The Minister for Finance spoke for in excess of one hour yesterday but he did not make any detailed announcements which had not already been flagged in the media. I tried to recall this morning whether the media flagged major announcements which did not appear in the budget but I cannot recall any. Perhaps the brouhaha which attends the presentation of a budget is no longer justified as all the detail is available several weeks in advance. I am not sure that is bad but it is interesting in the context of the difficulties which the former Minister of State, Deputy Hogan, experienced a couple of years ago. It appears to indicate that the leeway available to a Minister is perhaps no longer limited in terms of budget preparation.
It is also sad that the Minister for Finance had the largest amount of money ever available to spend but the events of the previous weeks substantially undermined his position. His public disagreement with his party leader coloured his presentation of the budget and perhaps the budget experience in the House. We are all relieved by the existence of the Maastricht Treaty guidelines, and perhaps none more so than the Minister, because they appeared to help him keep within certain parameters. Given the economic state of the country, many people would prefer the Minister to stay within tighter financial parameters than those laid down in the Maastricht Treaty and in the other requirements which arise from our intention to become part of economic and monetary union in two years.
The Minister had a huge amount of money at his disposal but seems to have come under some very unreasonable pressure not just, as one might have expected, from the other two parties who are in Government with his own, but also from within his own party. Perhaps in an election year that is not surprising, but it is sad for the Minister.
There are other worrying factors in the underlying arithmetic of the budget and in the assumptions that underlie its targets. They depend on a number of factors which are outside the control of the Minister and of the Government. The new agreement is a key factor. The Minister believes that the taxation cuts and other measures he announced yesterday will go some way towards ensuring the budget is acceptable to all the partners. I very much hope that turns out to be the case, because while it might be a political embarrassment for the Minister and the Government were the agreement to come off the rails, it would not be in the national interest. It would be damaging to the State and would undermine much of the economic philosophy which underpins the general budget strategy.
I would question whether the Minister's projected growth rate can be achieved, even in 1997. Given the economic background to the budget and that growth rate projections have decreased from those achieved in 1996, further projections to 1998 and 1999 might still err on the side of being generous; if they do it will undoubtedly have the effect of undermining our economic situation and have the effect of rendering this a very poor budget indeed.
The other requirement for the budget figures to come in according to plan is that inflation be held at about 2 per cent. Following a period of great difficulty in the area of inflation through the 1980s, and since 1987 when many people said that we could never get it under control, we have as a nation succeeded in getting inflation very much under control to the extent that we are the envy of many of our more wealthy European neighbours. Future economic growth and development depends to a huge extent on the country's ability to maintain this low level of inflation, and there are aspects of this budget which put undue pressure on the continuation of that level of inflation. It would be a great tragedy for everybody, and particularly for those of us involved at a political level, if elements of this budget were to signal an end to control of inflation and to the very encouraging growth rates we have enjoyed.
Everybody involved in the business community acknowledges that the most important factor in the country's economic well-being is the control of inflation which has been achieved with great difficulty and no little pain, and which has set the groundwork for the growth rates that have been achieved. In pointing out the dangers, none of us on this side of the House want to see our worst predictions come to pass. We do want to point out to the Minister that in some of what he has attempted to do he has, to a worrying extent, undermined the bedrock of that control of inflation which has contributed so handsomely to economic well-being over the past four or five years.
It continues to amaze me that between 1994 and 1996 we have experienced growth in the number of people working without a corresponding decline in the numbers on the live register. The Minister predicts the creation of a large number of new jobs, which will mean that 45,000 extra people will be in total employment, but he expects a drop of only 7,000 in the live register numbers. That could be partly accounted for by the numbers leaving school, although a good deal of that would be matched by people leaving employment and natural wastage of one kind or another. It is extraordinary that any Government would project an increase of the order of 45,000 in employment and simultaneously concede that only 7,000 fewer people will be on the live register.
