Dáil Éireann debate -
Thursday, 25 Apr 1991

Vol. 407 No. 5

Finance Bill, 1991: Second Stage (Resumed).

The following motion was moved by the Minister for Finance, Deputy A. Reynolds, on Tuesday, 23 April 1991:

That the Bill be now read a Second Time.

Debate resumed on amendment No. 1:

1. To delete all words after "That" and substitute the following:

"Dáil Éireann believing

(a) that it fails to make any significant progress towards fundamental tax reform, broadening the tax base or a shift in the tax burden away from the PAYE sector.

(b) that the provisions in regard to reform of B.E.S. abuses represent a significant retreat from the measures announced in the budget as a result of extensive lobbying from vested interests, and are particularly unacceptable in the light of the findings of the Comptroller and Auditor General.

(c) that it fails to take any steps to promote job creation, despite the fact that the March unemployment figures were, in real terms, the worst on record,

declines to give a second reading to the Bill."

—(Deputy Rabbitte.)

Mr. Deenihan

The most startling aspect of this year's budget was the admission by the Minister that unemployment would increase to an average of 228,000 in 1991. It would appear that, after the publication of the March figures, the Minister will have to revise his estimate dramatically upwards. I find it extraordinary that the Minister, in the Finance Bill, makes no effort whatsoever to redress the spiralling growth of unemployment, rapidly approaching a figure of 250,000 and which could well be in the region of 300,000 by December 1991.

Over the past few years our unemployment figures have been artificially depressed by the extraordinarily high level of emigration, particularly to Britain. Recent economic forecasts across the water are alarming and have a strong bearing on our economic prospects particularly on our rates of unemployment. A survey recently undertaken by the Confederation of British Industry showed that prospects for manufacturing output and employment are the worst since the recession of 1981. Manufacturing investment is expected to fall by 16 per cent this year. In addition, it is forecast that 90,000 manufacturing jobs will be lost over the first six months.

The outlook for the services sector is no better. The London Chamber of Commerce predict rising unemployment in this sector, also in accordance with their recent survey. Obviously Britain will allow unemployment to increase as a means of dampening demand to reduce their inflation figures. This gloomy outlook will have serious repercussions on our future. Our high levels of emigration to Britain will ease, with a corresponding increase in our levels of unemployment, but with its attendant range of social evils. Our Government appear to have a fatalistic attitude to the problem. They appear to think that creating the right economic climate, in time, will solve the problem, which process will have an incremental effect only and make no major impact on the figures.

The recent data on the 1990 school leavers are quite alarming showing that nearly 17,000 had either emigrated or were unemployed a year after leaving school, representing 25 per cent of that year's school leavers. Recent figures show a 23 per cent unemployment rate within the under-25 age group. I might remind the Minister that is one of the highest within the EC. I might add that, but for the high rate of emigration within that age group, that figure would be considerably higher. In the light of that information I request the Minister and the Taoiseach — this is a repetition of a request I made in the course of my contribution to the budget debate — to assemble immediately an all-party committee on unemployment involving the social partners, representatives of the unemployed as well as the Conference of Major Religious Superiors. A fresh, radical approach to this awful problem is warranted before irreversible damage is done to the social fabric of our society. Government response to date has been one of no interest, of allowing economic indicators to dictate their policy on jobs.

I should like to refer specifically to tax relief and higher education grants. I am most disappointed that this problem has not been addressed in the Finance Bill. Despite several promises by the Minister for Education there is no provision in the Bill of any tax relief for parents who must pay for their children's third-level education. The increasing cost of maintaining students at universities and other colleges is causing severe financial hardship to many parents. The burden on parents of middle income families who are maintaining students away from home has become intolerable. For example, a family with three dependent children, whose income is in excess of £15,400 per annum, receive no help whatsoever. Parents who are not entitled to fee subvention or maintenance grants are subjected to enormous financial pressure and, in many cases, must forego their life savings or resort to second mortgages or loans in order to send their children to university or college. In the main these are middle aged parents who have worked hard over 20 to 25 years and made substantial tax contributions to the State over those years.

The financial burden on parents is particularly severe when students are required to live away from home in order to pursue their third level studies. I might give one example of such burden, that of a family in Kerry with three children in receipt of an annual income of £15,400. The oldest child of that family is attending a degree course at the University of Limerick. The course fee amounts to £1,500, the cost of maintenance, books, travel and so on is in the region of £3,500, amounting to a total cost on the parents for one year's education of that child of £5,000. That cost may be reduced in subsequent years to £4,000, if the student concerned can earn £1,000 by engaging in summer work leaving the total cost to the parents over the four year course in the region of £17,000. Their financial burden is quite alarming as those costs must be met from income after payment of income tax, mortgage repayments, life assurance premia, VHI contributions, service charges and the other routine costs involved in rearing and maintaining a family. If two children from such a a family wish to attend college the position becomes almost impossible.

Many families in that position must forego the opportunity of a university education for their children and instead, send them to regional technical colleges or to courses at the Dublin Institute of Technology where they can avail of ESF funding. This is done despite the fact that those children have the ability, aptitude and motivation to attend university. This trend places additional pressures on regional colleges, in turn leading to an increase in their entry requirements.

An Ceann Comhairle

May I prevail on the Deputy not to elaborate unduly in respect of any Estimate, such as that for Education with which he is dealing with rather great detail. The detail is something which should be left to the Estimate for that Department. We are now dealing with the Finance Bill. A brief reference should be sufficient rather than going into a lot of detail on a subject that should be left to the Estimate for Education proper.

Mr. Deenihan

Unfortunately, it is a finance matter.

An Ceann Comhairle

It is a finance matter but there is no justification for going into such detail.

Mr. Deenihan

It is very important.

An Ceann Comhairle

It is not in order on the Finance Bill.

Mr. Deenihan

I will finish on this aspect.

An Ceann Comhairle

A brief reference is in order but not detail.

Mr. Deenihan

I should like to compare the position of, say, a Kerry family with a similar family living in Newry in Northern Ireland. Were a child from the Newry family to attend a university course he or she would receive the following annual benefits: course fee, £1,500 and maintenance grant, £2,265 which means that the total benefit to the family would be in the region of £3,765. Whereas the corresponding Kerry family face an annual outlay of £4,000, the Newry family receive £3,765. It is quite obvious from that comparison that the student grant system, and support for families in meeting higher education costs, is infinitely better in Northern Ireland than in the South. Clearly our education grants system needs a radical review.

An Ceann Comhairle

Deputy Deenihan is clearly ignoring the admonition of the Chair. The Deputy either accepts my ruling or he does not. I will not permit him to circumvent it.

Mr. Deenihan

Unfortunately, I heard several contributions that traversed the world and Members were not interrupted. However, I will defer to the Chair's ruling.

An Ceann Comhairle

This is not the Estimate for Education.

Mr. Deenihan

It is not but the point I am making is very important. I recommend that a number of proposals be implemented and I will be putting down amendments on Committee Stage to put them into effect, if that is permissible.

First, we should allow parents to offset course fees against their tax liability at the standard rate. Second, we should revise the grant scheme immediately so that eligibility for fees and maintenance is assessed on residual income as in the case of Northern Ireland. In the Republic eligibility is assessed on reckonable income which is gross income less superannuation contributions. Residual income is gross less payment of mortgage interests, payment to pension schemes and superannuation and half the amount of life assurance premia.

An Ceann Comhairle

When is the Deputy going to obey the Chair?

Mr. Deenihan

I will be putting down amendments on Committee Stage to put those proposals into effect. I welcome the improvement in the tax bands for PAYE workers and the self-employed. I compliment the Government on this achievement. It is probably their major achievement since they took office. Certainly we have a long way to go as regards introducing an equitable tax system but this Government are moving in the right direction. However, I would like to refer briefly to income tax on farming and to certain anomalies that appear in the Bill. For example, section 23 provides that expenditure on pollution control, in order to qualify for accelerated capital allowances, must be incurred before 1 April 1993. The scheme of investment aid for the control of farmyard pollution is a five year programme ending on 31 December 1993. While no final dates have been fixed by the Department of Agriculture and Food for approval and completion of grant-aided works it is certain that farmers will have all or most of 1993 to complete grant-aided work under this scheme. I suggest, and perhaps a note will be taken of this, that section 23 be amended to read "31 December 1993" as the latest date for incurring qualifying expenditure.

The new EC milk hygiene regulations will require substantial new investment on some farms. The Government have agreed under the Programme for Economic and Social Progress that a submission for EC grant aid will be lodged. The nature of the investment required under the new EC regulations is similar to expenditure necessitated for pollution control measures. Therefore, the provisions to give effect to the 50 per cent accellerated allowance relief should extend to expenditure incurred in upgrading dairy farm facilities as required by the new EC regulations. For a family farm with a taxable income the non-availability of the expenditure on extra quotas, as a deductible expense, results in many cases in farmers having an income, for tax purposes, in excess of the low income exemption threshold. Where marginal relief applies the farmer will have incurred 52 per cent tax on income and will then have to pay for the extra quota out of his after-tax income. I suggest to the Minister that he consider a provision in this Bill to allow expenditure on extra quotas as a deductible expense.

I would like to refer briefly to capital acquisitions tax. I welcome the improvement suggested in section 104 in relation to capital acquisitions tax. However, the whole area of capital acquisitions tax and stamp duty should be reviewed especially in relation to the transfer of the family farm. I suggest that the transfer of a typical family farm from father to son or daughter should be exempt from capital acquisitions tax. Also, the high level of stamp duty is a major obstacle to the transfer of farms and to land mobility in general. Stamp duty should be abolished for the transfer of farms to young people under the age of 35 years and who have the green certificate. If this is not possible, and if it would result in the loss of too much income for the Exchequer, we should at least, go back to the 1 per cent stamp duty level which operated prior to 1982.

I would point out that many farmers are unable to transfer their farms to their family at present because of the imposition of a cruel system of capital acquisitions tax and stamp duty. As a result farms are not being passed on to sons or daughters who, in many cases, are better motivated and willing to work hard on the family farm for life. If the farms are not passed on to them early in life they lose their motivation and interest and, in many cases, leave farming. It is very important for the continuation of the family farm in Ireland that capital acquisitions tax and stamp duty be reviewed. We are very anxious to keep young people on the family farm. This is a major obstacle and it must be faced. A number of farmers either have to sell parts or borrow large sums of money from the banks to pay capital acquisitions tax and stamp duty. This money could go into developing the farm and family settlements. The bottom line is that if one wants to transfer one's farm, one has to go into debt. That is probably the greatest disincentive of all.

A number of farm organisations have sought to have the special PAYE allowance extended to farmers. I am disappointed that the Government have not seen fit to do this to date. However, if it is not possible to do this I call on the Minister to raise the lower income threshold for farmers and self-employed people to compensate for the non-availability of the special PAYE allowance to this sector. That would be a major boost especially for the smaller farmer. At a time when small farmers are being forced off the land or to surrender their milk quotas we should not put any additional impositions on them. Unfortunately, the imposition of taxation on lower income farmers is another major obstacle to farmers continuing on the land. Indeed, it is a major disincentive. Farmers want to pay tax, they know they have to pay tax, they are responsible people but if we are to keep the small farmer on the land we must have an acceptable tax regime. I suggest that the lower income threshold be raised to compensate for the absence of the special PAYE allowance for this sector.

Previous speakers referred in detail to the proposed urban renewal scheme for the Temple Bar area in Dublin. I welcome that announcement. If this part of Dublin is improved and upgraded it will enhance the appearance of the city. My experience from travelling around several cities in Europe and the US is that inner Dublin has much to offer but unfortunately it is in continual decline. If we want to attract tourists into that city we must make it more attractive and we must have clean street scapes.

I would like to remind the Minister, and the Government, that there has been positive discrimination towards the major urban centres in regard to the urban renewal scheme. I am disappointed that larger provincial towns have not benefited from this scheme to date. Indeed, in my own county of Kerry only a small portion of Tralee has benefited. Vast parts of the town, formerly the business centre, are left to decay due to the absence of urban renewal type incentives. Also 19th century towns like Castleisland and Listowel could benefit considerably from this scheme or some form of it. It may not give the same tax reliefs in the major urban areas but there should be some incentive for urban renewal in these towns. At a time when we are talking about peripherality and trying to keep people in the west and outside Dublin, I am disappointed that this obvious discrimination exists. I suggest that consideration should be given to extending the scheme, maybe in a different form, to more centres throughout the country so that they can benefit from it.

Finally, I would like to refer to a matter I did not mention when addressing the problem of unemployment, that is, the social employment schemes which are the responsibility of the Minister present. At the moment in Kerry over 100 schemes with the potential of employing over 300 people are held up in the Department of Labour. They should be released as soon as possible and funds provided so that the 320 people or so who could benefit can be taken off the dole queues.

Overall, the introduction of this Finance Bill is not really a major event. There is very little new in the Bill apart from the proposal for the Temple Bar area and the revision of the BES proposed in the budget. No effort is made in the Bill to address the spiralling growth of unemployment despite the fact that the Minister admitted to that growth in his budget speech. I had expected that there would be some incentive, perhaps in the form of tax relief, for employers to take on more people.

Basically the Finance Bill is, as the Minister said in the past "steady as we go; do not get too excited about the spiralling levels of unemployment." The hope is that because our macro-economy looks all right at the moment this in turn will create the climate for job creation. Personally I feel this is not going to happen and at the end of this year we will have a major problem in this country.

Minister for Social Welfare (Dr. Woods)

This is a very substantial Bill and one about which we could talk at great length, but given the time available I will just deal with a few issues.

