Financial Resolutions 1994. - Financial Resolution No. 8: General (resumed). – Dáil Éireann (27th Dáil) – Tuesday, 1 Feb 1994

Financial Resolutions 1994. - Financial Resolution No. 8: 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.

Minister of State at the Department of Enterprise and Employment (Mrs. O'Rourke)

I am glad of the opportunity to resume my contribution to the debate. It is some time now since the opening speech by the Minister for Finance and people have had time to reflect on the measures and to develop objective views on them.

I will refer to employment measures which will continue to be taken in the Department in order to benefit employment. Because unemployment is so serious it demands intense Government attention and innovation linked to freedom of market forces. This budget provides such a mix. The Minister for Finance responded positively with a range of measures which had been sought particularly by small businesses who saw the need to relax some areas so that they could pursue their businesses in an unfettered way and consolidate and expand employment.

A programme for jobs is the clear strategy in the current talks between the Government and the social partners. The policies and programmes outlined in the budget have given a boost to those talks. The budget contains measures which free up business and clear many irksome taxation and bureaucratic burdens from small businesses. When I travelled the country last year I was constantly reminded of the need to have simplified forms in clear language, particularly to address revenue regulations. This is a simple measure which will greatly benefit business.

I have had many inquiries with regard to soft loans. I hope the arrangements to provide such loans can be quickly implemented. These measures help to free up business and I hope employers and employees will build on the new realism emerging in the workplace.

There should be greater openness, honest dialogue and sharing of information between the social partners at individual plant level. There is no place in the modern work environment for a "them and us" mentality. This type of local social partnership means that each group associated with it carries rights and responsibilities which will have to be openly addressed and we must work together at business level. I am convinced that this kind of genuine work partnership can lead to greater motivation, productivity and responsibility. There are already excellent experiences in this country to show that this type of realism can have results in job retention and creation. At the moment there is much dialogue between the social partners as to how they will eventually work out new arrangements for another Programme for Economic and Social Progress. There is need for openness and honesty of dialogue between employers and employees in that context. Such dialogue can only be regarded as progressive for both sides.

If workers are interested in their jobs, are motivated and committed to the essential mission statement of the firm, that commitment is enhanced by the more information they have. Throughout the country where such measures have been used they have proved to be of enormous benefit. This leads to workers having a psychological stake in the business in which they are involved and they are no longer seen as cogs in a wheel but rather important components in an important process. I cannot stress strongly enough that this type of involvement carries rights and responsibilities for both sides. I urge the social partners involved in dialogue at plant and national level to address openly the duties and responsibilities involved in that process.

The ICTU in their programme for dialogue clearly outlined how they wished to see it develop and how they want to be involved in changes and technology, in work practices and in developing openness in firms. Without dialogue hurried decisions about which workers have no knowledge will continue to be implemented.

The House might feel that I am talking about the pending EC directive, but I am interpreting it in a local way. Genuine work partnership can lead to greater motivation, productivity and responsibility. I have seen the beneficial effect of such interaction.

I am considering a measure to update the 1977 Worker Protection Act. An EU directive of 1992 to be implemented this year lays down general guidelines in this direction. I want to use the review in conjunction with the social partners to bring about a climate of job retention rather than job reduction. In the context of that review there are changes under the directive to the Worker Participation Act. Lest some Members of the House should say that we are imposing bureaucratic burdens on business, as was said two weeks ago on the Committee Stage of a simple information Bill about workers' wages and conditions of employment, this is not an irksome burden. It is a measure which has already been implemented in the UK.

I am always amazed that despite their trumpeting about opting out of the social charter legislation, and the Prime Minister, Mr. John Major's, constant reiteration that people should come to the UK because jobs are so much cheaper and better and so on, I find when I am in Europe on social affairs business, that the UK have already implemented a directive towards which we are working. In many cases they had made it more embracing than envisaged by the terms of the directive. Somehow or other they seem to be able to bring about a volte face when required and to say they do not have any such legislation relating to the social chapter. People seem to be swallowing this, but I avail of every opportunity to point out that they have implemented social legislation ahead of many other countries which have a fine record in this area. It is odd then that they stand up in the House of Commons and declare that they are anti-regulations and are going to make bonfires of directives while on the other hand they are busy implementing them.

I am considering a measure to update the 1977 Worker Protection Act. An EU directive of 1992 lays down general guidelines. In consultations with the social partners one must have regard, for reasons outlined in the directive, to measures other than redundancies such as retraining, redeployment and retention, albeit in other capacities. When this measure is brought before the House Members will have an opportunity to amend it.

It should be said that the route to redundancy is often too easily taken. It seems firms have recourse to this first when they find themselves in trouble. This has bred a culture where we are no longer shocked when major redundancies are announced. Perhaps we are shocked for a while but not for long. I intend to link the review of the worker protection legislation into the operation of the competitiveness and employment protection unit which has been established in the Department of Enterprise and Employment.

Last week Deputy John Bruton bemoaned the fact that this EU directive and measures contained in the Programme for Government concerning the competitiveness and employment protection unit had not been fully implemented. I hope when I introduce these measures in the House that he, along with his party spokesperson in this area, will show interest and enthusiasm and accept them.

The competitiveness and employment protection unit was established some months ago in the Department. It has had reasonable, albeit modest success. Various firms have put forward ideas and have sought expert advice. I am particularly pleased that this unit is in operation because this was one of the ideas I put forward from my office in the dialogue between Fianna Fáil and the Labour Party which led to the establishment of a partnership Government. I had thought about this matter during the year I was Minister of State with responsibility for trade and marketing.

This unit is not presented by the Department of Enterprise and Employment as a saviour of lame ducks. People want to put us into a corner and say that this is the case. The unit will, however, anticipate business difficulties, helping viable firms to change and modernise in order to convert these difficulties into challenges and opportunities. The personnel in this unit working with the State agencies will then be able to pursue a robust pro-active policy, not passively waiting for the news of redundancies to be announced but identifying in advance firm by firm, sector by sector, where there are likely to be potential business hazards. I always had difficulty in accepting the IDA's early warning system which patently did not work. One received a notice each week when redundancies were notified. In effect, late warnings were given.

Mr. Cullen

A red card instead of a yellow card.

Mrs. O'Rourke

As I said, the unit will identify in advance firm by firm, sector by sector, where there are likely to be potential business hazards. These discerned difficulties can then be addressed in a professional, structured way in order to retain jobs and obviate redundancies.

Quite rightly, we trumpet loudly when a tranche of new jobs is announced, yet we often seem to accept in a blithe way daily announcements of redundancies. I am strongly convinced that retention, consolidation and maintenance of existing jobs can lead to growth and that this strategy is an important component of our employment policy.

