Government. The outstanding progress achieved in recent years can continue. We have made progress towards rebuilding a shattered economy.

Progress has been achieved largely because the Fianna Fáil Government in 1987 recognised the seriousness of our problems. They had the courage to provide the leadership and skill which dispirited people sought at the time. Unfortunately, that was lacking in the preceding years. Considerable progress has been made in the last three years because of the consensus achieved between the social partners. That consensus was based on a set of agreed policies and targets and was also based on a mutual understanding and respect among the partners. The consensus was further supported and buttressed by the mechanism which was built into the agreed programme, and that is the operation of the central review committee. That was an outstanding feature of the programme because it allowed for considerable discussion and debate where difficulties arose.

The Principal Features of the Budget are intended to promote more economic growth and inevitably this will lead to the creation of jobs. We are all agreed in this House that unemployment is at an unacceptably high level, in the order of 17.9 per cent at the end of 1989. I identify particularly net job creation as the crunch issue for the nineties. People who are unemployed want to work and have a right to work. Therefore, we must not be sidetracked from the goal of achieving considerable new job creation and net job creation. It is generally recognised that the economy fared very well in 1989. It is accepted that there was considerable improvement in the net number of new jobs created and this is accepted by the partners to the Programme for National Recovery. Therefore, I expect that there is a reasonable expectation that unemployment will continue to fall, based on the net creation of new jobs. We will be looking to the coming years to see a continuing trend which has emerged in job creation in recent years.

Taking all the relevant factors into account, net job creation, excluding the farming sector, was over 30,000 in the last few years. Forecasters tell us also that in the year up to 1990 there is an expected net increase of jobs in the order of 30,000. We can all accept this as an encouraging trend. In the year up to 1991 we could be looking at net job creation in order of 17,500 jobs, based on some very positive features which are now present in the economy.

The trend in rising employment needs the active support of employers particularly at this time. This is a crucial issue and will have a major bearing on any future agreement between the social partners and the Government. We have to be clear in our minds that the employers have a very crucial role to play in the area of job creation. It is accepted by all of us that industry had a very difficult time during the eighties when employment fell by approximately 60,000. We were faced with very substantial interest rates and inflation for a good part of the eighties was at an average of approximately 7 per cent. We are aware also that the export markets already available to Irish industry proved very difficult to hold and the creation of new markets was also difficult. Industry was faced with considerable energy and communication costs. Taking all these factors into account, industry found itself in a position where cutting back on staff numbers was the order of the day. I have outlined the many reasons for this. The change in the circumstances of the economy, the decreasing interest rates, the lowering of costs and the improvement of our competitiveness must give industry new heart. Because of Government policy and, in some cases, external factors, industry will have to show that it is capable of meeting the challenges necessary to provide a considerable number of new jobs. If industry fails at this time, major problems will arise in the next four to five years.

Industry, having pared back to some extent on overloading in certain areas, in terms of staff and other costs, should now be in a position to gear itself to take advantage of an improving international situation and to take advantage of markets that are becoming available for the first time to a country such as ours. The fact that we are a member of the EC gives us an immediate entree to over 300 million people. The new relationships that are developing between the EC and Eastern Europe should undoubtedly lead to some additional advantages for our own industry in terms of product supply and the supply of skills and management. This is a crucial opportunity which is available to us and which we must be able to take up so that the improvement, particularly in exports, should lead to the creation of additional new jobs. This is the only way in which new, sustainable jobs can be created.

Industry has fared very well over the last few years in terms of Government policy. It has benefited greatly from sound financial management and now it needs to show that it has the capacity to build on that good policy be creating sustainable jobs which are based on the export performance of the companies concerned or on the provision of products and services to displace imports — in other words, import substitution, which is a major aspect of Government and IDA policy.

I would like to turn to the area of tax collection which has been a bone of contention in this country for many years. Historically, tax collection had been a taboo subject with many people holding the attitude that somehow tax evasion was all right, it was acceptable if one could get away with it. Indeed, in the old days it might be taken as something akin to a strike or a blow against the Empire. However, if it was to continue in that vein it would have had major repercussions for the finances of the State. The taxation system at the time, including tax collection, was anything but progressive and it was not until the major tax marches of the eighties that we saw a focus of public attention on the whole area of tax collection and, indeed, of tax evasion.

The publication of the reports by the Commission on Taxation geared the debate in earnest and brought home to all of us the need for a complete overhaul of our tax system which should lead to an opportunity to distribute the tax burden in a fairer way over all sectors. In looking at the issue we could have faced it immediately, and completely disbanded the system as it then existed for tax collection, or adopted the gradualist approach rather than the immediate approach in overhauling the taxation system. Successive Governments in the eighties showed the gradualist approach as being the best way to achieve what we all considered was essential, a complete reorganisation and overhauling of the tax system.

During the eighties the public perception and understanding of the National Debt assisted the efforts made by successive Governments to overhaul our taxation system. The national debt, which played a significant role in cooling the major expectation of people in the mid-eighties and later, made people realise that we were all citizens of the State, owners of the State's assets and responsible for the State's debts. This realisation helped people to focus on the need to overhaul our taxation system and ensure that everybody paid their fair share of tax, that evasion in future would not be tolerated or accepted and that there would be no sympathy for those charged and convicted of evasion.

In recent years many factors have affected taxation policy and changes have brought about major improvements in the system. The appointment of Revenue sheriffs was a major step in the right direction and the extensive use of technology by the Revenue Commissioners helped considerably to improve the level of tax collection. The more aggressive approach adopted by the Revenue Commissioners towards tax collection helped to improve the system. Of course, the tax amnesty, produced outstanding results and all of us should be aware that this was indicative of the amount and type of taxes which were being wrongfully held from the State.

The recent introduction of self-assessment will help greatly in the improvement of tax collection. This system puts the onus on taxpayers to make the appropriate returns. It will also allow the scarce resources within the Revenue Commissioners to be diverted towards chasing up those who failed to pay their tax on time. There is considerable room for optimism in so far as the payment of taxation is concerned. As I have said the appointment of Revenue sheriffs was a very logical and long overdue step in giving the Revenue Commissioners an effective enforcement arm which they lacked in the past. The improvement in the collection of taxes in recent years can be traced to the appointment of Revenue sheriffs, improved technology and the other factors to which I have referred.

One area which still needs to be addressed in the collection of taxation is the ability of the Revenue Commissioners to bring tax defaulters before the courts quickly. I believe the time has come to establish Revenue courts which would specialise in matters concerning taxation. These courts could have trained personnel to deal with tax evasion matters and other cases concerning tax avoidance brought before the court by the Revenue Commissioners. This would speed up the making of decisions in regard to tax evasion and delays in the payment of tax and would be an indication to taxpayers who avoid their responsibility to pay tax that the system had been changed fundamentally. The public would be made aware of what was going on and to a certain extent public pressure would be brought on those avoiding the payment of tax to keep their tax affairs in order. The courts could also have trained personnel who would be skilled in examining accounts, determining difficulties about tax liability, deciding on penalties, interest on late payments, etc. They should concentrate only on the issue of tax collection and the failure of individuals and organisations to pay their tax on time.

The establishment of such a court would strengthen the hand of the Revenue Commissioners and ensure that those who are not meeting their responsibilities in the payment of their taxes on time would know that there would not be a delay of a year or more on the part of the Revenue Commissioners in bringing their case before the appropriate court. This would give an added impetus to those who are responsible for paying their taxes to get their affairs in order. They would know that difficulties could accrue for them because of the operation of the Revenue courts.

The Companies Bill which is currently being considered by a committee of this House will further strengthen the role of the Revenue Commissioners in the discharge of their functions. Many sections of the Bill are devoted almost entirely to matters concerning taxation, tax avoidance and the ability of the directors of some companies who, once their company goes into liquidation, leaving large debts, including tax debts behind, set up again in the Phoenix company syndrome. I am glad we are facing up to this issue in our discussions on the Companies Bill. Even though we still have a considerable number of amendments to discuss I hope we will be able to complete our deliberations on the Bill quickly so that it can come into effect as soon as possible. This Bill has a major role to play in regard to taxation.

Considerable progress has been made by all concerned in the collection of outstanding taxes. I hope this will continue so that the attitude which has prevailed for too long in this country — if you can avoid paying tax, fair enough, but do not get caught — can be dealt with once and for all. I am confident we are on the road to changing this attitude. As we have seen in the past number of years, our finances will be dramatically improved when the people who collect taxes on behalf of the State will be able to pay them over to the State at the appropriate time. That is the only effective way in which we can keep the nation's finances properly balanced.

I want to refer to the social welfare aspects of the budget. I welcome many of the provisions in the budget. I will not refer to all of them but I want to refer in particular to what might be described as the smaller social welfare issues which had been raised for some time by many individuals and organisations but on which no substantial progress was being made. I will refer first to the new clothing allowance. This is a new allowance for school and winter clothing for families on social welfare. When the Minister is working out the details of his scheme I hope specific guidelines will be laid down by 1 September next so that people who are entitled to these allowances will receive them and it will be clear to all concerned that they are entitled to such an allowance. I hope the Minister will not allow individuals too much discretion and that a person will not have to go through the hoop arguing that their case is more pressing than someone else's. This is a welcome innovation and I hope it will be in place by September next as this is a time when parents find it difficult to get by financially.

The introduction of a carer's allowance marks a great step forward and will help to reduce the number of incapacitated elderly people who have to be institutionalised. As anyone involved in the health service or health board would know, the vast majority of elderly people wish to remain in their own communities among people they know. It is very sad that elderly people have to be plucked out of their own communities for a variety of reasons and placed in institutions where they have to begin the process of making friends all over again, which is not an easy thing to do at their time of life. Any attempt on the part of the Minister to address this problem would be welcomed by all of us. It may well be that this allowance will have to be looked at again in the light of the number in receipt of it and the cost involved, but a very good start has been made. For that reason we will be watching the implementation of this allowance in the year ahead very carefully to see if it is proving beneficial for those to whom I have referred.

I now wish to refer briefly to the family income supplement scheme. It is a great disappointment that this scheme is not being taken up by all entitled to avail of it. To some extent the reason for this is the amount of bureaucracy involved. I appeal to the Minister to take another look at this scheme to see if we can get around this problem. In certain health board areas some people who have availed of this allowance have ended up losing their entitlement to a medical card and there appears to be a divergence of opinion on this matter. I understand that the Minister has made a decision that those who avail of this allowance will not be disqualified from receiving a medical card. I ask him to implement this decision as soon as possible so that all the health boards will act in uniformity.

Some criticism has been made of the increase in child benefit. If we look at it in terms of the specific increase given we can understand this argument. However, I understand no increase was given last year and, if I recall correctly, the Minister was not subjected to any criticism because of this. This is a 5 per cent increase which will take effect from October, and which I hope will be above the rate of inflation which is expected to be around 3 per cent or 3.2 per cent this year. This should be taken as an indication that the child benefit is not going to be abolished. I welcome this. We will need to continuously review this benefit to see if further increases are necessary. The increase in respect of a fifth child, £1, is also to be welcomed. Obviously, the more resources that are made available the greater the increases for all concerned.

