Finance Bill, 1997: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time".

I wish to share some of my time with Deputy Jim O'Keeffe.

An Leas-Cheann Comhairle:

That is in order.

Yesterday I made a point about the hypocrisy of the Progressive Democrats and of the Fianna Fáil Party on water charges. When Deputy Harney was asked to comment on the results of a public opinion poll which were not very favourable to her on radio this week she launched into a tirade on water charges and suddenly realised she had said many things that are politically unpopular that she had not intended to say. She and her party tried to claw back by making statements to which we have been listening ever since. Water charges are unpopular with 95 per cent of the people in Deputy Harney's constituency and about 75 per cent of people throughout the country. Public representatives and Members of the Dáil and Government have to take those views into account and reflect on them. It is also dishonest and untrue to suggest that water rates are being replaced by motor tax. Motor tax is replacing the rates support grants to local authorities. Deputy McDowell made that inaccurate and almost dishonest statement in the House yesterday. If he was a member of a local authority, he might know better.

We all know that the amount of local authority revenue generated by charges was a very small portion of overall income. With the level of rebalancing and local authorities retaining motor tax revenue, which is collected locally and which was returned heretofore to the Department of the Environment for use in the general pool of Government spending, most local authorities will do better by this system rather than relying on the Department of the Environment on an annual basis for a rates support grant which was put in place after the abolition of various rates, such as the relief of agricultural rates which existed in the 1940s and the disastrous rates policy which followed the Fianna Fáil manifesto 20 years ago.

That was also in the Fine Gael manifesto.

Following a court action, rates on land were abolished in 1982 also.

The Deputy is cherry-picking.

That is what led to the rates support grant.

Dublin Corporation does not impose water charges. What the Deputy is saying does not work out.

An Leas-Cheann Comhairle:

Deputy Callely will have an opportunity to speak and he will not be interrupted either.

I am sorely tempted to take issue with Deputy Callely but I will refrain from doing so.

He is not able to do so.

Section 23 of the Finance Bill extends the urban renewal scheme for another year. The scheme has been a signal success in the larger towns to which it was applied. It was first introduced in the cities and it then extended to larger towns and it is a great pity that it is not being extended further this year. There are a number of smaller towns throughout the country with populations of between 2,500 and 5,000 people in which there are areas of dereliction which would benefit enormously if this scheme was extended. I know a study group is examining the matter but there is a major argument for its extension because it has stimulated an unprecedented level of economic activity everywhere it has been applied. Will the Minister ensure it is retained as a live issue on the Government's agenda? I hope the review body will report before the forthcoming budget in November and that the Minister will have more news for towns throughout the country which await this because, while there is a major boom, it is a little uneven and only the larger cities and towns are doing extremely well.

I travel from the west to the Dáil and when I pass Mullingar and get closer to Dublin I can see the boom in the level of traffic on the road. In the last year I have had to allow an extra 15 minutes for the journey to Dublin because of the additional traffic. We have provided millions of pounds on additional road capacity, by-passes, wider roads, realignments, etc., but that has been swallowed up gradually by the additional traffic, and freight traffic in particular, which this economic boom is creating. The boom is wonderful but we must look at it in relation to the development of the roads infrastructure. While we have been over reliant on EU funds to build by-passes or realignments, we must now look at providing further Exchequer funding to supplement the roads projects which are necessary because of the increased traffic which this boom has generated and, with good management, will continue to generate for several years. The extra roads capacity which we have provided has been absorbed by the additional traffic. Many have spoken about the retarding effect of bad infrastructure on economic growth so this must be borne in mind and we ought not to lose sight of it.

The seaside resort scheme was not extended this year but it has also been a signal success in those areas where it applied. I appeal to the Minister to look at providing this resort scheme in inland areas. There will always be seaside resorts which need the scheme but inland resorts also need such incentives. Tourism is a major industry in inland areas which attract tourists. I live in an area which is straddled by the greatest navigable waterway in Europe, the River Shannon, which has links to the River Erne. Whole stretches of that waterway are underdeveloped and without amenities for tourists. When I cross the Shannon every week during the summer months I can see traffic jams on the river. There is scope for additional capacity and much additional revenue could be generated if we invested more in inland resorts.

In Boyle, County Roscommon, near Lough Key, which is a gem among Ireland's beauty spots, we had put in place a £30 million programme of investment from the US to build a large conference centre and hotel, chalets, other improvements and an 18 hole golf course which would appeal to the upper end of the tourism market. Unfortunately, that project collapsed earlier this year due to lack of finance but if it became a tax incentive area, that project would be relaunched. If that concession was available, it would have a huge impact on an area which is totally underdeveloped. What was proposed would not damage the environment but it would give an infusion to the area and the small town of Boyle, which has a population of 3,000. I appeal to the Minister to examine the possibility of providing a scheme along those lines before the Finance Bill is passed.

I am delighted that section 24 has been extended around the International Financial Services Centre in Dublin and that additional streets now qualify for the tax concessions. That is a good provision because the IFSC has been a major success in Dublin, but people in my part of the world will naturally say that they also need some such concession. We need to do many things to hold the population together and give local economies the boost they need and a greater chance to participate in the present boom. The places which are already well developed in terms of investment and infrastructure are doing disproportionately well out of the boom but there are still black areas which can only enjoy 10 per cent of the growth of other, more developed, areas. I ask the Government to look at that area around Boyle and Lough Key where the project fell through because of difficulties with the investment in the US. If there was provision for a tax incentive, the investment will come forward again.

It is probably unnecessary at this stage to spend much time lauding the achievements of the Government or the Minister for Finance, Deputy Quinn. It is generally accepted that he has done a good job and the best tribute I can pay to him is that I could hardly do better myself. He is doing a fine job and that is accepted and recognised.

We should use this debate to look for a different focus because some interesting things are emerging on the Opposition side. One could almost say the search for the missing link is reaching its final stages. I have been looking to see what common bond there might be between Fianna Fáil and the Progressive Democrats, the alleged alternative Government. It is difficult enough to find much in common between them. If one goes back to the past all one will find is a rather poisonous relationship. Be that as it may, an interesting scenario is unfolding and we are getting a new approach to politics. What is emerging is a combined platform involving a fraudulent Fianna Fáil and a phoney PD programme on public expenditure. I say that deliberately because if you examine the approach of both, clearly that is what we are heading into. Let me be more specific.

Both Opposition parties had a difficulty in deciding how they might best tackle the Finance Bill and the budget. Quite simply, they are green with envy at the success story of the Government. They cannot attack the huge extra numbers at work, our interest rates which are so low, our inflation rate which is at an historic low or any of the economic indicators. They cannot attack the fact that we are now one of the leading member states of the European Union in respect of our compliance with the Maastricht criteria.

Rather than taking an honest approach and accepting this fine job has been done, a phoney bond is emerging between Fianna Fáil and the Progressive Democrats on public expenditure. In 1989 and 1992 there was not much evidence of interest in cutting public expenditure, in fact the contrary was the case but with the revisionist approach that can be overlooked by them.

Let us focus on exactly what they mean by cutting public expenditure. Perhaps the Leader of Fianna Fáil, who is present, will be more specific. I am interested to know what he will do about cuts in public expenditure. There is the general approach that public expenditure must be cut but under no circumstances will one single item be specified. It seems there is an approach which involves making it clear, directly or indirectly, that any item which might cause hardship will not be mentioned. We are told there is a secret list. It is fair to remind Deputy Ahern of his interview in Business and Finance when he mentioned he had a list of spending cuts. That was about a year ago. He thought it inappropriate to tell the people at that time. I want to know a little more about the secret list of spending cuts. It is unfair that we should not know the full facts because they are relevant. If Deputy Ahern has a magic formula to achieve cuts in public expenditure without causing hardship or pain, he has a duty to tell the country. We are all agog and want to hear it.

I have noticed the Fianna Fáil posters which state that it is putting people before politics. That sounds anodyne and meaningless. Will Deputy Ahern consider putting the facts before the people? What will he do about the secret list of public expenditure cuts? Will he clutch it to his breast and hold it tightly throughout the election campaign? Will he ensure that nobody is made aware of the contents of this secret list?

When I think of such secret lists I am reminded of the bad old days when Popes used to appoint cardinals behind the iron curtain in pector. They could not mention it in case the person appointed was killed by the regime of the day. This seems to be the approach of Deputy Ahern as far as his famous secret list of spending cuts is concerned. I sometimes wonder if there is a mafia-like approach —omerta— to this list. If Deputy Ahern is serious about spending cuts I challenge him to tell us about them and let us not have this secrecy any longer. He should think of his own Deputies. I was listening the other night to Vincent Browne's programme when Deputy Eoin Ryan was speared by Vincent Browne on this issue. I felt sorry for Deputy Eoin Ryan, a decent Deputy, who was left by his leader in a situation where he had no answer to give on this vital issue.

I feel sorry for anyone appearing on Vincent Browne's programme, I even felt sorry for the Deputy.