I now want to address other areas of policy with which the Department and the Minister, Deputy Quinn, are dealing. I would first like to address the service sector. From time to time all parties in this House have mentioned that there is a need to look at this sector and, so far as possible, to allow it to avail of the benefits already available to manufacturing industry. To this end some time ago the Taoiseach set up a group comprised of people with an interest in this area which has published a fine report which is being considered in the Department. Some of the issues arising from this report have been addressed in the budget.

In the past we relied on manufacturing industry whereas more and more there is growth in the service sector. As people's lifestyles and work practices change there will be a greater dependence on service industries. This report compiled by various experts will be an important factor in the jobs arena.

I would like to deal briefly with the question of linkages. Now that the legislation has been passed we know what the various divisions of the IDA will be doing. Criticism was expressed in the House and in the Seanad where Members argued that this would be another layer of bureaucracy. Clearly, the need to create employment will be addressed. Already Forbairt, which deals with home business, and IDA-Ireland have recognised that there is a need for a linkages policy. IDA-Ireland will continue to attract multinationals. We often do not realise how many people depend on multinationals for employment. Once multinationals are established there is a need to ensure that sub-supply services are provided locally or by domestic firms. This is being addressed by Forbairt with IDA-Ireland and will bear much fruit.

One might ask if such intervention is a good thing. However, where there are up to 300,000 unemployed it would be quite wrong to adopt a laissez-faire attitude because, clearly, that will not work. The linkage to which I refer has been needed for a long time. The EU rules preclude us from baying too loudly about buying Irish but when I meet other Ministers at meetings in Europe I realise we are far too decorous and demure in our policy. They pin various names on their strategies. I cannot remember the UK one but it is quite an attractive coinage of words; yet when one breaks it down it means that the Department of Trade and Industry loudly proclaims its belief in British industry, the need for firms in Britain to rely on other firms within Britain and that its consumers should, so to speak, look to their own — I will leave that to my colleague beside me who may speak about it later.

I want to talk about the cluster policy. A very fine report has come out from the IMI which I have not yet had an opportunity to read. I came upon it inadvertently in last month's issue of Management which, according to its precis, should be required reading for senior management in every overseasowned manufacturing company in Ireland. It is, in the main, permeated by the thinking Michael Porter who was the main mover behind the Culliton report and who always has very innovative and highly-individualist commercial ideas. In the article the IMI say:

There are also things a region or a country can do to create and maintain competitive advantage. This is why the report also recommends a collective approach, sector by sector, region by region that ultimately influences national policy from the ground up.

It goes on to say that ultimately only companies themselves can achieve and sustain competitive advantage. He advocates building trust and sharing ideas so that firms can work together and, with local research and development resources, meet the demands for innovation by their most sophisticated customers, working through the cluster idea where the core component of excellence in research and technology can be shared with other companies. I know there is an appreciation here of industrial espionage where firms are afraid to share knowledge or to share their competence for fear that somehow their ideas will be lifted. However, sharing technology among companies of different kinds, making different products, supplying different services that have a core competency of technology which could be shared in a cluster environment would allow it to be more cheaply disseminated, more modern and up-to-date. I am sure that report will make very good reading.

The last measure I wish to speak about briefly, because I hope to address it on another occasion in the House and Minister Quinn dealt with it at length last week, is the community employment programme. This is an honest effort to give employment to people who would otherwise not have a chance. I very much commend the Progressive Democrats who came forward with a programme themselves. I am sure it will vary in some respects from what we have put forward but, broadly speaking, it is along the same liens. We tapped into the imagination and the initiative of the CMRS, Fr. Seán Healy and Sister Bridget Randalls in their long commitment to this cause. There will be proper training and development — I insisted on that — and a dignified developmental chance for workers through it to come back into the open labour market. I commend the budget to the House and am glad to have had the opportunity to speak on it.

Ms O'Donnell

I propose to share my time with Deputy Martin Cullen if this is agreed.

An Ceann Comhairle

It is a feature of this debate that time may be shared. There is no need for the Chair's intervention or for the approval of the House in the matter.

Ms O'Donnell

I note, not with surprise, that the Minister has concentrated on the positive aspects of the budget from the point of view of her Department. There were positive and radical developments, such as the community employment programme, and my party welcomes that progressive way of dealing with the huge human set-aside problem of unemployment.

The Minister will forgive me if, in the limited time I have available, I concentrate on dealing with some matters which irk me about the budget. I want to concentrate on one aspect, the property tax and the changed regulations relating to it proposed in the budget. If ever there was a budgetary measure which contained the whiff of the hard Labour left ideology it is this one of the wider application of the property tax to include houses over the value of £75,000 and increase the rate of tax to 2 per cent for houses valued over £100,000. It is very surprising to see members of Fianna Fáil and the Labour Party pointing the finger at each other and each disclaiming responsibility for this measure. It is also surprising to see ACRA threatening electoral sanctions against Fianna Fáil Euro-candidates. I do not see why they are pinning themselves only to Fianna Fáil responsibility in this matter.

It is surprising to see the Taoiseach justifying the property tax on the basis that only 3 per cent of houses in the State will be affected by it. This is clearly wrong. Our figures, in consultation with leading auctioneers and property valuers, show that up to 40 per cent of households, 100,000 households, will be liable for this tax, that is particularly the case in Dublin where there are approximately 250,000 households.

Although this is a national tax, its application will be arbitrary and will hit ordinary people in a penal way. This measure will hugely impact on my constituents in Dublin South and, for that reason, I am using my time today to set out by way of example how this will affect them.

The first difficulty in relation to the new application of the tax is that it fails to look behind the veil of the value of a house and supposed wealth. It does not look in an objective way at the outgoings of the occupiers. It may well be that they are a hard-working couple already severely stretched in terms of their outgoings, very high mortgage and VHI payments and all the other expenses which go with a middle income. These people are paying through the nose for everything at the moment. The implications of this tax, particularly the increased 2 per cent on properties valued over £100,000 is that middle income families and people trying to make the best of their lives and who are enterprising and hard-working are a sure target for the Government. Many of my constituents reject the ideology behind this; the Government seems to be saying: "let us hit the contented". The people of Dublin South are not happy either politically or economically. They are hard pressed to pay the bills that are part and parcel of their lives.

There was not a squeak about the proposed changes to the property tax in the Labour Party manifesto which was presented to the voters in Dublin South with great effect. It was a very soft focus policy document and did not mention the property tax. That must be set against the huge support which the Labour Party received in Dublin South by way of approximately 18,000 first preference votes for the Minister of State, Deputy Fitzgerald. The Labour Party carried out a dishonest election campaign and this is proof of its dishonesty.

