Dáil Éireann debate -
Thursday, 6 Feb 1992

Vol. 415 No. 5

Financial Resolutions, 1992. - Financial Resolution No. 22: General (Resumed).

Debate resumed on the following motion:

That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.

—(Minister for Finance.)

Mr. G. Reynolds

It is appropriate to comment this afternoon, when I face so many empty benches, on the way the Government have tried to govern the country over the past six to eight months. They have failed dismally; they have not governed. The budget is the yardstick on which the economy will be assessed over the next 12 months.

The leadership battle for control of Fianna Fáil starts at 3 o'clock. The budget shows that more thought was given to the leadership of Fianna Fáil than to the leadership the people need. The budget is neutral. The new Minister for Finance has a safe pair of hands and he kicked for touch at every opportunity he got. However, this country needs a far seeing and strong budget. This country needed leadership but the budget failed dismally to provide it.

I remember speaking in the House on last year's budget. I honestly do not know what school of economics was attended by the former Minister for Finance, Deputy Albert Reynolds — probably we will find that out in the next month or so — and I certainly do not know what school of economics the present Minister for Finance, Deputy Bertie Ahern, went to, but it is obvious that the two men did not go to the same school. The economic vision has changed drastically during the past 12 months from what the Government were hoping to do last year compared to what is hoped for this year. Such shoddiness in economic and budgetary development can only mean that the Government have not been aiming for a co-ordinated and far-reaching approach for the betterment of this country.

Last year the former Minister for Finance gave much emphasis to economic growth. Despite there being several experts in the House, the former Minister for Finance came into the House last year and arrogantly stated that there would be economic growth of 3 per cent to 4 per cent, that the economy would develop as a result and that jobs would be created. We all know that the economy grew at about 0.5 per cent, that the number of jobs decreased rather than increased and that we now have 270,000 unemployed.

If two Ministers for Finance from the same party cannot agree on a projection for the way forward economically then it is time for them to put the mandate to the people so that real leaders might be elected. The people need a Government that will tell them clearly where the country is to be led through the next three, four or five years rather than a Government that tries to lead the country one day at a time, which has disastrous consequences. For example, the Programme for Economic and Social Progress was negotiated last year and it was then left for the new Minister for Finance to try to cobble together a new deal with the unions in order to prevent complete economic betrayal on the streets. A deal had to be struck that would encourage all public service union members to stay at work rather than go out to protest against the Government's intention to break a promise they made last year based on budgetary figures. This year's budget gives no incentive for the creation of new jobs, which is the major need in our country. The Minister, Deputy Ahern has made a promise to the public service unions pertaining to next year and up to 1994 that he will uphold the Programme for Economic and Social Progress promises made last year, which means that extremely harsh economic decisions will need to be taken in the next 12 months. The Minister has failed to face that reality in the budget.

I have no doubt that the Government will fail to increase the number of jobs. I do not mean to be pessimistic but the budgetary strategy for the next 12 months gives no guidance for an increase in the number of jobs. The garage industry provides a good example. In the budget the Minister for Finance decided to reduce excise duties on new car sales; that was a laudable decision and one that was needed. However, many garages have new cars in stock that they purchased before the announcement in the budget and the Minister is not willing to forego the excise duty on those cars retrospectively. There were more than 1,000 job losses in the garage industry last year, and if the Minister is not willing to show any leniency towards garages in retrospectively foregoing excise duty on the cars to which I have referred then more job losses will occur. That would certainly be a bad way to start the year.

The Minister stated in the budget that he would increase the price of a packet of cigarettes by 16 pence. The reason given for that was that he had the health of the Irish people foremost in his mind. I am not a smoker and I have never smoked, but I find that statement rather ironic in that three or four pages further on in the Minister's budget speech he announced his decision to put a 21 per cent VAT charge on commercial bodies providing exercise facilities such as gymnasiums. All of the Health Bureau's advertisements tell us that exercise is very important, so it is obvious that it was certainly not consideration for people's health that was behind the increase in the price of cigarettes. That move was just another attempt to increase the take of the central coffers. Small inconsistencies such as the one to which I have just referred show that the Government put no great thought or plan into their budget strategy. It was a retrograde step for the Minister to put a 21 per cent VAT charge on commercial sports enterprises. Those bodies give a service that is provided by the State in most other European countries. In this country it is private enterprise that provides such facilities and we have new hotels equipped with excellent gymnasiums, swimming pools and leisure centres. The State has failed to provide any of those facilities, but now private enterprise is about to be taxed on the provision of such facilities. That is not giving the private sector an incentive to create employment. Many Government Ministers state that the opportunity for employment in the tourist industry is incredible — apparently the potential for job creation could be compared to a bottomless well if we were to believe all of the statements made by different Government members — yet here the Government are about to put a 21 per cent VAT charge on one part of the tourist industry that has been successful in creating jobs. The increased charge is an incredible hike, it will add more than one-fifth to the price for people using the facilities.

I come from County Leitrim, which is a part of the country, along with surrounding areas, that has suffered greatly from lack of economic planning. In Arigna, which borders Roscommon, Sligo and Leitrim, there has been an ongoing struggle to try to save mining jobs. More than 250 people were employed in the mining industry in that part of the country when the ESB decided that it was no longer economically viable to provide a power station at Arigna. In fairness to the Minister for Energy, I should point out that he did commission an independent report to determine whether coal could be produced in Arigna and then brought to the power station so that electricity could be produced at an economic level. Several coal merchants in the area have stated that they can provide coal at a very much reduced price. The Minister was given a copy of the report on 7 January but, unfortunately, we have not yet heard what the report states.

I take the opportunity to ask the Minister for Energy to make this report public. The people in the Arigna catchment area are awaiting it with bated breath. Their jobs are on the line. I hope the report will be positive and that mining can continue in the Arigna area of Leitrim and Roscommon and that the Arigna power station will be kept open.

There have been many initiatives over the last couple of months by various organisations in the west. For instance, the western alliance of Catholic Bishops called a number of meetings in the west to try to co-ordinate efforts by people who are extremely concerned about the appalling lack of economic planning in the region. They are trying to save the west of Ireland as an entity. This gives the Government an opportunity to co-ordinate efforts by the interested groups in developing a positive policy for the west. As the next Taoiseach will probably be a namesake of mine — he is probably the only Reynolds who will ever become Taoiseach — and as he comes from Roscommon, I hope he will appoint a Minister with responsibility for western development.

In this budget the Minister, and his civil servants, seem to indicate that everyone involved in business is dishonest. Because of the major business scandals in Greencore and the Goodman group of companies a number of initiatives have been taken which will hinder the growth and development of small and medium size businesses. Business people have not been given any incentives to create employment. We should be trying to provide more jobs through small and medium enterprises. With a proper economic climate they would create jobs. The Minister seems to have the idea that most people involved in business are on the make. It is sad if that is the perception we have of business people. The Progressive Democrats have always preached the gospel of free enterprise, that business people have a major role to play and I am surprised they would allow that sort of message go out after the budget. It will have far reaching consequences on job creation and on initiatives in business.

