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Dáil Éireann debate -
Thursday, 7 Feb 1991

Vol. 404 No. 8

Financial Resolutions, 1991. - Financial Resolution No. 6: 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.)

I welcome the extra £9 million in the agricultural budget for 1991 to give 18,000 additional farmers headage payments for the first time. I am glad the Minister for Agriculture and Food refuted today on radio the argument put forward by Joe McCartin, MEP. The Minister stated clearly that this will happen and I am glad that all County Galway will be included for headage payments. Eleven thousand farmers will qualify for increased payments. This is welcome because 1990 was a particularly difficult year. Farmers are concerned at the prospect of severe cuts in farm supports.

We should examine very closely the proposals put forward by Commissioner MacSharry. He has warned time and again of the surpluses in Europe and pointed out that 80 per cent of farm subsidies are going to the larger 20 per cent of farmers. Over 90 per cent of Irish beef is going into intervention and this cannot continue. We are all in favour of reform. The Minister has said that the small to medium type farmers should be protected in any reform. Many leaked documents have been discussed referring to beef intervention prices, cuts in grain prices and milk quotas. We should have an opportunity to debate these matters to ensure that any changes will not affect smallholders. I have heard reports that payments will be based on livestock units per hectare. That would be a drastic step.

Quotas on sheep production would militate against smallholders or against farmers who were not in sheep in 1990. The top 10 per cent of farmers in Europe are well able to look after themselves. It is a matter of protecting the small to medium size farmer.

I regret that the problem of flooding is not a major priority. In view of the severe flooding experienced in early January, the Office of Public Works should look seriously at arterial drainage. Every year areas of south Galway around Ardrahan, and mid-Galway around Turloughmore and also in the north Galway area are liable to severe flooding. We have set up Shannon Forum and drainage committees to deal with maintenance of the rivers. It is time for the Office of Public Works to deal with some of the obstacles which are causing flooding.

I am glad that the problem of large classes in primary schools is being tackled. The overall pupil-teacher ratio will be reduced to 25:1 in 1992 and in second level schools a pupil-teacher ratio of 19:1 will be phased in over 1991 and 1992. The INTO have stated that 1,400 teaching jobs will be provided over the next two years in the primary schools. This is a welcome development. I am also glad that there will be increased capitation grants and that extra money will be made available to the disadvantaged at all levels of education.

The business expansion scheme has been the subject of much comment in the media. The basic idea behind the scheme is very good and I hope the Minister will look at projects which were in the process of negotiation for BES funding in County Galway, particularly in the tourist areas. Many projects have gone through the planning process in accordance with the county development plan and have been approved by Bord Fáilte. In many cases these projects are designed to cater for what are known as the "new tourists" in that self-catering accommodation is a priority. I hope these schemes will succeed in attracting tourists by providing the facilities which are badly needed. My concern is that if Irish entrepreneurs do not provide these facilities, French or German companies will.

I am glad that the whole question of the operations of An Post will come before a Dáil committee. In County Galway efforts have been made to cut back on services in rural areas, particularly by the provision of letter boxes placed on county roads. The idea is that people living along that road will have to travel up to a mile to collect their mail. This is particularly difficult for elderly people and it is not a good service. There is talk now about laying off 1,500 people and closing down 550 post offices. At the same time An Post are saying they intend to instal more and more of these letter boxes. Imagine the problems if the postman puts letters into the wrong boxes or when the boxes are interfered with and letters are stolen. These problems will be increased and multiplied if these drastic proposals go ahead. It will be devastating for rural Ireland. I hope the committee will consider this matter in great detail and elicit more information as to what is envisaged in changing the delivery service in rural Ireland.

I would like to compliment the Minister for the Environment on the funding that has been made available for county roads over the last couple of years. As I mentioned earlier, we had problems in County Galway, the west and in other parts of the country. There are proposals with the Department for increased funding to repair damage to county roads from flooding and high winds in early January. I hope the allocation for county roads will reflect the damage that was done.

The Minister has done his best to provide money for housing and there are many vacant houses throughout the country that could be improved using reconstruction grants. I hope the Minister will be in a position soon to reintroduce house improvement grants so that the necessary repairs can be carried out to those houses. Let me make a suggestion that I made before. The income limit for reconstruction loans, £10,000, should be increased to allow more people avail of house improvement loans to carry out necessary repairs.

In the health area I hope the rationalisation that has been talked about by the Minister for Health in relation to hospitals will soon take place. In Galway city we have two fine hospitals, the University College Hospital which was known as the regional hospital and Merlin Park Hospital. It is certainly time to have one major hospital for the city of Galway and the region. There are proposals with the health board to sell some of the land attached to Merlin Park and move the specialities and facilities to the regional hospital. This should be undertaken as quickly as possible.

In conclusion, the budget implements the new Programme for Economic and Social Progress. The Government have continued the policy of reducing borrowing and bringing in tax reductions, and there are positive measures to help the disadvantaged and raise the income of the less well off. The Government are promoting the creation of new jobs. We have seen investment in tourism, the extension of the section 23 relief for construction, extra teachers and extra money for community health care. I hope the budget will be successful in its aims.

A Cheann Comhairle, this is the ninth successive year that I have had the obligation, indeed the bounden duty, to stand up in this echo Chamber and make a plea for the people of County Louth, the forgotten area of this land, an area sadly neglected by all Governments in the recent past. Despite many urgings the net result has been one of almost total disregard, little recognition and certainly no help.

The crisis in the Border areas started in 1969 with the outbreak of the war in the Six Counties and that marked the demise of the biggest town in Ireland, Dundalk, a town of 30,000 inhabitants that had enjoyed the highest rate of employment outside the cities over the years. Twenty two years later the sad reality of life in the Border areas is that the unemployment figures are double the national average. They vary between 32 and 34 per cent; the national average is 18 per cent.

I listened last evening to Deputy Michael D. Higgins expressing righteous indignation that the rate of unemployment here stood at 18 per cent. How would he feel if he represented County Louth where the rate is double the national average? That is a crisis but it has not raised the profile of the Border areas as being in need of remedial help by any Government. There is a complacency here, an inertia that grips Governments. There is a belief that while the Ulster troubles last the Border areas are expendable. That is not good enough. There are parts of my town, and, indeed, other Border towns, where there is 100 per cent unemployment in housing estates in deprived areas, 100 per cent unemployment in households and there is very little hope that that will be remedied in the near future.

On budget night I expressed my disappointment at the lack of comment in the budget and the lack of forward planning for 1992-93 and what it means to the Border areas. I would have thought that the Minister would have addressed the problem in a more definite manner. He did reduce the VAT by 2 per cent, leaving a difference of 6 per cent. I would have thought he would have taken the opportunity to reduce it by another three points because next year he will have a mighty problem.

The real problem that exists in that regard is the lack of information emanating from the Government to the people to whom they owe an explanation, particularly the people in the customs clearance service in the public sector, the customs officers. In my town they total almost 400 people, 400 jobs; and these people have been left blissfully unaware of their future. What will happen to these people? Will they get compensation? Will the people in the private sector, who have been harried and harrassed by the Revenue Commissioners in recent years and made put very expensive computer type equipment into their businesses, just close down and be told to walk away? Will they get compensation? Will the Government seek compensation from Brussels? Those people are entitled to some information. They are getting none.

I realise better than most that the geographical location of the Border does not always attract industrialists to the region because of the troubles that occur on our doorstep. That is why I cannot comprehend the failure of successive Governments to decentralise an industry to the town of Dundalk. I accept they cannot get an industrialist and demand that he set up in a particular town but they have within their control the ability to decentralise and locate a sizeable industry, an acceptable industry in a town that, by any standards, is crying out for help. They have failed to do that. What they have done is to locate industries in Athlone, in Sligo, in one horse towns in the west and have neglected the town with the most unacceptable unemployment figures. I did not invent the statistics. They are cold statistical facts compiled by the State.

I appeal to the Taoiseach to give special consideration to the problems of County Louth. The Taoiseach took me to task on budget night, he suggested that I was out of line for speaking about the problems of the Border areas and he told me that the 48 hour rule had helped the Border area but I wish to say to him that it has not, but that it has kept jobs in Ireland. I welcome that and I supported that particular action but it does not specifically help the Border areas. The amount of money from here being spent across the Border was horrific. It was an absolute haemorrhage. Tours from every hamlet and village in Ireland were going across the Border. They were not going to Dundalk, Carrickmacross or Monaghan to spend their money. They were going specifically to spend their money across the Border. The only reason they stopped in Border towns was for a cup of tea or perhaps to go to the toilet but this was of no benefit to the Border towns.

The next item I wish to address — I want to be unashamedly parochial in this — is the hypocritical targeting of the cigarette industry. I would not advise anybody to smoke but I believe that the targeting of this industry in recent years has been hypocritical in the extreme. When one contrasts the damage done by drink, and its social cost, to every family in this land, the damage done by cigarettes pales into insignificance. This country is awash with drink. Government statistics show that young children are starting to drink at 12 years of age. The social consequences of that are tragic. A number of young girls, have at the tender age of 15 or 16 years, come to me pregnant. In many such cases, the girls became pregnant by married men after visiting public houses. This bears witness to the social tragedy of drink. The number of wives and husbands, too, who are battered as a consequence of drinking is alarming. There are also the victims of incest who are interfered with on a daily basis by people with drink on them. All of this is far more alarming and, I believe, far more injurious than any damage that might be done by smoking cigarettes. People who smoke cigarettes are well aware of the danger to their health but for many, particularly the unemployed and people on low incomes, it is an acceptable and worthwhile risk. To put 10p tax on a packet of cigarettes can only be described as mean and vindictive. It hits my town yet again. While I cannot justify cigarette smoking on the grounds of employment, it means a great deal to the people who earn their living in P. J. Carroll Company Limited. The contrast in the treatment of cigarette smoking and the abuse of drinking leaves me to suggest that the Minister is running on sight, as they say in coursing parlance when a dog loses sight of the hare.

I would like to commend the Minister, although it was long overdue, for the recognition in the budget of the double taxation of people who live in the Border area but who in many cases have had no option but to obtain employment in the Six Counties. They have had to endure double taxation. For the life of me I do not know how any civil servant could justify that immorality. The Minister has acknowledged this and these people have been included in the entitlement to an £800 PAYE allowance. I applaud him for that measure. However I would like him, in the Finance Bill, to address a remaining anomaly. People who have worked in the North or in England and who have retired to Ireland are regarded as self employed and are not allowed that particular allowance. The Minister may need, therefore, to bring in legislation to create a new section. I hope he will address that in the Finance Bill.

I would like to express my disappointment at the carers' allowance. In last year's budget I applauded this new allowance very enthusiastically but shortly afterwards I was horrified that fewer than 2,000 people were in receipt of this allowance. I understand that while the number has increased this year there are people who are in receipt of a carers' allowance as low as £2 per week. The many people who keep their aged relatives at home should be lauded and applauded. That allowance which has the potential to be very good is too narrow. It should be widened and expanded.

I now want to move from the parochial to the global context. Perhaps I am the only TD in the House, but that will not deter me, who will lament our lack of contribution to the Gulf War. We have been a member of the United Nations for 35 years and we have reaped the benefits of membership. The Taoiseach was emperor of Europe, a role which he carried out quite successfully in recent times. We have had the begging bowl out on a permanent basis to get the fruits of what is available from Europe. The poorest country in the European Community, Portugal, gets twice its contribution but we get five times the amount we put into Europe.

We have to grow up and mature as a nation. We have to accept our obligations as well as accepting what we can milk from the system. Those obligations mean supporting the aims of the United Nations. We have once again allowed England, a country we love to hate, and America to do our fighting for us. We have not contributed a sou. I think the time has come to make a contribution voluntarily in some way. I am not suggesting that Irish soldiers, who are not really equipped for war — let us face that — should go to the Gulf but I am suggesting that we should make a cash contribution. In any event we may be asked for a contribution before the year is out.

We could look at the possibility of having a field hospital but we should put our shoulder to the wheel and support the United Nations. In saying that I also want to express my personal support for the action of America. Nobody wants to see the war continuing and nobody wants to see people dying but the war was inevitable because it is a war about future peace. I think we are very fortunate that the Americans and the British are prepared to stand up to a despot — a man who is clearly mad. The Americans waited for five and a half months in the desert and gave this madman every possible opportunity to pull out of Kuwait. I think the Irish nation should acknowledge that. I deplore the recent attacks made on America by the gentleman on the loony left. I would remind them that we have had very strong ethnic ties with America from the days of the Famine until the present. There is a 40 million strong Irish ethnic group in America. In the past five years they have contributed £150 million to the International Fund for Ireland. In the past five years young Irish boys and girls 75,000 have got US visas. America has never been a colonising country. They got involved in the Second World War very reluctantly and refloated Europe with the Marshall Aid Plan directly after the war had ended.

I intervene to advise the Deputy that some three minutes now remain of the time available to him.

I should like to say that when this war is over the Taoiseach and the Government of the day should make it a priority to ensure the banning of weapons which are horrific and frightening. The double standards of countries who have sold weapons to these unfortunate people in the Middle East and who are now threatening the future of the world is appalling. I deplore the double standards of the German Government who have armed them up to the teeth and now refuse to support the manpower in the Gulf: I understand 22,000 of their soldiers have pulled out on sick leave or on conscience grounds. The banning of the sale of weapons is imperative for world peace.

I plead with the Taoiseach to give a fairer deal to the people who live in the Border region. By any standards they have not had a fair deal in the last 22 years. They have borne the brunt of the Ulster troubles on behalf of mother Ireland. It is surely an abuse of Government when the unemployment figures of Dundalk, Ardee and Drogheda remain as high as they do.

Finally, I should like to invite the Taoiseach, instead of going to Kerry this year on his holidays, to come to County Louth — the forgotten county of Ireland — and spend a week not necessarily with the Minister of State at the Department of Agriculture and Food, Deputy Kirk, but with me. I will show him the real problems and the real deprivations that exist in the Border area. I know that the deprivation that exists in the Border area may be unknown to him because his own two Deputies have not been vocal in enunciating the problems that confront people who have to live in that area. They have not made any noise in this Chamber. I would have thought they would have had a word in his ear but obviously that is not so. I extend an invitation to the Taoiseach to come and be my guest for his summer holidays this year.

The budget this year has an important extra dimension to its overall purpose. In addition to the normal economic and fiscal role, this budget starts to implement the new Programme for Economic and Social Progress, as the first segment of our new ten year strategy to transform Irish society — and place Ireland firmly among the advanced European nations — by the turn of the century.

The budget was formulated against a difficult international background, which has created world-wide political and economic uncertainty. There has been a considerable slowdown in the world economy in recent months, with definite signs of recession in some of our major trading partners. The war in the Gulf; and doubts about the outcome of the GATT negotiations are having an unsettling affect. This budget, therefore, had to be constructed in a way that would achieve three broad strategic objectives.

First, we were determined that the steady economic and social progress of the last four years and the improvement in the public finances would be continued. Secondly, we wished to begin inplementing the Programme for Economic and Social Progress by making the necessary provision for the steps to be taken this year and in preparation for future years. Thirdly, the implications for Ireland of the uncertain international situation clearly demanded that we adopt a careful and prudent approach to the budget and especially to our financial and economic projections.

This budget continues the policy firmly established in recent budgets, of reducing borrowings to very low levels, of tax reform and reduction, and important improvements in social provision for the vulnerable and disadvantaged in our society. We have been able to sustain some progress on all these fronts, despite the deterioration in the international economic climate and the consequent prospect of a slowing down in our own rate for growth.