The presumption that people on middle incomes are content must be confronted. I can point to one area where people are not content, namely, Knocklyon and Rathfarnham, the fastest growing area in south Dublin. The population of that area is steadily increasing and there is no post-primary school there. People there are living in a limbo with unfinished road developments because of the delay in the construction of the Southern Cross route. People can spend up to 30 minutes trying to get out on the main road because the necessary infrastructure to deal with the development there has not been put in place. There are plans for 2,000 more houses in the parish of Knocklyon without any promise of a post-primary school. The primary schools there are bulging, there is no proper infrastructure in place and we now have the threat of water charges. When the people there are on the ropes, they are told that their houses valued at £75,000 or more will be included in the property tax net.

There is a real danger that the Government is losing sight and an understanding of the psyche of middle income families here and it should not be complacent about the discontent of such people. The people whom I represent in Dublin South are up in arms because this is the final straw. It is normal for a person's pay packet to be hit by taxation. People are used to that as they have grown up with heavy taxation. However, having paid one's tax, there is something different and painful about having to write a cheque for several hundred pounds purely because one's house is deemed to be of a value which puts one in the contented class. For many of my constituents the requirement to write a cheque for several hundred or, in some cases several thousand pounds to pay the property tax will mean they will not have a family holiday. That may mean nothing to members of the Labour Party who probably think such people are lucky to be able to consider going on holiday when they have a nice house in which to live. It does not work like that. Those whom the Government is harassing and piling more taxes on are the people who pay for everything. They pay for the dependency system, Government spending and so on.

There are two ways in which the Government can get money, namely, from Europe and from taxes. There is a wide belief that the public debt is being mismanaged. People wonder why they should have to pay a property tax when the Minister, Deputy Ahern, can allocate £5 million by way of gift with no conditions attached to Croke Park. It is anticipated that £5 million will be the take from the lowering of the property threshold. It is political madness to have those two matters set against each other,. Is it worth the candle for this Government for the small take it is predicted it will represent?

As I said, the Knocklyon area does not have a post-primary school, decent roads or adequate public transport facilities and it is the victim of bad rezoning in south County Dublin. As a result of that rezoning the quality of life for people in that area has diminished. The last available pocket of land in the ownership of the county council has been earmarked for 55 local authority houses. That pocket of land which could provide much needed recreational space for the growing population of my constituency is being eroded and the people are powerless to stop it. At a time when the Government proposes to hit middle income people in south Dublin, Cork or Galway——

Mr. Cullen

And Waterford.

Ms O'Donnell

——it should wise up to the notion that the middle income classes have had enough. The property tax is slight on the upwardly mobile. Many Irish people, quite rightly, aspire to own their homes and to date there has been tacit Government support for that by way of tax breaks. This property tax is a type of ideological statement advocating that people should not put money into property but rather into manufacturing industry and so on. I do not agree with that nor would the people in my constituency.

Mr. Cullen

As usual, I listened with interest to the Minister of State, Deputy O'Rourke, and as my colleague stated, she said little with which one could disagree. I know the Minister for a long time and I accept that she is committed to the changes she proposes, particularly in the area of labour relations. It was interesting to note the buzz words she used and in case we might miss them she underlined them in her script. She talked about bringing about a climate of job retention rather than job reduction and that the route to redundancy was often taken too easily. We are all aware of the management by redundancy which has taken place here for some time. However, I disagree with her on one major issue, namely, the whole premise on which she based her comments. She stated that "this is a budget for business, a budget for jobs". That is where the Minister and the Progressive Democrats part company. By no stretch of reasonable analysis — which I am happy to say is beginning to emerge in the serious media here — could this budget be described as a budget for jobs or one which encourages investment or the sustaining of jobs. In my view, it encourages the complete opposite.

I want to nail down a few facts about the great public relations package. There is no doubt the Labour Party learned one thing from its participation in Government in the mid-eighties and the debacle which that caused for the Irish people and for it as a party. It will not make the mistake this time of being lacking in public relations or in how to persuade the mind of the public to believe the opposite to what is actually occurring. They did so in conjunction with Fianna Fáil in the run up to this budget, a budget which was so well leaked, discussed and anticipated that nothing the Minister for Finance could have done would have come as a surprise.

The budget speech was couched in language and phraseology that clouded the entire issue. One underlying fact in the budget, which is contained in the figures the Minister outlined, is that tax this year will increase by almost 11 per cent on the 1993 figure. There is no tax giveaway or even a maintenance of the burden of taxation that existed in 1993. The tax burden will be substantially increased this year. That is the first and indeed only message that underpins the direction, if any, in which this budget and Government are heading. This will represent an increase to the Exchequer of approximately £667 million in the coming year. Not satisfied with an increased burden of £667 million on the taxpayers of this country we now have an Exchequer borrowing requirement of some £798 million so that we can go on a good spending spree that all of us accept we cannot afford.

In the past four years Government borrowing increased by 73 per cent, an astonishing figure. We have not learned the lessons of the adverse effects of the policies of the mid-1980s which were largely responsible for our intolerable level of unemployment today. We are now embarking on a similar course of action and nobody is saying stop. I read the initial reports on the budget in the papers with astonishment. I wondered if the media were present for the budget debate, and if any analysis had been done. Was the hogwash from the PR machines washed away and did the media address the underlying messages in the budget. For the first time since I came to this House in 1987 Members were supplied with a copy of the Minister's script. As the Minister announced his intentions the more astonished and fearful I became regarding the direction this country is taking. Our inflation rate is 1.8 per cent and taxes are six times that rate, extraordinary figures for a country whose top priority is job creation.

Regarding discussions in recent weeks and today under the new Programme for Economic and Social Progress agreement, an 8 per cent pay increase has been agreed for the private sector and the figure of 12 per cent has been mentioned for the public sector. It would be welcome if, two or three years down the road, we could see an 8 per cent reduction in the cost of employment, to be shared between employee's take home pay and what the employers must fork out. I predict that the impact on employment by taking that course of action would be far greater than simply sitting in smoke filled rooms trying to create an easy life for the powers that be at the top levels of Government, trade unions, farming organisations and all those involved as social partners. It is easy for those people to go through the annual ritual of talking about job protection. From the point of view of the trade unions and, regrettably, from that of the employers, it is astonishing that those groups knowingly engage in this ritual in the knowledge that the outcome of their discussions will lead to a further inability to sustain existing jobs, not to mention creating jobs. The impact of those discussions is not helping those matters. There is no point in Deputies sitting on committees that have grown up like mushrooms talking about employment, crossing their hearts and beating their breasts as if the Holy Grail is there to be found. It will not be found in some committee room by a spiel or philosophy, but by facing hard reality. One of the hard realities is that the cost of employing people here is out of kilter with countries in the European Union — our immediate competitors — and countries worldwide.

