Skip to main content
Normal View

Dáil Éireann debate -
Thursday, 14 Feb 1991

Vol. 405 No. 2

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 am very pleased, as Minister for Trade and Marketing, to have this opportunity to speak in this House on the Government's 1991 budget. I intend to frame my remarks in the context of my specific area of responsibility, namely, Ireland's export performance and prospects and how this budget and Government policy in general are assisting this vital economic activity.

How well have Irish exports performed in 1990? Better, I submit, than the statistics at first glance would indicate. The export figures to November 1990 show that the value of overseas sales in the first 11 months of the year was running at £13.2 billion. This is some £200 million below the level for the same period in 1989. The likelihood is that the 12 month figures will show a similar outcome. This apparent disimprovement in revenue from sales abroad, however, masks what was still a very good performance by Irish exporters. The volume, as distinct from the value, of our exports is estimated to have risen by 6 per cent last year with the drop in value being attributed to price deflation on a similar level. Manufacturing exports, with a volume growth of about 9 per cent in 1990 have grown at a faster rate than total exports. When one considers that this volume increase was achieved against a disimproving world trading climate, especially in the second half of 1990, there is more comfort than sorrow for us in the 1990 outturn.

Preliminary CTT surveys indicate that their 1,200 indigenous companies will show a small increase of 3 per cent in the value of their exports in 1990. The sectors which performed best were clothing, footwear, electronics and added value food products.

Before leaving the question of our export performance in 1990, it is worth making the point that there is a tendency in some circles to become complacent about export achievements and to expect consistent growth year after year. The harsh fact of economic life is that many export orders won in 1989 had to be fought for and won again in 1990 and the battle will continue this year. Buyers abroad will only continue to buy Irish goods if the service, quality and price are maintained at a high level.

We do not have an automatic God given right to have our products bought by customers abroad. Breaking into new markets is, of course, very difficult, but staying in and competing in those markets is also a major challenge — a challenge to which Irish business is responding very well.

Looking ahead to the prospects for 1991, there are many factors, some positive and some negative, which will impact strongly on our export performance this year. I will briefly touch on these in my remarks. Overall, however, a growth rate in the volume of industrial exports of around 4.5 per cent is anticipated for 1991.

With all our knowledge, all our sophistication and all our history, the realisation that a war such as the Gulf war can still happen is horrific and chilling. The human tragedy of war and the damage done to thousands of lives is, of course, our greatest concern and the over-powering reason we want to see the conflict ended as soon as possible. We must all share in the deep sorrow at the loss of so many lives and the tragedies which are occurring daily. The war will have economic impacts on us and it is only prudent that we consider them. Bearing in mind the sensitivity and the sadness of this conflict we must consider what is happening in my area of responsibility.

In terms of trade, the Gulf war could have serious consequences for Ireland particularly if it is of long duration. However, while we could lose our immediate export markets in that region, it is important to put this in context. Our total exports to countries in the Gulf region in 1989 amounted to £244 million; this was less than 2 per cent of our total exports.

There is no doubt that some Irish companies would be affected by the loss of these markets. However, of much more concern from an economic viewpoint would be a conflict which might affect world trade generally.

Because we have an open economy which is dependent on exports, a general deterioration in the world's trading environment would have to be viewed from our point of view with deep concern. Apart from any effect on our own economy, a downturn in the economies of our major trading partners would have to be of concern. Just as I continually express fears for Ireland in the event of a breakdown of the GATT negotiations, my fears in terms of our trading capability focus on the effects which this crisis will have on the world economy rather than on any immediate loss of markets in that region.

Most experts are agreed that this war should not cause the same havoc as was experienced in the aftermath of the 1973 and 1979 oil price rises. What can happen is that war will exacerbate trends already showing in the world economy. Developing nations and those relying heavily on oil imports would suffer the most. African, Asian and South American oil producing States could gain, depending on prices and the desire of western countries to seek alternative supplies. This could open up new markets for Ireland. However, in the context of our overall trade, we rely heavily on the strong western economies. Over 90 per cent of our exports go to Europe and North America. These are the countries most capable of withstanding economic shocks and recovering quickest.

Another significant negative factor is the increasingly difficult market conditions in the UK which is experiencing high inflation, high interest rates and low business confidence. The UK's entry to the exchange rate mechanism together with our lower rate of inflation will help to remove some of the price volatility in our trade there and provides a competitive boost for Irish exporters. Similarly, the US economy has been slowing considerably and together these markets constitute some 40 per cent of our exports. All economic forecasts for the UK and US markets predict that they will perform worse in 1991 than in 1990 and that the level of growth in imports, if indeed there is growth, will be at a lower level than in 1990.

On the positive side is the continuing improvement in our export penetration of major mainland European markets. In the 11 months to November 1990, our exports to Germany and France showed increases in value of 3.5 and 4.5 per cent, respectively.

Last year, 1990, has also seen very good export performances to smaller markets on the rim of the Community, with exports to Portugal up 26 per cent, Greece up 20 per cent and Denmark up 15 per cent. While the value of these markets is small compared to our main trading partners, the evidence that Irish exports are diversifying is encouraging. The expectations are that all main European markets will continue to show strong, if reduced, growth in demand in 1991.

One factor which is clearly providing a positive practical and psychological impulse to increased trade with our mainland EC partners is the steady pace at which the Single European Market is developing. Over 68 per cent of the Internal Market programme of measures has now been agreed. Progress has been most notable in areas such as the opening up of public procurement, insurance, merger control and air transport.

Harmonisation has been slower in the area of indirect taxation but I expect that significant progress will be made on this and other areas still requiring agreement during 1991. In this budget, we have taken another step towards achieving common rates with other members states.

I am heartened to see that companies all over the country, both large and small, are now looking forward to the completion of the Single Market — any earlier apprehension on the part of some has given way to an air of enthusiasm. Indeed, to a large extent the Single Market is already a reality and I would like to commend Irish companies for the way they have taken up the challenge.

I am aware that many have reviewed and adapted their marketing strategy and many others are in the process of doing so. There is an awareness now that the opportunities presented far outweigh the potential threats which may exist.

As a result of the Single Market, Europe as a whole will be the major economic growth centre of the nineties with GNP rates consistently outstripping those of the United States. A recent independent analysis of the countries within Europe which will gain most in the Europe of the nineties lists Ireland at number five. Only Germany, Austria, Switzerland and the Netherlands are rated ahead of us.

Another product of the Community's drive towards greater integration is the increased interest from EFTA countries in consolidating and broadening its relations with the Community. Since June 1990, the EC and EFTA have been engaged in negotiations to create between them a European economic area throughout which goods, services, capital and labour would move freely.

I would like to refer briefly, a Cheann Comhairle, to the General Agreement on Tariffs and Trade. The Uruguay Round of trade negotiations was due to conclude at a ministerial meeting at which I participated, together with the Minister for Industry and Commerce and the Minister for Agriculture and Food, in December last. As Deputies will know, the negotiations had to be suspended because some participants were seeking concessions from the Community on agriculture which were completely unrealistic.

A successful conclusion to these negotiations is very important for Ireland. It will result in greater access for Irish exporters to markets in third countries. It will also strengthen the authority of the GATT. This will mean that trade can carry on in a secure environment without the danger of unilateral measures, such as those which the US might have taken before Christmas against a number of EC exports, including cream liquers and mineral waters. In a more general way, a good result is even more desirable because of all the uncertainties which now threaten the world economy. It would go some way to reassuring businessmen and investors.

Talks have begun again at official level. It is my hope that it will be possible to find a solution in agriculture which will be within the terms agreed by the Community's Ministers for Trade and Agriculture last November. It should also be possible to find solutions in other sectors of the negotiations. This will allow the negotiations to be brought to a successful conclusion, to the benefit of investors and exporters.

These then are the external factors which can give us confidence in a strong export performance this year. However, probably the most important factor favouring Irish exporters at present is the maintenance of the secure and increasingly competitive climate for business at home.

That is why this budget, following on the negotiation of the Programme for Economic and Social Progress, has set out to sustain the economic and social recovery which the country has enjoyed since 1987. This budget will keep the public finances under tight control; this budget will help to maintain our inflation rate at the second lowest level in the EC; and as the Minister for Finance said in his speech, this budget will form a bridge linking the progress we made under the Programme for National Recovery and the progress we are aiming for under the new programme.

The commitment in this budget to maintaining a firm exchange rate within the narrow band of the EMS is one which all exporters will welcome.

A major factor influencing the cost competitiveness of Irish exporters will be the modest pay increases contained in the proposed programme. Increases, which are likely to average little more than 4 per cent over the next three years, will help Irish exporters to gain a distinct competitive advantage over competitors in, say the UK where some firms are paying out that level of increase in one year.

I would like to turn now to the question of the resources which this Government are putting into providing marketing supports for Irish exporters and how those resources are being targeted.

There has been general agreement in this country that, historically, too high a proportion of State expenditure on industrial development has gone towards investment in equipment and fixed assets. It is acknowledged that the balance needed to be shifted towards "softer" assets and particularly towards areas of perceived weakness like marketing, management development and technology.

This policy was adopted in the White Paper on Industrial Policy in 1984. The two reviews of that policy which have been published, the last one in December 1990, bear out that a significant shift within the industry budget from support for fixed assets to non-fixed assets has taken place.

The completion of the Single European Market, and the resulting increased competition in both domestic and overseas markets, further increases the pressure on Irish industry to bring its marketing capabilities up to the level of its competitors in the Community.

We have many programmes before us for 1991. The amalgamation of Coras Tráchtála and the Irish Goods Council is an exciting development which will help to increase our exports and maintain the markets which we have built up during the past few years.

Deputy Gregory.

A Cheann Comhairle——

Deputy Tony Gregory has been called and will be heard. The Deputy will be called in due course.

That is not the information I had from my Whip.

The Chair is in charge of matters in this House.

Last week the Taoiseach stated in this House that the one thing he dislikes most in political life is hypocrisy. That is precisely how I felt when I listened to the Minister for Finance deliver his budget speech. At an early stage in his speech the Minister said:

I have always stressed that disadvantaged people in our society should benefit from any economic progress we achieve. That is again going to be one of my priorities today. A budget must have a ‘social dimension'. It must give expression to our responsibilty for the welfare of all our people. So today's budget will address key aspects of social policy.

The Minister continued this message several times in the course of his speech. He went on to say that protecting and improving the living standards of disadvantaged people has to be an integral part of our overall strategy. The same message was repeated when he stated:

The Government have a strong commitment to the poor and the disadvantaged in this country. This budget, like our last three, continues to give effect to that caring philosophy.

Each time he repeated what I regard as this bogus concern for the disadvantaged my reaction was, as it still is, "what utter hypocrisy".

In a society where one third of our people live in poverty, where 40 per cent of our children are disadvantaged, where in health and education there are two standards, two systems, one for the rich and one for the poor, with unemployment continuing to increase while tens of thousands of our people are forced to emigrate and for those who remain there is the homeless list, where the local authority house building programme has been all but scrapped and 20,000 people are officially on waiting lists, how could any Government Minister presiding over a system that results in such appalling and widespread poverty and inequality claim to be protecting and improving the living standards of the disadvantaged? I could not. This budget does nothing for the disadvantaged. There is no attempt whatever even to begin to change the social and economic conditions that create poverty. Like successive budgets, it serves only to perpetuate the poverty which is now endemic.

The real test of commitment to the disadvantaged lies in the annual budgetary increases to those on social welfare. Social welfare increases this year, at best 1 per cent above inflation rates and not due to come into operation until the end of July when inflation could be far higher, will not protect and certainly will not improve living standards. Pensioners will not even get an increase in line with current inflation rates. The most likely effect of these miserable increases is that by the end of the year widows, pensioners and the unemployed, in real terms, will be worse off than they are now. Certainly when we add to that the VAT increases on fuel and clothing and the Fianna Fáil-imposed increases in local authority rents, we will see that what has been given with one hand is being more than taken away with the other. The only way such petty increases could be justified would be if social welfare payments were already at a level adequate to allow people to live life with basic dignity. The only guidelines we have for assessing that are in the report of the Commission on Social Welfare. At today's rates they commend an absolute minimum income of £62 per week, yet many of the unemployed will be more than £12 below that minimum level. How could anyone, from the Taoiseach down, live on £50 or, indeed, £62 per week?

Here I have to mention the thousands of unemployed young people who live in their parents' homes and get no income whatsoever. They are non-persons in the eyes of the State. Year after year, political budgetary decisions are taken, the effects of which are to keep one-third of our people where they are, below the poverty line. Every Deputy is constantly reminded of this, if we needed reminding in the pre-budget submissions from religious groups and agencies such as Combat Poverty and Focus Point. While these pre-budget statements get little or no response in the actual budgetary decisions, they are largely responsible for forcing the Government into at least a verbal pretence of concern for the disadvantaged. The Government have consistently ignored the calls for social justice by these groups. Indeed, the Taoiseach on RTE even disputed the accuracy of their assessment of the extent of poverty in Ireland today. Given this persistently negative response I would respectfully suggest to all such groups, religious or otherwise, that they should actively oppose the conservative parties at election time. The fate of the poor and disadvantaged is decided at election time. If we want an inequitably divided society then vote for the status quo, vote for the conservative parties.

If we look at the taxation system, despite all the press releases and press leaks, there has still been no widening of the tax base and, consequently, no tax reform. Many thousands of people on incomes below the poverty line remain in the tax net. The taxation system is still not based on one's ability to pay and the PAYE sector continue to shoulder the bulk of the burden.

Another example of extreme hypocrisy is the Government's approach to the housing crisis. Every Member knows full well that if we stop building local authority houses the waiting lists of families and people will inevitably increase and result in severe hardship for the disadvantaged. Yet that is precisely what the Government have done. Prior to the Government taking office an average of 1,500 local authority houses were built each year in Dublin alone. In 1989 not a single house was built by Dublin Corporation in Dublin city. Last year funding was provided to the corporation for a mere 25 new houses. Not content with that, Fianna Fáil, and the Government city councillors, forced the corporation to sell off their prime inner city sites which were crucial to their planned house building programme.

Even if the Government reverse their policy and allocate money for house building, though this is not very likely, the corporation will have lost the very best of their sites. One example of this misuse of power is a site in Marlborough Street just off Sean MacDermot Street in the north inner city of Dublin where the local community association have campaigned for years, backed up by the church in that area, for a senior citizens' development for the many elderly people living in dreadful conditions in the local communities. The Government refused the money for the scheme. The site was sold off and an office block was recently built there. The cynicism goes way beyond that. In a Dáil reply to Question No. 72 on 6 February this year the Minister for the Environment admitted that 126 local authority houses were built in County Mayo in the last two years but only 41 houses were built by the corporation in Dublin. When I checked with the corporation they could only locate 25 of those houses, so the figure is even lower.

I intervene to advise Deputy Gregory that five minutes now remain of the time available to him.

The scandal is not that there were 126 local authority houses built in Mayo — I am sure they were badly needed—it is that in our capital city with its huge housing problem there were only 25 houses built by Dublin Corporation in two years. The Minister for the Environment recognises the housing need in his own constituency and ignores the vastly more serious housing problems in Dublin. That surely can be rightly described as nothing short of corruption. This one example of extreme political cynicism gives the lie to the Government's claim to have a caring philosophy, and it is not the only example; there are many others.