There are a few other points I would like to make. First, I would like to refer to local authority housing. Unfortunately the housing lists are beginning to lengthen once again and because of this the Minister for the Environment, Deputy Flynn, and the Minister of State, Deputy Connolly, will have to address themselves to this issue. This is a cause of concern for Members of this House, members of local authorities and those who find themselves on a waiting list.

I am not so sure that the right direction to take would be to begin building large local authority housing estates once more, as happened in the past. It may well be that the Minister for the Environment will have to look at new ways of providing local authority housing.

Perhaps there could be a coming together of the public and private sectors to provide housing. Possibly, this is one way by which this need could be met. I do not believe there is any great demand in Dublin, the area in which I am most familiar, to build huge housing estates as happened in the past. I would much prefer to see the Department of the Environment introduce a scheme which would allow the acquisition of houses by local authorities for allocation to those on waiting lists. Such a scheme could also allow tenants to apply for part ownership of the house with the option of applying some years down the road for full ownership.

The argument has always been advanced by local authority officials that it is very difficult to maintain individual houses in estates not exclusively owned by the local authority. One could accept this argument if the local authority own only one or two houses in a particular estate when the costs could be substantial. I suggest that the way to deal with this problem when allocating houses is to give the tenant the responsibility for maintenance as part of the arrangement which would ultimately allow that tenant to become the owner of the property, at preferred terms, at some stage in the future. I would like the Minister to address this matter as quickly as possible.

An Leas-Cheann Comhairle

The Deputy has trespassed into Opposition time.

Mr. Flood

I beg your pardon.

An Leas-Cheann Comhairle

If the Deputy has one final sentence I am sure Deputy Spring will be patient. Has the Deputy any final comment to make?

Mr. Spring

Say goodbye.

Mr. Flood

I am extremely encouraged by the number of new construction schemes under way, including major road construction, which is changing the face of our capital city. I believe the roads construction in Dublin, which I speak about from experience, will allow for tremendous development in the area. It is happening already. Apprenticeships in building are now coming forward again so young people are getting the opportunity to participate in apprenticeship training.

The budget is continuing on in the direction the Government are taking.

An Leas-Cheann Comhairle

I would not like Deputy Spring to think that it was not worth his while to be patient.

Mr. Flood

I appreciate Deputy Spring's co-operation. Thank you, a Leas-Cheann Comhairle.

Mr. Spring

I had no difficulty at all about Deputy Flood's intrusion into Opposition time because his remarks in relation to local authority housing were very pertinent. I would like to think that Deputy Flood might succeed in getting through to the Minister for the Environment and the Cabinet because it would appear that they are not listening to anybody else. They are certainly not listening to people from the Opposition benches.

The fact is that there are about 30,000 people on local authority housing lists and there will be a very serious crisis in terms of local authority houses. Therefore, I welcome Deputy Flood's intrusion into Opposition time because he was stating what a member of the Opposition would be saying.

Some time back, when the present Government was formed, when the Coalition arrangement was hammered out, I made some remarks in this House, wishing the Government well in the task they were facing. I even tried to assist and give some guidance by identifying some of the tasks. At that time I said:

Over the next months and years, two main question will pre-occupy the political system of our country. At least, these two questions ought to be among the principal issues that we face and deal with. It may well be that these issues will be ignored, and that they will be settled by default. It may well be that the politicians we have elected to Government will simply turn a blind eye to them, and allow them to be decided by faceless, anonymous people. If that were to happen, the result would be disastrous, as it has been disastrous in other countries where these issues have arisen.

The questions are these: first, how are the fruits of economic growth to be distributed? And second, who is going to wield the power and influence of ownership in Ireland in the future?

These are huge and difficult questions. They may not seem at first glance to be the most obvious ones that arise on a day like this. But if recent political experience has shown us anything, it has shown us that issues like these must be pushed to the centre of the political stage. Too much of our recent experience has been tied up with defending people against the callous and unthinking consequences of an ill-considered approach to policy. Too much of our recent experience has been tied up with unscrambling the consequences of secret deals and political cronyism. We cannot, as a community, allow the style and substance of this kind of Government to continue.

We have now had an opportunity to assess the style and substance that I referred to in that speech, and I have to say that the result of my assessment, at any rate, is that this Government are failing abjectly to address these two fundamental issues. I want to address both of these issues in turn. Because of the importance of the issue of accountability in Government, I want to deal with it first.

The last Fianna Fáil régime was one which specialised in secret deals. Many of the details of the agreements they made will, I suspect, take years to unravel. I have already on a previous occasion, for instance, referred to some of the highly dubious and unpublicised elements of the agreement made between the Government and a single individual for the development of the beef processing industry. That agreement was subsequently clouded even further by the very deep reservations held in many parts of this House about the granting of export credit insurance to the same individual in circumstances where, to put it at its mildest, objective consideration of risk would have led to different decisions.

What is disturbing is that there is already a great deal of evidence that this Government are set on a similar course. Perhaps the first example of this relates to the scandalous treatment of the Office of the Ombudsman just before Christmas. Evidence now available to me suggests very strongly that the Minister for Finance knew for several months before Christmas that the term of office of the Ombudsman was due to expire at the end of the year, and that he refrained from telling the majority of his Cabinet colleagues about it. If that is the case, it must be equally true that the Minister, despite all his protestations in this House, was involved effectively in an unworthy conspiracy to remove the Ombudsman from office, presumably for the purpose of replacing him with someone more congenial.

But that is only one example of the style of this Government. There are many others which deserve to be outlined. The assurances given to Deputy Jackie Fahey and the overt deal offered to Deputy Tom Foxe are other examples of a style which is less concerned with parliamentary democracy, and more concerned with the back room, stroking politics of old which have done so much damage to this country.

In the middle of a major health crisis, which has caused untold suffering and hardship to thousands of Irish citizens, it is not acceptable that the subject should be dealt with as if the only issue were possible embarrassment for the Government. Wheeling and dealing on issues involving the basic rights of our citizens, and the major policy choices that must be made by Government, is a shabby form of politics.

I have seen detailed proposals, made essentially by the Nigerian Government, to the Irish Government. These proposals involve an agreement by the Nigerian Government to supply oil at favourable prices to Ireland. This oil would be stored in Whiddy, refined at Whitegate, and distributed throughout the country as finished product. Both Whiddy and Whitegate would be considerably upgraded. There would, of course, be a price to pay, and a considerable investment to be made, both by the Irish Government and by the Nigerian Government on a joint venture basis.

On the face of it, I would have to say that this is a proposal that deserves the most serious considerations. It might be that after careful examination we might decide as a country that the price was too high, the risks too great, or that it failed to meet some strategic consideration. But it deserves to be studied and debated. The public deserves to be involved. Instead, my understanding is that for all sorts of reasons, to do with personalities, power plays, and bureaucratic inertia, the idea is simply being sat upon, with nobody willing to expose it to the light of day, and to examine where the public interest in this matter might lie. What kind of a way is that to run an accountable Government?

Exactly the same argument applies to the issue of privatisation, which is now being intensively discussed behind a large number of closed doors. It is impossible to make decisions about privatisation without deeply affecting the national interest — and yet a great many of these decisions are going to be made without the slightest involvement by the public at large.

There are a number of issues involved in the privatisation debate. I must say that it often seems to me that the public good is the last issue that gets discussed on the agenda. But these issues must be addressed, before any rational decisions can be made on this subject — and certainly before the public can be assured that their interest is being served by a privatisation programme.

To listen to many of the commentators on this subject, one would almost believe that there was no point in raising one's voice about this subject. A culture has been growing, in the financial press and in the pubs frequented by the business gurus, to the effect that privatisation is the only sensible way to approach the issue of the development of State companies. All right — thinking people, they proclaim, will readily agree that it is nonsense for the State to be holding on to valuable assets when they could be offset against the national debt, or when they could be sold in order to reduce taxation.

What these so called independent experts never talk about is the large fees to be got from advising and consulting the State about these matters. Ever since the good people in NCB were paid more than half a million pounds to advise the Government to sell Tara Mines to Outokumpo, the fashion for consulting about privatisation has grown. There are huge question marks about why that fee was paid in the first place, expecially when anyone with eyes to see could have told the Government that once the decision to sell has been made, there was only one company that made any sense as a customer. This was well known in the industry for the last ten years.

But since then, there have been consultancy reports on State companies generally, on Irish Life, on the Irish Sugar Company, on the Great Southern Hotels, and on Irish Steel — that we know of. First, no consultant worth his salt nowadays will say something his paymasters do not want to hear. Secondly, all these reports were prepared on the basis of anti-public sector bias. In the case of Irish Life, for instance, I understand that four options have been recommended, but each is a different method of privatisation. I believe no serious examination was given to the possibility of developing Irish Life into a stronger player on the European Insurance scene as a native-owned Irish public company.

When are these reports going to be published? When are the policy holders in Irish Life going to be consulted about their future? When will the workers in Irish Steel, the farmers who supply the Irish Sugar Company be consulted about their future? When will the tourist industry generally be consulted about the Great Southern Hotels? When will the people as a whole be consulted?

If a consultant prepared a report for, say, Michael Smurfit and told him the only sensible way to deal with his overdraft was to sell off most of his profitable business, I doubt if he would be working again for the said gentleman, but that is what we are being told. When I say "we", I mean the Irish people, and we are not even being given an opportunity to express our views about these consultants and their conventional wisdom.

The argument is being bolstered by some public company managers who feel constrained by the influence of Government Departments and who long, it would appear, for the excitement of the private sector. I have some sympathy for them in this dilemma, and would argue strongly that when public sector control becomes public sector interference they have a case, but the way to deal with this is hardly to swap the control of a Government Department for the control of a German multinational. If our public sector managers believe they are going to be better off in the private sector, many of them are going to have a rude awakening. Over and above that, it was the spirit of public service in our public companies that was one of the main-strings of our national economic development from the thirties through to the sixties. I do not believe we can allow that to be frittered away in dreams of private sector glory.

On the subject of national development, there is another side to this argument. How can our national interest be served by selling our insurance companies to the French, our steel industry to the Germans, the flagships of our tourist industry to the English, our sugar industry to the Americans, or our aviation company possibly to the Arabs? Surely the future economic prosperity of this country depends on the development of strong, native owned industries. How can we be so blind as to be willing to sell to the highest bidder, without any regard for the future?

As I said earlier, there are a great many issues involved in this whole debate, but these subjects are being swept under the carpet, and the debate is being conducted only among the vested interests and the decisions are being made in secret.