Companies near the Border who have relocated their business 20 to 50 miles north have saved a fortune on employer costs by being liable to an employer PRSI rate of 5.65 per cent compared with the 12 per cent rate here. Surely the penny must be dropping as to how we should go about trying to sustain jobs here, not to mention creating new ones. The Programme for Economic and Social Progress is nothing more than a wage deal to keep everybody happy, it has achieved nothing in the area of employment or to our economic welfare in spite of the highminded spiels we hear every so often.

The Government did an incredible job in December 1993 when 10,000 people were added to the live register with hardly a murmur in the media because the old machine was working towards the budget. The good news was on the way; massive tax reductions were promised. The Minister had some £300 million to give away and we would all be better off. Sadly, that did not happen. If the 12 per cent pay deal sought by the public sector is granted we can close up shop and turn out the light on Ireland Incorporated. The country is more badly managed than companies that have gone to the wall in recent times. It has failed to deal with reality and soft options are being taken.

I am sick and tired of the phrase "social justice" because it is primarily concerned with a small, disadvantaged group. I agree there is a need for social justice in that area, but is there justice for parents raising and educating their children, encouraging them to achieve more than they did to get better jobs and be better prepared for the world? Do those people represent the 3 per cent to whom the Taoiseach referred? He showed he was not in touch with reality by bandying that figure around. Surely the two Ministers sitting on the Government benches realise that the vast majority of people are trying to do their best to keep Ireland Incorporated afloat, to create jobs. They are the soft touch at budget time. There is no justice.

We have quantity middle management here but we have not sustained quality people in that area or at senior management level. We are unable to sustain them because the message in the budget last week was that the Government does not want them here. They are being told to go out into the market, to go to the UK and Europe where their talents will be properly recognised and where they will get a reasonable reward for their efforts and labour. That is the message in this budget.

The State is supposed to provide for everybody, but the few who are working are trying to pay for everything. We have reached a point where we cannot pay any more and cannot offer our children any hope of work here if the direction set out in this budget is to be maintained. From where does the Minister for Finance think that education, hospital and VHI fees come? Many people do not have the ability to look after their families and are not encouraged to do so. The problem does not necessarily lie with the bald facts of income tax. The fixtures set out the position clearly. There is a philosophy underlying those figures.

I am sickened when I hear Deputies on the Government side talk about an enterprising philosophy here. They would check the definition of "enterprise" in the dictionary because the message to people from the budget is the opposite. It tells them to keep working for the Government which will continue to cripple them. Last year people had a saddle put on their backs by the imposition of the 1 per cent levy. This year the levy was lifted but instead the Minister got spurs, shined them up and gave them to everybody on the saddle so that he could climb further up our backs and ride us over Beecher's Brook or at Cheltenham. That is the position and the Minister might well smile.

Mr. McCreevy

Cruelty.

Mr. Cullen

That is what has happened. The preamble to the budget was the greatest con job ever perpetrated. I give credit to the Labour Party for the lessons learned from the mistakes it made in the mid-1980s but the spin doctors will not make any mistakes now. The Fianna Fáil Party view is that it is the Government party come what may, and it will be sustained. The Government can sit back and smile but a tragedy is unfolding. There is no justice for middle income people here at any level. Most families have relatives working abroad. Does anyone believe that those people wish to come back to the penal servitude that applies to people who are trying to work here? They certainly do not. Employers in foreign countries have been the beneficiaries of the resources that were spent on educating those people. The number of artificial barriers that are constantly created by Governments is increasing. We should not depend on Europe to give us another £1 billion to solve our problems. The real problems with this country relate to what the Government of the day is doing, and this budget is the final straw.

My colleague referred to the property tax. I will not repeat what she said, if ever there was a slimy, cynical and disgraceful attempt to totally undermine people, for the Government to laugh up their sleeves at them, this is it. I can think of no measure in recent times that was so biased and grossly unfair as this. I feel so strongly about it that words fail me. I and my party have a view on the issue of property tax and I am prepared to sit down and debate it with anybody, but I never advocated a property tax that would destroy the people who are left in this country, trying to earn a decent living and look after their children. This tax has been introduced in an arbitrary fashion.

Last year was a particularly tough and challenging time for Irish exporters, given the difficult trading environment in which they operated, the depressed economies in some of our main markets and the conditions prevailing at home, particularly in relation to high interest and exchange rate uncertainty in the early part of the year. Despite these difficulties, it is encouraging that the overall value of Irish exports is estimated to have grown by 8.25 per cent to £18 billion in 1993. An Bord Tráchtála has estimated that indigenous exports reached a total of £3.9 billion in 1993, an increase of 8 per cent on the 1992 figure.

Last year I introduced the EURO-PLACE scheme which gives very substantial financial support to firms putting extra sales representatives on the ground in overseas markets. This scheme is estimated to yield additional business of £3 million per annum per sales person. An Bord Tráchtála's targeted marketing consultancy scheme offers assistance to Irish companies in preparing and implementing a marketing plan involving significant financial investment. To date, TMC grants have been approved for 124 companies to a total of £24.6 million. Over the four year cycle of the scheme for these companies, it is expected that additional export sales of £1.3 billion will be achieved.

The GATT Uruguay Round Agreement, on which negotiations concluded on 15 December last, is the biggest trade agreement ever concluded in the history of world trade. It is a major victory for multi-lateralism over unilateral solutions to trade problems and incorporates the biggest single reduction every achieved in trade tariffs.

While it is not possible to be very precise about the benefits for Ireland of the GATT Agreement, the consultancy study which I commissioned, and published in December, estimated that the Irish economy stood to directly gain in excess of 20,000 jobs from a GATT agreement. This is in comparison with a failure scenario which would lead to trade hostilities and a proliferation of protectionist measures.

The exploitation of the trade and growth opportunities the round will create is, of course, a matter for industry — manufacturing agriculture and services. The Government can only contribute to the creation of the economic environment which will stimulate growth and trade opportunities which, if exploited, will result in increased output and employment. Many of the provisions in the budget will help to improve the competitiveness of our exporters and boost their ability to take full advantage of the GATT.

Last year was a very eventful year for the tourism industry. Despite the recessionary climate in Britain and the United States and the fact that travel within Europe has been stagnant, total foreign exchange earnings are expected to exceed £1.3 billion for the first time ever. According to preliminary forecasts compiled by Bord Fáilte from available Central Statistics Office returns, the number of overseas visitors is estimated at 3.27 million, a 4.9 per cent increase. This puts performance for the 1993 season in line with Government growth targets. When revenue from domestic tourism is added, total earnings are expected to exceed £1.8 billion.

