This being the first budget of the new Minister for Finance, Deputy Ahern, one was led to believe that the Minister wanted to break new ground and to be dynamic in his approach. Information was leaked in advance to give the impression that tremendous change would come about and that the budget would be fair and redistributive. These are all the things one would expect from a young and innovative Minister who might have aspirations to higher office at some time in the future, if not in the immediate future. There was a very boring budget presentation lasting for one and three-quarter hours. When analysed overnight by various experts it is seen that there is relatively little to generate a new movement by the Government into areas which have been neglected, particularly during the past 12 months when the Government have been rocked internally by problems and scandals. Various Ministers have set up inquiries which are taking place. The Government seem to have been anaesthetised in respect of their major responsibilities. Unemployment has escalated and there has been neglect in the area of health, particularly mental handicap. The Government are now tinkering around the edges of the social welfare system and bringing recipients of benefits into the taxation net, even when they have contributed to those benefits. Changes in VAT will impinge on various services which are experiencing great difficulty in staying in business and retaining people in employment.
All of us have spoken about the problem of unemployment and advocated various schemes in an attempt to address the scandal and cancer of unemployment. People eligible for work are unable to find it and are forced to emigrate. They have been leaving in their thousands since this Government and the previous minority Government took office.
The Minister said that unemployment is the single greatest social problem that we have to contend with and that the Government are keenly aware of the needs posed by the continuing growth in the labour force. The Minister's speech did not go on to address the problem of finding proper jobs, adequately paid, which would not have to depend on reluctant employers or social employment schemes which have been used by local authorities and others in a non-profit making way.
Employers' representatives welcomed the incentives given at the request of the Progressive Democrats in the area of taxation, the lowering of the rates and the small adjustment in the bands. It was suggested that this would be an incentive for people to go back to work. This is a condemnation of people who are unable to get work and who are dependent on the people whom this employer association represent to provide jobs. I do not know anybody in my constituency who would refuse a job because of the taxation code. People are eager to have gainful employment. It is an unfair condemnation of those who are signing for benefits. They would dearly love to be in the work place. The social employment schemes have been successful because people want to be at work with their colleagues. These schemes do not give any major financial benefit but people want the fulfilment of work. It is wrong for any employer association to suggest that moving the tax bands will provide an incentive to go back to work. We have not seen any evidence in this budget or in the Programme for Government of an opportunity being provided for people to return to work, if it is available to them. The Labour Party contend that there are critical, capital works needing to be undertaken here which would give gainful employment, which would improve our infrastructure generally, and would benefit tourism and the other service industries if only we could convince the Government that they should devote some of their energies to the creation of such genuine jobs. We know there has been a massive expenditure of IDA budgets abroad in an endeavour to attract foreign industrialists here but they have been confined specifically to industrial jobs in manufacturing industry leading to exports. Very little money is spent abroad campaigning for the tourist industry here in an attempt to convince potential visitors that Ireland remains a happy, safe country to visit with a decent, clean environment, that we would welcome tourists, confirming that we have made efforts to improve our tourism infrastructure and facilities. At least some of that budgetary expenditure on the part of the IDA, CTT and other agencies should have been devoted to the creation of tourism-oriented jobs within the service industry. If we can get people working it will be immaterial whether they are employed in manufacturing industry or in the provision of a service. Ireland has a tremendous reputation of hospitality, of being able to offer a different type holiday to its visitors from that offered by any of its competitors. This Government should devote much more of their efforts and energies in that direction.
The success of some of these new employment and training schemes is dependent on employers having jobs for their participants, giving such employers an incentive of £50 odd a week to take people off the long term unemployed register, an important move in its own right, but does not constitute everything on which this Government should be pinning their hopes despite the fact that they have identified some 15,000 people who would benefit therefrom. Let us hope they will. We in the Labour Party have advocated the greatest possible flexibility even in the operation of the social employment scheme because much important work was undertaken in this area over the years particularly in implementing improvements to the environment in a non-profit-making area.
We are concerned that there appears to be no priority afforded in the Programme for Government or the budget to the injection of a massive amount dedicated to genuine job creation. It would appear the Government have hung their hats on the peg on the basis that they would create a suitable environment rendering it possible for others to create the jobs. They have been doing that for so long now I am uncertain what additional environmental incentives are needed for the private sector, apart from profits, to create jobs. Indeed some additional action in the budget — in areas treated with some insensitivity — could have created such jobs.
In discussing the financial resolutions last evening I talked of the Government decision to tax cider and perry, and in that context I referred to a manufacturing industry located in my area employing some 400 people. Because it is an industry using the natural resources of the area I contend it has an impact not only on manufacturing and exports but also on the economic development of the area. Yet this Government wanted to penalise it on the basis that somehow this drink was socially unacceptable or because its sales were increasing, an altogether wrong reason for taxing it. We should remember the only reason consumption of this drink has increased is the perfection of the product and the expenditure of massive amounts of money on advertising. We are very proud of it in Tipperary. I regret that the Cabinet should have resorted to taxing that product as a fund-raising objective in this budget.
