I wish to share my time with the Minister for the Marine and Natural Resources, Deputy Woods.
Financial Resolutions, 1998. - Financial Resolution No. 9: General (Resumed).
Debate resumed on the following motion:
THAT it is expedient to amend the law relating to inland revenue (including value-added tax and excise) and to make further provision in connection with finance.
——(Minister for Education and Science)
Is that agreed? Agreed.
I am delighted to have an opportunity to contribute to the budget debate which has such important ramifications for the economy, including those sectors for which I have ministerial responsibility at the Department of Public Enterprise. The budget contains initiatives of relevance to those sectors. I welcome the fact it successfully delivers on the commitments made in An Action Programme for the Millennium to exercise careful control over Government spending and borrowing to protect and develop Ireland's burgeoning economy over the longer term taking account of developments internationally, including the challenge of EMU participation and the status of EU Structural Funds after 1999.
The economy is experiencing a period of sustained economic growth on an unprecedented scale which, with continued prudent management by Government, will provide a prosperous future for people well into the new millennium. The Government is committed to supplying the necessary stability throughout its time in office and this budget is evidence of that commitment.
The live register is probably the single most important barometer of economic performance for most people. However, while the ever shrinking dole queues are to be whole-heartedly welcomed, we must not forget that dole queues in many areas are still long and will only be further reduced through a continuation of the tight management of the economy and finances to which the Government is committed. Above all we must guard against any sense of complacency which the prevailing economic climate might otherwise encourage.
I have a special interest in how the budget impacts on my responsibilities and it is this aspect to which I turn. My ministerial responsibilities extend across a diverse range of areas in the transport and energy sectors, including road freight haulage, travel trade bonding and licensing, nuclear safety issues as well as the gas and renewable energy markets and energy conservation. In addition I have responsibility for Met Éireann, the Irish Aviation Authority and Bord Gáis Éireann.
The road haulage industry will be satisfied with the decision of the Minister for Finance not to raise the level of excise duty on diesel which comprises a significant element of road freight costs. This decision will maintain competitiveness in an important industry which plays a key role in the movement of goods nationally and internationally. Unfortunately, as recent events on the other side of the Irish Sea have again underlined, this industry and Ireland's import and export trade are subject to unauthorised obstruction and disruption on an increasingly frequent basis. It is a most unsatisfactory and unacceptable situation.
Once more an internal dispute in another country has concentrated on road freight transport to highlight the grievances of those concerned. Deputies will not need long memories to recall a significant number of such disruptions in the very recent past. I refer to some of them — French farmers destroyed perishable cargoes bound for Paris markets on a number of occasions during 1993, 1994 and 1995; French fishermen blockaded ferry ports in the north of France during 1996; the French lorry drivers' strike in November 1996; Danish lorry drivers blocked roads on the German border in support of claims in 1996; Greek farmers blocked roads seeking higher prices for their produce in December 1996; the French drivers' strike last month and the current situation at Holyhead and other ferry ports serving the Irish Sea.
This is an extremely disturbing trend, particularly for Ireland. In a country so dependent on trade for its economic lifeblood, the ability to move exports to our main markets is of paramount concern and imports of raw materials are also vital. As a small island nation, we are very reliant on road freight transport to enable us to trade successfully. The recent trend towards disrupting transport links is very serious as road transport is seen as an easy target in all manner of disputes and it is becoming increasingly difficult for Ireland to benefit from the internal market. The combination of driving bans throughout Europe and third party internal disputes is making it more difficult to move freight by road freely.
The frequency of these disputes in recent times constitutes a crisis for the internal market. If the Single Market is to mean anything, a way of ensuring free movement of goods must be found. We cannot continue to allow a central principle of the EU to be violated in this way. The Minister for Public Enterprise, Deputy O'Rourke, and I have made this point very forcefully to Commissioner Kinnock on a number of occasions during the French lorry drivers' strike and the current situation in the UK. The Minister will use today's Transport Council in Brussels to express our serious concerns to the Commissioner and other transport Ministers.
Apart from the contacts the Minister and I made on the current dispute, the Government is making every effort to impress on the UK Government the need for a speedy resolution. The Taoiseach raised the matter with Prime Minister Blair and the Minister for Agriculture and Food went to London to speak to Mr. Jack Cunningham, Minister for Agriculture in the UK. I am pleased that there are some indications that the Government's efforts are beginning to meet with success and that Irish beef exports are getting through UK ferry ports. It is gratifying that goods moved freely during the past two nights and the British police appear to be doing their job.
There has been one other development of relevance to this situation. The European Court of Justice, in a recent judgment, confirmed that member states must adopt all necessary and proportionate measures to ensure the free movement of goods. I hope other member states have noted the judgment and will meet their obligations in this regard.
I refer to energy issues. Few people can have failed to notice the media coverage of the climate change conference in Kyoto over the past two or three weeks. It will have affected us at many different levels. For some it simply holds a passing interest but, for others, its outcome is key to the global environment to be bequeathed to the next generation. I have specific responsibility for the development of Ireland's renewable energy resources and for our energy efficiency programme and, therefore, I have maintained a close watching brief on developments at Kyoto.
Sustainability is a byword which encapsulates what Kyoto is trying to achieve. Sustainable development is not a "no growth" policy, but one which seeks alternative ways to grow. The goal of sustainable development cannot be realised without some changes in the world's energy system. Sustainable energy development cannot be achieved without new thinking, policies and programmes to increase the contribution of environmentally benign, cost effective energy systems, especially renewable ones or without Governments taking the right policy decisions.
The generation of electricity from fossil fuels, such as coal, oil and gas, produces a range of atmospheric pollutants and greenhouse gases which can cause environmental damage. The most significant of these pollutants is carbon dioxide. Approximately 1 kilogram of it is produced when 1 kilowatt hour of electricity is generated from fossil fuels. The generation of electricity from renewable energy sources produces no harmful emissions. A considerable proportion of existing electricity supply from fossil fuel electricity stations could be replaced with renewable energy with an associated decrease in carbon dioxide emissions.
In the context of the ongoing Kyoto discussions, the EU set a 15 per cent carbon dioxide emissions reduction objective as a negotiating position. Recently the European Commission published a White Paper on renewable energy. It is an ambitious strategy to double the amount of renewable energy in the EU by 2010 considering that at present the contribution of renewable energy is 6 per cent. The White Paper also contains estimates of the carbon dioxide emissions reductions resulting from targeted renewable energy development. The estimated figure of 402 million tonnes per year represents almost 50 per cent of the reduction in emissions required to achieve the 15 per cent reduction target. The White Paper also quantifies job creation in the renewable energy sector of 910,000 new jobs and annual savings of 3 billion ecu in imported fuels are also quantified.
The target of 12 per cent is eminently realisable in Ireland which has significant renewable energy resources but the sector needs to be stimulated into action. There is considerable inertia resulting from a number of factors which have been identified by various EU funded studies and by the renewable energy information office. One of the most important barriers is the attitude of financial investors to the sector. Renewable energy is a relatively new business area in Ireland and a certain aversion to risk is understandable. The initiative announced in the budget will address the financiability of frontier energy technology and will assist Ireland to contribute towards achieving that European wide goal of harnessing renewable energy sources and carbon dioxide reduction. It will also help to strategically position Ireland to get its share of the employment potential of renewables. The budget provides that tax relief will be introduced in the Finance Bill for corporate equity investment in wind energy and biomass projects which are approved by the Minister for Public Enterprise. Under this scheme of tax relief, up to 50 per cent of the total cost of a project may be financed under the scheme. This is subject to an overall cap of £7.5 million for the project and a limit of £10 million per annum will apply to the amount which any one company, or group of companies, can invest in all qualifying projects in a year.
Energy use is without doubt a significant contributor to global warming and climate change. Renewable energy is one of the few forms of energy whose continuous use is sustainable. Ireland has a large reservoir of renewable energy, such as wind energy. This scheme is timely in a week when the attention of the world is rightly focused on the Kyoto Conference. This initiative is a loud and clear statement of Ireland's intention to play its role in addressing the global problem of climate change, probably the single biggest environmental challenge facing the world.
In view of the four alternative energy requirement competitions already in place, there can be no doubt about the Government's commitment to sustainable energy development. The £5 million which it is estimated this initiative will cost in 1998 is, in every sense, an ethical investment in the energy future of the next generation.
While we continue to strive to develop alternative energy sources we are highly dependent on fossil fuels to meet our energy requirements. One of the most important indigenous fossil fuels is natural gas which accounts for 20 per cent of our total primary energy requirements. The Irish natural gas industry is a dynamic one. A total of 285,000 customers are served with natural gas, including 10,000 customers in the commercial and industrial sectors. Gas demand grew by 5 per cent in 1997 and next year a growth of 4.5 per cent is projected.
Because of the growth in gas demand, I have initiated a study into future gas needs up to the year 2025 to ensure that any necessary infrastructural development is identified and put in place in good time. The study is a joint project between my Department and Bord Gáis Éireann.
This study is timely because our only indigenous gas reserves at the Kinsale Head-Ballycotton field are expected to expire in five or six years' time. In the absence of further indigenous gas finds, Ireland would then be totally dependent on imported gas from a single supply source — the undersea interconnector from Scotland. Imported gas through the interconnector accounts for some 30 per cent of our total gas consumption. This percentage will increase as the depletion date of the Kinsale Head-Ballycotton field approaches.
A joint North-South study of the feasibility of providing a natural gas interconnector between Dublin and Belfast was completed a few months ago. The report concluded that such an interconnector is technically possible and represents the most cost-effective solution in relation to gas supply issues for both sides of the Border. The report is a valuable contribution towards policy making in relation to gas infrastructure requirements. It represents an excellent example of cross-Border co-operation in the energy sector involving officials from my Department, the Northern Ireland Department of Economic Development, Bord Gáis Éireann and Phoenix Natural Gas Limited. Its findings are being studied by all parties concerned.
One of the key priorities for the energy sector in the Government programme is to extend natural gas as far as practicable to major towns and cities. I am happy that the following towns which do not have a natural gas service are included in Bord Gáis Éireann's study for the extension of supply; Kinsale, Bandon, Fermoy, Carrick-onShannon, Navan, Portlaoise, Athy, BallinaKillaloe and in north County Wicklow, Kilcoole-Newtownmountkennedy.
Surveys of the load potential for the residential and commercial markets in these towns are ongoing and should sufficient loads be identified for each extension to be economically viable, the project will be included in the Bord Gáis programme. Some other towns may be included in the programme should the extensions to them be identified as economically viable. Bord Gáis is arranging also gas supplies to the towns of Mitchelstown, Mallow, Cobh, Annacotty, Ashbourne, Bettystown, Clane, Kildare, Dunshaughlin and Ratoath.