The budget, is seen by the public as striking the right balance for our current circumstances. There has of course to be a degree of caution, because of the world situation and the possibility that assumptions will not hold good, that world events, and particularly the tragic war in the Gulf, will give rise to further problems. It was not an occasion for taking unnecessary risks. The important thing is that we have not allowed the uncertainties to divert us from what we know to be the right way forward; from sticking to our successful, proven, policies; from holding a steady course through uncertain waters.

To those who, before the budget, thought we could not hold the line, let me state clearly: there has been no halt to budgetary discipline; there has been no halt to tax reform; and there has been no halt to social progress. Instead, we have moved forward purposefully in all these areas and have actually expanded our agenda. The budget has delivered solid benefits, while holding responsibly to discipline.

This budget clearly confirms and continues our policy of sound financial management. That cannot be disputed. The objective is a current budget deficit of 1 per cent of GNP and Exchequer borrowing of 1.9 per cent. Outstanding progress has been made over the last four years in reducing the current budget deficit, Government borrowing, especially foreign borrowing, and the ratio of national debt to national output. Year after year the outcome at the end of the year has been better than the targets we set in the budget, clear proof of consistent good mangement.

In the four year period to 1990 the current budget has been brought down from 8.3 per cent of GNP in 1986 to 0.7 per cent last year. This year, it has been set at 1 per cent and the Government have undertaken to bring it into broad balance by 1993. Similarly, Exchequer borrowing has been reduced from 13 per cent to 2 per cent of GNP, or in money terms from £2,145 million in 1986 to £462 million in 1990. I remind the House that these borrowing figures, both last year's and this year's, are the lowest for over 40 years.

I would like to stress also that the actual amount to be borrowed this year will in all probability be substantially below the official target, we have set, because of the sale of a majority stake in Irish Life. While this will, of course have little effect on the underlying borrowing level, it will mean that there will be little actual addition to the national debt this year, with subsequent savings in interest in future years.

Without continued reduction of the burden of debt, all our aspirations will be frustrated. This is why the Government considered it essential, even in the difficult circumstances of this year and despite many conflicting demands, to continue the downward pressure on borrowing levels. It was important to signal our determination to hold on to the gains that have been made and to continue the process, until our goals have been achieved. With borrowing levels rising in Germany and Britain, our decision to continue to reduce borrowing has sent a strong positive signal of our resolve to financial markets everywhere around the world.

Since 1988 increases in the national debt have been minimal. Today it stands at just over £25 billion and the foreign debt has actually been reduced from £9.7 billion in 1987 to £8.85 billion at the end of 1990. The debt/GNP ratio fell eight percentage points last year to 111 per cent, making a drop of 20 points from its peak in 1987. Further progress will be made this year. We are on target for reducing it towards 100 per cent of GNP by 1993. Our longer term target is a level more in keeping with our EC partners.

Service of the national debt, despite the record reduction in annual borrowing that has been made and the savings achieved by better management of the debt portfolio, has nevertheless increased from just under £2 billion in 1986 to £2.4 billion in 1991. Looked at in one way, that is a significant containment compared to previous years, but it continues to be a massive overhead, which remained a major obstacle to our economic and social development.

We have, therefore, now established a National Treasury Management Agency, directly responsible to the Minister for Finance, but operating outside traditional Civil Service structures in a strictly competitive market environment. The agency will utilise the most sophisticated tools of debt management in order to achieve maximum savings on debt servicing.

The Book of Estimates is the basis of the budget. That is where the quality of a budget is decided. The Government subjected the Estimates to detailed examination and assessment again this year. The key indispensable element in the improvement in the public finances since 1987 was the control of and the reduction in Government expenditure. There should be no doubt about that. Other factors helped but that was the core element. The level of Government expenditure has been brought down from around 55 per cent of GNP in 1986 to around 41 per cent this year, a fall of 14 points. I do not know of any other country in Europe or in the OECD in the past 30 years, which has succeeded over the relatively short space of four years in making a downward adjustment of that magnitude.

Subsequent to the publication of the 1991 Book of Estimates in December last year, the Government carried out a further final rigorous review of expenditure in every Department. This produced further reductions of £33 million which are shown in the budget table. This was achieved despite the fact that in many sectors expenditure had to be increased in order to draw down Structural Funds.

There is no question of allowing Government expenditure to rise again as a proportion of GNP above the present level of a little above 40 per cent. Improvements in services will have to be paid for out of economic growth, which has also to provide the means for easing the tax burden and maintaining a steady improvement in the public finances. I wish to categorically reject the suggestion that the programme involves any relaxation or return to the days of big spending. There has been no policy change whatever. Instead, we have reinforced and strengthened our medium term targets.

There has been some suggestion by certain commentators that the alleged cost of the programme raises the spectre of a return to high borrowing. But if the record is examined, most of those who are sceptical of the new programme were equally sceptical about the Programme for National Recovery in 1987 and its implications for borrowing. The success of that programme over the last three years proved them wrong. I would not like respected commentators to misread the situation and this Government's determination a second time. The Programme for Economic and Social Progress is a model of economic, financial, and social responsibility.

Those for whom the size of the national debt and borrowing are the main concern should, in fact, welcome the agreement reached on a new programme and the stability it ensures in the economy and the public finances. The truth is that the Government's success in dealing with the public finances and reducing debt and borrowing since 1987 can in large measure be attributed to building a consensus around a number of key objectives, allowing balanced progress to be made on the public finances, employment, tax reform and social equity.

A good deal of the critical comment outside this House has focused on the issue of public service pay in recent times, both before the new programme was agreed and since. Some economic observers talk about the public service as some kind of impersonal body isolated from life's realities, unnecessarily absorbing a large slice of the country's resources. The reality is something totally different. For the most part the public service is made up of staff who provide the services to the community which everybody, including the commentators themselves, would accept and demand as being an essential part of the type of caring democratic society that we all cherish.

When we refer to the public service, we are talking of the doctors, nurses and other staff who provide the health services, teachers who educate our children, gardaí and soldiers who provide security for us all and who maintain law and order, welfare officers and social workers who deal with the unemployed and others who are disadvantaged, and so on, not forgetting those who have the task of raising the revenue needed to meet the cost of all these services. These members of our national community perform vital functions and the overwhelming majority are highly qualified and dedicated people. They expect to be treated as fairly as possible by the community they serve in terms of remuneration, reasonable account being taken of the rates available outside the public service, with due allowance for the capacity of the public finances.

Indeed, the crucial question is how, as a country, we can afford public services of the size and quality we aspire to without incurring levels of taxation which are unsustainable and damaging to the economy as a whole. The Programme for National Recovery attempted to provide a balanced response to that key question. There was an acceptance that the numbers in the public service would have to be reduced significantly, that economies should be effected, especially where there was an overlapping of functions between different agencies, and that greater efficiency and better management should be promoted and achieved. In the period 1987 to date, public service numbers were reduced from 217,000 to 199,000; the efficiency audit group were set up; major efficiency studies in Office of Public Works and the health area were completed and the new system of administrative budgets was developed. There was a significant rationalisation of State bodies, and a substantial investment in technology took place with the result that a number of our larger Departments are now as technologically advanced as many of the most progressive private sector companies.

Special pay increases arise from independent arbitration awards on claims for particular groups. Under the Programme for National Recovery, there was agreement by the public service unions in the national interest that a large amount of the special pay awards would be deferred from 1987 to 1991. This agreement was of very significant benefit to the Exchequer for the critical period of the Programme for National Recovery. It means, however, that a major portion of the cost of these different specials have to be paid in 1991, in addition to the cost of the general pay increase — 4 per cent — provided for in the Programme for Economic and Social Progress. For 1991, therefore, a total of £245 million is being provided for pay increases — £54 million in the published Estimates and £191 million in the budget. That is a major increase with which we have to deal.

The overall provision for the Exchequer pay and pensions bill in 1991 is, therefore, £3,422 million, an increase of 8 per cent over the 1990 provisional outturn. However, in the new programme there will be a further moratorium on all new claims, and the restrictions on local bargaining including the limit of 3 per cent will not apply earlier than 1993. The public service unions have agreed again to the same type of procedure in this programme as they agreed to in the Programme for National Recovery.

Nevertheless, the rising cost of Exchequer pay and pensions presents a major problem in the management of the public finances and in the framing of any budget. At the same time, public servants are entitled to reasonable standards of remuneration and conditions of service relative to the private sector. The only way to reconcile these apparently conflicting demands must lie in consistent and unremitting efforts to limit overall numbers in the public service by better management, increased efficiency and increasing use of technology. The new programme provides a clear framework in the memorandum of understanding within which this greater efficiency can be negotiated and achieved.

The Programme for Economic and Social Progress, which this budget starts to implement, is the best long term strategy for attacking in a coherent way our persistent unemployment problem, including long term unemployment. It is a comprehensive programme for development, and the budget provides for the Government's special commitments under the programme in 1991. More than that, it ensures the continuance of the basic underlying financial and economic conditions which make growth and development possible, and from which the defeat of unemployment will in due course follow.

In this budget and in the new programme, the interdependent relationship between economic development and social progress is clearly stated and emphasised. Arising from the programme, the scope of the social provisions of the budget has been broadened to include health, education and housing, with continuing concentration on the problems of disadvantage and of low income families.

The critical achievement has been to renew the consensus between the social partners and to develop a new and more ambitious strategy for the next three years and extending to the end of the decade. This firmly establishes the consensus approach to our economic and social affairs. It is this fundamental change in the national ethos and the enormous unquantifiable bonus that this brings right across the board that the critics fail to take into account in their restricted evaluation and assessment of the programme. The fact that we can agree is more important than the precise detail of what we agree about. Once the consensus is there, the targets, the projections and so on, if shown to be unrealistic or unattainable, can be adjusted by agreement. The national consensus provides the basis for a sustained renewal of confidence, increased investment and higher employment, all within the framework of a sound economy. Its benefits continued to be reflected in the economic achievements of 1990, and indeed in the cumulative advances that have been made since 1987, a situation which has caused the English newspaper, The Guardian to say about the Irish economy that “amazing things are happening in Ireland”, or the Annual Economic Report of the EC Commission to state in its chapter on convergence that “the most spectacular results were achieved in Ireland”. The critics do not seem to understand the enormous and inestimable economic benefit that flows from the atmosphere created by consensus, industrial peace, certainty in planning and a spirit of co-operation.

At the most recent ECOFIN Council, the President of the EC Commission, Jacques Delors, praised Ireland's efforts to redress its economy since 1987, and said — this is important — the reason for our success was through sticking to a rigid programme of fiscal management in agreement with the social partners.

The year, 1990, was the fourth year of sustained economic progress, further consolidating the recovery that began here in 1987. For the second year running, we had exceptional economic growth, close to 5 per cent, the best performance in ten years, and also the highest growth rate in the European Community. In the period 1987-90 our GNP has grown by an average annual rate of 4.25 per cent. From being well under two-thirds of the Community average of national income per head five years ago, we will be approaching 70 per cent by 1991, demonstrating that a process of convergence is taking place. We are catching up.

In 1991, we are anticipating continued growth of 2.25 per cent. Some of the criticism of the budget is based on the suggestion that this projected growth rate is over-optimistic, and that a shortfall in revenue will throw the budget off course during the year. This is a fairly standard criticism, and in recent years has invariably been proved unfounded.

I do not accept that the economic forecast underlying this budget is too optimistic. A range of relevant forecasts — issued this month — suggests GNP growth rates from 1.5 per cent to almost 2.5 per cent. Our post-budget forecast, at 2.25 per cent, falls comfortably within this range. In general, over the years the official Department of Finance Estimates have proven to be the most accurate, probably because they are more directly related to the final make-up and impact of the budget. Some private sector post-budget forecasts envisage domestic output growth of 2 per cent or more, which is broadly in line with that underlying the budget.

The view taken of external growth is one crucial element in any macro-economic forecast. The forecast of Irish economic developments assumes external growth as projected by the European Commission in December. Recent reductions have brought world oil prices well below the level the Commission then assumed. However, our economic forecast makes the prudent assumption that any beneficial effects on world growth of lower average oil prices would be offset by the negative effects of the greater uncertainty brought about by the Gulf War.

An essential difference in the budgetary context between the various forecasts relates to investment propects and expectations for construction. In the short term some investors may be tempted to defer decisions because of the uncertainty induced by the Gulf conflict. On the other hand, investment this year will continue to benefit from the EC Structural Funds, and business investment should benefit as industry gears up for the Single European Market. Taking into account the overall budgetary stance and its various specific measures, an estimate of the order of 3 per cent volume growth for the construction industry is scarcely unreasonable.

The very major economic uncertainties facing the world are unfortunately a fact of life. They pose particular problems for countries which, like us, depend on external trade and, critically, on imported energy, but Government cannot wait until the outlook becomes clearer. Assumptions must be made, and budgets formed and implemented even as events are unfolding. Those assumptions must be as realistic as circumstances may permit but, on the other hand, we must not over-react to international uncertainties. One of the early effects of the Gulf War, unexpectedly, was to bring oil prices down. We should not underestimate the worth of the progress made at home and the capacity it provides to withstand adverse external developments now as against our previous capacity. Our workforce is skilled, educated and motivated, our economy is competitive, the new programme ensures industrial harmony, over the years immediately ahead. I believe that we are capable of progress this year, despite the uncertain external conditions that now prevail.

The suggestion that the predicted increase in tax revenue is optimistic in relation to the economic forecast does not stand up. Revenue is predicted to represent the same percentage of GNP in 1991 as in 1990. Put quite simply, the budget figures imply that we expect revenue, in aggregate, to grow in line with money GNP in 1991.

Unlike some previous occasions, we have experienced fast growth, while maintaining a low level of inflation. Low inflation growth means that gains made should be sustained. It is a remarkable achievement that, despite the recent oil price shock following the Iraqi invasion of Kuwait, inflation in Ireland has nonetheless continued on a downward trend, ending the year at 2.7 per cent among the lowest in the European Community, compared with an inflation rate still close to 10 per cent in Britain. In 1991, we are expecting a rate of inflation in the region of 3 per cent, a reduction by nearly ½ per cent on the average for 1990. This position is in sharp contrast with our experience in the two previous oil shocks. Whereas very often in the past decade budgets contributed substantially to annual inflation, the present budget will have a negligible impact on inflation of 0.1 per cent. Likewise, the pay rises envisaged in the new programme are fully consistent with the maintenance of low single figure inflation.

A firm exchange rate policy has helped us to secure low inflation, and that in turn has enabled us to maintain over a four year period, and into the future, a stable exchange rate which is of fundamental importance in the economic and financial situation. In March 1987, the Irish pound was worth around 2.67 DM. Today, four years later, it is still worth around 2.67 DM, give or take a pfennig. Irish businesses, which borrowed DMs, will have gained, as have German investors who have bought Irish Government bonds. In contrast with earlier years, we have succeeded in establishing a firm link within the European Monetary System to the currency of the strongest economy in Europe. This is good preparation for full participation in economic and monetary union. This has also enabled us, for the first time ever, over the past two years to keep interest rates several points below British interest rates, although of course, internationally, interest rates remain high.

The uncertain international background makes it particularly difficult to forecast the trend of interest rates at present. Last week we saw pressures arising from German unification pushing up official interest rates by ½ per cent in Germany, while at the same time weakness in the US economy led to a cut of ½ per cent in the US discount rate. In budgetary terms, these movements are not significant, given the magnitudes involved in the budgetary aggregates. In any event, the increase in official German interest rates has, so far, had little impact on market rates, even in Germany itself.

Given the extent to which emigration can fluctuate with the economic fortunes of the UK and the US in particular, the real measure of progress in our economy is the trend of employment in Ireland. The basic aims of Government economic policy are to provide the conditions for a substantial and sustained increase in employment, to encourage investment for this purpose, and to act directly to bring jobs on stream where possible. The right financial conditions for investment, tax reform, social policy, specific measures in the different employment sectors, can all contribute to a growth in employment. The budget will on this occasion directly create some employment; in education, community health care, tourism, and construction.