I felt like suggesting at the time we should set up the society for the prevention of cruelty to Fianna Fáil Deputies. It is hardly fair they should be left in that situation. Clearly this fraudulent Fianna Fáil approach — it cannot be referred to as anything other than fraud——

On a point of order, as Deputy O'Keeffe's speech is so good he should have more people to listen to him. I call a quorum.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

I was speaking of the development involving a fraudulent Fianna Fáil and phoney Progressive Democrats programme on public expenditure. I demanded this famous secret spending list of Deputy Bertie Ahern, or will it be like the third secret of Fatima and remain a secret until well after the general election?

I wanted to examine the possibility of this alleged alternative alliance of Fianna Fáil and the Progressive Democrats. There was a disastrous effort on their part between 1989 and 1992. On the Fianna Fáil side we had a twice-divorced party. One might recall that Elizabeth Taylor remarried Richard Burton but that second alliance did not work out either. That is the sort of alliance about which we are talking. There appears to be nothing in common between these two parties except a dishonest approach to public expenditure. As dishonest as is the Fianna Fáil approach to public expenditure, the approach of the Progressive Democrats is totally phoney to the extent there is a danger that party might be rechristened the "Phoney Democrats".

The Progressive Democrats has portrayed an apparent tough approach to public expenditure, levelling a solemn attack on third level fees, which leads me to question whether they will propose their reinstatement in their manifesto. That party has also launched an attack on the county enterprise boards despite the fact that they are producing hundreds of jobs in most areas at an approximate cost of £3,000 to £3,500 each. Is there a specific proposal from the Progressive Democrats to abolish these?

The principal question is what the Progressive Democrats will do about water rates and what will the Fianna Fáil party stomach on that issue.

The latest proposal is to spend £200 million on metering with a further £8 million to £10 million annually on collecting from those meters. Deputy Mary Harney appears to be in very deep water on that issue.

The Progressive Democrats has become involved in option politics. That party has a great image of being very tough on expenditure at national level. However, to save their seat in Galway they had no problem with Deputy Molloy's commitment to produce £23 million, three times the amount required, for rural water schemes. Closer to Dublin, in Laois-Offaly, we find they have no problem in committing £60 million to the new Cathy Honan wing of Portlaoise Prison to give some little push to her flagging campaign there. Even closer to Dublin, in Kildare, we find Senator John Dardis who is seeking a seat there proposing to produce sufficient funds to buy out the MMDS monopoly operators, at an estimated £100 million.

That is the kind of option politics in which that party engages at local level. It gives the lie to the approach that suggests that party has any interest in cutting public expenditure. It confirms that if, by some remote chance they and Fianna Fáil ever got back into Government, we would be faced with the same circumstances as obtained between 1989 and 1992 with public expenditure again running out of control.

A reasonable comment on this alleged alternative Government, is that it is a lethal cocktail, a combination that would bring disaster. The country is doing well and the only advice I can give to the people is "if it works, don't fix it".

Is Deputy Ahern prepared to unveil this famous secret list? This fraudulent Fianna Fáil and phoney Progressive Democrats' approach to public expenditure needs to be exposed. The public deserve to know about it. If there is any defence from either party against what I have said, I shall be glad to hear it but I have serious doubts based on any of the evidence before me.

I propose, with the permission of the House, to share my time with Deputy Browne.

Is that agreed? Agreed.

Beyond putting into effect the tax changes announced in the budget this is a dull, pedestrian Finance Bill, unimaginative, uninspiring, a disappointing non-event compared with its predecessors. With one or two minor exceptions such as the proposals relating to the film industry there is no obvious political input. Just as in the case of Programme 2000, economic policy appears to have been put on auto-pilot leaving the Civil Service and Revenue Commissioners to do most of the work on the policy thinking of the Government, such as it is. I detect no strong political commitment from this Government to the development of a dynamic enterprise economy. I have serious worries about the lack of direction of economic policy clearly evident throughout its tenure. The view seems to be prevalent that all the Government has to do is coast along on the crest of the wave and, despite the budgetary concessions, tax reform and reduction remains on the back burner. Everything else by way of spending and meeting the Maastricht criteria has been provided for.

I shall deal first with the technical aspects of this Bill and later with some of its broader provisions. When my party was in Government, after the budget, we regarded the Finance Bill as the second major annual opportunity to stimulate development and enterprise in our economy. The Taoiseach, the Minister for Finance and other Ministers with key economic portfolios took a personal interest in framing the legislation which provided an opportunity to introduce more technical financial measures aimed at creating employment. During my 20 years service in the House, the launch and presentation to the media of important legislation such as the Finance Bill has always been a major event. This year, however, only a number of brief newspaper articles referred to its introduction during Easter Week and the majority of these were concerned mainly with provisions involving the film industry.

The Finance Bill I presented in 1994 reduced capital gains and profits from the sale of shares in small Irish companies which was a very important initiative. It eased the capital acquisitions tax on the transfer of a family business, which is carried a stage further in this year's Finance Bill but not to the ultimate conclusion I set out in 1994, namely, 100 per cent relief to help small family businesses. The 1994 Act also extended the PAYE allowance to the children of directors or owners of small businesses and dealt with tax difficulties on foreign currency borrowings, which was an extremely complex issue at that time.

There are some useful minor measures in this year's Finance Bill, particularly section 12 which makes provision for the exemption of payments made to employees under certain company restructuring schemes and in the situation of company rescue. I welcome the measures designed to secure the continued successful operation of the International Financial Services Centre which was largely created by the 1987 Act. As the Minister of State at the Department of the Taoiseach, Deputy Gay Mitchell, is aware, that legislation was introduced entirely on the initiative of my party. I hope he will do no damage to it before it is returned safely to Fianna Fáil hands.

I recently completed my review of the legislation in question.

Generally speaking, the Finance Bill is woefully short of any real or comprehensive vision to encourage a more thriving small business sector. Fianna Fáil outlined many of its proposals in this area in its policy document "Rewarding the Risk-Takers" which was presented by the party's deputy leader, Deputy O'Rourke. We propose a reduction in corporation tax to 25 per cent for companies with profits below £100,000 and an intermediate rate of 30 per cent on the balance up to £250,000. We also propose a PAYE allowance for proprietary directors and suggest that small business owners who increase employment should be given personal tax incentives to do so. Despite the headline importance and prestige of multinationals, in practice most new employment will be created in the immediate future in the small business and services sectors.

The Government employs a piecemeal approach to the needs of the small business sector which it regards with as much suspicion as enthusiasm. Labour and Democratic Left remain uneasy about private sector profits and they are not prepared to recognise the owners of small businesses who create jobs as the real patriots I consider them to be.

In the period ahead, when EU Structural Funds will play a reduced role in our economy, we will need to be more self-reliant. Our economy will literally stand or fall on the dynamism of the business sector. Fianna Fáil will, as in the past, support business in every possible way. I do not refer to subsidies or hand-outs but to fostering a more pro-business environment. One might have expected the Finance Bill to provide a clear signal on the future of the 10 per cent rate of corporation tax for manufacturing and international financial services. EU agreements on the latter run out in under ten years. As most Members are aware, multinational and financial sector companies want to know what will happen in the future because they must make plans on the basis of ten or 15 year investment strategies. They must make decisions now for their long-term development. This may seem a long period to some people but that is how the process works on the international and domestic scenes. Therefore, we must deal with this issue.

There is no doubt the tax incentives which were highly successful in attracting inward investment will come under closer scrutiny in Europe as monetary union approaches, despite the fact that the majority of member states wish to preserve their fiscal sovereignty. Ireland is no longer a relatively underdeveloped country on the periphery of Europe and our partners will look on our success and the reasons for it with an increasingly jaundiced eye.

It has been suggested that corporation tax could be standardised at 12.5 per cent, 15 per cent or 17 per cent. It is necessary to be clear on this matter because members of the Government have spoken to senior business people at dinner parties trying to discover their views on a 12.5 per cent or 15 per cent rate. I spoke to many of these people who are extremely concerned about the Government's efforts to move to that rate without engaging in a strong battle in Europe in favour of its introduction. If such a rate were put in place it would mean a 25 per cent, 50 per cent or 75 per cent increase in the tax liability of multi-nationals operating in Ireland. I am afraid there is a lack of understanding among Ministers who state this merely involves a move to a 12.5 per cent or 15 per cent rate. It involves far greater risks for multinational companies. The indecision should cease. The Taoiseach is attempting to wait until an election is called so that he will not be obliged to make a decision but he owes it to the business community to state his negotiating position in Europe. It is difficult to say whether he holds such a position, given that he does not have an opinion on CAP, Structural or Cohesion Funds, the review of Cohesion Funds or the mid-term review of the Structural Funds. However, if he has a view — some people believe he favours a 15 per cent rate — he should make it known to the House. The Taoiseach has declined to answer my questions in this regard on a number of recent occasions.