I fully endorse the call by the Irish Congress of Trade Unions for a White Paper on this subject, which will set out all the arguments, and not just the self-serving ones. I would go further, and assert here that if any of these State companies are sold off without the people being consulted, then the Government who do that have lost all sight of the need for accountability. Irish State companies are the property of the people of Ireland — our past and our future is bound up with those companies, and we are entitled to say in what happens to them. They are not the property of any Minister, any consultant or any entrepreneur — they are ours, and we are entitled to demand to know what is going on before any final decisions are made.

I now wish to turn to the other theme I mentioned at the start of these remarks — the importance of policy directed at fair and equitable distribution of the fruits of growth.

There is every possibility now that we are facing into a period of sustained economic growth. The recent medium-term review published by the Economic and Social Research Institute heralded the possibility that within a few short years we will be making capital repayments on our debt, rather than simply servicing the interest.

According to the ESRI, our economy could grow on average by 5 per cent a year for each of the next five years. By 1991, on the basis of present revenue and spending policies, we will be taking in more in taxation then we spend, for the first time since the early seventies. This appears to create a rosy picture — some would say that it is much too optimistic and is not unusual for the ESRI to have to change their predictions — but even if we allow for a degree of optimism, the likelihood is, as I have said, that our economy will grow. The question that poses is — who will benefit from that growth? The authors of the ESRI review pose the question well. They say: "The policy dilemma will be the reconciliation of the need for economic efficiency and the desirability of social equity." The Labour Party in the past have attempted to pose the same question over and over again. We have insisted at all times that the management of our economy must go be efficient and tough, but it must go hand in hand with a deep, underlying commitment to the principles of social justice.

We have had economic growth in the past two and a half years. We have had more efficiency in the public service and throughout the economy. Nobody can deny that, but it has been built on the backs of 100,000 emigrants and a quarter of a million unemployed people. It has been built on the backs of one million poor. It has been built at the cost of increasing inequality and disadvantage at every level of our society.

Side by side with the increasing efficiency of our economy, we have witnessed, in the past two and a half years, an increasing polarisation in our society. It is manifest in our two tier health service, just as it is manifest in the virtual collapse in our public housing, the gradual elimination of free education, and the dismantling of social welfare schemes. A more efficient economy, coupled with a more unjust and a less equal society is what we have begun to create in our country in the short lifetime of the last Dáil.

Sad to say, there is little evidence in anything we have seen so far that the issue of equality and justice will feature on this new Government's agenda. From what we have seen of the programme for Government, it is not a programme for government at all but a recipe for ensuring that the spoils of office are grabbed and held on to.

From the recent "Kanturk Declaration" of the Minister for Finance we can deduce that what is uppermost in his mind is the need to assure the party faithful that he at least has not lost sight of Fianna Fáil's "core values". Not for him the weight issue of how economic growth should be fairly managed. Not for him the task of ensuring that those who are now marginalised in our society will be entitled to participate fully in the future. His primary concern — indeed, his only concern — is the task of positioning himself to succeed his present leader by sniping in private at his Government partners. For as long as this power struggle bubbles under the surface of the Fianna Fáil Party, I see no prospect that their senior members are likely to deal, or are even capable of dealing with the major issues that ought to be their principal preoccupation. In short, I have seen or heard nothing that persuades me that this Government are even aware of the fundamental importance of wisely managed and fairly distributed economic growth.

The Taoiseach himself is on record as saying that the major issue facing us in the context of growth is the question of how to ensure that that growth is translated into jobs here in Ireland, but what is he doing about it? What review of industrial policy has been initiated since he took office? The only views we have heard on the subject from the Taoiseach appear to rely totally on renewal of the Programme for National Recovery, without spelling out the new and different elements that will make that programme meaningful to those who are unemployed. The only views that we have heard so far from the relevant Minister, the Minister for Industry and Commerce, appear to consist of suggestions that the buses should be privatised.

The experience of the Irish economy since Independence has been the failure of job creation in Ireland. That has been the central fact of Irish economic and social development. Associated with this, apart from certain brief periods, we have had comparatively high levels of unemployment and unique levels of forced emigration by European standards. For the last two years Labour have been undertaking a fundamental reassessment of the type of policies necessary to confront fully this legacy of failure by our society. We see it as our task to place back on the agenda the goal of full employment as the fundamental objective of Government. This needs to be demonstrated and expressed as a moral as well as a political commitment. Growth, competitiveness and job creation can and must be pursued in the context of Labour's vision of a humane, just and democratic economy.

One of the most critical factors in ensuring long-term economic growth and employment is this: no small country has achieved self-sustaining industrial growth and expansion in employment based mainly on multinational investment from abroad. A strong domestic industrial base is of central importance. The objective must be to retain value added in Ireland. This is not being achieved by the current strategy — all that the current strategy has achieved is that a high proportion of value added by overseas industry is repatriated as profits — nearly £2 billion in 1988. That is dead money — money which is being generated here, and is going to create jobs and wealth elsewhere.

The key to creating wealth and jobs here is retaining value added in the economy. To retain value added in the economy we have proposed: public ownership, part or whole, in the traded sector; public intervention by targeting grants and incentives to overcome the issue of firm size and tax reform through radical changes in the income, company and wealth tax codes with far larger revenues from the company sector.

This approach is not in conflict with any obligations arising from the Single European Act, and is applicable to both manufacturing and internationally traded services. We recognise that strategic investment abroad by Irish firms will often be an essential part of the overall development.

One of our key proposals to build up native industry is to get the IDA to focus entirely on inward investment from abroad, and fundamentally to reorganise the National Development Corporation as the major leader in the development of Irish industry. We cannot hope to win the battle for retaining value added in Ireland and increasing jobs if we sell our proven winners to foreigners.

Another key proposal is that public sector commercial enterprises must be given independence to make commercial decisions and be compensated by the Government where they are required to retain non-viable enterprises for social or national reasons. The reward package for top managers in the enterprises must be market-related and the link with public service pay and control by the Department of Finance must be broken. The National Development Corporation must be allowed powers to raise up to £500 million of commercial capital for selective investment in expanding indigenous industry, with the transfer of the IDA grant budget for indigenous industry to it.

In addition, Labour want every public and private sector worker to have both an individual and collective financial stake both in his place of work and in the creation of new resources of wealth in the economy.

We have already published detailed plans for the establishment of employees investment funds. These plans include: tax relief in the form of a deduction from taxable income of 125 per cent saved and contributed to a fund each year; a key promotional role for the trade unions and the funds to be used for expansion of existing public or private companies.

There are a number of reasons why the extent of poverty in Ireland is so great, and has grown larger in the past few years; high unemployment; low pay; an increasing number of people in part-time or casual work; inadequate social support, charges for essential services like health care; cutbacks in education, and so on. Perhaps the largest single cause is unemployment, and we have already outlined a number of proposals in regard to that.

In many other areas that have been mentioned, direct Government action is not only essential, but possible in the short term. Under the social charter that was signed recently, for instance, our Government have accepted a moral obligation to ensure that part-time workers are no longer exploited. That will require legislation, covering such things as pay, sick leave entitlements, protection against unfair dismissal, and so on.

There is also an obligation on the Government now to examine the whole issue of low pay, and to legislate for a minimum wage if necessary. There has been a great deal of publicity lately about the so-called "poverty trap", which results in some people on social welfare being better off than some people at work. The right-wing politicians and commentators always seem to draw the conclusion that the reason for this is that social welfare levels are too high. The truth is that in too many cases wage levels are too low. But it is in the context of the budgetary process that the Government can do most to begin an attack on poverty in the short-term.

Last year, for instance, the 1989 budget aimed to remove 24,000 low-paid employees from the tax net. But according to the Combat Poverty Agency and other reputable sources, there are still families paying tax whose incomes are less than 60 per cent of the average industrial wage — in other words, very poor families. In most cases, the £10 or more that they pay in income tax is the reason they fall below the poverty line.

To take another example, it has been estimated that the cost of feeding, clothing, and caring for a child varies from £19.60 a week for children under four to £28.20 a week for children over four. Almost 350,000 children in Ireland are being maintained by social welfare payments — and the basic child dependant rate was £10 a week until the budget. Is it any wonder that too many of our children are under-nourished? Child benefit, which is intended to supplement these rates and to be an income for mothers, has been frozen ever since Fianna Fáil returned to office — or to put it another way, it has been cut in real terms by about 15 per cent.

The 1989 budget contained a welcome innovation inasmuch as it introduced an addition of £200 per child to the exemption limits that applied to low-paid workers. In our pre-budget submission, we estimated that it would cost about £20 million in 1990 to increase that allowance for each child to £600, and the net result would be to remove perhaps 50,000 low-income families from the tax net altogether. In addition, it would cost about £60 million to increase child benefit by 25 per cent, and to pay an extra mother's benefit in September, a time when many families suffer the hardship of enormous additional child-related expenditure.

These are not solutions to poverty — that cannot be achieved by one or two isolated steps, but only by a concentrated and integrated programme of activity, which may take several years, and which must be based on the twin principles I mentioned earlier — economic efficiency coupled with social justice. But they would help many families who are suffering now to share in the benefits of the very considerable improvements in our financial situation that the last few years of hardship have brought about.

What was the Government's response in the budget? They raised child dependency rates by about £1, increased the children's allowance by 19 pence a week, and through various other measures exempted about 30,000 people from the tax net. Just as in 1989, the vast bulk of the relief granted in budget, instead of representing even the beginning of an assault on poverty, will instead go to benefit the better-off sections of our community.

When the budget was published, we issued the following statement:

Many of the individual items in Budget 1990 are welcome, but in overall terms it is a Budget that tinkers with our many social problems, rather than addressing them in any fundamental way. There is nothing in the Budget that seriously attempts to address the unemployment and emigration concerns that affect us, and not nearly enough to address the growing crisis in health.

The money allocated for mental handicap will do no more than begin to reverse the cutbacks implemented by this Government. And the crisis in our health services generally has been totally ignored. There is nothing here to shorten waiting lists, to reopen the acute beds that are urgently needed, or to employ the doctors and nurses.

On income tax, it is surely typical of a Fianna Fáil-Progressive Democrats coalition that it would offer more to the highest paid taxpayers in our country than to the lowest paid. The combination of measures outlined today will ensure a disproportionate benefit to those on the highest incomes. Many of the measures applicable to low pay will have effects that are more cosmetic than real — The PRSI exemption package, for instance, is clearly designed to benefit only casual workers, and even then, they will not secure that benefit every week.

Child Benefit is increased for the first time since 1986. It continues to lag well behind inflation, and in general, the provisions in this Budget for children show that the Government has not studied the evidence available that shows that the cost of nuturing children is almost twice what the Government is providing. In this context, an increase of nineteen pence a week in Child Benefit can only be described as a cynical gesture — especially when set beside the continuing favourable treatment for companies and profits.

The real value of tax reductions has to be measures against increases of £70 a month in typical mortgage repayments, increases in local authority rents, increases in telephone and ESB bills, and increases in the cost of genuine life insurance policies. Few people, apart from the very well paid, will see significant improvements in their living standards when all these factors are taken into account.

