I congratulate Deputy John Bruton on his appointment. He has worked long and hard and deserves some good fortune. I have no doubt he will do a good job. I also congratulate the incoming Ministers and their teams. They could hardly have imagined their good fortune a few weeks ago.
I congratulate the Taoiseach and his party for standing firm two weeks ago. Despite the pressures they did not commit themselves to the concept of a rotating Taoiseach. This would not be in the country's interest or that of good government. Fianna Fáil's view remains that if any party wants to put forward its leader as Taoiseach, with the support of any other party, it must first win an electoral mandate which makes it either the largest or second largest grouping in the Dáil.
To the Taoiseach and his colleagues in the new Government I promise constructive and vigorous opposition conducted in the national interest at all times. We will defend the policies and plans we approved in Government and the political commitments we have given. We will support their continuation from the Opposition benches. At the same time, it is our duty as an Opposition to be vigilant and constructively critical of the Government and to provide a vehicle for other points of view to be democratically expressed in the House. We, in Fianna Fáil, will also work on the development of new policies which will carry this nation forward into the next century.
This new rainbow Government is novel. Although our first experience of multicoloured Administrations was not entirely encouraging some time ago, we are willing to suspend judgment temporarily — in the festive spirit we will give it until after Christmas. I remind the House of what William Woodsworth said: "the rainbow comes and goes". We, in Fianna Fáil, will try to ensure that it goes as quickly as possible.
I wish our former Labour Party colleagues well. The new Government will be expected to live up to the high standards of efficiency and effectiveness of the last Government in processing Government business. Our former Labour Party colleagues will have learned much from us on how to properly handle the affairs of State. I congratulate my good friend and colleague, Deputy Ruairí Quinn, on his appointment as Minister for Finance. He will do an excellent job.
Deputy Yates had the misfortune of trying to follow me — without success — in recent times as Minister for Finance but I wish him well in the Department of Agriculture, Food and Forestry. The Democratic Left Members, as a result of their hard work and ability, deserve to be in Government and I congratulate their new Minister and Minister of State. It will induce a greater sense of realism in the party and among their supporters when they experience the pain of decision making. People will be very interested to see to what extent they have effectively traded in their policies for seats in Government and whether insistence on their demands will impose a new burden on the State and the taxpayer. Again, we will withhold judgment on those matters.
When we last went out of office in December 1982, the Fine Gael and Labour parties formed a Government but, unfortunately, things went from bad to worse. The national debt doubled from £12.7 billion to £25 billion, unemployment soared by 80,000, there was a huge shake out of industry, zero growth and taxes went through the roof. I hope that on this occasion in much more favourable circumstances the Fine Gael, Labour and Democratic Left term in Government will see a continuation of economic progress, not a deterioration of prospects. The new Government should not take investor confidence for granted and will have to work to establish it. The consequences are enormous either way.
War in Ireland is thankfully over and thanks be to God and all those who helped to make this dream come true. The consolidation of the breakthrough in the peace process will be the most urgent and vitally important task of the new Government. I hope it will move swiftly in the new year to complete negotiations on the Framework Document so that political talks can get underway. The outgoing Government had established a sound negotiating position which addressed all the issues and the relationships in a fundamental way. If the Government carries those negotiations through to a successful outcome on the basis of the position they are taking over, they will have Fianna Fáil support. Deputy Bruton will be aware, as the record and our real achievements show, that Fianna Fáil has always put the North at the top of the national agenda. We want to see institutions evolve which will enable and encourage both traditions to move forward in co-operation and peace to share equitably in the prosperity that peace makes possible.
Fianna Fáil in Opposition will remain deeply committed to the success of the peace process and the progress towards a negotiated settlement on the basis of the Framework Document. I wish the Government well in this regard as peace is infinitely precious, it is the oxygen of political life.
The outgoing Government was pro-enterprise. The operational programme for industrial development has been put in place and amounts to an average annual investment of over £600 million to the end of the decade. Progress has been made in the implementation of the Culliton and Moriarty reports. A new agency structure to implement industrial policy and 36 county enterprise boards were established to turn local initiative into jobs.
The task force on small business and a £100 million low interest fund were established to support small and medium size enterprises. We attached a high priority to training in the Youth-reach programme with over 2,500 places this year, under the vocational training opportunities scheme there were 5,000 places for second chance education; services to industry divisions in FÁS and a new apprenticeship training scheme. Under the community employment scheme 40,000 participants were targeted and we have more or less reached that figure. We introduced pioneering new measures in the area of consumer protection including the new powers to the Director of Consumer Affairs and a major new consumer credit Bill.