Two important institutional developments took place in 1993. In September, I established the Tourism Council which includes representatives of the tourism industry, State agencies and Government Departments dealing with tourism. The council will act as a national forum for consultation and advice on tourism policy.

The reaction to the council has been very positive and its members have shown great enthusiasm for its work. I look forward to hearing the views of members on the key issues of marketing, access and product development which have been set before them.

Also in 1993, I reached agreement with the regional tourism organisations to reform the corporate structures of the organisations. Arising from that agreement new structures based upon county divisions are in the process of being established to replace the existing regional councils of the RTOs. Each county, therefore, will be represented by a county tourism committee comprising representatives of the various membership categories within each RTO, including members of voluntary groups and organisations. In addition, new slimmed-down boards of management will be established to replace the existing management committees.

There were a number of other very positive developments in the tourism area in 1993 which merit brief mention. Following Government approval of the Aer Lingus survival plan, a new bi-lateral air services agreement was arranged which will allow direct scheduled services between the United States and Dublin. There was an expansion of scheduled air services from Britain and mainland Europe, and the number of in-bound seats on charter flights from the Continent increased from 110,000 to 120,000. Capacity on Irish Sea and continental routes was increased significantly. During 1993 investment in tourism training, marketing, infrastructure and plant continued strongly with support from Government, EU and International Fund for Ireland incentive schemes. It is estimated that these schemes supported an investment of over £100 million in the year. In 1993 a number of new projects of scale were opened which are of international standard and which will help Ireland establish itself as an exciting quality holiday destination.

Despite the uncertain start to the year, 1993 turned out to be one of good performance by both the exporting and tourism sectors, aided by focused and sensible measures on the part of my Department and agencies.

Coming into 1994 we had grounds for optimism on a number of fronts. The period of weak growth in the international economy seems to have reached its lowest point in 1993. An increasingly solid expansion is underway in the United States and Canada. The recovery in the UK seems well established and the indications are that, in some EU countries at least, the low point of economic activity has been passed. This improving international climate is good in terms of demand for our goods and services and good in terms of the ability of the overseas consumer to consider a holiday in Ireland.

The provision in my Department's Estimate of an additional £3 million for tourism promotion activities has enabled me to provide a major impetus to our marketing drive this year. A sum of £2 million of this allocation will go to a new programme linking the tourism industry, my Department, Bord Fáilte and tourism specialists as we strive to increase the number of visitors from the United States in 1994 by 57,000. An intensive advertising campaign is about to begin in the US using TV, magazines and newspapers which will highlight Ireland in a new and vibrant way. We expect this major campaign to bear fruit in a way that will mean increased numbers of visitors from the US throughout the year. Carrier capacity is also being expanded in order to meet the anticipated demand for seats.

I need hardly remind Deputies that there has been concern for some time that the full potential of tourism from the US was not being reached. This year there is evidence of an improvement in the United States economy. The dollar is strong on the exchange markets and of no little importance to us because of our presence in the US at the World Cup finals. The time is ripe to interest US holiday makers in Ireland.

One of the major factors which impairs the profitability of Irish tourism is that operators do not get a year round return on their product. Improving the seasonality of Irish tourism through greater utilisation of facilities throughout the year would greatly help the industry. I am allocating £800,000 this year for a special seasonality campaign to be operated by Bord Fáilte in conjunction with the industry to promote holidays in off peak seasons.

An additional £100,000 is being made available for tourism promotion in Japan. Due to the distance separating our two countries and the lack of direct air services we do not receive as many Japanese tourists in Ireland as we would like. A new strategy being developed by my Department in co-operation with Bord Fáilte will emphasise Ireland as a green island with a Celtic culture and will focus on the opportunities for language training and leisure activities. The bulk of the additional money will be concentrated on travel agencies and the media with a view to getting Ireland better known as a viable travel destination. We would hope to have up to 20,000 Japanese visitors in 1994.

A further £100,000 is set aside for marketing in Australia and New Zealand. A major task will be to increase awareness of the Fly Free facility. This facility allows Australian visitors who travel to initial destinations such as London to fly to secondary destinations at no extra cost. We must make increased efforts to ensure that more Australians choose Ireland as their fly free destinations.

With the support of the European Union, we are completing the Tourism Operational Programme, 1989-1993, the single biggest investment programme ever undertaken in the industry and are about to embark on an even more ambitious programme.

Over the period of the last programme, overseas visitors increased by over 800,000 per annum, generating an extra £450 million annually and in the process creating an additional 20,000 jobs in the economy. The investment programme undertaken over the programme period has supported this success. It is estimated that total investment in tourist facilities, training and marketing over the period was well over £500 million.

The new operational programme aims to build on the partnership process initiated under the previous programme, with the public and private sectors again working jointly towards the achieving of Government targets. The Government aims to achieve an increase of 50 per cent in real terms, equivalent to an extra £1 billion in foreign tourism revenue and in the process to create up to half the net employment growth in the economy over the next five years. The new operational programme will be the key plank in the strategy to achieve these targets. Investment under the programme will be targeted at further product development to meet specific market deficiencies; a large expansion in marketing activities; major improvements in the conference, angling and cultural tourism product and an expansion in the range and scale of training.

The draft programme is at present being finalised and will be formally submitted to the Commission in the near future. I hope to be in a position to publish its content before the middle of this year.

Against the background of solid achievements in 1993 and an improving international climate, this year's budget gives a powerful incentive to investment and job creation in the economy. It contains measures which will help growth of all small businesses as well as measures which are targeted specifically at the tourist sector.

The reality of the international marketplace for multinational investment is such that the number of mobile projects is declining and the level of competition is intensifying. We must, and will, continue to attract suitable overseas projects to locate here, but we must look more and more to indigenous industry, especially small and medium sized industry. Indigenous industry tends to be more job intensive and this is why successive reports, including the Culliton report, place such considerable emphasis on developing native enterprises. This budget has set about tackling many of the barriers which have inhibited the growth of small business in Ireland.

The establishment of a £100 million enterprise fund available to small businesses at low, fixed rates for a ten year period addresses a major obstacle which small business has faced for many years. I know from my contact with entrepreneurs throughout Ireland that they are not lacking in the energy and commitment to make their businesses succeed, but so often they simply cannot access the funds to get the business on a sound footing. Business people seeking loans from the enterprise fund will not be required to give personal guarantees and no repayments will be made in the first two years.