A proposal for a major extension of the gas network to the midlands and the west to provide gas to Trim, Mullingar, Athlone, Ballinasloe, Galway, Ennis and Shannon, with the support of Exchequer funding, is under consideration. The necessary notification to the EU's Commission's Competition Directorate in relation to the State aids aspect is still being examined in Brussels and my Department is in contact with the EU Commission in that regard.
Earlier this week I participated in a meeting of the EU Council of Energy Ministers at which the principal item under consideration was the establishment of common rules for the internal market in natural gas. Agreement was reached on the terms of a directive which introduces competition into the natural gas industry in the form of third party access to gas networks throughout the European Union. As a result consumers of large volumes of gas will, in future, have the choice of buying their gas supplies direct from gas undertakings as at present or in buying their gas from other suppliers and having it transmitted through the network for a fee. Ireland has already provided for this form of competition and the necessary detailed operating and pricing rules are being developed. The EU Directive is broadly in line with Ireland's domestic legislation.
The directive also provides a mechanism to encourage investment in the development and extension of the gas network to new areas. Ireland had insisted on this provision from the outset. The provision will be of relevance to areas such as the midlands and the west, which have as yet no natural gas service.
The environmental and public safety implications of the UK's nuclear industry, and British Nuclear Fuels operations at Sellafield in particular, have been a cause of serious concern to successive Governments as well as this House. Recently I met my UK counterpart, Mr. Michael Meacher, MP, Minister for the Environment, for an exchange of views of Sellafield and related matters. Mr. Meacher acknowledged the longstanding concerns about nuclear matters and stated that the UK Government shared many of these concerns. I look forward to further contacts with him and I will watch with interest the evolution of the new UK Government's thinking on the nuclear industry and radiological protection.
The House will be aware of the wideranging operations carried out at the Sellafield plant. These include reprocessing, high level waste storage and fuel fabrication activities. This number of activities on a single site increases the possibility of an accident occurring and, due to its proximity to Ireland, represents an unnecessary risk to the health and safety of the Irish population.
My Department will continue to monitor nuclear proposals and developments in the UK. Some immediate issues of concern are BNFL's application for a variation to Sellafield's discharge authorisations; recent reports of steep increases in the levels of radionuclide technetium-99 in lobsters and other shellfish in areas of the Irish Sea close to Sellafield; BNFL's proposals to commission its mixed oxide fuel fabrication plant at Sellafield; the four ageing magnox reactors at the Calder Hall plants and the storage of highly radioactive liquid waste in tanks at Sellafield. I will continue to use every opportunity to articulate to the UK authorities, Ireland's views on these specific issues of concern.
I congratulate my colleague, the Minister for Finance, Deputy McCreevy, for a measured and equitable budget. The 1998 budget provides a solid foundation on which the economy can successfully build in the year ahead.
The closure of the Seagate operation and the loss of 1,400 jobs in Clonmel comes as a great shock to us all. My sympathies go out to all who have entered into a period of painful uncertainty about their future because of this tragic and sudden decision. I join the Taoiseach and the Tánaiste in assuring all concerned that the Government will do everything possible to put in place new opportunities for employment and bring back confidence in the future for all those who are facing the trauma of sudden unemployment.
The suddenness of the decision to close is a shock to us all. It will inevitably create unease among employees across the country that they might be exposed to similarly sudden closures with decisions being made elsewhere and having regard to global factors beyond our control. While these fears are essentially unfounded, the closure reinforces the view that we must strive to balance the necessary reliance on big inward investment projects with greater efforts to create well anchored employment through developing indigenous resources whenever and wherever we can identify the opportunities. There are opportunities in abundance. The marine and natural resources sector alone employs almost 70,000 people in relatively stable and well grounded jobs. There is potential for much more. Bringing these jobs into being is painstaking and difficult but once in place they are often grounded in a highly marketable resource and strongly committed people. I intend to address during the next six months or so how we, as owners of valuable and largely untapped marine, coastal and other natural resources, can create jobs anchored and embedded in vibrant communities and individuals.
There are major developments in the forestry sector which will create 11,000 jobs. These are outlined in the Government's programme for the development of the sector. The issues and challenges in carrying through these developments will be dealt with by my colleague, the Minister of State, Deputy Byrne.
The budget has three basic themes. All three represent objectives outlined to the electorate in the election last June as priorities. They are control of public spending, reducing the tax burden and acknowledging the contribution of older people to society. The budget is a significant contributor to these aims. Taken with Partnership 2000 and the Government's programme, An Action Programme for the Millennium, we are positioning ourselves for prosperity into the 21st century. The budget is the first step in a five year strategy to deliver on our key economic priorities. Next year will see further progress on the Government's action programme.
I welcome the reduction of 2 per cent in the standard and higher rates of taxation to 24 per cent and 46 per cent, respectively. Gone are the days of the 35 per cent and 58 per cent income tax rates. We will reduce them further. These reductions, with other measures relating to exemptions, allowances and PRSI, underline the Government's determination to reach a ceiling of no more than 50 per cent for all deductions. The budget has made significant progress in meeting the personal tax reduction commitments in Partnership 2000.
The budget gives long overdue recognition to the contribution older people have made to the economic success we are experiencing. The £5 increase in pensions, as well as substantial increases in tax exemption thresholds, will help to ensure older people enjoy their retirement with fewer financial worries. A free travel pass will be provided to all recipients of carer's allowance and eligibility for the companion travel pass has been extended to people over 75 years who are unable to travel alone.
No Government can ignore the fact that, despite our buoyant economy, there are people in society who are not reaping the rewards of our economic success. The significant social inclusion measures announced by the Minister for Finance, with ongoing initiatives across a range of Departments, are evidence of the Government's determination to combat disadvantage and build strong, confident local communities.
From 6 April there will be a new tax relief on personal and corporate donations to disadvantaged schools. There are other improvements in the area of sports and recreational facilities to combat disadvantage. An increase of £7 in the family income thresholds from June and the removal of income tax from the basis of assessment with effect from October are major improvements which further strengthen income support for families in low paid work.
I am particularly pleased that from September child benefit for twins will be paid at 150 per cent of the usual rate. I argued strongly for this in Opposition and am glad to see that commitment being met early in the Government's term of office. It will deliver on its promises in future budgets.
I am pleased to have the opportunity to set out, in the context of the budget, the action I am taking and the investment support strategies under way to deliver on the Government's commitments to the fishing industry. The thrust of policy is to secure and enhance the livelihoods of coastal communities which depend on the sea for their future. In line with the Government's commitments, my key priorities include maximising quota and non-quota fishing opportunities for the fleet, protecting fish stocks, modernising the whitefish fleet, attracting investment in the whitefish fleet, expanding the fish processing sector and ensuring the necessary investment in fishery harbour infrastructure. My overall policy objective is to strengthen the contribution of the fish and fish processing sectors to the economy and their contribution to job creation and growth in coastal communities.
Since taking office I have been working to deliver on the Government's commitment to modernise the fishing fleet. I recently announced a new round of Exchequer and EU supported investment of £11 million in modernisation of the fleet. This investment is aimed primarily at the whitefish fleet to enhance safety as well as quality and competitiveness. I am finalising a new capital grant aid scheme to support investment in a number of new whitefish boats. The available funding under the fisheries operational programme up to 1999 will be utilised to maximum effect.
I am pursuing other measures to facilitate investment in the fleet in line with the Government's specific commitment to make the industry attractive to providers of capital by examining the provision of tax based incentives. I am working with the Minister for Finance, in the context of the Finance Bill, on proposals to deliver feasible measures which will provide the much needed incentives for investment in the fishing fleet with particular emphasis on the investment needs of the white fish fleet.
In line with the Government's commitments to the fishing industry and rural development, I am reviewing urgently the funding requirements for capital investment in key fishery harbours. I will bring detailed proposals to Government shortly. I will shortly announce a new round of grant aid for fish processing development projects. The remaining funds for fish processing under the fisheries operational programme will not be sufficient to fund all projects in the pipeline. I will pursue the scope for additional funding to support capacity expansion in the processing sector which will deliver tangible jobs, value added, exports and revenue.
Within the sea fisheries sector aquaculture is a key component of growing importance. It is a growing industry and accounts for almost 30 per cent of the total value of fish production. Its contribution to the economy continues to grow. The total value of output increased from £49 million in 1995 to £55 million in 1996, an increase of 12 per cent. The future development of aquaculture is critically dependent on modernising and streamlining the licensing and regulation of this valuable natural resource. Work in this area is under way.
There is great potential for the development of our unique inland fisheries. To capitalise on this our superior angling product must be developed and protected. Last week I launched the Central Fisheries Board's five year strategic development plan which sets clear management, development, protection and conservation objectives for our inland fisheries during the period 1998-2002. I particularly welcome the emphasis on maximising jobs and economic activity through further targeted, well spread development of the game, coarse and sea angling components. I look forward to working with the board in delivering on that agenda.
This is an exciting and challenging time for all those involved in maritime transport. The economy is booming. We have brought the standard of ports' infrastructures into the 21st century through well thought out and planned investments. We have seen the quality and volume of shipping services improve beyond recognition on Irish Sea routes. Our shipping companies are seizing good commercial opportunities in international markets. Most importantly, we have provided eight ports with structures and investments which will underpin the continuation of vital high quality transport services to and from the island.
The Government will support and facilitate, in the interest of national economic and commercial development, competitive sea transport and port services. In this context, my Department has set in train a number of important strategic actions. It has set about the initiation of a systematic review of the efficiency and relative costs and charges for maritime transport services at commercial seaports. The purpose is to reach a cumulative minimum of 15 per cent in real terms.
The Government is committed to developing a comprehensive policy for the shipping industry. This policy must be about Irish jobs, that is, jobs on Irish vessels registered under the Irish flag, jobs on other vessels, jobs onshore servicing the sector and, importantly, jobs in expanded maritime activity around the coast whether for leisure, commercial or industrial purposes. For such a policy to be effective in delivering jobs it is essential that the size of the Irish flagged fleet is maximised. A number of measures have been introduced in recent years in the areas of training, corporation tax reliefs and employers' PRSI. I am conscious that the PRSI concession is a particularly valuable one to employers of seafarers within our taxation system. This scheme has been submitted to the European Union Commission and I hope to be able to announce its approval very shortly.
Enhancing the supply of competitive and welltrained Irish seafarers is the key to a successful shipping policy. I have secured the agreement of my ministerial colleague, the Minister for Finance, to consider an income tax concession for inclusion in the forthcoming Finance Bill, aimed at making seafaring, especially on Irish-flagged vessels, more attractive as well as competitive. Thus, the steady encroachment on the seafarers' labour market of low-cost, non-Irish, especially non-EU, seafarers would be reversed. However, a supply of seafarers is one side of the coin only; the other is training.
A task force on seafarer training will commence its work very shortly under the chairmanship of Mr. Brian Kerr, a member of the Council of Shipping, at present holding the prestigious position of chairman of the European Communities Shipowners' Association.