With regard to housing, a number of speakers referred to the fact that the rate support grant to local authorities was the same this year as last year, which in real terms represents a cut of 3 per cent. The increase of 20 per cent in motor tax was a soft option taken by the Government.

There have been many complaints about the condition of our roads. The Minister has not made much money available for our roads programmes and this will have dire consequences for our economy. Transport costs will increase and this will have a knock-on effect on employment. When we seek EC money we make the case that we are on the periphery of Europe and that our transport costs are higher than those of the countries in mainland Europe. That argument will be strengthened by the advent of the Channel Tunnel. At meetings of Heads of State we made that case to try to win special concessions, but the Government are imposing a major increase in transport costs. There is not any economic sense in that. If our transport costs are higher our exports will be more expensive. I do not know what line of economic vision the Minister is using. Having studied economics, I know it is neither micro nor macro economics. It must be the philosophy of the Ahern school of economics. The increases will make transport more expensive and cost jobs. This further increase in costs will hinder the development of industry.

The Government have a poor record on housing. There is not any good news in the budget in the form of extra money for housing which is badly needed. The situation in Dublin is deplorable but it is bad also in Sligo and Leitrim, the two counties I represent. Money has not been provided in the budget to enable local authorities build more houses.

I did not intend to be totally negative about the budget. There are a number of aspects of it I welcome, for instance the reduction in the income tax rates which is a step in the right direction. However, it did not give us any economic hope for the future.

Mr. Doyle

At this stage of a budget debate, repetition often creeps in. I will try to avoid that. I compliment the Minister on bringing his first budget before the Dáil and I wish him well in the Department of Finance. The biggest problem facing the country is unemployment and the budget did very little to deal with it. Unemployment brings with it the major problem of poverty, affecting both urban and rural areas. The Conference of Major Religious Superiors have already made known their views regarding the failure of the budget to deal with this question. I am speaking about people on very low incomes depending on social welfare assistance. I often wonder how people on very low incomes can rear families, pay for light, heat and rent and look after their children as well as they do. I thank the Minister for the provision of £25 towards the cost of uniforms for school-going children of low income families and £50 for children attending secondary school. Although the amount is small, the measure is welcome.

I also thank the Minister for the provision of £3 million for the mentally handicapped. It is extremely sad to come across an ageing father or mother seeking a residential place for a mentally handicapped child for whom they have cared so lovingly. Very few places are available and I hope the £3 million will be invested by the health boards to provide more residential places for people with mental handicap. The Minister has also provided £2 million for the elderly and £1 million for child care. This is to be welcomed.

The budget fails to look after that sector of the community who try to provide for their families by their own efforts and are not a burden on the State. People who are just above the qualification limit for a medical card have to pay for everything they get. A large number of people are in that category, rearing large families and having to meet food and clothing bills. This budget does very little for them. The increase in VAT will not help and if they have life assurance they lose tax relief. One of the costliest aspects of the family budget is health care. In October last year the Government changed the drugs subsidisation scheme in such a way that the year is divided into four quarters. The new scheme has two main disadvantages. Under the original scheme those who paid over £32 per month for prescribed medicines were entitled to a full rebate. Now a patient spending £120 in October but nothing in November or December will get a refund of £30, over £50 less than the £88 which would have been refunded under the original scheme. The second disadvantage is that expenditure on drugs cannot be transferred from one quarter to another. A person spending £90 in December and £90 in January, the two months when people are most likely to fall ill, will not get a refund. That hits very hard at low income families who cannot qualify for a medical card.

I agree with my colleague, Deputy Reynolds, that the housing situation in Dublin is deplorable. At one time when a vacancy occurred people asked if they could be considered for that vacancy. The stage was reached some years ago that when a person went into hospital inquiries were made about a possible vacancy. We have now reached the position that when a person dies there is immediately a request for the house or flat which the deceased person had occupied. There is a terrible need for housing in Dublin, especially in the inner city. A husband, wife and three children can be living in a one-bedroomed flat. We have returned to the conditions of the early eighties. The Government must provide money to enable local authorities to build houses for people who cannot afford them.

The State also has an obligation to help those who wish to purchase their houses but are unable to do so without assistance. Under the shared ownership scheme a local authority will allow one of their applicants to buy a house; they will provide a full mortgage, half of which will be taken up by the tenant, and the other half will be rented from the local authority. That is an excellent way of helping people to purchase their own houses but unfortunately it requires legislation. A Bill has been promised every month for the past six months. The Minister indicated that £35 million will be made available this year under that scheme but we still await the legislation. Many people come to me who could avail of that scheme if it were fully operational. A pilot scheme is in operation but that is not the answer. People are anxious to obtain housing at their own expense with the help of the local authority and I call on the Minister to bring the Housing Bill before the House as a matter of urgency.

I was rather amused yesterday to hear some Deputies opposite speak about the economic miracle which has occurred over the past few years. It is hard to understand what they mean by an economic miracle when almost 300,000 people are out of work. Deputy Power and Deputy Hilliard raked over the record of the Coalition Government between 1982 and 1987. They made the political charge that during that time the Government doubled the national debt. If they had researched their figures a little better they would have discovered that Fianna Fáil trebled the national debt between 1977 to 1982. That was the real problem with which we had to grapple in 1982 and we did it very well. The unemployment figures in those years certainly did not resemble those of today.

The Minister for Finance has completed an agreement with the public sector unions regarding the Programme for Economic and Social Progress which effectively postpones the expenditure of £100 million until the 1993 budget. This has helped the 1992 situation, but does nothing for overall commitment to expenditure in the medium term. I predict the 1993 budgetary exercise will be very difficult, given the task involved, especially in regard to the £200 million VAT revenue to be foregone at the point of entry, an amount that must be found from some source. The Government must ensure that indirect taxes are sufficiently close to the levels obtaining in the United Kingdom to prevent adverse effects on trade with the free movement of goods and services, and the disappearance of custom borders.

The year 1992 can be seen as a critical one for our economy since, at its end, we shall have a Single Market not only throughout the European Community but throughout this island. These changes will have a significant impact on our industry. This budget should have been framed with an eye to the difficulties of the ensuing year but it was not. For example, its provisions should have aimed at an Exchequer borrowing requirement of 1.5 per cent of gross national product, which would necessitate the trimming of some expenditure. Failure to have tackled that issue this year will render the expenditure base in 1993 that much larger in the light of the movement to a single currency and its attendant discipline. We cannot allow our public finances to revert from their path of rectitude.

Mr. Ryan

As I contribute to this debate more important events take place in another room in this building, that is from the point of view of the Government. I make these few comments on behalf of the people I represent.

Last Wednesday evening I was asked to comment on this budget. I predicted then that when the hype of budget day had died down, the photographers moved away and the gloss worn off the Minister's statement, this budget would be perceived as a non-event, a failed opportunity on the part of the Minister for Finance and the Government to respond in any meaningful or positive way to the needs of thousands of our people awaiting its provisions with a certain sense of hope and expectation. Had they expected that these budgetary provisions would constitute the beginning of progress to greater equality within our society their expectations will have proved to have been unfounded.