There is much disappointment in the area of tourism at what is proposed in the budget. Statements issued by the Irish Tourist Industry Confederation and the Irish Hotels Federation welcome specific aspects of the budget, particularly the reduction in corporation tax which is clearly of benefit to them, but were also clearly displeased that tourism was not adverted to, that the extraordinary role tourism has played in the growth of employment and in the general improvement of the economy was not recognised and that there was no indication of a policy for the future which would ensure continued growth in that area.
Another question that is closely associated with tourism is that of low pay. Perhaps the most frequent complaint I encounter from people in the industry is that they are in very low-paid employment, sometimes in appallingly bad conditions. The figures the Minister distributed yesterday, not in the Financial Statement but in the Principal Features of the Budget, were very interesting. For a single person earning £80 a week on the full rate of PRSI, the annual increase in income is only £40, which is 79p a week. I have met many of the people working in the services and hotel sectors, some of whom are married women but many of whom are young single girls, and they are in this category. A single person who is fortunate enough to be earning £1,000 a week would get an increase of £10 a week, which is much better than the 79p that the person on £80 a week gets. Interestingly, a person on social welfare of £64.50 a week will get an increase of £3. I am not for a moment claiming that is a generous increase, but it is £3 as against 79p for somebody who is working and earning £80 a week, and there are many expenses involved in being part of the workforce.
Generally, there is a failure in the budget to advert to the difficulties which single people in particular at the lower end of the scale encounter. A married couple with two children on £250 a week get an increase when everything is taken into account, including family income supplement, of just £3.60 a week. If they were fortunate enough to be earning £1,000 a week, their increase would be £16 a week. It comes down to the fundamental Government decision on how to go about applying the increases that are possible to apply when the kind of money that was available to the Minister is available. I suppose the fact that it is an election year prompted the Minister to give a little to everybody and to ensure that nobody was entirely left out.
However, from my standpoint the people on £80 a week might as well be left out for all the advantage they have, and the extra £3.60 a week that the married couple on £250 a week will get, some of which will not come into effect until September when the additional child allowances come into play, is derisory. A married couple with four children on £300 a week will receive an increase of £5.20 a week. If they were on £1,000 a week the increase would be £18 a week. There does not seem to be a strong move in the direction of those in low-paid employment compared to those on social welfare. People in low-paid employment frequently incur such expenses getting to and from employment and being presentable for work that they are in a worse poverty trap than if they were receiving unemployment assistance. It has been a great failure of the body politic in this House over a number of budgets, but particularly the last three, that no progress has been made in moving forward the position of such a person.
In marketing, the same advantage applies in relation to corporation tax for companies as applies in tourism. There is a lot of disappointment over the consistent, long-term failure of the Government to address the difficulties which beset the indigenous sector in trading generally and marketing in particular. The indigenous sector depends on Britain to a far greater extent than on any other element in Irish trade. While the percentage of the indigenous sector looks small at about one quarter, it is very large in terms of employment. It is generally lo-tech with a high rate of employment compared to hi-tech industries which have lower levels of employment.
Some of the great worries of the indigenous sector have been dispelled as there is now virtually no disparity between the punt and sterling. However, over the last year there have been enormous difficulties for firms exporting to Britain and they continue to be in crisis. The indigenous sector needs to spread its export net wider. The current dependence on the UK market is worrying and the fact that we are facing into economic and monetary union without knowing if Britain is joining is worse. The people in this sector of the export market are deeply worried about the consequences of economic and monetary union for them. They are even more worried that the Government is adopting such a laid back approach and is giving no leadership. Leadership is urgently required and those who need it have neither the resources not the time to provide it themselves.