There is nothing in this Budget to deal with the growing housing crisis, nothing to alleviate overcrowding in our classrooms.

This was a sticking plaster Budget, not a reforming one. Sharing the fruits of growth demands more fundamental reform than the Government has attempted.

I see no reason to change that judgement now. The reality is that our economy needs fundamental reform, in order to bring justice and equity to our society. The task of reform holds no interest for the parties now in Coalition.

Minister of State at the Department of Tourism and Transport (Mr. Lyons)

Is mór an t-áthas dom gur tugadh seans dom cuidiú leis an díospóireacht ar an gcáinaisnéis seo thar a bheith tábhachtach a thug an tAire Airgeadais dúinn ar 31 Eanáir 1990.

This budget continues the constructive and realistic policies of the past three years which have proved to be successful. History will record that these were the years when we reversed the downward spiral in economic activity and achieved a level of growth which surprised even the most optimistic forecasters. This note of confidence should not be mistaken for smugness or complacency. We in Government are well aware of the pitfalls and we will heed the economic commentators in their warning of a need for a continuing cautious approach. The message that must go forth from this debate is that we must continue with our present economic strategy which has been clearly demonstrated as being the correct one. The strategy adopted by and the performance of the Government over the past three years has convinced the financial markets and the many investors both at home and abroad that we in Ireland can tackle the fundamental problems of our economy. This in turn has underpinned business confidence as it implies greater certainty in regard to future movements in prices and in costs.

The Government have laid great stress on the need to achieve growth in the tourism sector. In this context, quite ambitious targets have been set by us for the industry. This budget demonstrates a continuation of the firm commitment of the Government to the development of Irish tourism. By any standards, the sustained growth in Irish tourism since 1987 represents a remarkable recovery. Up to then the eighties had seen little or no growth in overall visitor numbers but thankfully this situation has been turned around and the industry is now beginning to realise its undoubted potential as a generator of significant fund revenue and a provider of viable employment.

While official figures are not yet to hand for 1989, Bord Fáilte estimate that visitor numbers will be around 2.8 million, an increase of 15 per cent on 1988 and, more significantly, an increase of almost 50 per cent on the 1986 performance. This 50 per cent increase in tourism traffic and the broadly similar increase in foreign tourism revenue is estimated to have created over 18,000 new jobs in the economy since the beginning of 1987. The growth in tourism is a vivid testimony to the success of the tourism development strategy adopted by the Government since 1987. It is a strategy that will be continued and with increasing vigour, this year and in the years ahead. We know the true potential of Irish tourism and that with the right strategy, the industry can deliver the goods.

At the heart of the Government's strategy for tourism development is a signficant increase in capital investment in the tourism product. Over the past few years we have seen a significant rise in private sector investment, largely stimulated by increased tourism activity and with the help of Government incentives, not least the business expansion scheme which we made available to tourism when it was only previously available to manufacturing industry. This increased level of investment, on the one hand, represents firm evidence of the confident light in which the future of Irish tourism is viewed; however, on the other hand, it highlights the accepted need for increased investment in developing the range and quality of our tourism facilities and amenities to meet the growing demand and the changing requirements in the international market. It was for this latter reason that Irish tourism was chosen by Government for priority development in the Government's National Development Plan 1989-1993. Investment over the next four years will radically change the face of Irish tourism. It will ensure that we have a world class saleable product which will generate a significant increase in tourist traffic and create an additional 25,000 new jobs, the jobs target we in Government have set for the industry.

On a specific tourism matter, I am very pleased that the Government decided to provide financial assistance to Swansea Cork Ferris Limited for the provision of a service between Cork and Swansea in 1990. The financial assistance, in case it is not known already by everybody, consists of a grant of £500,000 together with a loan of £500,000. Arrangements are well in hand for the commencement of the service on 9 May and it will operate until the end of September 1990. I am confident, and I have always been so, that the service will be of significant benefit to tourism interests, and the economy generally in the south-west region. In that regard, I am glad to record the enhusiasm and welcome it has received both at home and in the UK.

If I had more time available to me I would expand on that but I would just indicate that when I was at a tourism workshop in London recently and visited the UK tourist office in Lower Regent Street I was pleasantly surprised by the welcome attitude of British Rail to the news that the ferry was back. Another indication is that when the office opened in Cork this week people were waiting before the staff arrived at 9 a.m. and in the first 15 minutes of opening there were five firm bookings. Since then the enthusiasm has been reflected in the continuing phone calls and calls to the office.

As regards the longer term, the Government support the maintenance and indeed the expansion of our ferry services in the interests of tourism and trade. I must stress however that it is Government policy that access transport services should operate on a commercial basis. In those circumstances, Cork Swansea Ferries Limited have been informed that the Government have decided that no further Exchequer assistance will be available to the company from 1990 onwards. I am a lot more confident than some of my cynical political colleagues from that area that the ferry will be commercially viable.

It is now up to the operators of the service and to the people of the Cork-Kerry region to prove that a commercially self-sustaining service can be operated in future years. I would appeal to my cynical collegues in that area to lend a hand also to the success of the ferry. It will continue to have my full support and commitment. I would ask a constituency colleague, Deputy Allen, to be gracious enough to withdraw the personal attack he levelled at me, as reported in the local Evening Echo on 18 January 1990. He should acknowledge that he was wrong in the case of the ferry, as he has been in many of his negative utterances about Cork. At the same time, he might indicate either here in the Dáil or outside it what he has done for Cork at any time in his public life, including the time when he was Lord Mayor of Cork. I am a firm believer in the old adage that talk is very cheap and easily available but that actions speak louder than words. Deputy Allen must be very disappointed — and he is not alone in that politically in Cork — that the ferry is back. They would much prefer if it was not back for narrow political gamesmanship. To quote another heading from my very respected local paper “It is ferry blossom time in Cork”.

In relation to tourism development at EC level, on assuming the Presidency of the Council of Tourism Ministers, the Minister and I set our sights on raising the profile of tourism in the Community's programme of activities. The lack of progress to date in the development of Community tourism policy has been disappointing, particularly having regard to the single market objectives.

In order to give impetus to the development of an EC tourism policy during the Irish Presidency, the Minister, Deputy Brennan announced at the inauguration of European Year of Tourism in Dublin Castle that we were bringing forward to next month an informal Council of Tourism Ministers which had originally been called for April. This informal meeting will be followed by a formal Council of Tourism Ministers in June.

We will be using these two meetings to concentrate on four specific themes which require urgent development at Community level. These are: the development of an EC Tourism Research Programme; a speeding up of the time scale of the harmonisation of tourism statistics in the Community; a detailed assessment of the impact the single market will have on the tourism sector and the maximisation of the return on EC financial support for the tourism industry.

We are determined to use our term of office as President of the Council of Ministers to achieve concrete results in these four crucial areas. This will create a revitalised tourism agenda at Community level, one that will be positioned to carry the industry safely into the twenty-first century.

A prerequisite to realising our tourism ambitions is the availability of an effective access transport system. Through our policies we have created a climate in which the efficient transport operator can prosper in a liberal environment. All elements of the transport sector are experiencing an upturn in fortunes and are assisting the tourism cause through the services they are providing.

The provision of services represents only half of the picture, however. We must also ensure that the airports and the air traffic control facilities and navigational equipment at the airports are able to cope with the expansion in services and traffic. With this in mind, ambitious investment proposals for the State airports, involving expenditure of over £100 million in the period up to 1993, are planned under the National Development Plan.

I am glad that a significant proportion of this investment will be concentrated at Cork Airport where a major extension of the existing passenger terminal is planned to commence this year. The extended terminal together with the recent extension of the runway and improved navigational facilities, will ensure the availability of first-class passenger facilities at Cork to cater for the rapidly growing passenger throughput at the airport. I take pride in reporting to the House that in 1989 passenger throughput at Cork Airport reached 600,000 which is almost double the figure recorded in 1985.

More generally, I am satisfied that the planned development of Cork Airport, which I have set as one of my fundamental objectives in office, will play a major role in stimulating the economic, industrial and tourism development of Cork and the south-west region generally.

With regard to air traffic control and air navigation facilities, the Air Navigation Services Office of the Department are currently engaged in a major equipment renewal programme at the State airports involving total expenditure of £30 million. The main elements of the programme are: new radar systems at Dublin, Cork and Shannon Airports including a secondary surveillance radar at Dublin Airport which has already been installed; complete replacement of the main VHF communications systems at Dublin, Cork and Shannon Airports which will be completed over the next few months; replacement of most of the existing navigational aids at Dublin and Cork Airports including the installation of additional instrument landing systems; this project is also nearing completion; and installation of instrumented runway visual range systems at Cork and Shannon which are currently being evaluated.

The re-equipment programme will be completed by 1992 and within budget. I am satisfied that the new air traffic control facilities coupled with the recruitment of additional staff will substantially expand the capacity of the Irish air traffic control system and further enhance the safety of aircraft operations within Irish controlled airspace.

A lot has been said and written in the recent past about Ireland's peripheral location. As an island trading national we have a serious problem due to our geographic location on the edge of Europe. That does not mean that there are no measures we can take to offset the disadvantages of peripherality.

The Government have been very active in negotiating increases in EC funds which will also be used to help fund major investment programmes in the areas of roads, port and airports. Subject to the results of a feasibility study, which is being carried out in conjunction with the EC, investments in sea and air freight shuttle services may be considered. Investments made will not bring us physically nearer to Europe but we will be closer to our key export markets in terms of the key parameters of competitiveness, namely the quality, frequency and cost-competitiveness of our access transport service.

On the domestic front, it is essential that the transport sector operates as efficiently as possible. All transport services whether road or rail, public or private are and should be judged on the quality of the services provided and the costs to the user. If transport services are not cost-effective and efficient they will constrain the future growth in the economy. The Irish transport industry has become more competitive in recent years but there is still room for improvement, particularly if the economy is to harness to the maximum, the potential benefits of the Single European Market. The need for greater competitiveness has led to the revision of the road passenger transport legislation which is in progress. At the same time I must assure the House that the Minister, Deputy Brennan, and I will not lose sight of the need to continue to provide socially desirable, but in some cases unprofitable services.

In air transport, the second phase of EC liberalisation, which will mark a further advance towards achieving a single air transport market in Europe, will be concluded during our Presidency. The first phase, adopted by the Council of Ministers in December 1987 provided opportunities for Irish airlines to operate on additional routes within the European Community. The measures contained in the first phase together with the even more liberal terms of the Memorandum of Understanding concluded with the UK in 1988 have allowed Aer Lingus to commence direct services from Dublin to Newcastle and Hamburg and to operate fifth freedom services through Manchester to Amsterdam, Copenhagen, Hamburg and Zurich.

In addition, Ryanair have introduced services from Dublin to Liverpool, Coventry and Munich and have developed new routes from the regional airports at Connacht, Galway and Kerry to a number of points in the UK.