The Government's economic strategy set out in the 1987Programme for National Recovery laid the groundwork for the exceptional performance of the Irish economy in the period since then. The new measures agreed with the social partners in the Programme for Economic and Social Progress will further consolidate and build on the progress made to date. The pace and extent of our economic recovery is a tribute to the workers of Ireland. Through pay restraint they have lowered inflation and paved the way for the general upturn in the economy and for the increase in employment. Living standards have improved as a result and successive income tax reductions have significantly increased real take-home pay. High nominal pay increases mean nothing when they are outpaced by inflation. The spiral of rising prices which so harassed people trying to manage family budgets is now ended.

On the business front, our performance in fostering further investment and employment growth has outstripped that of our nearest neighbour. Inflation now stands at 2.6 per cent, and is continuing to decline. This compares with over 8 per cent in the UK. Wage inflation is less than 5 per cent against 9.25 per cent in the UK. Interest rates here have fallen to 10.75 per cent so that costs to business here of raising finance are considerably less than that of their British counterparts, where the interest rate is in excess of 12 per cent.

We have now had four years of growth, averaging 4 per cent. Our objective is to continue that growth. Low rates of interest and inflation, and a stable exchange rate will maintain a high rate of investment and these must be our priorities. Even in this most difficult year we will maintain a growth rate of 2.25 per cent while most economies are in recession. Ireland is now seen internationally as an attractive investment location. The US Department of Commerce has recently identified Ireland as the most profitable location in Europe. Their experience is that the average rate of return of US companies in Ireland is four times the EC average. The measures in this Finance Bill will enhance our position. Foreign industry can invest here in the knowledge that they are gaining access to an economic market of 340 million people, which will provide a high rate of return on capital. The 10 per cent rate of corporation tax for manufacturing industry which has been extended to the year 2010 compares with an average rate of 39 per cent in the EC.

We are well placed because of our greatly improved economic standing to receive a major inflow of new investment. The Programme for Economic and Social Progress will attract this investment by creating a stable environment in which industry can prosper. Industry needs to prosper and we need the extra jobs. Apart from the international dimension, this Bill contains a number of measures to support community based job creation projects. Section 34 of the Bill relaxes the conditions under which dividends received by companies in the State from their foreign subsidiaries are relieved from corporation tax. This measure is specifically designed to enhance job creation.

Section 33 of the Finance Bill extends to 31 March 1992, the period during which a donation to the Trust for Community Initiatives made by a company may be treated for tax purposes as a trading expense. The trust provides startup capital for projects which will create jobs in areas of high unemployment. It is of great benefit to those who may have a good idea for job creation but who do not have the equity or track record which a bank or lending institution would require before providing funding.

I would like to refer to the area-based strategy for the long term unemployed. Our response to the problem of long term unemployment outlined in the Programme for Economic and Social Progress may well come to be recognised as one of the most fundamental changes brought about by the programme. We are establishing a new integrated partnership between the local community and public agencies to remedy the social deprivation that exists in many black spot areas of high unemployment. This strategy will ensure that the long term unemployed have the opportunity of training, work experience and second chance education leading to qualifications and, therefore, a greater real possibility of a job. Arrangements are now well in hand to give effect to the proposals. Twelve pilot locations have been selected: Dublin inner city, Tallaght, Coolock-Darndale, Finglas, Ballymun, Cork north city, Limerick city, Dundalk, north Mayo, south Kerry, west Waterford and south-west Wexford. Local companies limited by guarantee, will be established to co-ordinate the response in the pilot areas. The companies will be representative of local community interests, public agencies and social partners. It is intended that the local companies will be operational at the beginning of May. In many ways the strategy mirrors that of the nationwide Community Development Programme which we introduced in 1990. Under that programme grants are being made to locally based projects to equip and staff resource centres. These are a focal point for community development in disadvantaged urban and rural areas. The expertise gained by local interests in community development will ensure the successful implementation of the new strategy.

This Bill contains important new measures to improve the financial position of pensioners and to help the bereaved. A special allowance is being introduced to help families financially at a time of bereavement. This will apply to widowed parents and qualifying children who are bereaved on or after 6 April 1991. The allowance, which will apply for three years, will be: £1,500 in the first year; £1,000 in the second year; and £500 in the third year. In addition, I introduced a new measure this year to give families on social welfare financial help at a time of bereavement. Under the new Social Welfare Act, we will pay the full social welfare payment for six weeks after the death of a spouse or child. These are two important measures, one in relation to tax and the other to social welfare.

The extension of the adult dependant payments will apply to all those in receipt of disability benefit, unemployment benefit, short and long term unemployment assistance, injury benefit and supplementary welfare allowance. The six weeks extension of the child dependant allowance will apply to all short and long term social welfare payments.

The Bill also provides that a person aged 55 years or more who inherits a house or part of a house from a brother or sister will be entitled to a special relief from inheritance tax if they have lived in the house for five years prior to the owner's death. The effect of this relief will be to reduce the survivor's liability for capital acquisitions tax. For taxation purposes only, the value of the house will be reduced by 50 per cent or £50,000, whichever is less. This provision does not affect the real market value of the house.

Dwellings with a market value up to £43,000 will be completely exempted from capital acquisitions tax. There will be tax savings where the value is above the figure. Where a half share of the house inherited, no capital acquisitions tax will arise where its market value does not exceed £86,000. These are very important measures for pensioners and those aged 55 years or more.

Suitable housing for elderly people and the provision of options for people who, because of their age are no longer comfortable at home, are issues which I have taken up in my capacity as Minister for Social Welfare. Many elderly persons are living in houses which have been their homes for many years, but which are no longer suited to their needs and which they are no longer in a position to maintain. Although they may be able to find alternative accommodation which is more suited to their needs or have the opportunity to avail of sheltered housing, they face the dilemma that, if they sell their homes, they may lose all or part of their old age pensions. This arises because the capital realised on the sale of the house will fall to be assessed as means under the rules for assessing capital for non-contributory pension purposes. Faced with this situation many elderly persons may hold on to their homes, perhaps eventually ending up in hospital or in institutionalised care instead of living out their lives in comfortable circumstances in the community.

Next month I will make regulations exempting the proceeds from the sale of a pensioner's home in such circumstances from the means test. The necessary discussions with the Department of Health and Environment are now completed.

In recent years the range of benefits for pensioners has grown enormously. There are a myriad of schemes and fringe benefits now available to retired people. Deputies will be familiar with the free travel, free electricity scheme and free TV licence, but there are also a range of tax benefits and health board and local authority schemes for pensioners. We are recognised as a people for the extent of our commitment to providing for the elderly. This is a reflection of the priorities set by the Irish people. As we move into the new society of the nineties we plan to ensure that retired workers will continue to be a priority.

We must ensure that pensioners are fully taking up all that they are entitled to and indeed they should also be encouraged to arrange their affairs to ensure that they maximise their entitlements. I am now making arrangements to introduce a specialist information and advice service for pensioners. We make payments to over 310,000 pensioners each week. Our expenditure on pensions is running at £950 million a year or 33 per cent of the total social welfare budget. The new service will help pensioners to improve their standard of living in retirement by assisting them to maximise the benefits to them under State and other services.

Pensioners are known to be the most assiduous of savers but many people do not make the most of their savings because they do not fully understand how the means tests or the tax system work. In some cases pensioners have been known to put themselves at risk of robbery because they are afraid to lodge their money in a financial institution. The new service is intended to dispel such fears. The emphasis will be on encouraging people to apply for all their entitlements and to arrange their affairs to suit their own situation.

The pensioners' advice service will in particular: explain basic entitlements and how they are affected by savings/ investments and assets such as property; explain pro-rata pensions and pensions for people who worked outside Ireland; provide basic tax information affecting pensioners; explain what type of expert financial information is available from outside agencies; and provide information and referral for advice, if required, on household budgeting and money management. It will not recommend particular investments or institutions or make investment for pensioners. Neither will it recommend particular courses of action to pensioners but will provide the information on which decisions can be made.

We have already extended the range of information on social welfare topics of particular interest to pensioners. An information leaflet about savings introduced a few years ago was very well received. Our most recent guide, which deals with occupational pensions, is being reprinted because of high demand. It was a total sell out.

The new service will co-ordinate all the existing information available for pensioners. It will identify particular financial issues of importance to pensioners. For example, the effects of disposing of assets such as a smallholding or savings or a private house are topics of concern to many people as they get older and cannot manage.

This service will give pensioners the confidence to make the best use of their savings for their own benefit by reassuring them about their entitlements, dispelling any misunderstandings about the effects of savings on entitlements and providing practical information about where they can go for advice about their savings.

New technology has made possible major improvements in the way in which information can be disseminated but older people can benefit greatly from a highly personalised face-to-face service. Developments such as pensions for former emigrants under reciprocal agreements with countries outside the EC or changes in the means test which allow the sale of a private house to be disregarded in certain circumstances can best be explained at personal interviews.

The new service will be locally based within my Department's information service but with a headquarters-based coordinator who will specialise in financial issues affecting pensioners. The new service will be piloted in a number of centres around the country.

Deputies will be aware that we are localising our services to the greatest extent possible while at the same time introducing the most modern technology. As part of this development we hope to give a better service locally and one of the groups that will particularly benefit from this is the pensioners.

Occupational pensions have an increasingly important role in supplementing the incomes of retired people. Last December I formally set up the Pensions Board to supervise the implementation of the Pensions Act, 1990. Deputies will be glad to know that it is making rapid progress with its work and with the recruitment of staff. The Act provides that the administrative expenses of the board are to be financed in full by fees payable by occupational pension schemes. It is my intention and that of the Government that the fees should be used only for the purpose of meeting necessary administrative expenses. I have made it clear to the board that we want to keep the expenses to what is necessary so that the charges are minimal.

The fees will be collected by the Board itself and the whole procedure will be entirely separated from my own Department's financial arrangements. I have asked the board, as a priority, to advise me on the level of fee and the basis for levying it. I expect to receive their recommendations within the next two weeks. I will then be in a position to make an announcement on the matter so that schemes will have adequate notice to enable them to make the necessary financial provision. The board intends to have arrangements for the registration of schemes and the collection of fees in place by September at the latest.

As the Board has been established as a body corporate it would in the normal course be subject to corporation tax. However, this would in effect give rise to a form of double taxation. Schemes would be required under the Pensions Act to pay fees to finance the board's activities. There could then be a liability on the board to pay corporation tax on any surplus of fee income at year end. This surplus could instead be used to reduce the fees payable the following year. I am pleased to say that specific provision has been made in section 35 of this Finance Bill to exempt the Pensions Board from corporation tax. This is a clear indication to employers and employees, who finance occupational pension schemes, that the Government have no intention of imposing any additional burdens on schemes over and above what is required to finance the essential administrative expenses of the Pensions Board.

This Government's policy of decentralising Civil Service functions has been a major success. It provides a welcome boost for local economies and increases the demand for housing, goods and services in the areas concerned. This in turn leads to the creation of jobs. My own Department have played a major part in that process through the relocation of the Pensions Services Office to Sligo in 1989 and the recent transfer of Child Benefit and Treatment Benefits Sections to Letterkenny. There are now over three hundred and fifty Social Welfare staff in the Pensions Services Office in Sligo. Salaries alone will inject over £2.7 million per annum into the local economy of Sligo town and surrounding regions of south Donegal, Mayo and Leitrim. The relocation of 172 staff of my Department to Letterkenny has increased the income of the town and its environs by £1.8 million annually. Almost half the junior staff involved in both moves were recruited locally. I would like to take this opportunity to thank and congratulate management, staff and unions on the smooth and professional transfer of these major functions to Sligo and Letterkenny.

While continuing our strategy of sound economic management we are also making substantial progress, despite international uncertainties, in key areas like the reduction of taxes, greater social equity and welfare improvements. The improvement in the public finances achieved under the Programme for National Recovery made possible substantial income tax reductions and increases in social welfare payments. These increases were ahead of the rate of inflation each year.

In my travels in other countries, seeing their economic depression, even if it is only mild depression at this stage, they are very envious of what has been achieved by the Programme for National Recovery here and of the prospects for the Programme for Economic and Social Progress. As a result those at work and those who depend on social welfare and their families gained in real terms over the last three years. This contrasted sharply with the period prior to 1987 when most people lost out. We recognise that those on social welfare benefits, particularly those with large families, deserve as our economy grows to share in the rising living standards of the community as a whole. The social welfare commitments in the Programme for Economic and Social Progress will ensure that that objective is met.

I believe that the Minister for Finance has got the balance right in this Finance Bill. In addition to keeping the economy on the sound path which the partners in the Programme for Economic and Social Progress have set out, the Bill takes some of the first steps to implement improvements. This Bill begins that and will deliver what we all want to see, that is, employment for the many returning emigrants — because there are thousands of emigrants returning to Ireland at this time and depending on Ireland for their future. There are thousands of people unemployed who likewise depend on us. I have pleasure in commending this Bill to the House as a very important instrument in the overall strategy.

Mr. Browne

(Carlow/Kilkenny): Tá seanfhocal ann a deireann “ní mar síltear bítear” agus tuigeann gach einne é sin, is dócha; agus tá sé an-oiriúnach don díospóireacht seo mar tá sé soiléir go gceapann an tAire Airgeadais agus b'fhéidir an tAire anseo inniu go bhfuil rudaí ar shlí amháin agus ceapann daoine eile nach bhfuil. Deireann an tAire go bhfuil agus go mbeidh dul chun cinn mór déanta de bharr na cáin-fhaisnéise seo. Ach tá seanfhocal eile ann a deireann “tosach maith leath na hoibre”, agus os rud é nach bhfuil tosach maith déanta anois mar tá dífhostaíocht imithe ar strae ar fad, agus tá an EBR imithe ar strae freisin: tá níos mó bainte amach againn anois ná mar don bhliain ar fad. Tá tosach——

Dr. Woods

Is dócha gur chuala tú faoin Gulf War.

Mr. Browne

(Carlow-Kilkenny): Tá an Bille seo os ár gcomhair. Beidh leithscéal ann is dócha agus beidh a lán rudaí eile, ach níl a fhios agam cad a tharlóidh.