In the area of oil and gas exploration and development there are very significant things taking place, and we expect the present level of research, development and exploration in that area will continue. The year 1997 has been the busiest one for acquisition of new offshore seismic data with in excess of 25,000 kilometres having been acquired to date.
Not only do we have a large number of licences but licensees include most of the major exploration companies. Of course, having indigenous production would provide security of supply, help our balance of payments and contribute to reduced unemployment.
The offshore exploration and production industry is of great importance to Ireland. Its economic benefits — royalties, tax, jobs, opportunities for support services and so on — resulting from our existing gasfields in Kinsale and Ballycotton illustrate the importance of indigenous supplies apart altogether from the intrinsic value of the resource itself.
I am anxious to ensure real commitment by exploration licence-holders to provide opportunities for Irish goods and services at all stages of exploration and development in Irish waters. I have asked them to ensure that such opportunities are provided and that contracts are designed not to preclude smaller suppliers.
We are also making considerable advances in minerals exploration and development. For example, there will be some 700 jobs forthcoming in the initial construction phase of the new large mine at Lisheen, County Tipperary, with some 300 permanent jobs being provided in that area.
There is much potential and a lot of good news in this area, research exceeding anything experienced in the past. It is my belief that we shall have a very successful, well-grounded marine and natural resources sector, which is where our medium to long-term future lies, and must be developed.
I should like to pay tribute to the marine emergency services engaged in providing total national cover, which is appreciated by everybody.
The Labour Party spokesman on Finance, Deputy Quinn, appeared to consider this is not an important debate. I consider it to be a particularly important one, on which there will be much to be said, of value to future policy, by all Members.
I should like to share my time with Deputies Gerry Reynolds and D'Arcy.
Is that agreed? Agreed. The Deputies have 30 minutes between them.
One of the important features of any budget, particularly at a time when the Minister for Finance has a substantial amount of money at his disposal for disbursal, is a clear indication of the manner in which it will be disbursed to the best advantage of economic development and social cohesion. In that respect, the Minister and Government have chosen the wrong option.
In the course of the last general election we were told that, if returned to power, Fianna Fáil and the Progressive Democrats would take a considerable number of people off the top rate of income tax, placing them on the standard rate. Yet the effect of what the Minister has done in this budget is that, whereas up to 1997, 37 per cent of taxpayers were subjected to the higher rate of income tax, 48 per cent, henceforth there will be 38.7 per cent subjected to the new higher rate of 46 per cent. Contrary to the Minister's stated objective — which was to take a large number of taxpayers out of the high tax rate net — the taxation measures of this budget will ensure there will be greater numbers of taxpayers and PAYE workers subjected to the higher rate. Clearly that is in breach of all commitments in the taxation area given by the Minister and all the parties in this Government in the course of the last general election. They have not honoured their commitment to the electorate in relation to tax rates.
The Minister for Finance has built up a reputation with regard to his attitude to public expenditure over many years. He ridiculed the previous Administration on having slightly exceeded its target on public expenditure, yet he has endeavoured to pull a three-card confidence trick on the electorate, giving the impression he is controlling public expenditure, when he is not. Deputy McCreevy, who has spoken in this House on many occasions as Opposition spokesman on Finance, admonished the previous Administration for spending too much money. Yet the first opportunity he has, as Minister for Finance, he will have spent more money this year, to the tune of £700 million, while simultaneously informing everybody that he is controlling public expenditure. Nothing could be further from the truth.
The planning about which the Minister speaks, of what is required of our national finances, in particular post-1999, is not being done by him or his Department. All we have got is a lecture from the Minister on the difficulties he will encounter in future in respect of the public service pay and pensions bill, totally ignoring the fact that he raised public expenditure substantially this year on many unnecessary measures.
The breach of faith in respect of Partnership 2000, by the manner in which funds have been allocated in this budget, is unforgivable. At a time when everybody could see clearly that less well-off, lower paid workers could get out of their poverty trap by taking up employment, the Minister has compounded their enormous difficulties. For example, a threshold of £14,000 annual income in the case of a single person reaching the higher rate of tax is very low indeed. What the Minister has done in this budget has nothing to do with removing those poverty traps, or creating an incentive to work at lower wage levels, instead the well-off are being catered for, without any statement by the Minister on how he intends to tackle the problem of the incentive to work at that lower wage level. The roaring Celtic tiger does not stand easily with low wage earners, those who want to be extracted from the welfare net and gain employment. In fact this budget accentuates the gap between the rich and poor.
I welcome two budgetary provisions which will give some people the incentive to work, that is treating the family income supplement on a net basis, signalled by the Minister's predecessor, Deputy Quinn. I am delighted the Minister has seen fit to do that because there had been an anomaly in that many who should have been benefiting were unable to do so because of the limit being too low at the lower wage level.
I also welcome the increased allowance for the long-term unemployed. However, I was very disappointed the Minister failed to take other action, the hallmark of the previous Administration, to tackle the huge hospital waiting lists in our health services. Over the past four years successive Ministers for Health have made substantial inroads in these waiting lists across a range of health services to alleviate the appalling circumstances of so many people awaiting admission to hospital. I am glad that the Minister of State at the Department of Health and Children is present. Hopefully, in the future, he will be able to indicate that his Minister will address this problem in 1998, by shifting, as he has done in the budget, from capital to current expenditure in a number of areas.
The Minister of State at the Department of the Marine and Natural Resources, Deputy Byrne, has long been a proponent of the difficulties of the agricultural community, particularly when he was in Opposition, but he has become silent recently. Perhaps office sits uneasily with him. We are more familiar with his tactics over the past two and a half years of telling everybody what Fianna Fáil would do for the farming community when it returned to office. I will tell the Minister of State what Fianna Fáil has done. It has abandoned the charter for farmers' rights and he and I know, from the number of representations we make on behalf of the farmers of Wexford, that the charter may as well be torn up. People are not getting their entitlements from the European Union due to the ineffectiveness of the Minister for Agriculture and Food in ensuring the charter is upheld.
Deputy Yates tore it up the day he was appointed.
The Minister of State should allow Deputy Hogan continue.
We were also told by the Minister of State, Deputy Byrne, and Fianna Fáil that we would have a new control of farmyard pollution scheme and a new dairy hygiene scheme, but where are they? We have not heard a squeak from the Minister of State about these matters. There has not been any commitment to installation aid for young farmers. When the Minister for Agriculture and Food, Deputy Walsh, got his hands on that portfolio, he abandoned the installation aid grant for young farmers for the second time on 7 August. All we are getting in this budget is a payment to meet outstanding commitments. I am sure the Minister of State will have a good explanation of that for the Macra na Feirme members in Wexford.
Another three card trick was attempted in headage payments where the Minister cut £35 million in the Estimate and gave back £23 million in the budget. He expects people to say he gave them £23 million but he ignores the fact that we have already had a cut in the Estimate of £35 million.
The agricultural community is not too happy with the performance of this Government, to put it mildly, and the promises made about live cattle exports and other issues sound hollow now. This Government will have an uneasy relationship with the agricultural community, and deservedly so, because of the expectations it generated before the election.
I would like the Minister for Finance and the Government in general to address some of the important infrastructural problems in my constituency of Carlow-Kilkenny particularly in regard to roads, which are inhibiting industrial progress in Kilkenny. The road from Waterford to Kilkenny and the road network around the city of Kilkenny is very deficient and I hope the Minister for the Environment and Local Government will address some of those issues in the near future. I understand he will visit Kilkenny soon and we expect some good news on those issues.
I am disappointed the Minister of State at the Department of Public Enterprise, Deputy Jacob, announced studies for natural gas for almost every town in the country except one that has been on the stocks for a considerable period, namely, Callan, County Kilkenny. The previous chairman of the regional authority, Councillor Brett, made a big play on this issue some years ago but he has been silent on it recently. I intend to ask the Minister of State to reconsider carrying out a feasibility study on behalf of the people of Callan with a view to having the town connected to the national gas grid as soon as possible.
I encourage the Tánaiste and Minister for Enterprise, Trade and Employment, in the context of the so-called regional policy of employment distribution, to take particular cognisance of the fact that we now have an IDA business park of 60 acres in Kilkenny city which is ripe for development. We hope it will be properly marketed by the IDA and the Department with a view to attracting a major manufacturing facility to Kilkenny as soon as possible.
Will the Minister for Finance consider designating the Barrow and Suir rivers with a view to providing tourist and angling facilities which would help to enhance the tourism potential of those undeveloped rivers.
Despite the promises made before the election, the Minister for Finance has lost the opportunity of doing something for the lower wage earners. He has not achieved the objectives he set out, particularly in the taxation area.
I thank Deputy Hogan for sharing time with me. I wish to share my time with Deputy D'Arcy.
That is agreed.
I hope the Minister of State will forgive me if I am rather parochial in my comments rather than considering the general economic benefits of the budget. The Government missed an opportunity in the budget to give more money to the less well off in our society. The Minister for Finance, Deputy McCreevy, made his name as a politician who was opposed to public expenditure, yet when he had the opportunity to include strict guidelines on public expenditure, he was unwilling to take the difficult decision. He has increased public expenditure, which is easy to do in good times, but when the Celtic tiger boom subsides, public expenditure will become a difficult issue. The Minister missed an opportunity to put a rein on that aspect of our economic policy.
I welcome the tax relief pilot scheme being introduced for the upper Shannon region. I understand the Minister must obtain permission from the European Commission for this but I do not see a problem arising about that. I hope this scheme will go ahead. I presume the reason the Minister has introduced this scheme is because the upper Shannon region is being denuded of its population. This scheme will work well if the Department of Finance takes an innovative approach to its implementation.
If the Department of Finance, in its wisdom, decides to establish a tax renewal scheme for the upper Shannon region based on the previous urban renewal schemes, which were successful in many provincial towns and cities in recent years, it will not work. The Department must consider innovative ways to give investors the incentive to invest in this area.
I referred to the area I represent as being denuded of its people. The population in Leitrim is decreasing at a slower rate now than in previous years but it is continuing to decrease. The same applies to the population in Roscommon, Sligo and Longford. Those counties will be included in the upper Shannon catchment area. When the Department of Finance examines the implementation of the scheme, I ask that serious consideration be given to the concept of creating a new town in this county. A number of years ago, the British Government allocated an enormous amount of money to the development of a new city called Milton Keynes. We should examine the possibility of creating a new town here which should be sited in the upper Shannon region under the tax relief proposals. Obviously, a third level institute would have to be provided as well as high tech industries, proper infrastructure and numerous other capital expenditures which would allow a population increase of 20,000 to 30,000 to take place.
The reason I propose such a concept is that everybody is aware of the dramatic increase in house prices in the greater Dublin area. If we continue to develop economically in the greater Dublin area, young people will be unable to sustain their current mortgages. It would be of much greater economic benefit to the community if there was diversification and the new town concept was applied to counties, such as the one from which I come, in which the population is declining. That concept involves people moving from over populated areas to areas where property is not as expensive. People could buy homes in such areas without having to mortgages their incomes for the next 25 to 30 years.