This budget continues the policies which have proved so successful over the past three years. The available evidence tells us we are on the right path. The most striking example of that evidence is the fact that the Exchequer borrowing requirement for last year was down to £479 million or only 2.4 per cent of GNP. The Government are aware that there is no room for complacency and that the job is not yet complete. We must continue to strive for growth and to improve employment prospects for our youth.

Growth in employment will depend on our success in producing and selling profitably more of our goods and services in the wider international market, particularly that which is opening up to us in the context of the single market and the new Europe of the 1990s. I am confident that the tourism and transport sectors will not be found wanting when we come to review the decade which we have just entered.

Mr. Cotter

I welcome the opportunity to speak because this is the first opportunity I have had to speak in this House on a budget. No doubt, some of the sentiments I will express will be a little bitter, but I hope people will take them in the right spirit.

Deputy Noonan was right when he likened the budget to Lannah Machree's dog, it went a little bit of the road with everyone but did little for anyone. The initial reacton on the evening of the budget and the following morning was that it was a success. On closer examination, however, it was described as cautious and, as the week went on, it was seen as a non-event. The Minister fiddled about with figures and he succeeded in doing nothing worthy of note during the process. He reduced the top and bottom rates of tax which was acclaimed at the time. However, the bands were not index-linked, many people who expect to pay tax at the 30 per cent rate will, after a small increase in their wages, end up on the 48 per cent band and many others will move up to the 53 per cent band under similar circumstances.

The Minister relieved a little bit of the misery at the bottom end of the scale but the middle income people, many of whom have hefty mortgages, will pay more tax. The figures for the tax take next year are up by something in the region of £104 million to £110 million on last year. Mortgage interest relief remains unchanged even though interest rates have gone up by four points since the relief was originally cut. That was done at a time when interest rates were moving downwards, which is why it was done. We can expect another revolt from this group later in the year when the budget propaganda is translated into the reality of take home pay every week. This will especially be the case if interest rates are increased further because of developments in Eastern Europe.

The tax changes in the budget can only be described as a failure. The PAYE sector are still left with the old, familiar and unfair burden. The Minister scattered a few crumbs in the direction of those in the poverty trap. There is no doubt that social welfare recipients and the lower paid will be a little better off. However, the quality of their lives has not been improved one whit and the budget did not give them any hope for the future. The lower paid workers end up quite often worse off than those on social welfare because of the way the system operates. This group will take little solace from the fine statistics and the proud boasts of the Minister during his speech.

The surplus in the balance of payments reduced Exchequer borrowing requirements and there was a lower than expected budget deficit. These facts are hardly music to the ears of the poor because they do not put bread on their tables. Our society is as deeply divided today as it was the day before the budget was delivered. The unemployed and the lower paid are still trapped in the twilight zone where social justice and equality of opportunity remain empty slogans. The roots of this problem go back 13 years. I have to get this off my chest and I hope the people on the Government side will have the patience to listen to me for a while.

Mr. Lyons

We are all ears.

Mr. Cotter

Some of the authors have left the stage but some are still in the House. The Fianna Fáil Party produced the mad manifesto of 1977 and the same party spent their way recklessly into the eighties. I could mention the massive rise in the pay of teachers and gardaí and the crazy Estimates of 1981. The same party tried hard to get the people to rise against the FitzGerald Government during their efforts to put the economy right. We all remember the way pressure groups were given a hearing and a little push in the right direction. That same party are now masquerading as the saviour of the republic. The poor people literally belong to Fianna Fáil as they are the authors of their abject poverty. They will see to it that the majority in this House, which Fianna Fáil so urgently desire, will be denied. All their utterances point to the fact that life began in 1987. They pretend that they are undoing the wrongs although they originally perpetrated them. The saviours of the country are my colleagues on these benches. If it had not been for the Tallaght speech we would still be squandering money and in the same squalid mess.

Deputy Dukes could have played tricks with Fianna Fáil. For example, he could have demanded extra money for the hospitals in Kildare and he could have blackmailed them in regard to every constituency. To use a pun, he could have foxed them in every corridor in the House. However, Deputy Dukes decided to stand by the country and its people. If the Taoiseach had decided to adopt these principles in 1983 what would the position be today? We can only guess. What would have happened if we had had a Kinsealy strategy? In the light of our experience, it is obvious that we will never have a strategy from that quarter. The people — in particular the poor — have often been used as pawns in crazy power games and it is noticeable that they have recently come to realise that.

Social justice and equality of opportunity are the markers against which we measure the achievements of society. How do we score? In education, health, social welfare and the administration of justice we are way off target. Free primary education is a myth. Parents are paying for maintenance, equipment and basic heating oil. Indeed, they are paying an even bigger price. Pupils in primary schools right across the country need remedial help, particularly in rural areas as, in many cases, the bigger schools in towns are provided with a service. These students must do without assistance of this kind and they languish at the back of large classes. Later on they will be dropouts because they leave school at 15 years of age without certification and have not benefited from 11 years of school. They are then the beneficiaries of a social guarantee, which means that they will be given the benefit of a six months FAS course. It would be better if at least some of the resources put at their disposal when it is too late could be used when it would be most beneficial. Could we channel some of these funds into remedial education at primary level, thereby cutting down on the demand for social guarantee courses later on? I hope the Minister will see some sense in this approach and consider it.

In the delivery of the health services, the weaker members of society are locked out. According to reports, the situation in Roscommon has improved — or will soon do so — and I understand that things are also looking up in Waterford. Generally, the situation is very bad——

Mr. Lyons

Everything is grand in Cork.

Mr. Cotter

I am glad to hear that there are no problems in Cork. The Minister must have been away for a while if he does not know about the problems in the rest of the country. It has come to my attention that the street-wise in urgent need of medical attention have taken to falling down on the streets which means that they gain admission to hospital through casualty. It is in the health services that the clearest picture is thrown up of the deep divisions in our society and there is no indication that that will change. In an area where we need urgent decisions no decisions are forthcoming. We have to make do with further studies. Our health services must be the most studied services in any country in the world.

Within the social welfare code we have a most ridiculous inequity. Under the means test a few pounds in savings is reckoned to be worth a return of 10 per cent to the owner. That is classified as income for the saver. Will the Minister for Social Welfare advise those who have saved a few pounds of where they can obtain such a return? Will the Minister not consider changing that element of the means test immediately? The same ridiculous anomaly applies in the case of means test for health cards. In fact, it is even more ridiculous. In the case of two identical units with the same incomes one family is entitled to a medical card and the other is not. When income is obtained from employment a ficitious figure is used in the means test. It is called gross income. However, a family can only spend the money they receive; they cannot spend the gross income.

I should like to appeal to the Minister to introduce an element of fairness into the means test. Obviously, it is one of the main reasons for the poverty trap we hear so much about. There are many clearly defined cases of blatant injustices in the way we conduct our affairs and the budget did not make any attempt to root any of them out of the system. Social justice and equality of opportunity are a myth and the Government prefer to leave things as they are. One of the hallmarks of the Government is that they will not change anything. That is true as far as the health services and the systems of taxation and social welfare are concerned.

There were many glaring omissions in the Minister's analysis of the economy. In his budget speech he never once referred to interest rates. I have no doubt that the reason is that our interest rates are four points higher than those of our European partners in the EMS.

The Minister displayed a passing interest in agriculture. The industry was mentioned on three occasions in his speech and was given one sentence on each occasion. The Minister did not carry out an analysis of the agricultural industry. He did not refer to the difficulties in the industry or the fact that farmers are not getting a proper price for their produce. Milk is holding a little but there is not much milk produced in the winter time. We have been told that within a couple of months the price of a gallon of milk will have dropped by up to 17p per gallon. It is surprising that the Minister did not mention agriculture, or outline the prospects for its future.

Most people expected the Minister to produce a number of prescriptions for improvement in that industry. He did not do so and it is my hope that the farmers will take note of that. In my view, the farmers have been relegated to the lower divisions by the Minister and, obviously, by the Government. It appears that farmers no longer count. That may explain why they must wait so long for their headage payments and why their 55 per cent anti-pollution grant works out at half that when they receive their cheque. It may also explain why roads leading to farmers' houses are badly holed dirt tracks.

What about the completion of the Single Market? That is of particular interest to me because of the constituency I represent. The top rate of VAT is down 2 per cent, selected excise duties have been decreased and, in some cases, abolished. There was great joy in some circles about that. The Minister felt extremely proud of himself and he thought he was doing an enormous amount of good for the Border regions. He told us he was preparing for 1992 but he should ask representatives from Border towns, such as Clones, Castleblayney and so on, if that contribution will do anything for the wellbeing of retailers in those towns. In my view the answer will be in the negative.

Price differences for many products, North and South, can only be described as ludicrous. I should like to give some examples and I will express the differences in percentage terms. Most people are aware that the difference in the price of petrol is between 45 and 50 per cent. In the case of a personal computer the price south of the Border is 50 per cent higher than it is north of the Border. I checked those prices myself. I came across a ludicrous case last week. I discovered that a 5lb box of sweets manufactured in Dublin was 87.5 per cent more expensive in the South than in the North. I do not understand how sweets manufactured in Dublin cost twice as much here than they do in the North.

A few days ago I asked the Minister for Industry and Commerce to investigate why the sweets were almost twice as expensive here and he pointed out that as the Prices Commission had been abolished he had no mechanism for examining such complaints. I should like to tell the Minister, and this is the first opportunity I have had to do this, that he is acting like a puppet. He does not have any intention of getting off his "butt" and examining what is a ludicrous price as far as this product is concerned. I have no doubt that a few phone calls would give him some of the reasons for the difference in price. If he investigated the matter in greater detail he would discover that flaws in our economy are the cause of many of the higher prices. If he discovered that, I have no doubt that he would take steps to improve the position. It is unfortunate that the Minister has adopted the attitude that as the Prices Commission have been abolished he intends sitting in his office and letting the prices go where they like. On another day the Minister told us that there was a 2 per cent decrease in the VAT rate in the budget and he intended to monitor prices to ensure that consumers got the value they were entitled to.

I do not understand his attitude. He would benefit greatly from investigating the reason for the huge difference in prices north and south of the Border. He would learn a lot about the fundamental flaws in the Irish economy and, given his past record, I have no doubt that he would do something about the difference. We would all benefit from such a move. People in the southern half of the Republic have little idea of what I am talking about. They do not cross the Border for their petrol or to buy sweets and other goods for Christmas. I accept that they cannot do so legally.