Dr. Woods

A minor hiccup.

Mr. Browne

(Carlow-Kilkenny): Tá an Bille seo os ár gcomhair agus b'fheidir nach bhfuil rudaí faoi mar a cheapann gach éinne. Tá súil agam ó thaobh na tíre de go mbeidh feabhas ar an scéal ar fad ach tá tosach an-lag déanta faoi láthair. Os rud é nach bhfuil tosach maith ann b'fhéidir nach bhfuil leath na hoibre déanta agus nach mbeidh a leithéid ann ag deireadh na bliana. Leanfaidh mé ar aghaidh go dtí an príomh rud, b'fheidir. Tá seanfhocal eile ann a deireann “aithníonn ciaróg ciaróg eile”. Níl an tAire Airgeadais i láthair agus nílim ag rá go bhfuil sé in a chiaróg, ach beidh mé ag caint faoi lucht gnó agus lucht fostaíochta. Bhí an tAire, agus is dócha go bhfuil sé fós, in a fhear gnó os rud é go bhfuil monarcha aige i Longfort, agus tuigfidh sé an méid atá le rá agam ar na fadhbanna atá acu.

I want to highlight some of the problems experienced by people who give employment and bring revenue into the Exchequer. I should like to highlight difficulties some employers face. One man who came to me to talk about his problems had learned his skills in England at no expense to this country, had come back and given of his time, energy and money to provide employment here. This man who is doing major work for a semi-State company has to pay his PRSI and PAYE contributions at the end of every month. Yet, for some strange reason, the semi-State company he is working for think it is in order to pay him for his work at the end of three months. When this man was subjected to rat-a-tats from the Revenue Commissioners about the delay in the payment of his contributions he had to borrow £100,000 to keep the sheriff off his back. This should not be allowed to happen.

I tabled a parliamentary question to the Minister asking him if he would compel semi-State companies to pay such people on time. If there is a rule that employers have to pay their contributions at the end of every month why do semi-State companies, who are an arm of the Government, not have to pay these people every month also? Why should legitimate traders who have a good record find sheriffs at their doors while cowboy outfits who charge cheap prices and employ people who are on the dole do not? While some of those cowboy outfits have met their comeuppance, many more owe the Revenue Commissioners a fortune. There should be a much more flexible arrangement for the payment of PRSI and PAYE contributions by employers. It is crazy that the first option of the Revenue Commissioners is to send out a sheriff once employers are late in paying their contributions.

I want to refer to the problems being experienced by an employer who works for a very important company who are in the news at present. This company have decided that the handiest way to pay their bills is when the job is completed. This man is in the same position as the man to whom I referred previously but he did not have to borrow money from the bank. However, because he was late in making his contributions for two months he got bills for £345 and £575 for interest on late payments of PAYE and PRSI. The company for which this man worked only paid him when the job was almost completed and he had to borrow money to pay the Revenue Commissioners. That man was due a repayment on VAT from the Revenue Commissioners and it was not paid on time. However, he got no interest on the money he was due.

It is a contradiction if an employer who is a little late in paying his PAYE and PRSI contributions at the end of the month should have to pay interest on what he owes to the Government while they do not have to pay interest on what they owe him in VAT repayments. Even though the Revenue Commissioners were about six months behind in making this repayment on VAT to this man, he will get no interest on the money he was owed. To use another seanfhocal, what is sauce for the goose should be sauce for the gander in these days of equality. I ask the Minister to look at the inequities of this system where interest can be charged on the amount owed by an employer when he is late in making his payments while the Revenue Commissioners do not have to pay interest if they are late in making refunds. While I am not blaming the Revenue Commissioners — we make the rules — they could be a little more flexible and not send out sheriffs straight away, which seems to be the easy option.

I want to refer to another factor which is of concern to employers. The Revenue Commissioners seem to have a very poor record in transferring money which is paid. The man to whom I referred earlier paid his money through the bank in February but last week he received a letter which said that a sheriff would call on him if he did not pay this money. It is absurd that this can happen in the computer age.

I too was a ciaróg when I employed one person for a fortnight in June 1989. As I learned very quickly, the frustration experienced by employers is enough to drive them out of business. I had more forms to fill in than Michael Smurfit. When I explained to the Revenue Commissioners that I only wanted to employ this person for a fortnight they accepted this and said I would be cut off by the computer on 30 June 1989. However, for some strange reason, the computer must have got a flu — it did not take that message. I then received another form asking me about my returns, the number of people I employed, what I paid them and so on. I again explained the position to them and they apologised. However, when I returned home last week I found a note from a tax inspector from Kilkenny who said he had called and would be grateful if I would ring him. When I rang this man I kept as calm as I could and informed him that I had already cleared up the matter. Perhaps that man had to call to bigger fish in my area then me but there is something wrong when such mistakes can occur at that level.

There is so much red tape here that we are getting tied up in knots. I should like to compliment the Minister for Social Welfare, Deputy Woods, who is present in the House for getting rid of much of the red tape he inherited and for simplifying the social welfare system. It might be no harm if one of the Fianna Fáil backbenchers was given a new post of "Minister for Cutting Our Red Tape". People are frustrated with all the red tape. I know a widow who had enough trouble after the death of her husband without having to worry about receipts for an extension which had been built to her house. She had no interest in this matter. Because she does not have any VAT receipts, neither hell nor high water will enable her to get her a grant for this work, even with the help of the Ombudsman. It is obvious the house was built and the extension added on — an inspector has only to visit the house to see this. Houses down the country, do not grow overnight like mushrooms, materials have to be bought and the houses have to be built. A Minister who would have responsibility for cutting out much of this red tape could do a marvellous job. The Minister for Finance should look at the workings of the Revenue Commissioners, simplify the system and give them a human touch.

Mr. N. Treacy

We have done that and it is working well.

Mr. Browne

(Carlow-Kilkenny): Perhaps they could send people other than sheriffs out to talk to people who owe them money. It is ironic that the cowboy operators can cod Revenue and go into liquidation while legitimate traders cannot. I know of a genuine firm who had to compete with a cowboy operation which went to the wall. The Revenue Commissioners were hounding that cowboy operation for a much bigger sum than they were hounding my client for. I do not know where the balance lies. I accept that the Revenue Commissioners have to chase the money but they should be able to ask firms what is wrong when they are late in making their monthly payments instead of using the mallet straight away. I know a businessman who was wondering if he should sell his business and live happily ever after. A balance has to be struck so that we do not drive people who are carrying risks and giving employment around the bend and cause them to give up their ventures.

As I said, things are not what they might seem. In his speech the Minister forecast economic growth of 2.5 per cent. I am not so sure that that target will be reached. In my town for the first time in a long time workers are being let go. It is a sign of the times. From talking to business people I know that things are not going as well as the PR of this Government maintains.

A few days ago I had a chat with a business man who employs about 150 people. It is a good company competing in Europe but he told me that the last six months had been very bad. I know there is deflation in Europe but I will be very surprised if we can continue having growth here because all the signs are that we are slowing down. When we see long established firms letting workers go simply because they no longer have the market, we are slightly in trouble and "ní mar síltear bítear". As William Shakespear said "There is nothing either good or bad, but thinking makes it so." The Minister projects a great image of confidence and that is good for the nation, I suppose, but there must be realism at the back of it. Perhaps we will be able to compete, but it is doubtful.

Education is one of those areas in life where many people who should know better think it is a luxury that we could do without and that because they cannot see something like a box or a motor car at the end of the day, nothing has happened. The Minister for Finance must deal with all Departments but I appeal to him to seriously consider the importance of employing remedial teachers in all areas of school life, particularly at primary level because a good start is very important. Career guidance teachers are very important at second level. Students are in a dilemma about what subjects they should choose and what they should put on their CAO form. Career guidance teachers could help here; they are a very important part of school life.

The Minister for Education will say that her budget is the biggest ever for education, but if one takes inflation and normal wage increases into account the budget must increase every year. The increase might not make an improvement but might simply be maintaining the status quo. The present dilemma with the ESB strike will be only chicken feed compared to the result if teachers get frustrated and work to rule, that is, not doing unpaid work in relation to games, concerts and so on. If teachers decide to do only what they are paid for, the country will suffer. In the long run teachers are the unseen and often unappreciated moulders of posterity. We cannot compensate somebody for that sort of work. In Finance Bills, education should be seen for what it is — an invisible asset but a very practical and necessary asset.

We have make believe about emigration and unemployment. Our unemployment figures were going nicely when people were ignoring the fact that emigration figures were soaring. If at the end of March we have 242,800 people unemployed, it is nothing short of scandalous. That is an increase of 10,000 since the budget was introduced two months ago. One of the reasons given for this rise in unemployment is that emigration stopped and the people who came home at Christmas did not return abroad to oblige us.

No amount of bluffing will get away from the fact that we are not making any impact on unemployment although it is a major problem on which we must impact. The figures projected are not even correct. There is a new scheme where people over the age of 58 are not registered any more on the unemployment register. We have a figure for emigration which could be up to 40,000. If those figures were taken into account we would be heading for a figure of 300,000 unemployed, and that is just not acceptable.

The Minister talked about the Government's overall economic strategy and said that it was based on lower public borrowing, improved competitiveness, strict adherence to our obligations and so on and that these in turn resulted in higher unemployment and a rate of economic growth which is one of the highest in the EC. I am always fascinated by these figures. They seem to come out of nowhere.

The labour force survey was carried out very casually. There has been a gradual tightening up in this labour force survey. I am talking from experience. They suddenly found that there were far more people employed than heretofore, just because the collection of statistics became more efficient. I have very serious doubts about the figures of rising employment we get from Ministers every so often. Why is there a rise in unemployment if we have such massive emigration and jobs are being created? This is another piece of make believe, another bit of PR.

The Minister said our policy on improving benefits for those on social welfare was being maintained. A percentage has been given that will nearly keep up with inflation, if we do not include the VAT increases and so on. Deputy J. O'Keeffe introduced an excellent carer's allowance on foot of an amendment to last year's Finance Bill. This is an allowance that should be given to those who are looking after the elderly. Who can get it? It is beautiful concept. The other day I visited a woman whose husband works very hard for £80 a week, she looks after her sister and brother who are both mentally handicapped. This woman was turned down for the carer's allowance, although the two people she is looking after should be in hospital.

The Minister may say the policy of improving benefits for those on social welfare is being maintained, but the position is twice as bad. The carer's allowance was used as a propaganda exercise last year from January to October when the application forms became available. The Minister on my own local radio told us about the carer's allowance and I was worn out with people asking me how to get it. The scheme was announced in January but the forms did not arrive until October. The Government got almost 12 months' propaganda from it and then, when it came into play, the numbers who could benefit were minimal. That is a pity.

In his budget speech the Minister reaffirmed our medium term objective of progressively reducing the debt/GNP ratio towards 100 per cent by 1993. If, at this stage, we have borrowed £39 million over the projected full year's borrowing, that poses a question which even a confident Minister might have to face. If we borrowed £499 million in the first three months and we expect to borrow £460 million in the whole year, we are in trouble. We will have to play poker or do some bluffing somewhere along the line.

The Minister said that given the particular uncertainties which are a feature of 1991 it was bound to be difficult to evaluate the overall budgetary picture until a good part of the year would have passed but that nevertheless the Government would monitor the evolving situation very closely and would not hesitate to do what they think necessary. Does this mean that we will have to wait until after the local elections for the Minister to say that things are going wrong; in other words, will the tone be confident, will we be told that everything is grand and we will be fine but, as soon as the elections are over, will a mini-budget be introduced?

Mr. N. Treacy

Do not wish that on us.

Mr. Browne

(Carlow-Kilkenny): I wish the country well but at the same time we have to face reality.

I would like to make reference to the amount allocated to the Department of the Environment. We face two great problems at present: the first is the problem of our roads and the other is the problem of potholes to which the Taoiseach, much to his shame, referred today. It appears that the Minister lost out in the battle to get money. Like a good school master, he called in the engineers to find out why they were not spending the money allocated for road repairs. I am not here to speak on behalf of the county engineers but I have no doubt if they had been given sufficient funds during the years for county roads they would have done a very good job. As a member of Carlow County Council I said it is a gross insult for any Minister for the Environment to pretend that the engineers have this money in their back pockets and are not prepared to spend it. There is no doubt that if we had not received money from Europe for our national primary roads nothing would have been done in regard to our county roads. The problem is that we neglected those roads and no money was allocated for them.

Mr. Maurice Doyle yesterday commented that it is great we are improving our infrastructure to get our goods out of the country but it should be remembered that there is two-way traffic on roads. Once we have improved our roads immensely, foreign operators will be able to transport their goods here and compete with us. Therefore improving our roads will not remove our difficulties.

The business expansion scheme has been discussed ad infinitum. I will not go into the details of the scheme but “tax foregone” is an interesting phrase. On budget night the Taoiseach defended the proposed changes but suddenly there has been a change and the figures no longer amount to tax foregone.

The urban renewal scheme has done a lot for towns but the emphasis should be on the word "renewal". I do not think that it was ever the intention that the scheme should be used to open up new businesses. It is also a pity that greater emphasis was not put on housing. A town can only take a certain amount of business and unless there is an increase in employment in an area, new businesses will only take business from existing enterprises. I doubt very much that those who invest in this scheme will get a great return for their money. The scheme would be of benefit if houses were being built for the elderly in town centres but it seems that many shops are being built for which the builders, who can avail of tax incentives, can charge very high rents. The people renting these properties will find it very difficult to survive. If they survive, the older businesses will not or vice versa. It is great that one is able to come into a town to announce that a few million pounds has been granted but the result may not be nearly as good.

I compliment the Minister for Finance for making improvements to the inheritance tax system. While it is difficult to get this system right, I compliment the Minister in particular for removing an anomaly which arose in a case where a father left land to his son who then returned to the land. He also addressed the question of insurance policies which were regarded as assets. I ask him to keep up the good work as young farmers need to be given a start. At present only the house and lands are exempt and I would ask him to consider exempting stock and machinery.