While the Minister was spending the taxpayers' money feathering his own political nest in Mayo he was telling me here in reply to Dáil questions that the tenants of St. Joseph's Mansions, for example, would have to continue to live in Dickensian conditions without even basic washing facilities available to them. It is a public scandal that thousands of our tenants living in Dublin Corporation flats complexes across the city have to endure deteriorating living conditions because the corporation are refused Government funding while at the same time £17 million can be found at the drop of a hat to be squandered on the Taoiseach's own political office block. Clearly the disadvantaged have no place in the priorities of the Government and any claim to the contrary is just common hypocrisy.

I sincerely hope, and I am quite confident, that the Government will get the answer they deserve in the forthcoming local elections in June — rejection at the polls; and no special housing package to be announced by the Minister today will save them. People will not be fooled by pre-election promises.

On Tuesday this week in the Dáil the Minister for Education refused to accept that we have a two-tier educational system here. Perhaps the Minister would look around the north inner city of Dublin. She will not have very far to look. In the same complex where she has her ministerial office there are 250 children aged between four and 12 years being educated in deplorable conditions in shabby damp prefabs that are nine years old. They are the children of the Central Model School, Marlborough Street, a school based in prefabs for nearly nine years right on the Minister's doorstep. In fact the Minister, because it is a model school and it is in her own complex, has a direct responsibility as manager of that school. Would those conditions be tolerated in more affluent areas? I doubt it.

In the same area children going into second level education have been waiting for more than ten years for a community college in Sean McDermot Street. The site for that second level college, geared to their special needs, lies derelict awaiting ministerial sanction. How long more will they wait? What chance do those children have of breaking out of the cycle of poverty? None. Not far away in St. Laurence O'Toole national school in Seville Place the staff, management and the parents' plea to be allowed retain a special concessionary teacher has been refused by the Department. This school is trying to educate children who are proably the most disadvantaged in the State, and instead of getting more resources to do the job their existing resources are being taken from them. A system that does not allow positive discrimination on such a pathetically small scale is inevitably open to the charge of a two-tier system, one for the rich and one for the poor.

I would be grateful if the Deputy would now bring his speech to a close.

I will conclude on this point. I want to restate one blatant example of inequality mentioned in the House because it sums up everything I have said. Last year one individual in this country received a personal bonus payment of £86 million, more than the combined amount provided in the budget for social welfare increases for nearly half a million people. This is cherishing the children of the nation equally, 1991 Irish style.

This is a cautious, sound and sensible budget and it had to be because we are at present trading in very difficult times. It would have been very irresponsible of the Government if it were otherwise. This budget will increase economic growth, improve the living standards of the less well off in our society and will continue to reduce over-spending, the ratio of the national debt and will create the correct environment in which to provide employment. The future of our economic growth will depend on how we plan and tackle our financial affairs for the years 1991-92. As a community, we must make the European Community Single Market a reality. Our Governments must encourage all our business people, industrialists, agriculturalists and others to be properly prepared and ready to avail of the many opportunities so that we maintain and increase our economic growth in future years.

The Government policies over the past few years have been correct and successful. The country has been managed better than at any time within the past 25 years. Economic growth averaged 4 per cent for the years 1987-90 during the Fianna Fáil led Administration. Let us compare that record with that of the Fine Gael-Labour Coalition Government in 1983-86, when we had no economic growth. Yes, this budget is cautious, but no pessimistic.

The Minister for Finance was quite right to be cautious. Trade in the United States and in the United Kingdom is on a downward trend at present and these two export markets play a major role in our present economic growth. It will be difficult to increase our exports to these countries under the present circumstances; however, I am confident we can still achieve a 2.25 per cent growth rate in 1991. The outcome of the GATT talks and the reform of the Common Agricultural Policy will also cause us concern regarding our agricultural production.

Our food industry is at present going through a very difficult time and this will continue in future years unless we adjust our present day type of productivity. However, the opportunities are there to increase agricultural exports. If we are serious, resolute and virtuous we can become the pure food producers of Europe. The danger is, however, that greed will overtake price, quality and supply. We have to set our minds to the whole concept of long term consumer appeal.

I want to see investment in marketing and research. We must find out what people want to buy and the price they can afford to pay for it. We now live in times where the consumer is much more conscious of nutrition, health, fitness and the environmental aspects of food. There is no sense producing goods that people do not want to buy. There is no sense dumping food products continuously into intervention. Intervention was never intended for that purpose. We have to set our minds to the concept of long term consumer appeal in all our trading and marketing enterprises. Otherwise we will not be able to increase economic growth as we should. In my opinion a new national investment drive is needed to increase the sale of our agricultural output in Europe, as this is one clear way of increasing economic growth and employment. I believe we should set up a new national agricultural investment fund to raise finance from the private and public sectors, together with Government financial support to plan and develop a new national pure food export drive.

As an island people we have major trading advantages even though we may not be at the centre of European business. We must set up Irish showhouses in Europe to display our quality goods as I am sure in this way we can further increase our economic growth.

The date for the completion of the European Community Internal Market is only 22 months away and the budget in 1993 will have to contend with much greater freedom of movement of people, capital, goods and services, and we must prepare now for such a change. That is the reason Deputy Albert Reynolds, the Minister for Finance, had to make alterations to the VAT system in the 1991 budget and will have to continue this policy in 1992. This is a very costly exercise but this Government have the political courage to make unpopular decisions for the future common good of all. The 2 per cent reduction in VAT, from 23 per cent to 21 per cent, will reduce our revenue by £98.4 million this year. However, we have cancelled out this loss by a 2.5 per cent increase on the existing 10 per cent VAT rate, and by increasing the rate of road tax and the tax on cigarettes and tobacco. It is clear that unless we are well prepared and ready to participate in the EC Single Market we will not be able to achieve the economic growth rate that we should. We will meet increasing competition in Europe whether we like it or not. Changes will have to take place.

Most Irish companies are quite capable of matching their competitors in any European country in business. We have a market of 280 million people in Europe to whom we can sell our goods. We have very successful Irish business people doing very well in Europe today and I am sure many more can follow their example. Our business people must be thinking ahead of our European competitors at all times. I can see a good future in Europe for Irish electrical products, engineering, high tech software, fashion and clothing and other lines of business, but we must have the right brands at the right price and the right quality. We must let our customers in Europe know that Ireland has much more to offer than our green fields and Guinness.

We have been criticised by the Opposition speakers for not doing enough in regard to income tax reform. I just do not know what these people want. The standard rate of income tax has been reduced from 35 per cent to 29 per cent and the highest rate has been reduced from 58 per cent to 52 per cent within the past few years. In the year 1988-89 the single person paid 35 per cent tax on the first £5,700 of taxable income, whereas next April the same person will pay 29 per cent tax on the first £6,500 of taxable pay. In 1988-89 a married couple paid 35 per cent tax on the first £11,400 of taxable pay whereas next April a married couple will pay tax at the rate of 29 per cent on the first £13,000 of taxable pay. Surely this is a clear commitment by the Government to the reform of taxation, especially for the people on low incomes.

There are also major improvements in the tax exemption limits: a worker with four children can now earn £8,400 per annum compared to £5,300 in 1988 before paying any tax. The married old aged pensioner over 75 years can have an income of £9,000 and pay no tax and the single pensioner over 75 years can have an income of £4,500 and pay no tax. These are major improvements, whether the Opposition agree or not. The income tax relief in this budget will cost the Exchequer a total of £70.9 million. Surely that is a clear indication of the Government's concern for people on low incomes, especially pensioners and those with families.

Let us look at other tax revenue areas. Under the Fine Gael-Labour Coalition Government the yield from capital taxes increased by £13 million whereas under the Fianna Fáil led Administration the yield from capital tax will increase by £53 million by 1991, or four times as much, to a total of £87 million. Corporation tax increased by £26 million under the Fine Gael-Labour Coalition but under Fianna Fáil it increased by £207 million or ten times as much. Yet, some people like to identify us as a Right wing party, which we never were and never will be.

Let us look at our policy on social welfare in this budget. The estimated cost of the improvements in social welfare will be £62 million this year — improvements in the family income supplement, increased support for small farm families, the special allowance for widows and wid-owers after the difficult period of bereavement, the extension of social insurance cover to part-time workers, the payment of at least partial old aged pensions to people who have lost out on their pensions because they have paid different types of social welfare contributions during their careers and the extension of the carer's allowance to people looking after the recipients of the disabled persons maintenance allowance; these are all very important and very welcome developments in social welfare policy. For the past few years major increases also have been granted in the social welfare areas. Over the years Fianna Fáil have done more to improve the social welfare system. Today it is costing £2 billion gross to maintain all the pensions and social welfare payments. One thing Fianna Fáil never did was to decrease the old age pensions. We have a proud social welfare record.

We could take on more debt but it must be for productive purposes and we must be capable of servicing the debt and be prepared to produce quality goods at a reasonable price and maintain supply. There must be a certain amount of flexibility and social concern in budget financing; it is not just a matter of balancing books. The equality of a nation is people at work, and that is being tackled at present by the Government. We must encourage and develop new productivity, otherwise we cannot create new and/or extra employment for our young people. Without economic growth you cannot create extra employment and you cannot create extra economic growth unless you have good Government policy which is acceptable by the people and supported by the people. We cannot afford to borrow for non-productive purposes as we have done in the past. The records of Dáil Éireann will show that the new leader of Fine Gael, when Minister for Finance, sought Exchequer borrowing of over £2,100 million or 13 per cent of gross national product and a record budget deficit of 8.5 per cent of GNP.

Since 1987, under a Fianna Fáil-led administration, Exchequer borrowing has been reduced to under £500 million or 2 per cent of gross national product, the lowest for 40 years. The current budget deficit is now only 1 per cent, a sum of £151 million outturn in 1990 compared with almost £1,400 million when the present Fine Gael leader was Minister for Finance. The Fine Gael-Labour Coalition doubled the national debt from 1982 to 1987, from £12.5 billion to £25 billion and trebled it from 1973 to 1977 from £1.4 billion to £4.2 billion. The Fine Gael-Labour Coalition should have reduced expenditure from 1982 to 1987 but failed to do so. They allowed the health boards and others to overspend their annual budgets because they had not got the political guts to control the overspending so they allowed the national debt to continue increasing — the easy way out. These same people are now criticising us for our actions.

We are now in a position where we have to provide £2.1 billion to repay interest on our national debt each year; in other words the £2.1 billion we have estimated as VAT revenue in this budget cannot be used for any new productive development which would create new employment for our young people. In a nutshell I wish to make it clear that the foolish borrowing in the past by the Fine Gael-Labour Coalition is now one of the greatest stumbling blocks to economic growth today. We must adjust expenditure to what people can afford to pay rather than increase taxes to balance expenditure and/or borrow to provide services. The proper management of employment is essential to future economic growth.

This budget is framed in order to increase economic growth, to create jobs at home and provide a better standard of living for all our people. The policies which are already being implemented for the past few years are delivering the results. Sustainable growth in the economy has been achieved and is helping to give us more jobs. We must continue the bombardment on unemployment as Government priority policy. The excellent progress we have made in keeping the public finances under control must be continued and carefully supervised at all times because we cannot allow our national debt to continue increasing even though, percentagewise of gross national product the increase is very small at present. We must ensure that all sectors of our community will share in the benefits of our economic growth.

Finally, future economic growth and social improvements depend on the social partner's understanding of and support for Government policy. There is no better way forward.

It is my intention, as spokesperson for my party on tourism matters, to confine my remarks to the treatment given to the tourism sector in the 1991 budget.

If 1990 was the "year of the invisible tourist" 1991 is fast becoming the "year of the invisible Minister for Tourism". The questions being asked by the electorate at the moment and by the tourism sector, in particular, are: where was Deputy Brennan, the Minister for Tourism, when the 1991 budget was being put together? Did he have anything to say about his own particular brief, when crucial budgetary decisions were being taken? Why has tourism been battered, bombarded and downgraded in the 1991 budget? What, if anything, has he been doing since budget day, to try to limit the damage being done.

I have listened since budget day to certain economic commentators, describing the budget as being neutral. If being neutral means going nowhere, standing still, remaining stationary, I would accept that as a pretty accurate description of the budget. The Minister for Finance is muddled, confused, bewildered and perplexed. He does not know where to go, or where we are going, so he throws the main engines into neutral and lets the craft drift.

When it comes to some of the support engines, however, the Minister does not have the good sense to leave them going forward, or even to throw them into neutral; when it came to the tourism engine, he managed to throw it into reverse, to send it spinning backwards.

In relation to tourism, budget 1991 has been deflationary, destructive and demoralising. In the 60 pages of typescript that forms the Minister for Finance's budget speech, tourism merited five lines, and when it does raise its head, it is only to be hammered by a selection of blunt instruments.

Budget day provides a Minister for Finance with a once-a-year opportunity to shape a nation's future, to consolidate past gains and to plot future progress. National attention, through the media, is focused on Dáil Éireann, and the capacity to make changes for the better exists. People expect the Minister for Finance to address the central problems of the day and to offer solutions.

In recent years, one central over-riding problem with two dimensions has hung as constant as the North Star over this House on budget day. That problem which has been crying out to Heaven year-in, year-out for consideration and resolution has been: how did we increase employment and decrease emigration?

In poll after poll, it emerges and reemerges as the central concern of the Irish people young and old alike: how do we create enough jobs at home to keep our people at home? The answer coming from the Government in its budget in this particular year has been: "We do not know, will someone please tell us?"

Tourism is a highly labour-intensive industry as it relies so much on personal service. Much of the employment generated by tourism is in an areas which are otherwise economically underdeveloped. Tourism is a source of foreign exchange earnings. It has a low import content, as it is based on native resources, both natural and man-made. Tourism is a source of Exchequer revenue and yields substantial income to the Government through indirect taxes from tourist activity within the country.

Tourism benefits all regions of the country, notably along the west coast, which has few other advantages, to support economic or social development. Tourism spawns a multitude of spin-off economic activities, from cottage crafts to high-technology industry, from all sectors and from all parts of the country. Why was the enormous economic potential of this great industry not unleashed in this year's budget? Why, instead, was the great industry demeaned and degraded, in this year's budget.

We recognised that the Gulf War has radically changed the whole tourist picture worldwide this year. We recognise that, even without the Gulf War, major difficulties existed with recessions in the USA and the UK which would have made life difficult for the industry in any event.

We recognise that tourism is a highrisk business, it is vulnerable to storms blowing in from the Atlantic as they did in January. It is vulnerable to the uncertainities of war and terrorism. It is vulnerable to the vagaries of international recession. It is vulnerable to the blundering and bungling of incompetent Governments.

We also recognise, however, that the industry has great strength. In the past we have managed to overcome and counteract in our marketing and promotions the negative aspects of events in Northern Ireland. Today Ireland and Iceland are the only two true island nations in Western Europe. In a world at war, we must market our inherent safety, security and stability. However, the Government have thrown in the towel — they have hit the canvas before a blow has been hit. They stand paralysed like a hare in the headlights of a motor-car. This is a "do not mention the war" budget and as such, it is already irrelevant except for its harmful after-effects.