The Government should be conscious that a significant number of multi-nationals will move to alternative locations if we proceed with the higher level of taxation. Following much analysis, my party reached the conclusion that the higher rate of corporation tax must be gradually reduced in stages over a period of years to a rate of approximately 10 per cent. The advantage of a phased reduction over a prolonged period is that it would have the effect of stimulating business, particularly if a clear and continuous trend, which will largely offset any shortfall in revenue, is visible.

In the mid-1980s, trade unions and others complained about the small tax take from the corporate sector. In 1986, corporation tax raised only £258 million or 6 per cent of tax revenue. During the 1987 election campaign, my party stated that it would address that matter and deal with the issue of section 84 loans and other hidden shelters, exemptions and allowances that had been put in place for the business sector to try to create a level playing pitch and make the process more transparent. Successive Fianna Fáil Ministers for Finance, Ray MacSharry, Deputy Reynolds and me, did so and the corporation tax yield is now six times the level it was when my party assumed office in 1987. The figure is approximately £1.5 billion, exactly double what it was a decade ago at 11 per cent of national revenue. Fianna Fáil claims 98 per cent of the credit for that transformation which placed a previously stagnant source of revenue into a dynamic growth path. We did so at the same time tremendous growth in the economy, particularly in the multinational business sector, took place.

The International Financial Services Centre has made a significant contribution to the tax take to which I referred, thanks to the initiatives of Charles Haughey and those who worked with him against Garret FitzGerald and others——

That is not fair.

——who criticised the idea and stated that it was a brass plate operation which would enable financiers to hide. However, it is a different story now that the IFSC is bringing in £600 million, creating 5,000 jobs and expanding annually.

In contrast, the chopping and changing of very successful film incentives — which are dealt with in the Finance Bill — provides an object lesson in how not to go about one's business. The incentives I introduced as part of the Finance Act, 1993, admittedly in consultation with the Minister for Arts, Culture and the Gaeltacht, had a positive and immediate impact. The clawing back of these incentives in 1996 meant a considerable loss of interest on the part of international film producers. That the incentives are being changed strongly suggests that the Government got it wrong and was foolish to interfere with the goose that was laying the golden eggs, by drastically tightening the provisions. In the debate on last year's Finance Bill, I stated that it was the height of stupidity to introduce these concessions. At a time when the Irish industry was performing strongly, as a result of the incentives I introduced in 1993, and the British Government had realised what we were doing and introduced similar incentives, what did we do? Instead of trying to go a little further than the British Treasury's proposals we went backwards and paid the price. That is what happens when people stop listening. I have no doubt the incentives may have to be altered yet again judging by the lukewarm reaction from the film industry. If we are serious about promoting Ireland in the film sector we should listen to the industry.

I am concerned at the operation of the BES scheme which is only touched on in a minor way in paragraph 13 of the Seventh Schedule. Investors encounter serious and unsatisfactory delays in issuing the requisite documentation and certifications. This makes the scheme less attractive because investors may be deprived of any immediate tax benefit. The process must become more streamlined. Successive Governments have been concerned to ensure that BES investments carry a genuine risk but the Government must also ensure that investors enjoy reasonable safeguards. The BES should not become a cover for financial scams.

There is a good deal of disquiet among those who some years ago entered a certain BES investment scheme involving a relatively new manufacturing company which has a national reputation. Everything may well be above board but there needs to be full transparency. Around the time the investors were due to be reimbursed the company went into receivership and re-emerged with new owners, producing as normal with the same number of staff employed. We are happy that employment has been safeguarded but questions continue to be asked about the changes of management and ownership. It would be too convenient for a firm if by sleight of hand BES investors remain out of pocket while the business continues to function as before under different management.

The Minister for Finance and the Minister for Enterprise and Employment should satisfy themselves fully as to all the circumstances of such cases, not just in the interests of the shareholders who, as things stand, have lost their money, but also to learn lessons for the future if the schemes are to continue. There will be a lack of confidence in future BES schemes if there is a suspicion that investors can be taken for a ride and then shrugged off.

The Bill contains a limited extension of the urban renewal scheme. It is Fianna Fáil's view that the scheme continues to have valuable potential although it should not be extended for too long in any one area. Apart from inner city areas, there are a number of towns which would benefit from urban renewal schemes and it was our intention that the scheme, having had a fair run in urban areas, should be extended to give people in rural areas a chance to benefit and to tackle dereliction and, furthermore, to give a chance to those in local communities who have sufficient resources to invest in it with the relevant tax breaks. I stated that view in 1993 and 1994 and we developed the scheme with that intention. Unfortunately, the Government does not seem interested in extending the scheme to the rural areas. Fianna Fáil made creative use of the scheme throughout its period in office and it wants the scheme to continue, particularly in newly designated areas and rural locations.

The Bill implements the stamp duty provisions to replace the residential property tax. The level of stamp duty on homes must be reviewed as the rise in house prices is putting houses further out of the reach of young couples, particularly in the Dublin area. The increases in stamp duty are too steep in the attempt to convert the RPT into an extra stamp duty charge which will fall on the buyers of property rather than existing owners. There is no doubt that such a measure is intended in the short term to assist in cooling down an overheated property market but it is not consistent in the long run with an enterprise economy in which mobile employees, whether returning emigrants or others, are seeking homes to work here in the high-tech, services, construction and financial sectors.

When people look back on the record of this coalition Government, particularly if it continues in office, they will see an undistinguished record of economic management with possibly disastrous long-term consequences. I relate these remarks in reply to Deputy Jim O'Keeffe who was trying to work out a new economic theory which, although Deputy Briscoe gave him time to work it out, he did not articulate in a way which I could understand. In so far as he wished to know my criticisms perhaps he would listen to me. When this Government took office everything had been set up for it — a fast growing economy, the PCW, the flow of Structural Funds and the first current budget surplus in over 25 years. The opportunity was squandered and all that was done with the additional resources was to spend them. Nearly every spending limit and target has been broken. Between 1994 and 1997 nominal economic growth is estimated to have increased by 26 per cent of which about 6.5 per cent is accounted for by inflation. That is the rainbow Government's record.

Total Exchequer funded public spending increased by 19 per cent or roughly three times the rate of inflation. This explains why taxpayers have received only a 1 per cent cut in income tax in one of the best economic periods we have seen. Between 1989 and 1992 Fianna Fáil Ministers for Finance, on their own and with the Progressive Democrats, cut the standard rate of income tax from 35 per cent to 27 per cent and the top rate from 58 per cent to 48 per cent while also cutting VAT from 25 per cent to 21 per cent. They are the comparative facts and realities. When the people have to decide we will stand on our record of tax reform and tax cuts.

There can be no comparison with the present Government which is not a friend to the PAYE sector. The headline tax concessions announced in Partnership 2000 have already been given in this year's budget on the assumption that they will not be clawed back over the next two budgets. If the Government had stuck to the disciplines it set out in its programme it would have had over £500 million in hand to cut the tax burden and move towards the goal of eliminating Government borrowing. Instead the Government proposes to borrow another £2 billion between now and 1999 according to the Minister's figures. I do not know why.

The cyclically adjusted deficit is not consistent with the stability pact for which the Minister claims some credit. In his recent document on economic and monetary union he reminds us that the stability and growth pact will require member states in EMU to commit themselves to aim for a medium term budgetary position of close to balance or in surplus. An article on Ireland in yesterday's Financial Times by a senior banking economist in London indicated that a 1 per cent drop in growth could cause us to miss the 3 per cent deficit target — not my prediction but that of an eminent economist. However, the Minister's multiannual budget table shows Ireland continuing to borrow up to £700 million to £900 million. In Europe he negotiated a pact to bring us down to 1 per cent yet four weeks later in the budget his three year figures indicate that he will borrow another £2 billion.

There is little effort to control the growth in public spending and serious tax relief will be off the agenda for another five years if the electorate make the mistake of returning this Government to office. If there was a better balance between the needs to improve public service, limiting further debt and creating a healthier and more competitive economy everyone would be more prosperous in the long run. The foundations would also be laid for a steady improvement in public services. A tighter grip on the public finances and the public spending commitments cannot come too soon. If the right decisions are taken now we may prolong the present period of prosperity even with the reduction in some forms of EU assistance after 1999.

The Irish economy weathered the last international recession remarkably well under a Fianna Fáil-PD coalition. It was one of the very few countries to escape recession. Public spending rises faster in such conditions but that should not be a criticism. Indeed, the OECD questioned whether we were too tight on spending during the last recession. It is economic ignorance to try to compare public spending growth when the economy is in periods of low and high growth. The Taoiseach, who failed to have a budget or a Finance Bill passed when Minister for Finance, does not understand that logic, which is to his discredit. However, such a comparison is one that other members of the Government try to make with their typically shallow political rhetoric.

Ministers have boasted of 1,000 jobs per month created since they took office. Jobs were being created at that rate throughout 1994. The Government has taken no decisions of any consequence to speed up the flow of inward investment since it took office. The economic decisions of March 1987 to the end of 1994 have the economy working well but nothing is being done to plan for the future. An effort is being made to drift on to 1999 to see what will happen.