On the morning following the introduction of this budget I went into a local shop to purchase a newspaper. I was served by a girl of approximately 19 years of age — somebody I would not have anticipated having any comments to make on politics, or have made any in the past — who commented that the only hope remaining to young people here, following the introduction of this budget, was to get the best education possible and then emigrate. We face a huge problem if that view is representative of many young people.

I listened attentively to various statements about this budget, particularly those of the Progressive Democrats. I am glad to note that one of their members, the Minister of State at the Department of the Environment, Deputy Harney, is present this afternoon. I also listened to the comments of many economists who contended that this was a tax reforming budget. It may be for a small section of society, the better off, but it is anything but progressive for the majority of taxpayers. This will become very evident when they examine their first pay packets after 6 April next.

This budget's main beneficiaries are the high income earners, which has been the case over the preceding three years. For example, a married man with an average industrial wage will gain approximately £150 annually as a result of the income tax changes proposed in this budget, against which he and his family must face a 20 per cent increase in car tax. One might well ask why did the Minister find it necessary to do this? In many areas in this country possession of a car can no longer be classified as a luxury but rather a necessity, given the lack of commitment on the part of this Government to public transport. I was appalled that there was no reference whatsoever to public transport in the Minister's Budget Statement, particularly since the Progressive Democrats had made a public commitment in that area.

Less well-off families — generally those who must avail of public transport — are to be the subject of an additional financial imposition on their household budgets occasioned by VAT increases on a wide range of essential commodities, such as clothing, footwear, transport and communications, personal services and maintenance services, to mention just a few. As a result of these budgetary provisions the average taxpayer will be worse off, that same group of taxpayers who have made a major contribution over the years by way of PRSI deductions from their salaries. To those who claim this is a reforming budget I say that those less-well-off families can justifiably ask what type of reform is this.

As Labour spokesperson on youth affairs I am very concerned at the Government's decision to apply VAT at the standard rate on all commercially organised sports and leisure functions. Perhaps the Minister of State present would take note of my comments and bring them to the attention of her Cabinet colleagues. Indeed, I warn the Government that I will be seeking a commitment from them that voluntary community organisations will be exempt from VAT, particularly on necessary fund raising activities which may be held in commercial type sports halls.

I object strongly to the Government decision to abolish income tax relief on shares allocated to employees under approved profit-sharing schemes. Is the Minister not aware that this relief was introduced by Fianna Fáil following protracted negotiations between the trade unions, certain employers and with the full consent of the Revenue Commissioners? The scheme proved enormously successful, leading on the part of thousands of employees, to greater involvement in and commitment to their companies. This was fully acknowledged by their employers. I know from representations I have had to date on this issue that it is having a very damaging effect on the morale of staff in many such companies. I would ask the Minister to re-examine this proposal with a view to its revision in the Finance Bill.

The Government's response in the Book of Estimates and in this budget to the housing crisis is pathetic. Were the problem not so critical their response could be perceived as something of a cynical joke. The Labour Party must highlight the reality prevailing on the ground in this respect throughout the length and breadth of the country, since there are up to 30,000 applicant families living in deplorable, overcrowded conditions. If my comments are seen by the Minister and Government to be something like a long-playing record, so be it.

The Government's policy in regard to homelessness must be changed if we are to deal with the major problems of inequality and growing divisions in our society. I hope the Government take on board the concerns expressed by all local authorities about the crisis.

In the context of the Government's policy document on social housing I should like to ask the Minister to consult with her colleagues regarding the possibility of the State providing further technical and financial assistance to housing co-operatives. I hope more housing coops will be formed by suitably qualified applicants on the local authority housing lists to avail of the subsidised site scheme announced in the policy document on social housing. I make this appeal as a former member of a housing co-operative who benefited from the assistance of State agencies such as the NBA and others.

I welcome the proposed reduction in the pupil/teacher ratio from September next but it must be said that following those changes we will still have the largest class sizes in Europe. I welcome the allocation for disadvantaged areas. However, it is only a proportion of what is required. I ask the Minister to bring to the attention of the Minister for Education, Deputy Davern, the need for more remedial teachers. That is most important at primary level particularly for pupils in rural areas. In my constituency — I do not like being parochial — the villages of Ballyboughal, Garristown and Naul have been seeking, for the last three years, a shared remedial teacher. I ask the Government to consider favourably schools in rural areas.

I am very conscious of the need for new school buildings in my constituency and I was appalled at the cutback in the allocation in the budget for primary and second level schools. Problems exist in two schools in my constituency. Fingal Community College is cluttered with prefabricated buildings and there is a need for an additional school. The Minister should ensure that the necessary finance is provided to enable the promised improvements for Fingal Community College and Coláiste Colm in Swords to proceed to the next stage this year.

The major social problem in Ireland is unemployment. The report of the Government's industrial policy review group, which was published recently, stated something we knew for some time, that there is no national strategy for job creation. The most important issue we must address is unemployment. At present the unemployment figure stands at 270,000 and is rapidly rising. This is totally unacceptable in any society given that unemployment is at the core of many fiscal problems. It is also at the core of the grinding poverty which afflicts thousands of families and at the core of many of our mounting health bills that have not been effectively dealt with in the budget. It contributes to thousands of cases of depression, stress-related conditions, violence in the home, alcoholism and a host of other conditions. Above all unemployment is at the core of our equality crisis. It is not an accident that unemployment is at a peak in many of the alienated suburbs of our large cities and towns but particularly in the Dublin area. The budget will do nothing to stimulate investment in job creation. The best thing we can give to many of those people is a sense of hope but unfortunately, there is not very much in the budget for the unemployed.

I wish to refer to horticulture, a market-led industry with great potential for employment, particularly for young people. It has a low capital cost per job and compares favourably with any other sector of agriculture. The Government should invest in the horticulture industry because there is great potential for local consumption and exports. There is potential in the mushroom industry, the nursery stock industry and amenity horticulture.

We are all aware of the major difficulties which Teagasc are experiencing. In my constituency there is the research unit in Kinsealy and I am pleased the new Minister for Agriculture and Food, Dr. Woods, has given a commitment to keep open that centre. However, the commitment he has given is not enough. The allocation in the Estimate of £1 million does not go far enough to deal with the major problems. We have great potential if only we invested in research and development. We have the expertise and the technique. I fear that when the Minister says the research unit is safe he may still sell the family silver — the assets, the resources, the 60 acres of land — that could be cultivated and utilised to improve the whole industry in north County Dublin, Meath and Louth, a natural region for horticulture. I fear there is a hidden agenda to sell that land which has an extra value at a giveaway price. I will not accept lands being sold off to individuals or groups who are waiting in the wings.

I could refer to many aspects of health care. Has the budget done anything to reduce the waiting lists for people seeking hospital care? Has the budget done anything to ensure that community health care is provided? There is nothing in the budget to deal with that major problem. A health centre is long awaited in Swords, County Dublin a town which has a population of 25,000 people.