This budget also contains an impressive package of taxation and administrative changes which have been developed in consultation with business to reduce the bureaucratic burden and let them get on with productive activity. I will mention just a few: A new tax relief for the transfer of business assets is being introduced into capital acquisitions tax. The relief will also cover the transfer of shares in a business; the company value limit for enterpreneurs' investment in their own company under the BES is being raised from £150,000 to £250,000; the VAT registration thresholds for both goods and services are being increased significantly; businesses whose turnover is less than £250,000 a year will be entitled to account for VAT on a cash receipts basis; the Revenue Commissioners will shortly produce a single registration form which can be used by businesses to register for all taxes; and the tax clearance procedures for public sector contracts are also being simplified.

I wish to give the last ten minutes to my colleagues and prospective MEP, Deputy Gerard Collins.

Mr. Collins

I hope the Minister campaigns in a similar way in Munster.

Mr. McCreevy

This has been a good budget for business and for tourism. At the outset of my contribution I outlined some of the problems any Government has when it attempts to make some changes to the taxation code. As a result of this budget every taxpayer will be better off. In the area of taxation significant changes have been made which signal the intention of the Government to encourage people at all levels of enterprise in the economy to get on with the job of working for themselves.

We welcome the multinational companies that come to Ireland. They have provided much employment here in the past years but, as I said earlier, it is becoming increasingly difficult to attract international mobile investment here. We can make changes ourselves. We can put more money into people's pockets to allow them get on with the business of creating economic activity. This budget gives many signals in that regard and it marks a turning point in economic activity. We have experienced considerable difficulties economically but we have overcome those difficulties by prudent financial management in the past seven years. This budget will lead to greater economic activity which in the long term will lead to sustainable jobs in the Irish economy.

I commend the budget to the House.

Mr. Collins

I express my sincere gratitude to the Minister for Tourism and Trade, Deputy McCreevy, for giving me some of his time to contribute briefly to this important debate. I wish him well in the new responsibilities with which he must contend as a result of his acquiring additional finances from the Government to promote tourism. We all recognise the value of tourism and we recognise also that in the short term it can have the quickest pay-off for the economy by helping us create additional employment and job opportunities for young people. I wish him every success in that regard.

I particularly welcome this budget in that its essential thrust seems to make job creation the major priorty. That is very important. The Minister for Finance has delivered a package that combines incentives to industry with personal tax cuts, a strategy aimed at stimulating the economy. The budget also contains a range of special measures to create jobs in small and labour intensive industries while those in low paid jobs were given approximately £200 million in tax cuts. That is a worthwhile measure which I welcome.

There are many aspects of this budget on which I would like to comment if the time was available to me but as it is not I wish to refer briefly to one matter on which I have voiced opinions previously in this House and which has now been dealt with successfully by the Government, namely, the probate tax. I am very pleased to register my support of the efforts of the Minister for Finance in that spouses will now be fully exempt from probate tax. In addition, the Minister's efforts provide for a 30 per cent reduction in the market value of agricultural land buildings for probate tax purposes. I am glad to note that these have been made retrospective to 18 June 1993, the date on which that tax came into effect.

In regard to the tax measures to assist business and employment generally I should say that over the past weekend I was contacted by three small business people already preparing applications to the Minister for Enterprise and Employment in an effort to help them maintain what they have and improve their stability in an effort to keep the show on the road. One of those businesses employs 28 people full-time and another small industry in the same vicinity employs six people full-time and another six parttime, something that is very valuable in a rural area. What the Government is doing under this heading will be of great benefit to such people.

I welcome what has been said with regard to the urban renewal scheme which is indeed worthwhile. It would be my hope that, when the Minister for the Environment is designating towns outside the Dublin area, for such urban renewal, he would engage in greater consultation, perhaps with public representatives, and would listen to cases that must be made in an effort to develop county towns that have been run down for one reason or another. In this respoct I might mention two towns in County Limerick, Newcastlewest and Rathkeale, Rathkeale in particular, a unique community, where there are between 600 and 800 travellers throughout the year, integrating in so far as possible with the settled community. There is need for much development in Rathkeale which should be examined in particular in that it does not have a local authority. It is a town that must be closely examined having regard to the overall problems we experience nationally endeavouring to settle travelling people. That is very important and it is my hope that the Minister will act in this regard.

I welcome also the very worthwhile social benefits to come on stream: for example, the 3 per cent increase from July next for weekly welfare payments and the provision whereby people in receipt of disability and unemployment benefit will receive an increase in payments of almost 10 per cent. That is something to be welcomed by everybody.

I was rather amused, on coming into the House this afternoon, to hear the Progressive Democrats express exceptional concern for people living in houses valued up to £100,000. I should have preferred that their social consciences would have reminded them that there are very many old people living alone in eligible houses for small grants for essential repairs such as doors, windows and leaking roofs. The fact that the Government recognise that such a class exists within our society and are allocating £4 million to this scheme is to be welcomed. However, I would contend it is not sufficient, that it is a start only. I know of many old people whose applications for this help were submitted in 1992 and processed in 1993 but who have been told that they cannot expect help before late 1994 or perhaps into 1995. By then, it is fair to assume, many of them will be dead and gone. Therefore, I hope the allocation of £4 million will make some mark in that area and do something worthwhile for such applicants. I am not sure how many applicants would be involved but certainly £4 million divided among 26 or 27 local authorities demonstrates exactly the amount available. When there is talk of £10 million being allocated to Collins Barracks and £10 million for Dublin Castle it is not easy to tell an old person that they are being given priority. However, I will stand corrected if the £4 million turns out to be adequate to deal with the backlog obtaining. Nonetheless, I have had people come to me letting me know that that is the score, that they have been told that their applications will not be implemented before late 1994 or early 1995.

I also welcome the Government's recognition of the disastrous state of county roads nationwide and that an additional £15 million is being provided to counteract that problem. However, I would emphasise that this amount is being provided as an emergency measure to deal with what is now recognised as a drastic position, a very serious problem which is causing many people grave concern, particularly those living in rural areas. Serious accidents occur almost daily because of the shocking conditions of roads in the various counties with people being injured and considerable damage being caused to motor vehicles. I have spoken to two garage owners in small towns recently and that was the message being put across. Motorists and other road users are very angry and are demanding that urgent consideration be given to what they consider to be a major problem, with a view to its resolution, not overnight but within a reasonable period. The inclement weather of the past two months has contributed to the continued deterioration of those roads, with, in some cases, parts of the roads disappearing. It must be recognised that a large number of county roads were already in a deplorable condition. Not alone were they full of potholes but, in many cases, both sides of the road had sunk leaving the centre elevated and rendering it impossible for vehicles, in particular cars, to travel on them because of the potential damage to oil sumps. Some of these roads are almost impassable at present.