Arising from the 1987Programme for National Recovery, a five-year plan for tourism covering the years 1988-92 was launched. The industry were set the target of doubling the number of foreign visitors from 2.1 million to 4.2 million over five years, creating 25,000 jobs and increasing foreign tourist revenue by an additional £500 million.

The five main elements of the plan were as follows: (i) Bord Fáilte were given responsibility for defining and attaining targets; (ii) a product strategy was devised, targeted at new markets and a comprehensive investment programme put in place; (iii) a competitiveness startegy was devised to reduce price, improve quality, add value and promote only the best; (iv) a promotional strategy was devised to take business from competitors, provide more and better reasons for visiting Ireland, secure customer loyalty and enter new geographic market areas; and (v) a distribution strategy was devised to ensure that the tourism product was available at point of purchase in the form the customer required, for example, computerised reservations, and so on.

Three years of the plan have now passed and professionals in the field have worked long and hard and with a fair degree of success towards attaining the defined targets. In this regard I must compliment the chairman and other members of Bord Fáilte who have worked to ensure the success of this plan. However, the budget has now foisted certain decisions on the industry which will have the effect of aborting the five-year plan, abandoning its well-defined targets and undoing all of the good work achieved over the past three years.

Half way through his 60-page speech, the Minister devoted an entire five-line paragraph to tourism. The gist of what he said in this paragraph was that he would allocate an additional £1 million to Bord Fáilte for marketing and promotion in 1991, particularly in the UK and mainland European markets.

A number of things have to be said about this £1 million. In 1990, £21.5 million had been allocated to Bord Fáilte in their non-capital budget. In the 1991 Estimates published prior to the budget £1 million had been chopped from the 1990 figure, making it £20.5 million for 1991. In the budget, the Minister reinstated the £1 million he had chopped off prior to Christmas. If someone took money from me against my will before Christmas and returned it grudgingly after Christmas that person would not deserve much by way of praise and credit for so doing.

The grant to Bord Fáilte of £21.5 million for 1991 has to be seen in the context of grants they have received over the past five years. The amount of money made available to Bord Fáilte has been reduced from £28.4 million in 1988, the year the plan began, to £21.5 million in 1991. The story has been one of declining investment throughout the period of the plan, even though the proposers of the plan asked that between £3 million and £5 million extra would be made available for each year of the plan. The reinstatement of this £1 million for marketing and promotion in the UK and mainland Europe will only benefit Irish tourism if extra access transport and surface carrier facilities are made available on crosschannel routes. I hope the Minister makes some improvements in this area.

With regard to Cork Ferries Limited, I fully acknowledge the substantial contribution made to tourism in the southwest region and fully support the provision of loan facilities of £0.5 million to Swansea-Cork Ferries Limited. Similarly, I acknowledge the tourist value of heritage buildings and fully support the provision of £0.5 million from national lottery funds for the restoration and conservation of heritage properties open to the public.

In order to achieve the targets set by the Government for the industry, Bord Fáilte have embarked upon a five-year product development programme which will shape the tourism product for the rest of the nineties. It is very clear that the targets set for tourism must be accompanied by substantial and sustained investment.

One such investment scheme was the business expansion scheme, BES, which was extended to tourism in 1987. The scheme allowed the investor, to obtain annual tax relief on investments up to a maximum of £25,000 per annum in each tax year for the duration of the scheme at the investor's highest rate of income tax.

Since the expansion of the scheme to tourism, Bord Fáilte have approved applications involving a total investment of £504 million with a BES element of £271 million, approximately 54 per cent of total investment over the period. It is estimated that projects with BES funding of £175 million had obtained sanction from Bord Fáilte and were in the pipeline ready to roll.

It is obvious that the BES incentives had proved successful with the industry. On Tuesday, 22 January 1991, eight days before budget day the Minister for Tourism, Transport Deputy Seamus Brennan, arrived at the headquarters of the ICC to launch a £6 million BES for four hotel projects. In the course of his address, eight days before the budget was introduced, the Minister praised the ICC fund and declared that such schemes were to be recommended to the investing public.

Eight days later, on budget day, the Minister, Deputy Reynolds excluded hotels, guest-houses, self-catering accommodation and shipping from the scope of the BES for all schemes issued on and from that day without exception, including schemes for which subscriptions had already been sought. For all BES funds remaining, a corporate cap of £500,000 per scheme was imposed and an individual lifetime cap of £50,000 fixed. This was a major fundamental error on the part of the Minister for Finance and the Government which they could have avoided.

The Minister was ill-advised and he should admit his error, correct the problem and allow all BES funds to be honoured for the present tax year up to 5 April 1991. He should enter into discussion with the industry, review the operation of existing schemes, identify abuses and plug any abuses which exist so as to enable such schemes continue as heretofore.

The Government, through the actions of the Minister for Tourism, created legitimate expectations in peoples' minds that such schemes would run to the end of the current tax year, at the very least. On that basis, people entered into contracts to employ consultants to purchase land, publish literature and spend money. It is vital that the BES is continued without its current capping restrictions so that people can continue to develop and extend its accommodation base and range, improve product quality, provide weather-independent facilities, increase the scale of development in order to sustain the employment of professional management and marketing personnel and develop a new and diversified product range.

Apart from the measures in the budget, which will impact directly on the tourism sector, there are a number of other measures in it which will impact indirectly on it and will serve to make life even more difficult in an already difficult industry. The increase in VAT levels from 10 per cent to 12½ per cent on restaurants will have a devastating effect on a sector that provides 17,000 jobs. Such an increase signals the Minister's intention to include this sector in the higher 14-20 per cent standard VAT band post 1992. This will have a disproportionate effect here in comparison to other EC countries because of our higher proportionate earnings from tourism.

The increase in VAT levels from 10 per cent to 12½ per cent on fuel for heating, light and power, personal repairs, maintenance services and telecommunications will individually and collectively have an adverse impact on the industry.

The failure of the Minister to retain accelerated allowances will mean that allowances will have fallen from 100 per cent in 1988 to 0 per cent in 1992. Increases in road tax of 10 per cent on cars and goods vehicles will add further to the overheads of the car rental, selfdrive and taxi sector. If all the people involved in that business buy 30 year old cars they will not have to pay extra tax.

In conclusion, it must be stated that the Government missed a golden opportunity in this year's budget to dismantle some of the negative constraints and create some positive incentives which would enable the industry to grow and flourish. The 10% per cent rate of corporation profits tax which currently applies to manufacturing industry could have been extended to some tourism activities to provide a stimulus to investment in the sort of facilities and infrastructure which are required if the Government's tourism targets are to be achieved.

There is need for more investment in the protection of our natural environment. Investment measures are required to deal with crimes against tourists. There is a lack of tax reliefs or incentive schemes to increase sales personnel in the market-place at home and abroad. The ongoing problem of unapproved accommodation means that certain establishments escape their VAT or rates obligations. There is a lack of incentive for refurbishment and the provision of all-weather facilities. The question of high cost public liability insurance for walking and other activities needs to be tackled. The lack of incentives for picking up foreign language skills impacts on our ability to penetrate more effectively with sales campaigns in Europe. Cross-Border shopping confusion still exists. The lack of investment in basic infrastructure such as roads, signposts, public toilets and so on leads to tourist annoyance and frustration. In world terms we are a small country with many small concerns, with low turnover and marketing budgets. Great reliance is placed on the tourist industry and more attention should have been given to it in the budget.

This budget has been referred to by some speakers as a conservative budget but to my mind it is a progressive and very steady budget. Anyone who sees storm clouds coming will batten down the hatches and take things very steadily. However, the Minister did not do that. I would like to outline three points in the budget that affect my area directly: section 23 inner city developments, special allowance for bereavements and social welfare increases.

I was very pleased with the extensions to 1993 of the section 23 provision. In the designated areas it is absolutely essential that we do not end up with a mass of concrete buildings with all the workers going home at 5 p.m., leaving the centre of the city derelict. By giving tax concessions for accommodation we will ensure a living city, and that is absolutely essential. This is one of the things that will bring the city back to life. It is a matter about which I have made representations to the Minister for many years. Another good measure in the budget is the tax allowance on rental income from properties. This is also a very important incentive.

I would like to commend the Minister for the Environment on what he has done in regard to the Sheriff Street area. In the past few months, contrary to what some people have said, the Minister has been extremely helpful and supportive as regards the rehousing of the people of Sheriff Street in their own area. Building has begun on a senior citizens complex and the Minister has approved expenditure by the local authority on the purchase and redevelopment of old houses in the area allowing some of the people from the Sheriff Street flat complex to move into these houses. There are two good points in that. First the derelict houses in the old St. Lawrence O'Toole's parish will be redeveloped. There may be people with houses in the area who wish to sell them and they can move elsewhere if they so wish, but the majority of people in the area would like to stay in the houses they are in.

There is also provision in the budget — I believe an announcement will be made in this regard this afternoon — to assist people in local authority houses who wish to move to a new area. The £5,000 grant scheme which was available heretofore created a great problem in that many people who had good jobs in an area moved out of that area. I am not sure whether the Minister had that in mind when considering this provision, but he has proposed a grant which will allow people in local authority houses to buy a private house in another area. If a person with a reasonable job, living in, say, Cabra, for some reason is transferred to Tallaght, that person has no option but to get up at 6.30 a.m. to travel across town, a journey which could take an hour or more. People cannot move from one area to another because of the points system. The new grant will allow the person with a local authority house to buy a house nearer his place of employment and this will be of great benefit to families. I commend the Minister on proposing this measure. The whole idea of social housing also has to be considered, and this is also referred to in the budget.

I would like to refer to the matter of bereavements, an area in which I have been involved for some time. At a time when families are at their most vulnerable and are going through a traumatic period in their lives, they feel the State does not help them. The Minister has introduced a new bereavement allowance which, to my mind, is excellent. In the first year after the death of a spouse an allowance of £1,500 is provided, in the second year, £1,000 and in the third year, £500. Families who suffered a bereavement since April of last year will qualify for the £1,500. I was very heartened by the Minister's interest in the family and in the whole area of bereavements. We owe him great credit for bringing in this allowance.

I know the Minister has considered the position with regard to widows. If a woman's husband dies at 66 years of age or older, and she happens to be younger than him, apart from the loss of his old age pension she will also lose the benefit of free travel. This benefit is very important to people whose family are living in different parts of the country. In Ireland the wife is normally younger by a few years than the husband, and it often happens that at the most vulnerable time in their lives this concession is taken away. I know the Minister has considered this matter and there is a problem in that you cannot favour one section of the community as against another, but if some measure was introduced to provide for widows it would not cost a great deal of money. I would appeal to the Minister to consider that matter further.

Despite the problems facing the Government in relation to our financial situation and the clouds which are gathering on the financial scene, they did not step back from the problem of dealing with the less well off. In all cases relating to social welfare, at the very least there was increases of 4 per cent, which possibly is not a lot of money but at least it is above inflation.

Some people do not accept that there is poverty; of course there is and one of the saddest elements is in large families. In the budget there was an increase for families with four children or more which will help larger families. This is an excellent move in the right direction. The long term unemployment rates have also been increased by 6 per cent, up to £55 for the most vulnerable sections of the community. A couple will also receive an extra £38 on top of that. Short-term unemployment assistance and supplementary welfare allowances will be increased by 11 per cent. The carer's allowance, although strictly controlled, is also a great help to a family. The top rate is £50 but there is a pro rata rate of less than that amount. It is one of the better allowances to have been brought in over the past few years. People are living longer and many families find it extremely difficult to keep a parent in his or her eighties in a nursing home. Even if they are entitled to grants the family often must divide the cost between their members which creates a burden particularly on the younger members.

I have listed some of the items in the budget which are most important to my area, including the increases in social welfare and the bereavement allowance. The inner city development and the extension of section 23 are also most important matters in the budget in relation to my area.

I commend the budget to the House.

I should like to bring the discussion back to the economic aspects of the budget. There are good and bad things in it which are an appropriate subject for discussion but the fundamental thing about the budget is its economic impact and the effect it will have on the future of the country.

This budget represents an unambiguous setback to the progress made in recent years towards a balanced budget, and has for the moment at least virtually brought to a halt the process of reducing the ratio of national debt interest to GNP. These facts have been obscured by the manner of presentation of the budget data and in particular by the failure to show clearly the impact on the budgetary figures of delays in the payment of EC Social and Regional Fund grants.

The apparent drop in borrowing for capital purposes is totally illusory. Far from dropping by 30 per cent, from £310 million to 215 million the true budget picture is of an increase of almost 30 per cent in the level of capital borrowing, for the late arrival of £80 million of Regional Fund payments from the EC artificially increased last year's Exchequer borrowing for capital purposes from £230 million to £310 million and the provision in the budget for the payment of this delayed sum in 1991 reduces artifically the true figure of £295 million borrowing for capital purposes to a fictitious figure of £215 million. The true picture is thus one of a £60 million increase in borrowing for capital purposes between 1990 and 1991.

Similarly, when account is also taken of the late payment of £30 million from the Social Fund to the Department of Education, the overall level of Exchequer borrowing has not, as the budget tables purport to show, been kept down to last year's level of £460 million. The reality is that the £352 million borrowing that actually relates to last year has jumped — I should, perhaps, say has leaped — by over 60 per cent to £570 million.

The true level of Exchequer borrowing required in 1991 by this budget, when the fortuitous postponement of these EC payments from last year is allowed for, is significantly higher not merely than last year's outturn, but higher also than the budgeted borrowing figure for last year, which has not been brought out, so far, in this debate.

All this is on the assumption that economic growth will be at the level optimistically assumed for the purpose of this budget — viz. 2.25 per cent as against the widely canvassed figures of around 1.5 per cent and that VAT and excise receipts remain buoyant as a result of the rate of increase in private consumption remaining at last year's level of 3.25 per cent, despite the Government's own assumption — itself almost certainly over-optimistic — that national output will grow at less than half last year's rate and that the growth of imports will be one-third lower than last year.

Given those facts, to assume no reduction in the rate of increase of private consumption is very temerarious and, when one bears in mind the extraordinary drop in spending everywhere in the world at present — and the sharp increase in savings as people simply stop spending money which previously they spent out of disposable income — this assumption with regard to the level of cansumption seems to be completely without foundation and against all the indications we are getting at home and abroad. A further grossly optimistic element in the Government's budget calculations is the unemployment projection. The seasonally adjusted live register figure for unemployment has risen in the ten months to January this year by no less than 12,700 or almost 6 per cent, from 219,000 to a figure of 232,400. But the budget speech states that the average live register figure used for the purpose of the expenditure estimates in the budget is 228,000. This assumes that over the year ahead unemployment, which has been climbing by two-thirds of a per cent per month since long before the Gulf crisis, will now suddenly start to fall; it would need to drop by 4 per cent by around next December for this assumption to be validated.