Young people need a lot of encouragement to go into farming given that we do not know what is going to happen in the GATT talks or in Europe. If it appeared that nothing was going to go wrong and everything was booming there would not be a dark cloud on the horizon and all would be fine but the reality is quite different. I hope that things are not as bad as they appear but we should not discourage young people from going into farming. A young farmer could well do without having to borrow £25,000 to £30,000 to pay off a tax bill before starting to farm. If he could borrow that amount to construct sheds, buy machinery or set up a milking parlour, then at least he would be helping himself. While the threshold has been increased in line with inflation, this is not enough. Young farmers should be given a guarantee that they will not have to borrow money. I could say more on that topic but I think the Minister is going about it in the right way. While young farmers will not be satisfied I hope the Minister will take some of my suggestions on board next year.

I would also ask the Minister, in preparing the budget next year, to remove some of the anomalies in the third level grant scheme. It is a bone of contention that PAYE workers have no hope of getting third level grants for their children while others who appear to be better off seem to be able to get them. That matter has to be tackled.

I stated at the outset "ní mar síltear bítear". It appears that the position is not as good as the Taoiseach and the Government would have us believe. The economy is slowing down. Perhaps the Minister's forecast is correct but it is my hope the picture is not as bad as it appears. There is far too much propaganda about employment and a lack of realism about unemployment.

The Minister should have tackled in the budget the high cost of employing a person, because if employers are not encouraged to take on extra employees then we will get nowhere. If we do not get the employment figures right we are destroying a young nation of people who are emigrating and giving their talents to other countries. I have no objection to people going abroad if they want to, but it is pathetic to watch people from the west, as we saw in a Christmas TV programme, leaving against their will simply because we are not making the changes here that would encourage employment.

Mr. D. Ahern

I welcome the opportunity to say a few words on the Finance Bill, 1991. I listened intently to what Deputy Browne had to say and I and others on this side of the House should regard as a compliment the fact that Deputy Browne made very little reference to the provisions of the Finance Bill but talked about everything else under the sun. I also acknowledge the fact that he complimented the Minister on a number of changes he has made not only this year but in previous years in relation to such things as inheritance tax.

Deputy Browne suggested to this side of the House that the Government look at the possibility of making a new portfolio for a Minister for Red Tape. I am surprised his own leader did not think of that when he was throwing out spokespersons willy-nilly not so long ago.

Mr. Browne

(Carlow-Kilkenny): He set up subcommittees in this House.

Mr. Hogan

Deputy Ahern will be all right next time.

Mr. D. Ahern

Some of the Deputy's own people have criticised the Minister on the self-assessment details in this Bill and in the last two Bills. Self-assessment is one way of getting rid of much of the red tape the Deputy was talking about. Most people, particularly in business, would say the self-assessment system is working well, given the fact that it is not being treated like capital gains tax. That too will be of major benefit to people in business in particular.

Deputy Browne mentioned the sheriffs system and the way they operate with a mallet. I would remind Deputy Browne that it was his Government at the end of the 1982-87 period, who introduced the sheriffs system. Not only did they introduce it, but they brought in people without advertising the jobs.

Mr. Browne

(Carlow-Kilkenny): The Deputy's party have changed everything since 1987. Why not change that?

Mr. D. Ahern

They nominated people in the last throes of the Government's——

(Interruptions.)

Acting Chairman (Mr. Stafford)

Allow the Deputy to proceed. Deputy Ahern without interruption.

Mr. D. Ahern

It was one of the final flings of their last Government. As I said, without advertising and without notification to the rest of us, they appointed sheriffs to go around and do exactly what the Deputy said, come down on the people who are defaulting with a heavy mallet.

The Deputy mentioned the country roads system. Everyone acknowledges that county roads are not what they should be, but the Minister for the Environment in 1988 decided to implement a three year programme spending £150 million in 1988, 1989 and 1990, upgrading our county roads. That money was spent and an extra £15 million was spent last year. For the Deputy's information, a sum of £63 million will be spent this year on county roads. That contrasts very starkly——

Mr. Browne

(Carlow-Kilkenny): What about potholes?

Mr. D. Ahern

——with the paltry sum paid by the Deputy's Government in 1986, £23 million, I believe. The fact that so much money is now being spent on our county roads begs the question why they are still in such a state. They are still in a bad state of repair because the road surface dressing programme of each county council has been put to nought because in the early eighties literally no money was spent upgrading or surface dressing our county roads.

Mr. Hogan

That is not true.

Mr. Browne

(Carlow-Kilkenny): Ní mar síltear bítear.

Mr. D. Ahern

The surface dressing cycle of the roads in my county is now almost 20 years, and it should be seven. In the early years money was not spent. Now we are spending money to put right the roads that got into a bad state in the Deputy's time.

Mr. Browne

(Carlow-Kilkenny): What happened in 1977, if the Deputy wants to go back?

Mr. D. Ahern

I listened to what Deputy Michael Noonan had to say from that side of the House about the Minister's figures and Deputy Browne adverted to that. He said the figures are out of line. He said so last year and the year before. In the middle of the year he said that at the end of the year the Minister's figures would be out and he would have to have a mini-budget. He did not have to have a mini-budget and he will not have to have one this year either because his figures will be in line; it is accepted by most independent commentators that the figures will be on line at the end of the year.

Mr. Browne

(Carlow-Kilkenny): The Irish Times.

Mr. Hogan

Dermot Desmond.

Mr. D. Ahern

I listened intently to Deputy Rabbitte and, while it might make great listening, his attitude and that of The Workers' Party is totally simplistic. I suppose that comes from the fact that they know that as a party it is unlikely that they will form a Government in the near future. In order to provide jobs the economy must be growing and the economy is now in growth pattern, contrasting very definitely with the period from the early eighties up to 1987.

On the return of Fianna Fáil to power in 1987 the word "confidence" that we hear so much about came back into the economy and had a major role to play in the growth pattern. Our inflation rate now is one of the lowest in the EC and that has to have an effect on job creation. While I accept what Deputy Browne says in relation to unemployment figures rising, that trend is caused because emigrants are now returning home because the prospect of getting jobs here is better now than they were since there is a recession in the UK and the US.

Mr. Hogan

Why are so many unemployed?

Mr. D. Ahern

The job creation statistics are there for all to see; they are prepared by indepenent people to prove the economy is creating jobs. The fact is people are returning.

I would like to speak in some detail on the harmonisation of VAT and excise duties come 1992. The Minister in all his Budget Statements has made much of the fact that when 1992 comes he will have to get his taxes and excise duty harmonised. Excise duty will go after 1992 and the Minister is well aware that that will have grave implications in the Border areas. If excise duty is abolished overnight and VAT rates are harmonised with those across the Border, there will be major job losses in the public sector, and particularly in the private sector. This has been highlighted over the past number of years, and particularly over the past number of months, and people in those areas are very worried.

I am reading from a number of figures I have been handed. In Dundalk and district 150 Customs and Excise staff are employed and in Castleblayney approximately 14 are employed. In that area alone there are 164 staff who are unsure they will still have jobs on 1 January 1993. The customs clearance industry has grown up as a result of the barriers we are trying to do away with. About 150 people in that sector are employed in the Dundalk region alone; come 1 January 1993 if what we are told takes place, some alternative arrangements will have to be made for the redeployment or re-employment in both the public and private sectors. As regards this document I have in relation to the Customs and Excise officials at the customs posts, the wages they earn amount to about £2.85 million a year and this goes into the local economy. Dundalk has a 30 per cent rate of unemployment, well over the national avarage, and would be badly hit by such a loss of revenue. It is incumbent on the Minister and the Government to ensure that alternative employment is available for both the Customs and Excise officials and the customs clearance people.

I compliment the Minister for Finance on his recent visit to Dundalk where he addressed a function on this subject. He also spent time afterwards discussing the matter with every sector involved. Some concrete suggestions were made and many people have complimented the Minister on his approach.

The age profile of those employed in the Customs and Excise service is an important factor. Eighteen per cent are under the age of 30, 46 per cent are aged between 30 and 40 and 26 per cent are between 40 and 50. Many of those people would not find employment in private industry if they were to be let go or accept redundancy. The Minister suggested that they should themselves make suggestions to the Department of Finance as to their re-employment, preferably within the Dundalk area. One answer would be a decentralised office in Dundalk which could provide employment for them.

When the decentralisation scheme was put in place in 1980 the Department designated for Dundalk was the Department of Posts and Telegraphs. We left office in 1982 and as a result of an ideological stance against decentralisation, the incoming Fine Gael-Labour Government did not proceed with the programme. It was not reactivated until we returned to office in 1987. Sections of the Department of Posts and Telegraphs were to have been relocated to Dundalk and Waterford but in 1983 the then Government split the Department and set up two semi-State bodies, An Post and Telecom Éireann. An Post are totally unwilling, and probably unable because of financial constraints, to decentralise to Dundalk. The Government are investigating the possibility of assigning another Department to Dundalk and I would ask the Minister to expedite that matter. A decentralised office of a Government Department would be ideal for soaking up the jobs that will be lost by Customs staff in places like Carrickarnon and the Newry Road station at Dundalk.

The customs clearance agents are in a different category.

Acting Chairman

I would remind the Deputy that we are debating the Finance Bill. I have given the Deputy a lot of latitude.

Mr. D. Ahern

I am referring to the Finance Bill. The Minister has stated that the thrust of the Bill is to try to harmonise taxes. Tax harmonisation has huge implications. The position of customs clearance agents is worse than that of Customs and Excise officers because they are in the private sector. The Minister indicated in Dundalk that he would be quite willing to set up a task force to investigate the possibility of further employment for these people, about 150 or 160 of whom face the possibility of redundancy.

This Government have been criticised by some Members opposite as not being aware of the problems of Border areas. The Minister for Health, who is in the House, is well aware of the position. The budget speech was peppered with references to the Border areas. Reference was made to cross-frontier employees, people who are employed across the Border in Newry or Armagh but resident in the Republic. The Minister for Finance has acknowledged the anomaly by giving them the £800 PAYE allowance which previously they did not receive. He took on board representations by me and other Border Deputies. That is one recognition of the Border scene.

The other is the implementation of the new 24-hour rule. I can unashamedly say that the 48-hour rule put the town of Dundalk back on its feet, having suffered massive haemorrhaging during the 1980s. The service sector in the town can at least make a living now. The introduction of a 24-hour rule, with the consent of the Commission, will help. As a result of the recession in the UK and VAT reductions here, the scene on the Border is not as drastic as it used to be and there is not a great desire to travel from the Republic to the North. There are far more bargains in the Republic than in Newry.

The amendments to the BES scheme are welcome and I do not accept the criticisms from The Workers' Party. A simplistic approach does not assist. If we do not have growth in the economy we cannot create jobs. This is an area where there is growth and the Government have to accept that by building up an infrastructure for tourism, allowing hotels to build extensions and so on, we are creating jobs.

CERT, the hotel management and training body, are looking for recruits. Most of the people who participate in these courses are employed at the end of the day. I compliment the Minister on his action in that regard. I made representations to him in relation to a number of problems that arose as a result of the guillotining of the scheme in the budget. The Minister has adopted a realistic approach asking people, caught in that trap, to produce a contract in order to prove that they had set expansion procedures in motion. Of course there are people still excluded from its provisions but most of them would have to accept that they had not gone sufficiently down the line to prove that they had been availing of it.

The recent VAT reductions in the United Kingdom have been a help to Border areas. Coupled with the reduction in VAT here, from its earlier level of 25 per cent to 21 per cent, this means that the differential between North and South —which impinges directly on my home town — is not now as great. I am aware that it is the Minister's wish between now and 1992 to reduce the VAT rate to as near as makes no difference between the United Kingdom, the North and the South which can only be beneficial in my area.

People may tend to criticise the increases in road tax announced in the budget. I was interested to hear recent suggestions by the Leader of the main Opposition party, Deputy John Bruton, in regard to the road fund tax when he contended that that tax should go directly to local authorities enabling them to put money into roads. He did not say from where the Government would be able to recoup the money they would not receive were it to go directly to local authorities. Deputy Bruton's approach was completely ill-considered. He appears to take an awful lot on himself, despite the fact that he is surrounded by so many spokespersons capable of advising him properly.

The changes in stamp duty included in the Finance Bill are welcome. I know that to date the late payment of stamp duty has not been helpful, causing people engaging in property transactions much difficulty. The penalty clauses that obtained to date were somewhat injudicious and did not leave any room for manoeuvre. The changes to be implemented under the provisions of this Bill will render the position of people liable to the payment of stamp duty easier. Stamp duty now constitutes a major outlay on the part of people engaging in property transactions. The section dealing with the under-statement of values of property vis-à-vis stamp duty — when such property is the subject of a gift — is to be welcomed also because it would appear there has been some laxity on the part of the Revenue Commisioners in this regard. Henceforth, once people are aware that these provisions exist, that they will be penalised for advancing an under-value, there will be more realistic values put on such properties.

The Minister said that there is a review taking place of the disabled drivers' scheme. I would ask him to examine the possibility of amending the regulations in regard to eligibility for that scheme. I have had a number of people come into my clinic seeking this concession, for example, people who have the use of one arm only, who have not been included in its provisions which is most anomalous. Obviously, because of their disability, they are not in a position to drive a normal car with gears, manoeuvre the steering wheel and so on.

The Minister for Finance, in his budget statement and introductory remarks on this Bill — as did the Minister for Social Welfare in the course of his contribution — referred to the fact that, under the Programme for Economic and Social Progress the Government have initiated 12 pilot projects for a locally based response to long term unemployment. I am, indeed, glad the Government saw fit to include the town of Dundalk in one of those pilot projects. No doubt the town of Dundalk was chosen because of its very high unemployment rate of over 30 per cent. I know meetings are taking place between local interested groups to set up a company in the town. Many of the people unemployed in Dundalk have been out of work since many of the major factories in the area went out of business in the late seventies and early eighties. These will be middle-aged people who are unemployable unless retrained. Unfortunately, to date emphasis has been placed on the younger unemployed and not sufficient on the middle aged group.