Those involved in trade are disappointed, as they are with almost every budget, with the increase in excise duties on petrol and diesel, which has a huge bearing on their transport costs. They will feel they have borne the brunt of the Minister's need to garner additional resources for the State and that it is from that area that money to keep the wheels of the economy oiled is sought. It seems extremely unfair and attacks the viability of the sector. The Minister projects growth of 11.75 per cent in exports in 1997, which would be an increase on 10.5 per cent in 1996. In the context of some of the assumptions made in the budget arithmetic to which I referred earlier, it seems extremely optimistic to push for this level of growth in 1997. He also expects a visible trade surplus of about £8 billion. This would be healthy but depends on many factors which do not appear to have been adequately addressed in the opportunity presented to him by this budget.
The Minister for Health spoke before me and brought some matters to mind of which we are all aware. He mentioned an extra allocation for the waiting list initiative. The length of the waiting list in the midwest is absolutely disgraceful. There are people awaiting cataract surgery, hip replacements and even eye tests for very long periods. There seems to be no attempt at national or Department of Health level to put a policy in place to deal with these problems. The extra allocation will go only a tiny way towards addressing this problem. It has become an embarrassment. People on the waiting list for a year for hip replacements are dropped from it and put on a new list and, effectively, the length of time they are on the waiting list is dated from that new date. Alternatively, a letter couched in vague terms is sent to them asking if they still wish to be considered. Many old people do not understand what is involved. Some think they are being called immediately and are delighted. Some neglect to respond stating that they are still interested in being called and are taken off the list. When the pain becomes unbearable six or 12 months afterwards and they make inquiries, they are put back on the list in a new position that leaves them with an apparently shorter span on the list. The reason for this is administrative in that older people are likely to die or be in such bad health they will be unable to have surgery. It gives the impression that health authorities want to artificially minimise the waiting list.
The same problem applies to dental services generally and orthodontic services particularly where very little progress is being made. A worrying factor is that each Minister appears to throw an extra £3 million or £4 million at the problem but we never see a corresponding improvement in the level of service. That is deeply worrying. It seems to point up an underlying malaise in the health services as do many recent events, not least the hepatitis C scandal. Perhaps it is time to overhaul the health services in such a way as to pinpoint these difficulties and enable the provision of extra finances such as the Minister announced, small as it is, to have the impact one would reasonably expect.
I welcome the increased allocation for services for the mentally handicapped. These people and those who look after them have been abandoned for so long that even the amount the Minister announced is unlikely to have an impact. It is an area that is a disgrace to all of us in the body politic and there is a need to deal with it.
Our care of elderly people is also appallingly poor. There is an acute shortage of places in institutions run by health boards and while there are many new privately run hospitals and centres being built, there are huge difficulties with the payment of subventions towards the cost of keeping geriatric patients in these homes. It is causing huge difficulties for the families and patients involved. They have made an enormous contribution to the life of the country and have been through far more difficult times than any of us in the Chamber. At the end of their days they deserve more recognition from the State and a better level of service.
The other group of people who deal with handicapped people and geriatric patients are carers in the home. There is a substantial increase for those caring for one or more people in the home. This is to be welcomed but it does not address the problems they have or recognise them in a meaningful financial way.
Farmers are mentioned in this year's budget which is an improvement on at least a previous one. The scheme for the control of farmyard pollution which was dropped by the Minister some time ago has not been restored, which is disappointing. There is an improvement of 50 per cent — in place of the existing 15 per cent — in the capital allowance for taxpaying farmers who undertake works of this nature. Unfortunately it will benefit only the farmer who can afford to undertake such works, pay for them in the first instance and wait until the following tax year to recoup the taxation gain. It will not benefit those farmers who are in the tax net and cannot afford to undertake that work. Certainly it will not benefit the substantial number of small farmers in the midlands and west who are not in the tax net and for whom the announcement by the Minister yesterday is meaningless in that it conveys the message that the long-term intention of the State is to drive them out of farming, with no help towards making their farms more viable and no help in the fight against pollution to which everybody in the State appears committed.