The increases in social welfare announced in the budget barely keep pace with the rate of inflation and this is at a time when social welfare recipients will be hit by increases in VAT rates and in differential rents. The budget is only one vehicle available to the Government to bring about greater equality in this country. The Government, through the Estimates and the budget, can shape the type of society we want. Unfortunately, having listened to the contributions of the Minister and other speakers it is clear that this Coalition Government have little or no commitment to bringing about greater equality. On this basis, it gives me no great joy to say that I have no confidence in the budget.

Minister of State at the Department of the Environment (Miss Harney)

Many of the Opposition speakers that I have been listening to mentioned the need for Dáil reform. I concur with all the remarks made in that regard. As one of my colleagues, who is not present in the House, said on many occasions we spend our time talking to the wood and the leatherette. Ordinary Members of the House find the manner in which we arrange debates frustrating. The Programme for Government contains a commitment to carry out major reforms. It is urgent that that commitment is implemented as quickly as possible. Unfortunately, it was not met before the deadline of the end of December last.

It is very important that we look at our archaic voting procedures, the speaking arrangements for Members who wish to contribute to debates and, in particular, the way this House and the Seanad deal with the legislative process. As someone who has been trying to pioneer a Bill through the Oireachtas for the past 12 months, I am well aware that Ministers find it extremely frustrating that they have to negotiate with the various Whips, in seeking to have a major Bill put through the House, to have time allocated to deal with that Bill and amendments to it in a rational, logical and coherent fashion. Indeed, one is lucky to get one hour or one day. This is not an adequate way to deal with important legislative matters. Before this House is forced by outside influences to reform itself it is important that the commitment in the Programme for Government is implemented as quickly as possible. The Progressive Democrats, as a partner in Government, are anxious to ensure that Dáil reforms are carried out during the next few weeks.

The priority of the Progressive Democrats and the Government as a whole is to tackle the appalling level of unemployment. We must, as politicians, explore every possible avenue and every means of doing this. The comprehensive tax reform proposals contained in this year's budget, which have been widely hailed as the most radical and most reformist ever introduced in this country, will undoubtedly play a huge part in helping to generate employment opportunities. There is no doubt right across the developed world that lower rates of personal tax not only benefit those at work but significantly improve the climate for enterprise and job creation. The consequent reduction in the cost of employing people will make it far more attractive for employers to take on extra workers.

The broadening of the tax base is another Progressive Democrats policy priority. During the past three years we have seen the tax take from the corporate sector double to over £700 million, or 7 per cent of the total tax take. It is still not enough but at least we are moving in the right direction. Furthermore, the proposed fringe benefits tax allied to the proposed taxing of short term social welfare benefits is intended to ensure that all forms of income, whether from wages, perks, or welfare, are treated equally under the tax code. This is the sensible way forward. It is what every expert study of our taxation system has recommended. We have had a number of such studies, the results of many of which have been left to wither away on library shelves all over the country.

The question of taxing short term social welfare benefits has brought much adverse comment in this House from members of the Opposition parties. Let me say this: I do not think there is any Deputy in the House who is not aware of the fact that as we approach the end of each tax year the old pain in the back seems to become more prevalent. It is true that in January, February and March, at the end of each tax year, it seems that far more people suffer from the old pain in the back than during any of the other months of the year. There is no doubt that if it proves to be more beneficial for an individual to work nine months and claim social welfare benefit for three months, because they would be substantially better off as a result, many people will opt for that system. All forms of income from whatever source, be it from welfare, direct work or perks, must be treated on the same basis and nobody must be given a tax advantage simply because he or she earns income from a different source.

When this country has a simple, fair, easy to operate tax system and when it becomes clear that tax evasion scams of every sort will be strenuously punished we will be on the road to equity and enterprise. Thanks to the implementation of a significant proportion of the Programme for Government agreed between the two parties in Government, the 1992 budget is a reforming, radical budget which sets us well on the way towards having a fair, simple and coherent tax system.

I am also pleased that the substantial decreases in the personal rates of income tax, with the higher rate coming down by four percentage points to 48p and the lower rate by two percentage points to 27p, leaving us with just two tax bands, are being funded by changes in the tax system. This is appropriate and is the right approach. It would be inappropriate to fund personal taxation changes through borrowings, decreases in public spending or cutbacks in health, education or welfare services.

Welcome as these reforms are and while undoubtedly they will improve the prospects for greater employment, on their own they are not enough. That is the reason it is also essential that the Government implement as a matter of priority the recommendations of the Culliton industrial review group. This report was produced in record time by their practitioner committee. They were appointed by the Minister for Industry and Commerce to review industrial policy last June and given a six months deadline.

To further underline the Minister's determination to promote radical change in the industrial reform area, the committee were comprised solely of people from outside the realm of the Government's own jobs and industrial policy agency. This is no reflection on the sterling efforts that they have made during the years but it is all too painfully obvious that industrial policy, as practised and promoted in this country over the past two decades, has been an abysmal failure and the 270,000 unemployed people are grim testimony to this.

The Minister rightly saw that if industrial policy reform was to be in any way meaningful it had to reach beyond the orthodox definition of industrial policy as we have known it. Hence, the Culliton review group were given broad terms of reference. Their report underlines the interdependence of such factors as infrastructural costs, telecommunications, job training, our education system and much more. Their sweeping recommendations for change must be undertaken with urgency and the task force which my colleague, the Minister for Industry and Commerce, has recently appointed must approach their task with this in mind. Clearly, this is one report which must not simply gather dust. The Progressive Democrats are determined that decisive and speedy action in implementing it will proceed immediately.

Sadly, however, the bottom line is even if the industrial review is implemented from first to last inside a couple of years the scourge of long-term mass unemployment will still dog our society. This is the reason orthodox responses alone will not adequately ensure that every able-bodied person in our society, eager and willing to work and participate in worthwhile activity in this society, can be looked after.

We must then look to other measures, such as expanding social employment schemes, looking at the incidence of overtime in both the public and private sectors, promoting job-sharing on a wider basis and other initiatives that will spread the inadequate supply of work in our society as widely as possible.

We must be imaginative and find worthwhile activity; we must be far more willing to look outside the traditional definition of what constitutes worthwhile employment if we are to give people meaningful things to do. In that regard all parties in this House, the social partners and the Government have a part to play and we must not reject any suggestion, from whatever source. We must all be involved in a partnership in trying to look at this problem realistically and honestly and trying to ensure that we, as elected representatives, do not play party politics in our endeavours to win a few votes from each other. It is important to see the jobs crisis for what it is and that we do not make false commitments which cannot be honoured. We all have a responsibility to be far more open and honest with each other. We have long passed the stage, in terms of unemployment, when the Opposition oppose simply for the sake of opposing.

The revised Programme for Government negotiated last October placed a very heavy emphasis on protecting the living standards of all social welfare recipients. We want to develop support for families with children and to promote greater equality between all categories of social welfare recipients. The budget makes significant progress in meeting these criteria. Besides the general 4 per cent rise the rate of increase for the lower level short term allowances, including unemployment benefit, disability benefit, short term unemployment assistance and the supplementary welfare allowance will be increased by 6 per cent this year.