The outgoing Government was committed to the growth of the agricultural sector and continuing rural development. Under Fianna Fáil net farm incomes increased by over 30 per cent between 1991-93. The reform of the Common Agricultural Policy has been completed and new headage and premia payments are in place. The GATT negotiations have been successfully concluded and farmers can now plan for the future in relative security. The Leader programme is expected to generate over 2,200 jobs and the next programme will offer even more job creation potential for rural areas. We have always recognised the importance of the agri-sector and between 1987-93 £323 million was invested in this sector. A new body, An Bord Bia, has been established to promote and develop markets for Irish food produce. In the fisheries sector new initiatives were undertaken in angling tourism, research and export promotion.
At the outset we recognised the key role of tourism in generating employment. Under the tourism operational programme, £652 million will be spent in the next six years. A major marketing drive in the United States has been completed; new cross-Border tourism initiatives have been put in place, including a £6 million marketing campaign to promote the island as a whole. A tourism council has been established, a major review of Bord Fáilte has been completed and its recommendations are being put into effect.
The modernisation of transport and communications infrastructure was a key aim of the outgoing Government, this year alone £195 million will be spent on our national roads and over £101 million on other roads. County and regional roads will receive an investment of almost £1 billion in the years ahead. The Dublin light rail system will be commenced and the Dublin Transportation Initiative recommendations will be implemented. Fianna Fáil is committed to the development of the national carrier and the outgoing Government invested £175 million to secure Aer Lingus's future.
Up to £7 million has already been invested in the marine sector, largely in the development of ports and harbours. The effect of this investment on new jobs, sustained and in construction is in the order of 4,000.
For Fianna Fáil, being in Government is about making a real difference to the people it serves. This means ensuring a better quality of life, creating opportunities and caring for the less well off. It is about investing in education, health and social welfare and the outgoing Government acted with success on all these principles. There was a massive investment in education over the term of the outgoing Government, with the pupil-teacher ratio being improved and greater resources being allocated to school buildings and improvement works. There has been a strong focus on the needs of pupils in schools in disadvantaged areas with greatly increased funding and teacher allocation. The number of remedial, resource and guidance teachers has been greatly increased. The post primary capital programme has been increased and there are currently 450 projects in the course of implementation, including many green field developments. We have facilitated greater access to third level education and sport.
Our commitment to improve health care is clearly evident. Action has been taken to cut hospital waiting lists, to eliminate the out-patient charge and investment in the facilities for the mentally handicapped has been greatly increased. The Nursing Homes Act was implemented and £4 million has been made available to fund the initiative for the elderly. This year £100 million was allocated to put hospitals and health boards on a more secure financial basis. Work has begun on the construction of the Tallaght Hospital and the HIV-AIDS prevention programme was launched.
The Fianna Fáil Party has always been committed to a strong social welfare system. The outgoing Government increased all the social welfare and health board payments ahead of the rate of inflation in all years. This year, the package of increases amounted to £168 million and will benefit 822,000 people and their 627,000 dependants, including pensioners, lone parents and families out of work. All the weekly payments have now reached the priority rate of payment recommended by the Commission on Social Welfare. In Government we have adopted a vigorous work support approach to assist the unemployed, including a back to work allowance which provides unemployed people with 75 per cent of their social welfare payment. Measures were also introduced to support jobs in hard pressed labour intensive areas, including the PRSI reliefs and other exemptions. We had a great deal of success in the areas of equality, housing, arts, culture and the Gaeltacht, and my colleague, the former Minister for Defence and the Marine, Deputy Andrews will outline his contribution in detail.
During the Fianna Fáil term of office the economy has been one of the star performers on the world stage with the highest growth rate in the European Union. The European recession has ended, there has been growth in output and employment continued to strengthen as a result of favourable domestic developments and an improving international environment.
Domestic demand has also grown strongly. The combined effect of the tax changes in this year's budget, the moderate pay increases under the Programme for Competitiveness and Work and the continued low inflation will translate into significant growth in real disposable incomes both this year and next. For the year as a whole, consumer spending should rise by 4.5 per cent and investment by over 6.5 per cent. Overall, the outlook for 1995 is for real GDP growth of over 6 per cent and GNP growth of 5.5 per cent. Employment should increase significantly this year and the live register is expected to fall by some 12,000.
While unemployment remains much too high, we should take heart from recent progress. As a result of Fianna Fáil's policy in Government, strong output growth has been translated into significant and sustainable employment growth. Despite strong improvements this year, inflation has been moderate and is expected to remain at 2.5 per cent.
Hand in hand with a strong economic performance, the outgoing Government has made considerable progress on the budgetary front. The Exchequer borrowing requirement is well under 3 per cent of GNP, the general Government deficit — the key figure on which our colleagues in Europe judge us — has not exceeded 2.25 per cent of GDP since 1988. This year Exchequer borrowing will again come in below the budget target. Indeed, depending on the precise timing of the Structural Fund receipts from the European Union, we will see a current budget surplus for the first time since the mid-1960s.