Net employment increased in the three years to April 1990 by 40,000 and by a further significant amount in the course of last year. Emigration declined by 15,000 in the year to April 1990, and the signs are that there has been a further signficant fall since. Unemployment was brought down from its peak of over a quarter of a million in the winter of 1987 to 215,000 last May, but because of the fall in emigration it has increased somewhat since then. It is also encouraging that unemployment among school leavers has continued to fall. The best strategy to increase employment and to reduce unemployment is a sustained high level of economic performance, as well as targeted measures following the approach recommended in the new programme.

A problem in our economy a few years ago was the absence of a positive link between economic growth and employment. I am sure a number of Deputies will have heard me say from time to time that this was a dilemma which we did not seem to be able to solve and that we did not seem to be able to translate economic growth into employment. Fortunately, that scene has changed. Research has now shown that one of the most significant changes brought about by the Programme for National Recovery was the re-establishment of a positive link between growth and employment. Since 1987, every 1 per cent growth in output is producing a rise in employment of two in every thousand. This new and positive link between output and employment will continue under the new programme, which maintains the low inflation competitive conditions first established by the Programme for National Recovery.

The new programme, carries forward the approach of its predecessor to employment creation; 20,000 new jobs are to be created each year in manufacturing industry and the international services, with carefully targeted incentives and selective development measures. An additional 5,000 jobs on average are being created in tourism. Objectives for the construction industry, the marine, forestry and commercial State companies are also set out.

Employment in Ireland primarily depends on our success as a trading nation, in relation to both goods and services. Our achievements in the last four years have been outstanding and unprecedented. The surplus on both the balance of trade and balance of payments was continued for the fourth year in succession in 1990, an unprecedented performance for the Irish economy, and the balance of payments surplus is likely to remain near its 1989 level, due to an improved balance on services, a slowdown in profit repatriations, and the increase in EC transfers.

The level of investment, which is the key to employment, increased by about 10 per cent for the second year running. This is the best performance for at least a decade, and puts us back at or near the top of the European league. The new programme is intended to maintain the conditions here for a strong and positive investment climate over the coming decade.

Ireland continues to demonstrate that it is a very attractive location for major overseas investment. Many leading international corporations at the forefront of technology have decided to locate their European manufacturing operations here. The fact that high-quality corporations such as Intel, Motorola, Maxtor, Seagate, Brother, Fujitsu Isotec and Yamanouchi, established in Ireland during 1990, rather than anywhere else in the EC, shows that our economic criteria are right for the establishment of successful modern technological enterprises, including the best and brightest young workforce in Europe. That is the advantage of having a good, bright, highly skilled and well-trained workforce.

With the International Financial Services Centre in Dublin, the Government have successfully pioneered a new development which will make the city an important financial centre in Europe; 150 companies, including some of the world's leading financial institutions, have already committed themselves to locating in the centre, creating 2,500 jobs. The time limit for approvals of new firms has been extended to the end of 1994, and the Finance Act will extend the 10 per cent rate of corporation tax to the end of the year 2005. The 10 per cent rate of tax for firms in the Shannon Customs Free Airport Zone will be similarly extended to 2005.

While more than half of all new manufacturing jobs were created in the past three years in Irish-owned companies, there is an increasingly urgent need to build more such companies with the scale and scope to compete in the Single Market. The firms which will get priority from the State agencies will be those which show a clear commitment and ability to achieve growth in excess of £2 million turnover. In addition, the dynamic contribution to job creation seen for the first time from some of the State companies will continue to be fostered and supported. Ambitious investments in companies, such as Top Tech and TEAM Aer Lingus, are role models for other joint-venture developments within this sector of Irish industry.

Small business is also a vigorous part of the industry scene. Over one-third of the sustainable new jobs in the last three years were created by small firms, which supply £3.5 billion worth of goods to overseas companies in Ireland. The renewal of the business expansion scheme, now firmly focused on the smaller company needing equity finance, will contribute to fostering and nourishing the spirit of enterprise, which is critical to achieving a regional spread in our job-creation work.

The construction industry has also shown strong growth over the last two years, leading to a substantial increase in employment. The number at work in the sector should be about 10,000 higher this year than in 1987.

New industrial investment, growth in tourism, the revival of the housing sector with the highest level of completions since 1983, urban renewal, and increased Structural Funds which have allowed a 5 per cent increase in the public capital programme affecting the building industry in 1991, are all contributing to a much more healthy building industry as well as the maintenance of a climate of confidence in a sound economy. The budget also contains measures to boost the voluntary housing sector, and retains "section 23" relief for one final year. Predictions last year, however, that there might be an overheating in the construction industry fuelled by the Structural Funds, have proved groundless.

Tourism has enjoyed four successful years in a row, with growth rates of between 12 and 15 per cent far in excess of the international average, fully justifying our decision in 1987 to give tourism a much higher Government priority. We aim to create an additional 15,000 tourist-related jobs by 1993. It is one area in which heavy new investment has been in progress since 1987, which will continue through to the end of 1993 with the help of Structural Fund assistance. However, given that tourism is one of the sectors that could be adversely affected by the Gulf War, an extra £1 million has been provided for marketing promotion by Bord Fáilte in the budget, into markets such as continental Europe that have performed strongly in the last four years, with a doubling of the number of visitors.

Two other areas that have shown considerable growth potential are the marine and forestry. Employment in the fishing industry is set to increase by a further 3,000 over the next three years. Forestry planting has almost doubled to nearly 20,000 hectares in 1990, mainly due to a huge increase in private sector planting, and will be increased to a level of 30,000 hectares by 1991.

I think everybody knows that our farmers are having a difficult time. In nominal terms, income fell by some 5 per cent or so last year. When account is taken of inflation and the net interest position, the real drop was well in excess of that figure, but it must be pointed out that that was a reduction from a relatively high plateau in 1989 when incomes in farming, in nominal terms, were 51 per cent higher than in 1986. Farm incomes therefore in 1990 are still about 28 per cent above the 1986 level. In the difficult circumstances prevailing since last summer, the Government sought to limit the fall in farm incomes by obtaining increased EC intervention purchases, and through earlier payment of headage grants.

The new programme recognises the central importance of agriculture to the Irish economy and the need to maximise its contribution. While the protection of the livelihood of farmers must to a great extent be negotiated at EC level, a number of specific measures agreed to in the programme are being implemented in the budget, including the bringing forward to 1991 of the increase in headage rates scheduled for 1992.

Farmers, of course, do not live apart from the rest of the community. From the point of view of their farms as business enterprises, they will benefit from overall economic improvement and, in particular, from low inflation and interest rates. Farm families will benefit too, with other families, from the improvements in the budget and the programme in education, health, community care and social welfare.

An essential component of the new programme is a firm commitment to the future growth and development of our agriculture industry and the prosperity of our farmers. In my view, both of these are necessary not only in the interest of keeping an equitable balance in our society but in the overall national interest also. Agricultural output and the food industry make a massive contribution to the economy, both domestically and externally. Of equal importance is the need to maintain a viable and vibrant rural population based on the family farm as part of our basic social structure. It is also important for the preservation of the countryside and our natural environment. Deputies will be interested to know that in the course of a conversation recently among European leaders, I found that there is a fairly widespread commitment to this concept and agreement that it must be a key element in any reshaping of European agriculture.

A major debate is now under way on the reform of the Common Agricultural Policy, and the EC Commissioner, Mr. Ray MacSharry, has been outlining radical reform proposals, which involve a considerable switch from farm price support to income support, concentrated on the smaller and less intensive farmer. The philosophy behind these reforms is that substantial reductions in Community support will be inevitable over the foreseeable future and that, in those circumstances, small scale producers will have to be protected. The objective is to maintain the fabric of rural society by helping retain the maximum number of families on the land. We have no problem with the philosophy, indeed we welcome it, but how it is to be implemented could create significant difficulties for us. Our task will be to ensure that there is no damage to the vital interests of Irish agriculture as a modern viable commercial industry.

In adapting the Common Agricultural Policy, we will be insisting that smaller scale producers receive adequate protection, going beyond socio-structural aid and built into the market mechanism. The right balance has to be struck. The future development of rural society and of a competitive food industry demands the continued viability and participation of the modern and progressive commercial farmers, whose contribution is vitally important to us. The Community must ensure that competition and efficient commercial farming on a reasonable scale is not undermined in the policy changes which will eventually emerge. Therefore, we will be insisting that full account must be taken of the diversity of Community agriculture and of economies like ours, particularly dependent on agriculture, and that adequate, Community-funded compensation for producers and regions adversely affected is provided, in whatever proposals emerge from the Commission on Common Agricultural Policy reform and on the Community's response to the GATT negotiations.

One major long term objective of tax policy must be that Ireland has a fully competitive tax system compared to other countries in relation to all key areas of taxation. This must be accompanied by the creation of equity throughout the entire taxation system.

Our commitment to tax reform is being pursued. Tax reform to most people means tax rate reductions. We have accepted for some years now that rates of taxation in our main revenue-earning taxes — Income Tax, VAT and excise duties — are generally too high. We have begun adjusting them and in the process have put many hundreds of millions of pounds back into taxpayers' pockets: £800 million in income tax alone over the past few years. This is right both from the viewpoint of the domestic incentive to effort and the onset of the European Single Market in 1992. The resources generated through taxation are not excessive by international standards. It is the way the burden is structured that gives rise to concern. Accordingly, we have committed ourselves to a programme of major — even radical — reform of the structure of taxation, which is continuing in this year's budget.

Over the past few years, breaking the trend of more than 20 years, the burden of taxation, both direct and indirect, has been substantially reduced. In the area of income tax, the changes made have exempted many thousands of taxpayers from any liability. Through broadening the bands, especially in 1988, the proportion of taxpayers on the standard rate has been brought to over 60 per cent. The standard rate of tax and the top rate have been progressively reduced. In three budgets, six points have been taken off each. The important thing is that progress towards the objective of a 25 per cent standard rate and a single higher rate of tax is continuing to be made, despite the difficult conditions facing us this year.

This budget continues to give effect to our policy of steadily improving the position of the lower paid. The exemption limits and the allowance for the third and subsequent child have been raised. Significant improvements in the family income supplemement, the special minimum wage increase in the new programme draft pay agreement, and the extension of PRSI to part-time workers are all part of a consistent approach to helping this section of our society, whose situation requires special priority treatment. These changes for the benefit of those whose family situation is particularly difficult are also reflected in the new provision for persons bereaved and the extension of the PAYE allowance to persons living on this side of the Border and working on the other side.

The tax base has been substantially broadened in this budget. The business expansion scheme is being redirected. The business expansion scheme has served a purpose of stimulating investment and employment, but its cost is high, and we could not afford the rising costs of the scheme if we were to take further action this year to reduce the main rates of income tax. I just could not afford to bring in these improvements in the rates of income tax and at the same time bear the increasing costs arising from the business expansion scheme. There will, undoubtedly, be grounds for complaint that this or that valuable scheme providing employment will not now be able to go ahead or that the sudden cutoff point is unfair to individuals, and these we understand.

I would like to take this opportunity to pay a special tribute to the dedication, professionalism and integrity of officials of the Department of Finance. These qualities and the range of modern skills which they can deploy in support of the Government's efforts to transform the Irish economy have been of crucial importance in everything that has been achieved. Their performance during the Irish Presidency and in the ongoing EC negotiations has been superb. The Government have not been and are not now prepared to engage in irresponsible tax cutting of the type that caused major disruption in the British economy, while postponing the elimination of the current budget deficit indefinitely. The budget is decided and produced by the Government, and any criticism or complaints about it should be politically directed at the Government in accordance with the best traditions of our parliamentary democracy.

A Deputy

Michael McDowell take note.

I have always been cautious about the notion of radical tax reform involving as it must enormous short term disruption of personal finances and of borrowings made on the assumption of a reasonably stable tax system. To keep on bleating about some vague unspecified "tax reform" while ignoring what is actually happening is not very honest. The truth is that real tax reform has been taking place at an unprecedented rate in recent years and is continuing apace.

There has been a vast improvement in the tax administration system also in recent years. The introduction of self-assessment procedures has undoubtedly, for self-employed individuals in 1988 and for companies in 1989, been very successful from every point of view, including a very satisfactory increase in revenue. A scheme of self-assessment has now been extended to capital acquisitions tax with effect from September 1989. Self-assessment has greatly improved the efficiency of the tax system and simplified its operation for taxpayers and their advisers by bringing greater certainty into their tax affairs and eliminating long delays in finalising taxpayers' liabilities which were such a diverse feature of the old system. It ensures that more resources are available to pursue those remaining outside the tax net.

The Government have also very substantially increased the yields from capital taxes and from corporation tax, the rates of which have been simplified and rationalised. Whereas the yield from capital taxes only increased by £13 million in the four years to 1986, they are projected to increase by £16 million alone this year, and the total 1991 yield of £87 million is well over double the 1986 yield of £34 million. The increase in yield has come, it should be noted, not from punitive increases in the rates of capital tax as advocated in some quarters, but from the creation of more wealth in the economy.

The increase in corporation tax is even more substantial. The reduction of the standard rate and the broadening of the base over recent budgets, including the reduction of accelerated capital allowances, and the restrictions this year on section 84 lending are leading to a significant increase in the yield from corporation tax. In the four years to 1986 inclusive, corporation tax increased by a mere £26 million. Since 1986, the increase has been ten times that amount, with an increase of £270 million since that date. As a result, the total yield will have more than doubled to £527 million in 1991 compared with £258 million five years ago. Again, these results have come from important reforms coupled with greatly increased industrial and commercial activity, rather than from the imposition of penal measures or a breach of faith with overseas investors who have been promised long term tax stability, which some have urged.

The changes in VAT rates are designed to align ourselves progressively with our European partners in preparation for the Single Market. There has now been a 4 per cent reduction in the standard rate to 21 per cent. While it was necessary to increase the lower 10 per cent rate to 12.5 per cent, sensitive sectors of the economy from the employment point of view, such as tourism, construction and newspapers, have been left out and remain at 10 per cent, until such time as harmonisation requires further change. The VAT changes represent a net cost to the Exchequer of £37 million. That is what I pointed out here on budget night. The combined effect of the changes in the VAT rate is to give £37 million back to our consumers. Indeed, most people will benefit from these indirect tax changes, with the possible exception of the heavy smoker, with due apologies to Deputy Brendan McGahon.

For the second year running, there has been no increase in the excise duties on drink and petrol. Indeed, VAT on both drink and petrol has been reduced, resulting in a fall of 5p in the price of a gallon of petrol from 1 March and a 3p fall in the price of a pint. It is a long time since any Minister reduced the price of the pint, and it astonishes me that there have not been more excited, congratulatory and even ecstatic comments about that aspect of the budget. The price of new cars also will come down and many household goods will be favourably affected — electrical goods, soaps, detergents, household furnishings, kitchen utensils, etc. Items required by children, particularly school children, will all be reduced in price. These reductions will benefit not only the consumer but important sections of industry as well, and the cost of professional services will be reduced.

One of the prime objectives of the budget was to give priority, as always, to improving the circumstances of the less well-off and disadvantaged, and to begin work on the comprehensive and ambitious social agenda of the new programme. The clear thrust of this budget is progressive and redistributive. The fruits of economic growth must be shared.

The general increase of 4 per cent in social welfare rates, in line with this year's wage and salaries increases under the programme, is 1 per cent above the projected rate of inflation and to that extent is an improvement in real terms. All categories of social welfare recipient, pensioners, widows, the long term unemployed, and the handicapped are, therefore, receiving real increases in benefit. As in previous years, those on the lowest rates are receiving increases over and above the general rate. The long term unemployment rate is increased by almost 6 per cent. The lowest payments, short term unemployment assistance and supplementary welfare allowance, are up by 11 per cent to a minimum of £50 a week. Adult dependant allowances for the unemployed are increased by 6.5 per cent.