The allocation to the Combat Poverty Agency, the additional allocation to reduce the pupil-teacher ratio and the money being allocated for schools in disadvantged areas for the provision of caretakers and secretaries are very important and significant steps in helping the most vulnerable and disadvantaged in our society. There is no doubt that, even when one thinks in terms of unemployment, an educated unemployed person is far better off — and has a much greater chance of being able to cope — than an uneducated unemployed person. Education is the key to equality in society and we must place great store and emphasis on ensuring that we do not allow the disadvantaged to become more disadvantaged, particularly in times of economic difficulty.

As a woman Deputy, I particularly welcome the allocation of £22 million this year towards the implementation of equality treatment under the European Community Directive. The Minister for Finance has given a commitment that further allocations will be made in 1993 and 1994 to meet back payments due under the directive relating to equal treatment of men and women in matters of social security. This arises because whereas the date of implementation of the directive was May and November in 1986, it should have been implemented by the deadline of December 1984. These payments will cover the period in between for people who were entitled to them and it is right and appropriate that they should be paid.

There is also the very welcome measure in relation to back to school payments which are being increased by £10 per child next September. It means that for primary school children the payment goes to £35 and to £50 for second level children. This measure will cost £2.2 million this year.

The scheme being introduced for adoptive mothers must also be welcomed by all Members of the House. Maternity leave for a ten week period on the same basis as existing maternity leave will now be available for mothers of adoptive children. This is a very progressive measure and, with the full implementation of the equality directive, indicates the Government's commitment to ensuring that women are treated fairly and equally.

The payments being increased under the family income supplement amount to between £9 and £11 per week and they are also welcome. It is very important, if we want to tackle the poverty trap of low pay, to ensure that people lucky enough to get employment, do not lose out financially vis-á-vis a person on social welfare. The overall limit to qualify for the family income supplement is being raised by between £15 and £18 per week, depending on the number of children in the family.

I also welcome the announcement of the Minister for Finance that he will spend more on publicising the family income scheme so that many people who are entitled to it — but who have not availed of it because of a lack of information — will be encouraged to make application for what they are entitled to. The provision of £3 million for services for the mentally handicapped is also welcome. It is appalling that the parents of mentally handicapped children have had to take their campaign for greater improved service and places for their mentally handicapped dependants to the streets.

I now wish to turn to my own area of interest, the environment. It is important that when the State becomes involved in developments, it adopts an approach consistent with the highest environmental standards. This is particularly true in the case of the interpretative centres proposed for the Dingle Peninsula, the Burren, the Wicklow Mountains and the Boyne Valley. I am deeply concerned that the approach being currently adopted to these centres takes little account of the legitimate concerns of local people for the environment.

I am in favour, in principle, of the idea of developing tourism infrastructure, and interpretative centres in the right location should be part of that infrastructure. However, in areas of outstanding natural beauty, the State in particular must ensure that it carries out independent environmental impact assessment studies and ensures that the centres are located in the most appropriate areas. In the case of the Dingle Peninsula, for example, it is plain that this area has reached full capacity in terms of tourist numbers. Many, if not all, those tourists are high spending, car borne tourists. Experience in this country and elsewhere tells us that interpretative centres of the scale proposed in Dingle will attract large numbers of coaches and change the emphasis from high value to low value mass tourism. Far from benefiting the local economy the interpretative centre currently proposed may actually discourage the type of tourist on which that economy now depends. It is vital, if these centres are to go ahead in specific locations in Kerry, Clare, Wicklow or the Boyne Valley, that their development is consistent with an overall management plan for the areas. I welcome the announcement by the Minister of State at the Office of Public Works that he is considering a request from Wicklow County Council to refrain from going ahead with the visitors' centre for the Wicklow mountains national park until a major study of the county's upland region is completed. This move will be of benefit in ensuring that these developments are consistent with the protection of the environment and appropriate tourism development. A similar management plan for the Dingle Peninsula, the Boyne Valley and the Burren is urgently needed before any steps are taken to proceed with the construction of the proposed centres.

I am also concerned at the announcement made yesterday by the Minister for Tourism and Transport regarding the reopening of the Harcourt Street line as a bus-way. The Minister agreed that there is widespread acceptance that the Harcourt Street line should constitute a central element of any overall network solution to Dublin's public transport problems. The Minister will also agree that our experience with the DART and Dublin Bus systems have shown that people will simply not get out of their cars for any type of bus. The time for a piecemeal solution to our transport problems is over; the city of Dublin needs an integrated approach to public transport and that approach must encompass the construction of a light rail system. The funding of this system from the European Community and the private sector will be available in the short term and to talk of an interim solution, such as a bus-way, will only delay the day when we have a successful light rail system for Dublin. It is essential that any money which might have been earmarked for the eastern bypass, which would destroy the natural amenity of Dublin Bay and areas like Sandymount, should be diverted to putting in place in the city and county of Dublin a proper light rail system such as the one recently introduced in the city of Manchester, which is similar in size to Dublin.

This year's budget is not just a reforming one in terms of the tax measures taken, it is not just one which will further encourage enterprise and reward initiative; it will give people more in terms of take home pay and allow them to make the kind of decisions about their own life as to how they will spend it. It is a budget with a strong social dimension, it helps welfare recipients and seeks to treat everyone on the same basis. It seeks to set in place a fair and equal society because I believe that ordinary people object to — not so much the level of tax — but the fact that some sectors of the community, because they are paid by way of perks or whatever, pay a lot less tax than those in other sectors. The disparity and unfairness of that is what causes such unrest in our community. The measures in the budget announced by the Minister for Finance last week go a long way towards levelling the playing pitch so far as ordinary taxpayers and ordinary people are concerned. The budget is the beginning of a process: it is the Government's intention that the commitment in the Programme for Government to a standard rate of tax of 25 per cent and a higher rate of 44 per cent will be met in next year's budget. The Progressive Democrats look forward to participating in Government and seeing to it that those measures are introduced.

Mr. Bradford

The Minister of State at the Department of the Environment may be interested to hear that white smoke has been seen coming from the Fianna Fáil parliamentary party rooms on the fifth floor. I wish to congratulate Deputy Reynolds on having been elected Leader of the Fianna Fáil Party. I wish him well in the future. Barring unforeseen circumstances presumably he will take over as Taoiseach next Tuesday but he will face a very difficult task in trying to turn around the economy. I wish him well in his endeavours.

Before I refer to the measures in the budget, I wish to refer briefly to the comments made by the Minister of State, Deputy Harney, in regard to Dáil reform. She summed up the position very well. It is disappointing in debates such as this to see one Deputy after another basically talking to himself or herself. This makes a mockery of democracy. Dáil procedure needs to be reformed urgently. The committee system needs to be expanded so that the talents of all Members can be utilised. Even though the Government have to take precedence, they do not have all the answers to the problems. An expanded committee system would enable Members to put forward their suggestions so that they can be debated and, hopefully, acted upon.