In section 33 the Minister proposes extending the tax relief on company donations to the Trust for Community Initiatives, formed as a result of suggestions on the part of a number of business people, if not at the behest of the Minister, that such trust be established to help individuals who are unemployed to set up small businesses. The Trust for Community Initiatives is working well in my area, a number of people having applied for funding. I must compliment the major player in that trust, Mr. Neil McCann of the FII, from Dundalk, who contributed a sizeable amount of money to the trust, thereby enabling unemployed people, who would not have the wherewithal or who would be unable to get a loan from a bank to set up a small business. The provisions of that trust have fitted into that slot, allowing some of these people to set up small businesses.

This Finance Bill constitutes another step in an integrated approach to putting our economy back on the rails after years of neglect. That is evident from all the figures produced by independent commentators. This can only be beneficial as far as employment is concerned. Jobs are being created, people are returning from abroad, and hopefully, with increased growth in our economy, there will be jobs for those who return in addition to those leaving school.

I commend the Bill to the House.

Mr. Garland

In spite of the very grave budgetary problems this year I am most surprised at the Minister's decision to give further concessions to the business sector by extending the provisions of the business expansion scheme for an additional two years. As the House will be aware, it had been intended that the provisions of that scheme would be terminated this year, a proposition with which the Green Party would agree. The business expansion scheme was a notorious loophole enabling high rate taxpayers to avoid paying their fair share of tax. As already mentioned in my budget contribution the Green Party do not find income tax a very satisfactory form of taxation. However, as long as it exists we must ensure that both tax avoidance and tax evasion are eliminated. The purpose of the BES scheme was supposed to be the encouragement of job creation to reduce the appalling scandal of 250,000 people out of work and the continuing drain of emigration. The reality is that the scheme has had the main effect of feathering the nest of speculators and get-rich-quick merchants. The employment created by these schemes has been minimal in relation to the revenue foregone. The Minister in his review of the scheme has identified 4,250 additional jobs in companies involved in the scheme at a cost of £74 million in tax foregone and IDA grants. The cost works out at £17,411 for each job created. This is an enormous sum. How many of these people have permanent jobs? I would like the Minister to give an undertaking in the House to carry out a survey in, say, five years' time of the 347 companies involved to see how many of these jobs are still in existence. It is only then the full cost of State aid can be calculated.

The Green Party have consistently maintained that grants to industry should be limited to small, preferably Irish owned, industry in labour-intensive areas. While deploring the extension of this scheme for a further two years I welcome the changes in the scheme announced in the Bill. If the Minister has money to give away — which he has not — it would be much better spent on a reduction in employers' PRSI which, as the Minister and everyone here must realise, is a tax on labour. Anything more ludicrous at a time of such high unemployment is hard to visualise.

If we look at the income tax situation we find the cracks are showing at the seams between the Coalition partners. In an effort to try to reach the target of a standard rate of 25 per cent by 1993 the Government have reduced the existing standard rate of 30 per cent to a new rate of 29 per cent. So far as we have an income tax system the Green Party have consistently maintained that the way towards modest tax reform would be to concentrate on increased exemption limits to take the poor out of the tax net altogether and to give allowance relief at the standard rate only, which would make the tax system more progressive. I admit the Government have increased exemption limits but they are still too low. The minimum exemption limit should be £4,000 for a single person and £8,000 for a married couple as against £3,400 and £6,800, respectively, provided in the Bill.

I note that the rent allowance for elderly people has been increased, perhaps, in response to my amendment to the 1990 Finance Act.

I note also that section 23 relief — relief covering concessions to landlords on the provision of rented accommodation — has been extended for a further year. This relief is similar to BES and should be abolished forthwith. At the very minimum the Minister should give an undertaking not to renew this relief next year. The House will recall that this concession was originally introduced as a temporary measure as far back as the 1981 Finance Act.

The bank levy has been retained at the ludicrously low figure of £25 million. This figure should be increased substantially. I welcome the further reduction in life assurance relief which is another form of tax avoidance. The complete abolition of this relief would make a contribution towards widening the tax base.

The Minister has not responded to my suggestions last year that the PAYE-PRSI allowance should be granted to business, professional people and farmers in addition to being allowed to employees. There is no longer any excuse for differentiating between two classes of earned income. Incidentally, I would refer once again to the discrimination against small family business due to the non allowance of PAYE-PRSI allowance to members of the family working in the business. The reason for this apparently is, that payment of wages to family members is a tax avoidance device. I call on the Minister to remove this obnoxious provision which is a slight on the integrity of small business people.

I am disappointed that the full cost of VHI premiums to cover treatment at the Blackrock Clinic and the Mater Private Hospital is still being allowed.

I suggest the reintroduction of children's allowance at £300 per annum for all taxpayers in view of the grossly inadequate amount provided for in the Social Welfare Act in respect of child benefit.

I wish to refer once again to the inequity of the withholding tax on professional fees. This represents unfair treatment of professional people and professional firms and I am sure it is unconstitutional. For the reasons outlined above and the many other shortcomings in the Bill I will be opposing it.

Minister for Health (Dr. O'Hanlon)

The Bill before us is a further indication of the Government's commitment to preserve and enhance confidence in the national economy. There has been further tax reform and the Government are honouring their commitment to ease the burden on the taxpayer. Earlier, Deputy Ahern referred to a number of the beneficial effects of the Finance Bill, particularly in the Border counties. I agree with what Deputy Ahern said because if we cast our minds back to 1987 and the serious situation that existed in the economy at the Border towns as a result of people crossing the Border to do their shopping, we now see a complete reversal of that situation. First of all, there was the 48 hour rule introduced by a former Minister for Finance Mr. Ray MacSharry, which had a beneficial effect. Because we had the time to build up our economy here and, indeed, did so when other economies in Europe were suffering, we are now in a position to compete with the Northern side of the Border. In 1987 the difference in VAT rates in the North and the South was 10 per cent, it is 3½ per cent today. That is an indication of the good work done by the Government in getting our economy right. The benefits of the improved economy are not confined to the Border areas but are felt throughout the State.

The health services cannot be immune from the Government's financial strategy. It is fair to say that the health services met the challenge presented to them in that they maintained a high quality of service and at the same time met the necessary financial targets laid down. It is a tribute to all the staff working in the health services that they maintain such a high quality service, something which is is recognised not alone in Ireland but throughout the world. The nature of health services is changing because of new developing technology. That in itself is a challenge and although we like every other country in the world have to live within a finite resource, the manner in which the challenge has been met is very encouraging.

In his introductory remarks the Minister said that 1991 would be a difficult year and, of course, we have recognised that in the health services. Indeed, the Government have always recognised the difficulties in managing the health service and in meeting the needs of the people. This year we are receiving 22 per cent of Exchequer funding as against 18.7 per cent in 1987. The allocation to health boards and voluntary hospitals represents an increase of 7 per cent over 1990. Of course, I accept that much of the increase —£108 million — goes on additional pay, and nobody objects to that because the staff are entitled to be remunerated and their work recognised.

A major element in the policy is improved efficiency. The Fox and Kennedy studies will assist in giving greater direction to the efficiency measures. At present Noel Fox, management consultant, and two Assistant Secretaries in my Department are spearheading the efficiency measures throughout the service. Again, it is encouraging to see the enthusiasm at local level, in health boards, voluntary hospitals and voluntary organisations, to meet the efficiency measures which are so essential in ensuring that we maintain a proper financial strategy here.

We all think of health boards as providers of health services, but it is no harm now and again to remind ourselves of their economic impact, of the large force they are in their respective regions. They are a major business organisation, as it were. Practically every health board are by far the largest employer, they have the largest transport fleet and the largest catering organisation. This is important in that it puts them in a key position to be very competitive in the prices they pay for goods and services. This again leads to greater efficiency. I would add that we are about to establish a performance audit unit in the Department of Health which will monitor efficiency measures and see how they might be improved and enhanced.

In a debate here on 26 February last, as reported at Volume 405, column 1662-78 of the Official Report, I dealt in some detail with the services. I will not go into them in detail today except to make a passing reference to the fact that we said at that stage that the required number of acute hospital beds is approximately 12,000. We maintained that number of beds throughout the latter half of 1989 and right through 1990 and we intend to maintain that number throughout 1991, apart from the normal seasonal closures which are always associated with hospital services. I was a houseman in a hospital 30 years ago and at that time a whole corridor was closed. It amuses me in some ways, and saddens me in others, to hear people referring to a normal holiday seasonal closure as a cut back. It is certainly not a cutback.

Mr. Hogan

We have not advanced any further in 30 years.

Dr. O'Hanlon

I am not going to refer to all the improvements in the hospital services. The hospital in Beaumont that was closed for four years has been opened. A new £40 million building has been opened in the Mater. Part of a new hospital in St. James's has been opened and it will be fully opened this year.

Mr. Hogan

If the Minister looks after Kilkenny we will not say a word to him.

Dr. O'Hanlon

Kilkenny has been well looked after.

Mr. Ferris

What about Tallaght?

Dr. O'Hanlon

We are providing money for a major hospital in Kilkenny. In the Deputy's health board area we are building a massive hospital in Ardkeen in Waterford and another major hospital in Wexford, not to talk of the work at the other end of the country, in Sligo, Cavan and Mullingar. I could talk all day about the major developments in the four years since I became Minister for Health.

Another area that stretches the financial resources of the health boards is the demand led schemes, the community drugs schemes and the disabled person's maintenance allowance. Health boards are obliged statutorily to pay for those services. They have no control over the number of people who will benefit. It is a matter for the doctors to prescribe whatever drugs are necessary for the population. If an epidemic occurs leading to an increase in the amount of drugs required health boards are obliged to meet the cost. If that cost goes beyond what the health board have allowed, in order to pay the extra cost other areas of the service may be impinged upon. This year there has been another major development in that the Government have decided to create a special subhead for these accounts to ensure that they will not impinge on others. Indeed, we will be better able to monitor the demand for drugs and also for the disabled person's maintenance allowance.

Another important change due to take place on 1 June is the change in eligibility. This is something that, as the House knows, was recommended by the commission on funding and NESC and was requested by the Irish Congress of Trade Unions. That, in effect, will mean that all patients will be entitled to free consultant services in a public bed in a public ward.

Mr. Hogan

If they can get in.

Dr. O'Hanlon

That will be phased in over time. Naturally it would not be possible to bring it in overnight. It will ensure that there will be an increased number of public beds available for public patients.

Mr. Ferris

How will that happen?

Dr. O'Hanlon

It will be quite simple because private patients will no longer be allowed occupy public beds.

Mr. Ferris

How many private beds are there in public hospitals?

Dr. O'Hanlon

In theory under the present arrangement there is no reason why every bed could not be occupied by private patients. There is no law against that.

Mr. Hogan

The public patient cannot get in, not to talk of the private patient.

Dr. O'Hanlon

We monitor the system and that does not happen. In future beds designated for public patients will be occupied by public patients only, except of course for emergency treatment. If an accident comes into a hospital obviously the person involved will be given the first bed available. For elective work in future public beds will be available for public patients only. If we take, for example, hip replacement operations there is no reason at present why a person who needs a hip replacement cannot occupy a public bed and pay the surgeon. It has been alleged that there may be queue jumping. That does not happen to any great extent but the fact that there is a perception that it does happen is a good reason why beds should be designated, why public beds should be available for public patients and private beds for private patients. The new change will ensure that public beds will be designated and that only public patients will be allowed into those beds except in an emergency. On the other hand private beds will be designated for private patients. As I said, this measure will be phased in over time because, obviously, the requirements will differ in different hospitals in terms of the number of public and private beds.

Mr. Ferris

Will the Minister prohibit the redesignation of public beds? That is the plan in some health board areas.

Dr. O'Hanlon

The plan is to designate a certain number of public and private beds. I am satisfied that that will increase the total number of public beds available in the service. In future private beds will have to be self-supporting. If there is a demand for more private beds it will be a matter for the VHI to enter an arrangement with the hospitals to finance further bed development. If there is a bigger demand obviously that is something the VHI will be able to cope with.

In the Programme for Social and Economic Progress it was also pointed out that private practice will exist side by side with public practice. We have an integrated system of public-private mix which has served us well since the foundation of the State and the Government recognise that in the budget and the Finance Bill.

There has been no change in the tax relief available to people who pay their premium to the VHI. As the House is aware, negotiations are in progress with the consultants about a number of issues following the report of the Review Body on Higher Remuneration. They are discussing the question of pay, account-ability and a managerial role for consultants which is very important. Eligibility is included in those discussions and I am hopeful that they will be brought to a successful conclusion.

Mr. Ferris

Will the Minister keep us informed?

Dr. O'Hanlon

Yes, we will keep the Deputy informed. The Government strategy for the next seven years is outlined in the Programme for Economic and Social Progress and, of course, as Minister for Health, I am pleased with the emphasis on developments in the health service. Indeed, it is as a result of good Government management over the last four years that the Government were able to announce, through the programme, quite substantial developments which will take place during that seven year period. There will be a major additional investment over the seven years which will be targeted at community and primary health care. I will not go into the reasons for this but, world-wide, the emphasis is on these areas. The objective is that health services should be available to the lowest level of complexity appropriate to the person's need.

Over the seven years there will be an investment of £100 million capital for community based facilities; there will also be a progressively increasing amount of current expenditure, up to £90 million more in the seventh year compared to what is spent in the current year.