The same huge differences are evident in audio and visual equipment and the Minister thinks he has resolved the problem there also. He should ask the people in the Border towns and they will tell him. To begin with the price difference was so wide that what he did was totally and completely meaningless. The Government party proclaimed loudly that they had solved the Border problem in 1987 and many people actually believed them. Committees were set up along the Border which were designed to put pressure on the previous Government. Needless to say they were Fianna Fáil committees in most cases but in 1987, after the election, the committees disappeared into the ground and were never to be heard of again. The Border traders and their families were then left in the mud and now three years later the Border people are beginning to realise they were gulled. I am now being called to meetings in the Border areas to help and support them. Much could have been done in the past three years but nothing was done, it was all politically motivated which is a shame for the people involved.

When one asks the Minister about the completion of the internal market — I did it recently — he will say he is not sure how it works. He will tell you that there may well be approximation of VAT and excise duties, but then again he says there may not be. He says that this whole business may be market driven; whenever he says that another shiver goes down the spines of the people in Clones, Castleblayney and all the other Border towns because they know exactly what that means. It means that another nail will be driven into their coffins, and given the conditions at present for many it will be the last nail.

The people who work at the Border posts — the customs officials — are very anxious to know what the future holds for them. When the Minister is asked about it he says: "I do not know, it will transpire sometime in the future." The customs officials are wondering whether they should sell their houses or keep them; young married people working in the customs are wondering whether they should buy or rent a house, but the Minister says he does not know. This whole business of the Border difficulties is well worth looking at from the Government's point of view because, as I said earlier, it points to the fact that all problems are not tax and excise based, though some are. Tax and excise duties are the major elements involved, but there are others, and these are fundamental flaws in the economy. For example, the exclusive import agreements — where many products are imported exclusively by a single individual or company into Ireland — allow importers to charge what they like as there is nobody else in the market against them.

I have two ESRI reports in front of me — The Economics of 1992 A Symposium on Sectoral Issues and an Analysis of Cross-Border Shopping — which have dealt in great detail with this problem. They have analysed and found market differentiation to be the problem. Companies are producing products for particular markets at a particular price or whatever price that particular market will hold. We have a lot of that in Ireland. There was a great furore a few years ago and it certainly helped because what is known as the KVI — the known value items, those which are bought every day — and the wholesalers and producers took note and withdrew their prices and there was a levelling off at the pre-tax level.

Many of the problems in the economy which are visible to us in the Border counties could well do with an examination. For example, the distribution of goods and transport costs. If you were living in Monaghan you would ask if we can afford to maintain Whitegate. When you tell somebody in that area that it adds 20p to the cost of petrol he knows what it means. The poor boy in Cahirciveen does not think about it too often because he has no choice, he buys £10 worth of petrol or whatever but, of course, it is a fact that by maintaining Whitegate we are pushing up the price of every product we buy in Ireland because the price of petrol is a factor in the price of everything. If you ask us about Whitegate we could give you the answer. That, of course, would be an emotional answer; it might not be the correct or the best answer but we would have an answer.

When the Minister for Industry and Commerce, Deputy O'Malley, tells me that he has no interest in looking at prices along the Border I will give him an answer; it may not be the right or the best answer but it is an emotional answer. I hope the next time I ask him a question about the welfare of the Border people — this is a matter which it is within his competence to look at — I hope he will respond a little better than he did the other day. The people of the Border towns would hope that the Minister for Industry and Commerce would display an interest in matters pertaining to Industry and Commerce irrespective of whether there is a Prices Commission. I am sure that the Minister for Industry and Commerce, Deputy O'Malley, if he thought about the situation for a while, would excuse me for becoming angry. These are the problems we have to deal with.

I am glad I had the opportunity to get these problems off my chest in this House. Some of the matters about which I feel very strongly are now on record here for the first time. Having them on record in Leinster House is no guarantee that anybody else listened or that there will be any material change as a result of my 30 minute contribution today, but at least I can point to the record and say these are the matters which mainly concern me and these are the things which I share with my constituents. I want the people in this House to listen, to act and to tell the people in the Border areas: "We are sorry we have forgotten you, we will be a little more understanding about your problems in the future". There are things we can do, things we have not done which we can do, so let us do them now.

Mr. Hilliard

I am pleased to have this opportunity to speak on the 1990 national budget. In 1987 this country was in a major crisis where there was virtually no growth in the economy in the previous years under the Fine Gael-Labour Coalition Government. The change about in the economic situation during the past two and a half to three years, since 1987 is unbelievable for any country in western Europe.

This budget will certainly maintain economic progress. It will continue to encourage and facilitate the continuation of social equality and share the gains of productivity and the extra revenue derived from that extra productivity, among all our people, but especially among the less well off in our society, and rightly so. For any political party to identify the Fianna Fáil Party as a right wing party — which Labour and The Workers' Party have been doing over the last few years — is completely ridiculous because this is a very solid, sound, social budget.

The first Programme for National Recovery has been an outstanding success and the Government and the social partners all have to be congratulated. I have no doubt that the only successful way to higher employment in this country and better living standards in the future is to continue along this road. I am very pleased, indeed, that the unions recently agreed to continue their support for the Programme for National Recovery for the remaining eight or nine months. This is a clear sign of acceptance that the only way to future national progress is working together and not working apart. All sectors of our community must respect one another and work together for the common good. If this is not done, national progress will not continue at the rate it has over the past three years.

This is a good, well prepared expressed and well planned budget which looks after the less well off in our society. There have been 5 per cent increases in social welfare and an increase of 11 per cent in long-term unemployment assistance. Many other important policy decisions have been taken in this budget. The budget seeks to control inflation and has given major tax reliefs to workers. I would point out to Opposition speakers who have commented on our performance that we have reduced income tax from 35 per cent to 30 per cent in 12 months. I challenge other political parties to match that record. We are also moving towards tax harmonisation with out partners in the European Community. If we do not take steps in this area now we will have another crisis on our hands in three or four years' time. At least this Government, unlike the previous Coalition Government, have the courage to take decisions.

The foundation for future growth in the economy and employment creation has also been strengthened by the budget. Families, the elderly and persons living alone are well looked after and extra finance has been provided for priority areas such as education and health. The Opposition parties may be critical of these small increases but at least this Government, unlike the previous Coalition Government who had nothing to give, are in a position to give something.

Another aspect of the budget is the programme to improve and protect our environment. A sum of £12 million is provided in the budget towards this programme. This amount may be small but at least this Government are acknowledging the fact that our environment must be protected.

During 1989 there was solid growth in the economy and investment, a very healthy trade balance and further improvements in employment. For the third year in a row the outturn in the 1989 budget was well below the figure estimated at the beginning of the year; in fact, it was less than half that estimated. The budget deficit which stood at £1,055 million at the beginning at 1989 was reduced to £479 million by the end of the year. This is a clear sign of good Government financial management. Government borrowing is at its lowest level for 40 years. At the end of 1989 the budget deficit was £479 million compared to the figure of over £2 billion under the previous Coalition Government. This is a remarkable achievement in economic terms by any Government. However, we must not run away with ourselves; much hard work must still be done. We should make hay while the sun shines and build sound foundations for future developments and trade. We should do this now because our trading prospects may not be as favourable in the future.

The total budget deficit will be reduced to £449 million in 1990. If trade and commerce continue to grow as they did in 1988 and 1989 we should not be surprised if we have a surplus budget at the end of this year for the first time in history. This would be an outstanding national achievement. The Taoiseach and the Minister for Finance have already made it clear that we are not out of the woods yet. I wish to repeat that message loudly and clearly here today.

It is of the utmost importance that we work towards reducing our national debt, which stands at £25 billion, now that our financial position has improved. The national debt high jump record was achieved by the Fine Gael-Labour Coalition during their period in office from 14 December 1982 to 10 March 1987. They achieved the record of increasing the national debt from £11.669 billion to £22.812 billion, which is almost double. It is strange that, having been a total failure when they were in office these are the political parties who are now advising this side of the House on how we should run the economic affairs of this country. It costs over £2 billion to service our national debt at present. This is a massive liability on future investment and progress. We must become experts on how to use taxpayers' money, how to invest and reinvest and where to invest and not to invest. We must also keep a close eye on the cost of financing our loans, which can be an expensive business.

Some very important financial savings have been undertaken in this area. I am very glad the Taoiseach decided to set up immediately a national debt office. This is a major step forward. I am sure this office will keep the Government fully briefed on developments in international financial markets and financial trading costs. The setting up of this body has been long overdue.

It has been difficult to achieve the progress made over the past three years. Many sectors of our community were affected by the policy decisions made by the Government. I do not deny that fact, but I must point out that the minority Fianna Fáil Government at that time had the courage to make difficult policy decisions for the common good. The record of this Government under the leadership of the Taoiseach, Deputy Charles J. Haughey, will be recorded in national financial history books as having saved our national economic ship from sinking. The policy decisions taken by the Fianna Fáil Government have resulted in new national pride and confidence. I know it is not easy for the Opposition parties to stomach what I am saying but these are the facts. I hope we can continue to achieve further economic growth and success in the years ahead.

It is still essential, and will be for many years to come, for the Government to exercise very disciplined control over our public expenditure in order to achieve major reductions in the national debt as well as meeting other major demands which may arise. The strict control of public expenditure which was imposed is being maintained for no reason other than to safeguard the future economic well being of the people, and our economy, which was in grave danger of collapse some years ago.

Some sectors of our community are of the opinion that now is the time to make claims for increased services and wages. I hope the Government and social partners will act wisely in this regard. We still have a national debt of £25 billion and a £2 billion plus annual interest repayment to honour. We cannot use one penny of this £2 billion for any productive developments until we have first cleared our national debt. The reality is that continued economic progress depends entirely on the exercise of tight control on public expenditure. If we fail to do this we will soon find ourselves back in the poverty trap. As the people do not want to find themselves in that position again, we must draw the line and get back to having balanced annual budgets. We cannot allow the successes of the past few years to be thrown away.

In 1989 there was yet another excellent increase in exports. In the year 1987-88 there was a 15 per cent increase in exports. A similar increase is likely to be recorded for 1989, along with a trade surplus in excess of £2 billion for the three-year period, with the balance of payments also remaining in surplus. Industrial production continued to increase over the past three years, reaching a 10 per cent growth and more in volume, the highest ever increase achieved. Given the renewed flow of investment of the past two years there is no reason why this good export performance cannot be sustained.

I now wish to refer to unemployment. The aim of the Government must be to increase the net number of jobs created. I am sure that this will be one of the main issues discussed during the negotiations on the second programme for national recovery between the Government and the social partners. In the two year period to mid-April 1989 net employment rose by 10,000. It has been forecast that this figure will increase to at least 13,000 for the year to April 1990. The Government are determined to increase further the net number of jobs created during the next three to four years.

It is estimated that 21,500 new jobs were created in manufacturing and international services in 1989. It is worth remembering that the trade unions, in difficult circumstances, honoured their commitments under the first Programme for National Recovery. We should continue making prudent investments to increase employment and slow down emigration. The days of creating artificial jobs are over. It is of the utmost importance that the social partners be in full agreement with Government policy if we are to maintain economic growth and create employment in future years. No matter what the differences may be between them the well being of our people should be our first priority in the discussion on the second programme for national recovery. I wish them well.