I believe that when the Taoiseach and his Cabinet meet next week, they will realise that the central issue facing the nation is job creation. I am sure most Members who have contributed to this debate have referred to the need to make job creation a priority. Having analysed the 1992 budget, I have to ask what it will do to reduce the level of unemployment. Will it have led to a reduction in the number of people on the dole queues by the time the 1993 budget is introduced?

The Government Estimates for 1992 make provision for a continuing level of unemployment of 270,000. This speaks for itself and does not indicate any great confidence in the Government about their ability to create jobs. Speaker after speaker on the other side of the House has claimed that the budget is a landmark in terms of job creation, that somehow it will take us down a new road and that jobs will flow.

The Minister has made some progress in the budget in relation to tax reform. I am sure that, like me, every citizen would like people to pay less tax. The budget continues the reform of our tax system initated in the 1987 budget and continued perhaps more strongly in the 1989 budget. However, we have to ask if the results will be any different. Even though tax was reduced in the 1987 and 1989 budgets, unemployment continued to rise. There is no clear-cut guarantee that the tax reform proposals in this budget will result in jobs for everyone.

Notwithstanding this, the issue of job creation must remain the primary concern of the Government. Apart from a weekly social welfare cheque, approximately 270,000 families have no income. The cost to the State of increased social welfare payments and tax foregone is enormous.

We have now reached the stage where social chaos and disorder cannot be far away. Almost 20 per cent of our working population are unemployed, over twice the EC average. If we believe that people will continue to suffer in silence we are taking a very innocent view of things. All the indications are that unemployment will continue to rise in 1992 and that it will not be too long before 300,000 people will be officially unemployed. Some years ago, the then Taoiseach. Mr. Lynch, stated that if unemployment reached a level of 100,000 he would feel duty bound to resign. The incoming Taoiseach is facing the possibility of unemployment rising to 300,000 during his first six months in office. I do not know what action he will take between now and then to deal with the problem but I certainly hope he will make it a priority.

While the tax reform measures in the budget may be of some help in reducing the unemployment level they will not produce the dramatic results now required. We cannot continue to accept the present taxation system. The Minister has merely tinkered around with the system in the budget and has not introduced any of the radical reforms needed at a time when there is an unprecedented level of unemployment.

Deputy Bruton and many non-political groups have called for the setting up of a national jobs forum. I want to be associated with this request. The Government do not have all the ideas on how to create jobs — if they do, they must be very limited. Many political parties and interest groups have views on how to resolve our unemployment problem. If the Government ignore the suggestions of these people, they will do so at their peril. I hope the new Taoiseach will make the setting up of a jobs forum a priority. For some strange reason the outgoing Taoiseach, Deputy Haughey, and I wish him well in his retirement, opposed the idea of a national jobs forum. He seemed to believe that the Government had all the answers. However, as we know they do not have all the answers. The new Taoiseach should take into account the views of all groups on job creation.

The Government need to seriously examine their job creation record and the cost of job creation to date. Thousands of millions of pounds have been spent over the past number of years in job creation measures. While some jobs have been created, an equal number of jobs have been lost. A jobs forum could look at the cost of job preservation as well as at the cost of job creation. I am sure many Deputies know of small factories, cottage-like industries, which have closed down with the loss of five or six jobs.

Many of those factories closed simply because they could not afford to pay the £20,000, £30,000, or £40,000 they owed to the Revenue Commissioners or to third parties. The cost of cheap loans to keep those factories open would be minimal in comparison with the cost of unemployment payments to those people or of setting up new industries, which in many instances would amount to £30,000 or £40,000 per job. I hope job preservation and job creation will be discussed in more detail by the Government and interested parties in 1992.

The Minister of State, Deputy Harney, and other Deputies said the tax reform measures in the budget would turn the tide of unemployment. I do not totally disagree with that analysis, but at the end of the day work is taxed as a luxury rather than a necessity. Tax on work is higher than tax on capital or profits, and that is a matter we should consider. There is no incentive for employers to employ extra workers. The incentive is to purchase a machine rather than employ a worker. While that practice continues we will have high levels of unemployment. The tax reform measures will not make a substantial difference to unemployment in the early and mid-nineties.

The previous speaker for the Opposition, Deputy Ryan, expressed disappointment at the changes in relation to profit-sharing. His analysis is correct in that worker-participation should be encouraged. One of the best ways of doing this is through profit-sharing schemes. To do away with those schemes would be a retrograde step and I am disappointed the Minister has moved in that direction. The changes will result in a minimal saving to the State and will do nothing to encourage profit-sharing or job creation.

No dramatic changes have been made in the social welfare system. Annual increases in social welfare have been in line with inflation. I welcome the increases but, unfortunately, according to the groups who deal with those marginalised in our society, thousands of Irish families live below the poverty line. The increases as announced last week are not sufficient to turn the tide as far as those people are concerned.

The red tape surrounding the social welfare system is almost an industry in itself. There are too many social welfare schemes. We should aim at introducing basic social welfare schemes, whether for the unemployed, disabled or separated people. There are so many schemes that one would almost need a Ph.D in English to understand all the documents involved. I hope the Minister for Social Welfare will consider streamlining social welfare schemes with a view to making them more meaningful and responsive to the needs of the people. He should eliminate the red tape which in many cases prevents people applying for social welfare. The Minister of State, Deputy Harney, referred to the family income supplement. This excellent scheme is under-utilised because people are unaware of its existence. The streamlining of social welfare schemes would result in payments being made sooner to those in need.

I agree in principle with the carer's allowance but I am not happy with the operation of this scheme. I had hoped that the Minister would have announced changes in this scheme but he did not do so. Many questions have been put at Question Time to the Minister for Social Welfare on this matter but the response has not been positive. The carer's allowance is an excellent scheme but at present only 3,500 people qualify for it. I was present in the Dáil Chamber when it was announced in a budget speech and the Minister estimated at the time that 28,000 people would qualify for it. As the take-up is less than anticipated the scheme should be brought back on track.

Carer's allowances enable people to care for their elderly relatives at home and result in huge savings to the State. We are all aware that the cost to the State of keeping a person in a State-run home or hospital is £300 to £500 per week. Considering that the carer's allowance is £55 per week it makes sense not just socially but also economically to expand the scheme and make it more readily available to those who are willing to care for their elderly relatives in the comfort of their homes. I appeal to the Minister to see if changes can be made even at this late stage.

A number of speakers referred to the health budget. It appears that health boards will continue to stumble from crisis to crisis in 1992, with thousands of people remaining on hospital waiting lists. The suggestion was made by the Fine Gael spokesperson on Finance, Deputy Michael Noonan, and has been made by numerous interests throughout the country, that a large proportion of surplus national lottery money should be spent on health in 1992, specifically to cater for those awaiting hospital treatment. I fully support this view. At a time when national lottery money is allocated on an ad hoc basis and is spent on questionable projects, it is difficult to explain to people who have been waiting 12 months or two years for an operation why some of this funding cannot be made available to alleviate their plight. I appeal to the Minister of State, Deputy Harney, to ensure that national lottery funding is made available as part of the health budget for 1992 so that thousands of people on waiting lists can be treated. We must remember that by the time hip or joint replacement operations are carried out they will cost more to the State. National lottery money should be used to speed up this process.