On what conceivable basis is this assumption made? With the British and US economies in recession and the world economy threatened by the consequences of a Gulf war of unknown length and dimensions, the reality is that many of those without work who, under more favourable employment conditions in Britain and the USA would emigrate this year, will remain at home, swelling still further the numbers of the unemployed. At the same time the drop in air travel to Ieland — 10 per cent in January — portends a poor tourist year with a disastrous fall in particular in the number of US tourists who spend more and thus provide more employment than other visitors. Unemployment rather than extra jobs looks like being the order of the day for both transport companies and hotels this year.

Moreover, more generally, the Government's own optimistic forecast for national output is below the level that normally generates extra jobs. With output per worker at the national level rising annually by over 3 per cent on average, a 2.25 per cent growth rate implies a reduction rather than an increase in the total numbers at work in 1991.

All this points not to a 4 per cent fall in unemployment but to an acceleration of the 7 per cent annual rate of increase in unemployment experienced since March last year. It would be in no way surprising if seasonally adjusted unemployment approached 250,000 at the end of this year as against the end-1991 figure of around 223,000 upon which the Government appear to be basing their budget. Average unemployment in 1991 is likely to be some 15,000 higher than the Government have assumed, with significant adverse effects on the Social Welfare Bill.

The Exchequer borrowing figure of £570 million that underlies the budget — artificially reduced to £460 million as a result of the chance carry-over of £110 million in European Community funds last year — is thus likely to turn out to be a good deal higher in view of the probable shortfall in VAT and excise receipts and the certain over-run on unemployment payments. Unless something quite unexpected happens the true borrowing requirement for 1991 is unlikely to be less than £650 million or almost 3 per cent of GNP. This figure will, of course, when it emerges, appear to be about £100 million less because of the receipt by the Government of £110 million of 1990 European Community funds in the current year but the fact remains that the 1992 budget will have to be drawn up on the basis of an underlying 1991 outturn of around £650 million, perhaps more, which is 3 per cent of GNP.

With this outturn for 1991 now in prospect it may be instructive to compare the progress made in reducing borrowing between the budgets proposed by the Fine Gael-Labour Governments in July 1981 and the end of our term of office in January 1987 with the progress that will have been made by Governments led by the present Taoiseach between early 1987 and the end of this year.

When I became Taoiseach on 30 June 1981 the projected outturn of the 1982 budget on existing Fianna Fáil policies, as assessed by Department of Finance officials in mid-July, just before our supplementary budget was introduced, showed a prospective borrowing requirement of £2.555 billion. That is the figure which I looked at last night and which I was handed immediately before the budget in mid-July of that year. It represented 20.5 per cent of 1982 GNP. Because of subsequent adjustments arising from the establishment of An Post and Bord Telecom as State companies, this figure is not strictly comparable with figures for the years 1985 onwards. On a comparable basis that figure would have represented something over 21 per cent of GNP. That is the figure we started with, where we came from and what Fianna Fáil left us with in mid-1981.

Despite the severe setback deriving from the fact that the Fianna Fáil budget of March 1982 increased borrowing significantly — the position we found a year later was no less than £500 million worse than that which Deputy John Bruton had left behind in his defeated budget — the measures we took during our two periods in office almost halved the level of borrowing that faced us when I first took office in June 1981, namely, something over 21 per cent of GNP. The budget on which Fine Gael fought the February 1987 general election would, if implemented, have involved a level of borrowing of 10.75 per cent of GNP in 1987, which would have represented a reduction of well over 10 percentage points from the mid-1981 position that we inherited from Fianna Fáil. Between the 1987 and the 1991 budgets which we are discussing here the reduction in borrowing shown in the budget tables is a further 8.75 points which in reality, for the reasons I have just given, is likely to turn out to have been only 7.75 points. Thus, almost 60 per cent of the reduction in borrowing between 1981 and 1991 will in due course emerge as having been effected by our Governments in 1981-82 and 1982-87.

It is remarkable in the face of those facts that the myth persists, sedulously fostered by Fianna Fáil and accepted to a remarkable degree by the media, the general public and even at times by economists, that we somehow failed to do our job in those years and Fianna Fáil miraculously changed everything after 1987. I do not wish to denigrate or diminish the budgetary achievements between 1987 and 1990 of the two Governments led by the present Taoiseach. The reductions in public spending in these years may not have come anywhere near off-setting the 55 per cent increase in the volume of public spending which Fianna Fáil effected between 1977 and 1982 but the spending cuts during these years have been substantial and, as I know to my cost, such cuts are infinitely more difficult and painful than spending increases. The fact remains however that the bulk of the reduction in the level of Exchequer borrowing was achieved by the two Fine Gael-Labour Governments and it is most disturbing that this budget would seem likely to double the real level of Exchequer borrowing from the very satisfactory figure of 1.5 per cent of GNP that was attained last year to a true figure of something like 3 per cent by the end of this year.

With such a prospect looming up ahead it was quite irresponsible of the Government to enter into firm commitments of a populist character to reduce both the higher and lower income tax rates by 2 percentage points in each of the next two years at a total cost of some £300 million. Tax rate reductions on this scale would, even in very favourable conditions, leave little room for the far more important task which has been totally neglected by the Government of widening the lower rate band so as to reduce the marginal tax-cum-PRSI rate on a typical single worker from the present penal level of 55.75 per cent. The proposed reductions in the lower and higher tax rates will leave quite unchanged this penal tax rate on the average male wage. These tax proposals which will particularly benefit the better off people in our community will absorb funds that are badly needed for the relief of poverty.

A final point I want to make relates to the Government's commitment to reduce the national debt-GNP ratio from its present figure of 111 to 100 by 1993. On the basis of the Department of Finance's figures for the national debt, which are £1.5 billion lower than those of the Central Bank — a discrepancy which they should sort out between them in the interest of avoiding public confusion — this target seems to be a very relaxed one. On the middle of the road assumption of a 3 per cent inflation rate during the next two years and a 3 per cent growth rate, the level of GNP in 1993 would be about £26.8 billion. On the basis of the Government's target of a national debt-GNP ratio of 100 in 1993, this allows room for the national debt to rise by no less than £1.7 billion from its end-1990 figure of £25.11 billion which, allowing for a £550 million actual figure this year, implies an average borrowing rate of £575 million a year in 1992 and 1993. The Government should not seem to be contemplating borrowing at this level in the next three years. If this were seriously their intention confidence would be undermined. Surely, the Government should in the interest of maintaining confidence now revise the 1993 national debt-GNP ratio to an appropriate lower figure. I think this deserves serious consideration at present when the Government have just introduced a budget which implies a significant relaxation of borrowing constraints and a doubling of the real level of borrowing in the current year that must be raising doubts as to their commitment to continuing fiscal prudence.

The fact is that after a few years of prudent management — on which the Government can reasonably congratulate themselves — that reduced the level of borrowing at a rate similar to that achieved by the two Fine Gael-Labour Governments, namely, an average of just over 2 percentage points for each year in Government, this Fianna Fáil-Progressive Democrats coalition, under pressure from its smaller element to cut tax rates, have lost control of their policies and are now heading in the wrong direction, towards an increase rather than a reduction in borrowing. That is the clear implication of the budget and it needs to be spelled out. It has been covered by the way in which the figures have been presented. I do not mean that they have been distorted or any attempt has been made to deceive but because of the impact of the change in the date of payment of European Community funds the figures look better than they really are. This needs to be highlighted and the reality is that this budget will double the level of borrowing in the current year while the Government's debt-GNP ratio projection for 1993 implies continuous borrowing at a level near £600 million a year. These are facts which need to be brought out and need to be faced by the House and the Government.

I listened with interest to Deputy FitzGerald who referred to the performance and achievements of the Fine Gael-Labour Coalition of 1982-87, but I would like to remind him that what he and that Government will be most remembered for is that they were the Government who almost bankrupted the country in that they doubled the national debt at a time when we had rampant inflation and high interest rates.

Who trebled it?

That is the reason they now sit on those benches and will remain there. The people of this country will never again trust a coalition Government comprising Fine Gael and Labour. They failed to take decisions in the national interest because they could not reach agreement. It is a bit much therefore for the Deputy to come into the House this morning to criticise the Government, the Minister and his predecessor who have endeavoured during the past three or four years to tackle the real problems facing the country which they ran away from. If they had faced up to their responsibilities and took the necessary decisions at that time we might not be facing the problems that confront us today. That is the legacy of the Deputy's term in Government.

The Deputy is dreaming.

The Government continue to deal with the difficult problems the country faces in getting the national finances into order. Even though there will be a slight increase in real terms in Government spending, in 1991 the emphasis is on controlling expenditure while providing more help for those dependent on the State.

The Minister for Finance introduced a cautious budget which made a special provision for low paid workers, including those in part-time employment, provided for social welfare increases in excess of the rate of inflation with special increases of up to 9 per cent for those on the lowest payments, and made further progress towards reducing the standard rate of income tax to 25 per cent. The budget is also designed to secure a low wage deal and an inflation rate of some 3 per cent. All this has been achieved while the borrowing requirement has been reduced slightly to 1.9 per cent of GNP.

The Minister for Finance introduced this budget at a particularly difficult time in international affairs. Not only are we faced with the uncertainty created by the war in the Gulf, we also face a recession in the US and Britain. This creates uncertainty for growth rate in the economy in 1991. The Minister has based his budget on a rate of 2.25 per cent or somewhat less than half the rate for 1990. This seems to be a cautious yet realistic approach to the development of the economy in 1991. It is impossible to say with certainty what the growth rate will be. Some economists are predicting a growth rate lower than the Minister's prediction. They estimate a rate in the region of 1 to 1.5 per cent in 1991. They may yet prove to be right, but similar questions were raised over the estimated growth rates used by the Minister, and his predecessor former Deputy MacSharry, in previous budgets. At the end of the year the Minister's estimates proved to be nearer the eventual figure.

I support the Minister in his assessment. It is cautious but likely to be more realistic than other estimates being given at present. However, even if the growth rate is lower than the Minister estimates it may add £100 million to our borrowing requirement for 1991 bringing it to around £560 million. While this may create some difficulty it would not be significantly in excess of the level of borrowing expected by some of those same commentators who made predictions before the budget. In any event, the Minister has made it clear that he will not allow the gains we made since 1987 to slip away even if it means a supplementary budget later in the year.

It was somewhat ironic to listen to Deputy John Bruton, Leader of the Opposition, criticising the budget. He must have forgotten it was he who, as Minister for Finance, had the unique distinction of introducing a budget which directly resulted in the fall of the Government of which he was a member. It was interesting to hear him criticising the Government for borrowing £460 million 1991. During the 1982-87 Fine Gael-Labour Coalition he was a member of a Government who doubled the national debt and brought annual borrowing to 13 per cent of GNP. Fianna Fáil have taken the difficult step of reducing the level of borrowing. We have brought public expenditure under control and created a climate of growth in the economy. Those steps have enabled us to reduce borrowing in 1991 to less than 2 per cent of GNP.

The budget continues the programme initiated in 1987 to improve the position of people who depend on social welfare. I am particularly pleased that the Minister for Social Welfare, Deputy Michael Woods, is moving to tackle two areas which have long been a source of concern to many of us, namely mixed insurance and part-time workers. For a number of years my colleagues and I have been drawing the Minister's attention to the plight of people with a mixed insurance record. To give an example, this arises in the case of CIE drivers and conductors who paid class A1 PRSI contributions for many years and then were promoted to either inspector or clerical positions leaving them liable only for a modified public service rate of social insurance. When they reach retirement age they find they do not have the minimum number of PRSI contributions averaged over their working life to qualify for social welfare pensions. On the other hand they have only ten to 20 years' pensionable service so they qualify for a very small pension from the company. They are in a classic "catch 22" situation and it is totally outside their control. The Minister's proposal to give these people a pro rata pension is a very welcome move. I know it will be welcomed by the people involved who have been very active in recent years in advising us of the difficulties they face.

The decision to bring part-time workers more fully into the social insurance system is very welcome. While part-time working suits many people many were exploited by being required to work fractionally less than 18 hours per week. Below 18 hours they, and their employers, pay a much lower PRSI contribution. I await with interest details of how the Minister will ensure that part-time workers get a fair deal under the social insurance system.

I would like to say a few words about the main social issue facing the country, namely, the level of unemployment. The rate of unemployment rose from 7 per cent of the labour force in 1979 to 18 per cent in 1987. It has been said that about half the increase was due to the world recession arising from the second major increase in oil prices by OPEC. The other half was said to be a result of the fiscal actions, mainly tax increases, of the eighties.

My constituency of Cork North-Central is one of the most disadvantaged in the country. It has an unacceptable level of unemployment and a very high level of dependence on social welfare. These are not just my comments. The problems in Cork North-Central are accepted locally, nationally and within the EC and have been clearly identified. Whatever the reason — and the economic commentary to which I have referred seems to be one of simplification — the problem of unemployment cannot easily be overcome. I see the problems caused by unemployment on an ongoing basis as I go about my role as a TD in Cork. It is no exaggeration to say the problem has reached crisis proportions and calls for special consideration by the Government. The unemployment figures published on 1 February appear to indicate that the national position is getting worse after improving over the past few years. There are, of course, a number of reasons for the increase in unemployment but none of them give rise to any optimism for an improved outlook. We face a recession in Britain and the US. This means many of those who would otherwise have emigrated are remaining at home. It has been estimated that emigration fell by 15,000 last year and will fall further this year. In addition, many emigrants have returned to Ireland because they have been unable to maintain the jobs they had because of the recession in those countries.

The scope for any Government to create jobs is very limited. Such jobs must be paid for out of taxation, leading to increases in taxes and increased borrowing. Neither approach is acceptable as a means of reducing unemployment. However, a number of State agencies are involved in employment-creating activities. In addition some Government Departments have an input into various measures which affect employment and the employability of people. What is needed is a Minister with specific resposibility for tackling the problem of unemployment. This does not involve the creation of a major Department of employment in any way. What is required is a Minister who can co-ordinate various activities, obtain information and take action from a central position to control and direct our activities.

We need to analyse the make-up of the live register, to ascertain how many people are physically unfit for work and how many in part-time jobs sign on as the only means of supplementing their incomes. For example, how many taxi drivers in small urban areas, or in rural areas, sign on to protect their social welfare pension entitlements rather than receive payment? This category could include many public servants who opted for redundancy or early retirement in addition to those in the same position in the private sector. We must also ask: how many people are illiterate and lacking basic education? What work experience have those people who are fit for work? Where are the unemployed living? What realistic prospects exist for providing employment opportunities in those areas? Those are some of the questions needing to be addressed.

Various State agencies such as FÁS, the IDA, CERT and others are involved in attracting jobs and training people. We must also ask ourselves: how cost-effective are these bodies? To what extent do they endeavour to provide services for those most in need, mainly the 100,000 long term unemployed? We need to tackle the problem of unemployment in a structured, realistic manner. The present cost to the nation of unemployment must be in the region of £1,000 million or more when the amount of social welfare payments, local authority housing, medical services, PRSI and loss of income tax receipts are taken into account. We must devote more attention to this matter because it affects all our citizens. I appeal to the Minister and the Government to do so. While much is being done in this area there is need for all the facts and details to be collated so that we can clearly identify nationally who is in need of what.