Another innovative idea the Department of Finance should consider in regard to the upper Shannon tax incentive scheme is to give a £10,000 new house grant to one member of a farm family. The number of people leaving farms in the west is increasing dramatically daily. If such an incentive was provided to enable one member of a farm family to build a house on an existing farm of 30 to 40 acres it would encourage many people to stay at home. They may not engage in full-time farming, but in part-time farming and other employment in the region which may necessitate their commuting 20, 30 or 40 miles. Ireland has become a nation of commuters and people, regardless of where they reside, do not have any difficulty spending an hour commuting to work. Such innovative ideas would be very beneficial to the area I represent. If the Department of Finance in its wisdom selects a number of lines on a map and decides that investors can be given tax breaks if they invest in an area north of the upper Shannon region, such a scheme would not be of any great benefit to the people living in that area. It would benefit wealthy businessmen and those who have the money to invest in such schemes but that strategy will not benefit the upper Shannon region in the long-term.
I welcome the tax relief given in respect of three star hotels in County Leitrim and other counties in that region. That assistance is needed and I compliment the Minister on taking that initiative.
I have raised the contentious issue of corporation tax here on a number of occasions when I had the opportunity to do so. The Government has continued the work of the previous Government by reducing corporation tax. However, there is an anomaly in the scheme which has not been considered by any Government and I hope the Minister for Finance will address it. Small business people are paying £380 million per year in rates to local authorities. When business people in any county show potential by developing their businesses a rateable revaluation of their property is taken. I know of instances in my county and others where people have spent in the region of £250,000 on the capital development of their premises and created extra jobs. However, many have had a visit from a representative of the Valuation Commission and in some instances their rates have been increased from £1,500 up to as much as £12,000. That is a major disincentive and is stifling business. The country is dependent on small family run businesses. The incentives given in the budget to those types of businesses have been slim. In the Finance Bill I hope the Minister will redress the imbalance in regard to rates and commercial rates that apply to small family run businesses.
I am sure the Minister of State, Deputy Byrne, agrees with what my colleague, Deputy Hogan, said about the agricultural industry which is facing its greatest crisis in the history of this State. It is the largest employer and is experiencing major difficulties. The Government parties when in Opposition, particularly Fianna Fáil, stated they would reintroduce the control of farmyard pollution scheme, but that has not happened. The chances of it being reintroduced are extremely unlikely given the 9 per cent or £35 million cut in the Department's expenses. The installation aid scheme for young farmers will not be reintroduced, which does not provide any incentive for young farmers to remain in agriculture. Another difficulty is the amount of time taken by the Department of Agriculture and Food to process headage payments. That is disgraceful. The Department has not lived up to the farmers' charter established by the previous Minister for Agriculture, Food and Forestry, Deputy Yates. I would also like to raise other issues but I wish to share the remainder of my time with Deputy D'Arcy. There are some good measures in the budget which I welcome and some missed opportunities, but I will not condemn it outright. I will wait to see if the Minister for Finance will make adjustments in the Finance Bill.
Less and less time is available to Deputies to contribute to debates. I have more time to make a point at a meeting of Wexford County Council than I have in this House. A committee system has been established, but when I was a Member of this House four years ago Deputies were allocated a half hour to make their contributions to the budget debate, now we do not have enough time. That is a mistake because it would be helpful for the Government to hear the issues debated properly and at length. The only way a Deputy has to make his contribution in eight minutes is to rush through a prepared statement, which I tend to do.
There are good measures in the budget. However, in regard to the low paid workers the point has been made time and again, and I am sure the Minister of State, Deputy Byrne, will agree, that even in our constituency where there is a demand for workers in hotels and meat factories, which pay their workers only £4.50 an hour, such businesses cannot recruit enough staff. That applies to all low paid sectors in that area.
I tend to speak mainly on one area, agriculture. In the short time available I wish to make a few important points about it. The Government is pitiful in its unwillingness to recognise the consistent core of our economy is the earnings farmers derive from production on their farms. It will be a long time before a Celtic tiger can match an Irish cow in its ability to protect the long-term interests of our nation. The reality is that while jobs associated with imported industries are of value, they do not represent solid contributions to the creation of and increases in national wealth. They represent income tax, revenue, a low level manufacturing tax and a contribution to reduce dole queues and emigration. However, as we have seen they do not represent anything like the performance and employment national income represents in respect of agriculture and agri-business. All one need do is ask the people from Mayo and Galway about problems they had with Digital and the people from Tallaght about the problems they had with Packard Electric. Concentrating on such industries is to some degree building the nation on unstable ground. I welcome inward investment and I would like a large foreign industry to invest in Wexford, but that should not happen at the expense of agriculture. The foreign industries sector can be contrasted with the agricultural sector and the contributions of our farm families which every year contribute to increased exports and foreign earnings vital to our national interests in reducing our national debt.
Irish agriculture and the spin off sectors have consistently proven their importance to our national well-being. Why is the Government progressively demeaning the role of agriculture? It refuses equitable tax treatment to farmers. I do not understand why farmers should pay a different rate of tax. The Government has removed incentives for young farmers, which is a great mistake. I am sure the Minister of State, Deputy Byrne, will agree that young farmers have been given the wrong message in regard to tax.
Only 6,500 places were provided under the installation aid scheme. I understand the Minister said yesterday that he intends to introduce the scheme in a different form. That is only tinkering with the issue; this scheme is an important incentive to young farmers and sends them the message that they are wanted in agriculture. Agricultural colleges cannot fill their places and numerous farmers cannot get their sons to stay home on the farm.
A very serious situation is developing as far as tax is concerned. No excuse can be accepted from the Minister for Agriculture and Food for failure to protect the vital national interest represented by the agricultural sector. It is obvious from the Estimates that the influence of the Minister, Deputy Walsh, at the Cabinet table is minimal and that the Minister for Finance and the Taoiseach are those really in command. That is unfortunate.
It has already been stated that the Estimates have been cut by £35 million and only £23 million has been introduced. It has now been stated that £11 million or £13 million must be found in some other area. It will be necessary to cut some other service to provide this. It is very serious to cut back on services at a time when agriculture is going through its most difficult period since the time I first entered this House. We saw a decrease in net incomes in 1996 of 3 per cent and I expect that the decrease for 1997 will be of the order of 4 to 7 per cent, depending on the type of farming involved.
I sought an answer from the Minister for Agriculture and Food on the issue of grants payable by his Department. I received a reply from a higher executive officer, a Ms Catherine Foley, dated 28 November. In it Ms Foley acknowledges my request for data in Parliamentary Question No. 218 of Wednesday, 12 November 1997 and the information is shown on an attached table. The main reasons applications were refused is also outlined. I could not believe so many people had been refused grant payments. I brought the issue to the attention of the Fine Gael agriculture group last night but they said the information must be wrong. However, this letter was issued by the Department of Agriculture and Food.
The number of applications refused payment under the livestock, headage and premium schemes from 1993 to 1996 are as follows: in 1993 there were 5,487 refusals; 7,705 in 1994; 7,362 in 1995 and, in 1996, the figure had risen to 9,191. I am sure every Member of these Houses is dealing with 20 or 30 cases in which payment has been refused. I have brought these cases to the attention of the current and former Ministers. Deputy Walsh was also the Minister for Agriculture in 1993. Have we created a monster in the Department? An over-efficient Department is the greatest threat to democracy as bureaucrats set themselves up as experts on everything.
I brought four cases to the attention of the Ombudsman although I was not successful. It is unbelievable that 9,191 people were refused payment in 1996. How many will be refused in 1997? I feel the Department of Agriculture and Food, like the English Department of Agriculture and the EU, could be brought to court on this issue. It seems that the English Government and the EU lost every case brought against them. On 6 March 1997 Advocate General Leger delivered his opinion on the NFU's annual challenge to ICIACS penalties for innocent errors of 20 per cent or more of setaside. Under the scheme, prior to its amendment in July 1995, such errors were taken as resulting in total loss of any area linkage payments to beef premiums for the farmers concerned. The Advocate General considered the MAFF correctly understood the effect of the regulation in force at the relevant time but that the penalty was illegal because it breached the requirement of proportionality.
Has the Department of Agriculture and Food ever understood what is meant by proportionality? Does it arise where a farmer innocently has one ewe too many and loses £4,000 as a result? In some cases, when errors are discovered, farmers are disallowed payment for the following year. I will not let this issue lie, I will take it up with the Department and with farmers' organisations. The extent of the refusal of payments over the past four years was unknown before I asked a question on it.
Payments have been refused to 30,000 farmers. In certain cases, these payments represent 100 per cent of a farmer's net income. The Ombudsman does not seem to understand the concept of proportionality either. His report was discussed in this House recently and it stated issues should be looked at proportionately. He is not following that advice and neither is the Department of Agriculture. This is an intolerable situation. I am not asserting that the entire 9,000 farmers involved are without blame. I have, however, seen borderline cases and the Ombudsman and the Department of Agriculture and Food should seek to strike a balance between proportionality and benefit of the doubt.
I wish to share time with Deputy O'Hanlon.
Is that agreed? Agreed.
I was interested to hear Deputy Hogan's comments, which I thought lacked some conviction, that those who are better off are being pushed into the higher tax bracket and paying more tax. In the next breath he said that the rich are getting richer. It is difficult to understand what precisely he meant as his comments were contradictory.
Deputy Gerry Reynolds welcomed most of the budget's contents. The Deputy mentioned the farmers' charter introduced by the previous Minister in a blaze of publicity. I do not believe anyone believed the farmers' charter actually worked and I fail to see why such an argument is being made for it. My understanding is that headage payments are being paid at a much faster rate now than heretofore, probably due to computerisation. We should attempt to be accurate about these matters.
I agree with many of the comments made by Deputy D'Arcy. His colleague, Deputy Yates, was responsible for closing the installation aid and other schemes. The issue of installation aid was examined by two groups, one of which was commissioned by the rainbow coalition some years ago. Both reports suggested that change was required to the installation aid scheme and that is what the Minister for Agriculture and Food is proposing to do in order that the lower paid should reap the benefit rather than those who are well off. I met farmers' organisations in recent days and they want to see installation aid restored to help those who need it most.
I am pleased to have the opportunity to make a contribution to this year's budget debate. Details of the budget have already been outlined by my colleague, the Minister for Finance. The aims of the budget are clear. The Government intends to reward work, promote enterprise and strengthen social solidarity.
The performance of the economy has been impressive in recent years and our economic growth is generating jobs for our people at an unprecedented rate. We must continue to build on this strong foundation through proper and prudent management of the nation's finances. The budget for 1998 is a significant step towards achieving that goal.