The new Programme for Economic and Social Progress sets out a timetable for fulfilling the priority requirements of the Commission on Social Welfare. That is our basic long term approach to the social welfare rates.

Families, especially those on low incomes, are our continuing and special priority in both the income tax and social welfare codes. As I have pointed out, there will be substantial improvements for families from the increases in the income tax exemption limits, and the family income supplement. In addition, the higher rate of child benefit is now being extended to the fourth child, having been given to the fifth child last year. Child dependant allowances are being raised by up to 9 per cent, and are being continued up to age 21 for children in full-time education. Other measures for deprived families are the allocation of 60 extra teachers to schools in disadvantaged areas and a repeat of the £0.5 million allocated by the Minister for Social Welfare to women's groups in last year's budget.

An important and significant social reform is the extension of social insurance and corresponding benefits to part-time workers, most of whom at present are women excluded from social insurance cover. We are in the process of creating one of the most progressive systems of protection for part-time workers in Europe.

The Programme for Economic and Social Progress has a broad and comprehensive social agenda. Significant steps are being taken in this budget to implement important parts of that agenda and commitments that we have entered into.

Action to deal in a real way with the scourge of long term unemployment spans the ground between employment and social policy. A major new initiative in dealing with the problem of long term unemployment is included in the new Programme for Economic and Social Progress and will be implemented quickly following the ratification of that programme.

The implementation of this new initiative will be undertaken, first of all, at local level by a new, more effective and co-ordinated partnership between the local community, including employers, trade unions and farmers, and the official development agencies both national and local, and in addition, at the national level by the involvement and supervision of the Central Review Committee which will recommend appropriate arrangements to Governments to bind together the local community interests and all the public agencies concerned in each participating area.

This is a new departure bringing a much more intensive approach based on recommendations by the NESC in its recent report A Strategy for the Nineties. What is now envisaged is welding all these agencies together and linking them up with the local community groups who have done much work in these areas, so that there will a single combined attack on long term unemployment and all the deprivation which flows from it in these areas. By combining resources in this way and by involving local communities in the planning and delivery of area based projects, the more specific local needs and priorities will be recogised and met.

A primary focus of the new strategy will be to improve the education and skills in these communities. A major cause of long term unemployment is educational deprivation. Special measures will be taken to improve education and skills throughout these areas, particularly among young people who need a second chance in education or an opportunity to acquire appropriate qualifications in the skills now in demand in all labour markets. We must ensure that employers and trade unions in the areas are involved, so that training and education can be directed to producing the skills required for the jobs likely to arise in these particular areas. It is very important to relate the jobs that we will create in any particular area to the needs that will arise in that area and to the sorts of jobs that are likely to arise, in other words, to match the two. The objectives will also include community development in its widest sense, so that all resources are mobilised within these areas to change fundamentally the corrosive patterns of deprivation which exist in them and contribute directly to long term unemployment.

At national level, the Central Review Committee, including all the social partners and also representatives from combat poverty, The Irish Resource Development Trust and the Trust for Community Initiatives, will meet as soon as the programme has been ratified and will recommend to Government the specific organisational requirements for this new strategy and for the pilot areas which will be selected to be implemented in 1991.

The new approach will be piloted in both rural and urban areas this year on the basis of the provision of £0.5 million in this year's budget to cover the managerial costs of the local companies to be established. The relevant public agencies will implement the specific measures of the new strategy in the pilot areas with appropriate funds from their budgets and with new assistance from a number of European funds. Satisfactory models will be progressively extended nationwide by 1994, as resources become available from a growing economy. I am quite optimistic that this new approach will succeed and I hope Deputies will play a supportive role in their own areas. I would like to recommend it to Deputies on all sides of the House and seek their full support for it in local areas, in their constituencies.

Before I come to the improvements in the budget and the programme related to health and education, I would like to clear up a serious misrepresentation of the real level of Government expenditure in relation to these key elements of the social services. Health expenditure in 1991 will be about 6 per cent ahead in real constant price terms of its 1986 level. Between 1986 and 1990 education spending increased in real terms by over 13 per cent. In other words — in spite of all that has been said — there have been no lasting cuts in the overall health and education budgets. Indeed, resources either have been, or are being, increased in both areas. In response to a greater deal being said at present about the health budgets for 1991, that fact should be borne in mind, that they are actually 6 per cent higher in real terms — not just in money terms — than they were. Somehow that dilemma has to be sorted out. Why is it that there are such complaints from health boards and others when, in fact, in real terms, budgets have been increased by 6 per cent.

A high quality of education for all children and young people is increasingly being seen worldwide as the key to a country's future development. Research has estabished that it is a major factor in competitiveness of any country's economy. The Irish education system, relative to its resources, is excellent. The objective of the new programme is to make it even better by introducing major educational improvements — the lowering of the pupil-teacher ratio at primary and second levels, the reintroduction of clerical and secretarial assistance in national schools and of vice-principals and guidance teachers in post-primary schools, the upgrading and replacement of buildings, the tackling of disadvantage, the phasing in of a six-year post-primary cycle and the expansion of third-level places. The extra resources that will be involved represent one of the best investments we can posssibly make in our future. We have made a start in this year's budget. I have said already that education is the key. Certainly in this new Programme for Economic and Social Progress we have given effect to that principle.

From June, we will be providing free access to hospital consultant services for the entire population. That completes the process of extending access to hospitals which I started as Minister for Health in 1979, when I gave free access for all to hospital beds. This is designed, in accordance with the programme particularly to ensure equity of access to hospital services. The Government remain committed to the maintenance of private practice inside and outside of hospitals, and to supporting the vital role played by the VHI, payments to which will continue to receive full income tax relief.

An additional £8 million is being provided to health boards for community health services in 1991, to assist older and handicapped people to live in their own community, and not in institutions. One Fine Gael Deputy last evening — I think it was Deputy Boylan — spoke about that very specific matter, about the problem of an old person in a hospital who could no longer remain there and had to be sent home. This is precisely what we are tackling in a major way in the Programme for Economic and Social Progress. We are starting this year by providing an extra £8 million for community care. Dental services will be improved also and we will provide the particular services and facilities required under the provisions of the new child care legislation. The carer's allowance has been increased from £45 to £50. It has now been extended to carers of people in receipt of disabled person's maintenance allowance. In addition, £500,000 are being provided to assist voluntary and community organisations. Those are a number of initiatives outlined in the programme and referred to in the budget to encourage the provision of social housing and to tackle the problem of homelessness at a total cost of almost £10 million. We have no intention of allowing this social problem to grow to the proportions it has assumed in many other more developed countries.

Concern for our environment permeates all the policies and actions of this Government. Last year, the Government launched an ambitious £1 billion environment action programme to secure a high quality environment to protect the health, safety and well-being of this and future generations. In fact, we will shortly be carrying out a review of progress in that programme, to date.

Environmentally friendly aspects of the budget include higher road tax increases for larger cars, the reduction in excise duty on auto LPG, and the combination of the 50 per cent rate of accelerated allowances to help combat farmyard pollution. In addition, half a million pounds has been provided to assist the restoration of heritage buildings, which are open to the public, on the advice of the National Heritage Council. The restoration of architecturally important buildings in urban designated areas is an equally valuable step. For the first time the refurbishment costs of these buildings can now be offset against all rental income.

We should be very satisfied, in today's international conditions, that it has been possible to bring in a positive budget, one which enables us to continue the progress of the last few years and to start significant new initiatives agreed in the Programme for Economic and Social Progress.

The budget has been generally welcomed outside the House. It has been recognised as right in present circumstances. Business and financial confidence has been fully maintained. There is tax reform and real social progress. Our strategy for increasing employment and living standards is in place. We are meeting the challenges of the nineties fortified by a national consensus.

We may not have been able on this occasion to do all that we would have wished to do in the social area, but we have been fair and balanced in our approach and taken the careful and prudent approach demanded by present circumstances in the best long term interest of all the people.

We, the Irish people, must make our way in increasingly difficult world conditions. We can make no better response to those conditions than by creating economic stability at home. This year's budget, and the longer term framework provided by the new programme, lay the groundwork for doing this.

We know there are difficulties to be faced in the world market-place. We must not be intimidated by these difficulties. There is a huge potential there as well. Our people are better equipped than ever before to exploit that potential. By working together we can build up and strengthen our economy and our society. This is the only way, ultimately, that we can help and encourage the unemployed, the deprived and the disadvantaged in our society, and create a better standard of living for all the Irish people.

The Taoiseach has spent the last 70 minutes gilding the lily in the most outrageous fashion. He has been laying on the gilt not just with a trowel but with a shovel and it is about time he realised that. The Taoiseach went as far as repeating the nonsensical guff about farm incomes in 1990, recently retreated from by the Minister for Agriculture and Food. It is time to get back to reality.

There are two major fundamental flaws in this budget. The first is that it is based on the expectation that there will be growth in output and real GNP this year of 2¼ per cent. That expectation is clearly central to the revenue figures set out in the budget. I am not yet sure whether the last minute change in the provision for unemployment assistance marks a departure from that expectation. It may well. The Government now seem to be the only actor on the national stage who believe in the projection of 2¼ per cent growth. The Taoiseach thinks that the Government's projection of 2¼ per cent falls comfortably within the range of projections of between 1½ per cent and 2½ per cent that are being made. I have news for the Taoiseach. That 2½ per cent at the top of the range is very far fetched and the Taoiseach's 2¼ per cent is not much less far fetched. I suspect that the projection of 2¼ per cent has been chosen for political reasons because it suits the culture the Government are trying to cultivate. It suits the propaganda they are trying to get across. Large sections of the media have swallowed the propaganda and are now promoting the culture in spite of the fact that their colleagues in other sections constantly bring before them evidence to the effect that things are not as they are presented to be. All the other experts and commentators have lower expectations of growth, sometimes substantially lower expectations. If they turn out to be right, as I believe they will, the Government will quickly find that their budget arithmetic is getting seriously out of kilter.

The second flaw lies in the underlying trend in the current budget deficit and the Exchequer borrowing requirement as they were set out by the Minister in his budget speech. The Minister indicated that the current deficit for 1990 turned out at £152 million. His forecast for 1991 is £245 million. That in itself is a substantial increase in circumstances where, if we were to believe the Minister's rhetoric over the last three years, we should see a reduction rather than an increase, in the current deficit. The outturn for the Exchequer borrowing requirement in 1990 was £462 million and the Minister is forecasting a figure of £460 million for this year. When we look behind the figures we get a clearer picture. A sum of £52 million due to the Government here from the European Social Fund was held up in the works towards the end of last year. It is expected apparently that that money will come in during the course of this year. Had that delay not happened last year the current deficit for 1990 would have been £100 million and the Exchequer borrowing requirement would have been £410 million. Equally, had that delay not happened last year, the current deficit for this year would be £297 million and the Exchequer borrowing requirement would have been £512 million. The real underlying picture is that the current budget deficit for 1991 would be three times what it was in 1990 — £290 million instead of £100 million and the Exchequer borrowing requirement would be £100 million more in 1991 than it was in 1990. That is the real underlying trend in those two major budgetary aggregates. The trends are going in the wrong way and no amount of lily gilding by the Taoiseach or the Minister for Finance can alter that.

Those two factors in themselves — the inflated expectation of growth and the unreal picture presented by the Minister's figures for a current deficit and Exchequer borrowing requirement — cast doubt on the overall architecture of this budget.

The growth projection is clearly the key to the projections of revenue and receipts. Looking at the figures, we find that non-capital receipts are projected to increase by 6.3 per cent in 1990 and capital receipts are expected to double. The total increase in receipts is projected at 9.7 per cent. That gives a real increase in receipts of 3.2 per cent for non-capital, 95 per cent for capital receipts and 6.5 per cent overall. If the growth in the economy falls short of the Government's assumptions, these levels of receipts will be in danger and the outturn in terms of the current budget deficit and the Exchequer borrowing requirement will exceed the levels now being projected by the Minister.

The picture is no brighter on the expenditure side. Looking at the pre-budget projections of expenditure for 1991 presented to this House by the Government last week, we find an overall increase of 6.7 per cent in non-capital expenditure. This means a real increase of 3.6 per cent in Government current spending, if we are to believe the inflation figure projected by the Government.

The total increase in expenditure on debt service and other Central Fund charges is 7.4 per cent in current money terms, or 4.3 per cent in real terms. The increase in expenditure on non-capital supply services is 6.4 per cent in current terms, or 3.3 per cent in real terms.

Thus, we see that instead of there being any curb on the volume of public expenditure, as the Taoiseach tried to indicate and as the Minister's rhetoric over the last three years would seem to be designed to make us believe, there is, in fact, an increase in the volume of Government activity in terms of current expenditure.

The Government, who are presenting themselves at every opportunity as having expenditure under control, are again this year projecting real increases in the volume of public expenditure and trying to hide the fact that in the process they are increasing the current budget deficit and the Exchequer borrowing requirement. That is important in terms of the Programme for Economic and Social Progress— PESP, as it is now being called.

Looking at capital expenditure, we see an increase of 27.3 per cent in current money terms or 23.6 per cent in real terms. The biggest single increase here is in relation to capital issues under various statutes, where there is an increase of 182 per cent in current money terms or 174 per cent in real terms. Here again, there is no evidence whatever of the Government's taking the rhetoric of the Minister for Finance in any way seriously. The Taoiseach referred in his speech to his expectation that there will be a volume growth of 3 per cent in investment this year and he referred to the fact that some of the capital expenditure provisions had to be increased in order to allow us to draw down money from the Community Structural Funds.

I recently carried out a brief review of the prospects for investment in the major areas in the coming year to try to decide how successful we would be in drawing down Community Structural Funds. There was only one area where I could feel confident that we would use up all the Structural Funds that would come onstream. That was in the specific area of industrial development, not in infrastructure where programmes are years behind, not in agriculture where I have very little confidence that there will be the response in terms of investment, given the income situation. Maybe there will be the kind of response we need in our food processing industry because it needs constantly to update its technology. In the other areas I cannot see any real grounds for expecting the kind of investment activity this year that would give us a 3 per cent volume increase in investment in the economy.

There are 19 separate tax measures in the budget and one would think that the devil and all was being done in terms of tax reform. That is not the case. Twelve of these tax measures work out, on the face of it, to the benefit of taxpayers in general. The remaining seven represent new impositions of one kind or another. We have to ask ourselves what the net effect is of this complex of 19 separate measures.

Let us look at tax relief first. On the face of it, the measures cover a wide range. They include the increase in personal allowances — £50 for a single person or £100 for a married couple. It is not worthwhile to give the Revenue Commissioners the extra work of doing that. The widening of the standard rate band by £200 for a single person or £400 for a married couple will cost more to administer than it will bring in and the ordinary taxpayer will not notice the effect. There are the extension of capital allowances for farm pollution control, the renewal and extension of section 23 relief, so beloved of Fianna Fáil, miscellaneous reliefs, the reduction of the 23 per cent VAT rate to 21 per cent, miscellaneous excise reductions and minor reliefs on capital taxes. Together these measures come to a grand total of £175 million in 1991. Ten tax measures produce a mere £175 million. If we add in the effect of the increase in the general and age tax exemption limits — £150 for a single person or £300 for a married couple — and the increase of £200 for the third and subsequent children, as well as the reduction in the marginal income tax relief rate, we get a grand total of £183.6 million worth of tax reliefs. I wonder what proportion of people claiming the child exemption have three or more children.