The development of community services — or indeed in some instances the substitute community services — for long stay residential care is not a cheap option. In many ways it costs just as much to ensure that you have the necessary staff available. Of course the House is aware that last year we spent an extra £5 million, which was allocated in the budget, on the elderly. This year the sum of £5 million was repeated and a further sum of £3 million has been allocated to enhance the services for the elderly. This will help the support services, public health nurses, home helps, twilight nursing — a new service — the provision of day centres, long stay places where necessary and general support for the elderly and their carers.

A sum of £2 million was allocated in the budget for the mentally handicapped in 1990 which was repeated in the original allocation this year with a further £1 million announced in this year's budget which was helped to provide a whole range of new services for the mentally handicapped. I will soon be announcing the number of new places which will be provided as a result of the extra money.

Mr. Ferris

It is not enough.

Dr. O'Hanlon

The same applies to the physically handicapped. In the seven-year programme there will be a major development of services for the physically handicapped and I am sure everybody in the House agrees that we need more speech therapists, occupational therapists and physiotherapists. All Members will agree that money is not always the reason for not being able to recruit these people as some of these disciplines are in very short supply. I am in consultation with my colleague, the Minister for Education, as to how we can ensure that more people are trained in these very important disciplines.

In the Finance Bill the Minister referred to the very important disabled drivers' scheme and he introduced very worthwhile improvements in the scheme two years ago. This year he introduced further improvements; he said that he is reviewing the scheme and, naturally, my Department will be in consultation with him about it. We provided an extra £3 million last year for the dental service and we are providing another £3 million this year.

Everybody will agree that there has been a substantial improvement in the dental services which is continuing this year. Nobody disputes that more needs to be done, there is no point saying that all the problems are solved. They are not and, indeed, as I have often said, a Minister for Health who thought he had all the problems solved should not be in office. However, the substantial improvement envisaged in the seven year programme will certainly help.

The Taoiseach appointed my colleague in the Department, Deputy Flood, Minister of State, to co-ordinate all the childcare services. This is a very worthwhile job and I am sure that everybody in the House will agree that the Minister of State, from the first day, took his duties very seriously and has done a splendid amount of work in that whole area.

One of the areas about which we must be concerned is child abuse. In 1982 there were 37 confirmed cases and in 1989 there were 1,300 confirmed cases of child abuse, including 500 cases of child sexual abuse. Shortly after I came to office I established two new units to investigate, manage and treat children suffering from child abuse. There is one unit in Temple Street and one in Crumlin; these are multi-discipline units with social workers, psychologists, paediatricians and backup psychiatric support where necessary. We also issued new guidelines for the investigation and management of children suffering child abuse. The multidiscipline approach is very important in ensuring that a number of disciplines are involved because it is very important that the diagnosis is accurate and that mistakes are not made.

We have also funded each of the health boards to ensure that they have their own facilities for the investigation and management of children who suffer child abuse and an extra sum of £1 million was provided in the budget for the childcare services. A substantial amount of that money will be allocated to the health boards for the provision of a number of social workers, particularly to look at areas of deprivation and disadvantage. The plight of the young homeless is one such area and substantial work has been done, including new hostels being provided in Ballymun and Tallaght. A number of new hostels will be built.

I should also like to refer to the misuse of drugs. Obviously, an inter-departmental approach is necessary to combat this serious problem. It is important to state that this week the Government approved a new national strategy to prevent drug abuse. The strategy is based on recommendations of the National Co-ordinating Committee on Drug Abuse which I reconstituted last year and which will provide a co-ordinated and integrated framework to deal effectively with the demand and supply aspects of drug abuse and drug trafficking.

The key provisions of the strategy are the co-ordination of services at national, regional and area levels; the development of a community-based response to reduce the demand for drugs and for the treatment and rehabilitation of drug abusers; the development of drug education programmes for schools, teacher-training colleges and third level colleges; the extension of service training for teachers on drug related matters; the co-ordination of services for AIDs and for drug misusers; a strengthening of the legislative framework to deal with illicit drug trafficking and the supply of illicit drugs to the community; and the establishment of a national data base which will provide general data on the prevalence and incidence of drug abuse. I would hope to publish the strategy in a few weeks.

This Bill is an indication of the Government's policy to ensure that we continue to maintain a healthy economy. At present, compared to 1987, we have the lowest inflation in Europe, much lower interest rates than we had, increasing employment and, above all, confidence in our economy and tax reforms which were promised by Government which improve the position of the taxpayers in the State. It is only by having a healthy economy, it is only by providing the necessary finance through our own work and our own resources, that we can develop our social services to the extent that all of us would wish to see.

Mr. Hogan

I am certainly delighted to hear the Minister for Health enunciate a policy of fiscal rectitude and acknowledge that it is important to have a healthy financial climate in the country in order to instill confidence in our economy. I wish he had taken the same line when he was in Opposition between 1982 and 1987. If he had the country would certainly be much better off today financially than it is.

Despite the acknowledged improvements that have taken place and which I hope will continue, there have been a number of slippages in recent times. Whether it is a matter of coincidence or not, every time the Taoiseach and Deputy O'Malley is in Cabinet together, the financial situation in the country comes under threat because, in recent times, we appear to be running the risk of increasing borrowing again, and that is something I thought we had got away from. I thought all sides of the House had agreed that progress should be made towards eliminating the Exchequer borrowing requirement as soon as possible. I hope the fears being expressed today are unfounded.

In order to keep the financial and budgetary figures on the rails, in line with the budget speech made by the Minister for Finance some weeks ago, I expect that the Minister for Finance will have no option but to introduce a mini-budget some time after the local elections to ensure that our finances are kept on target and that the confidence necessary to build up the economy and keep interest rates and inflation as low as possible are implemented.

Ireland is fast becoming a divided society. That is regrettable. That process must be arrested and reversed. If it is not we run the risk of being one State with two societies politically and socially pitted against each other. Already there are dangers of division in Irish society. There are very strong feelings of alienation and frustration among unemplyed people, among our young people and among people who cannot get housing. These are some examples of the wrong direction Government policy is taking.

In areas like health, education, and agriculture people who have are able to get the service they require but those who have not have difficulty getting access to their entitlements. If we are to progress as a nation, the strong and the weak must move forward together and economic advancement must not be bought at the expense of social deprivation and division. Our first priority in this House must, therefore, be to ensure that those who are economically weakest can truly consider themselves part of the social consensus. To achieve this we must inevitably reform our tax and social welfare systems. We have talked long enough about it but we have not achieved very much.

Today's system is neither efficient nor effective because it contains too many anomalies. These arise from the operation of a set of different thresholds to determine eligibility for different benefits or services. In some circumstances small changes in income levels can result in very large changes in the levels of entitlement. The operation of thresholds in this way creates serious disincentives to enterprise and effort. It gives rise to feelings of resentment and alienation.

Some people see their family circumstances worsen considerably even though they are making strong personal efforts to improve their own circumstances. A move to overtime or a change to shift work can remove entitlement to a medical card. Where there is illness in the family this brings about a substantial disimprovement in living standards. There are people in full-time employment whose incomes are only marginally above the eligibility limits for a medical card. The look at the situation of their neighbour and conclude that they and their families would be better off if they were unemployed.

These are some examples of the real world and of the anomalies that must be addressed but are not addressed in the Finance Bill, 1991. There are parents of children attending third level colleges who are experiencing real hardship at the moment, particularly if they have more than one student at college. We all know the huge sacrifices that are required and that are being made by parents of children who are going to college. The aim of these parents is to ensure that their children get a good education at the least possible expense to themselves. There is a huge financial drain on parents who are trying to achieve the best possible education for their family. These families need a break. This can be achieved by fine-tuning the tax system to reward people who want to do what is best for their families, who want to give their children the best possible education to ensure that they realise their full potential in the world of work thereafter.

The tax and social welfare system as we know it today has become a myriad of anomalies and distortions resulting in huge poverty traps. As legislators we have to tackle this. The elimination of these anomalies and traps will remove the feelings of injustice, discrimination and alienation that I have referred to and restore the spirit of enterprise and belief in the value of effort. It is clearly desirable to simplify the tax code and the social welfare code while meeting real needs. We must eliminate the mechanisms that encourage fraud and abuse of the system.

Some politicians believe that they can lose votes by their failure to tackle the black economy and the abuses of the social welfare system. How many of us, on a daily basis, encounter people who are working and procuring benefits from the social welfare system at the same time? We have failed as legislators to correct this matter. The Government have failed to take the necessary political action to stamp out this discrimination against people who are at work and people who are genuine recipients of social welfare. The people who are upset at people defrauding the social welfare system, the people who are working and drawing unemployment benefit and assistance at the same time, are social welfare recipients themselves and do not want to see their neighbour defrauding the social welfare system while he or she must be satisfied with the basic social welfare payment or with almost half their salary taken at source because of the luxury of doing a good week's work. A system of tax and social welfare must be devised to restore the incentive to work rather than penalise people for their effort, that will simplify the administrative machinery that is creating a bureaucratic nightmare for employers and that will eliminate the obstacles to the expansion of employment and reduce the incentive to enter the black economy.

Fine Gael have on many occasions proposed that the best way to do this is through an all-party committee working towards the reform of the income tax and social welfare systems. It is abundantly clear to all of us that no substantial reforms can take place in these areas without all-party agreement. Any proposals for reform run the risk of being sabotaged by the vested interests involved. Tax reform is not just about meeting the objective of reducing the standard or high rates of tax, which seems to be the popular view of the Government. Unless there is all-party agreement on the issue of tax reform, movement will be slow and the barriers to growth and employment will continue to exist and absorb the energy of the nation.

The Government should be honest with the general public in regard to tax reliefs applicable in the tax code. It would appear from recent media reports of statements by their Chairman, Mr. McDowell, that the Progressive Democrats are in favour of the abolition of all possible reliefs so that the top rate of tax can be reduced to 40 per cent. Is this the objective of the Minister for Finance? Perhaps he will clarify his position in this regard.

The Government, in particular, the Fianna Fáil Party, have reduced mortgage relief at a time of high interest rates. The reduction in life assurance relief has rendered the concept of endownment mortgages practically useless. Fianna Fáil promised to abolish the deposit interest retention tax on return to Government in 1987 but instead the Government have extended the scope of this tax.

The Government have been dishonest in relation to the treatment of PRSI for farmers and the self-employed in so far as it is now regarded as an extra tax on all those aged 56 years and over. It is ridiculous in the extreme for the Government to be deducting finance from members of the public while at the same time they are telling them they will get no benefits at the end of the contribution period. Why can the Government not introduce a system whereby even a partial contributory pension can be paid to those people in line with the contributions they have paid. Alternatively, they could extend the contribution period so that the self-employed will qualify for a full contributory pension.

I welcome the changes announced by the Minister for Finance to the business expansion scheme. Obviously, the financial interests of the Fianna Fáil Party and the Progressive Democrats changed the minds of the legislators in this regard. This is not an unusual interference in the mechanisms of Government.

I want to express my gratitude to the Minister for Finance for including section 107 in relation to inheritance tax. During the course of a debate in 1990 I pointed out to the Minister that there was a huge anomaly in respect of the transfer of lands from a father to his son or daughter and that if a son or daughter pre-deceased his or her parents only £10,000 relief was applicable in respect of the transfer of the property back to the parents. I raised this issue because I was aware of a particular case. I am pleased the Minister for Finance has, as promised, introduced the appropriate provisions so that this anomaly can be eliminated. I assure the Minister that this amendment to the inheritance tax code will be welcomed by all those whom it affects. It will take a huge financial burden off those people at a time when they can ill afford major financial headaches.

I welcome the continuation of section 23 reliefs for farmers who are carrying out important works for the control of pollution. I ask the Government to look very seriously at the problems being experienced by farm development offices which do not have funds to pay the expenses of their employees who go out to inspect work. That needs to be done in regard to the control of farmyard pollution. It is ridiculous to have employees of the Department of Agriculture and Food engaged in administrative work in their offices while farmers cannot proceed with the necessary work until an inspection is carried out. I appeal to the Government to resolve this problem as soon as possible so that the valuable work of controlling farmyard pollution can continue.

The agricultural community have received very bad press about the pollution of streams. I want to assure the House that the farming community in my area of County Kilkenny have invested substantial resources to improve farmyard facilities for the control of effluent. This work is regularly monitored by the local authority with tremendous success. Substantial progress has been made in this area over the past number of years.

I welcome the further improvements announced in regard to the treatment of widows. However, I do not believe the Minister has gone far enough in the context of our tax and social welfare codes in recognising the unique position of widows and widowers. When one looks at our existing tax and social welfare codes one would think that widows and widowers were never married. The State should recognise once and for all the trauma experienced by people when their partners die. They should give recognition to the financial problems experienced by widows and widowers at that time by treating them as married people in our tax and social welfare codes. This would show tremendous maturity and a humanitarian resolve on the part of the State.

The public relations exercise being carried out by the Government gives the impression that our economy is going well and everything is rosy and perfect. However, we should remember that interest rates are 4 percentage points higher than they were in 1987 and that our level of unemployment is still high — the Minister stated it will continue to grow. The people we meet in our daily routine speak about the huge financial pressures on families and the difficulties they experience in trying to make ends meet. The Government seem to be giving the impression that those problems do not exist. This is why I want to refer to a number of problems about which the Government may not be aware.

In 1989 the Taoiseach said he was not aware of the crisis in the health services. The Minister for Health, Deputy O'Hanlon, who spoke about the huge improvements in the health services must not have told the Taoiseach about the problems in the health services in the lead up to the 1989 general election. Apart from the debacle in relation to haemophiliacs there were many other problems in the health area at that time. The Taoiseach became acutely aware of these problems when his party lost seats in several constituencies. His party will lose more seats in the local elections if they do not address some other problems.

Unemployment is one of those problems, health is another. In spite of the assurances given by the Minister for Health today, the waiting lists are not getting any shorter. The extension of public hospital care to everyone will only exacerbate this appalling problem.