Unemployment can have devastating effects on people and their families. All politicians should appreciate this. Given that the books are now almost balanced it is now time to really tackle the unemployment problem and I hope new policies will reap results. We cannot allow our young generation to be condemned to idleness on the dole queue. They will lose whatever hope or trust they have in us as politicians to manage the affairs of the country if we fail to make a serious effort to solve the unemployment problem. Although unemployment has much to do with idleness, people need not be idle. They could be active. We cannot afford to allow them to be idle.

We all have a part to play as some unemployment is self-inflicted and what is self-inflicted is curable. The position is not as bad as four or five years ago when there was a high rate of absenteeism, idling on the job, abuse of expense accounts within companies, neglectful, managements, excessive profits, high imports which could have been replaced by home produced goods and strikes which we do not appear to suffer from at present for the simple reason that the Government and the social partners came together to draw up a national plan. If these matters are corrected and if productivity is increased jobs could be created.

Many people like to talk about this problem but it is a different matter altogether when one is asked to do something about it. Increased profits are not necessarily the answer. One of the reasons we have high unemployment and poverty is that there is too much greed in the world today. Many business people and institutions could employ one more worker. I accept that this would lead to an increase in production costs but at the same time all that would happen is that the company would make reduced profits at the end of the year. There must be new thinking within the community if we are to create employment. Businesses should try to link up with the third level system to meet those about to qualify to discuss their futures. In this way we might prevent them from travelling abroad where they will be grabbed. There is no doubt that every parish and community council as well as the local authorities could employ one or two extra workers.

Another way to create employment would be for the Government to establish a risk fund with the funding being distributed to the county development officers, in the process cutting out much of the red tape, with the aim of encouraging young people to set up small enterprises of their own by offering them grants ranging from £10,000 to £30,000. Even if three-quarters of these projects failed the other quarter would be successful and although money would be lost at least it would have been lost within the country. This is a suggestion which should be considered.

We must also give some thought to the suggestion of providing incentives for employers and employees. In the past, the policy appeared to be to invest in mechanisation rather than in labour. One would have to say that the company employing 100 people and making £500,000 a year profit should be provided with more incentives than the company employing ten people and making £500,000 a year profit. However, the policy appeared to be to invest in mechanisation. Perhaps this is the reason that only ten people are being employed with machines doing the work that the 90 in the other company are doing. I am glad that the Minister touched on this matter in his Budget Statement and has provided a sum of £11 million for employment incentives. The result of this will be investment in labour and not in mechanisation. There are too many companies coming into this country and promising to create, say, 500 jobs over four years, when applying for and getting massive grants for capital costs. If one were to look back at the records one would find that none of the employment targets was ever reached. Some of these companies went bust before they even reached the three or five year target. I am not criticising the IDA for that because there have been many successes but the point I am making is that the jobs were not created as promised in the applications these companies put before the IDA to get State money. There is a change taking place here and I am delighted to see that.

It is an indisputable fact that each year industry employs more capital and fewer people. Each year fewer people are required to carry out the work; each year there is less purchasing power and that creates further unemployment. It is important that we reverse this trend. We must control the ratio between production and the number of people employed in that production. Grants for automation to decrease employment and so reduce purchasing power and create further unemployment does not appear to be good policy. Let us now acknowledge those who increase employment rather than capital grants.

I am confident that the second Programme for National Recovery will be agreed and, together with the £3 billion Structural Funds properly invested, the next five years should be very exciting for future progress and new employment. The Government alone cannot solve the unemployment problem. That is why I would emphasis so strongly the necessity for the Government and the social partners to agree to the second Programme for National Recovery and to develop new ideas.

I want to say a few words about investment. The first Programme for National Recovery has also made a remarkable improvement in the volume of increased investment in our country; investment as a whole increased by 10 per cent last year and is expected to increase further this year. This is certainly a breath of fresh air when one looks back three or four years ago when money was running out of this country and there was little or no confidence here. There is an inflow of new industrial investment now and a very strong interest in overseas companies locating here in the near future. I would like to emphasise again the moral responsibility on those with money and property to give priority to productive investment within their own country. My message is invest at home and ask before buying goods if they are Irish made.

The year 1989 witnessed a strong revival in the construction industry with current sales up by 20 per cent and the number of new house completions up by 13 per cent with some increases in employment. I would like to have seen more, but that is the situation.

I want to say a few words on agriculture. Agriculture has also done well over the past three years. As a result of this budget farmers will benefit from an increase in the VAT refunds to 2.3 per cent. The placing of agricultural trainees on residential courses on an equal footing with other vocational trainees in regard to payment of fees, charges in stock relief rules to accommodate farmers whose herds are affected by disease eradication and the indexation of capital acquisitions tax thresholds in 1990 and future years, are intended to be of particular assistance to farmers in facilitating the orderly transfer of farms from one generation to another.

I am very concerned about the success rate of the TB eradication scheme to date. The farmers are now more or less paying for the entire cost of this scheme through levies. It is time all concerned sat down and discussed a better way to speed up progress in that area. We must protect our future agricultural export business. If we wait much longer we may be too late. I appeal to all concerned to set definite targets to be achieved over the next five years.

The Government should call in all concerned to decide on a national food export plan with set targets over the next ten years. This is an area where much employment could be created. I know certain efforts have been made and that there have been advances but we have not gone very far up that road yet. The European market is wide open to us. Even if we were to double our food exports to the EC we would still be supplying less than 5 per cent of the total EC markets. I call on all Irish agricultural cooperatives, creameries and agricultural business enterprises to stop the infighting and join together as one massive national food unit. We should have a single national brand for all our top quality foods for sale abroad and at home. There are many people out there prepared to pay dearly for quality food. There is no limit to the market. The Government must act immediately to encourage debate and discussion on this important issue. We must act now or it will be too late. It is a pity we cannot unite in this area for the common good of national progress as opposed to individual success.

Mr. Belton

As this is the first time I have spoken in a budget debate I would like to take this opportunity to wish my fellow constituency TD, the Minister for Finance, Deputy Albert Reynolds, well in his position.

In the time allowed to me I wish to immediately raise the problems in my constituency. The major problems for the past number of years in County Longford has been the lack of jobs. The young people are leaving by the plane load some, perhaps, never to work again in their own country. In the sixties I, like many others, emigrated and worked abroad for some time. However, since then, and especially in the early seventies, forced emigration was a thing of the past. It was during the latter part of the seventies that the economic ills about which we hear so much today and which are supposedly being solved, were created. Emigration crept back in the early eighties and in latter years has become one way traffic.

A great opportunity was missed in the late seventies. If a reasonable approach had been taken at that time the young people today would have choices and there would be jobs available and I would not have had to listen today to what previous speakers said about a debt management department. If the same action had been taken by the politicians at that time, there would not have to be the debt management we are now witnessing. The young people are paying the price. I have read this Budget Statement many times and I find no ray of hope in it for my constituency in the area of job creation. In County Longford we have suffered from closures and redundancies to the tune of almost 700 jobs lost in a number of years. I hope the Minister for Industry and Commerce, Deputy O'Malley, will listen to my appeal that our part of the country needs investment. I would like to see Longford designated as a special area for increased grants. The workers in that area are as good as workers anywhere else in the country and they deserve a chance. Major industry is needed there and I hope the Minister for Industry and Commerce and the IDA will listen to my comments in this regard. For example, Granard had a clothing industry some years ago and no industry has been found to replace it. We have an excellent workforce of machinists there who are ready, willing and able to work and in the town of Longford also we have machinists. It is not their fault that the jobs are not there; they are prepared to work.

I find it difficult to understand why the Fianna Fáil Government who, in past years, constantly boasted that they were on the side of the builders have scrapped the home improvement grants. These grant schemes gave employment to small builders, boosted the builders' suppliers business and improved houses. I call on the Government to remedy this mistake and to introduce some badly needed boost for the small builder. Surely this is one way of creating jobs on the ground.

On the health issue, I welcome the extra money for the care of the elderly. I spoke on this matter here recently and I am glad the Minister has taken the first step in the right direction. I welcome also the extension of free travel to companions of the disabled. I have raised this issue at the request of people directly concerned in working for the mentally handicapped, etc., so I must compliment the Minister on this.

The Minister has missed a great opportunity in this budget by not being more adventurous about job creation. He has sidestepped this issue. It is easy for me as a Deputy to advise any Minister for Finance to make unpopular decisions regarding Government expenditure, but bearing in mind the extra tax collected in 1989, together with the extra funds from Europe, the Minister has stopped short. So much was expected from this budget; indeed, so much pre-budget hype has seldom been experienced. In my estimation it was all hype and very little fight. There was a great opportunity to give the unemployed of the country and of my constituency a chance to fight back but the Government failed to give that lead. I will give an example. The proprietors of two family-owned hotels came to me saying they were anxious to expand their business and to install extra bedrooms. Unfortunately, they will not be helped and there are no grants for them.

I was glad to hear today that it is the Government who are making the decisions, contrary to recently expressed beliefs that it was only part of the Government who are making the decisions. If the Government were serious about job creation in the rural areas and the small towns, surely a small town hotel is an ideal business in which to generate jobs, for young girls especially, and others. It would bring people on holiday to my area, especially for fishing holidays and it would generate business. The Government talk about tourism. Money seems to be available for larger projects and things like leisure centres and there is nothing wrong with that, but the money should be evenly spread and the small hotelier and investor should be taken into account. Let us not be carried away. In the past, large industries were State-supported and unfortunately some of them did not stand the test of time. We have heard about supporting smaller industry. I am citing the example of the small hotelier who should be helped out in the same way as the large hoteliers.

While the increases in social welfare payments were welcomed, they were just above the rate of inflation. The standard practice of successive Governments has been to keep in line with inflation in these increases. Here the Minister has continued the practice when increasing allowances for the long-term unemployed. Surely those in our society who have been deprived of employment for a number of years deserve increases. I fail to find in these increases any reason for cheers.

In my constituency in the last few weeks many farmers were under severe pressure due to problems caused by flooding because grants have not yet been paid out to them. I take this opportunity to appeal to the Minister for Agriculture to pay out those grants because these people are in dire straits waiting for money, and their farms, their farmyards and in some cases their houses, were flooded. I am not blaming the Government for that but I am asking the Government, and especially the Minister for Agriculture, to see that those grants are paid. There have been delays and it is time this money was paid.

There are proposals in my constituency for a regional airport at Abbeyshrule and I would hope when these plans come before the Government every support would be given to this project. An airstrip has been established there for some years. If the Government give their support for European funding, this regional airport will serve the midlands well. It is well situated between Mullingar, Athlone and Longford. I hope the project will get the necessary support and go ahead. The region certainly needs a boost, although I am not saying that an airport would be an answer to all our problems.

