The 1992 budget indicates gross irresponsibility and indifference towards the 269,000 people who are unemployed. It also shows neglect of those living in poverty and isolation, an uncaring attitude towards the homeless and the destitute, and a total lack of interest in the agricultural and rural community. The irresponsibility displayed in the 1991 budget has been continued and expanded in this year's effort. This is not good enough and it must not be allowed to continue. At the recent CCI annual dinner the Minister for Finance said:
The outstanding objective for the future must be to maximise the number of sustainable jobs in Ireland. All of us must give top priority at all times to the business of generating more viable work.
On budget day the Minister, Deputy Ahern said:
Unemployment is the single greatest social problem we have to contend with. The Government are keenly aware of the needs posed by the continuing growth in the labour force.
Is it not amazing and unbelievable that in spite of all this rhetoric about unemployment, the Minister on budget day did nothing about it? Nothing was done to promote employment, to create an environment conducive to job creation, to encourage people back to work, to entice employers to provide jobs or reward those who already do so. The budget is nothing short of disastrous for the thousands of people out of work who perhaps depended on the Minister for Finance to do something for them.
The Minister for Finance made a miserable attempt to reduce the numbers on the employment register by announcing two new FÁS schemes. This attempt could be classed as laughable if the situation were not so serious. The employment subsidy scheme is merely a substitute for the employment incentive scheme already in operation, and the in-company training scheme is merely a replacement for the training courses already run by FÁS. The difference is that the cost will be borne by the company rather than by the State. I would remind the Minister that changing titles will not fool those without jobs. Their needs are so great and urgent that they will not be codded by these tricks.
Action was not proposed to combat the enormous unemployment problem facing us in 1992. I suppose people have to be realistic and, in the absence of a worthwhile effort to solve unemployment, be satisfied with even those two unsatisfactory attempts. The employment subsidy scheme has two welcome changes: an employee must now be on the unemployment register for only two months, and the scheme is open to a broader range of employers. Nevertheless certain questions must be asked. Who will benefit from the scheme? Will it be those on long term unemployment who are our greatest concern? Will this scheme result in the creation of suitable jobs? Can we expect that when the subsidy ends employees will once more find themselves in the labour queue? Such schemes do not have a good record here but I hope that, despite my pessimism, the scheme will live up to the Minister's prediction of 15,000 additional jobs.
I must admit that I am very sceptical. The major blunder in this scheme is the exclusion of married women working in the home. It is totally unacceptable that they, not being on the unemployment register, will be excluded from being beneficiaries of the scheme. It is totally unjust and unfair and I will be asking the Minister to make immediate provisions to eliminate this injustice in the interests of fairness and equity.
The in-company job training scheme envisages that up to 10,000 people will be provided with training, at no cost to the Exchequer. The fact that it will not be a burden on the Exchequer is its only asset. We are reassured that these schemes will have a big public launch, full of fanfare, but unfortunately the substance will remain the same. Several questions must be asked about this scheme. Who will monitor it? Who will ensure that the scheme consists in training people rather than work? Will the training be certified? Where are the companies who will be prepared to employ people to provide training? Do we believe that the subsidy is sufficient to entice companies into this type of scheme? I pose serious questions about the future of the scheme and question whether it will do anything to reduce numbers on the unemployment register.
The sum total of the Minister's concern and strategy to deal with unemployment consists of those two schemes. As a result of the budget, the future of the unemployed is still a future without hopes and dreams. For how long more can we expect the patience of the 269,000 people who are workless to last? How long can they cope with the utter despair and desperation that unemployment brings? How much longer will they control their anger and frustration at the continuous neglect and ignoring of their plight? How long more will this Government remain convinced of the inevitability of unemployment? Their inaction to date verifies this tendency. Surely they cannot allow themselves to believe that the unemployment problem, so severe and protracted, can be seen as a national phenomenon. We cannot believe that unemployment is something that will sort itself out if other things can be achieved first.