When Fianna Fáil negotiated the £12 billion in European funds in 1989 and 1993 we were hounded about what would happen on the review of the funds. The review was meant to take place in 1996-97. We are coming to the end of the period yet we have not received an extra pound. When Deputy Joe Walsh was Minister for Agriculture, Food and Forestry and Ray MacSharry was commissioner, extra resources were made available continually under the Common Agricultural Policy. The Minister for Agriculture, Food and Forestry, Deputy Yates, has been in hiding in his constituency for the past three weeks and unable to meet farmers to answer their questions because he has no money to give them. There was confidence in the economy long before the Government took office. The only thing about which it can boast is that it has not affected it too much, although in 1995 and 1996 there was a decided dip in Ireland's world competitiveness ratings.

The prospects of the economy depend on whether the necessary gear change is made now. The people will have an opportunity to elect a Government fully committed to creating an enterprise economy with definite all-round improvements in employment and living standards without sacrificing social solidarity or they can opt to re-elect a Government which has shown a lack of ambition and is just drifting along doing nothing other than frittering away the fruits of economic growth without giving the taxpayer a break. They deserve better.

(Wexford): One would think that a Labour Minister for Finance in introducing a Finance Bill would be biased towards creating jobs and looking after the less well off sections of the community. There is, however, nothing in the Bill that will lead to increased job creation or give extra income to the less well off in society. The creation of 1,000 jobs per week has been the subject of much hype and discussion but there are still 260,000 people unemployed, 150,000 of whom are long-term unemployed. The unemployment rate among young people stands at 25 per cent. I would like to know, as someone who comes from the heart of rural Ireland, where these jobs are being created.

It is obvious that there is a bias towards Dublin and our major cities. Rural Ireland is being neglected. In the past three years there has been only one such announcement in County Wexford. The factory in question has provided a welcome boost to the county but jobs are not being created at the same rate as in Dublin and our major cities. It is important to recognise that there is a serious unemployment problem in rural Ireland which is leading to social problems in housing estates in our communities. While the Minister for Enterprise and Employment has done a little, he has not gone far enough.

The Minister for Finance should consider providing incentives to stimulate job creation and rebuild the social fabric of towns and villages. There has been much talk about urban renewal in our major towns and cities, a welcome development, but the Minister should consider seriously introducing BES and urban renewal-type schemes to encourage investment in smaller towns and villages. Farmers who are well off and making plenty of money are buying apartments and investing in BES schemes in Dublin. Some have informed me that they would be prepared to invest in similar schemes in smaller towns and villages. The Minister for Agriculture, Food and Forestry, Deputy Yates, has informed me in replies to parliamentary questions that a high powered committee is looking at the matter but the Minister for Finance should consider providing incentives as people are willing to put money up front for schemes in rural Ireland.

On tax reform, with the Labour Party and Democratic Left in Government and a Labour Minister for Finance I expected to see substantial reductions in tax rates but in the past three years there has been a reduction of only 1 per cent in the standard rate. During the previous four years, under Fianna Fáil, the standard rate was reduced from 35 per cent to 27 per cent and the top rate from 58 per cent to 48 per cent. According to the Minister, there have been record tax receipts in the first three months of the year. In spite of this, there has been a miserable reduction of only 1 per cent in the standard rate. This is baffling at a time when the country is awash with money.

There is no doubt that the PAYE taxpayer is being ripped off and taken to the cleaners. Other sectors are not paying their fair share. Even at this late hour, the Minister should consider further reductions. It is unacceptable that Democratic Left and the Labour Party, which see themselves as the champions of the working class, have not provided for greater reductions.

I have been arguing for some time that greater amounts should be allocated for facilities for people with disabilities to give them more independence. Those who work with them have made numerous submissions to the Minister for Finance and the Minister for Health seeking greater resources to fund the provision of minders or carers. People with disabilities want to live independent lives but they can only do so with the necessary backup from the Department of Health and the Department of Finance. The Minister for Finance should seriously consider increasing substantially the amounts paid to health boards through the Department of Health for the provision of services. Centres of Independent Living have been established in most towns and are run by the physically challenged. The Minister, who is a caring and compassionate man, should make adequate resources available to fund these centres.

I wish to share time with my colleague, Deputy Costello.

Acting Chairman:

Is that agreed? Agreed.

In spite of the begrudgery, the Labour Party and Democratic Left have made a major contribution to Government and the political life of the country. We have shown by our performance that we are capable of filling the most responsible of positions in Government, including the Department of Finance. I congratulate my colleague, the Minister for Finance, Deputy Quinn, and the Government for the steady progress that has been made in managing the national finances. There has been sensible tax reform without bankrupting the country and the needs of the elderly, the underprivileged and those on the margins of society mentioned by Deputy Browne have been met.

The Labour Party has always argued that Governments must bring justice back into economics and not merely seek to balance the books. In 1987, when Fianna Fáil and the Progressive Democrats had control of the books, there were widespread swingeing cuts in the health area, hospitals were closed and 5,000 workers were sacked. One might say this was marvellous economics but unfortunately it had serious implications for those people who need these services. The Labour Party proudly fought bitter battles against these closures and job losses and when it was returned to Government it ensured these issues were addressed. In spite of the begrudgery, we have proven to the public that we are not only capable of doing this but are willing to do it.

The Deputies opposite have criticised the Government for moving away from its spending targets. However, in recent years during Private Members' time Fianna Fáil and the righteous Progressive Democrats have sought additional spending. When it comes to looking for additional spending and making promises these parties bring in their agents of despair. Yesterday at IFA, county council and other meetings these agents looked for additional spending. Members of the Opposition parties are speaking with a forked tongue because they criticise the Government for spending too much on the one hand and seek additional funding on the other. This is particularly true of the Progressive Democrats. Deputy O'Keeffe referred to a string of possible seats for the Progressive Democrats if they promise enough to the electorate. With complete abandon, that party has promised to spend millions of pounds to deal with the water charges issue, deflector systems, etc.

Yesterday I chaired a meeting of an Oireachtas joint committee which dealt with the cattle crisis which has correctly been referred to by several speakers. At that meeting a previous Fianna Fáil Minister for Agriculture, Food and Forestry said that when he was in office he sought and got a facility whereby the State would top up a green pound revaluation during a crisis. He advocated the use of this facility to deal with this crisis in the cattle industry. To chair the meeting fairly, I called on members of the Progressive Democrats to give their views on the matter. The former eminent Minister, Deputy O'Malley, for whom I have much regard and respect, said no Government of which he was a member or any other Government had ever used this facility and we would be setting a dangerous precedent if we used tax-payer's money at national Exchequer level to deal with such a crisis. He also said that once we did this we would undermine the concept and principle of the Common Agricultural Policy.

The Chair and I represent rural constituencies and we are aware of the importance of the agriculture industry to these areas in terms of income, employment and exports. However, as a result of the revaluation of the green pound there will be a loss of income in this sector. Like previous Governments, we must ask the European Union and the Commission if they accept responsibility for the Common Agricultural Policy. Our economy is different from that of Germany and the Bundestag has not only paid German farmers but has also paid farmers in other countries, including Ireland. This is one of the benefits of membership of the European Union.

There are problems in the agriculture industry and, having listened to all the wise men who were members of previous Governments, the joint committee agreed the Government and the Ministers for Agriculture, Food and Forestry and Finance should be asked to consider ways of addressing the loss of income in this sector. We all have a responsibility to ensure facilities are in place which take account of what is happening in agricultural production and the industry generally. Farmers were beginning to recover from the BSE crisis when this problem arose. No doubt this will also become an election issue.

I have discovered the differences between the two parties which hope to form the next Government. They have different views on neutrality, on how this problem should be addressed, water charges, etc. Deputy Harney referred to the installation of water meters. One would think that the word "meter" was not heard of until she referred to it. However, there have been water meters in South Tipperary since 1899 when water charges were first introduced in rural areas. Farmyards, public houses and hairdressing salons all have meters and we do not need promises from the Progressive Democrats Party that it will allocate £200 million for the installation of meters in the houses of old age pensioners who use only £20 worth of water a year. Deputy Harney wants to charge these people for water.

It is disgraceful.

These PD economics satisfy those members of the electorate to which that party is pandering. It wants to reduce the level of tax for its supporters. It is a pity members of that party are not present in the House because they love to dish it out on the radio but do not want to listen to the truth in the House where it matters. They are never present to defend some of their ludicrous suggestions on how to approach problems. They do not seem to know the difference between a directive and a proposed directive. It seems Deputy Harney was never allowed to see directives when she was a Minister of State. Maybe that was part of the temporary little arrangement. She does not seem to have been allowed near the action when she was in Government. No doubt her party will be kept far away from the action if it goes into Government with Fianna Fáil to prevent some of the problems which would arise if all the different opinions had to be taken into account. The possibility of these two parties forming a Government is very remote because the public is satisfied with the Government's performance and there is a "feel good" factor. The Government is working well and the parties trust one another, something which did not occur in the previous Government or in the Fianna Fáil-Progressive Democrats Government.