Everybody has a responsibility to make a substantial contribution towards sustaining economic development. My Department, the Department of the Marine and Natural Resources, also has an important role to play in this process. It is a relatively new Department established by this Government to maximise the strategic development and management of natural resources in a cohesive and pro-active way. The Department's brief is a wide one and covers shipping, ports, fisheries, safety at sea, the marine environment, research, coast protection, mining, petroleum, forestry and aquaculture.
As Minister of State with special responsibility for aquaculture and forestry, I will confine my comments to these two important areas. Within the sea fisheries sector, aquaculture is a key component of growing importance. The industry is on a firm growth path and is making a contribution to the economy. Almost 30 per cent of the total value of fish production now comes from the aquaculture industry. The industry employs about 3,000 people directly, with as many more in downstream jobs. When one considers that these jobs are substantially located in regions where employment opportunities are often few and far between, it further emphasises the importance of the industry to rural Ireland's social and economic well being. We must protect the rural fabric of this country.
The industry's contribution to the economy continues to grow with the volume of aquaculture production increasing from over 27,000 tonnes in 1995 to an estimated 35,000 tonnes during 1996, an increase of 28 per cent. The total value of aquaculture output increased from £49 million in 1995 to over £55 million in 1996, an increase of 12 per cent. The potential exists for further sustainable expansion and development of the industry.
In order to facilitate the future development of the industry, the need for a new statutory framework for the licensing and regulation of aquaculture has been widely acknowledged. The Fisheries (Amendment) Act, 1997 will provide an effective, legally secure and transparent licensing process which will command the confidence of the fish farming industry and all other relevant interests, including environmental and angling groups. It is a priority of my Department to get the new system up and running as soon as possible. The new licensing and regulatory system, when in place, will legally underpin the further development of the industry.
In achieving this we will, of course, take full account of environmental considerations and the concerns of other interested parties. Full and open consultative systems and an appropriate appeals mechanism will be introduced, and we will ensure that both licence applicants and objectors will have equal entitlement to all information involved in the licencing process. Our development strategy will also focus on the need for research and development of new species as well as providing targeted support services, including financial and technical support and training and quality assurances.
In order to further enhance the development of the sector, I recently announced two initiatives in relation to aquaculture. The first relates to the establishment of a customer focused aquaculture forum to improve communications between the aquaculture industry and the State agencies delivering services to it. The second initiative which I intend to bring to fruition is a root and branch analysis of the future direction for the aquaculture industry. Some would suggest that heretofore it has been scattered. During 1998 progress will be made on both these initiatives to ensure that this industry which is based on Ireland's most prolific natural resource, the sea, will be well placed to meet future challenges.
I am aware of the concerns expressed by the industry in relation to the imposition of rates on fish farms. This primarily affects salmon smolt and trout producers. With the ongoing development of the industry, new land-based projects such as holding and purification facilities for shellfish as well as eel and turbot facilities are coming into the net as well. I am sympathetically disposed to the case made by the industry to be given parity of treatment with the agriculture sector. Since my appointment, I have been pursuing the issue with my colleague, the Minister for Finance, with a view to obtaining a satisfactory resolution.
Under existing valuation legislation, fish farms are considered rateable and amending legislation would be required to remove the burden. The draft heads of a valuation Bill are at an advanced stage of preparation in the Department of Finance. The purpose of the proposed Bill is to modernise and streamline the valuation code. The Minister for Finance has assured me that he will consider the issue of rates on fish and shellfish farms when the draft heads of the Bill are being finalised.
The House will be aware of the very substantial increases in forestry grant and premium rates which I announced recently. The grants and premium payments, which are made under the forestry accompanying measure of the CAP programme, have been increased by an average of 13.5 per cent from 15 October 1997 in the case of planting grants and will cover the current planting season. The premium level increases will apply to all payments from January 1998. There is a commitment in Partnership 2000 that the Government would review the levels of premium and maximise the premium payable to farmers on the first 20 hectares planted. The recent package which I announced meets that commitment. The new rates include a top-up of £10 per hectare on the premium for sites between six and 12 hectares and a top-up of £20 per hectare for larger sites. These top-ups apply only to farmers planting on enclosed land and have been approved by the European Commission. I have always held the view that, to be effective in encouraging farmers to plant, the premium rates must remain comparable with other agricultural returns.
Planting levels in the current year will be substantially below the 25,000 hectare target set in the strategic plan for the development of the forestry sector published last year. The shortfall this year is due in part to farmers postponing planting decisions pending news of the increased rates. Unfortunately, discussions with the European Commission took much longer than anticipated. The new package of rates should play a significant role in getting planting levels back on track.
Concerns have been expressed within the forestry sector that changes in planning controls on planting are inhibiting our forestry programme. This is obviously a matter to which I will pay attention.
With regard to the mix of species being planted, the modifications included in the package are a recognition of the need to promote greater diversity. In that context, the bias towards diverse planting of conifers and of broadleafs included in the new grant and premium rates is particularly relevant. An increase in the diversity of species being planted is vital, not alone to provide a greater range of downstream processing opportunities but also for environmental reasons and to protect forest health.
The need to promote greater use of timber is another important priority. To this end, the Department is making available grant assistance of £178,500 to the Wood Marketing Federation for the purpose of producing an Irish Specifiers' Timber Guide. Some 75 per cent of the grant assistance is being provided by the European Union under the downstream development support measure of the Operational Programme for Agriculture, Rural Development and Forestry.
The specifiers' guide will provide a major boost to the timber industry. As timber is a natural material, specifiers view it as a material area requiring specialised advice. For timber and timber-based products to compete effectively with other materials it is essential that a comprehensive timber specification manual be provided to architects, engineers and quantity surveyors. The new guide will be just that. It will be user friendly, authoritative and up-to-the-minute, and will assist specifiers while simultaneously promoting and encouraging the use of timber and timber-based materials.
The Department is also very much at the frontier of technological advancement in developing a unique and innovative computerised information and planning tool, known as the forest inventory and planning system. The function of the new system will be to locate, classify, quantify and forecast future volume production as well as planning the location of future afforestation. The new system comprises three main components: a national forest inventory, a redevelopment of the forestry grants administration system and an indicative forest strategy.
Investment in the new system, which is receiving substantial financial support from the European Union, will result in a state-of-the-art technological framework for the future development of the forestry sector.
With a real increase in the investment in forestry — it is now almost a £200 million industry — it is essential that there is a focused and structured research and development programme. New challenges are being posed for the industry and solid research is of vital importance. With the expansion of the private forestry sector it is of particular importance to that sector that research is available on the technical aspects of forestry.
In conjunction with the Council for Forestry Research and Development, COFORD, set up in 1993 to advise on forestry and research development matters, the forest service is preparing a costed programme for a phased and prioritised upgrading of national research and development effort. This will take account of the increased private sector involvement and the need for balance between fundamental and applied research and development. It will also place particular emphasis on market demands, industrial needs, environmental concerns and cost efficiency. Investment by my Department on forest research and development in currently running at about £1.5 million per annum and future expenditure on research will be directed in line with this new programme.
I reiterate my personal commitment to the development of forestry. I am satisfied that the outlook for forestry is very bright and believe the objectives of our strategic plan will be met. The overall aim of the plan is to develop the sector to a scale which maximises its contribution to economic and social well-being and in the process creates 11,000 new jobs. There is a commitment from the European Commission to continued support for forestry in Ireland and forestry is set to become a major sector in the economy.
I thank the Minister of State for sharing his time. It is welcome that the budget was introduced in the autumn this year, a change from previous years when it was introduced in the spring. This was also the policy of the previous Government, which is to be commended. Introducing the budget at this time of year will be of great benefit to the State agencies who depend on Exchequer funding. They will be in a better position to manage their finances and do their job appropriately as a result of this change.
Last year I referred to the need to avoid borrowing, to treat workers fairly and target funding to those on social welfare. I am glad the Minister for Finance, Deputy McCreevy, has done this in a prudent way. We know the lessons that were learned in the late 1970s and the early 1980s and the discipline and difficulties we experienced in 1987 and 1989 in trying to correct our finances. I hope future Ministers for Finance will not forget this. I am pleased the Minister plans a surplus in 1999 and 2000. The net current spending, including central funds, will be controlled at 3.7 per cent.
The Minister treated workers fairly and honoured the agreement made in the programme for Government. He reduced the 26 per cent and 48 per cent tax rates by 2 per cent. I do not understand those who argue that 2 per cent should not have been taken off. Many of those I meet pay 48 per cent tax but are on a relatively modest income. They have to provide housing for themselves, education for their children and meet their health needs. They do not benefit from the facilities in place. It is right they should be recognised because like everyone in our workforce they are making a major contribution to our successful economy. I compliment the Minister on his taxation relief measures.
I compliment my colleague from the neighbouring constituency, the Minister for Social, Community and Family Affairs, Deputy Dermot Ahern, on his contribution to the budget. On the £5 increase in the old age pension, it is right that when the economy is doing so well that those who contributed to this success in the past are recognised. The £5 increase for all old age pensioners and those over 66 years with a disability on a social welfare allowance is the largest given by any Minister in the history of the State. The £3 increase per week is ahead of inflation and will benefit those who depend on social welfare.
I welcome the Minister's decision to process claims for family income supplement on net income. This will benefit 7,200 families. Many people do not receive the family income supplement because they do not know they are entitled to it. The Minister might address how one ensures that those in the workforce entitled to family income supplement are aware of it. It can be a substantial benefit. It is unfortunate that there are people who have been in the workforce for a number of years with three, four or more children who would have benefited but were unaware of the scheme.
The increase in the number of those who will benefit from the back-to-work allowance by 5,000 to 27,000 and the new tax allowance initiatives for the long-term unemployed are also welcome. The £3,000 allowance, £1,000 per child and the double tax deduction for employers for three years are welcome measures.
I ask the Minister to look at the cases of those who are caring for persons who are totally incapacitated and perhaps to do something about the income limit for the carer's allowance. The income assessment should be removed where someone is totally incapacitated. The number of carers who do not receive the allowance is not large. However, in most cases the woman of the house takes care of her mother-in-law or father-in-law who is totally incapacitated, bedridden and needs to be fed three times a day. The husband's income should not be taken into account in those circumstances. I would like an increase in the carer's allowance based on the degree of dependency. There will be four more budgets in the tenure of this Government and I am sure this issue will be addressed. It is important to state, because some Members do not seem to be aware of it, that we will spend £9.5 million on child benefit this year, compared with the previous Government's £8.3 million. This will amount to £28.4 million in a full year compared with the previous Government's £25 million.
I welcome the changes in farmers' tax, the extension of the limit on capital allowance for the control of farmyard pollution from £20,000 to £30,000, the fact that the current 100 per cent stock relief for young qualifying farmers will apply for four years instead of two years, the £3.5 million extra for capital gains tax retirement relief, the £3.5 for outstanding applications for installation aid for young farmers, and the £23 million extra for headage payments.