I congratulate the Minister for Finance on the excellent balance achieved in his most recent budget between the need to continue to exert control over Exchequer expenditure and the importance of making real progress in improving the income of the most needy in our society. Because of the size of our national debt and its annual servicing requirements the degree of flexibility available to the Minister is severely limited. Despite the fiscal constaints on him the Minister has managed to make a number of real contributions to the less well off, particularly by way of improvements in social welfare payments exceeding the rate of inflation. Bearing in mind that we still have a substantial national debt any budget commentator seeking large scale allocation of extra resources to any specific sector either is ill-informed or mischievous. The broad framework for the future development of our society and economy has been defined by the recent Programme for Economic and Social Development which has received the support of all relevant parties. The principal responsibility of the budget is to ensure that specified economic targets are met rather than merely be expressed as pious aspirations. In this regard the track records of the Minister, and that of his predecessor, Commissioner MacSharry, have been excellent.

There is one small but nonetheless important issue I hope the Minister will be able to address as soon as possible. I refer to the circumstances in which VAT continues to be payable on medical equipment donated to our hospitals by voluntary charitable organisations. At a time when the health sector continues to require an enormous input of State finance each year the initiative of many individuals, or groups, to raise funds in order to purchase medical equipment to supplement hospitals existing resources must be commended an encouraged. There is no doubt but that at present such people are discouraged to discover that, in effect, the State penalises their efforts by imposing VAT on the relevant equipment purchased. While there may be technical or legal reasons which inhibit the waiving of such VAT charges — such as perhaps the potential for abuse in corresponding non-medical areas — it would be a welcome gesture if the imposition of tax levies on the purchase of such medical equipment and on donations could be addressed and rectified. The amount of money involved may be minimal while the morale boost involved for the many selfless individuals and groups involved in such fund-raising activities would be substantial.

I am glad to have had an opportunity to contribute to this debate. While we have serious problems nationwide the Government, and Minister, have tackled them in a positive, resolute way. I would ask the support of this House in dealing with the complex issues affecting our community generally.

My party colleagues have dealt with the wider issues in this budget dealing with taxation, social welfare and our economic position generally. I wish to refer to one aspect of the budget, that is the decision to increase VAT on heating fuel and the implications of that decision for householders already suffering hardship from the manner in which the Government banned smokey coal in Dublin.

Everybody agreed that to solve the smog problem in Dublin it was necessary to ban bituminous coal. But the way in which the Government banned coal, has caused hardship for thousands of Dublin families; has left many much colder this winter; has doubled the cost of heating for most Dublin families, has damaged fireplaces and furnishings and is now compounded by the decision to increase the cost by 2.5 per cent.

Just over a year ago, the Minister for the Environment, at one of his now familiar public relations carnivals, announced that bituminous coal was to be banned in Dublin. "No smoke, no smog," he proclaimed to virtual uncritical acclaim. The announcement was a surprise, because, less than three months previously the Taoiseach had rejected the need to take action on smog when he claimed that the problem was greatly exaggerated. It was also surprising because the Minister was proposing to ban bituminous coal all over Dublin, in one go, and with little or no financial provision. What took Belfast, London, and most European cities, almost a decade to achieve Minister Flynn would do in ten months.

In September, the Minister of State, Deputy Harney, made the order banning bituminous coal. Coal would be banned all over Dublin city and county, with the principal exception of her neighbourhood, in her constituency.

There is no doubt that the banning of coal has left this city virtually smog-free this winter. And for that the Government are to be complimented. But there the compliments end because the hasty, ill-thought out manner of the banning of bituminous coal has caused harship and damage all over Dublin. The budget should have recognised that hardship and attempted to ease it. Instead it has gone the other way and increased the cost of an already expensive fuel.

Families throughout Dublin, especially those on low incomes, have suffered this winter because of the way the Government banned bituminous coal. There are two main problems. First, problems with the new coal itself and, secondly, the problem of cost.

The problems with the new coal, have been tested and reported on by Eolas as follows:

Difficulties with lighting in the case of the low volatile category of fuels;

Damage to grates and

Spitting of fragments of fuel out of the fire setting.

The difficulty with lighting the new coal has been hardest on elderly people, perhaps living alone, who have lived an entire lifetime with the more familiar traditional coal. The difficulty with lighting, and the fact that they do not throw out the same degree of heat, has resulted in additional costs for most households. The household which could get by last year with one bag of the old coal per week, is now burning two bags of the new coal, with either sticks or briquettes, and more firelighters as a back-up. The cost of heating a household this winter has gone up from about £8 or £9 per week, to almost £20 per week.

The additional £3 fuel allowance does not bridge that gap and under this budget the cost of heating fuel including the new coal is to be increased by 2.5 per cent. The damage to grates which has been acknowledged by Eolas will add the additional cost of grate replacements for most households using the new coal. The spitting and exploding of the new coal will add to the cost of replacing carpets, floorcoverings and some furnishings. More worryingly though, it adds to the danger of fire.

The report from Eolas states:

While the problem of damage to grates is a nuisance and an expense the problem of spitting of fuel, which can take the form of either of particles of hot fuel from the fire setting and the hearth, can be a hazard. We have received several reports on our telephone advice services of fuel fragments passing through spark guards, in some cases across the width of the room, with damage to furnishings and potentially to persons.

These kinds of problems should have been anticipated. At the time of the Government's announcement last year The Workers' Party warned that the cost of banning coal would be borne by those least able to afford it. The events of this winter have proved this to be correct.

At very least this budget should have acknowledged the problem and abolish VAT on low smoke fuels. Instead, the budget has increased VAT on low smoke fuels. The Minister for Industry and Commerce could help the problem if he placed a maximum prices order on low smoke fuels which would help to eliminate the price profiteering which has been going on this winter.

Some effort should have been made to help households who want to convert to natural gas. Is it not amazing that on the very day he banned smokey coal, the Minister for the Environment also abolished the limited grants for conversion, which were then available in smoke control zones. This budget should have restored conversion grants. Instead, it ignores the problem. The cost of keeping Dublin free of smog will not be borne by the Government but by the elderly, who cannot manage to even light the new coal, and by low income families whose heating costs are doubled and who cannot afford to convert.

Even those families who can afford to convert to gas are unable to do so, because over 100,000 houses in Dublin are not connected to the gas grid at all, and the Gas Company say that they have not got the money to extend natural gas to those housing estates which are not at present connected. They say it would cost approximately £1,000 per house, in addition to the coversion costs to bring gas to these houses, which neither the gas company nor the householder can afford. This problem has not been addressed in the budget.

This budget tells us how the Government will spend the sale proceeds of the privatised Irish Life, but it makes no mention of the profits made by An Bord Gáis. Over the past decade, An Bord Gáis have made approximately £400 million profit. Admittedly the annual profits dropped in 1987 to £11 million when An Bord Gáis took over the failed Dublin Gas Company, but they have now climbed again and in 1989, An Bord Gáis's profits stood at a healthy £44 million. The bulk of those profits are normally transferred to the Exchequer. I am now calling on the Minister for Finance and Minister for Energy to redirect these profits to extend the gas grid in Dublin, to bring gas at reasonable cost to Dublin's householders who are now bearing the cost of the ban on coal. This would be a wise investment, which would save money for householders, would provide a native, environmentally friendly fuel for Dublin and would ultimately generate additional income and profit for the Gas Company itself.

It may be that the members of this Government are so far removed from the daily concerns of ordinary people that they have not yet realised the hardships which the coal ban has caused. Next June, when members of the Minister, Deputy Flynn's party and the Minister of State Deputy Harney's party, knock on the doors of Dublin, they will be asked what are they to do about the price of new coal and the costs of converting.

Before the debate on the budget ends, I want to ask the Government to abolish VAT on low smoke fuels; to make a maximum prices order for low smoke fuels; to reintroduce the conversion grants which were abolished at the time of the ban on smokey fuel and to use the profits of An Bord Gais to bring natural gas to the people of Dublin.

When rural Ireland had no electricity, previous governments paid for the ESB's rural electrification scheme. The Bord Gáis profits should now be used for a similar Dublin gas scheme so that the people, particularly those on low incomes who so far have had to bear the cost of the ban of smokey coal, will be helped in some way by this Government.

I am sorry that the Minister of State at the Department of the Environment did not remain in the Chamber, because I wanted to remind him that on the last occasion when I sat across the floor from him it was during an Adjournment debate which I sought on the problem of housing. On that occassion, only two months ago, the Minister seemed very reluctant to acknowledge that there was a housing crisis here, that there were over 20,000 people on local authority housing lists, that the extent of homelessness had been greatly underestimated by the Government and that there was a need to take some action on it.

I am pleased that at the very least we have now got to the stage where the Government acknowledge that there is a housing problem and that today somewhere in Dublin the Minister for the Environment is to unveil his housing action plan. In the previews that we have been giving of this plan in the Programme for Economic and Social Progress and in the budget speech it would appear that the Minister for the Environment is laying great emphasis on a shift in policy towards home ownership, shared ownership and so on. This may be a very welcome shift in policy as far as house tenure is concerned, but the principal concern that most of us in this House who deal on a daily basis with applicants on the housing waiting list have, is not so much how Government policy may change in relation to tenure but how many new homes will be provided and how many of the 20,000 people on the waiting lists will be provided with a home as a result of this policy, and more importantly, when will homes be provided for them.

I have no doubt that the onset of the local elections has prompted the Minister to make his announcement today but the people on the housing lists now living in overcrowded conditions who have been frustrated for the past number of years will want to know when they will get a new house. They will not accept it if, after today's announcement, all they will have is some glamorous exposition of a new Government policy. Homeless people want homes. People on the housing lists want houses, and they want them soon.

Over the last number of years we have probably created an expectation that a budget is purely to reduce taxes. Everybody looks at the budget to see what is in it for them. If we followed that to its logical conclusion eventually nobody would pay tax. That cannot happen. Obviously, we would like to reduce taxation but we cannot reduce it altogether.

This budget has continued a policy of reducing taxation. This is very important. The previous Administration appeared to be going in the other direction. With Fianna Fáil in Government we are going the right way again. I was particularly pleased that in this budget taxation measures were geared to a large extent towards the lower paid in our society. Perhaps it could be argued that last year the higher paid did well out of the budget but this year it has been geared more towards the lower paid in the community. This is an important aspect. In 1988 a worker with four children has a tax exemption of £5,300. That has now increased to £8,400. This represents significant progress.

This budget also creates a tremendous atmosphere for continued growth in the economy. Over the past four years the average growth has been about 4 per cent, while in the prevous four years, 1983 to 1986 inclusive, the average growth was zero, the worst performance of any OECD country. We are creating the right climate, despite the Gulf war and the impending recession in the United Kingdom and the United States which will have a major bearing on world markets. We are confidently predicting growth of 2.25 per cent this year. That prediction can be validly made because of the Programme for Economic and Social Progress, a very important document. Its predecessor, the Programme for National Recovery, was instrumental in helping this country to recover during the past few years. All those associated with it should be complimented on the responsible stance they adopted in the negotiations.

VAT rates have come down from 23 per cent to 21 per cent. The previous speaker confined his comments to the one or two items which went up from 10 per cent to 12.5 per cent. The vast bulk of items liable to VAT have been reduced. Almost everything has come down. I am also pleased at the restraint which has been shown as regards excise duties this year and last year. Perhaps the most inflationary tax is an indirect tax. The secret of our success is that we have kept inflation to a minimum. This is a deflationary budget which gives a welcome boost to the economy. I am pleased we are not trying to go too fast. In Britain a number of years ago they ploughed too much money into the economy, basically over-cooking the system and fueling inflation. We are not going down that road.

We have been bringing public finances back into order. Since 1987 the borrowing requirement as a percentage of GNP has come down to 2 per cent; under the previous Administration it was 8.5 per cent. The debt-GNP ratio over the past four years has come down by approximately 20 points. Under the Fine Gael/Labour Coalition it went up by about 40 points. Social welfare is an extremely important aspect in any budget and we have succeeded in the past few years in keeping social welfare increases above the rate of inflation. That means a real increase to the more needy, the poor and less well off in our society. The 4 per cent increase this year is substantially ahead of inflation which is running at about 2.7 per cent.

I am particularly pleased at the extension of the carer's allowance to carers of the recipients of disabled person's maintenance allowance. It was an omission the previous year which has now been corrected. I know there are flaws in this system but that is inevitable in any new provision. About £8 million was spent on that scheme in 1990. It will prove one of the most important provisions to have been introduced for some time. We have a duty to look after our elderly parents. The carer's allowance will encourage us to do so in coming years. I believe the scheme will be expanded in the future and bring about savings in many other areas.

I am not, of course, entirely happy with everything this Government are doing. It would be a bit much to expect everybody to be entirely happy. We have not delivered on the decentralisation programme. I remember a song released a few years ago by the Wolfe Tones called "The Teddy Bear's Head". The record sleeve showed a map of Ireland in the shape of a teddy bear whose head was in the north of Ireland and whose back end was in the south-east — in Waterford, where I come from. We are to a large extent forgotten. We were included in the decentralisation programme at the outset. A section of the then Department of Posts and Telegraphs was to move to Waterford. Unfortunately we appear to have drawn the short straw because of the change in status of Telecom Éireann. There seems to be some confusion as to whether they intend to decentralise to Waterford. Originally we were in phase I, then we slipped to phase II and to phase IIB and we are now stuck in phase IIC.

The Bannon report issued some time ago argued strongly for decentralisation to Waterford because of the imbalance between white and blue collar workers there. One of the first places to get a decentralised Government Department was Galway. I do not begrudge them their good fortune but the percentage of people working in white collar employment in that city was even then 20 per cent above the national average. Waterford was significantly below the national average and we still have not got a Government Department. The chief executive of Telecom is saying that they do not have to move and that the Government cannot force them to do so. Government sources tell me they are proceeding to get them to move. I would like an answer, once and for all. If they are not moving to Waterford I want some other Department singled out as a matter of urgency so that the process can continue.

I have to take issue with some statements made in this House and at home, particularly by members of the Labour Party, concerning that process. I should like to know their policy on decentralisation. In December 1981 the then Minister of State at the Department of Finance, Deputy Barry Desmond, said there was a substantial programme needed for existing staffs in the greater Dublin area and that the more money diverted into the building or renting of new office blocks in provincial towns the less would be available for absolutely essential construction and the removal of bad accommodation in existing offices. Where are those existing offices? In Dublin. He also said there was a great "to do" about the Government's decision to stop the programme and they were instrumental in stopping the decentralisation programme. It is rich that they should now criticise this Government for not proceeding with that programme.

In December 1983 the then Minister for Finance, Deputy Dukes, said that we had to ask whether the programme which was intended to decentralise about 3,000 civil servants from their jobs in Dublin to the same jobs in other places was worth the money or was worth the urgent priority for the country as a whole. That was the whole idea behind the programme. That Government stopped the programme and it is a bit much for them to come along now and criticise this Government particularly in relation to decentralisation to Waterford.