Now let us look at the tax impositions. There are the reduction in life assurance relief, the BES restrictions, the increase in the 10 per cent VAT rate to 12.5 per cent, the increase in road tax rates, the increase in excise duties on cigarettes and tobacco, which I personally will have the honour of paying, the introduction of self-assessment for capital gains tax, which I will not have the honour of paying this year, and the introduction of a capital acqusitions tax amnesty, from which I will not benefit. Taken together, they increase tax revenue by £134.3 million. So far we have tax reliefs of £183.6 million and new impositions of £134.3 million. The figures are getting very close.

Two other measures are hidden in the explanatory table under the apparently innocuous heading of "Net Revisions to Estimates". There we find in the footnote that this includes £10 million receipt arising from the abolition of the health contributions ceiling and the extension of PRSI to part-time workers. These are two measures we must look at to determine the total effect of the taxation measures on the ordinary person. When we take all these into account we find that the net effect of the budget on the taxation of ordinary people is to relieve taxation by the miserly sum of £39.3 million. All that fire and thunder — 19 tax measures in the budget — to produce a net hand back to taxpayers of £39.3 million. The mountain laboured mightily and produced a mouse. Let the Minister not tell us that this plethora of measures which has to be gone through to arrive at the figure of £39.3 million makes any substantial change in the balance or equity of our tax system. Each of them is far too small to have any effect. Taken altogether, they are too mean and too miserly to make the slightest difference to the ordinary taxpayer. All it means is that Irish taxpayers will end up paying more tax this year than last year despite all the posturing by the Minister and despite all his claims to be giving something back. They will pay this extra tax under a system that has not been reformed in any real way, but has been tinkered with around the edges.

The Taoiseach tried to defend some of that and he tried to find a little bit in it that would take some of the badness out of it. On VAT and trying to soften the impact of the VAT, his script read: "Items required by children, school notebooks and satchels, toys, soft drinks, sweets and biscuits will all be reduced in price". This is the sweetner for these changes in VAT. I wonder if the Taoiseach remembers the simple fact that people who are involved in the ordinary day-to-day business of raising children, getting them up in the morning, giving them their lunch, getting them out to school and looking after all the other things they need, will very quickly tell you that school notebooks and satchels, toys, soft drinks, sweets and biscuits are very marginal to their main concerns about the costs and burdens of raising children. I find it very amusing because I read that text which the Taoiseach was kind enough to distribute to us before he started. Even the Taoiseach himself was so embarrassed by the vacuity of that statement that he did not read it out.

That is eloquent comment on what that will mean for taxpayers raising children in this country. No wonder that the Progressive Democrats' chairman in exile and spokesman in the wilderness has most recently been even more virulent than ever about the "temporary little arrangement" of having Deputy Reynolds as Minister for Finance. As far as tax reform is concerned this year the Progressive Democrats huffed and puffed and blew themselves out of the water.

An excellent theatrical performance.

Do not tempt me. You will have a double disability.

No. I am the next speaker.

That is even worse because you will have to follow a few choice comments about your party leader and what he has to say about the budget this year that contrasts very sharply with things he said in 1987, but I will come to that in a moment.

The only expenditure provisions of this budget that give anything back to ordinary people are the much vaunted social welfare improvements. These amount to £62 million in 1991. In the context of this budget, this must be the smallest provision made for many years.

The Deputy has one minute left.

Sir, I cannot believe it. I must have at least six. You have got five minutes out of kilter.

You thought you had six years as leader of the Fine Gael Party too.

I want to give one example. I spoke to a constituent of mine last Thursday, an old age pensioner who uses kerosene for heating and cooking. I will give the example very summarily. His pension will increase by £90 in 1991 and his fuel bill, with the addition of the value-added tax, will increase by £417.50. This budget has done absolutely nothing for him. If we add that £62 million to the miserly £39.3 million handed back in tax we will find that the Irish population have been given £101.3 million and that is the total measure of the munificence of this Government faced as it is by intractable problems of unemployment and the growing problems of poverty. So much for caring, for understanding or for even the slightest comprehension of what is happening in Irish society.

It could have been very different. Over the past three years my party have made a series of proposals providing for real reforms in our tax system, a restructuring and greater efficiency in our health service, a fundamental reorganisation of our social insurance payments scheme and a much more creative and employment-friendly approach to social welfare.

It is a pity you did not implement that when you were in.

Only two weeks ago, a very coherent and thought-provoking proposal for a budget was put forward by the Reverend Sean Healy of the Conference of Major Religious Superiors. On reflection, I suppose, even on mature reflection, we should have seen that that proposal had very little chance of getting any consideration from a Taoiseach who is on record in this House as distrusting organisations that use the words "major" and "superior" in their titles. The Taoiseach's hubris, apparently, is such that he thinks those terms must be exclusively reserved to himself. Any chance that the Reverend Sean Healy's proposal might have had after that was further jeopardised when the Minister for Industry and Commerce and Leader of the Progressive Democrats, Deputy O'Malley, described the author — and I quote his exact words — as a man who would "still be complaining when he gets to heaven".

Acting Chairman

Perhaps the Deputy would conclude now.

I will conclude in just a moment, Sir. Can you beat that for an arrogant and intolerant statement from a man who has turned his back on tax reform?

This budget, Sir, has been very heavily influenced by the Programme for Economic and Social Progress. There is even a section in the explanatory table that speaks of other PESP-related provisions.

On a point of order, the order of the House is quite clear that each speaker has 20 minutes. Deputy Dukes has gone over the time and this means that the rest of us have to wait.

I must say it is a pity that the Minister and the Government are not able to count as closely as the Deputy. They might have got their sums right. It is nice to know that I am under benevolent scrutiny from the other side; and I will come to a conclusion. The point I want to make is that a very large proportion of this budget was decided outside of this House by groups of people who are not democratically representative. I do not criticise the people who negotiated with the Government; I criticise the Government for having capitulated.

I look back to 1987 — and I will conclude on this, Sir — at what Deputy O'Malley then had to say about the predecessor of this programme, the Programme for National Recovery. He rightly castigated the job targets. The new programme has even more ambitious job targets. He called them myths back in 1987. He rightly castigated the expenditure commitments contained in them and he came to this conclusion: “I am afraid the leopard does not really change its spots. This Government's wilful throwing away of all they gained in recent months underlines again the daftness of giving such an administration a blank cheque”. He was right. The leopard does not change his spots; but then, Deputy O'Malley is no leopard. He is a submissive and compliant pussy cat.

The very final thing, Sir, that this PESP has perpetrated on us is a series of injustices. The first is that I am now being told, apparently with the agreement of the Government——

Deputy Dukes is totally out of order.

This reminds me of the "Today Tonight" programme. Everybody else knows when it is time to go.

I will be entitled, if I go into hospital——

You are not entitled to break the order of the House.

——to have my consultant's fees paid for me. If the Government and the social partners——

Deputy Dukes is four minutes over his time.

——want to put more resources into education — and there is no evidence of it yet — they should target them and they should not give me an uncovenanted benefit that I do not want and that I do not deserve to have.

Acting Chairman

I am calling Deputy Quill.

I am afraid, a Chathaoirligh, a budget built on that kind of concession——

Go before you are shafted, as you were by your own party.

You would do well to keep your language a little more parliamentary when you are so reduced in numbers. A budget based on that kind of injustice and total misconception of how to target public spending will fail.

It gives me no pleasure at all to see that in the course of his most entertaining and theatrical speech Deputy Dukes should be so cruelly cut off in midstream. It seems to be the story of his political career to date. Indeed it is my normal instinct to ignore what has been said in the course of the Deputy's speech because since the Fine Gael Party led by Deputy John Bruton have taken themselves into the world of entertainment they do not deserve to be taken seriously in this House.

The Deputy is like a right little terrier.

There is a rumour going about that Eoghan Harris, having taken them in hand, is about to change their name to "Johnny and the Jaw Doctors".

Acting Chairman

I have to ask the Deputy to speak on the budget.

I have, I think you will concede, been provoked.

This budget is scarcely eight days old and already it is becoming increasingly difficult to find anything new to say about it. Indeed, it is only fair to remind ourselves of the atmosphere in which the budget was framed, an atmosphere of extreme uncertainty arising out of the gathering gloom in the Gulf and the ever deepening recession in the United Kingdom and on the continent of North America. When the EC demands of tax harmonisation are added to this climate of unpredictability, it then becomes both unfair and unreasonable to have expected a major radical budget in the year that is in it. At times like this responsible Governments seek to consolidate existing gains, batten down the hatches and opt for stability. That is what was done in the budget of 1991.

Of course, the Progressive Democrats are disappointed. We argued for more extensive tax reductions and more accelerated tax reform. We wanted to see a comprehensive reform of PRSI in this calendar year, but we have to be ruthlessly realistic. In all the circumstances, we have to settle for the slower pace that the delicate balance of today's events and tomorrow's uncertainties dictate. Is it not significant that we are now regretting the pace of reform, not the absence of reform, as we did in the eighties? One thing I find hard to settle for, however, is the antics and semantics of the main Opposition party in their reaction to this budget. Traditionally times of international difficulties have been times of constructive Opposition and have been times of a basic consensus at home. This consensus seems to be remarkably absent these days. I was particularly struck by the extraordinary comments of the present Leader of the Fine Gael Party, Deputy John Bruton on the budget debate on Thursday last. In the course of his comments he made a bitter attack on the Progressive Democrats Party and proceeded to predict in his own inimitable fashion a rapid demise for our party. I was reminded of another day in the interesting history of Fine Gael in March 1987 when the then new Leader, the previous speaker Deputy Alan Dukes, was chaired shoulder high from this House to Kildare Street where he gave an impromptu press conference in the course of which he predicted that the Progressive Democrats Party would be gone in one year——

Acting Chairman

I must ask the Deputy to come back to the budget as this has nothing to do with the budget——

——and that his aim and his ambition was to put an end to that party.

A Deputy

You are not always right.

That was three and a half years ago and now they, the Progressive Democrats, are a pivotal part of this Government.

——with six seats.

Acting Chairman

The Deputy is making a contribution on the budget and not a political broadcast. I ask the Deputy to return to the contents of the budget.

On a point of order, Sir, with all due respects, I have listened to many contributions and in fairness to the Deputy it has been a very wide ranging debate.

I would remind the Chair that during his comments, Deputy Dukes made a persistent attack on my party and on members of my party, and there was no intervention from the Chair.

What would the Deputy's party leader say?

That is what happened in March 1987.

What happened in June 1989?

The Progressive Democrats Party are now a pivotal part of this Government — one of the best Governments this country has had since the foundation of the State, and so adjudged by all independent commentators. I am proud to say that our party is now playing a pivotal role in making that so and in keeping that Government in power.

Why is the Deputy disappointed with the budget if the Government are that good?

I would have thought that leading as he does a party that changes its leaders more often than I change my raincoat——

The Deputy changed parties.

——that Deputy Bruton would have other matters——

Acting Chairman

May I remind the Deputy that this debate is confined to taxation, expenditure and financial policy and other matters only in so far as they are connected with financial policy. These are the terms put before speakers and I ask the Deputy to keep to these terms.

The Deputy has no ideas on that.

In the cut and thrust of debate it is normal to refer to previous contributions and I understand that is what Dáil Éireann is all about.


I was most astonished with Deputy Bruton's allegations that the Progressive Democrats had given up on tax reform and that our contribution in Government is entirely negative.

The Deputy should not ask the party chairman, Mr. McDowell, about her party's contribution to tax reform.

That is some nerve coming from a man who holds the unique distinction of being the only politician in the history of Irish political life who on two occasions, failed to bring a successful budget before this House.

I wonder what the Irish electorate, who have a fairly long memory, think of his utterances in this budget debate. Let me briefly remind them of Deputy Bruton's pitiful record in Government by referring to the economic misery this country suffered in 1985 the mid-term point of his time in office. In 1985 the Irish economy was in utter despair, unemployment and emigration shot up, manufacturing jobs were lost at the rate of 6,000 per year, the Exchequer borrowing requirement reached a record high of 12.9 per cent, average industrial earnings were falling by up to 10 per cent a year, moneys flowed out of this country into the infamous black hole and total confidence in the Irish economy both at home and abroad collapsed.

And every member of the present Government fought against measures——

Acting Chairman

The Deputy without interruption.

Today the contrast with those depressing years, could scarcely be greater. Confidence has now been restored in the Irish economy both at home and abroad and much of that economic recovery owes its origin and momentum directly to the policies of the Progressive Democrats and to our contribution to Government. When Deputy Bruton was last in Government the top tax rate was 60 per cent, now it is 52 per cent. At that time the standard rate of tax was 35 per cent, now it is 29 per cent and it is only in the past two years, since the Progressive Democrats came into Government, that our out-of-line VAT rates are being tackled and have now been brought down in two successive budgets from 25 per cent to 21 per cent. Let us not forget that it was Deputy Bruton's Government who brought the standard VAT rate up to the exorbitant figure of 35 per cent, a measure which obviously and inevitably not only crippled industries up and down the country but laid waste our Border regions and in particular, led to a flood of cross-Border shopping. It is fascinating to compare the situation now with what it was then. I will not say any more about that unless I am provoked further.

This year's budget takes a significant step forward in tax reform. I am satisfied that our presence in Government is playing a crucial role in ensuring that the overall momentum towards reform and towards the achievement of lower rates of personal taxation will be realised. Irish PAYE taxpayers can now look forward with every degree of confidence that over the next two budgets the standard rate of income tax will be brought down to 25 per cent and that there will be just one higher rate. Obviously, my party want to see a rate very much lower than the present rate of 48 per cent.

Another major focus of concern for Progressive Democrats would be the plight of the less well off and the poor in our society. We are very pleased with the extension of child care benefit in this budget. We are pleased with the extension of the carer's allowance, even though we would argue for a much more sympathetic system than currently applies. Because of the eligibility limits a number of people who ought to qualify do not qualify at present. We will be working towards that end in the course of the next year.

We are satisfied that a number of additional teachers are put into areas of disadvantage in education. I agree totally with the Taoiseach when he said in the course of his address this morning that education is the real key to getting young people out of poverty traps — poverty traps into which they were put during the bleak and miserable years of the mid-eighties. In my own city industries such as Fords, Dunlops, the dockyards and a host of other small industries were closed down and no alternative employment was put in their place. We still have to this very day deep, entrenched pockets of poverty resulting from those closures in those bad years in Irish political life.

I have first hand experience of this. No matter how many new jobs we create in Cork city — and in the past year we have created more new jobs than were created in any given year in the last ten years — the backlog and the job losses are so great because of the failure to create jobs in the eighties, that even with creating a record number of new jobs we are still only nibbling at the margins of the problem. We still have deep poverty with its consequent economic and social effects in my own city, all of which stems back directly to the miserable years of the mid-eighties.

However, I am glad to see that significant steps are being taken to come to the assistance of poorer families. I am pleased to see an increase in the rate of family income supplement and an extension of the eligibility limits for those who wish to apply for that supplement. A very serious problem must be addressed in regard to the net take home pay of workers on low wages and the income of people who are in receipt of unemployment assistance. We must use stronger measures to ensure, in the years ahead, that we make it rewarding for workers to get up and go out to work. That has not been the case in recent years. I know of householders living side by side in housing estates in my city where the would-be breadwinner who is at home and in receipt of unemployment assistance has a better cash take at the end of the week than his next door neighbour who goes out to work and who does not have access to a medical card or a rent reduction or any of the benefits that go with being in receipt of unemployment assistance. That cannot be allowed to continue because if so it will have a corrosive effect on the work ethic in this country and it will kill off enterprise and the appetite for work.

In the coming year and in future budgets I will be arguing very strongly for measures that will make it more profitable and more rewarding for people to work and will take away the penalties that go with low paid work in some parts of our city. However, over all, I am pleased with the measures which have been adopted this year.