The Minister has provided £20 million from the lottery for the GAA over three years. That will be a contribution towards the £138 million investment by the GAA in Croke Park. It is very welcome because the GAA is our national sporting organisation and it would be impossible to estimate the value of its contribution to players and spectators over 100 years. Gaelic games are represented in the community, the parish, the county, the province. They instil a spirit of honour for those who play and pride in communities when their teams play in a championship and particularly when they win. Involvement in sport and healthy recreation must contribute to a healthier society. If more young people had the opportunity to partake in sport perhaps we would not see so many dysfunctional children, or so much misuse of drugs, etc. I commend the Minister for Finance for this contribution to the GAA.
I welcome the Minister's decision to look at a means of addressing an anomaly that exists for workers on this side of the Border who work in the North. I also welcome the new unrestricted availability of capital allowances for individuals in the seven counties, including the two counties, Cavan and Monaghan, in my constituency. This will benefit the constituency greatly. It recognises the deficiency in the number of tourists being attracted to areas with no tradition of tourism. Having recognised that, the Minister might look further to see what else can be done to ensure that every county benefits from the current boom in tourism.
I always welcomed excise duty on cigarettes, no matter what Government was in power. I am pleased that the Minister did not increase excise duty on unleaded petrol and diesel. That will benefit everybody, particularly those in the Border counties.
I welcome the tax relief on donations to charities. That is a worthwhile initiative because we have many voluntary organisations that are complementary to the State. Together, the voluntary organisations and the State provide a level of service that compares favourably with anything available in Europe and around the world, and it is something we should cherish. I hope we never see the day that the State provides everything for everybody, and that we will always have voluntary commitment.
The innovation on information technology in schools is a major one which will bring credit to this Government for many years to come, and ensure that all our children are computer literate.
We should always be looking for ways of reducing Government spending and getting value for money. We should ask ourselves whether some of our schemes are redundant, and whether some services could be improved or delivered more efficiently. Ministers in various Departments might look at the question of transport. The Departments of Education and Science, Health and Children, Social, Community and Family Affairs all spend large amounts of money on transport. The time has come to look at the possibility of an integrated transport network.
I propose to share ten minutes of my time with my colleague, Deputy Joe Higgins.
I congratulate my constituency colleague on this, his first budget, and wish him well as Minister for Finance. The rest of what I have to say, however, will not be so complimentary.
The options available this year were never before available to a Minister for Finance. Never was there such an abundance of resources to be disbursed in such a way as to have a major impact not only on the country generally but on the social and economic lives of its people for the foreseeable future. This may or may not be the first of four budgets of this administration. Only time will tell.
The direction and administration taken at an early stage often has an impact long into the future. The Government could have adopted an inclusive policy by rewarding those who provide opportunities for people who are currently excluded. Such a policy would include encouraging those already in the labour force to remain there. My reason for saying this is simply that in other jurisdictions policies such as those in this budget have turned out disastrously. It may be different here, nobody knows yet. However, throughout Europe such policies rewarded better off people who were not looking for a reward, and ignored the less well off. Commentators have said that this is what the public voted for, that it was greed on the part of the public. I do not believe that. The public are often led by certain media publications and some politicians who tell them what they should be looking for, and extol the virtues of proceeding in that way. That is how we arrived at this juncture. I have never seen greed manifested to the extent that is being suggested. People very often look for more when they are told they should receive more. This is the reason this is an unwise budget.
Social requirements must be measured against the needs in the areas of housing, taxation, employment, health and education services, all of which impact directly on the day to day lives of families. The budget has ignored people on the average industrial wage who are expected to provide housing for themselves. Local authorities do not provide houses for people in this income category and it would not be advisable to encourage them to borrow to buy a £100,000 house. The budget has done little for them in the area of housing. We must encourage people to remain at work through our financial and fiscal policies. If we do not do this then we have little chance of encouraging the unemployed to take up work.
There is ample evidence in my constituency and other constituencies that people on an average industrial wage are being ignored. They are expected to provide their own housing but have not been given tax concessions in the budget to enable them to do this. The budget is of greater benefit to people on higher incomes and it excludes this group. We must address this issue as everyone is entitled to housing.
The needs in the area of public authority housing have been neglected for many years. Evidence of this can be seen in the amount spent by health boards in subsidising rented accommodation. This is bad value for money and creates hardship for many people.
I do not want to be political but in the run up to the election the Minister for Health and Children was very outspoken about hospital services and other aspects of the health services. He visited hospitals and other institutions and highlighted their problems. However, these problems have not been addressed in the context of the budget. It is often said that the public has a short memory but politicians also have short memories when it suits them.
On waiting lists, an 80 year old person in my constituency was told that if she contributed £3,000 she could have a hip operation carried out within a matter of weeks. It is a scandal that a person who has contributed to society all her working life should have scant recognition given to her efforts. She has been asked to contribute £3,000 to the cost of the operation despite the fact that she is a medical card holder, receives a non-contributory pension and has a limited income. This is only one of many such cases. It is a disgrace that people in this category should be excluded from receiving treatment.
The budget does not address this and many other issues. For example, it does not recognise the existence of waiting lists. The reason waiting lists have been reduced is that the means of assessment and evaluation have been changed. I could give many examples where a person deemed by the State not to be in need of category one or urgent treatment was also deemed by a private orthodontist to be in need of urgent surgery. The victims in such cases are the children. Unfortunately the budget does not address this issue.
The issue of special hospital services has occupied the time of some commentators recently. I am referring to psychiatric and psycho-geriatric services and services for people with a physical, mental or sensory disability. I will not name individual institutions but the conditions in some institutions are disgraceful. The buildings are old fashioned and have no heating, while the system of administering care to patients is inadequate. I could say it is Victorian but that would be a sad reflection on that era. The facilities may have been adequate 100 years ago but time does not stand still and they are totally inadequate today. If we are a caring society we must give serious consideration to this issue. This has nothing to do with the Celtic tiger; it has to do with recognising problems which have existed for a long time.
Some commentators referred to St. Ita's Hospital, Portrane. When I was a member of the visiting committee ten or 15 years ago conditions in the hospital were not good then. While there have been some improvements in the meantime the conditions are still bad. The same applies to many other similar institutions. We must seek to improve the way we deal with such problems. However, there is little evidence in the budget that this will be done.
Many other areas of the health services which impact directly on patients also need to be improved. In some hospitals patients are left waiting on trolleys. In some cases this may be due to an emergency or extenuating circumstances. Last summer the Minister set himself up as an inspector and visited numerous hospitals. I presumed he was formulating some sort of super plan to resolve problems but this was not the case. Most disturbing is that the public are let down because the promises made before the election are not being met. The so-called care and concern that existed beforehand is not evident when people get into Government.
That our population, particularly our ageing population, is increasing and medicine is advancing must be taken into account to ensure maximum benefit to the taxpayer on the one hand and maximum benefit in terms of delivery of services to the consumer on the other. That is important in terms of the strategic management initiative taken by the Government. If that is not taken into account, we are ignoring reality.
There is need for modern technology in hospitals, particularly in training hospitals. Young medical professionals do not wish to serve their internships in hospitals that do not have access to modern facilities because when they seek appointment elsewhere there is immediate reference to whether those facilities were available where they served their internship and whether they are au fait with modern technology and modern practices. That is a serious issue in the administration of medical and surgical services and it should be dealt with.
Recent reports show that, while our education system is reasonably good, the pupil-teacher ratio is one of the worst in modern economies. If we are serious about targeting people in need and enabling them to compete in the marketplace for jobs, we must ensure they have a good grounding in education at an early age. Otherwise, developments at a later stage will be of little significance.
There is no indication in the budget of what the Government plans to do about agriculture, and perhaps that is not unusual. The Government must be aware of the serious difficulties facing the agriculture industry and the agri-sector in general. Thousands of jobs depend on that industry. Difficulties have arisen recently in terms of the operation of the Single Market and the health status of products from the industry. If those matters are not addressed urgently there will be a huge price to pay. Failure to deal with them will have negative knock-on effects. I am concerned we are attempting to equate the health status of our meat products with those of another jurisdiction which is experiencing a serious problem. Association of that nature will do serious damage to our product.
There has been much discussion about the £20 million made available to the GAA. If I was the Minister, Deputy McDaid, I would be very upset at the transfer of £20 million from the national lottery fund to another area, but that is a matter for him. The GAA caters for a huge section of society and I laud it for the work it has done, but I have one reservation about the money allocated to it. Was it a good idea to give £20 million to central headquarters? Would it not be better to give £15 million to individual clubs and organisations which deal directly with the public? Perhaps the money would have been better spent in that way.
In regard to pensions, widows received some concession by way of taxation, but widow's pension, particularly for younger widows, has not been addressed. In the case of two old aged pensioners living in a household, when one dies the other receives a concessional rate of pension for only a short period. That is a matter which must be addressed. In regard to pro rata pensions for the self-employed and those with a mixture of contributions, there is also a problem that needs to be addressed. If a court case is taken on this matter in the future the Minister would lose. Once the principle of pro rata payments is established it must be applied.
Many positive comments could be made about this budget, but unfortunately one could also make many negative comments. I hope we will not be back here in a year's time pointing out the failures in the budget.
(Dublin West): I appreciate the time sharing arrangements. The budget amounts to a calculated insult to working people, unemployed people and senior citizens. They have been the foundation of the wealth created in the State, but the Government rewards them with contempt. That contempt is nowhere more evident than in the extraordinary cuts in tax on corporation profits. The Government gave a paltry few pounds per week in the form of tax reduction to low paid workers and they are supposed to be grateful. It gave £3 and £5 respectively to social welfare recipients and older people and that is supposed to be a great step forward. By contrast, however, tens of millions of pounds were handed to leading banks, which have been very profitable for many years, in savings on corporation tax. Likewise, millions of pounds were handed to the big business sector whose profitability has been massive in recent times.
During the ten years of the so-called partnership agreements since l987, business profits have increased by 70 per cent in real terms. By contrast, wage increases of working people remain at 1 per cent per year in real terms. Clearly the big corporations and banks, which have funded the coffers of the major political parties, must feel they got value in the budget for their political investment.
At the same time the Government stands over a position where taxpaying householders, the backbone of the taxpaying system, are dragged into courts for arrears of the discredited double tax on water, which was forced out of existence by a massive number of people. The myth that the more that is handed in tax cuts to big corporations and big business, the more jobs they will create in the economy, has been blown sky high by the devastating announcement of the closure of Seagate Technology in Clonmel. Successive Governments have placed the fate of tens of thousands of workers in the hands of multinational corporations and reduced the economy to subservient dependence on them. This is policy. The recklessness of the Minister for Finance and of Government representatives was obvious when in the pre-budget discussions only a few weeks ago they blithely asserted the crisis in South East Asia was a little local difficulty which would not impact on the Irish economy. How can working class people have confidence in a Government that walks with closed eyes into disaster?