In the economic background to the budget the Minister mentioned the failure to increase exports in the agricultural sector. That no growth in that area is expected in 1997 must be a worry for farmers, much of which is accounted for by difficulties related to the BSE crisis. There are many other problems in farming, none of which is insurmountable and none of which is addressed in the budget or was addressed by the Minister and his Department over several months. An area which comes to mind immediately is that of the super levy where an extraordinary level of mismanagement and a laissez faire approach over a number of years has left a relatively small number of farmers in dire financial difficulties from which they fear they will never recover.
Before Christmas the Minister for the Environment announced the removal of domestic charges for water and sewage. This has an impact on the budget and has been welcomed by most sides of the House. However a difficulty arises in the case of local authority financing and group water schemes. The Minister was in Galway on Tuesday to meet local authority members and made an announcement which I heard on the radio, and misunderstood. The announcement appeared to indicate that domestic subscribers to group water schemes would benefit in the same way as subscribers to a local authority scheme.
I and other colleagues from western constituencies had tabled a parliamentary question to the Minister yesterday, the reply to which indicates that no such thing is intended. Some group water schemes get their supply from a local authority source and, through some extraordinary scheme which has not yet been worked out in detail, will not be charged for the water consumed by their domestic consumers. The Minister has not yet announced what magic formula will be put in place to calculate how many gallons of water will be allowed to local authorities free of charge to look after their domestic consumers. However, a huge number of subscribers to group water schemes get their water from lakes or private sources in their community and will not benefit from this announcement.
The difficulty for trustees and organisers of group water schemes is that a substantial number of domestic subscribers are indicating they will not pay since nobody else has to pay. They say, I think reasonably, they are caught for all the extra charges in terms of motor tax and so on and escape nothing. One of the positive aspects of group water schemes is that they provided water to many rural households who would never have had it. As one who was involved as a trustee and organiser in a group water scheme, I realise that an even greater strength is that it encourages and enables members of a local community to come together and operate a service for their own benefit and that of their neighbours.
If the Minister does not address this problem adequately by extending the same benefit to these people as to subscribers of local authority schemes he will have struck a blow against the self-sufficiency which the setting up of group water schemes encouraged in rural communities and will have created for himself, and members of the Government who represent rural constituencies, a political problem that will not go away but will grow with time. That this is an election year will ensure growth is more than might otherwise have been the case. I urge the Minister to re-examine this issue with a view to ensuring that rural communities involved in self-help schemes of this nature are not discriminated against further.
There are implications for the local authorities involved in that they will come under increasing pressure to take over group water schemes. The Minister announced a provision of £5 million to enable them take over such schemes. My reckoning is that £5 million would not be nearly enough to enable Clare County Council to take over all the group water schemes in that county, not to mention the other local authorities who will face the same problem.
In his response yesterday, the Minister said the existing tax allowance will remain. That will benefit PAYE taxpayers who are members of group water schemes but will be of no benefit to social welfare recipients or others and its effect on local authority finances could be damaging. Since we do not yet have a list of the amounts of money which will be available in place of local charges, it is difficult to make an assessment.
In 1977 the then Fianna Fáil Government abolished rates and put in place a 100 per cent rate support grant which worked well until 1982 or 1983 when Deputy Spring was Minister for the Environment. There was a good deal of economic pressure and the State finances were not as good as they might have been, and local authority finances were reduced substantially. Those of us who have been members of local authorities are aware of the difficulties this created when, having lost the local rate base, local authorities had a much reduced grant from State funds. While it seems the car tax replacement for charges cannot be interfered with by Government, there are a number of grant aiding systems under the control of the Minister which could be put in place. The obvious one is in the area of road grants, and there are others.
The Minister has announced a new form of grants, including a grant towards the cost of small water and sewage schemes but my greatest fear is that the system of financing, over which local authorities had some control, is being replaced by a system where they are entirely dependent on State funding and could be left short by a future Government when there is a turn in the economic tide.
Had time permitted I would like to have referred at some length to education but I may have a further opportunity to do so. The Minister was in an excellent position to do more in terms of what was available to him — I have no doubt he did his best — but I am deeply worried about the outcome in some of the areas I mentioned.