Last week I heard my colleague from South Kerry, Deputy O'Donovan, referring to peripherality and he was critical of the fact that it seemed to be concentrated along the east coast. That would imply that we in the south-east benefited, but we did not. Roads in my area have not been given priority and have not received enough funding. For instance, the main Waterford to Dublin road consists of 100 miles of roadway and only about 40 miles of it is up to national primary standard. Part of that road is not much better than a dirt track, and that has to be addressed. I was very disappointed not to see anything in the programme on the entrance from the Dublin side. There is a crying need for improvement and it is not being addressed. That all seems strange when we look at the structural funding and the high priority given to the port of Waterford and Waterford regional airport. The Government are promoting them and we are very thankful for that, but what is the point in doing that if we do not at the same time provide proper access.

One other matter that needs to be tackled is the provision of another bridge crossing. Waterford is the only large urban centre in this country that has only one bridge crossing. Every time a ship passes down everything has to stop because the bridge has to open. When I was coming up here I was delayed again coming out of Waterford because of that. In this day and age that is not good enough. A report on a high level bridge was commissioned ten or 15 years ago and is gathering dust in the Department of the Environment. It is about time that was resurrected.

Much has been said about provisions in the budget for the business expansion scheme. The business expansion scheme is a good concept but unfortunately there are abuses. Because certain people were greedy they killed it off for everybody else. Many promoters of business expansion schemes were expecting that it would stay in place until 5 April next at least and that was a legitimate expectation on their part. I know of a couple of projects particularly in Tramore and Dunmore East that are now in trouble because of the provisions in the budget. I would ask the Minister to look at that again and to extend the time for investment in the business expansion scheme to 5 April next. We are trying to promote tourism. We are told that it is where job creation will be in the future. For that reason and for the sake of my part of the country where there is great potential for tourism, I would like to see those schemes which already have Bord Fáilte and Revenue Commissioner approval being allowed to proceed.

I would like to briefly mention An Post. I am very pleased at the efforts the Minister is now making to try to resolve that debacle. I quoted a few extracts earlier on that showed the Dublin bias in the country. We are seeing it again in this whole question of An Post. There is a social dimension which has to be borne in mind. What is proposed will not impact on people in Dublin. They will not suffer hardship as a result. It is the poor and elderly in rural Ireland who will suffer. Again, however, it is a Dublin-based decision and they are not concerned about the rest of the country. I would ask them to review their decision and I would welcome the Minister's intervention.

Finally, I compliment the Minister on another excellent budget. I am very pleased with the growth there has been in the economy since last year and I hope this administration can continue in that vein.

I am faintly amused at the way the spokesmen on the other side of the House are congratulating themselves on this budget. I just wonder where they are in their constituencies. The reality is that in the last four or five years since the Government took power there has been a reduction of only 10,000 in unemployment, 2,000 per year. Not alone that but we had 150,000 people leaving the country in search of work. In other words the people who were unemployed at the beginning when this Government took office and the people who had to seek work overseas numbered 400,000 and only 10,000 have found work at home. Ninety-seven and a half per cent who needed to work, despite the public utterances of this Government that their priority was to tackle unemployment and emigration, have had to whistle and find work elsewhere or none at all and depend on social welfare. The Government are just not aware of the realities out there on the ground. I wonder do they even know the basic facts about the unemployed. I heard a speaker earlier say that it was about time we started to look at the problems facing the unemployed. It is a bit late in the day for a Government spokesman to be saying that. The reality is that of males on unemployment assistance, 45 per cent of them have been out of work for two years or more. The long term unemployed are by no means old. Sixty-six per cent of the long term unemployed out of work for over two years are under the age of 45 and a very significant proportion of those are under the age of 25. That is the reality and this Government's complacency about the way things are going in the economy is very misplaced. There is a time for fundamental reform in the way we run our economy. This is the time, and it has been the time for several years. We have had six volumes running to a foot in depth on every Minister's desk with proposals to reform our tax system that would release the potential of our people, and those volumes are left there virtually untouched. That is the reality. If you go into the depressed suburbs of Dublin city you will go into a community where one in every two households has no bread-winner, where they have no access to education beyond the basic level and only tiny proportions get access to third level education. They are the realities which the Government like to ignore in the self-congratulatory speeches we have heard here today and throughout the course of this budget.

I want to turn particularly to my own area of responsibility, namely, health. I have to say that after four years of administration by this Minister we are back once again in a health crisis. The health boards have been left without £20 million in order to merely maintain the last year's level of service. They are being told to wind back services in 1991 to the 1989 levels, a year when health services had reached a low in levels of provision for public patients. Every health board throughout the country is facing a situation where it will have to have fewer admissions to acute hospitals; that means longer waiting lists. There will be fewer residential places for the elderly who cannot cope in the community any more. There may be less nursing care in our hospitals, putting existing nurses under severe strain. What response has the Minister to this? He shrugs off the reports that are coming from health professionals on those health boards throughout the length and breadth of the country and contemptuously dismisses their appeals for extra funding. These are, according to the Minister, an annual ritual. Annual they may well be but the Minister and this party will discover, when he takes to the streets during the local election campaign, that these cuts are very real and real people are suffering the brunt of them. The tragedy is that this Minister has asked people for sacrifices, has squeezed sacrifices from patients, and those sacrifices have been in vain because the Minister has undertaken no fundamental reform that could have held out the vision of a better health service.

The recent report of the Commission on Health Funding which the Government commissioned points this out vividly in paragraph 2.45. The kernel of the commission's conclusions is that the solution to the problems facing the Irish health services does not primarily lie in the system of funding but rather in the way the services are planned, organised and delivered. That is the Minister's responsibility and that is what a good Minister should be doing — he should be planning, organising and delivering the service. It is not just a funding issue, and the Opposition parties are not the only people saying that, but the commission the Government established are saying that. In every area where we could have a better health service the Minister just sat back and did nothing. He is using crude cash controls that fall most heavily on those who are depending on frontline services, and that is his way of rationing what is available. The Minister is not going to take up the issue of fundamental reform. He is happy to leave us with a system of health administration that has never been rationalised and has resulted in a health service which is over-administered but under-managed.

We do not yet have a sensible way of budgeting for our hospitals on the basis of what they are achieving in their area. We have a system of rolling on the budget year in, year out, with the inefficient hospitals bearing the same brunt of cuts as the efficient hospitals. The Minister has failed to get to grips with any of the efficiencies that can be made in the health service and he has not touched on the proper management of admissions and stay in our hospitals and the efficient use of energy in our hospitals, issues that have been long recognised as needing attention.

The Minister's greatest failing is his unwillingness to face up to planning within the health service. He will not bring in any form of planning beyond plans for a couple of months ahead. We are facing a crisis in the services for the mentally handicapped and every Deputy knows that. We are facing a crisis yet we do not have any long term plans to cope with the needs of families trying to deal with mentally handicapped people. We are also facing a crisis with the problem of AIDS.

Again, the Minister will not come out from under his cover and provide a plan so that we can be confident that we will cope with this problem in the years ahead. Now he expects a gullible public to believe a few rhetorical statements made in this latest programmed about how he is going to improve the health services. I do not think people are that gullible any longer. People will not accept his commitment to a great new programme. of community care. They are much more critical than they were. They are right not to accept it because the Minister's commitment to community care has extremely shallow foundations.

One only has to ask, who are the providers of community care in this country? They are the health boards, who have borne the deepest cuts this year. The Minister would have us believe that they will be able to find new resources to develop new plans in the area of community care in 1991, but if you read the reports of any one of the health boards they say they cannot plan any new services in 1991. In fact, many have made detailed submissions to they Minister for the resources they need to provide community care in the community, but these requests have fallen on deaf ears. That is the reality.

The Minister has said that any extra funds available to him will be devoted to community care, but what did he do this year? He allocated almost twice the increase to the hospitals that he allocated to those providing community care. That is the reality underpinning this programme which we are supposed to believe will provide care in the community so that institutional care will not be so necessary. There will not be a community care service for those who will be discharged early from hospital or for those who do not gain admission to the residential places they need.

Even if we look further ahead, the prospects are dim. I questioned the Minister on the capital projects he had in mind for community care facilities in the country and he was not able to tell me of a single project he had in mind for 1991 or the subsequent years, yet, he says he will invest major money in these services. How in the name of goodness does he know the needs of the community care service if he has not yet got a project plan in his Department? It is sleight of hand. Similarly, underpinning this document there is not a single quantitative target for extra physiotherapists, day care facilities, residential places, etc. The Minister does not offer us even one figure as to what will be achieved in any of these areas.

I think the Minister is strong on rhetoric but decidedly weak on detail and we will not be able to monitor progress in this area because he has not put any real thought or planning into the contents of this document as a manifesto to offer the social partners. The reality is that we have to move towards establishing national standards of community care that are offered to everybody, and we are a very long way from that. We only have to look at the carer's allowance which this Government have vaunted as a great breakthrough. It is a deception and I defy any TD to show that this scheme has brought real benefits to carers. In reality you have to be on the breadline to benefit from the carer's allowance. The allowance is subject to a means test and a couple caring for any person must have an income of less than £100 in order to be eligible for the allowance. If they have £100 coming into the House they will not get a penny of that carer's allowance. That is a sick joke on the people who are often praised as the great people in our health service, the people who offer home care and the facilities that no institution can offer. We do not give them very much in return and this carer's allowance is a hollow gesture in their direction.

The Minister excelled himself as a ventriloquist on budget day. Through the mouth of the Minister for Finance he announced and expected applause for the additional £8 million allocation for extra services for dental care, care for the handicapped and care for the elderly. However you had only to open the Budget Statement to read the small print and find that the Minister is taking £4.5 Million out of the health services in 1991 and, instead of an extra £8 million, in the allocation, the figure is £4.5 million less. Where did that money go? It went as follows: £2.5 million in unspecified economies, £5 million in unspecified restructuring of borrowing and £5 million in extra public contributions for health that were being pocketed by the Exchequer.

That is the reality. We are back to the old days of creative accounting in phantom efficiencies, putting off the evil day when debts are paid and taxation by stealth. That is the reality of the Health Estimate in the Budget Statement. Even the announcements were fraudulent. The extra £3 million for dental services was only restoring the service to last year's level. There will be no improvement in service, and we are just maintaining the existing level of service. With regard to the £1 million which was allocated to services for the mentatly handicapped, you have only to speak to parents and they will tell you that the £1 million is only a trickle when £23 million are needed to cater for those who already are not getting the care they need.

Finally, I want to turn to the Minister's proposed changes in eligibility for hospital services.

The Deputy has two minutes left.

I hope to use those two minutes well.

I am gravely sceptical that these measures will bring any improvement to the services for public patients. This action is not in accord with the health commission's report, despite the Minister's misleading claims to the contrary. Yes, the commission favour the abolition of restricted hospital entitlements for the top 15 per cent of earners but their key recommendation is that there must be a:

common waiting list for both public and private patients from which cases would be taken on the basis of medically established priority.

This was to be backed by regular publication of criteria for admission to hospital and of maximum waiting periods for access to specific procedures. These were the fundamentals which were totally ignored by the Minister. The Minister has opted to make services available for people in category 3 so that he can get an extra £20 million in health contributions from those people but he has ignored the key recommendation of the commission of having fair access to health care by every person. Not only has he ignored that, but he is now institutionalising the two-speed health service. Those fundamental elements were totaly ignored by the Minister. He went for the removal of category 3 so he can obtain £20 million from those people in extra health contributions but he has ignored the key recommendation which related to fair access for every person to health care. Not only has he ignored that recomcomendation but he is now institutionalising the two speed health service. He has said that in future there will be a public waiting list and a private waiting list and never the twain will meet. I do not ask for any guesses as to which list will move faster. The Minister is well aware that the public waiting list will move slower.

The Minister confidently announced to hospital consultants that there will be no reduction in their private practice as a result of his changes to allow eligibility for everyone. There is only one reason that will happen, that the Minister will ensure that the public system is sufficiently starved of resources that people will be obliged, if they can afford it, to continue to stay in the VHI and pay £500 per annum for cover. That is the reality. The Minister has separated the two systems and is putting in place a system under which he will continue to have an inferior public service and keep the consultants with private patients. That is the manner in which it is progressing. It bodes ill for those who are waiting for public treatment. It bodes ill for the time they will have to wait to see this separation and the abandonment of the principle of a common waiting list that was at the heart of the health commission's proposals.

The budget, as has been stated on numerous times during this debate, was formulated against a very difficult international background which has generated political and economic uncertainty. In recent months there has been a slowdown in world economies and definite signs of recession in Britain and the United States. Of course, this has a knock-on effect for the economy in Ireland. The Government continue to pursue the policy of recent budgets which means reducing borrowing, tax reform and reduction, and improvements for social welfare recipients and the more disadvantaged in our society.

Our economic growth in 1989-90 was 4.5 per cent. There was no growth between 1983 and 1986. Our investment increased from 1989 to 1990 whereas it fell in the mid-eighties. Our inflation figure at present is one of the lowest in Europe. Due to the Programme for National Recovery we have had industrial peace for a number of years. Exchequer borrowing is the lowest for 40 years and there has been an increase in employment since 1987 of 40,000. Emigration has fallen. In looking at the figure for emigration it is important to realise why ernigration has fallen. There may be a number of answers to that question. In assimilating any resolutions to this problem we must remember that there has been, as I stated earlier, a recession in the United States and Britain which means that very young people feel there is no point seeking jobs in those countries because those jobs are no longer to be obtained. If we have less emigration we could find ourselves in a position where we would have to provide more jobs because of a larger market force.

The new Programme for Economic and Social Progress emphasises the need for job creation. All of us know that the most difficult task any TD is asked to do is find a job for a constituent. In recognising that it is a fair to point out that 20,000 new jobs are to be created each year in manufacturing and in the international services. I should like to point to a great improvement — one we can wholeheartedly welcome — in my own constituency, the setting up of the textile and manufacturing industry in what is known locally as the old Burlington plant by a Taiwanese firm. That will mean a great deal to the counties of Clare and Limerick. I thank the Minister, through the Minister for Finance, for encouraging such development in our constituency.

The creation of jobs in tourism is one to which we can look forward. The aim is to create an additional 15,000 jobs in tourist related areas by 1993.

In the construction industry I am glad to say that jobs are becoming available. This is a sign that proves we have a buoyant economy. This has always been so and I am glad to see once again those jobs are becoming available in that sector for our people.

I am glad to see that 600 extra jobs will be provided in the area of education. This is particularly important. There have been prolonged discussions on the importance of the pupil-teacher ratio. As a teacher, and as a pyschologist, I understand the importance of smaller class sizes not only because it makes the teacher's job that much easier but, more importantly, because it gives a chance to those students who find it more difficult to learn than the average student. I welcome the reduction in the pupil-teacher ratio wholeheartedly. In doing so I congratulate the Minister for Education on what she has done for education since she became Minister in 1987. Since that time there has been a commitment by the Government to bring down the pupil-teacher ratio and I am glad to see that is now underway in the primary secondary sector.