Calls have been made for a Government Department to be located in Longford and I am asking that at least a section of such a Department should be centred there. This would help an area which has been badly deprived over a number of years. I was elected to raise my voice to highlight the neglect of that area and the need for foreign investment. This is not idle talk; these are facts.

For the unemployed of County Longford the Minister has given little hope and for that reason I cannot welcome this budget.

Minister of State at the Department of Agriculture and Food (Mr. Kirk)

The Government and the Minister for Finance are to be congratulated on this very good budget which has been well received throughout the country. This does not mean that it was simply a popular budget; it was far more than that. It continued the progress towards national recovery commenced in 1987 and continued ever since with notable success. In common with budgets since 1987, the budget of 1990 has as a major objective the promotion of economic growth, the provision of more jobs at home and a better standard of living.

The first and foremost objective of the budget is to reduce the high level of unemployment. All Deputies have a common interest in finding a solution to the greatest problem facing the country, that is, unemployment, and all the consequences that flow from it. The whole country must be involved in setting this problem.

The area I represent has particular problems in regard to unemployment levels. Not only do we suffer from the general unemployment problem but because of our location close to Northern Ireland there are other added problems. My colleagues in Government are well aware of these problems and are very conscious of the pressure which I constantly put on them to improve the situation in the north eastern part of the country. When one checks the figures for employment creation in the area over the past two or three years one sees there has been a significant increase in the numbers employed in manufacturing industry, which is the barometer of the rate of progress and wellbeing in an area. In 1987 in the north-east there were 14,736 people employed in the manufacturing sector, while in 1989 the figure had risen to 15,677. In County Louth employment in manufacturing industry in 1987 was 7,056, while at the end of 1989 that figure had risen to 7,596. The figures for unemployment in the county have decreased significantly since 1987, from 9,664 to 8,770 at the end of 1989. The clear indications are that we are moving in the right direction.

The budget shows the firm determination of this Government to continue the task of putting the public finances in order. Current expenditure must be kept closely in control so that every penny taken from taxpayers is spent in ways which are not only essential but worthwhile. Government borrowing must be kept to a minimum. It is notable that last year Government borrowing was at its lowest level for about 40 years. This excellent progress as regards borrowing must be tempered by the thought that payment for past borrowings by previous Governments cost over £2 billion per annum, which is roughly equivalent to all the income tax paid in a year by the PAYE sector. These two facts should be looked at together.

We must consider what a determined Government can do when they set about the task of putting the national finances right. We must also think of all that could be done with the money from the PAYE sector if we did not have to pay for the spendthrift policy of previous years. The answer to the second point is very simple. The Minister for Finance would be in a position to greatly reduce tax on earnings and he would have the equally important option of providing money for capital investment in many areas.

The end result of good management of the economy since 1987 is the improvement in inflation and costs. The Minister for Finance has predicted that by the end of 1990 our inflation rate could be less than 2.5 per cent. These are very important elements in making sure the Programme for National Recovery continues on its steady course. It is important for for all our people that the successful understanding between the Government and the social partners should continue. If we had not had such an understanding during the past three years I would not like to contemplate the problems we would have to confront.

It is important to note that the target of 20,000 jobs in manufacturing and international services was met in 1988. The same target of 20,000 jobs was met in 1989.

The £3 billion from the European Structural Fund over the period 1989-93 will be of great help in supplementing benefits to the whole economy. To make full use of these funds our inflation and costs must be kept as low as possible. There is a continuing need to attract investment from outside the country. We have improved greatly the view taken of Ireland by financiers and business people in other countries. This is a direct result of the way in which the Government have approached economic management since 1987. A major beneficial factor in attracting investment is that we are members of the European Community, which is becoming more integrated with the passing of time.

The Government have continued to show their concern for the under-privileged in our society. That has been the policy of Government over the past three years and is continuing. Public representatives, through their weekly clinics and many other contacts, know far more than most people about the very difficult circumstances of the old, the unemployed, and the disadvantaged in our society. I am glad to say that the Minister for Finance, Deputy Albert Reynolds, has shown through the increases he has given over the whole range of welfare payments, that Government policy is continuing and is geared to helping the poor, the old, and the unemployed.

This Government have also continued in their policy of reducing the burden of income tax. This continuance of income tax relief has taken two forms. Firstly, there have been improved tax provisions for the people earning low incomes. Secondly, there have been significant reductions in the standard and higher rates of tax. Very important also is the new scheme where employees on the lowest earnings will be relieved of PRSI.

I would like to thank the Minister for Finance for the changes he has brought into effect as regards excise duties on televisions and on equipment such as videos. This measure will be of great benefit to the business community in my constituency. It has been a matter of major political controversy for some years and we are delighted Deputy Reynolds has taken the necessary remedial action.

Before finishing my comments on general aspects of the budget, I would like again to congratulate the Minister for Finance and his colleagues in Government for having brought in what I think is a very successful budget. I hesitate to mention other Ministers individually. However, one man in particular has had a particularly difficult task over the past three years. I am speaking of the Minister for Health, Deputy Rory O'Hanlon. He has had a difficult task reducing expenditure and at the same time improving efficiency in the health sector. More than any other Minister he has come in for a quite unjustified amount of criticism, a large amount of it, unfortunately, on a personal basis. He must be congratulated on having carried out a very difficult task in a most effective way.

Before going on to deal with horticulture, my main area of responsibility, I am glad to say that work is proceeding with the plan to revise the disadvantaged areas. I am looking forward to a successful completion of that work and approval by the EC Commission.

Legislation to set up An Bord Glas has now been passed by the Dáil and Seanad. I hope very soon to be in a position to establish the new board.

I am glad of the opportunity to pay tribute to the interim board for the very good work done since their establishment in 1987. The interim board took very many initiatives which have had a good impact on the outlook of the country and in particular of horticultural procedures as regards future possibilities for this important industry.

I do not wish to go into detail here about An Bord Glas. This has been done already during the debate on the Bill in the Dáil and Seanad. Nevertheless, a few points deserve mention since An Bord Glas have their place in Government policy of improving balance of payments through decreasing imports and increasing exports. It is also a very important vehicle for the creation of jobs. Anybody who has read the interim report of the review committee on the Programme for National Recovery will have seen that An Bord Glas made their contribution to job creation in 1988 and 1989. I am glad to say that significant increases in employment in the horticultural industry have taken place.

A development programme for horticulture was published at the end of 1988. It is the most important job done by the interim Bord Glas. Very clear and concise targets are set out in that programme. The main work of the new board, in close collaboration with Teagasc and other State agencies, is to put the programme into effect. Again I do not wish to go into detail but a very important point in the development programme is the need to improve marketing by horticultural procedures. This means that products must not only be of good quality. It also means that producers should not set about the production of a particular product without arranging for an outlet for their produce beforehand. This means the producer must know to whom he will be selling and that he will arrange with the purchaser regarding quantities, delivery dates and so on. These arrangements are already made in certain cases but not on a sufficiently wide scale.

I recognise that it is difficult for individual producers to make marketing arrangements working alone. To overcome this, producers should band together to make more unified deals with wholesalers. Above all they should set up producer groups for which they can obtain valuable financial assistance from the European Community.

In the eyes of many people the success of An Bord Glas will be reflected in developments in the potato industry. There have been improvements but there is still a long way to go in regard to both ware potatoes and seed potatoes.

There have been close contacts between An Bord Glas and the IFA as regards the IFA appointing a marketing co-ordinator for the potato sector. In the past year I have obtained EC approval for the extension of the producer group regulations to cover the potato sector. We are looking forward to the appointment of the market co-ordinator and the operations of the producer group grant scheme, effecting the changes in the marketing end of the potato industry.

Concerning hardy nursery stock there has been close co-operation between An Bord Glas, CTT and producers aimed at improving our exports of these products. Great possibilities exist for such trade in Britain and further afield. An important new grant scheme was introduced on the recommendation of the interim Bord Glas for the refurbishing of glasshouses. Unfortunately, because of lack of investment both in the refurbishing and the building of new glass houses over the past number of years, there has been a decline in that sector. We are looking forward to both the increased grant aid available under the farm improvement programme and the new greenhouse grant scheme, providing encouragement and the incentive to people to invest and refurbish, as is so necessary in the sector.

The mushroom sector has shown remarkable expansion in recent years. The present annual output is valued at £35 million at farm gate level. That figure has been reached over a relatively short period. Because of the very labour intensive nature of the industry, it is making a very valuable contribution in places such as Wexford, Monaghan, Claremorris and other parts of the country. We are looking forward to the continued expansion in that sector. The bulk of production is sold on the UK market. It is also fair to say that at present, because of the weak position of sterling, we are encountering some difficulties but we hope they will be of a temporary nature and that the ongoing rate of progress, the expansion and the gaining of new markets will continue after we have overcome the present difficulties.

I am glad to tell the House that in recent times I have had discussions with Mr. Peter Bottomley, Parliamentary Under-Secretary of State at the Northern Ireland Office. This followed a recent visit to the North. We have agreed to establish a working group to identify areas of common interest in regard to research and we hope to make progress in that area in the not too distant future.

I am sure Members are also aware that a new section has been established in the Department of Agriculture and Food for the purpose of developing the organic farming sector. A European Community draft directive is now before the Council to lay down rules on the control and marketing of organic products. There is undoubtedly a niche market for organically produced food and if we are to identify market needs, we will obviously have to take the necessary measures to improve developments in this sector.

I am sure many parents were very glad of the announcement in the budget regarding the provision for students at both agricultural and horticultural colleges. This State will be making its contribution towards the cost of their education. This matter has been near and dear to the heart of the Minister for Agriculture and Food, Deputy Michael O'Kennedy. He is particularly glad that changes have been effected in this sector. There was a certain inequality of treatment with regard to students in our agricultural and horticultural colleges vis-à-vis those in the RTCs. It was very necessary to effect the changes in that area and they are certainly very welcome.

The Minister for Agriculture and Food, Deputy Michael O'Kennedy, is making quite steady progress recovering from his operation. He is looking forward to being back in the Department and being involved in the deliberations of this House.

To conclude, we can say that the 1990 budget is a very successful one; it is a further stage in the Programme of National Recovery. We can look forward with considerable optimism to 1991, 1992 and beyond, to the process of national recovery and the re-establishment of our economy as a vibrant one within the Community. The fact that the targets that have been set out for 1988 and 1989 are being reached clearly indicates that the projections were accurate and close to reality when first framed. We look forward to continuing progress in that sector in the years immediately ahead.

Mr. G. Reynolds

I will take up a couple of points made by the Minister of State. It was fascinating that Deputy Kirk should say that the Minister for Finance had stated that he hoped that the inflation rate will decrease to two and a half per cent by the end of 1990. I have no doubt that everybody is aware of the Minister's projections for interest rates in the last budget.

An Ceann Comhairle

I hesitate to interrupt the Deputy who has just commenced his speech but the time has come to deal with questions. Perhaps the Deputy will move that the debate be adjourned.

Debate adjourned.