While welcoming the budgetary allocation it is vital that it be clearly understood that it is a barely adequate response to the problem I have outlined. While it may alleviate the deterioration caused by the exceptionally bad weather of the past two months it will not rectify the alarming conditions of a significant number of county roads nationwide which has worsened over the past two months. It is imperative that a suitable programme be devised to resolve this problem within a reasonable period, that the appropriate financial provision be made, not only in the interests of rural development but of rural preservation. We must not discriminate against people living in rural areas. We must not allow those areas become "no go" areas. The people there deserve justice and fair play.

Mr. Durkan

I listened in my office to the various contributions made in the House in relation to this budget. There were times when I smiled and times when I almost cried. I will not identify the particular occasions. Suffice it to say that the euphoria that seemed to befall the community, including Members of this House, in the course of the Minister's Budget Statement, was genuine in the sense that it was general but was very short-lived. The Minister had scarcely left the House and the various Members reached their homes before they began to feel that perhaps the euphoria they had felt earlier was not as well based as they might have thought or would have liked. Therefore, it was with a sneaking suspicion they reached their constituencies to be greeted by inquiries about property taxes, unemployment, local charges and various other matters. It was all discussed at the time, by the people being questioned, as having been not all that important but, as the week progressed, that questioning became more persistent and consistent. Indeed the unfortunate members of the Government parties became more irate because it was then recognised that there was a large group of people nationwide, at all ends of the social and economic scale, who were genuinely concerned at how the budgetary provisions would affect them.

Regardless of where they stood on the social or economic scale, they saw the budget as a threat. They saw the microscope being placed over them, information being extracted and identification of how much extra taxation they could tolerate, how much further the Government could go before breaking point was reached. It was a threat to the unemployed, of whom we have already 400,000. Indeed the way things are looking we shall have more of them. The only thing the Minister can say to the unemployed at present is that they will not be lonely, that they will have plenty of company for a very long time. There is nothing in the budget that will reduce permanently the number unemployed. There is a proposal, of course, to employ 35,000 on a massive FÁS scheme, but I wonder what will happen when the FÁS scheme comes to an end. How will the 400,000 unemployed be greeted? What is in the budget for those who have spent years seeking work? Absolutely nothing, but things being the way they are, the Government will attempt to dress it up.

The budget runs counter to a great many promises made by each party in Government. Although the promises were made by the individual parties they do not seem to apply to the partnership because each can now turn to the other and say the promises were made before they became partners. That appears to be the Government's attitude.

The budget is a threat to the farming community. Farmers were recently informed that their incomes were considerably higher than in previous years. Anybody to whom I spoke in the past week asked me how this could happen when most of the land has been under water for the past six months. I cannot understand how anybody assessed farmers' income unless they travelled by boat. In any event there is nothing in the budget for farmers.

Much has been said about the tremendous benefits to industry resulting from the minimal reductions in PRSI. The 1 per cent income levy is recognised as one of the most backward steps in the past 20 years. Surely it has been recognised by successive Governments that a direct tax on employment is a huge disincentive to employment. It has resulted in an increase in the number unemployed. The Minister had the option of removing the levy by way of a Supplementary Estimate but he did not choose to do so and I congratulate him for recognising belatedly the error of his ways. The partnership Government buckled under the pressure from the social partners and the community at large and were forced into recognising that the 1 per cent levy was a stupid tax and the quicker it was buried the better.

I make no apology for repeating this year that we must take a benign approach to the clothing industry. However, if this is the benign approach I would hate to see a hostile one. Throughout the length and breadth of the country people in the clothing industry do not know from day to day how long they will last. Their overheads are too high. Production costs, in addition to high VAT, place them in an uncompetitive position. Their lives are a misery. I would have thought even at this late stage the Minister would cast a benign eye on that industry. The budget is still a threat to employment in industry and to the well being of the country.

Did anybody escape the wrath of this Government? No. Residential property tax, that grand old chestnut, has been trotted out as a possibility since the foundation of the State but the two parties, having convinced each other that the promise was made individually felt there was no commitment to keep it collectively and they have brought the income and the valuation thresholds down. I listened to Deputy Gerard Collins reassuring himself but he did not reassure me that this was not a problem. I will outline where the problem lies. Former local authority houses will shortly fall within the thresholds for residential property tax as all that is required is that the household income be over £25,000. I cannot understand how the Government arrived at the alleged target of 12,000 homes. In fact, the number of homes likely to be targeted this year will be greatly in excess of 12,000. The Minister must know that. In my area some of the local authority houses built by Kildare County Council in the past 25 years will be subject to residential property tax in the next four to five years. That gives Members an idea of what is likely to happen elsewhere.

There must have been some considerable soul searching as Deputies viewed their respective constituencies. Some will be hit much harder than others. I will not go into the nitty gritty but I certainly would not like to be a Government backbencher representing a constituency in or around this city — I am not talking about the inner city. When reality dawns after the euphoria associated with the budget I have a sneaking suspicion the Minister will be made aware somehow that a great many people will be adversely affected by this arbitrary taxation. I have no objection to it in principle but we must ask why the parties in Government did not indicate before the last general election what they proposed to do. If somebody goes into a shop and pays for something behind the counter he likes to know what he is buying. Obviously a great many people did not know what they were buying at the last election because they were not told. It is a sad reflection on the Government's behaviour that it welshed on the promises it made to the community.

I am delighted to see the arrival of my colleague, Deputy Broughan, because I am sure he will be interested in the local charges proposal. This is not included directly in the budget but obviously it has had to be calculated in the context of overall expenditure. I can remember the last ditch battles fought in relation to local charges. In Dublin they said never to local charges.

Mr. Durkan

Those houses will not be private for long because of the residential property tax and the removal of the mortgage interest relief. This Government intend to own everything. They will soon have all the houses in the country within their control. It is important to remember that their performance in the housing area is bad. There has been much hype in relation to solving the problem of homelessness. Any Member of this House will verify that. They can go through this city or the adjoining constituencies and they will find there is not a single location into which a person in need of emergency housing can be put at present. This was brought home to me recently when the housing policy of the local authority was being discussed and I heard the phrase — which I presume emanated from the Department because I hope nobody in the local authority would have been so callous — that "local authority houses would be built as a last resort". That statement says much but I will not go any further down that road as there are other roads I wish to travel.

Any Member who lives in a rural constituency, such as I do, must be aware of the problems that have faced people during the years. I have heard various speakers applaud and congratulate the Minister for approving an extra £15 million for main and county roads or minor roads. I have the greatest of sympathy for the Minister and, in fact, I am worried about him. If he feels that £15 million will be sufficient to deal with the problem that exists in relation to main and county roads then his problems are much more serious than I thought. In my constituency of Kildare we could spend the £15 million in any one year and still have the job only half done. I do not know where the Minister got the inspiration that £15 million would solve the problem this year. I would like to know from whom he got his advice. Surely in the Department there must be lines of communication available to back benchers in both the Labour and Fianna Fáil parties whereby they can convey their worries to the Minister and let him know their problems.