I welcome the Minister's commitment to publish shortly the taxes consolidation Bill which will make the taxation area more user friendly. However, I sound a note of caution in regard to the threat to publish names. In cases where tax audits were carried out, genuine errors were discovered and the people involved are willing to pay these taxes and are not breaking any law or withholding tax.

This Bill, which will give legislative effect to the measures in the budget, reflects the success of the Government. We can stand proudly before anybody and suggest we did a good job. We do not owe any apology for participating in a Government which has proven to be of benefit to the people, and that is all that matters.

I thank my colleague for sharing time with me. I congratulate the Minister for Finance on producing such a fine Finance Bill and on the excellent budget introduced earlier, the main provisions of which are enshrined in this legislation. When one examines the provisions of this Bill, the budget and Partnership 2000, one must ask: why change a winning team and a winning formula? I am sure the electorate is asking that question

Let us contemplate the alternative proposed by the Opposition parties. The Progressive Democrats do not even consider the debate on the Finance Bill sufficiently important to warrant having a Deputy present in the Chamber to listen to the various contributions. To date we have heard from the Progressive Democrats in terms of the need for a low wage economy — what they see as the happy workforce in countries such as Hong Kong and New Zealand — and in terms of water charges, with money being spent hand over fist by Deputy Molloy. We have also had statements from the party leader that all households, including those of old age pensioners, should be metered for water supplies. In what type of auction politics are the Progressive Democrats currently engaging? This is the vehicle onto which Fianna Fáil is proposing to hitch its electoral message in the forthcoming election.

There was nothing of substance in the contributions of Fianna Fáil Deputies this morning. They were simply bluster and filibuster. It is difficult to see how they could have anything of substance to say when one considers the quantity and quality of the provisions we are dealing with in this legislation. In the first instance we have the basic principles adopted by the Government at the outset in terms of prudence as far as the economy is concerned. We are putting together a careful package, and that has been done year after year. This is the third budget introduced by the Minister, Deputy Quinn. It is a balanced one in which we have succeeded in reducing the personal rate of tax as well as corporation tax. We have widened the tax bands and increased personal allowances. More than 60 per cent of the population is on the standard 26 per cent rate, reduced from 27 per cent, with an opportunity for further reductions in years to come as a result of our buoyant economy.

Compare that to the slash and burn attitude of the Progressive Democrats who want to reduce the rate from 48 per cent to 40 per cent and from 26 per cent or 27 per cent to 20 per cent almost overnight. One can imagine the effect that would have on the economy, the provision of social services such as health and education and the lifestyle of old age pensioners.

In addition to having a successful formula in terms of maintaining a buoyant economy and reducing personal taxation, we have also remained within the parameters of the Maastricht criteria, in a better way than most of our EU colleagues. Ireland can set an example for the larger EU countries, such as Germany and France, which preached the loudest about meeting the Maastricht criteria

Inflation is less than 2 per cent and there is no indication that it will rise above that figure. Our gross domestic product is increasing by over 6 per cent per annum. The national debt, as a percentage of gross domestic product, has decreased this year stantially each year. It has decreased this year alone by approximately 8 per cent to 72 per cent or 73 per cent. If the economy continues in this vein, we can reduce it by a further 7 per cent or 8 per cent bringing the figure down to the low sixties. As we all know, 60 per cent is the cut-off point required for European Monetary Union entry. We have done extremely well, particularly when one considers we had a GDP debt ratio of 129 per cent a few years ago.

These are wonderful statistics of which few countries can boast, and it is nothing short of nit picking that we have not heard a single word of approval from the benches opposite for the excellent management of the economy and the positive direction in which the Minister for Finance and the Government is going in terms of the Finance Bill.

Under the Fianna Fáil-PD Administration there were approximately 145 job losses per week. Over the three and a half years of this Government more than 150,000 jobs have been created per year. That is a colossal transformation.

Let us examine the quality of the jobs created. There was a perception that many of them were in the casual and part-time area, but we know from studies undertaken that 85 per cent are in the permanent pensionable area, and that is to be welcomed. Compare that to the New Zealand economy which the Progressive Democrats present as its ideal economy. Between 1991 and 1996, New Zealand created 200,000 new jobs, most of which were part-time. At the same time, 165,000 jobs were lost, virtually all of which were full-time. That is the economy being put forward as a model we should follow, whereas we are creating new jobs and reducing unemployment. Over the past 12 months, unemployment levels have reduced by 18,900. That is the first time this has happened and it never happened during the Fianna Fáil-PD Government.

In New Zealand, the official statistics consider a person as being in employment if he or she works one hour per week. One can see, therefore, the way in which statistics can be manipulated. One hour's work per week is sufficient to officially classify a person in New Zealand as being employed. Tuition fees for third level education have been reintroduced in New Zealand, but we are going in the opposite direction, as we have abolished tuition fees for third level education. Inflation rates have gone up and mortgage interest rates are also very high. In 1993 mortgage rates here had reached the inflationary rate of 14 per cent. They are now less than 7 per cent, and the Trustee Savings Bank has introduced a special lower interest rate for first time mortgages. We are being advised by the Opposition that we should go down the road taken by New Zealand. During the debate on the Organisation of Working Time Bill Fianna Fáil and the Progressive Democrats argued strongly for an across the board opt-out clause in the manner of the British Government, which did not sign the Social Charter, and, rather than having a highly skilled well paid workforce we should adopt the Hong Kong or New Zealand model. That is not the way we should go and it is important that the trade union movement should know precisely what is being suggested by the Opposition.

Partnership 2000 is an integral part of the overall policy in the Finance Bill. This is the broader picture in which a partnership deal has been done over a three year period with all the social partners to ensure stability in the market place and the continuation of the progress up to now. There is provision in Partnership 2000 to look at the question of a basic income which is something I would certainly like to see carefully examined. The Conference of Religious of Ireland recently published a document on the issue indicating it might be possible to consider that option more seriously. I am not sure whether the figures would work out as proposed, but it is an interesting option and would result in considerable benefit if we were able to pursue it. The Partnership 2000 initiative is the first to get the full support of the Irish Organisation for the Unemployed, that is a very welcome contribution to the social partnership.

As to the specific measures in the Finance Bill, it is welcome that the Minister has proposed that VAT on child care services will not be operational. It is an area where there is much scope for State involvement in terms of assistance. I would like to see the State eventually providing a range of national pre-school and child care services. I am not sure whether we are in a position to go down that road, but we are in a position to recognise the importance of child care and give it the tax relief benefits it requires, and the Minister has begun this process in the Finance Bill.

I am also pleased there are tax breaks for film production which have already resulted in further announcements of major film making and film production here to take place this and in future years.

I am pleased that tax breaks are given to restructure companies in difficulties. That is a very sensible approach because too often companies in financial or trading difficulties have had to go into receivership. Now they will be able to benefit from tax relief until they return to full competitiveness in the market.

I am delighted that the Tax Consolidation Bill will be introduced soon. Much work has been done to close off the many loopholes in this area. In this Finance Bill and in the budget that preceded it, the Minister has taken the combined approach of giving corporate tax breaks and tax reductions, widening the tax bands and, at the same time, ensuring that the economy is put on a competitive footing and is not overheated.

Specifically in regard to the Dublin area, we have to look carefully at areas that might be described as unemployment black spots. Long-term unemployment remains a stubborn issue with which no Government has successfully dealt. It exists in rural areas but more particularly in urban areas where there are greater concentrations of local authority housing in certain areas. This is the case in my constituency to a substantial degree. My constituency has been beset in the past with major drug problems. Over the past few months we have seen how an area can be undermined and scourged by the problems of drugs and joyriding. All that is part and parcel of an overall problem of lack of services and facilities and unemployment. Areas like that, which are almost ghetto areas, need a particular tax break in terms of the people there rather than on the basis of property, on the basis of which tax relief and designated status has been given in the past. Perhaps the Minister will consider introducing an amendment to the Finance Bill with a view to designating some areas in the city on a pilot basis where emphasis could be put on giving tax breaks to an enterprise culture that would provide local employment rather than on the basis of property per se. I commend this Bill to the House and congratulate the Minister on its content.

I wish to share my time with Deputy Andrews.

I welcome the opportunity to make a few comments on this Finance Bill. It amuses me that in introducing each Finance Bill Ministers for Finance always say that they are happy to be able to say they have made further inroads into the tax bills of the hard-pressed taxpayers. This year was no exception. We heard nice words about the unfortunate PAYE taxpayers and were told that their burden would be reduced. Within weeks of that, the same Minister for Finance, Deputy Quinn, boasted a 15 per cent increase in the tax take for the first quarter of this year over the same period last year. The only logical conclusion of that is that the 15 per cent extra tax was paid by the ordinary taxpayer. The burden has not been reduced but increased quite dramatically by 15 per cent. Let nobody pretend that this is because more people are employed or that it is due to other factors. Figures relating to the long-term unemployed were released recently and, unfortunately, they are more acute than ever.