The budget should have addressed the unemployment problem ruthlessly, but sadly it ignored it ruthlessly. The verdict on this budget can only be given when the unemployment figures are examined in the months ahead. The most appropriate measure of our economic success is the number of people gainfully employed.
As we enter 1992, severe and widespread poverty remains an urgent challenge to us all. Yes, poverty should have been a priority in the budget, but was it?
The aspirations of the Programme for Economic and Social Progress were towards fundamental structural reforms and a commitment to develop greater social rights with our health, education, social welfare and housing services. Were all these aspirations set aside in the chilling Estimates and budget targets for the coming year? We all realise that the Minister for Finance faced very difficult choices in framing the budget. However, there is still no justification in failing to take any significant steps towards tackling the underlying causes of poverty.
Poverty is a denial of basic social and human rights and no delay in measures to tackle it can be justified. We cannot afford to wait for a rising economic tide before we start the process of reform. The harsh reality is known, yet this Government continue to ignore the alarming housing crisis, the deplorable living conditions of so many. The budget did not even mention the importance of housing.
The children of the poor were ignored yet again, with no proposals to increase the children's allowance or to turn the balance in favour of the less well off with children. That any Minister for Finance could ignore such screaming and urgent needs is unbelieveable and unacceptable.
Paltry increases in social welfare payments will never liberate those trapped in the poverty net, nor will loans for those in need substitute for the lack of a basic income to provide for the family. The poor among us are still left to depend on charity for survival. Is this fair? Does the Minister realise that while unemployment continues, the battle against poverty can never be won?
While the basic provisions in relation to housing, health and education are inadequate, the battle against poverty can never be won. Some effort must be made. The budget is guilty of downright neglect in its lack of care and concern for those in need.
The budget failed dismally to tackle the enormous problem of capital acquisition tax. In fact, to the dismay and astonishment of the farming community, the capital acquisition tax did not even merit a mention in the 1992 budget. This surely and sadly demonstrates the ignorance, and worse still, the lack of interest of this Government in the survival of family farms, threatened so often by the dreaded penalty. The concern and frustration among farmers over the implications of capital taxation cannot be overstated. Despite repeated calls for major reforms in the taxation system as it applies to farmers, the Fianna Fáil-PD Government gave the deaf ear to all who attempted to make a reasonable case.
The inequities of capital acquisition tax and stamp duty, which discriminate against family farming, are a major disincentive to young farmers embarking on a farming career. In fact, they are causing severe financial hardship to a vast number of farmers, often resulting in the sale of the family farm to meet a tax bill.
In spite of all this, the budget has dismissed this problem as unimportant. The crisis with the capital acquisitions tax is the unrealistic valuation of land for capital taxation purposes. A major change is called for urgently. Land for capital acquisitions tax should be taxed on its earning capacity rather than at present. Land is currently valued based on recent land sales. This too often results in a very inflated valuation, in particular where small parcels of land reach a very high and unrealistic figure at auction.
How can any taxation be judged as fair and equitable, when it is governed by an unreliable and unrealistic monitor — market prices? This is a taxation that is not based on capacity to pay. It is scandalous that the Minister for Finance chose, yet again, to ignore this problem. It is unfair and unwise that no changes were proposed in this budget to ease the financial hardship which the capital acquisition tax imposes on many families, many of whom are forced to borrow heavily in order to retain their farms on inheritance.
The Minister received a pre-budget submission on behalf of farmers seeking relief on stamp duty to encourage lifetime transfers to qualified farmers; this submission also sought adjustment of thresholds to take account of inflation in the period 1975-90. However, as this budget has proved, the Minister and Government decided to ignore such requests from a sector of our economy faced with daunting challenges in the months ahead.