The last point I should like to make relates to the matter of health and health budgeting and the value that we as taxpayers are getting from our budget this year and in recent years. In general terms it is fair to say that health has become the Achille's heel of almost every Government in the western world. We all have direct experience of a steady deterioration in the quality of health services. This has happened despite the fact that year after year additional funding has been made available from central Goverment to health boards. In the current year £1.426 billion has been made available for the health services. This is the largest amount of money made available by any Government in Ireland for the health services since the foundation of the State. That includes a sum of £100 million additional to what was provided in the Book of Estimates and a further £8 million in the budget to be targeted at certain community services.

Despite the allocation of these vast sums of money, the health services are in a state of chaos. This has led to acute anxiety among patients and families of patients who expect and demand a decent standard of public service. It is also a cause of acute bafflement to the taxpayers who, year after year, are expected to pay more and more for a health service that appears to be getting worse. Clearly, there is some fundamental fault in the administration of the health services. It is now becoming increasingly evident to everybody that voting additional money at budget time is not the answer.

This year the Southern Health Board will receive an increased allocation of £6 million; the Mid-Western Health Board will receive an increased allocation of £4 million; and the South Eastern Health Board will receive an increased allocation of £5 million. Despite that increased allocation there is a steady decrease and decline in the level of service. I think the time has come for a radical reappraisal of the delivery and the administration of the health services; in other words a radical reappraisal of the health boards. A number of thinking people are now beginning to argue that the boards ought to be abolished altogether and a different system put in their place. A strong argument could well be made to support that view. At a minimum I would argue that the composition of the health boards will have to be examined and changed. It is evident now that, no matter how much taxpayers' money is voted to the health boards, at the end of the day there is no significant improvement in the standard of service.

If, for example, £100 million were put into education and targeted properly in this financial year, you would see a significant improvement in some area of education. If £100,000 additional money was put into housing you would see some significant improvement in the area of housing. When £100 million is put into health what do you find? You find that the service is getting worse. I do not think that situation can be tolerated any longer. I said at the outset that the public health services were the Achilles' heel of many Governments in the western world. My own belief now is that the health services will be the Achilles' heel of this Government and I am giving a warning here this morning that the situation will have to be tackled soon and in a fundamental way. People who expect a reasonable standard of health care are not getting it at present. Tired taxpayers who are asked to put up more money year after year are not having their expectations met either. This issue will have to be tackled by the Government in this financial year.

The only factual and honest statement the Taoiseach made in his lengthy address was that the Government are pursuing a policy of fiscal rectitude. I am sorry Deputy Quill has not remained in the House to hear what I have to say about health contributions. I have never heard a more dishonest or inaccurate appraisal of the financial needs of the health services. The emphasis placed by the Taoiseach on the Government's efforts to contain public expenditure at a low percentage of GNP means only one thing, that there is a cut in public expenditure. I want to refer to how this cut in public expenditure affects people.

When the Taoiseach went to the country in 1989 he said he had not realised that the cut in expenditure on the health services was having such a detrimental effect. The Taoiseach has made the same mistake twice. He has failed to recognise that health board officers have an obligation to provide an adequate and safe level of services. The current crisis in the health services makes a nonsense of the commitment given by the Government in the Programme for Economic and Social Progress to provide a comprehensive, equitable and efficient health care system. Failure by the Government to honour the commitments in the programme in regard to the health services will cast doubt on the commitments they have made in other areas.

The chaos in the health services a year ago was blamed on the flu epidemic. There has been no flu epidemic this year but patients still face cutbacks and a seriously reduced level of service. Several health boards have made it clear that far from moving towards the comprehensive service envisaged in the Programme for Economic and Social Progress they are unable, due to a lack of Government funding, to even maintain existing services at their present levels. This will mean longer waiting lists, the early discharge of patients, longer closures of wards and beds during holiday periods, a worse plight for the mental handicapped and less money for child care services and facilities for the elderly.

I want to quote from a letter I received from the President of The Cheshire Foundation in Ireland:

Following the announcement of the Budget by the Government on the 30th January, there has been a great deal of publicity and comment concerning the needs of people with mental handicaps and their carers. It is marvellous to see politicians and journalists making an issue about a real problem that has existed for many years.

However, I am deeply concerned about the lack of notice given to the needs of people with severe physical disability. The Cheshire Foundation provides residential accommodation for close to 200 people in the seven Cheshire Homes that currently exist in this country. For every person living in our Homes, there is at least one other seeking a place. Carers of people with physical disabilities are experiencing the same degree of stress as carers of mentally handicapped people — some are barely surviving.

A submission made by a social workers' group to the Southern Health Board indicated that there are no places for people with mental handicaps. In some cases these are adults who have been maintained at home by elderly parents who have now reached the end of the road. There is no provision made for such people. The five or six hours per week care assistance provided by the Wheelchair Association to help the parents of mentally handicapped children of one or two years of age is being reduced because the health boards do not have the wherewithal to pay any additional money to the Wheelchair Association to enable them to provide that home care assistance.

I have asked many times when the recommendations in the report of the Commission on Health Funding will be implemented. I now find that these recommendations are being implemented piecemeal. While I welcome the recommendations on the extension of hospital facilities to all, I cannot understand how any Minister could entertain a request from consultants for an increase in their income to £100,000. It is obscene to entertain such an application at a time when so many of our people are unemployed.

The number of people eligible to receive a free hospital service was always around 39 per cent but this has now been reduced to 35 per cent. This means stricter guidelines are being applied in assessing people's eligibility and those who are marginally over the limit are not regarded as eligible. As I have said previously in the House, no account is taken of the amount of tax and PRSI deducted from the gross income of a person who is marginally over the limit. This is a scandal which needs to be rectified. If it is not rectified, people will not get the service to which they are entitled, with the result that many people may die. That is not an exaggeration. I have experience of this every other day. How has the number of eligible people decreased at a time when an increasing number of people are unemployed? There is something radically wrong with that.

I welcome the proposals in the programme in regard to the care of the elderly. However, more beds are needed for long stay patients. The present policy is to use beds which were formerly used for long stay patients as respite beds. Patients' relatives are being asked to sign a document stating that they will take the patient out of hospital when their time is up. This is creating a lot of stress not only for the elderly but for their families as well. Many people are now seeking beds in private nursing homes, yet no provision has been made in the budget health allocation to pay the subvention to which nursing homes are entitled under the Health (Nursing Homes) Act, 1989. Demands were made for that subvention but, because no provision has been made for it, the health board of which I am a member will not be able to pay it.

For the information of the previous speaker, I should say that the shortfall in expenditure for the Southern Health Board is £4.076 million, plus over-expenditure in 1990 of £2 million. The board are now requested by the Minister, and his Department officials, to retain the level of service at the December 1989 level. How can that be done with a lower allocation than is required to meet the increased cost of labour and the increased rate of inflation? There is no way the board can provide that level of service. Consequently, there will be a reduction in the level of activity in acute hospitals, longer holiday and seasonal closure of beds and an increased range of surgical and medical procedures to be performed on a daily basis. The Minister referred to this yesterday and said that was what was happening in America but it would not happen here. That is exactly what is happening and we are not making proper provision for any backup service. Our public health nurses cannot cope with their present workload let alone cope with people who are discharged early from hospitals. All that leads to a crisis in our health services.

The budget allocation for health is like a lottery. It is based upon the budget of the previous year, or even the year before, rather than on the needs of patients. I would like to mention a point to which the Minister did not refer. I find it surprising that the voluntary hospitals do not seem to have the same problems as other hospitals. They receive their allocation without having to submit any programme or plan for expenditure.

My colleague, Deputy Byrne, covered social welfare very adequately, but I would like to refer to what I see as great anomalies in the social welfare code. A great number of people on disability benefit do not qualify for other benefits such as free fuel, electricity and so on. They may be asthmatics but they do not get invalidity pensions. Some of them have been on disability benefit for eight or ten years and are receiving less than a person on long term unemployment assistance. There is an anomaly there. People on long term unemployment assistance are entitled to every penny they get, and more, but the person on disability benefit for a great length of time should be entitled to the same amount.

There is an archaic system of assessing people who apply for unemployment assistance, and this is driving people out of their homes. Very often they have to emigrate with not a penny in their pockets. It is a pity Deputy Quill did not read The Cork Examiner in which there was an article by a returned emigrant who stated that a very high percentage of people from our own city and county of Cork are homeless and hungry on the streets of London. That is an indictment of Government policy. It is very well to say the Government are putting their finances in order, but they are kicking out the people for whom there are no jobs leaving the remainder to wallow in unemployment and poverty for as long as they can get away with it.

On the question of education one welcomes the change in the pupil-teacher ratio, which is not before time, but it will not come until 1992. As a result of the crazy system which operated over the last number of years the percentage of young people who are illiterate when leaving national schools has increased enormously. The figure of 40,000 has been given — I stand corrected if I am wrong — and that is an indictment of our educational system. There are not enough remedial or career guidance teachers in our schools. That area of education needs to be addressed if we are to ensure that our young people are not illiterate and are able to cope with the problems of the world.

I have a particular interest in the matter of housing. It has been stated that 20,000 extra houses are needed. In the area I represent, which accounts for one-third of the county of Cork, 300 people have been on a housing list since 1989, 140 of whom are in urgent need of houses, but only 20 houses were completed in 1990. There are 700 families without piped water in the same area — those figures are from the last census — some of them are elderly people who have to get water from holes in the ground which may be polluted. Others use rain water taken from barrels at the rear of their houses. I demand that something be done about this matter. A reconstruction grant should also be given to enable people to reconstruct their homes. The scheme of grants for the elderly is working quite well but it is confined to pensioners. Widows, and people who are not very elderly, cannot afford to repair or improve their houses.

On agriculture, organisations like the IFA did no service to their members and the country by suggesting that the course on which the EC have now embarked could be reversed. The priority must be to set about restructuring Irish agriculture and ensuring that farm supports are given to those who need them most. At present 80 per cent of grant aid is given to 20 per cent of producers, people who run factory farms and do not care a straw whether their neighbours live or die. Unfortunately successive Irish Governments used the Common Agricultural Policy as a substitute for an effective national farming strategy. Goods are. produced for which there is no market and as a result the cost to the consumer is increased by up to £15 per week. Rather than fighting an unwinable battle to preserve Common Agricultural Policy spending at its current level the Government, and farming organisations, should be demanding that any reduction in EC farm support be matched by a compensating increase in EC Structural Funds for Ireland. Such a development would be of far more benefit to all sectors, including farmers, than the wasteful spending of the CAP.

The Programme for Economic and Social Progress is vague in terms of job creation in the agriculture and food industry and the development of horticulture. Our future lies in the products we can produce and manufacture. We must develop what we can control and produce ourselves. I recently saw a submission from the new farming organisation — the United Farmers' Association — which greatly impressed me as they are the only group which seem to be concerned about the plight of small farmers. We must seek to maintain a living for people on the land as there is no alternative employment. However, in order to achieve this a land policy is needed.

With your permission — and that of the House — I should like to share my time with Deputy Tom Kitt.

Acting Chairman

Is that agreed? Agreed.

I listened with interest to what Deputy Sherlock said in relation to the budget. I suppose it would be fair to summarise his contribution as one in which he pointed out how far we still have to go. I do not think that anybody in the House would disagree that there is a long way to go to solve many of the problems facing us. The point that we on this side of the House, and the Government, would make is that over the past four years there has been a very conscious and committed effort by the Government to try to rectify the serious problems which have recently arisen and indeed which had arisen in the economy over the last ten to 15 years. I know that the commitment is there and, from the way Deputy Sherlock phrased his speech, it is clear he recognises the fact that progress has been made. However, he is perfectly right to highlight areas where more progress could — and should — be made.

In his contribution earlier on, Deputy Dukes, as he thought, tore Government strategy to pieces. It followed along the lines of the Fine Gael criticism of this budget, that it was a missed opportunity. I find it easier to accept that kind of criticism from someone like Deputy Sherlock and the party he represents than criticisms from Deputy Dukes who spent four years in Government from 1982 to the end of 1986. Although he was Minister for Finance he did not introduce a single measure to try to solve our very serious problems. He, like a number of other Fine Gael speakers, are being dishonest because, although they call for taxes to be cut they are also calling for various measures which would add the cost to the Exchequer. Before Christmas they called for the reinstatement of full interest on mortgage relief and they signalled their opposition to any curtailment of the VHI relief. Yet they say that we are overspending, which will cause problems.

Before I became a Member of this House the one person for whom I always had sympathy was the Opposition spokesman on the day of the budget. His is an unenviable task; he must have an immediate response to anything from an hour to a two hour speech; he must detect the underlying trends in the speech and he must try to analyse it and, basically, to take it asunder. It is a most difficult task, particularly when you speak immediately after the Minister for Finance who has had the benefit of advice and a prepared script. I know that Opposition Deputies prepare some of their speech in advance but they must react to the budget speech.

As I said, before I became a Member of the House I had great sympathy for the Opposition spokesman but my sympathy for Deputy Noonan is wearing very thin because his speech over the past four years has been almost the same every year. In fairness, he has made an attempt to update it, this year he used very descriptive military terms — in deference to the Gulf war — and he also painted a nice picture of a broken car which Deputy O'Donoghue dealt with in great detail last night. The picture he painted of the broken car was very amusing and I noticed that it subsequently appeared in a Fine Gael Party political broadcast. I wonder if Deputy Noonan inspired the script or if he just stole the idea from it. Some people indeed have suggested — flatteringly for Deputy Noonan — that he could supply his scripts to a well known Saturday satire programme. That is a little flattering and because he repeats the same criticism every year of the budget, his script would be more appropriate to a Hal Roach show — that gentleman's scripts generally have the same names and places. Sometimes the names and places may change but the jokes are always the same.

Over the last four years Deputy Noonan predicted that the budget would not work. For three years running he said that there would not be any growth becuse the Government figures were over-optimistic. He predicted that the Government would not control public expenditure, that the buoyancy contained in the figures produced by the Government was over-estimated and that there would be trouble in store at the end of the year. He also predicted that the revenue was over-estimated. There is no need to underline the fact that, in each of the last four years, he was proved wrong.

The budget was drawn up in an air of uncertainty because of the Gulf war and the problems it might pose for investment. There is a recession in the United States and the United Kingdom and the budget was also framed under other constraints like our commitments under the Programme for Economic and Social Progress. Fianna Fáil have an on going commitment to the less well off, especially the old, those on low pay and on social welfare. There was a general consensus that there was very little room for manoeuvre and that the Minister had to be very careful. The post-budget analysis by most of the commentators accepted the fact that there were constraints but that the budget was a very responsible one in the circumstances.

I wish to turn to specific areas of the budget. One of the things about which I am most pleased is the commitment to the less well off which was underlined in the budget in relation to social welfare and taxation areas. The total value of the package of measures for people on social welfare or working for low pay amounts to £164 million in a full year. The increases in expenditure are right across the board, from short term unemployment assistance and carer's allowance to adult dependant allowances and child income support. All the measures in the budget for child income support were outlined by the Minister and will cost £41 million, which is a commitment to the family and to children. Families on low pay will benefit from the improved family income supplement and the tax exemption schemes. The package for social welfare and taxation regarding the lower paid was very comprehensive.

The criticism levelled at various budgets — and at the Government — about the lack of implementation of the recommendations of the Commission on Social Welfare is totally unjustified in the context of this and previous budgets. It is very hard to accept criticism from Fine Gael or Labour in this area because they had the report over a two year period and they had two years to take the first tentative steps in following the recommendations but did not do so. Yet, they now criticise us for not implementing almost immediately all the recommendations listed. The Government have been going through the list and to date 46 of the 67 or so recommendations made have been wholly or partially implemented. Furthermore, the four priorities listed have been tackled.