Despite the regular grand announcements about additional jobs and extra employment I found what I suspected when I put down a parliamentary question recently concerning employment in Cork. Cork was neglected and very shabbily treated. For instance jobs were not provided in west Cork by Forbairt. That is not good enough. The good citizens of Cork south west in the towns of Kinsale, Bandon, Clonakilty, Dunmanway, Skibbereen, Bantry and Castletownbere pay their taxes and deserve a fair share of the cake. An opportunity has been missed. Net spending has unfortunately been increased in this year's Estimates by 6.5 per cent, three times the rate of inflation.

I concede we have a buoyant economy with low inflation, a good growth rate and low interest rates, but it must be acknowledged that it was built up painstakingly under Fianna Fáil-led Governments from 1987 onwards. It is a pity current spending has been allowed to increase by more than 20 per cent against cumulative inflation which was less than 6 per cent in the period from January 1995 to December 1996. The national debt of £30 billion is at an all time high. It has been pointed out in a number of studies that it would greatly help the economic performance of this country if it were reduced. Regrettably, the opportunity to do that has not been taken.

I was honoured to serve as Minister for Agriculture, Food and Forestry along with Deputy O'Shea as Minister of State and I acknowledge the contribution made to the food industry by him during his time in the Department. He was a loyal and valued colleague. Regrettably, over the past 18 months there have been difficulties in agriculture, food and forestry. We have lost our way and are in a deep malaise. Cattle and beef prices are at their lowest for 20 years while milk prices are at their lowest for 25 years which affects the entire co-operative and plc sector. Yesterday, Golden Vale, a star performer in the agri-food world, announced its profits had decreased dramatically and, of course, so had farmer incomes. Following its annual general meeting, it stated the workforce would have to be trimmed down substantially. This did not have to happen. Avoidable mistakes were made. Inactivity was the order of the day. Making fine statements and appearing at nice photocalls is not what managing the Department of Agriculture, Food and Forestry is about.

For example, Irish Governments have on a consistent basis used their fine contacts to very good effect since we joined the EU. We lost our way in Brussels. I need only refer to the past few months where there have been two disastrous cuts in export refunds totalling 17.5 per cent and three disastrous revaluations of the green pound totalling 8.75 per cent. It should not have happened but did at a particularly bad time. Export refunds are vital as we have to export more than 80 per cent of what we produce.

Outside the EU, we have allowed ourselves to be shut out of vital markets in north Africa and Russia. For example, when Deputy O'Shea and I were in charge of the Department, more than 372,000 head of cattle were exported in 1993 while this figure increased to 400,000 in 1994. For the first quarter of this year that figure is down to a trickle, 15,000 head. We have been excluded from the Libyan, Egyptian and Iranian markets and beef from eight counties has been excluded from the Russian market. No effort is being made to restore these vital markets and no visits have been made to the countries involved. The Minister for Foreign Affairs has not met the very important trade commission with Iran. The last time he did so was in 1994. Farmers, workers in the agri-food business and the general economy deserve better. I am deeply concerned about the development of our primary indigenous natural resource. However, in its editorial this week, the Irish Farmers' Journal, which is found in every farmhouse in Ireland, stated:

The collapse in beef prices that has followed last week's revaluation and cut in export refunds is the clearest indication yet that we have lost our way in the day to day dealing with Brussels and its critical management of the beef market. There is no point in repeating the arguments of last week: the fact that at least three quarters of our steers go to third countries and so our unique vulnerability to export refund changes; the fact that we are effectively denied access to EU mainland beef markets—-; the fact that we have no live trade to give even a semblance of competition; the fact that beef at this time of year is at its most expensive to produce. Ultimately, the blame for this debacle has ended up on the desk of Ivan Yates. It will take more than recycled compensation announcements to quell farmers' anger and sense of betrayal this time.

There is a crisis. I call on the Government to meet farm leaders and embark on an immediate campaign to restore vital export refunds in Brussels and to pay compensation which was promised by the Minister to the IFA in the Davenport Hotel, Dublin, on 8 February 1997. There is also an explicit commitment to the payment of compensation in the Partnership 2000 programme. It is vital this is done not alone for farmers and the agricultural industry but for the entire economy.

The Finance Bill is governed by an internal contradiction. On one level it sets out detailed proposals on tax based investment and corporation taxes that are designed to subsidise investment in one of the fastest growing economies in Europe but on another it has ensured in an era of increased tax and value added tax receipts the Government will not make any significant concession to the ordinary man or woman.

I am talking not only about meaningful reform in income tax for those who have brought about this so-called boom, but of provisions that would improve the quality of life, provide more and better opportunities and ensure that every citizen could live in the dignified manner promised in our Proclamation of Independence. The Bill lays the foundations for an internally divided country. It recognises the growth of the so-called Celtic Tiger, but ignores the need to ensure that all sectors of society benefit. As such, it reflects the real danger that the effects of recovery will be distorted.

In recent years, the process and function of budgets and Finance Acts have undergone considerable change. They are no longer peculiar to any one year or mere lists of financial provisions and proposals. Just as the growth we are currently experiencing cannot be put in separate boxes and labelled "1997" and "1998", the policy that governs the growth must be long-term. The Finance Bill does not reflect this kind of integrated long-term approach and its encouragement of a divided society is an act of economic and social vandalism.

The Bill specifically exempts all regulated child care facilities from VAT. I need not remind the House that these provisions were included only as a result of considerable opposition to the original proposals the Minister for Finance announced in his budget last January. I commend the Government on its U-turn, but I also want to draw attention to a more fundamental point. That VAT on child care services was mooted in the first place shows how out of touch the Government is with the position of single parents who have to go out to work or of two parents who have to work to meet enormous mortgages. Child care facilities are a necessity, not a luxury. For many they are as central to family life as education and health. It is pointless claiming that low interest rates can help such families if at the same time mortgage relief remains unchanged and, more pointedly, if housing inflation in Dublin runs at more than 20 per cent — the official figure released on 3 April, It is pointless trumpeting a growing economy if certain sectors of our people are becoming worse off or if their needs, and those of their communities, are not recognised in the major financial legislation we consider each year.

When talking about Structural Funds we should recall why they were introduced in the first place. Jacques Delors quite rightly recognised that if the European market, and the various systems that underpin and inform it, were to have a realistic and integrated life, regional and sectoral imbalances would have to be addressed. The same applies to the Celtic Tiger. If we do not ensure the national cake is more equitably divided when the Exchequer has more money in its coffers, our recovery will be very lopsided. As currently drafted, the Finance Bill does not suggest that kind of vision and if the underlying philosophy does not change, the Government will continue to sow the seeds of future trouble.

The problems are evident for all to see, most notably in the areas of education and crime. I was not surprised to hear that apart from the loud objections to the Education Bill, many of the substantive motions concentrated on the lack of funding for the new problems — if I can call them that — a new educational environment is bringing out. For example, at the INTO Congress in Killarney, the delegates complained that the schools' remedial service was being run on a shoestring and being held together by a group of dedicated but grossly overworked people. Despite the need for such a basic service, the economic boom is certainly by-passing these teachers and schools, 900 of whom have no integrated remedial service. Following the introduction of the Finance Bill, they will still have cause to complain.

In recent weeks, much has been written about how best to deal with the increasing crime rate. Fianna Fáil published two documents on this issue, the second of which lists a wide range of proposals on crime prevention, including the provision of resources for community organisations and services, as well as incentives on community renewal and development. These must be priorities in Government policy. If this rising tide, about which we hear so much, is to lift all boats, our spending policy must be directed not just towards the Maastricht criteria, but towards renewing our social fabric. In this regard, the Finance Bill is sadly lacking.

Against this background, the tourism sector is all but ignored. This is one of our fastest growing industries, but it is also an area that can help to renew communities, especially in rural areas. Some time ago many of these communities were being devastated by emigration. Today, they are still under threat from an unpredictable and changing economic climate which the current Bill does little to clarify.

The Finance Bill is short-sighted and restrictive. It provides no framework or reference point for a broader agenda of renewing the social fabric of our country. Instead, it provides a recipe for community decline. It may mask itself in the "feel good" statistics of consumer spending and increased tax receipts but, as the legislative instrument of the budget, if it does not ensure Government policy halts the increasing internal division in our country in the longer term, it will fail the Government and the people.

Wealth has its place in society. Constructive and productive wealth creation is necessary to ensure the strength of industrial development and the security of jobs. However, when it is flouted and used as a slogan to claim rich is good and poor is bad, society had better be careful. When certain elements of the media seek to glorify and deify the rich it causes immense problems in our community. The haves and have nots syndrome causes immense and unnecessary tension and this was reflected in a newspaper last weekend when wealth was glorified. That is unacceptable. While wealth is necessary, I deplore the actions of a section of the media to glorify it.