Health is my responsibility within the labour movement. Therefore, it is my responsibility to bring to the attention of the Cabinet and appropriate Minister priorities within the health sector, which priorities have not been mentioned in this budget, there being a few lines only devoted to health and those confined to the handicapped. Over the past 12 months I suggested to the Minister on numerous occasions in this House that we examine the plight of the handicapped as a priority. Yet within the few lines in the Budget Statement allocated to health the Government have ignored the problems of the health service generally, the waiting lists, the problems of the nurse-patient ratio, the bed-patient ratio and have almost ignored the old and the sick, particularly those in need of geriatric accommodation. Rather they have foisted that responsibility onto the private sector under the provisions of the Nursing Homes Bill. They have devoted almost one and a half years to deciding there would be an allocation of money and a ministerial order introduced to implement the provisions of that Bill. In his budget there is a sum of £1 million allocated for the care of the elderly whereas at present old people spend anything from £60 to £80 weekly of their savings, in addition to their social welfare pensions, paying for accommodation in private nursing homes, and that, mind you, by people whose incomes and medical cards render them eligible for State intervention for accommodation particularly in their latter days. The Government have ignored that need and left it to the private sector. Indeed they have dilly-dallied for one and a half years before determining how people could be helped in a means-tested manner. I shall watch with interest what the Minister does in this area.
There has been much talk over the past year of the needs and rights of people with mental handicap. Indeed the Minister for Health announced last evening, after the introduction of the budget, that she had allocated an extra £10 million for this purpose this year as though it was true. I believed her at the time but I have discovered that she has given an additional £3 million over and above the budgetary allocation of £3 million and added them to last year's allocation to make up £10 million. We have contended that we would need an additional £17 million this year for the handicapped even in an effort to come to grips with problems, such as respite care, residential accommodation, training, transport of students to schools for the handicapped and all the other aspects we have brought to the Minister's attention. In addition to the Minister's budgetary allocation, this Government, despite having some funds available, have allowed the opportunity slip by again this year creating hardship for the many voluntary organisations nationwide without whom, our handicapped would remain totally neglected. Indeed a statement on the part of the association dealing with handicapped people last evening suggested the Government have reneged on a commitment in their own report in this area.
I have mentioned the 4 per cent increase in social welfare benefits. People welcome the fact that at least their payments will keep pace with the cost of living or inflation. But the reality is that the additional £2 weekly for adults and 60p weekly for children, payable in July next, will mean that by the time they receive it, the many local authorities having got their hands on that increase for rent purposes, the amount of their disposable income from the benefits of the social welfare code will be limited indeed. Then there is talk about the possibility of subjecting that income, whether it be derived from disability or unemployment benefit, to tax. That is an insult to those on the lowest level. We should remember that, in the case of many of these families, one spouse may be working, genuinely endeavouring to make ends meet, when the other spouse becomes ill and unable to work but must have held a job in order to reap benefit whether unemployment or disability benefit. When one considers that that level of income is to be subjected to tax one quickly realises we are scraping the pot. Just as the answer to the question, "will we sell the Asgard", is usually "no", so also to date usually is the answer "no" to the question of whether social welfare payments should be taxed but this Government, in their drive to satisfy their partners in Government, have decided that they will now attempt to bring all income, social welfare and other, into the tax net on the premise that that is fair. Such a change could mean that the benefits being given in the budget to the higher income tax earners would be paid for by those on lower incomes. Some of those in receipt of £30,000 or £40,000 per year will scope the pot for the third year in succession while poor people get poorer and the divide between the haves and the have nots widens.
Local authorities must grab money at the end of the year. There was 3 per cent or 4 per cent increase in inflation last year, but a 16 per cent increase in rents. That is bad enough but the Government have abandoned their responsibility to provide local authority housing. There is nothing in the capital programme to indicate that a dent will be made in the housing crisis in every local authority. Thousands of people are on the housing list.
The Government have a record of providing about 1,000 local authority houses per year. When our party were in Government the number of houses provided was 7,000 per annum. There are four or five schemes proposed, some of which are innovative, but none implemented. The Government have reneged on their responsibilities to provide houses for those in need, those on housing lists who have been approved for re-housing but who cannot afford to buy a house or are unable to obtain a mortgage to pay for a house. Those with mortgages who were praying that the Minister would not remove the mortgage interest relief have been offended by the removal of relief on endowment mortgages. Some people cannot save because of the amount of their disposable income but, acting responsibly take out life assurance to protect their spouses and children. The tax relief on such policies has been abolished. The Government removed that relief and saved £8 million but they refused to look at the social implications of the change.
Many changes were made in the budget in relation to the motor industry which is in difficulty in my constituency. A major motor car hire company has gone to the wall with the loss of 67 jobs. That company supplied cars to tourists. The Minister in announcing some give-aways talked about reducing the VAT and excise duty on new cars forgot that very few working people can afford to buy a new car. They will pay extra due to the increase by 20 per cent in road tax.
The amount of money which goes back to county councils for the maintenance of county roads and national secondary roads is negligible. "Pot hole" candidates from Cavan, and other areas, now represent ordinary road users who are not getting value for the road tax they are paying. It is a dangerous precedent to set whereby we increase road tax for people who are trying to get to work and give an incentive to people who can afford to buy a new car, even if they do not need it to get to work. Many of them are at race meetings when other poor guys are working on building sites. The private sector, and the employer's representatives, felt this was a reasonably good budget, that it contained incentives for this and that, but they expressed concern about the increased Exchequer borrowing requirements. Many have forgotten that buried in the Minister's speech is an admission, a plea of guilty, that he has to find £200 million. He has promised us that he will find this £200 million before the Finance Bill.