Also on the area of social welfare, I note that in his comments on the budget Deputy Byrne spoke at great length about a conference on poverty held in Galway in June 1990, during the Irish Presidency of the European Community, as part of the Commission's Third EC Poverty Programme. The conference was attended by 150 representatives of voluntary and statutory organisations from the various member states including those dealing with the mentally and physically handicapped and the unemployed as well as by representatives of the European Commission, the Council of Europe and other representative international organisations. A wide range of voluntary Irish organisations was also represented at the conference which provided the foundation for the development of a policy on the voluntary sector, at both national and European level, and in particular for the relationship between the State and voluntary organisations.

It is generally recognised that the conference was a success and as a result the Minister intends taking a number of major initiatives in the voluntary sector. The conference had a major input into the formulation of proposals in this regard. I find it very hard to accept Deputy Byrne's criticism and he seemed to imply that, as it was a conference on poverty, those attending should have been kept in hovels, that no money should have been spent on them and that they should have either walked or used some inferior transport in getting to and from the conference centre. Ireland was chosen as the location for the conference because of its commitment in this area. Therefore Deputy Byrne's criticism should be rejected out of hand.

I would now like to refer to the question of capital acquisitions tax, which I will deal with in greater detail during the course of the discussion on the Finance Bill. I would ask the Minister in drafting the changes he is going to bring about in the Finance Bill in this area to tackle one anomaly which exists in the system and which relates to those living together but not legally married, in other words two single people living together in a common law marriage. If one or other dies and the other is named in the will as the sole beneficiary, under existing legislation that person will find themselves at a major disadvantage vis-à-vis a married partner. As I said, I will elaborate further on this matter during the course of the debate on the Finance Bill but it should be borne in mind that a person legally married, on the death of their partner, will not pay any capital acquisitions tax whereas a person who has been living with a partner in a common law marriage for four or five years will find themselves £32,500 worse off.

As I have agreed to share my time with Deputy Kitt, I will conclude on that note.

It is a good politician who honours his promise.

I wish to sincerely thank my colleague, Deputy Dempsey, for his generosity. At the outset I would like to deal with the question of corporation tax. Some Deputies have argued that the corporate sector are not paying their fair share of tax but the truth is that Fianna Fáil in Government, by way of measures adopted in previous years, have ensured that there is a substantial tax take from the business community and have ended grants and subsidies. Furthermore, capital allowances have been cut and the day of the grant for machines is gone. In 1990 the yield from corporation tax increased by more than 56 per cent over the previous year. Export sales relief ended in April 1990 and all foreign companies now pay tax of 10 per cent on manufacturing profits.

The yield from corporation tax in this country is higher than in most EC countries. For example, the yield in 1990 represented 2.1 per cent of GNP whereas the corresponding figure in Germany was 1.9 per cent. Therefore the figures confirm that the business community are contributing substantially to the development of our economy. Deputies on the Left continually say that we should get more from the corporate sector but they should look at the figures first before commenting on the future.

Another issue which has been dealt with is the need to streamline our tax system. I would argue that in the future we should make the tax system more intelligible. It seems at present that it is understood only by the tax experts to whom the Revenue Commissioners send a news letter after each budget. Whatever about its impact on employment, it is certainly true that it creates employment for accountants. Given the different tax levels, reliefs, allowances and levies, is it any wonder that at the end of the Budget Statement very few people know if they are better or worse off?

I accept that it is not possible to change the Taxation Tower of Babel which has been constructed during the years but on a close examination of the tax system it is clear that anomalies still exist. For example, if a low paid worker, such as a cleaner on £70 per week, gets a rise of £10 she will pay tax at a rate of 29 per cent, PRSI at a rate of 5.5 per cent and a health contribution income levy of 2.25 per cent giving a total tax take of 36.75 per cent, leaving her with £6.33 out of the £10. However, if a taxpayer in the Michael Smurfit and Tony O'Reilly category gets an extra £10 he will pay tax at a rate of 52 per cent and health insurance tax at a rate of 2.25 per cent giving a total tax take of 54.25 per cent and leaving him with £4.58. As one can see, there is not a huge difference between the two. A tax system which treats a cleaner and Michael Smurfit almost as equals, as I have just illustrated, needs to be re-examined. We should discriminate in favour of the lower paid. I ask the Minister to consider this in formulating a new budgetary policy.

The budget is but one component of a larger comprehensive plan, the Programme for Economic and Social Progress. The previous programme, agreed in 1987, showed us that targets can be met. Every single objective was achieved and it is clear that the Government have done a good job. Despite the mish-mash of mixed Gulf War metaphors used by Deputy Noonan I am convinced he knows deep down that this is a good Government. It must have been very annoying for him that he could not find a like minded party to work with when in Government and that his party in hanging on to power, to keep Fianna Fáil out, brought the country to financial ruin. Deputy Noonan can fire all the Scud missiles he likes across the Chamber but they will have no impact. He will find instead that there is a surplus of Patriot missiles on this side of the House and that we will not be shaken from our clear objectives, one of which is to ensure that the specific targets set out in the new programme are reached regardless of how many journeys Deputy Bruton and his colleagues take on the DART. I safely predict that Fianna Fáil will still be in Government, to oversee the working of this historic programme, right up to the year 2000, indeed into the next century. I hope I am right as the Government have strong public support and the country deserves many years of steady and decisive leadership.

I welcome this opportunity to make a contribution to this debate on the budget. I listened with interest to what Deputy Kitt had to say and I contend that it would be a fate worse than death to have Fianna Fail in Government for the next ten to 15 years. I could not live with that possibility nor do the people expect it to happen.

The Taoiseach came in this morning to make a "state of the nation" address in the budget debate which was rather interesting. I presume he is not happy with the contributions from his Ministers or his backbenchers supporting this budget and obviously he came in to bolster the troops, but no amount of figures and percentages, GNP as a ratio of debt, national debt in relation to the population, cost of services and so on, will have any impact on the thousands of young people leaving this country annually. Try to tell them that our ratio of debt to GNP is satisfactory, GNP is on the way up and this economy is moving, when they cannot get jobs here. They will not listen, and if we fool ourselves into believing we are making progress when we are only glossing over the real problems, we will make no substantive progress in this House.

This morning I heard on radio the Bishop of Ferns issue a statement to the effect that 7,500 of his people, young people, the backbone of this country, left his diocese in the last five years. That can be repeated in every parish right across the country. We all are aware of it. At this time of year football coaches are getting their teams ready for the coming season, and of the 15 young men who were available last autumn five, six or seven have gone. Places have to be filled and the clubs are thinking of amalgamating to try to form teams for the coming season. That is sad. For the Taoiseach to come in here and say we are making progress, that this country never had it so good, when such things are happening, is false and is not in the best interests of progress.

I will deal with health because I am particularly interested in it, as is every Deputy, and most of the contributions have dealt with it. It is interesting that a senior Minister commented that this budget was like a blood transfusion to the economy. It was not the Minister for Health; he would be too wise to say that. All I can say is I am glad I was not the patient because if I had had that blood transfusion I would be in intensive care now. Probably that is where the economy is; it should be in the hands of the Fine Gael Party. We have people with the ability to deal with that matter, people who have progressive minds to develop the economy. There is ample scope for development and great opportunities are presented to us, but we are not grasping them. However, all the opportunities and all the development are of no use if the people have not the comfort of knowing they have a good health care system. In that regard our health care system has broken down.

I am glad that the Taoiseach this morning, in recognition of a comment I made here two evenings ago in relation to the plight of the aged, stated that in 1991 an additional £8 million is being provided to health boards for community health services. I will be the first to acknowledge that that is a step in the right direction. The plight of the elderly is nothing short of a national disgrace. It is not fair or acceptable that the aged — people of 65, 70,80 and the ripe old age of 90 — should be brought to the forefront to make their contribution to bring down the national debt. Those people grew up in hard times in the thirties, twenties or even earlier and made their contribution and helped to build up this country. We would not be here today if it were not for them. Now at the end of their days, when they should be enjoying their retirement, they find there is nobody to care for them. Elderly people are dying, literally, on the side of the road; they are dying lonely in homes or in their own houses that are not heated, not through their own fault, but because they are not able to look after themselves and we do not have a proper health care service to care for them.

Every public representative weekly has representations from a family to get an old person into a nursing home or hospital, and there simply are not enough places. Those lucky enough to gain admission will get some little care, but the pressure is on the hospital staff to move them out again. I know of a 70 year old man who was sent to his 76 year old sister and 96 year old mother in a house with no facilities. I have spoken to the staff in the hospital concerned. I am not criticising the staff in the hospitals. I know they are outstanding, dedicated people but they simply do not have sufficient staff to look after these patients. They are over-stretched. Many of our nursing staff are on the verge of a nervous breakdown because they see what is happening. Wards are crammed and patients cannot be given individual attention; and hospital staff are being asked to do the dirty work for the health boards and the Department of Health by putting pressure on relatives to take patients home. Family and friends are reluctant to visit patients in hospitals because of the pressure exerted on them to bring the patient home when they know — and the nursing staff and the doctors know — that the patients are not in a suitable condition to be sent home, and in many cases they have nowhere to go.

In deference to the family I will not mention names, but I have a letter here dated 4 February 1991 from a son whose father died in a hospital. I will go no further out of respect to the staff who I know did all they could, but if I was to read that letter people would be shocked at the treatment that unfortunate man received. There was nobody to look after him in a major hospital and he died a lonely man. He entered the hospital on Monday, 7 January and died the following Sunday evening having received very little attention. What happened in between makes a sad story. This letter has been sent to me, to the chief executive officer of the health board concerned and to the Minister for Health. The man who wrote it is an only son and he and his mother are very distressed. I bring this to the attention of the House in an effort to ensure that such a tragedy will not happen again. I will say no more about that.

We have a waiting list for orthodontic treatment in the North-Eastern Health Board area. I must be parochial now and fight my own cause because many services available in Dublin are far removed from the Cavan-Monaghan area I represent. We have no orthodontist. I am not qualified to give an opinion on orthodontic treatment, but parents and nursing staff tell me it needs to be carried out in the early years or early teens. Beyond that, irreparable damage can occur. Those are the formative, important years. What advice is being given to parents whose children attend for checkup or are notified through the schools selection — which is quite good — where the nurse calls to examine the children, sees the problems and recommends that treatment or action be taken to have them corrected? They are being advised to go to Northern Ireland. Here we have this great Republican Government yet these people are advised to go to Northern Ireland to get cheap treatment. Yes it is cheaper in Northern Ireland. Something that would cost a private patient in the region of £1,200 to £1,500 in a hospital in this country can be carried out in Northern Ireland for around £750 or £800. It is a substantial reduction but it is still a great deal of money and parents with young families simply cannot afford it. That is not acceptable. Likewise, the waiting list for hip replacement operations continues, with people experiencing great pain and discomfort. It is a very successful operation for those who can have it. I want to compliment Navan Hospital, its staff and doctors who carry out these operations so successfully. Hip replacements mean a new life to people, are enormously successful, bringing them great comfort. But we must remember that there remains a long waiting list. Constituents come to me and ask whether I could ascertain what it would cost them to have such an operation if they were to go private. Of course they can have it done privately but one is talking then about a figure of £2,000 to £4,000, which simply is not available. Then there are the operations necessitated by the removal of cataracts for people with eyesight problems in respect of which there is a long waiting list also.

I have no doubt that Deputy Connaughton, our spokesperson on social welfare, will deal with the carer's allowance, application of which is somewhat like the birds in the forest — one must catch them oneself. When that allowance was announced people thought it was marvellous and they would receive financial recognition for the work they were undertaking looking after dependent relatives. So often a son or daughter devotes his or her life to looking after an elderly parent or parents who find, after the demise of that parent or parents, they are then too old to make a life for themselves, discovering that they have missed out because of their long dedication. That is a great tradition in this country; thank God — we have this caring attitude to our elderly by sons, daughters, nieces, nephews and neighbours prepared to give of their time in that cause. There should be recognition of their dedication and care. I think there were approximately £48 per week available in respect of this allowance, but there was a sting in the tail in that it was means tested. This means that if one's income was above the limit, one was not eligible. It was soon discovered that very few people could avail of that allowance. While I do not mean to make fun of it, it transpired that if one was minding a clucking hen in a backyard, one would not be eligible for this allowance. That is most disappointing for people who thought that would help them in their good work, giving them some financial recognition therefor, whereas many discovered they were beyond the income limit and did not qualify. It has been pointed out to me that if one were a small farmer, or somebody running, let us say, a small business, little grocery shop, with a son or daughter minding an aged parent in a house above the shop or on the farm — in the case of a farmer with a couple of cows — one did not qualify. There is no evidence in this budget that there will be any improvement for such people. It is a scandal and insult.

On the question of agriculture I must take the Taoiseach to task. He went to two extremes. He spoke of farm incomes having fallen by 5 per cent last year. I am surprised at the Taoiseach, a former Minister for Agriculture, whom I know has an interest in land. If he is not aware that farm incomes have fallen by a minimum of 20 per cent he is not in touch. If his Minister has not advised him of that fact, than I suggest he should move him if for that reason only. Then the Taoiseach went on to the other extreme and said that, in 1989, farm incomes had increased by 51 per cent. So it appears that, when they are falling, they are down marginally only but, when they are rising, they go though the roof. That is nonsense; farm incomes did not increase by 51 per cent in 1989 and there are no figures to substantiate that claim. That is very annoying to people who are endeavouring to eke out a reasonable income on small farms, those people sorely hit at present.

I have been harping on the issue of severely handicapped areas since I became a Member of this House because such designation would be of tremendous benefit to my constituency of Cavan/ Monaghan. One must ask what is happening to the application for the extension of that scheme. I have here in my possession a letter from Joe McCartin, MEP, dated 6 Februarty 1991 in which he says:

You could say that the proposal by the Irish Government has been rejected by the Commission but this is, of course, arguable. It seems that the Commission has questioned the Government's proposals for an extension on the grounds that it does not follow a reasonable geographical pattern and, therefore, are not entirely compatible with the original legislation.

Indeed, the poor man who lost his ministerial position, Deputy Brian Lenihan, had to come in and apologise for misleading the Dáil in reply to a question I had tabled with regard to what was happening to the severely handicapped areas application. Four years later we are no further on. For the first time since 1987 the Minister of State at the Department of Agriculture and Food, Deputy Kirk, acknowledged in this House that an application had been lodged for an extension of the severely handicapped areas in respect of all of Cavan and Monaghan, lodged by the then Minister for Agriculture, Deputy Deasy, in 1987. That had always been denied until 12 December last when it was rectified and put on the record of this House, though I had been claiming that to be the case incessantly. Deputy Connaughton seated in front of me will have worked on its presentation which had been acceptable in Brussels but was withdrawn by the incoming Fianna Fáil Government for the reason, they said, it had been poorly presented. Four years later after endless research, officials having been sent around the country ascertaining farmers' stocking rates and so on — while all of that information was available already in the Department of Agriculture and Food — its presentation was rejected.

This very day, and no later, the Minister should come into this House and make a clear, categorical statement, of the exact position with regard to this matter because it will have serious repercussions nationally. Here I might quote from Directive 73 of 1975 as follows:

The livestock headage payments on cattle and/or sheep are intended as an income supplement which will compensate farmers in the very worst areas for the income limitations which the physical conditions of the land impose on them. The aim is to encourage farmers to remain in these poor areas so as to ensure the continuation of farming, the maintanance of a reasonable level of population and the preservation of the countryside.

Could anything be clearer — Directive 73 of 1975, 16 years ago? Do all of Cavan and Monaghan not qualify under the provisions of that directive? Would the Minister for Agriculture and Food, the Minister for Finance, the Tánaiste or Minister for Health come into this House and explain to the farmers of Cavan and Monaghan how the Minister for Finance was able to get his colleague, the Minister for Agriculture and Food, to submit an application for all of Longford and Roscommon and omit 40 per cent of Cavan and 70 per cent of Monaghan?