I want to highlight a problem regarding the Celtic Tiger, on the one hand, and the subculture of poverty, on the other. On Sunday morning I visited St. Joseph's House for Adult Deaf and Deaf Blind. That institution, which is well managed by the Dominican Sisters, was established in 1965 and caters for 42 people. The sisters told me three patients have been denied partial disability allowance. Why are they being victimised at a time of economic boom? Their request for partial disability allowance is under appeal in the Department of Social Welfare and I do not wish to prejudice the possibility of them receiving the allowance. However, this matter highlights the difference between the haves and the have nots and it is a mystery how it can happen in 1997. The system must be radically reviewed. I have written to the Minister about the three cases and, as a passionate person, I am sure he will give serious consideration to the matter.

Drugs, crime and a lack of local authority housing cause a number of problems in my constituency. I would appreciate if the Minister for Justice would bring to the attention of the Minister for Health the problems that will arise when a GP in Dún Laoghaire retires from his practice after many years of dedicated service to the community. He prescribes a number of chemicals, including methadone, for drug addicts and a local pharmacy dispenses medication to approximately 80 such addicts each week. The GP in question deals with between 240 and 400 addicts per week and will retire in the near future. It is crucial that the Minister for Health appoints another GP to the community to ensure the service continues.

While a clinic must be set up to deal with the serious drugs problem in Dún Laoghaire, it should not be located in a shopping centre or built up area. Dún Laoghaire suffers from a serious drug problem. I would strongly support any efforts to ensure that drug pushers are put in jail, where they should be, but that drug addicts are dealt with in a kind, compassionate and decent way. Hope should replace hopelessness, and compassion should replace despair as far as they are concerned.

I wish to address the proposed changes in the Finance Bill for the film industry. The proposals have been trumpeted by the Minister for Arts, Culture and the Gaeltacht, who has engaged in his usual soft focus public relations. However, the reality of the actual changes are much different.

The film industry will not get the major boost in big budget productions, as the Minister has claimed. Film finance intermediaries have said the Minister for Finance's increased tax relief on films with budgets of up to £15 million will not attract major Hollywood players back to Ireland. One financier has said there are very slim hopes of getting more big budget productions back here. He has said the measures fall way short of what would have been required to get big budget films.

We have the technical structures to attract these types of film but the legislation is not geared to encourage the individual to invest. This has been echoed by many tax partners in the major accountancy firms. One has said the changes are likely to have little practical bearing. Another has said the changes will not produce any improvement in the return available to the corporate sector to entice it back into investing in films. He went on to say that the doubling of the limits in the Finance Bill, 1997 in relation to certain films is contingent upon 50 per cent of the funding being provided by corporates. This, he said, will effectively thwart what is being presented as a positive incentive because of the lesser tax break associated with corporate investment film projects.

The Minister, Deputy Higgins, should have more interest in the film industry than just seeing it as a platform for photo opportunities. In our document, Planning for the Film and Television Industry, we criticised the lack of a long-term policy for the industry. We called on the Minister last December to explain why he has not dealt with the most obvious problems in the film industry: those in training and education; in the areas of company and project development; in marketing and distribution. We asked what strategy he had to deal with the current downturn in medium to large film projects, and why there is a delay in putting a film commission in place which could have dealt with, among other things, the bad coverage internationally for the changes in section 35 in 1996. We have never had a response. If these changes in the Finance Bill are absolute, then, unfortunately, the message from those central to the industry is that they will have little effect.

We have outlined the necessity for a ten year plan and we have said that in Government we will work closely with the industry to develop such a plan that will make the industry viable and secure for the future. In our policy discussion document we put forward ideas on training and education, development, production and financing, a film commission, co-production treaties, television broadcasting and the film industry. We also addressed the section 35 issue. We have said that in Government we will continue section 35 after 1999 when it is due to expire and look at extending its use. We also proposed a widening of the relief from production only to include script and project development. We believe tax relief can offer greater opportunities to film and television producers and that a tax regime that would encourage speculative investment in film and television development should be brought forward. This would encourage investors to finance the development of projects and scripts.

As well as tackling these issues, we also put forward proposals for regularising the PAYE regime for the film industry as, currently, different tax districts adopt different practices in relation to it. We also urged greater co-operation between An Bord Tráchtála and Forbairt, and a development of the facilities and infrastructure for the film industry.

Fianna Fáil has raised concern about how section 35 has operated under the Minister, Deputy Higgins. In particular, we asked how section 35 certificates were issued by him to a film promoter at a time when the film promoter involved was experiencing serious financial difficulties. The Minister said that at the time the certificates were issued by him to the promoter there was no substantive information available to his Department indicating that the promoter was experiencing serious financial difficulties. The Minister says that information only became available to him when he had issued a replacement certificate in respect of a project for this promoter.

In the light of this, one must question the type of investigations the Department undertakes before certificates are issued and how it keeps itself informed in relation to promoters. Not one of the productions from this promoter who received section 35 clearance from the Minister has been released and the investors in at least one of them have been informed by the Revenue that their tax relief is to be withdrawn. Staff were left high and dry for their salaries in another episode of this controversy. I believe there should be a full investigation into this matter and into the Minister's and Department's level of knowledge when certificates were issued.

Fianna Fáil believes that responsibility for the stability of the film and television industry ultimately lies with the industry itself. The State can play an important role in developing the industry and responding to changing needs as it becomes more stable. However, the State should not take a leading role as to do so is to ensure political and bureaucratic domination. We, therefore, propose the establishment of an industry think tank that has representation from industry, educational establishments, banks, broadcasters and others representing market interests as well as State agencies. We propose that this body should publish the outcome of its meetings.

Our policy for this industry must avoid domination by bureaucracy. To fail in this is to encourage mediocrity. The State is a facilitator, no more. Freedom, courage and conviction are required for the creative spirit and the entrepreneur to thrive. A successful industry ultimately depends on free spirits. It is our duty as policy makers to play our part in ensuring that space is created.

Other opportunities were missed in the Finance Bill. The same difficulties pertain to my constituency of Clare as those referred to earlier by Deputy Andrews in relation to his constituency. With regard to housing difficulties and jobs, I am sure every Deputy has experience of people asking where jobs are available and what hope they have of getting them. As public representatives we are all disappointed to have to say that, unfortunately, these jobs are not available. Although a good PR job is being done by the Government with regard to job creation, it is important to re-emphasise the point made by my party leader, Deputy Ahern, who said that job creation was no greater now than in 1994.

I want to put on record the difficulties experienced by my constituents as a result of the lack of remedial services in education. Only today I received a letter from the Minister for Education saying that no remedial services will be made available to a number of schools in west Clare, on behalf of which I made representations. There is a lack of psychological services and capital funding for education.

Health is another issue that has not been properly addressed in the budget. My constituency has a higher percentage of elderly people than the national average, but what will happen when they find that the medical care they need is not forthcoming?

I wish to share my time with Deputy Boylan and Deputy McGrath.

I heard Deputy de Valera speaking about the film industry. If oscars were being awarded for the state of the economy we would have won four of them this year. They would have gone to the Taoiseach, the Tánaiste, the Minister for Social Welfare, Deputy De Rossa, and the Minister for Finance, Deputy Quinn, for the way in which they managed the affairs of State for the past two years since going into Government.

"Acting" is the operative word.

I am glad to have the opportunity to speak on the Finance Bill. Everything cannot be done during the lifetime of one Government but this Government has done well since it came to office. It is only half way through its term because the opinion polls suggest the people who will benefit from increased tax allowances and the abolition of water charges and third level fees will return it after the next election. This Government has responded to the needs of the less well off in society.

Certain political parties have criticised this Government. I warn people in the west to think before they vote in the general election. It has been suggested that if this coalition is not returned after the next election, the next Government will be a Fianna Fáil-Progressive Democrats one. People must remember what the Progressive Democrats stand for. They will reintroduce water charges and reduce social welfare payments because their policy is to give the less well off as little as possible. This Government, however, has responded to those who need assistance.

Deputy de Valera mentioned unemployment. This Government has created 1,000 jobs per week in the past year. Everybody wants to be a professional, such as a doctor or teacher. It is difficult to find skilled people, such as plumbers, carpenters and tilers. A small extension was built to my house some time ago and I had to wait seven weeks for a tiler and eight weeks for a carpenter because they were busy. We should teach such skills to young people because everyone cannot be a doctor, teacher or politician. There is a shortage of skilled people, such as bricklayers, because previous Governments did not provide the necessary funding to train them. The Government and FÁS are beginning to realise that apprenticeships will soon be a thing of the past. It is good to have universities and regional technical colleges but we must also teach people skills.

I am delighted social welfare benefits will be paid earlier than usual. However, I am disappointed the seaside resort scheme, which applies to Westport, Achill and Mulrany, will not be extended to other areas.

This morning I heard Deputy Bertie Ahern and other members of Fianna Fáil talking about rural Ireland, although they did not do so when in Government. I am proud to be part of a Government which has reduced the level of emigration. More people are coming back to the west than are leaving it, although this causes problems in housing, infrastructure and jobs. Many Members have spoken about the decline in the rural population over the years. However, that is changing as more people return from foreign lands to take up good jobs. People criticise this country but our social welfare system, infrastructure and hospital services are better than those in other countries. This would be the greatest country in the world if we stopped criticising it. Many people criticised our beef industry during the BSE crisis which had a knock-on effect on those proposing to buy Irish beef. I am glad farmers highlighted the damage this was causing to the industry.