I welcome the fact that more resources are being poured into community health care. This means that an extra £8 million will be given to the health boards. I welcome also the extra moneys being allocated for the improvement of the services for the mentally handicapped, over and above the allocations which have been given by the Department to the respective health boards. I have to be honest in this debate and say that if we are to tackle the problem within the mental handicap services more money is obviously needed as existing services are under-funded and many persons in need of placement are not being accommodated. I am sure the Minister for Health is well aware that there is an acute shortage of residential places throughout the country, not least in the Mid-Western Health Board area.

At present the onus of care often falls back on families who are ill-equipped to manage and, obviously, this causes great stress and problems within a family. Research shows that 2,000 more residential places will be required within the next five years. The number of persons with a mental handicap is increasing and such people are living longer. This means there will be longer waiting lists. Very often children with a mental handicap cannot obtain services and, unfortunately and sadly, I have a number of those in my constituency. Some adult mentally handicapped persons are left sitting at home because of the lack of residential care. Given that background I am pleased with the allocation of funds the Minister has been able to allocate to the services for the handicapped through the budget but, of course, like every other Deputy I would like to see a greater allocation of money to deal with this very difficult and sensitive area.

I welcome the provision of free access to hospital consultant services for the entire population. The Minister for Health believes this will radically improve access to public beds for public patients. I fervently hope this will be the case as there is a crisis at present in my health board area regarding the need for further acute beds at Ennis General Hospital. There is a need for more geriatric beds at Saint Joseph's Hospital, Ennis, and elsewhere in the health board area. I hope the Minister for Health will see his way to giving further financial assistance, as soon as possible, to the health boards to help alleviate the problems being experienced at present.

The Mid-Western Health Board have just under £90 million for the health services for that area. That is a very large sum of money and I know all Members want to see value for money. I am sure further savings could be made. In making such savings we must ensure that patients do not suffer. When discussing the whole question of the health services the most important people are the patients. It is easy to be diverted by other interest groups who can be very important because they are in a position to supply a medical service but the medical service at all times must be in the interests of the patient.

As the Taoiseach rightly said, farmers have been going through a very difficult period. We all know that farmers incomes fell substantially during 1990. Therefore, I was delighted to hear that the Government propose to bring forward the increase in headage rates scheduled to be introduced in 1992. This increase will be of great help to many of my constituents.

The extension of the disadvantaged areas scheme is very important to everyone. I make no apologies for saying that the people of County Clare believe the entire county should be designed as a severely handicapped area. If some areas are designated as less severely handicapped then others it will only cause further dissension within communities. If the entire county is not designated as a severely handicapped area it will give rise to many problems for farm families and will certainly erode the entire social fabric of the agricultural community of which we are very proud. If the Government cannot get as much as they can from European institutions for disadvantaged ares the excellent policy on rural development put forward by the Government will be eroded. This programme was instigated to ensure that the social fabric of rural communities would be retained. The designation of western counties as severely handicapped areas would go a long way towards maintaining the social fabric of rural life there.

The Minister has provided £2 million in 1991 to depopulate herds affected by BSE. I should like once again to point out to the Minister for Agriculture and Food the need for more compensation to be paid to farmers whose herds have been affected by TB. This issue is of concern to people in rural areas. This disease has been a problem for more than 30 years and I am amazed that it has not been eradicated before now. I know the Minister is doing his utmost to ensure that TB is eradicated. Obviously the people who are suffering are those farmers whose herds are infected with TB. Farmers are very much in favour of the eradication of this disease. I am sure all Members of the House recognise that there is a need for increased compensation to be paid to farmers in the interim. I am aware of the financial constraints on Ministers who are trying to get our economy back on the rails but I ask the Minister to look again at this issue to see if further funds can be made available for the eradication of TB.

I support the provision of £600,000 which will enable the existing scheme of installation aid to be extended to a greater number of small farmers. This is a move in the right direction.

I want to refer to part-time workers.

The Deputy has two minutes left.

In that case my comments will be brief. There are 21,000 part-time workers in Ireland. I was very interested to note that almost 80 per cent of these workers are women while almost 30 per cent of them are under the age of 25 years. Up to now part-time workers earning less than £80 per week were not entitled to protection under the social welfare system. In future part-time workers earning over £40 per week will be entitled to protection under social welfare.

As a woman, I should like to welcome in particular the provision in the budget for women's organisations. The bulk of this money will be allocated to locally-based women's groups. Two groups in my constituency, the Parents' Awareness Group in Ennis and the Ennis branch of the Soroptimists, were lucky enough to receive funds last year under this scheme.

Another humane aspect of the budget is the special allowance for widowed parents with dependent children. This will give much needed financial relief to those people who are going through a very difficult time emotionally. I could go on at length and discuss all the increases in social welfare rates.

Acting Chairman

I regret to have to tell the Deputy that her time is up.

I welcome the increase of 4 per cent increase in social welfare rates, 1 per cent above the rate of inflation. Obviously, the Government would have liked to have been in a position to do more in the budget. Nevertheless, to be fair, what they have done should be supported and praised.

A time limit of 15 minutes for each speaker in this important debate is totally inadequate. I want to register my strong protest at this time allocation. Deputies should be given a time limit of at least half an hour each, if not longer. Within 15 minutes we cannot deal with all the items which need to be dealt with in a budget debate. I suppose this highlights the present indifference to budgets.

Budgets seems to be losing their momentum and sense of purpose. There is a lot of hope every year about the budget but all we get on budget day is a turgid financial statement on different issues which could be made any day of the week. Statements on the increases in excise duties could be made any time during the year. The increases in social welfare rates should be announced on an annual basis, for example, on 1 January or 1 April every year. In future, I should like greater emphasis to be placed on the Estimates which is where the money is expended. The practice has grown up in this House over the past few years to vote through the Estimates as quickly as possible. I do not think enough time is given to the debate on the Estimates.

I want to refer to the housing crisis. I look forward to hearing the statement today by the Minister for the Environment on his housing policy. The Minister would want to be able to do a bit more than pull a few rabbits out of the hat with his allocation of £80 million. There has been a tremendous reduction in the allocation for housing from £206 million in 1987 to £80 million in 1991. Deputies on all sides of the House can see the effect of this reduction in their clinics.

We managed to come to grips with the housing problem during the late seventies and the early eighties when for the first time people could be given hope in regard to housing. However, due to the neglect in the housing area over the past four years that is not the case any more. There is a housing crisis throughout the country, particularly in Dublin. It is proposed in the budget to give people who want to move out of their existing houses some type of support. We introduced this concept but it was eliminated because it was regarded as a very bad idea and was said to be creating ghettos. However, apparently this scheme is now being reintroduced.

The main problem in this area is that there is no housing policy. As a previous speaker said, in the run up to the local elections candidates will be putting forward all types of proposals to deal with this problem. There is only one way we can solve the housing problem and that is by devising a sound housing policy, using all our resources sensibly. The financial institutions could play an active role in helping local authorities to finance local authority housing schemes if the will was there, but I do not think that is the case. There is a lot of rhetoric and very little action.

One matter which I could like to have reconsidered is stamp duty. House prices have escalated and young couples buying property have to pay at least 6 per cent stamp duty. That is a horrendous tax on decent people who want to provide their own homes. What is this achieving? The principle is wrong and it should be considered again. We should be encouraging people to buy their own homes. If we have not got the money, which we do no not seem to have, we should facilitate in every way possible the first-time purchaser. These people have to pay stamp duty and all the additional expenses, as well as very high interest payments.

Over the last few years when the Minister was questioned on the reduction of the mortgage interest relief from 100 per cent cent to 80 per cent he glibly said that this was compensated by a lowering of interest rates. At the time interest rates were lower but now they have gone sky high, and yet the Minister is not saying that he is going to increase the mortgage interest relief. This is another penalty on people who want to better themselves. There is a total indifference to people who want to help themselves. They are pushed to one side.

Another example is the PAYE taxpayer who is corralled into paying tax. He is targeted year after year. We hear of all the advances these people got, but if we did the sums more accurately we would find they gain nothing. People earning over £17,000 a year now have to pay additional health charges. On the one hand they are being told their tax base will be reduced from 53 per cent to 52 per cent while on the other hand they will be charged this health levy. This is a sleight of hand. The Taoiseach indicated recently that we are not an over-taxed country. Maybe that is so, I will not argue with that, but we are an imbalanced taxed country. The PAYE sector are in a net and we try to get as much as possible from them. In other areas people can offset different items against their tax but the PAYE worker has no redress. Reliefs such as mortgage interest relief are being whittled away and I have no doubt as time goes on the same will happen with other reliefs. The PAYE worker will look on this budget as being very disappointing. Those people are the wheels of our economy and they are the people who are ground down regularly.

It has been proposed to open the health services to everyone, and I am amazed at this. At present people are queueing to get into hospitals and to see consultants, and all of a sudden everybody will be free to queue up and go into public wards. The Minister said this will create more beds and will result in a better health service. On the other hand he said that these people really will not take advantage of this, why should they? They are being charged for a service but we do not expect them to use it. This is a ripoff and is designed to get an extra £20 million, but it will have repercussions because I think people will use the service.

People take out insurance policies for many reasons and when a person takes out health insurance he knows that if he gets sick he can get compensation. People earning high incomes may now opt out of insurance or they may just insure themselves and exclude their children whom they know will be treated under the national health service. It was the trade union movement who succeeded in getting a full national service through the back door. Such a service would break the biggest and the best economy in the world. There has to be a joint system or a two-tier system, or whatever you like, but we must provide a better public health service for those who need it rather than this bland expansionism of opening the service to everybody. The Minister then has the gall and the audacity to say it will improve the health service. Let us not go down that road because, I regret to say, it will lead to an inferior health service. The Government have no overall policy on health. The amount of money spent on health right across the board is very substantial, but it is not managed properly. The Government have been in office for four years and the health services are worse off now than they were then.

As regards education, I was glad to see a report from the Review Body on Primary Education. The Minister talked about taking on additional teachers at primary level and I welcome that. A lot of lip service is paid to poverty in this country, but one way to eliminate poverty is by having a proper education system. More and more people are now in poverty traps than heretofore when there was a more mixed society. We have to target these areas by implementing a properly planned and co-ordinated educational policy rather than by throwing in a few extra pounds or taking on a few extra teachers. We have to consider the matter constructively and say what we intend to do. Many things can be done in regard to education but we must start with the primary schools. Training schemes such as FÁS are now becoming a joke. People are herded into these schemes in order to get them off the dole. Training should mean something and if it takes two years to train people a two year course should be provided. It will mean that they have a skill, something to sell and are independent. It is no use just taking them off the streets for a year, that is not the way to tackle poverty. This training should be done through the VECs, not through the Department of Labour.

I have a lot more to say but time has run out. I again wish to make the point that allowing Members to speak for 15 minutes is a disgrace and does not reflect well on this House.

(Wexford): I welcome the budget and the number of issues which the Minister set out to tackle in it. One political commentator described the budget as “steady as she goes” which is correct because many external factors, the Gulf War, oil prices and the world recession could affect our economy over the next year. Therefore, it was right that the budget continued the Government's policies of previous years by reducing borrowings, tax reductions and positive measures to help tackle the problem in relation to the disadvantaged and the less well off.

I welcome a number of areas in the budget, particularly social welfare improvements. The weekly rates have been incresed by 4 per cent which is above the level of inflation and the Minister set out to tackle the problems of the lowest paid in society. People on the lowest payments will now be entitled to special increases of up to 11 per cent. The carer's allowance is very welcome for people in receipt of DPMA. It was a mistake to exclude this allowance last year but the Minister has now rectified it. I know that many people will now be able to keep old people in their homes because of these changes. However, the means testing in relation to the carer's allowance is a bit too stringent and I ask the Minister for Finance and the Minister for Social Welfare to look at the possibility of making it available to families who would be in a position to look after old people if they received even part payment of the carer's allowance. I have no doubt that the Minister for Social Welfare will examine this in the coming months and will try to ensure that as many people as possible in need of the carer's allowance will receive it.

I also welcome the increases in the family income supplement although many people are still not availing of it. It is a very worthwhile measure which increases the level of income for many families and it is the difference between being on the poverty line and having a reasonable standard of living. I ask the Minister to ensure that, through television, radio and other media, he will make it known that the family income supplement is available for people who qualify and that they should apply for it.

Every year, Members put forward suggestions in relation to the social welfare area. Last year a number of Members put forward suggestions in relation to families in receipt of social welfare payments and the difficulties they have when their children return to school. The Minister took those suggestions on board and last September many families received a clothing allowance for children returning to school.

I should like to put forward a couple of suggestions to the Minister for Social Welfare. One is the introduction of a free telephone system to the Department of Social Welfare in Dublin; they are in operation in Sligo, Donegal and in other areas around the country. Nearly every small company now have a 1800 free telephone system and it is time that the Department introduced such a system for the unemployed. Many unemployed people do not receive their cheques on time and must query the matter with the Department. They have to make a telephone call on the local pay telephone and in many cases they are kept waiting for five, ten or 15 minutes while the person at the other end makes inquiries. As a result, in some cases, they pay up to £5 for the call, which they cannot afford. The Department of Social Welfare should introduce a free telephone system on a trial basis to see how it operates and to alleviate the major problems which unemployed people encounter when they make inquiries about their entitlements.

Over the last six or eight months we heard a lot of talk about mná na hÉireann but I want to talk about a particular group of mná na hÉireann, the widows. Over the last number of years, under different Governments, widows have had a raw deal. It is traumatic for a wife to lose her husband, the bread-winner, and to then find herself on a very limited widow's pension. She might have two, three or four children and no source of extra income. In many cases this causes appalling hardship and I ask the Minister to look at the possibility of introducing a special hardship allowance for widows who have no other source of income, apart from the pension, which would be based on the number of children she has to support. I know of many cases where widows find it very hard to clothe their children, pay school fees, buy school uniforms and, when the children become teenagers, to dress them in the style to which other teenagers are accustomed, to go to the disco or other entertainment. It is important to introduce some kind of special allowance for widows who only have the pension.

When an old age pensioner dies his wife may not have reached pension age. When both parties were alive they qualified for a free television licence, free travel, free telephone rental and a free electricity allowance. However, when the husband dies all those allowances are taken from the widow and she is left with nothing apart from the pension. Will the Minister consider — at least in cases where the widow is 60 years of age or over — allowing her to continue to receive those benefits until she reaches 66 years of age when she would, automatically, become entitled to them under the old age pension system? It is traumatic to lose her husband, she should not also lose the benefits. Such an improvement would cost very little.

I welcome the protection of the Minister for Social Welfare for the 21,000 part-time workers because up to now they have been exploited by the employers in many cases, particularly by supermarket owners, and others. When they got sick or took maternity leave they did not have any rights. I welcome the fact that the Minister has now decided to protect part-time workers; most of them are women, the system discriminated against them and I welcome the Minister's decision. I hope that many thousands of people will benefit because we are now in an era where part-time work has become the norm. This will continue to be the case as jobs become scarce and as the system of shopping changes. The experts say that 85 per cent to 90 per cent of the shopping by housewives is done at the weekend and, therefore, supermarkets and other shops are inclined to employ part-time workers. It is appropriate that these workers will be brought into the social welfare net and to be entitled to the benefits which they should have received for a number of years. I compliment the Minister for Social Welfare, Deputy Woods, for his enlightened decision in this regard.