I will give one example of the outrageous behaviour engaged in with regard to this application. I might add that it did not surprise me it was rejected in Brussels. A farmer in Longford with a milk quota in excess of 20,000 gallons — he is not a small farmer — with a store cattle enterprise on his farm and a sheep herd as well, according to the Minister for Finance, is severely handicapped and in need of aid from Brussels. Yet a farmer in Cavan — in Crossdoney up the road from my home — with a milk quota of 3,000 gallons and a net income of £1,756 last year is not regarded as being handicapped according to the Tánaiste and Minister for Health; he needs no aid from Brussels; he is well able to look after himself and cater for his wife and three children. That is pure, political skulduggery. Of course the reason that Longford and Roscommon were included is that, at the next general election, it will be a four-seater constituency, when the Government hope to take the maximum number of seats. That is the business of Longford and Roscommon but I think they will be in for a surprise on that occasion. If the people of Cavan and Monaghan put up with that type of nonsense, they might as well forget about it. However, I do not think they will because we cannot allow that to happen. I emphasise: there are no more enterprising people than the farmers of Cavan and Monaghan, particularly bearing in mind the conditions in which they work. The livestock headage payments would be a means of their maintaining a lively viable farm holding in that region.

According to the Irish Farmers Association case for increasing headage payments in disadvantaged areas in 1991:

Headage payments which have been applying in Ireland since 1975 are now a very important part of farmers' incomes... The last increase for headage payments for cattle and sheep was in 1981; only suckler cow headage rates have been increased in the meantime, in 1986.

I will give another interesting fact in relation to headage payments which are vitally important. In Germany the average payment amounts to £1,060; in France, £1,023; in Belgium, £878; in Luxembourg, £1,827; and in the UK, £2,626, whereas the average headage payment here is £605. An effort is not being made to reap the benefits available from these schemes developed in Brussels for regions far removed from the market place and which are disadvantaged.

Deputy Boylan has one minute left.

We can pay up to £104 per head in headage payments but we are not doing so. The Minister for Finance stated in his budget that an increased payment was being made this year. I think the Minister mentioned £19 million. It now transpires that that £19 million is made up of 65 per cent of moneys from Brussels. The money is not coming from the Government's pocket. How dare they claim that they are making that extra contribution to the farmers. That is not acceptable. If that is to be the carry on, the people will become very disillusioned. I appeal to the Minister to designate all of Cavan and Monaghan as being severely handicapped. There is an unanswerable case for it.

I could talk for another half hour on the condition of roads although I have only one minute left. Of course, I will be told of the increase in road grants this year and what it will mean. All I am saying is that the Minister for the Environment should come down and see the roads in my county. We are dependent on the roads for tourism but they are in a disgraceful condition. When the announcement was made I was told by Cavan County Council: "This is an increase on last year. It is an increase on what your Government gave". One hundred per cent of nothing is still nothing. The Minister should come down and see what is happening on the ground.

In relation to tourism, I have one final plea——

You are travelling in the time of the Minister for Energy.

The next speaker does not mind. I would ask the Minister and the Government to make grants available in the Border region to upgrade tourist accommodation. We were not able to avail of what was there in the sixties and seventies. This is one major last point that I want to make.

You have gone two minutes over.

Last Wednesday's budget was not an easy one to frame. Nobody can pretend that the economic background internationally is ideal at present. The underlying circumstances are certainly less favourable than those in more recent years. Great uncertainty is emerging on the horizon from the general economic downturn in the major Western economies. To that we must now add the tragic conflict in the Gulf. In times past, this island country might have tended towards excessively insular economic policies. Those times have long since gone; this budget had to take account of adverse international developments and this prevented us from doing certain things as quickly or as extensively as we would otherwise have liked. The situation was not helped by the enormity of the special pay awards to the public sector, something that the Cabinet do not have direct control over. This aspect of public pay policy will have to be urgently reviewed.

While the current international economic situation is not as favourable as we might like it to be, we have not stood back from adopting useful measures, within our own control, to improve our situation. There is no basis for undue pessimism. We can legitimately take heart from some of our economic achievements to date. The main economic indicators are positive enough to suggest that we can consolidate and build upon the progress we have already made. Among the more notable of our achievements to date are: an annual inflation rate, amongst the lowest in the EC; economic growth of about 10 per cent over the last two years; an improvement in our external competitiveness; the balance of payments remaining in a healthy surplus; the National Debt/GNP ratio moving steadily downwards; improved living standards for the less well-off; and also, significant progress on tax reform.

I am not for a moment suggesting that our work programme in these vital areas is complete. Certainly, for tax reform and unemployment, an awful lot remains to be done before we can record any degree of satisfaction. This budget and the recently negotiated Programme for Economic and Social Progress set out to tackle, in an integrated way, the problems that confront us. None of the issues or problems are being shirked. The 1991 budget is, I suggest, yet another most definite step in the right direction. But that is all it is, a step. We have a long road to travel yet.

Indeed, listening to Deputy Dukes making a most hypocritical speech earlier on, I was reminded of how far we have travelled since he was Minister for Finance. It is no harm to put on the record the index of misery for the year 1985 when Deputy Dukes was Minister for Finance, who is now suggesting that the Progressive Democrats are not making fast enough progress in implementing our income tax proposals, when we have told the world that it is a four year programme. It is no harm to remind Deputy Dukes how far we have to travel from the penal tax rates he imposed on this country, where we had rates of 35 per cent, 48 per cent and 60 per cent. At least we have reduced the standard rate by 6 per cent since those days, and the top rate is down by 8 per cent since those days. There is a firm commitment in this budget to continue reducing the standard rate and the top rate until, after the next two budgets, we come to a stage where we will have a 25 per cent standard rate and a rate of 48 per cent. That will not be the end of income tax reform. There are many other areas of the taxation system which need to be reformed. These rates of tax cannot be taken as the only aspect of tax reform necessary.

When Deputy Dukes was Minister we had unemployment of 226,000 people or 17.3 per cent. We had a growth rate of GNP at a miserly half per cent. That has now gone up to 4 per cent in 1990. The current budget deficit was 8.4 per cent of GNP. It is now down to 1.2 per cent. The Exchequer borrowing requirement was 12.9 per cent and that is now down to 2.1 per cent last year and going down. The living standards during the period in office of Deputy Dukes's Government were falling by 7 to 11 per cent, taking the average industrial earnings in that period. We have seen a rise over the last two years of from 4 to 8.5 per cent in average industrial earnings. I could go on with a long list outlining the state the country was in under Deputy Dukes and the Government of which he was a member. One must put things into context when one speaks here. The facile way in which Deputy Dukes sought to castigate the Progressive Democrats will not wash, when we look at his record and the hard work we have to do to turn the situation around.

The integrated concept underlying this budget and the Programme for Economic and Social Progress is worthy of emphasis. This Government are focusing on policies that will successfully develop our economy and job prospects — in my own area of responsibility, forestry features prominently in the PESP and I will speak on this later if I get time. But control of the public finances must also remain a priority. The lessons of the past are that piecemeal, unco-ordinated strategies represent little more than a “take now — pay later” approach. In a nutshell, sustainable progress is real progress.

This budget is a measured, socially caring, progressive budget. It sets tough but realistic targets, but it still offers good grounds for optimism in the future.

The Progressive Democrats are in this Government to achieve change. Among our priorities is major tax reform. That is a four year programme and the more difficult decisions lie ahead. This year's budget is laying further foundations for the radically new tax regime to which this Government are committed. Of course, major changes are needed in the administration and delivery of health services as outlined this morning by my colleague, Deputy Quill.

Earlier I stressed the international dimension and background to this budget. Specifically, the Gulf conflict looms large. It is, of course, a subject on which I must keep a particularly close watching brief given my responsibility for energy matters. I have come to this House on a number of occasions to keep Deputies informed of the measures which have been taken to ensure that the impact of the Gulf conflict on oil supply is minimised. It is appropriate that I take this opportunity today to spell out the relatively satisfactory position now existing in Ireland in this regard. Put succinctly, there is no need for undue concern.

Compared with the oil supply crises of the seventies, Ireland is now far less exposed to oil supply difficulties. In the early seventies, oil accounted for over 70 per cent of our total energy requirement. Now, the figure is less than 44 per cent. This did not happen by accident. Ireland, in common with the major OECD economies, have for many years pursued policies to reduce dependence on oil; the dependency percentages I have just mentioned speak for themselves. The two main factors behind the reduction were the advent of natural gas which is continuing to make major in roads into the energy market; and the switch towards coal for electricity generation.

I will return to those two factors later but I mention them now in order to put a correct perspective on a lot of ill-informed comment that has been made about this country's state of preparedness, on the oil supply front. It is against this changed background that we must consider our competence to bear the brunt of possible future oil shocks. I will not pretend that our vulnerability has diminished out of sight — the position on the transport side remains, for the most part, unchanged but I have taken certain measures to further secure and enhance our position in that sector.

The situation in the Gulf is, of course, uppermost in most people's minds at present. At the outset of hostilities, many commentators expected it to lead to an international oil crisis, caused by shortages of oil and by very high prices. Indeed in the week before hostilities started, market experts predicted a huge price rise as soon as war broke out.

We are now, of course, aware that the war has not, fortunately, resulted in the price scenarios predicted. Oil prices, far from rising, dropped about $10 on 17 January, and have remained around the $20 a barrel mark since then. Oil supplies are abundant, and there is no logical reason to believe that this will change.

The International Energy Agency, of which Ireland is a member, has confirmed that there has not been any significant reduction in crude oil exports from the Gulf region as a result of the outbreak of war in January. Crude oil loading operations are continuing normally.

Although it may appear that these facts have no direct bearing on the Irish oil supply situation — as we no longer import our oil from the Middle East — the widespread availability of crude oil on the world market serves to dampen down prices and demand. This eases any pressure on supplies from other sources of production such as the North Sea, which is our main supply source. I have been in contact with the oil companies to ensure that they have adequate shipping facilities in place to meet current and projected demand and am satisfied that they have sufficient procedures in place to continue to meet national needs.

I have already focused on this country's falling dependence on oil. Not alone am I anxious to reduce further our use of oil but I am taking steps to achieve a reduction in our overall energy consumption. Deputies will be aware of advertisements I placed in the national newspapers suggesting ways in which people could achieve this through transport use, energy in the home, fuel switching and electricity use. I would remind people that energy conservation is a saving, not just to the State in terms of oil use, but financially to each individual.

Ordinary energy consumers should commit themselves whole-heartedly to the energy conservation message. The Government will continue to do what they can to promote the message and give valuable advice but the people themselves must translate the sound message into sound practice. This should and must be done irrespective of the potential threats to oil supplies posed by the present Gulf crisis. The careful use of all forms of energy, not just oil, has always been an important part of my Department's energy policy. While the current Gulf crisis may now tend to give it added impetus, the conservation message would be valid even if we were getting oil at considerably lower prices. I shall ensure that the Department's energy conservation programme, no matter what happens in the Gulf, is rigorously pursued and implemented.

My Department will also continue to support alternative energy sources, where it is economically and technologically feasible to do so. In particular, I am hopeful that a decision will soon be possible as to which of the firms who tendered for it will be selected to build Ireland's first windfarm in County Mayo. This will be eligible for a capital allocation of up to nearly £4 million under the EC's Valoren Programme.

A key method of cushioning ourselves against the kind of shocks experienced in the late seventies and early eighties is to maintain oil stocks additional to normal requirements. Since 2 August last year, various measures have been taken by me to ensure that national stock levels were increased to meet, and indeed to exceed, EC and IEA stock requirements. The throughput at the national refinery was maximised in order to boost petrol and gasoil stocks; the Whiddy storage terminal was reactivated to hold 205,000 tonnes of crude oil and unused storage capacity belonging to the ESB and in the private sector was brought into commission to hold additional product stocks.

The national stocks situation is good. As of yesterday evening the position is that we have 102 days stocks of petrol, 89 days stocks of middle distillates — gasoil and derivatives and 283 days stocks of fuel oil. Given the present favourable international oil supply situation, I am satisfied that an appropriate level of oil stocks is now being held by this country. Ireland has an oil stock obligation through membership of the EC and IEA. These obligations are being met and, might I add, very comfortably so. Oil stocks held by the INPC oil companies and large consumers now represent an aggregate of 111 days supply.

As a further measure I have set up two national groups to advise on how best to manage the Irish oil market until the international oil market gets back to normal. I have already given the House information on that matter.

Apart from the measures I have taken to date and which I have just described, international organisations of which we are members have been monitoring the oil situation and have taken precautionary measures to cope with developments to date in the oil market. The International Energy Agency has asked its members to reduce market demand by 2.5 million barrels a day. This involves an agreed stockdraw of 2 million barrels a day and consumption reduction of 500,000 barrels a day through demand restraint measures. Even though no shortfall emerged, the IEA agreed to keep the stockdraw decision in place but to be implemented flexibly and in close consultation with the IEA. The European Community will also act in unison to reduce consumption if a shortfall in supplies occurs.

The Leader of the Labour Party, speaking in this House on 18 January, said that the Labour Party had tabled a series of questions to the Minister for Energy, who was due to answer parliamentary questions on the day the Dáil resumed, with a view to seeking clarification of the misleading information and advice emanating from the Department of Energy in relation to national reserves of petrol and diesel. There is no question of my Department issuing misleading information. There would be no reason for us to do so. I consider this allegation and the request for an independent authority to measure the stocks we hold to be a reflection on the integrity of the civil servants working in the Department of Energy. I absolutely and completely refute the allegation made by Deputy Spring on that occasion. There has been no change of any kind in the method of calculating stock figures since the setting up of the Department in 1980, nor during the period when Deputy Spring was Minister for Energy. Many of the people who are responsible for calculating these figures and making measurements of these stocks are the same officials who served under Deputy Spring and whom he never questioned.

The same Deputy Spring chose to try to create panic during the RTE interview on 28 September when he said he was against the stockpiling of oil here. When asked if we should stop stockpiling oil ourselves, he replied that in his view we should not be stockpiling at this time. That was in September, after Saddam Hussein had invaded Kuwait. Deputy Spring has changed his tune, he began by arguing against our having an adequate supply in the country and then tried to challenge the figures we gave.

I would remind the House that if Deputy Spring when Minister for Energy had not exported from the Bantry terminal the strategic stocks of fuel held there in May 1985 it would not have been necessary for me to commit such large amounts of scarce resources to buying in stocks now to try to put oil back in Whiddy. If the 115,000 tonnes of oil taken out by Deputy Spring had been left there, this country would have had some level of strategic stocks available to meet the crisis which arose last August. It was Deputy Spring who chose to release the 115,000 tonnes of crude oil. In March 1986 when Deputy Spring was Minister for Energy our level of stocks was well below international requirements — 62 days supply of motor spirit, 65 days of middle distillates and 95 days of fuel oil.

Deputy Spring puts forward a poor argument in seeking to accuse me of not performing my duties when he was largely responsible for many of the problems which confront us today in view of the removal of strategic stocks which were in place. I hope Deputy Spring, who has made a fool of himself over these figures, will have the decency to apologise to the Department and especially to the civil servants whom he has wrongly accused. I hope he will do so at some time in the near future and remove the confusion and chaos which he tried to engender in the marketplace.

One unexpected benefit of the events of recent months has been the realisation of many people of the importance to Ireland of the Whiddy Oil Terminal and the refinery at Whitegate. The Government have always appreciated the importance of these two facilities, and are anxious to promote investment in the facilities to maximise the economic benefits associated with them. Discussions are ongoing to find a suitable partner or partners to develop these important strategic assets. Of course, at present, in a volatile international situation oil companies may be slow to make investment decisions, but discussions are continuing.

Debate adjourned.