While referring to farming I might add that I too am very concerned at the lack of finance made available to Teagasc, our agricultural advisory body. For example, £1 million have been allocated to them whereas they need an extra £3.5 million even to continue what I might now describe as a decimated service, one which is no longer realistic and cannot cope with farmers' needs or render the quality of service eminently desirable. For example, in my constituency, the Teagasc office in Tipperary town has been pinpointed for closure, this in the wake of a Teagasc office already having been closed in Cahir. This latest proposal must be totally opposed particularly since Tipperary is a rural town located in the heart of the agricultural hinterland. The Teagasc office there is located adjacent to the livestock and veterinary offices. The agricultural community of the surrounding areas not only deserve but need such agricultural advisory services. If they are not continued, I fear for farmers' futures in the area and for the development and prosperity of agriculture generally in my constituency. Unfortunately these budgetary provisions did not bring us any hope. We realise that sufficient resources have not been made available to Teagasc to enable them provide an adequate service, resulting in offices such as the one in Tipperary town now being faced with closure.
The hands of the Progressive Democrats are very much in evidence in this budget. Their claim to honour is the introduction of two income tax bands. I welcome, as I am sure do most Members, the reduction in the income tax rates. Any measure which puts more money in workers' pockets is to be welcomed. However, on closer examination, it will be ascertained that this measure is socially misdirected since henceforth millionaires will find themselves in the same income tax bracket as the average industrial worker. The emphasis should have been on widening the tax bands which would have relieved many workers from paying tax at a higher rate. It may give the Progressive Democrats more satisfaction to put more money in the pockets of high earners than to relieve lower paid workers of their income tax burden. Resulting from their philosophy 30 per cent of the population will remain in the top tax bracket. Surely it is regressive and repressive to demand lower paid workers to pay the cost of relief for the better-off? I contend it would have been more equitable and just to have relieved the average wage earner from paying income tax at the higher rate, leaving those who can and are well able to pay income tax to shoulder the heaviest burden.
Of course the architects of this budget would like to convince us that such income tax measures are a means of encouraging job creation. They want us to believe the gospel: tax cuts create jobs, whereas all the evidence would lead one to the opposite conclusion. In spite of consistent reductions in the income tax rates over the past three years there has been a massive surge in unemployment figures. While voicing my support of and desire to see lower tax rates I believe in individuals having greater choice in the disposal of their incomes. In the face of the real facts I cannot accept the theory of tax cuts leading to job creation. The reality is that there is simply no evidence that the type of tax changes announced in this budget will lead to increased employment.
This budget puts many problems in abeyance to the year 1993 — the new escape route for this Government — put off the problem until tomorrow in the hope that it may even disappear. The problems being stored up for 1993 are serious. For example, the public sector pay bill will increase by 8 per cent in 1993, thanks to the rescheduling of the Programme for Economic and Social Progress; our VAT levels vis-à-vis those obtaining in the United Kingdom remain above the comfortable level necessary to prevent substantial erosion in 1993 when cross-Border constraints will be eliminated, with no action taken with regard to the deposit interest retention tax despite the abolition of exchange controls in 1993 and their effect on revenue. I contend that all the pre-budget warnings of 1992 must be repeated in 1993 since severe, deep cuts in public spending will be required again to meet the enormous burden now being transferred to next year's budget.
As one might expect, the Minister in his Budget Statement, paid lip service to the creation of employment whereas the budgetary provisions encourage the exact opposite. I recognise the Minister, in finalising his budgetary provisions, had his attention diverted to the creation of jobs in some areas detracting his attention from what should have been his obvious priority, overall job creation.
Unfortunately this budget achieves nothing. For example, it fails dismally to address the most serious problems of the nineties, that is, unemployment and poverty. It is my fear that these budgetary provisions will send the country into terminal decline and our people into eternal depression. It is a failed budget in that it gives no hope at all of improving the living standards of so many of our people. There will remain thousands queuing for social welfare weekly. Children will leave home each morning leaving parents with no work to go to, or having any useful purpose in life. We will continue to see the sick and elderly wait, hopefully living, until hospital beds become vacant for them.
What a pity that once again the opportunity to do something positive about job creation has been missed. In this budget, as in all of the Government's actions, unemployment continues to be the forgotten priority.