Mr. Broughan

Proper order.

Mr. Durkan

If they have done so, I am equally sorry for the back benchers as they did not do a very good job. He did not respond in the manner expected. This nonsense in relation to main and county roads has gone on long enough. It is a sick joke throughout the country. I am tired of going to meeting night after night explaining to people about the difficulties local authorities have in spending money which comes from the Department, because we only get about 10 per cent of what we require in any given year. We would be far better off if we tried to do a reasonably good job in one year so that we could indicate to the people that we had attempted to resolve the problem and that we had at least finally controlled it. What we are doing is throwing good money after bad. Year after year we spend that 10 per cent of what is required. It would be better to put it in the bank and wait until it had collected enough interest so that we could do a reasonable job on some of our roads. What we are doing now is an insult to ourselves, a sad reflection on the Government and an insult to the people this Government purports to represent.

Elderly people have not been reassured by this budget. They are concerned about primary health care, housing and security. Every household which contains people in their sixties or over that age is concerned about primary health care. Old people are particularly vulnerable and they feel they are being tossed on the economic sea by one Government after another with little regard for their well being. They are equally concerned about the knock on the door at night when they wonder if they will be alive in the morning. Protection for the elderly has not been enhanced in this budget. The problem has not been and will not be addressed because the resources are not being made available.

The budget is a threat to youth. It holds out the promise of more of the same. It throws out a few little treats but does not do anything really positive. There is nothing in this budget for the young people still at school, in second level or third level education or for those on work experience programmes. For them there is a strong possibility that they might have to join the 400,000 people already unemployed. There is nothing in the budget to suggest that anything else will happen.

It was said that there was more scope this year than at any time in 20 years but if that is the case the Minister made bad use of his time, as did the two parties in Government. The budget does not even give hope.

Last year many poor unfortunate people were threatened in the budget with probate tax, a tax which was banished 20 years ago because it was seen as a tax on the dead. While some people may be euphoric in welcoming the fact that it no longer applies to benefits accruing to spouses, it still applies to widows or widowers whose property may be passed on to members of the family. Given that the amount of money involved is not great I hoped that the Minister would have had the gumption to wipe this tax out altogether. However, the opportunity was lost and only a few of those who were made subject to the probate tax last year will be taken out of the net. The tax is removed in the case of spouses but not in the case of other members of the family. I do not know how that can be seen as a benefit because one must conclude that at some stage the property will be passed on to somebody other than the husband and wife who originally owned it.

This is a disappointing budget. It will generate a great deal more heat between now and the Finance Bill. Back benchers of both Government parties who are reneging on promises will feel a fair bit of heat between now and the introduction of the Finance Bill. Perhaps it will bring some reality back to this God forsaken Government.

Mr. Broughan

I propose to share my time with my colleague, Deputy Shortall.

I welcome this budget which my party and I see as a launching pad for the work we must do in the future in coping with unemployment. The budget carries on the programme of the partnership Government. I welcome the significant reduction in tax for lower paid workers and the first attempt to deal with the bad effects of the tax wedge. As my colleague, Deputy Quinn, said, this budget has been the best budget ever for small business and small enterprises and it has been widely welcomed in that quarter.

Mr. Durkan

We will all be small businesses shortly.

Mr. Broughan

This budget has attempted to provide a basic standard of living for the 1.5 million people caught in the poverty trap. The initiatives in the budget will take a large proportion of families out of the poverty trap over the next three years.

The Minister in reviewing the economy at the start of his budget speech pointed to the many favourable achievements of the partnership Government last year. The general Government deficit stood at 2.5 per cent, inflation stood at 1.5 per cent and GDP, against all the odds, alone among the countries in the OECD, rose by 2.25 per cent while the Exchequer borrowing requirement was less than 3 per cent. The Minister was the first to recognise that unemployment is unacceptably high. Provision has been made for a figure of 289,000 this year.

Like many other backbenchers in this House, I felt, because the economic indicators of performance were so favourable —for example, it has been forecast that there will be a 2 per cent growth rate in OECD countries this year—because of the success of the Programme for National Recovery and the Programme for Economic and Social Progress under which approximately 80,000 extra non-agricultural jobs have been created and because of the fall in personal taxation to 13 per cent of GNP there was never a more favourable opportunity to launch a major attack on unemployment.

Mr. Durkan

There are 400,000 people unemployed.

Mr. Broughan

Given the recent agreement on private sector pay and the fact that it is the clear wish of the trade union movement that a major jobs package should form a key component of a new agreement it is incumbent on the Government to work with it in putting a major jobs package together.

I have great admiration for many of the ICTU leaders, such as Mr. Peter Cassells who in the negotiations on the Programme for Economic and Social Progress put forward the idea of local economic development which has had a favourable effect in many parts of my constituency, Coolock in particular. There is still time in the negotiations for the Ministers for Finance and Enterprise and Employment to put a significant package together to create jobs for the 300,000 people unemployed.

Apart from development of our education system and greater competitiveness in the economy one possible solution is a national work sharing programme which would be very attractive to many people who wish to enter the labour force. For the past year the Government has been considering the possibility of introducing such a programme. I hope it will be introduced this year. While job sharing on a 50/50/ basis may be attractive to a minority of workers who can afford to take a drop in net pay it would not be sufficient. In this regard, it would be more realistic to introduce a Government programme in which employers and employees would be offered major incentives to switch to a shorter working week. Various suggestions have been made — for example, five workers doing the work of four. Even if agreement could not be reached on this policy initiative until next year it would still be worthwhile.

Mr. Durkan

There is no hope for the unemployed.

Mr. Broughan

Mr. Broughan

As the leader of the Labour group in Dublin City Council, I am glad that we are to receive further support for the major renovations of the city centre now taking place. I also welcome the new targeted urban renewal scheme which will commence from 1 August this year. Dublin City Council has been attempting to encourage people to live over business premises in city centre streets. While we have encountered difficulties in that regard I hope, given the new pilot scheme covering three of the major streets in Dublin, that this programme will prove successful.

I also welcome the extra funding for the health services. At last the Government has bravely dealt with the Damocles sword hanging over the health boards and decided to pay off the accumulated debt of £100 million. We have seen our Minister, who has been so successful in tackling the problem of long waiting lists, devote £10 million to dealing with this in the months ahead. Our recent NESC report mentioned, correctly, a major development for our economy in relation to unemployment.

Debate adjourned.

Dáil Éireann debate - Tuesday, 1 Feb 1994

Financial Resolutions 1994. - Financial Resolution No. 8: General (resumed).

Dáil Éireann debate -
Tuesday, 1 Feb 1994