Taxation has been a bone of contention for many years. Probably for 20 years, up to 1988 or 1989, the taxation system for the PAYE worker was on the up and up. They were carrying the burden of taxation while many others got away scotfree because they abused the system. They were not followed up by the Revenue Commissioners. There is no doubt that the group who have been most discriminated against for many years are the PAYE workers. I am glad the Minister has continued the trend of reducing the standard and highest tax brackets. It is important that we continue this trend with the aim of having within the next two years a 25 per cent standard rate, a single higher rate and a fair and equitable tax system. I hope the Minister who is doing a good job in this area will continue this trend and ensure, now that the economy is beginning to come right, that the PAYE sector who have had to carry the can for many years will reap the benefits.

One problem that the Government have not addressed in an adequate manner is that of unemployment. Even though they have managed to create jobs during the past three years and in general have done a good job, because of the large number of job losses our unemployment figures are appalling. The average unemployment figure in the European Community is 9 per cent whereas the figure for Ireland is 15 per cent. With this in mind the Government should go, cap in hand if necessary, to the European Community to seek special funds and argue that special measures are needed in an effort to tackle our unemployment problem. This is a blight on our nation and has led to many social problems such as marriage breakdown, separations, poverty and housing problems.

Unfortunately, these unemployment figures seem to have been accepted and I would question therefore the role of the IDA, FÁS and other Government agencies. The Industrial Development Authority seem to have outlived their usefulness and it is now time we took them by the scruff of the neck and overhauled that organisation to make them more relevant. The south-east, including County Wexford, seems to have become one of the forgotten areas so far as the Industrial Development Authority are concerned and they appear to have no interest in securing employment for those who are unemployed in that area. I ask the Minister for Industry and Commerce to review the role they are playing in the area of job creation to see if they are distributing new jobs in a fair manner as it appears that everything goes west of the Shannon while the south-east and all other areas seem to be ignored. I ask the Minister for Industry and Commerce, the Minister for Labour and all other Ministers to consider what can be done in tackling unemployment during the next few years as we cannot continue as we are.

Our many natural resources such as agriculure, forestry, fisheries and tourism are not being exploited or developed in the way they should and I appeal to the Government to ensure that a proper strategy is drawn up for the development of these resources to create sustainable jobs for our people, in particular our talented and highly educated young people who are now living and working in Boston, London and New York when they should be at home giving us the benefit of their talents.

In the area of housing, a radical policy needs to be implemented. The Minister for the Environment is committed to implementing such a programme. Indeed, we are all looking forward to the announcement he will make this afternoon. We are all aware of the many social problems associated with poor housing and that many people are living in substandard flats. Indeed, I am of the view that half of the flats in this country should be closed down as they are rat infested and are nothing more than damp hovels for which ruthless landlords charge between £40 and £60 a week in rent. The most galling thing about all of this is that the tenants are being subsidised by the health boards, to the tune of two-thirds of the cost. Instead of wasting this money in that way we should reinvest it in the construction of new houses. Ruthless landlords should not be allowed to become rich at the expense of the less well off and the poor of this country.

Earlier Deputy Fergus O'Brien stated that one could speak on the budget at great length. It is unfortunate that time is limited but it is only right that every Deputy should have the opportunity to speak. In conclusion, I welcome the proposal of the Minister for Agriculture and Food to increase the amount of land to be granted disadvantaged status. I welcome in particular the fact that the amount of land in Wexford to be so designated will be increased by 3 per cent to 31 per cent in recognition of the major problems which confront small farmers in that county. I hope the Minister's proposal will be sanctioned within the next four to six weeks in Brussels and that our farmers will reap the benefits which will accrue.

I am glad to have this opportunity to say a few words on the budget and have to conclude that it was a bit of a flop. I have never witnessed such a lack of interest and enthusiasm about any budget in all my days. Indeed, there was not one bit of excitement on the evening of the budget and people did not have the feeling that anything of importance had happened. This view was mirrored all around the country even though the budget was televised live for the first time ever. This should have created some excitement but it did not do this. The budget has been described to me as being drab and uninteresting while many other phrases have been used to denigrate it which is bad so far as the Government are concerned in the sense that they could face a credibility problem if people feel that was all the Government could achieve. I wonder how they are going to set about dealing with this.

No effort was made in the budget to tackle the fundamental problems in the economy. For the past few years now Ministers have been pointing to their success in various sectors of the economy. For example, they point to low inflation, improvements in the public finances and good growth rates. There is no doubt that they have achieved success in those areas but they have very good reason to lay emphasis on them because, taking the economy as a whole, the Government have been an absolute failure. The purpose should be to keep people at work and provide them with an opportunity to express themselves and obtain some reward in return. However I have to conclude that the Government have been a total and abject failure in this regard.

What is the point in recording growth rates of 2.5 per cent, 3.5 per cent and 4.5 per cent if at the same time people are emigrating in huge numbers and the number on the live register is as high as ever? We cannot feed our children or buy groceries with growth rates. The Government can be compared with a very mean parent who disregards his or her children and spend their time instead in improving their bank balance, perhaps in the process starving the children. There has been quite a turnaround in the way the Government are being seen by the public.

The Minister has brought this on himself because he has failed to grasp the underlying problems. Is he aware that people do not want to work overtime? The reason is very simple. There is no reward for it. The Revenue Commissioners take most of the reward. I would say all Deputies in this House are aware of that. They meet people who tell them there is no point in doing overtime. They meet factory managers and factory owners who tell them they cannot get people to work overtime. They will be aware also that people are finding ways to circumvent that. Overtime is being paid unofficially and no tax or PAYE is being stopped from it by many factories right across the country. They have to do it otherwise their productivity would suffer heavily. I am not blaming the factories but I am blaming the people responsible for it, that is the Minister for Finance and his advisers. Everybody knows what is happening and surely it is up to the Minister to respond to that problem and try to sort it out. It varies across the country of course. It is far worse in some areas that in others.

People on unemployment assistance do not want to take jobs, again for a very good reason. What is the point in taking a job and getting less reward than you get if you do not work at all? It does not make sense. The economy is operating upside down completely. The basic premise is that unless the economy rewards individual effort we will continue to have unacceptable rates of unemployment and emigration. This is pretty widely accepted. This budget has done nothing whatsoever to put more people to work. It has done nothing whatsoever to keep more people at home. I have not got the up to date figure, but already the live register has surpassed the Minister's own surmise of its maximum for the year and it looks like going out of control. The question everyone is asking now is when are we going to have the mini budget and they are offering their own cynical replies to that. They are saying that surely it will not happen before the local elections, that, therefore, we are going to have our mini budget after those elections. I hope we can survive that long.

Ever since 1987 the planes and boats have been heavily laden leaving the country. I have a picture in my mind of the former Tánaiste on television when he said the island was too small for us. Quite a number of youngsters have just come into the Gallery today. They may not have heard that message; probably they were too young at the time to notice it. In effect what the former Tánaiste said was that the country is too small for them, that there is no room here for them and so they should get into the planes, get into the boats and get out. This was in the early days of the minority Government in 1987. He actually encouraged people to leave the country, particularly young people who were well educated and who had the ability to make an enormous input into the economy here. Indeed, they responded. Since 1987 more than 100,000 people, nearly all young, have left the country to find work elsewhere. If only we could quantify the value of that loss to this economy. If only there was some way we could put £1 note value on it, we would be staggered. Of course, there is another side to it. They are working for our competitors. Many of them are in England, scattered around Europe or in America, and they are helping our competitors to beat us in the marketplace. This is the sad feature of it. Instead of having an opportunity to use their youthful energy, enthusiasm and idealism in this economy, they are using them to assist our competitors to give us a hammering in the marketplace. It is disgraceful. We must recognise that is the case, and this Government should have tried to do something about it. Did they?

I notice the Minister for Finance is of the opinion that tax reform means cutting tax rates. Ever since he has had his little arrangement with the Progressive Democrats he has been cutting tax rates little by little. People would not have been gulled when he announced his tax cuts in this budget because they had previous experience that when the Minister for Finance cuts tax rates he does not necessarily give back any money to the taxpayers. In fact, they are saying he somehow still manages to take more money out of the economy in income tax during the course of the year. Of course, he does and the projections for this year are the same. He has projected that he is going to take something short of £300 million extra out of the economy in taxes this year, and he has been very proud to proclaim to the nation that he is cutting the rates from 53 per cent to 52 per cent and from 30 per cent to 29 per cent. That is what he means by tax reform. There is no attempt whatsoever to reform the basis on which taxation is gathered. There is no attempt to broaden the base of tax. I suppose the Minister is waiting for the Single Market which will force his hand in that. When we get into the Single Market on 1 January 1993 we will be forced — or at least he will be able to put it forward that we are forced — to do certain things and spread taxation in areas where it is not spread now, and he will blame the EC for that.

As a result of this budget there is a certainty that unemployment will grow and it looks as if it will grow far faster than the economy will grow. The Minister has been saying the economy will grow at 2.5 per cent. He is one of the people——

Deputy, I must remind you, you have two minutes of your time left.

I do not believe it. I wanted to talk about agriculture particularly as it relates to my constituency of Cavan-Monaghan. We hear regularly the platitude being trotted out that agriculture is our most important industry. I wonder how many people on Cavan-Monaghan if they were answering a survey today would agree that Government Ministers believe that. We had a meeting the other night at which there were a huge crowd of farmers. It was a second meeting we had on the diabolical GATT business we are trying to deal with and on the reform of the CAP. I left here when the Dáil adjourned and went down to the meeting. My colleagues, Deputy Andrew Boylan and Senator Joe O'Reilly, were there also. A few chairs were vacant — four I think. There are two Ministers in our constituency, neither of whom was present at that meeting. I am sure they were very busy doing other things but a Government backbench Deputy could not turn up either. Neither could a Senator who is attached to the Government but perhaps he had a good excuse. None of them turned up, but for a very good reason. They would not have been welcome because nobody at that meeting would have believed they had any interest whatsoever in the development of agriculture. The reason is quite simple. Last year proposals were made——

Acting Chairman

Deputy, I cannot allow you to discuss agriculture. This debate is confined to taxation, expenditure and financial policy. Any other matters——

That probably explains, Sir, why we are slipping down the tube in rural Ireland. There are things we cannot discuss here. This is a general debate on the implications of the budget and we should be fit to discuss any sector of the economy as the budget relates to it. The point I am making is that the budget does nothing whatsoever for rural communities. It appears that the arms of Government, such as An Post, the ESB and others, are withdrawing from rural areas leaving us in circumstances in which we will have very few services and a very sparse population which will be self-perpetuating.

It is a shame we are not afforded sufficient time to offer our analyses of what will be the effect of the budgetary provisions on our constituencies and the public in general.

Acting Chairman

The Chair has no control over the time allocated to Members. It is determined by agreement between the Whips.

Since the Minister introduced his budget much has been said and written and analysts expressed views influenced by their perspectives and interests. Such wide variation of opinions tend to highlight the difficulties encountered by the Minister and Government in reaching a consensus and arriving at a correct balance between their economic and social policies. However, there is widespread acceptance on the part of independent commentators that the budget was carefully prepared and took into consideration the need to maintain the living standards of those most dependent on the State for support while ensuring the continuity of the economic developments achieved by recent budgets.

Those who tend to be critical of Governments and politicians, who express reservations with regard to the ability of Government to tackle the country's social and economic problems, can take heart from their achievements over a comparatively short time.

I will not make a lengthy, political speech. Nonetheless it is pertinent to ask politicians on the other side of the House — who have been critical of the Minister's proposals, contending that he has not gone far enough in providing a better and wider range of services — where we would be today in terms of economic development had not the previous Fianna Fáil Government and the present Coalition Government, of which Fianna Fáil is the major partner — tackled the economic decline of the preceding four and a half years of Coalition Government comprised of Fine Gael and Labour, a period during which the national debt doubled with all of its attendant problems. Had not the previous Fianna Fáil Government and present Coalition taken such action, what rate of income tax and other taxation would now be necessary? I predict that we would not now be talking in terms of adjusting the tax bands downwards. We must ask also: what would be the present rate of inflation? Would we now be able to protect the living standards of the old and unemployed, not to mention the effect of unemployment on our overall economic performance? How many more thousands of young people would be on the live register? While I accept that the present figure is totally unacceptable, until recently the trend had been very much in the right direction. With good management I predict that trend can be reversed and the overall position improved over a period of time.

We must ask also: what about education? For example, would we have been in a position to improve the pupil/teacher ratio and implement the necessary reforms in the field of education in respect of which we hear so many demands and indeed criticisms from the far side of the House? Also in the health sector we have heard much comment and criticism from the Opposition benches since the Minister for Health announced his departmental allocations to health boards. While no doubt many of such comments are sincerely held and some even justified, I contend too much of such comment is politically motivated as politicians clamour to embarrass the Government on what is unquestionably a very sensitive issue, one in respect of which politicians in general should demonstrate leadership and a sense of responsibility. I must reiterate the question: what kind of health service would we have today, how much more money could we afford to provide in the current budget had not the present Coalition and previous Fianna Fáil Governments tackled the whole area of financial rectitude? I shudder to think what the present position might be.

I pose these questions not by way of criticism but rather to expose the hypocrisy of the criticism of these issues expressed from the far side of the House. Like many other Members I am concerned about the position generally in our hospitals. Naturally I would be concerned about any reduction in the numbers of nurses and doctors they employ and extremely concerned about any reduction in the numbers of hospital beds. At the end of the day I do not believe that reductions in hospital personnel or in beds will materialise to the extent voiced or predicted in recent weeks. From my discussions with the Minister for Health — an extremely committed Minister, a professional man, who shares the views and concerns of all Members of this House and is anxious to ensure there will not be any shortfall in terms of personnel, beds or other hospital facilites — and from discussions he has had with members of my health board, I predict there will not be any significant cuts in terms of hospital personnel certainly in hospitals in County Laois or in the closure of hospital beds in Portlaoise or Mountmellick hospital. Our is one of the best managed health boards in the country. In terms of services provided for patients it is the most efficient. It would, indeed, be sad if the Midland Health Board had to suffer the same level of cuts as other less efficient health boards throughout the country. I am solidly of the view that, at the end of the day — when all the figures have been calculated; when the Minister will have dealt with all the allegations in relation to health cuts — that will not be the position as far as the Midland Health Board are concerned.

The previous Fine Gael/Labour Coalition Government were in office over a period of four and a half years during which they had an opportunity to effect reform but they failed dismally to do so. That failure has deprived this Government of the opportunity of implementing the level of social and economic development all of us in this House desire so much. As I said earlier, had this Government not tackled the overall economic position they inherited, we would be faced today with the total disintegration of a wide range of services Government are expected to provide. Part of their level of success achieved in recent years has been that in bringing about negotiation with the social partners. I should like to avail of this opportunity to express my gratitude at the success of this Government in this respect.

Debate adjourned.
Top
Share