I intended to speak on the housing crisis. I was amazed to hear the Minister state yesterday that a crisis did not exist when 20,000 people are waiting for council houses. During 1992 we will build approximately 1,200 houses, which is totally inadequate. As a result of the housing crisis every health board is paying tens of thousands of pounds weekly in the form of subsidies to assist people in private rented accommodation. This problem must be addressed by the building of more public housing as well as by making grants available, such as the £5,000 surrender grant which was paid to people who left their council houses, and I suggest the new house grant which was set at £2,000 back in 1980-81 be increased, if it is to be of meaningful assistance to young married couples.

The 1992 budget may be a move in the right direction but if we are to solve the unemployment and housing crises and to face up to the problems in social welfare and agriculture, we need to go much further.

The election of a new Taoiseach and the formation of a new Government offers the opportunity for a new beginning. We must note the public disquiet about politics and make a new beginning. We must put the issues of unemployment, emigration and housing on the top of the political agenda. Let us hope that the issues and not the scandals will be discussed in Dáil Éireann during the remainder of 1992.

Mr. McGrath

As I rise to speak, the House is buzzing with the news that Deputy Albert Reynolds has been elected Leader of the Fianna Fáil Party and as such is Taoiseach-elect. I am delighted to congratulate my constituency colleague and wish him luck in the difficult job that is ahead of him. I hope the incoming Taoiseach will put behind him the squabbles and internal turmoil in the party over the past couple of months and will now get on with the job in hand and address the difficulties that face the country.

This is the third budget I have had the opportunity to speak on as a Member of this House. While I welcome certain aspects, the budget has been a disappointment overall. I welcome the reduction in the rates of personal taxation. The reduction in the standard rate from 29 per cent to 27 per cent is worthwhile and will benefit a certain number of people. It will be of marginal benefit to the lower paid who are paying tax at the standard rate. I understand that in the region of 61 per cent of the working population are presently taxed at the standard rate only. The 2 per cent reduction will be a small benefit to them. However, 39 per cent of the working population pay at the higher rates of tax, that is, 48 per cent and 52 per cent but now they will all be in the 48 per cent tax band.

I am disappointed that the tax bands were not widened. While the benefits that will accrue, due to the reduction in the rates of tax, are marginal at the standard rate, a person with an income of £30,000 a year will benefit to the tune of approximately £1,000 a year. That is quite a substantial amount of money to somebody on that income. The benefits are greater for those higher up the ladder. I was talking to an accountant this morning and he pointed out that somebody with a taxable income of £400,000 per annum — that seems a huge amount of money and I was absolutely staggered when he told me that quite a number of people earn those kinds of salaries — will now pay tax at 48 per cent and as a result of the reduction from 52 per cent he will be better off at the end of the day by £16,000.

This raises the question of tax bands. Is it not very strange that somebody on an income of £19,000 a year will move on to the high rate of tax at 48 per cent while somebody with a taxable income of £400,000 will pay the same rate of tax? Is it right that they are both taxed at the same rate? Is his contribution to society so much better that he should get those extra benefits from the Department of Finance? Is there not something radically wrong when somebody earning less than £400 a week with a take-home pay of somewhere in the region of £250 a week would pay tax at the same rate as somebody earning £8,000 a week?

I am disappointed that the new Minister for Finance did not look at that aspect of the budget. Perhaps, instead of reducing the top rate from 52 per cent to 48 per cent the Minister could have used this money to widen the tax band at the bottom of the scale and reduce the percentage of people on the higher rate of tax. I understand that up to 100,000 taxpayers would come into the standard tax band if the top rate of tax of 52 per cent had been retained and the 48 per cent rate abolished. That would be a tremendous achievement and we should move towards that.

The Minister for Finance introduced taxation on benefits-in-kind. That raises all sorts of queries. We are all familiar with benefits-in-kind, for example, the company car, but people are already taxed on that. What about the situation where the company pays the VHI subscription for their employees, and I understand that a number of the large companies do that? Will they continue to pay it, bearing in mind the extra cost to them? What about people who avail of the VHI group schemes? One that comes to mind straight away is my own profession of teaching under which there is a reduced premium. Will this be deemed now to be a benefit-in-kind? Will an extra tax be placed on us because as teachers we avail of the group scheme? Teachers have reduced rates for car insurance. Will that now be considered a benefit-in-kind?

We hear that if the company provide a car parking space that other people would have to pay for that is a benefit-in-kind and that tax will have to be paid on it. That raises the question: what is the position of Members of this House, who are privileged to have an exclusive car parking space in the centre of Dublin at no cost? Will that mean that an extra burden will be put on our employer, the Minister for Finance, who will have to impose a tax on himself?

Some employers provide subsidised restaurants. That is a benefit-in-kind. We could consider the position right across the board. People employed by Irish Rail get free travel or special rates on travel. Is that to be classed as a benefit-in-kind and, if so, how is it to be taxed? What about many of those who work in some of the chain stores and who can buy goods at preferential rates? Will there be a tax placed on them in that respect? The tax that is being placed on benefits-in-kind will have to be borne by the employer, so it will cost the employer more to give those benefits. As a result of the employer facing increased cost his workers will cost him more, and the inevitable result of that is a reduced number of jobs. Therefore, this tax is another tax on jobs. If an employer takes away benefits from his staff or reduces benefits will the result be industrial unrest and many disputes because of employees wishing to maintain benefits to which they have become accustomed? We may well ask whether this change will lead us into a turbulent period in Irish industry? The Minister will have to consider the position very carefully when drafting the new Finance Bill.

I have been speaking about a reduction in the number of jobs, but one has to remember that, unfortunately, thare are approximately 270,000 people on the dole queues. Will the budget do anything to help them? Will the various tax measures introduced in the budget create more jobs? The Government must be fairly forthright in indicating that we have to look to the private sector to create jobs. The Government are busily shedding jobs in the public sector so we have to encourage the private sector to create the necessary extra jobs. Will the measures introduced in the budget create any jobs? Is the budget not going to be a burden on jobs and result in more unemployment and more emigration?

It is important to put on the record that somewhere in the region of 150,000 people, a tremendous number, have left this country since the outgoing Taoiseach, Deputy Haughey came into office in 1987. The latest census of population shows County Westmeath, to be one of the areas very badly hit by emigration. Westmeath would not generally be viewed as an emigration blackspot but the preliminary census figures show that our rate of emigration is the third highest in the country. That is a very frightening statistic, yet one can see evidence of that when one visits some of the villages in north Westmeath; there are houses locked up, empty and falling into disrepair. Unfortunately, that is the sign of the times.

I wish to turn to the effect of the budget on the motor industry. The owners of company cars will face a substantial increase in tax on those cars. They have been paying tax on the cars for a while but the budget will increase the rate substantially. Employers who have given their employees company cars will now try to find some way around the increased tax so that an employee is not penalised for having a car. I am sure that new systems will be devised whereby an employee buys out the vehicle and is then paid travelling expenses. The increased rate of tax will have the effect of reducing the number of cars purchased each year because industry and business generally buy a large proportion of the total number of cars purchased.