Tragically, Seagate will be only the first of such disasters. With all the cold calculation of Mafia dons, the multinational bosses in Seagate massacred 1,400 Irish workers' jobs under cover of the festive season only a few months after they threw champagne around the place for all the family, with gullible Government Ministers in attendance. Yet, successive Governments and the major conservative parties will continue to kiss the boots of multinationals, putting their trust in them to provide secure jobs, when it is patently obvious that when their profits begin to decline they will abandon the country with the contempt we saw yesterday.
The budget ignored the fact that the collapse of the stock exchanges in South East Asia and the drastic currency devaluations in that region spelt the end of the propaganda about those economies which were built on massive borrowing, speculation in stocks and shares, massive speculation in property, outright corruption in some cases and low wages and the exploitation of workers. Ominously, they were called the Asian tigers. The same propaganda about the so-called Celtic tiger has blinded this Government and other commentators to the cycles of the capitalist market which inevitably, driven by the irrational and competitive lust for private profit, run headlong into the problems of overproduction and overcapacity and then keel into recession with devastating consequences for the working people. That is what has begun to happen in South East Asia and, tragically, it has impacted on thousands of workers in Tipperary and will work its way into the world and European economies. However, the pendulum will swing from market madness to the ideas of democratic socialism under which natural, industrial and human resources will be utilised rationally to meet the needs of humanity here and internationally. In that manner we can create secure jobs, homes, clothes, dignity and freedom for all and eliminate the chaos of the capitalist market.
The Minister for Finance insists the budget is a preparation for EMU. In the light of the Seagate disaster and of the South East Asian crisis, EMU will be a disastrous straitjacket, particularly for the small European economies, including Ireland. One of the Seagate bosses said this morning the currency devaluation in South East Asia was one of the problems that affected the company. If sterling weakens when this Republic is in the EMU, does anyone believe the economy could resist the pressure that would put on exports?
The Minister lost a major opportunity in the budget to provide significant investment for public enterprise which could be solidly built on the basis of our natural resources, farming and other sectors. It is a shame the Government is apparently prepared to privatise and sell off one of the top State-owned companies, TEAM Aer Lingus. In view of yesterday's bolt from the blue at Seagate, would it not be criminally irresponsible to hand over TEAM Aer Lingus to another multinational whose ruthlessness will be equal in ferocity to those who savaged the jobs in Tipperary? The Government must answer.
It is bitterly disappointing that an emergency provision was not provided in the budget for the thousands of individuals and families who are on the housing and hospital waiting lists. A sum of £20 million was provided to refurbish a football stadium at GAA headquarters and tens of millions were provided for the banks and big corporations. What about those suffering terrible distress on the housing lists which, as a public representative, I hear about every week? Why not set aside an emergency provision to end the housing and hospital waiting lists in two or three years?
The people gave their verdict in an opinion poll published today. One cannot fool all the people all the time. The people know the budget prioritised the super rich, not middle income workers. The super rich and the big corporations will benefit. I hope the people will give their verdict on the Government's priorities in the by-elections next March.
I wish to share my time with the Minister for Justice, Equality and Law Reform, Deputy O'Donoghue.
Is that agreed? Agreed.
There is no doubt the Minister, Deputy McCreevy, put an excellent overall package of proposals before the House in the budget. When one looks at the overall shape of his proposals and a number of excellent individual components, it is nothing short of miraculous to observe the profound recovery which has been achieved in the State's finances in the past ten years. In 1987, the country's economic condition was nothing short of alarming, with almost every measure of financial well-being suggesting an economy in deep crisis. A mere decade later a tremendous transformation for the better has been achieved as a result of courageous, informed and consistent economic planning.
While a number of initiatives have contributed to this incredible recovery, there is one single outstanding feature at the root of both the nature and scale of the improvements which have been rapidly achieved, the recognition of the vital necessity for partnership and consensus as opposed to discord and sectional interests. Excellent political leadership has contributed substantially to this process. However, without widespread support across society for the core concept of partnership, it would not have been possible to achieve the level and rate of progress seen over the last decade.
In many instances, significant sacrifices were made by individuals and families through their support for a slow but systematic process of economic recovery. Successive Governments since l987 have recognised the central importance of balance in planning our economy. Like any modern society, we have a wide range of interests across our community. At one extreme, there are those who are financially well off and consequently have their own priorities in relation to the central management of the economy. Issues such as lower taxation, controlled Exchequer spending, the control of crime and improved educational facilities figure highly on their priorities. The majority of people are in the middle income bracket. While they share many of the concerns of the more affluent sector, issues such as employment creation, health services and bank interest rates are of vital importance.
The most vulnerable in society are those on the lowest income levels. Despite the sustained growth levels achieved consistently during the last decade, and a range of social cohesion measures sponsored by the Government and the European Union, a large percentage of people remain at or below the poverty line. In many cases, individuals and families are trapped in a circle of deprivation from one generation to the next. While a number of issues contribute to this reality, two particular issues are major contributory factors to sustained social deprivation. The obvious matter of long-term unemployment is the first issue. Irrespective of the level and range of social support measures in place, it is virtually impossible for a family without at least one employed member, to make ends meet. In particular, it is extremely rare for such a social unit to accumulate any substantial level of financial resource. As a result, a pattern of resignation and lack of hope is only too common. The second major factor contributing to persistent social deprivation is closely related to unemployment, the question of education.
Despite the fact that study after study has shown a high level of educational attainment is the single most important key to improved employment potential, we continue to see the depressing pattern of the lowest uptake of advanced education among those sectors of our society with greatest economic needs. It must be admitted that, while it is relatively easy to define this problem, it is far more difficult to obtain an effective solution. Recent initiatives by the Department of Education are certain to make a major difference in this regard. In particular, the increased level of access to computer training is vital to facilitate the necessary level of educational and social gain among the most economically deprived sectors of society.
In the short-term, however, the most immediate and frequently expressed needs of those with the lowest levels of income relate to social support provisions. Thus, as the current Minister designed his budgetary proposals he had to attempt to reconcile the major differences in emphasis placed on various issues by diverse sectors of the community. In carrying out this extremely difficult task the Minister had to keep clearly in mind the fact that seemingly major differences between various interest groups may in fact reflect the actual underlying realities. For example, the level of interdependence between different sectors is extremely clear.
Take the core issue of job creation. Unless those who are most affluent in our society decide to invest some of their resources in sometimes risky economic ventures, the vital lift-off in terms of substantial and sustained job creation levels is very unlikely to materialise. Similarly, if progress is not made in terms of removing the various poverty traps in our socio-economic structures, then the necessary level of manpower is unlikely to become available in the marketplace.
This brings me back to my opening theme of the need for balance in economic and social support measures within the budget. It would have been all too easy for the Minister, Deputy McCreevy, to take the easy way out as he planned this budget. He could have selected any one of a number of possible easy and populist ways out. In other words, he could have concentrated on a few sectors for very short-term gain, while ignoring the overall vital need to carefully grow the Irish economy for the benefit of all citizens, but particularly those most in need.
Thankfully, he did not lose this vital sense of balance in the construction of his budget. He did indeed take a number of important steps in dealing with immediate priorities, particularly in the area of social cohesion and justice. Similarly, he clearly recognised the special problems being encountered by groups such as small and middlesized farmers. Accepting the fact that our vital agricultural industry is coming under increasing pressure from a range of factors — such as lower world market prices, the likely enlargement of the EU to include countries with large agricultural bases and a worrying level of market uncertainty regarding vital agricultural products — the Minister has decisively responded to the sector's urgent needs.
Therefore, before considering some of the many excellent individual features of the Minister's budget, I congratulate him on the overall level of balance he has managed to achieve in his provisions. With a combination of exciting initiatives and economic prudence, he has ensured that a substantial proportion of the benefits of the current economic boom are spread across the wide range of interests in our society, while at the same time taking care to maintain the vital current momentum in growth and market confidence. I firmly believe that the excellent work of the Minister will reap substantial rewards in terms of sustained economic growth in the years immediately ahead.
In relation to the specific provisions of the budget, my main priorities continue to be in relation to two key issues, namely improving the range and quality of social cohesion provisions and reducing the burden of taxation on the PAYE employee. I am pleased to see the level of investment in both these areas by the Minister.
In conjunction with the Minister for Social, Community and Family Affairs, Deputy Dermot Ahern, the Minister for Finance, Deputy McCreevy, has made a number of excellent changes in terms of social support payments. Of course, the increase of £5 per week for those receiving old age pensions and retirement, invalidity, widow's and widower's pensions aged 65 years or over, was particularly welcome. Our senior citizens have unselfishly laid the foundation for our economic growth through many decades of work and effort. It is only fair and just that they should now receive appropriate recognition. Indeed, the ongoing commitment of both the Fianna Fáil and Progressive Democrats parties to this cherished sector of society has been clearly stated.
I equally welcome the other measures in this budget which assist our older citizens. For example, we have seen substantial improvements in terms of income tax. I am particularly happy with the extension of the free travel pass provisions in the case of companions of those aged 75 years or more. This initiative is certain to allow far greater freedom of movement to older people who, despite some level of illness or infirmity, wish to continue their social involvement to the greatest possible degree.
A particular feature of the income tax provisions is the major increase in the level of allowance provided for the widowed bereaved parent. The level of improvement is clearly evident from the first year provision which has jumped from £1,500 to £5,000. The improvement is sustained up to five years. At a time of family crisis this provision will provide a welcome practical indication of support and solidarity on the part of the State.
This Government's commitment to the taxpayer is abundantly clear from the many outstanding features of the budget. The evidence is clear and explicit. Five leading elements in this regard clearly illustrate the scope and level of improvement achieved in year one by the Minister. The major reduction of 2 per cent in the standard income tax rate represents an investment of £211 million per annum. Can anybody seriously complain about this excellent change? This is followed up by an increase of £250 in the personal allowance for a single person, or £500 for a couple. This measure involves the allocation of £125 million each year and represents a major relief in terms of PAYE income tax liabilities. The measure is further complemented by the increase in weekly PRSI allowance by £20 at an annual cost of £38 million. This progress is further reinforced by a widening of the standard bands at a cost of £15 million.
This interlinked range of measures by the Minister represents the greatest ever meaningful gesture by a Government towards the hard pressed PAYE sector. Their plight has been addressed at practically every level with a commitment to further radical improvements in the years ahead.
The Minister has also ensured that the incentive to invest in the economy is further increased by a number of steps. I would like to highlight the certain benefits of his decision to reduce the standard rate of corporation tax by 4 per cent. To survive and grow in an increasingly competitive international climate, business enterprise needs every possible level of practical relief. In particular, reinvestment levels need to be substantially increased in areas such as research and development, product development and marketing. This substantial reduction in the rate of corporation tax will mean that profits achieved in good times can be invested to a greater degree in a company's consolidation and growth. The major investment of £4 million per annum in reducing the top income tax rate by 2 per cent will add to the level of capital available for investment in a variety of job creation enterprises.