When I was elected to the Dáil in a by-election, the main issues were Castlebar General Hospital, the regional technical college and the country's roads. I am glad the Minister for Health allocated £25 million in the budget for the hospital over the next few years. I compliment the Government for providing £600,000 for the regional technical college. However, we will not be happy until the 500 students who attend the regional technical college on a part-time and full-time basis are accommodated in proper buildings.

When I came into the Dáil I was a member of Mayo County Council and Westport Urban District Council. The first major issue raised at every council meeting by Fianna Fáil members was the county's roads. They had a neck to complain about them, given that their party was in Government for seven years and did nothing to improve them. A record amount of money has been provided for county roads and a ten year programme has been put in place. I hope that whoever takes office after the election will continue that policy to ensure our county roads are improved as they have been in the past two years. I compliment the Government for identifying and tackling that problem.

I am disappointed the seaside resort scheme will not be extended to include towns such as Newport, Louisburgh and the Erris region which would benefit from it. This is a tax incentive, not a grant, so it would not cost the Government money. There is nothing wrong with giving people tax breaks to invest in places such as Belmullet, Erris and Louisburgh, like they did in Achill, Westport and Ballybunion, if the local people do not have the resources to do so themselves. It is good for these towns and for rural Ireland if a proper infrastructure is developed. We must have places for visitors to see and things for them to do when they come. There are many designated tax areas, particularly in Dublin, and I had hoped Knock Airport would be included. The west has benefited under this Government, not under Fianna Fáil. We heard nothing from the Deputy until he went into Opposition.

We did a good job in relation to Knock Airport.

Acting Chairman:

Deputy Ring, without interruption.

I would like designated tax areas to be extended to County Mayo in an effort to create more jobs. There will never be enough jobs, even if 2,000 a week were created.

I am pleased to be part of a Government which has delivered to the west. I will send a copy of the "Ring Times" to Deputy Matt Brennan to show him that £200 million has been delivered.

There are no jobs.

I am sure Deputies Nealon and Boylan will send the Deputy copies of what is being delivered in Sligo and Cavan, respectively. The people will respond to good representation when the election is called. They know what it is like to have good representation in Dáil Éireann. I am confident that three out of five of the Government candidates will be elected in County Mayo and three out of four, including Deputy Bree, elected in County Sligo. I wish to share the remainder of my time with Deputy Boylan.

I thank Deputy Ring for sharing his time with me. The Deputies opposite should heed his warning.

I am delighted to have this opportunity to make a brief contribution to the debate and to review the Government's work during the past two and a half years as we enter the last six months of its programme. We compliment the Government on its work as people, in general, are more than satisfied with the way it has managed the affairs of the country during the past two and a half years. Many were taken by surprise but those of us who are close to the principal players in the Government knew that they had the ability and that it would only be a matter of being in a position to show their abilities and skills. They are capably led by the Taoiseach, Deputy Bruton, whom we knew to be an honest and decent man when we elected him as leader of our party. That has proven to be the case as people have come to know the man and how he operates. Honesty and decency are important principles at this time in the development of our country.

If people are asked what has brought about the remarkable change in the past two and a half years, the two words that come across are "confidence and trust". People have confidence and trust in the Government. The days of the nod and wink and backslapping politics are gone. They are out of date. Decisions made by multinationals to invest here are made on the basis of hard economic factors. For decades Fianna Fáil promoted this country as a misty isle where one might discover a four leaved clover or shamrock, leprechauns and other such nonsense. That is as out of date as the ass and cart is to modern day farming. The Government must sell the country as a place where it is safe to make an investment which will yield a return. Those are the decisions being made in boardrooms, not only annually or every six months, but weekly. We hear weekly announcements of major companies, which do not have any ties with this country, investing here. They view this country as the in place to invest, a gateway to Europe and we have a Government that can maximise that opportunity. Our young people are the benefactors of that investment. Thousands of jobs are being created. Many people are surprised our young people have the necessary skills to take up those jobs and many companies which have invested here were surprised they have such skills. Credit for that lies with our education system, particularly regional technical colleges which produce graduates with computer skills. Many companies are major employers in the production of microchips and computer hardware and software. We have the ability and the skills to provide workers for the computer industry. Those companies are satisfied, otherwise they would not continue to invest here in such numbers.

Fianna Fáil Deputies are the best of people in many respects, but their attitude that it would have happened anyway annoys me. That attitude shaped its policy in Government. Its attitude is that tomorrow will come anyway, but that is not good enough. We know tomorrow will come, but we must plan to make the most of tomorrow. That is where this Government has shone. Plans were put in place and it had the vision to know where to direct the country and the economy. It has been a success and I compliment it. I complimented the Taoiseach for whom I have always had admiration. My party as the senior partner in Government is capably supported by the Labour Party and Democratic Left and capably led by the Tánaiste and Leader of the Labour Party, Deputy Spring, and the Leader of Democratic Left, the Minister for Social Welfare, Deputy De Rossa, for whom I have a high regard. The Government parties are working as a team and will continue their programme of work. I hope the Government will continue in office until next October to enable it to finish its programme, to show the people that this team can work together and that this is the type of Government we will have in the future. I have no doubt that when it comes to the secrecy of the ballot box the people will renew their confidence in the Government returning the majority of seats to Government Deputies to enable them to continue their good work.

Agriculture is the bedrock of the economy of Cavan-Monaghan and of the rest of the country. There is a problem concerning the cattle industry. It is not of our making, but arose as a result of a major blunder in the House of Commons more than 12 months ago with the BSE scare, which was blown out of all proportion. It undermined our agricultural economy and beef trade for which we are renowned worldwide. Third World and European markets were closed off to us, but thankfully we are now recovering from the worst effects. Unfortunately, cattle prices to beef finishers fell after Easter and there is no reason for 80p and 78p per lb being quoted. The factories can pay more. I have no hesitation saying here or outside the confines of this House, where some people may think I have protection, that a cartel is operating. That is not good enough. Farmers are entitled to more because the factories can pay more and farmers should have a sufficient return to make profits for their various enterprises. The sum of 85p and 86p per pound is a realistic price that should be paid. While factories have the advantage now. Third World countries will reopen and farmers will not forget how they were treated by the factories when doors were closed to them and they had no other outlet. The factories should note that warning and be careful about how they treat farmers. They should increase their prices to a realistic level to give a return to farmers who made an investment and bought cattle.

Regarding pollution grants, our environment is vitally important as is the control of farmyard pollution. Our rivers, lakes and streams are not only important to the farming community but to the tourism industry, including fishing and the enjoyment of those on holiday. Protection of the environment can be assured only through good methods of dealing with farm and all other types of waste. Pollution control grants have been stopped since April 1996. Thousands of young farmers through no fault of theirs have not applied for a grant. Some were not in a financial position to do so and others did not have control of the farm. Pollution control is an ongoing process. Under the farm retirement scheme elderly farmers can retire and hand on their farms to younger men who have been locked out of access to these grants. Will the Minister of State stress when he talks to the Minister for Agriculture, Food and Forestry that investment in this area is very important not only to protect the environment, the principal reason for the scheme, but also in terms of the spin-off of jobs created in the process? It ensures farms are tidied up and they can be a place of enjoyment. Farmers with small holdings are seeking alternative enterprises.

My constituency is renowned for the poultry industry which is experiencing problems, which I hope will be minimal. It is also renowned for the mushroom industry. Tourism could play a major role as an alternative farm enterprise including farmhouse holidays and the renovation of old homesteads on farms through the use of skills, to which Deputy Ring referred, into holiday homes, chalets and that type of development. There is a major opportunity for farmers to become involved in tourism development. I tell farmers this is a good enterprise, but the farm environment needs to be tidied up to ensure that people feel safe walking around the farm.

The care of the elderly must be high on our agenda as they have worked and handed on this country to us in its present fine state. There is a major problem in relation to cutbacks on home help. Old people like to live where they grew up and to die in their own home. In the past there were many sad cases where people were taken out of their home environment, away from their families and put into a nursing home. I accept nursing home care is very good, but many of the elderly who were moved to nursing homes must have died very lonely people. We now realise elderly people like to be in their own home and independent, and they can be. The system has changed with the development of mod cons. No matter how handicapped a person is he or she can cope with the assistance of push button equipment. Home help is vitally important to care for the elderly. I ask the Minister of State to consider this matter.

As a Deputy from the Border region, I appeal to the men of violence to stop the nonsense, to bring peace and restore the ceasefire so that the country, North and South, can grow and benefit from the great opportunities referred to. The men of violence are doing a major disservice to everybody involved, even those whom they claim to represent. I appeal to them to restore the ceasefire immediately. I wish to share the remainder of my time with Deputy McGrath.

Debate adjourned.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.