Public spending increased significantly this year. Much of this increased spending has gone on seeking improvements in the extensive range of services provided by the Government and as outlined in our Programme for Government. Much of the progress in reducing Government borrowing in the past few years came from higher tax revenues which outpaced the rise in spending. As a result, the tax burden as a proportion of GNP has risen in recent years. It must be remembered that this rise in the share of taxes in GNP over the past few years partly reflects improved efficiency in revenue collection procedures. When an analysis is done we will see that most of that has occurred as a result of closing loopholes such as section 84 and not increased taxes in any particular area. Unfortunately the argument about increased taxes is a flawed argument which some people who do not understand the figures continue to make. In regard to employment, it is important to note that the burden has shifted from income tax which has fallen by half a percentage point of GNP since 1991.
If we are to reduce the proportion of GNP taken by taxes, priority must be given to using the fruits of growth to lower the overall tax burden rather than improving public services. Every additional pound spent on developing public services however worthy or badly needed the service may be, is a pound which cannot be used to reduce taxes. I made that argument continually at the Cabinet table and I will continue to make it in Opposition.
A firm hand on public spending is also needed to further reduce our debt exposure which remains too high and leaves us vulnerable to increases in international interest rates or other external shocks. That vulnerability must be removed.
The outlook for next year is good. If international interest rates and inflation rates remain broadly at current levels, next year looks like being another year of strong economic growth, both domestically and internationally. GDP growth should be over 5 per cent with most of this growth coming from domestic demand — sufficient for a further increase in employment and a continuing decline in the numbers out of work. I do not intend to spell out today what we should gain by these figures but the Minister for Finance will soon see that the outlook for 1995 is good.
The International Financial Services Centre has made a significant contribution to employment creation, tax revenues and inner city renewal. Over 300 projects are now in operation or committed to the centre. Approximately 2,000 people are directly employed and a further substantial number are indirectly employed. At the end of November, which is the latest figure available to me, over £10 billion is under management in the collective fund sector. That figure was £2 billion when I took over in the Department of Finance and the sector has contributed significantly to job creation and to the huge increase this year in tax revenues. Time was lost in the political difficulties of recent weeks but extra time now available will allow a number of years in which to market the centre. That marketing should be continued by the new Government. The strong support of the Taoiseach will be required in this regard. The international institutions will not take an interest unless the Taoiseach of the day continues to monitor that centre. There are notices on the Taoiseach's desk of at least three meetings at very senior level which require attention, perhaps not before Christmas but certainly immediately afterwards, which will mean significant gains for the IFSC. It is good news for him but it must be done in the short term.
On national consensus, I would direct the attention of this new Administration to two major achievements of the last two Fianna Fáil led Governments. These achievements are central to the economic success story we have left for our successors. The Programme for Economic and Social Progress and the Programme for Competitiveness and Work were a vital factor in bringing our economy back on the road to recovery in the late 1980s. The spirit of co-operation, the sense of realism, the growing awareness of interdependence between both sides of industry, and indeed the appreciation of the interdependence of Government, public service, trade unions, employers and farmers, have given this country the competitive edge now reflected in industrial peace, record exports and increasingly favourable trade balances. We have left the new Government with a sound basis on which to build a new programme. As I said this morning, I do not want, on return to office in a few years, to have to start from scratch.
The Government will appreciate that we only received the programme negotiated by the rainbow parties this morning and have carried out only a limited study of it. This programme appears to replace the January 1993 Fianna Fáil-Labour Programme for a Partnership Government which was an excellent, comprehensive and detailed programme. The recent negotiations between Labour and Fianna Fáil proposed to add to that programme, not replace it. I can find no clear commitment in writing to that programme in the documentation I have received.
There are a number of attractive proposals in the new programme, and we look forward to debating those, but everybody should pay close attention not just to the new attractive commitments but to those that have been quietly dropped, presumably with the consent of the Labour Party. Time will tell whether the omissions are significant.
The new programme is quite fuzzy in many areas. In education, for example, the specific commitment to reduce the pupil-teacher ratio in primary schools appears to have been dropped, as well as the commitment to equal status legislation. The entire women's rights section appears to have been dropped in the new programme in addition to the policy of decentralisation.
The substance of the new section entitled Strategy for Renewal comes, in very large part, from the Fianna Fáil paper drafted and presented by my colleague, the former Chief Whip, Deputy Dempsey, two weeks ago. Other people have talked endlessly about openness, transparency and accountability. We, as a party, have devised concrete proposals and I am glad to see that the new Government will implement them almost to the word. I am glad that Fine Gael is now more committed to the virtues of social partnership which it opposed over the past eight years. It was the only party in this House to totally oppose the last programme. I welcome Fine Gael recognition that that was a grave error on its part that it has now moved away from all it said in Opposition and has adopted a policy we strongly pursued over the years.
I am glad to see that Fine Gael has signed up lock, stock and barrel to the third banking force concept.