I suppose that the nine pence reduction on the price of a gallon of petrol would be regarded as a tremendous benefit. However, it will mean to a person, driving an average of about 8,000 miles per year, a saving of about £18 a year, an insignificant amount. At the same time as the cost of petrol is reduced by £18 per year for the average driver, he or she will have to pay an increased car tax of approximately £40, irrespective of whether they use their car. On that front, the average driver will come out rather badly.

I am glad that the Minister Deputy Harney is in the House because I know of her great concern for the environment. On the question of the reduction in the price of petrol, I am disappointed, though, that the reduction in petrol was not matched by a similar or an even further reduction in the price of diesel on the grounds that diesel is more environmentally friendly. Perhaps that is a matter that the Minister and her Cabinet colleagues could examine and do something about.

Another worrying aspect in relation to the motor industry is that there will now be a registration fee for imported cars. Heretofore when importers brought in cars from Japan or elsewhere they had to pay up front the full value of each car, whether it be £3,000, £4,000 or some other figure. There will now be a change in that importers will not have to put as much money up front in order to bring in the cars, and they will therefore have more money available to bring in imported cars. Because the extra charge will be made at the point of registration, importers of foreign cars will receive an added bonus and will thus be able to flood the market even further and the number of ordinary sales will reduce.

The difficulties faced by the motor industry as a result of the budget will further reduce jobs in that industry.

I suppose we would all welcome the reduction in excise duty on new cars, but that will deal a very severe blow to dealers holding new cars in stock before the announcement of the reduction in duty. A dealer in my locality had 40 new cars in stock on the day of the budget. He estimates that he will lose aproximately £16,000 as a result of the overnight reduction in the cost of new cars. I suppose that is a problem dealers will have to put up with but it is indeed very disappointing to those who face such losses.

I should like to mention very briefly the implications of the budget for education. The education budget has been increased by a small amount this year. Unfortunately, that increase will only just keep pace with the payment of salaries and so on.

I am very disappointed that the amount provided for capital expenditure has not been improved to any great extent. I recall that in 1986 when the former Minister for Education, Deputy O'Rourke, was in Opposition she criticised the then Minister for Education for the amount of money that was being put into capital expenditure on schools, on new schools and school repairs. It is sad to reflect that the amount being spent on new school buildings this year is less than half the amount that Deputy O'Rourke said was inadequate in 1986, and that is not taking into account inflation. At the opening of a new school some time ago I heard the Minister Deputy O'Rourke declare her ambition to rid the schools of the prefab villages that surrounded them. How does such a statement carry through when the capital expenditure allocated in this budget is so dismal?

There are other aspects of education that have not been addressed. The free book scheme is very inadequate for dealing with the needs of pupils. As more people are caught in the poverty trap, the provision of school books is a major problem. The sum provided by the Department of Education is miserable. It does not do a great deal to encourage children from less well-off families to improve their education. The capitation allowances in schools has not been substantially improved and this creates great problems. In my area there is a continuous round of dances, fund raising events, table quizzes and so on to raise money to keep schools going. I am disappointed that provision was not made in the budget for that contingency.

This budget is anti-family. There is nothing in it to build up families. There is not any mention of the family and there is not any specific help for families. Life assurance relief has been abolished. Life insurance was taken out by the head of the household to cater for his family in the event of his death. Child benefits were not increased and that too was disappointing as that was one of the few ways we had of aiding a family. About 40 per cent of Irish children are in households that are short of money.

The housing programme is totally inadequate and the social housing programme launched 12 months ago has been a tremendous disapppointment. I welcome the 4 per cent increase in social welfare benefits but it is not adequate. Although it was not elaborated on, I welcome the fact that the FIS scheme is to be extended.

Mrs. Taylor-Quinn

This year I hoped the budget would have been jobs driven. Last year the Fine Gael Party and our leader proposed that all parties should come together to form a jobs forum in an effort to attack unemployment. We have reached the highest level of unemployment in the history of the State. Having refused the offer to partake in a jobs forum I hoped the Government would take the opportunity in the budget to create an environment conducive to job creation. This did not happen. From the point of view of job creation the budget is a major disappointment.

Some people believe that changes in the tax system automatically lead to job creation, but the tax changes in the budget only continue the policy of previous years which has been proved to be useless. Under the regime of the past two years unemployment has dramatically increased.

We are fortunate that we have natural resources and are able to produce some of the finest agricultural products in the world. Yet, we have not capitalised on that resource or created the necessary jobs spin off from agriculture. The Minister in his budget speech did not mention the agriculture industry. His only reference to agriculture was when he dealt with the proposed taxing of co-operatives. The Minister said that since the introduction of the exemption many years ago, co-operatives had undergone radical transformation and that the distinction between the co-operatives and other commercial entities had almost disappeared. The Minister then proposed the introduction of corporation tax on co-operatives. This will seriously affect the farming and fishing industries. The Minister proposes to impose a 40 per cent tax on all co-operatives. Farmers, as a result, might receive much reduced prices for their products from the co-operatives and the goods purchased by them from the co-operatives will be sold at a higher cost so that the co-operatives can meet the corporation tax demand. That is a very short-sighted view in regard to job creation. In this sector there was an opportunity to implement job creation policies. Instead of encouraging initiative, the budget stifles it.

The fishing areas which also happen to be the severely disadvantaged areas will now be affected by the 40 per cent corporation tax on co-operatives. Some of the co-operatives were only set up in the past ten years and as they will now be under more pressure from the Department this will stifle their initiative and hamper progress.

In addition, agriculture co-operatives are having difficulties with the milk quota buy-out scheme. They are being encouraged by the Department to reduce the overall milk quota by 1.9 per cent. The problem is that more farmers than anticipated are offering their quotas for sale and, in some instances, up to 12 per cent of quotas are being given back to the co-operatives who are bound to accept them. There is not any clear indication from the Department or the EC as to how they will deal with that. The co-operatives are in a quandary in relation to the buy-out scheme.

Those factors, coupled with the fact that the Minister has given an assurance to pay £2 million of the headage grants due for 1991 in 1992 and a commitment to make further payments in 1993 and 1994, not the £10 million outstanding, leave questions to be answered. How much does the Minister intend to pay, in 1993 and 1994? This combination of factors is a serious blow to the farming community and the Government are blind to what is going on there. Over the past year farmers have suffered one of the most serious income cuts ever experienced. Average farm income has reduced from £12,000 to £8,000 and many have been forced to apply for assistance from the Department of Social Welfare. This is happening at a time when the Government should be exploring ways of creating jobs in agriculture.

Another aspect of the budget which needs to be questioned is the Minister's promise to introduce equality payments. For this year the Minister has allocated £2 million for equal pay to women. I understand that this will only cater for payments to 4,000 or 5,000 women while more than 40,000 women should benefit from equality payments.

Debate adjourned.