Another problem is the rampant crime in urban areas and the inadequate Garda resources to deal with this. As Deputy Browne knows from his contacts in Wexford — there are farmers in County Wexford — there are problems in agriculture.

Mr. Browne

(Wexford): They are all good farmers.

Mr. Hogan

The changes proposed in the Common Agricultural Policy and the GATT negotiations will result in people in rural communities experiencing genuine hardship. The Government have given the impression that they can do nothing about this in domestic policy and that it all depends on Commissioner Mac-Sharry in Europe. However, when Deputy Austin Deasy was Minister for Agriculture he got £200 million of European money in working capital at 5 per cent interest to help Irish farmers. He also introduced a reduced interest subsidy to help people in financial difficulties. Every time Joe Rea, the former leader of the IFA — I hope the Leas-Cheann Comhairle will forgive me for referring to somebody outside the House — stood up to speak about the bad weather he got a fodder voucher. Those domestic solutions to financial problems were introduced by the Fine Gael-Labour Coalition. In spite of the fact that a drop in farm incomes of 27 per cent has been the order of the day over the past two years the Government have not put forward any solutions to this problem.

The problems in regard to our roads also need to be addressed. The Minister for the Environment, Deputy Flynn, was quoted, out of context, as saying he would fill every pothole over the next three weeks. It has been suggested by one or two Deputies that he was up quite late that night. Some of the motor tax revenue that comes to local authorities should be retained by them. It would give autonomy to local councils to make essential decisions to improve the lot of rural areas and to improve county roads. We have here a Minister for the Environment who is so intent on urban renewal that he will go down in history as the Minister for rural decay.

There is an appalling crisis in housing. In Kilkenny there are 550 people waiting for housing with the prospect of only 20 houses starting in 1991 and the Minister says there is not a housing crisis. Perhaps the Minister for the Environment is unaware that there is a housing crisis and he should be told about it by some of his friends on the Government benches.

The national lottery has done important work in assisting communities, in providing sporting, recreational and amenity facilities and in funding voluntary organisations. However, public representatives are inundated with requests from voluntary organisations for funding and one cannot but notice the flourishing number of voluntary organisations fund raising on the streets both day and night. On the establishment of the national lottery we were told that it would do away with the need for fund raising on the streets. This is not the case. The national lottery has developed into another slush fund supported by the Progressive Democrats who cried crocodile tears about the distribution of funds in the lead up to the last election but who have not done anything in Government to reform the system of allocating these funds. Just like the Minister for the Environment they have put their hands in the till and distributed money at the behest of their Government colleagues. Fianna Fáil and the Progressive Democrats are presiding over the decimation of services in rural Ireland. Services are being withdrawn from rural Ireland and we are seeing the return of government of the Pale.

The Taoiseach and the Government were unaware of many rural problems in the run-up to the last election. This Finance Bill gives us an opportunity to make them aware and they will be made more aware when their local candidates go knocking on the doors in the local elections looking for votes. The Government seem to think that everything is going well and that everything is rosy in the garden but that impression will be dispelled when reality comes home to them during the local elections, and the real issues of the day will then assume greater importance than seeking an Irish solution to an Irish problem by amendments relating to a social issue that has been threatened on the agenda in the coming weeks.

Mr. Browne

(Wexford): I welcome some of the announcements made by the Minister in the Finance Bill. The Minister this year, as in previous years, has continued on a course which will benefit the people and the economy.

Listening to Deputy Hogan one would think that the Fianna Fáil Government should have all the answers. When the Coalition Government were in office from 1982 to 1987 they did not seem to have any of the answers. The Minister and the Government generally have done a very good job over the last few years to ensure a better standard of living for the people. Despite the difficulties that are expected to arise in 1991 I hope that will continue to be the case.

In relation to the black economy, politicians tend to be hypocritical. I doubt if any politician can stand up here and say that he did not make representations on behalf of people who were disallowed unemployment benefit or unemployment assistance because of allegations about working and signing on. When a person is disallowed he immediately goes to the politician whingeing and crying and complaining that the family do not have an income and more often than not we politicians go back to the Department or to the Minister and seek to have the social welfare payment restored. We pay lip service to the problem, but politicians generally, perhaps because of the political system where if one politician will not oblige, another will, will make strong representations to have the payment restored. It is time for us to give total support to a social welfare officer in making these tough decisions where there is a genuine case against a person in relation to working and signing on.

It is good to see that interest rates have come down by ½ per cent. I would question whether or not interest rates are coming down quickly enough. I question the role of banks and building societies and their reluctance to reduce interest rates when they were announced. When interest rates were reduced by one quarter of 1 per cent they said that they could not pass it on to their clients as it would cost too much and would not be of major benefit. If interest rates had gone up by one quarter of 1 per cent the banks and building societies would have found every reason to increase interest rates for business people, farmers or mortgage holders. The Minister for Finance must take on the banks and the building societies and ensure that all reductions are passed on immediately. Even small reductions help families with high mortgages who are trying to make ends meet.

Interest rates generally are far too high. I am baffled that the farmers who are well organised are allowing themselves to be ripped off by the banks and the lending agencies. The farming organisations and people dealing with banks generally should get together and hammer out deals to benefit themselves. Interest rates are crippling farming as are the other problems in day-to-day farming activities.

The banks have a very mean attitude in relation to charges for cheque books, lodgments and so on. One has to pay to bank here. The Minister for Finance, the Minister for Industry and Commerce and any other Minister with a role to play in banking and financial institutions should examine the reason for exorbitant charges and restrict the charges which are being introduced by the banks on a weekly basis. At the moment if a person applies to a council for a loan he must supply a letter of refusal from a building society or a bank. In my constituency and probably in every other constituency the banks are charging a sum of £5 for a letter of refusal for a person on low income. They rip off their customers and make exorbitant profits in the process. I hope the Minister will take the banks and lending institutions on to ensure they give their customers a fair deal.

Deputy Hogan referred to the Fine Gael policy on roads and suggested that the moneys raised in motor tax should be used to maintain our roads. That suggestion has been considered on a number of occasions since I became a Member of this House but I wonder if the Deputies opposite know just how much money is collected in motor tax in each county and how the figures compare with the grants allocated by central Government. It is my information that the amount of money collected in motor tax in County Wexford falls far short of the amount allocated by the Department of the Environment for the upkeep of our roads. I, for one, hope that we are not going to be told by the Department of the Environment that the money raised in motor tax should be used to maintain our roads as it falls far short of the amount required. I also hope the Minister will increase the amount of money available for the upkeep of county roads and will not suggest that the money raised on motor tax should be used as this would to be no one's advantage.

Earlier the Minister for Health referred to the policies he has adopted. The Nursing Homes Bill was recently passed by the House and I would like to see a number of the sections of that Bill, particularly the sections dealing with subvented beds, implemented before the end of the year. Due to the closure of a number of hospitals in recent years we have lost a number of such beds. I welcome the fact that the regulations have been changed so that the person's means will now be taken into account. Up to now a certain number of beds in a nursing home or hospital were subvented. There is no doubt that the scheme has been abused in the past but this system should be fairer. I also hope that subventions will only be paid in respect of nursing homes which meet the standards laid down in legislation as there are many nursing homes around the country where the facilities leave much to be desired.

I would ask the Minister for Finance to consider introducing a tax allowance which people who have children in third level education could avail of. While a substantial number qualify for scholarships, grants or ESF funding, a number of families find themselves above the income limits with the result that they have to borrow from a bank or other lending institution if they wish to send their children to third level education. This will prove to be a major burden if they have to send more than one child to third level education at any one time. Some incentive is needed and I do not think it would cost the Exchequer an enormous amount to introduce a tax allowance which such families could avail of. I ask the Minister for Finance and the Minister for Education to examine this matter to see if such an allowance could be introduced.

I am aware of one family back home who had six children attending university at the one time. This family found themselves above the income limit and consequently unable to qualify for any grant, even though they paid one third or more of their income in taxation. The parents showed tremendous resolve in sending their children who have now qualified in different areas to university. Such a family need some incentive and the taxation system immediately springs to mind.

Unemployment is still the biggest problem facing this country. Far too many of our young talented people find themselves on the dole, in low paid jobs or they have to emigrate. The taxpayer has spent a fortune educating those young people and in many ways it is a scandal that they are now in Boston, New York, London or EC countries. We need to look at this problem in a very temperate way and work together to find a solution.

I come from the county with the second highest rate of unemployment in the country. Some people may find this strange as County Wexford is regarded as a rich agricultural county. Unfortunately, many agriculture related industries have collapsed and gone to the wall because their managements failed to modernise and diversify. When times were good people moved from such industries and we now find that the unemployment rate stands at 23 or 24 per cent.

Some Governments forgot County Wexford existed. Certainly, the Industrial Development Authority have no interest in County Wexford. We have sent deputation after deputation to meet them to highlight the fact that the county is a black spot but no action has been taken; neither do the Department of Industry and Commerce have any interest in the county. An advance factory was completed three of four months ago in Enniscorthy and despite repeated requests by politicians and the local council no industry has been found for that factory.

At times I get frustrated and wonder what I am doing here at all given the high rate of unemployment in the county. I have to put it on record that I am totally dissatisfied with the efforts of the Industrial Development Authority, the Minister for Industry and Commerce and other Government agencies to create employment in County Wexford. I will just have to adopt a stronger attitude in the interests of the unemployed because for far too long we have accepted that something would happen but to date nothing has. The time has come to raise the roof to ensure that we get our fair share of the national cake. It appears that industries are being opened all over the country, but no one seems to have an interest in County Wexford. The people of Wexford deserve better.

The urban renewal scheme has proved to be very successful in some towns, particularly Wexford town where a new shopping complex, with Dunnes Stores as the flag ship, has been developed. I would like to see this scheme extended to smaller towns like Enniscorthy, Gorey and New Ross. There is a crying need for redevelopment of old streets and shopping centres which are in decline. I hope at some stage in 1991 or early 1992 that this scheme, which initially was introduced in the cities and extended to the major towns, will be extended further to smaller towns. I come from Enniscorthy and Deputy Yates and I have been making representations for quite some time for urban renewal in that area. I hope that will be sanctioned within the next week.

I agree with previous speakers on this side of the House that the provisions for disabled drivers are a little restrictive. I understand the Minister for Finance is to examine this. A person is disabled in my opinion if he or she has only one arm or no use in one arm or hand. The provision should be relaxed and grants made available to people with any disability. That will not cost the Exchequer an enormous amount of money but it will make life much easier for people who are physically handicapped and want to participate in normal day to day activities requiring the use of a car. I know the Minister is a compassionate man and that he will look at this.

In 1987, for the first time in 20 years, there was a reduction in the income tax bands. This has continued over the last three years and by 1993 we will have a lower income tax rate of 25 per cent and a higher rate somewhere between 40 per cent and 45 per cent. For many years taxation of the ordinary PAYE worker increased under different Governments and it is welcome to see it going in the other direction, downwards. I hope the people who have paid the major share of taxation during that 20 years, the PAYE workers, will benefit as the economy changes direction. They carried the burden and it is only right that the benefit should pass back to them. I hope we will soon see tax at reasonable rates which will give an incentive to people working to earn what will provide a decent standard of living for them and their families.

Many people are not paying their fair share of taxation and it is the responsibility of the Minister to ensure such people are pursued and that any outstanding taxes due to the Revenue Commissioners are collected as quickly as possible. I do not care whether the Minister has to give an interest amnesty to people who owe tax be it PRSI, inheritance tax or whatever; the important thing is to get in the capital. If an inducement has to be offered to people to pay, so be it. It is important that revenue is brought into the Exchequer as quickly as possible so that it can contribute towards improvement where improvement is needed.

What will happen to Customs and Excise staff after 1992? We hear much talk about the Single European Market and the benefits for this country with the opening up of markets. That is good, but it is important that people working in Customs and Excise in places like Rosslare do not lose their entitlements and that their right to alternative work is protected. We have a tremendous staff at Rosslare harbour who have a great record in drug detection and carrying out their duties generally. It is important that they know well in advance if there is to be an allocation of new work to existing staff, if there will be redeployment involving relocation of Customs and Excise offices and if there is to be early retirement or a proper redundancy package for people who may not want to relocate or travel away from their present base. All the options I have mentioned should be outlined to Custom and Excise staff to permit the introduction of phased changes in staffing resulting from the Single Market on 1 January 1993.

We should not close up Customs and Excise — I know that will not happen — and run away from the problem. There is a great unknown beyond 1993 and a great uncertainty. Major decisions have yet to be made by the Government on Ireland's admission to the Single Market. There will be problems about illegal importation of drugs and people wanting to bring in foreign cars, a matter which can still cause problems. Adequate staff should be retained to deal with the problems. Racketeers and cowboys will always try to circumvent the regulations and laws and it is important that adequate staff are at our ports to ensure that our citizens are protected.

I compliment the Minister for Finance on the role he has played over the last three years in ensuring that the economy is developed for the betterment of our people. He often says, "Steady as she goes". I ask him to take a special interest in the problem of unemployment and continue to ensure that the tax rate continues on a downward spiral for the benefit of the people working and who need an incentive to continue to work. The Minister for Finance has a human side and is very capable of providing services that will be in the best interests of the people. It is to be hoped that as our economy develops more jobs will be created and the country will be a better place for all of us in the future.

Mr. Kenny

A Finance Bill is complex legislation giving as it does legitimacy to the provisions of the budget. Speakers from all sides in their contributions covered most aspects of Irish life and how they see developments. I am not sure that the Fianna Fáil-Progressive Democrat Government are clear in their own minds as to the kind of country we can expect to have in the closing years of this century. This Finance Bill is being processed through the House at a time when unemployment is at an unprecedented level and there is great pressure on business, through job creation incentives and attractions, to employ people rather than machines. It behoves all parties to put forward constructive suggestions as to how matters can be improved.