I warmly congratulate the Minister, Deputy McCreevy, who has skilfully built on the achievements of his predecessors since 1987, each of whom made a major contribution to the current state of the economy. The Minister has shown a tremendous sense of awareness of the need to combine compassion with prudence for the long-term benefit of all in society. His excellent start in the key ministry of Finance augurs well for the future growth and development of the to the benefit of all our citizens.
The budget provides further impetus for great changes already under way in the role of my Department which affect the operation of many constituent elements of the criminal justice system and the equality infrastructure.
In the cases of the courts service and prisons authority, new Statutes will outline the accountability structure. The position in regard to Garda legislation will be reviewed in the light of accountability changes which emerge in the implementation phase of the SMI review. In all cases, a key principle will be the devolution of authority, responsibility and accountability to the lowest appropriate level possible while maintaining the essential controls which, in a democratic society, must rest with the Minister and the Government.
Within the context of this unprecedented organisational change a number of concrete developments have already taken place and I will outline these briefly. The Courts Service Bill is before the Seanad and will be debated in this House early in the new year. I recently announced that I will appoint an interim board to prepare for the early establishment of the prisons authority and will announce its membership in the next few weeks. The report of the Steering Group on the Efficiency and Effectiveness of the Garda Síochána was published in November. A major review of the probation and welfare service as to its future role, needs and appropriate management structure has been commenced by an expert group. A major investment programme in computerised management systems in the Garda, prisons, courts, probation and welfare service and other agencies is under way.
The Employment Equality Bill, providing for the establishment of the equality authority and the director of equality investigations, is before the House. I announced last month that it is intended to establish the national disability authority. An establishment group will prepare detailed proposals for setting up the authority for submission to Government within six months.
A sum of £4.168 million has been set aside in this year's revised Estimate at subhead G of Vote 19 for the refugee determination process. I expect we will see a noticeable improvement in processing of asylum claims with the introduction of new procedures and the recruitment of additional staff. Provision is included in this amount for the establishment of a scheme of legal assistance to assist asylum seekers in the processing of their claims for refugee status. In addition, work has commenced on the provision of new premises at a cost of £2.5 million for staff processing asylum claims. The new building will act as a one stop shop for asylum seekers and will house not only the staff involved with the asylum determination process, but also the refugee unit of the Eastern Health Board, the UNHCR and the proposed legal assistance office.
My Department has made a great deal of progress on a wide range of equality issues since the merging of the Department of Justice and the Department of Equality and Law Reform in July. The publication of the Employment Equality Bill last week, reactivates the Employment Equality Bill, 1996, which fell, following the Supreme Courts' judgment of last May that aspects of it were repugnant to the Constitution. It represents the most important legislative development in combating discrimination in the workforce for 20 years. For the first time in Irish legislation, the Bill contains specific provisions to outlaw sexual harassment in the workplace and in the course of employment whether by an employer, a fellow employee or by clients, customers or business contacts.
The Government is committed to the realisation of equality across society. In this context, I intend to establish a new infrastructure for equality. Statutory provision has been made for this initiative in the Employment Equality Bill, 1997. The Estimate for the employment equality agency has been increased to £2.1 million in 1998. Moreover, the Government is concerned to ensure the fruits of the economic prosperity the country is experiencing are prudently availed of to foster a truly caring society where the needs of all who are vulnerable are paramount. It has made considerable provisions for improving the lives of people with disabilities.
Contrary to the seemingly widespread belief that people with disabilities are largely ignored, substantial funding has been provided across Government Departments, State boards and voluntary organisations. Between the Estimates for 1998 and budget provisions, £24.4 million extra is being provided in 1998 by the Minister for Health and Children. He has provided £7 million revenue and £5.25 million capital for the development of services for the mentally handicapped in 1998 with £3 million capital and £3 million revenue for the development of physical and sensory disability services in 1998. A sum of £6.15 million is already provided in the Department for these services in 1998.
Since the Government took office in June, a further £10 million has been invested in services to persons with physical and sensory disabilities. This includes £4.325 million made available in October by the Minister for Social, Community and Family Affairs for the purchase of aids and equipment for people with disabilities. A further £5 million has been provided by the Department of Health and Children for physical and sensory disability services. This will be used to help agencies providing services in the sector to eliminate accumulated deficits, for the purchase of essential equipment and for other urgent once off expenditure by non Government agencies and health boards. In addition, capital grants totalling £675,000 were given for the purpose of increasing the number of respite and residential places for people with severe physical disabilities. l was successful in getting the 1998 Estimate allocations for disability in my Department increased by more than 50 per cent to a total of £875,000. I provided £700,000 in the Estimate to fund the work of the Irish Council of People with Disabilities in 1998, which is more than double the 1997 Estimate provision of £300,000. I provided £160,000 in the Estimate to ensure that there is no reduction in momentum in the operation of the pilot community development projects for people with disabilities.
The Minister for Finance in his budget provisions, allocated £2.615 million to my Department for equal opportunity child care measures to facilitate the work of the expert working group on child care, established under Partnership 2000. Funding for equal opportunity child care measures in 1995 and 1996 was £800,000. The allocation of £2.615 million in 1998 represents an increase of more than 200 per cent and is an indication of the Government's intention to actively facilitate the development of a child care infrastructure in Ireland as an equal opportunity measure. A sum of £200,000 is provided for the National Women's Council in the Department's Estimate for 1998, which represents an increase on the allocation of £170,000 for 1997.
A further signal of the Government's commitment to equality is the action for equality awards scheme. The purpose of the scheme is to give recognition to good equality practices in society and while details of the 1998 scheme are not yet finalised, £40,000 has been allocated in the 1998 Estimate.
Family law cases account for approximately 90 per cent of cases dealt with by the Legal Aid Board. Legislation on domestic violence and divorce, which came into effect during 1996 and 1997, has resulted in much increased demand on the services of the board. To assist it in meeting the ever increasing demands on its services I increased its 1998 allocation to £9.495 million, which represents a 14 per cent increase on the 1997 allocation of £8.319 million at a time when expenditure on other services is being restrained to very modest growth.
I turn to the very important area of crime and the measures being taken to tackle the various aspects of crime affecting society. The provision for the Garda Síochána Vote for 1998 is £482.407 million, an increase of £25.5 million on the 1997 allocation. This includes extra funding to cover the cost of the recruitment of additional gardaí as part of the accelerated recruitment campaign to increase Garda numbers and bring the strength of the force to 12,000 over a period of years. Allowing for natural wastage this will require the recruitment of an estimated 2,200 gardaí. The first intake of these additional recruits will commence early next year. The recent report of the steering group on the efficiency and effectiveness of the Garda Síochána includes a significant number of recommendations as well as a comprehensive programme for their implementation. It represents a far reaching assessment of how the force should be managed and will lead to very significant changes. The Government has approved in principle most of the recommendations and has established the mechanism for their implementation in the coming years. One of the most significant recommendations was the proposal for carrying out of a "bottom-up" review of the force to determine the optimum number, structure and deployment of the Garda and the mix between gardaí and civilians.
Provision of £12.82 million has been made for expenditure next year on Garda computer projects such as the PULSE project. When this system is in place gardaí will have access to a centralised and integrated information base which will produce information in a timely and effective manner to facilitate the investigation of crime.
Almost £15 million is provided in the Garda Vote next year towards the cost of developing Garda IT systems. Most of this money will be spent on the current phase of the Garda IT strategy, the PULSE project. The total cost of the project, which will be completed over the next three years, will be in excess of £36 million. Almost all aspects of Garda operations will be affected by this far reaching project.
Of the £2.712 million capital allocation provided in the Garda Vote for the purchase of communications equipment next year, approximately £1.2 million has been provided for the completion of a new voice and data network to serve the Dublin metropolitan area. Service to the public will be greatly improved as a result of this investment. For example it will be possible to be put through to any Dublin station simply by ringing one centralised number.
The new witness security programme is part of the Government's commitment to tackling organised crime and will be put in place in situations where, as a result of evidence given in court, a threat to the safety of a witness is perceived to exist. I have made provision of £250,000 for it in the Garda Vote in 1998.
Funding for the Irish Association for Victim Support has increased to £645,000 for 1998, an increase of £365,000 on last year. I am hosting a conference on victims of crime which concludes today in Dublin Castle. In the new year I propose to develop a new charter for victims of crime which will reflect the Government's commitment in this area.
The Criminal Assets Bureau has proven, in the short time it has been in place, to be an effective weapon in denying drug dealers and organised criminals the benefits of their ill-gotten gains and has seriously disrupted the activities of criminal gangs. For 1998, £3.8 million has been allocated to facilitate the very important work of the Criminal Assets Bureau and ensure its continued effective operation.
From 1 January 1997 to 24 October last, the Criminal Assets Bureau obtained 20 interim orders for assets in excess of £2 million and 12 interlocutory orders for assets in excess of £1.3 million. Revenue officers of the Criminal Assets Bureau have investigated, assessed and made demands for payment of income tax, with interest, on persons suspected of criminal activity, to the value of £8.2 million. The bureau has also assessed social welfare overpayments of £0.15 million. I pay tribute to the Criminal Assets Bureau for its excellent work and also to the Garda for their perseverance and commitment to the fight against drugs, organised crime and crime generally.
Next year more than £9 million is to be allocated to the Garda building programme. The other side of the Government's response to crime is providing adequate prison accommodation. The Government's prison building programme will have a major impact on the level of available prison places in the State — a 45 per cent increase in the first two years and an overall increase in capacity of over 80 per cent in five years. At a time of major development of our courts system, the Government has increased the allocation for the Courts Vote from £30,475 million in 1997 to just over £40 million in 1998. This represents a substantial increase of 31 per cent over last year's allocation.
The Government is providing over £16.5 million in the Estimates for the Land Registry and Registry of Deeds this year which will maintain the considerable progress already made by the Registrar of Titles in modernising this essential service. It is expected that the final phase of the decentralisation of the Land Registry to Waterford will be completed in April of next year and at that stage a total of 140 member of staff will be decentralised there.
The provision of over £12.8 million for works on courthouses will enable a number of projects to be completed. These include Tallaght, Abbeyfeale, Cork Circuit Court — Phase 1, Ennis — Phase 1, Waterford, Portlaoise, Listowel, Roscrea, Castlerea, Templemore and Rathdowney. Work will commence on the refurbishment of Trim, Carlow — Phase 2, Ennis — Phase 2, and Mallow courthouses next year and I will approve further projects at other court venues in the coming months.
Plans for the registries include development of a new integrated title registration computer system and ongoing support of existing technology in both the Land Registry and the Registry of Deeds. Proposals for a change in the status of the registries are at the final stages of examination and I expect to bring proposals to Government in this regard early in the new year.
Debate adjourned.