I compliment Mr. Peter Brooke on his initiatives in regard to Northern Ireland. Serving as I do as a member of the British-Irish Parliamentary Association, it has been brought to our attention in dealing with British MPs that there is a great deal of difficulty and confusion abroad concerning the perception of Ireland, England and Northern Ireland. The Minister for Finance could well be introducing a different sort of Finance Bill if substantial progress were to be made at the Brooke talks. Such progress would allow any Government to project Ireland abroad as an island where it would be attractive to work, offering incentives to set up businesses. There would be a perception of peace rather than war. I trust that the Government in their input on behalf of us all will help to achieve some measure of progress.

We debated a motion yesterday relating to the power strike which is imposing a huge cost on the country. I have just listened to the chief executive of the IDA speaking of his shame that the power system in his own office was not operational when he was attempting to encourage senior Japanese bankers to invest here. I hope common sense will prevail and that work at the power station will resume immediately. If difficulties must be sorted out by negotiation afterwards, so be it.

A whole range of difficulties faces our country. We must ask whether the Government are living up to their responsibilities, especially in regard to the emigration problem. Is it fair that literally thousands of our young people are being condemned to involuntary emigration? Where is the concern of the Government to cope with that problem? Have they shown the ability to do so? It is advisable for qualified young people voluntarily to go abroad to acquire experience but the thousands who are forced into involuntary emigration are not being catered for in this Finance Bill. There are increases to the various voluntary organisations, but the problem is only being tinkered with.

There is a lack of job creation schemes. The work experience programme operated by AnCO was abused by some employers who treated young people as slave labour. However, it had some value in that it provided a measure of experience for young people. When they attend for interviews now they are caught in a catch-22 position in that they are qualified for the job but do not have experience of work practices. Major corporations and firms claim that the selection of their personnel is critical to the quality of the workforce. Thousands of young people are condemned to go abroad to get experience. There is need for a replacement work experience scheme under the auspices of FÁS which would allow employers to give qualified people a measure of experience so that ultimately they would succeed in acquiring permanent positions.

There is a great deal of frustration among young people who do not succeed at interviews, despite preparing themselves well, at some expense to their parents. Often they receive stereotype replies the following day simply informing them that they have been unsuccessful. When they inquire as to the weakness in their presentation they are not told. When young people are turned away, perhaps for very minor reasons, they should be told why.

I listened to the Minister for Health speaking about the health services and of course he mentioned all the good points. I recognise that he has a very difficult brief in a very sensitive area. The pumping of more millions into the health service would not of itself solve all its problems. It is fair to say that the Minister visited the general hospital in Castlebar in the company of the Minister for the Environment and then chairman of the Western Health Board, Senator Doherty. He gave a specific commitment that phase 2 of that hospital project would go ahead, but nothing has happened since. All that is outstanding is six months technical drawing which would not involve any capital expenditure this year. There are difficulties in the running of the hospital in the absence of phase 2. It is fair to call for the honouring of public commitments given by senior Ministers. I call on the Minister for Health to authorise the six months technical work for phase 2 of the hospital so that it can be favourably considered for inclusion in the 1992 budget.

In recent months we have witnessed the deliberate procrastination on the part of the Government in attempting to face up to serious economic and social issues, for instance, the awaited NESC report with regard to the An Post proposals which will be most interesting. It is very obvious that Ministerial intervention in this case has put the problem on the long finger until after the more immediate assessment of Government at the local elections. Fianna Fáil and Progressive Democrat members, who will have to deal with this in terms of the social responsibility of the Minister in this area, are well aware of the fundamental change which will be wrought in rural areas through the provision of 500,000 roadside boxes, the regrading of post offices, closure of sub-post offices and so on. This is of critical importance to very many people who benefited from a service over many years. Nonetheless it is being put on the long finger by the Government.

Looking at the position of Aer Lingus we find that many of their aircraft are quite old and in need of replacement but that Aer Lingus are not sufficiently profitable to purchase new aircraft. In addition, there is the ongoing controversy and difficulty about whether Aer Lingus should over-fly Shannon and fly directly to Dublin. Our Acting Chairman, Deputy Doyle, has been involved in this matter, as have most Members of the House. It is a problem that must be confronted, particularly in terms of replacement of the Aer Lingus fleet. If there is no money available at present to replace these ageing aircraft, then one can legitimately pose the question: from where will the requisite finance become available and by what means?

From an EC directive we learn that the Commission intend to proceed with the development of 10,000 kilometres of new rail lines in Europe, the improvement of several more thousand kilometres of lines, to be accompanied by a quality of train that will compete, in many cases, not with roads but with airlines in that they will be capable of speeds of up to 250 kilometres per hour. We are faced here with the continuous prospect of degrading or regrading of our rail service. Recently leaked documents, while I do not accept altogether their validity, tended to suggest that the rail services to Galway, Westport and Sligo would be terminated completely. That is just not feasible. Within the tourism area the Government have given Bord Fáilte a directive to double tourism within five years. If we are to be a Mecca for quality tourism in the future we must remember that internal access to various parts of the country always has been by rail. I should hate to think there would be any attempt at a deliberate running down of those rail services. With the removal of station masters and the abolition of freight depots it would appear that that is the approach of Íarnród Éireann. I prefer to think that the Minister for Tourism, Transport and Communications, would honour his social responsibility and continue to examine the subsidy made available to Íarnród Éireann alongside their proposals for the continuation and development of otheir services in the future.

Those are some matters the Government have decided to long-finger and not deal with in the immediate future. However, we must remember that these problems will recur in a never-ending circle.

Apart from all of that there are the proposed changes in the Common Agricultural Policy and the forthcoming additional round of GATT talks which will change forever the concept of agriculture in rural areas as we have known it.

I want now to refer to a matter requiring clarification in our laws. The House will be aware that the Government and the Minister for Finance always take a share of mining royalties from various companies. There has been national publicity given to mining proposals in the west. Mayo County Council have adopted a county development plan referring specifically to the fact that no mining of minerals will be allowed in certain areas under the relevant Minerals Act. Does this mean that the Minister for Energy, with responsibility for the development of our mineral resources, must accept that a local authority can contend that his responsibility is no longer relevant in terms of the development of certain of our mineral resources?

There must be clarification of this issue. If all local authorities nationwide were to adopt the same attitude it could lead to a serious decline in our mineral resources. I quite understand the difficulties in the public perception of the traditional kinds of mining. While technology has changed enormously and legitimate fears about such issues can be expressed, there has to be an element of natural justice in all of this. If the methods of application for mining leases and the granting of mining licences are to be adhered to, everybody must have their say before the Minister becomes the final arbiter. There is need for clarification of the law in terms of who has responsibility for this type of mining development with its consequent impact on employment and the nation's finances generally.

In reply to recent parliamentary questions I tabled to the Minister for Education in respect of remedial teachers she said that, under the Programme for Economic and Social Progress, she had received approval to appoint 80 additional remedial teachers within the period of that programme. Over the past 25 years we have developed a reasonably efficient and, in some cases, excellent level of service for handicapped children, that is in terms of aiding their backwardness, overcoming their learning difficulties and so on, experienced by the moderate or mildly handicapped. There would appear to be a strong tendency now to transfer such children from special schools to the normal community schools. I accept that there is much validity in that theory, that it would be more advantageous to have children with learning difficulties integrated in a normal school with their peers who do not encounter similar difficulties. But if that trend is not backed up by the provision of speech therapists, physiotherapists and other specialist people — in other words a massive injection of financial resources to allow those handicapped children reach their maximum learning potential — we will be condemning them to a life of enforced ignorance.

If that trend is to be followed it behoves the Government and the Minister to ensure that sufficient resources, in terms of specialised personnel capable of dealing with all of these specialised problems, are made available to cater for such children. The creation of 80 additional remedial teacher posts over the period of this programme is a mere pittance. There is clear need for remedial teachers in every parish in the country. I am quite sure that all Members of this House receive numerous representations from parents and teachers about handicapped children. If that trend is to be followed by the Minister for Education it behoves her colleague, the Minister for Finance, and the Cabinet in general — that is if we are to cherish all the children of the nation equally as is our constitutional responsibility — to make these extra facilities available for handicapped children.

Pollution has been mentioned by a number of speakers, one aspect of which deserves mention. It is fair to say that the agricultural community have made valiant efforts in the last number of years to cope with the effluent problem and to clean up the place. The Minister for Finance should seriously consider grant-aiding, even to a small degree, the provision of silage wrappers and balers. This would do away with a huge element of pollution in the conventional way and the farming community, many of whom are dealing with bad land and unsuitable sites, would be attracted to this concept. Even a small percentage grant would result in a substantial saving over a number of years in terms of having to deal with pollution. In that context the countryside, and we are proud to have natural facilities which can lead to high quality tourism, in many cases is being destroyed by thousands of tonnes of litter. It is amazing that people will drive several miles before they dump their rubbish. It should be a social sin to destroy our environment by this kind of pollution. There is a clear need for a strong education programme both in our schools and in our homes to ensure that the countryside is not destroyed in this way. We have a strong tourist potential but it must be developed in a planned and coordinated way.

The present Mayoman of the Year, a well known archaeologist, is developing the oldest stone-age site in the world. That project has been assessed by the Taoiseach and grant-aided due to his interest, and I thank him for it. Many other voluntary projects have to compete on shoe string budgets and these could lead to related economic activity in an area such as north Mayo. Twenty miles from where the Ceide Fields project is being developed, a social employment scheme together with other minor financial assistance schemes are trying to develop a major golf course, a hotel complex and so on. On the east coast private developments whether it be Straffan House of Mount Juliet, which are capable of attracting funding of the order of £6 million and £10 million, will cater for the other end of the corporate scale. If we are to develop our tourism facilities then we have to do it in a related economic fashion. One project leads to another and they should all be encouraged and given the best possible assistance.

The Minister for Tourism, Transport and Communications, Deputy Brennan, in reply to a question to me recently, said he was willing to meet the operators of multi-channel television systems throughout the country. Several hundreds of thousands of Irish homes now receive multi-channel viewing by the deflector system. The Government propose to impose further charges on these people and an annual charge by the introduction of the MMDS system. I am glad to note that the Minister said he is prepared to meet with the operators of those interested in multi-channel services. It behoves those people to ensure that when they do meet him, they are in a position to provide him with a set of criteria and objectives and a running method together with a cost structure which would enable him to say that we can leave well enough alone here provided it is monitored and acceptable to the vast majority of people. I welcome this move and hope this problem can be dealt with by common sense. If conditions and certain strictures are applied to the present deflector operators, the vast majority of people outside the Pale who now receive multi-channel services through deflector systems will be quite happy. The MMDS system does not operate in rural Ireland. Hundreds of thousands of people who receive multi-channel services at present are happy with what they have.

A certain arrogance appears to be creeping into some Departments. I am aware that my own county council made several formal approaches to Ministers for deputations to deal with matters ranging from storm damage, to road improvements to the provision of third level courses and so on. All these requests were formally acknowledged by the Ministers concerned at least 12 months ago and no deputation has yet been arranged. It is possible for a deputation from an island community to be met at the drop of a hat. Where local authorities make formal declarations to Ministers that they would like to meet them about various matters, they should be honoured as quickly as possible.

I hope the Minister for Finance, Deputy Reynolds, will ensure that the recommendations which are to be put by the British-Irish Association to their counterparts and to both Governments for further funding and facilities for our emirgrants will be met as far as possible. The Progressive Democrats element of the Government appear to have some heartaches about backing the Government, and the chairman of that party makes his remarks known constantly about how the Government are not moving fast enough for them, but you are either in this game or you are not, and if the Progressive Democrats cannot stand the heat they have the answer.

I would like to think that this Government would press on and take note of what is said here by various speakers — it is not possible to deliver everything in a short time — but it is necessary to work constantly at the perception of our country as an attractive place in which to work and live.

Mr. O'Dea

In relation to the last remarks made by Deputy Kenny I hope to address that subject at some length later. I compliment the Minister for Finance on introducing the Finance Bill before the House: I cannot recall whether it is his third or his fourth. Nevertheless, I am on firmer ground congratulating him on his outstanding successful record of economic management since his arrival at the Department in 1988. It must be recalled that that success was achieved against a very difficult background. On the economic front we had an almost unsustainable national debt as a result of four years of mismanagement since 1982. The Minister also has to operate within the constraints of the legal necessity to bring our tax laws into line with those of our European partners because of our accession to the Single Market.

Despite those difficulties and constraints, the record of the Minister for Finance, Deputy Reynolds, and both Governments of which he was a member, is truly outstanding. That is not just my opinion, it is not just the opinion of local commentators, it is acknowledged worldwide. The record of successive Governments since a Fianna Fáil Minister came back to the Department of Finance in 1987 has been the envy of the entire European Community.

Mr. Quinn

Rubbish.

Mr. O'Dea

Deputy Quinn was a member of the Government which brought the economy to the brink of ruin of 1987.

Mr. Quinn

That is not true.

Mr. O'Dea

I do not want to direct all the time available to me to dealing with the sterile, negative criticisms we have heard from that side of the House.

Mr. Dukes

Deal with the Progressive Democrats instead.

Mr. O'Dea

I prefer to address the more positive aspects of the budget. The main culprit, Deputy Dukes, in the Fine Gael backbenches is interrupting me now.

Mr. Quinn

The world began in 1987.

Mr. O'Dea

I will deal briefly with Deputy Quinn and Deputy Dukes if the time available to me permits.

Mr. Dukes

Deal with the Progressive Democrats. That is much more interesting.

Mr. O'Dea

The Deputy will have to come back after Question Time.

Acting Chairman (Mr. Sherlock)

Deputy O'Dea without any further interruption.

Mr. O'Dea

As I have said, the economic background against which the Minister and his predecessor have to operate is an extremely difficult one. He has to operate within constraints imposed by the accession of the Single Market but yet his record is, as I have said, the envy of the entire European Community and of economic commentators worldwide.

Debate adjourned.