Appropriation Bill, 1980 [Certified Money Bill]: Second Stage (Resumed) and Final Stages.

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

Mr. McDonald

Speaking yesterday evening about land policy and the White Paper. I said that the policy on land restricted farmers' second sons and daughters, members of the veterinary profession and people who have been traditionally part and parcel of the land scene in this country and people who have always enjoyed the use of certain acreages of land. I think that the new restrictions contained in the Land Bill will certainly cause a certain amount of hardship. Also, of course, it affects the three F's, the freedom of people either to sell or buy land. We do not need restrictions of this kind at the present time. There are many more urgent and pressing problems.

Taking my own constituency, if you look at the Castlecomer plateau, which is roughly the area from Castlecomer in Kilkenny up almost to the town of Athy and over to Carlow, you will find a very strong loam there — difficult, heavy soil. This soil, according to a land soil survey carried out by An Foras Talúntais some years ago, is identical in all respects to the soil found in County Leitrim. It is quite evident that the farmers in that particular area of Laois suffer the very same disadvantages as their counterparts in County Leitrim, but the great exception is that they do not get the benefit of the EEC Disadvantaged Areas Scheme.

Similarly, on the west side of my constituency in County Offaly, the farmers on the west bank of the river Shannon benefit. When you talk about the west bank you think about the Middle East, but there is a west bank to the River Shannon. The water floods to the same depth on the east bank for five months of the year and yet only the people in Galway have the advantage of the EEC Disadvantaged Areas Scheme. They have the advantage of significantly higher rates of grants. It is downright unjust that the farmers in my constituency in County Offaly are not treated in the same way and that their disadvantage is not recognised as it is on the other side of the river. It is time that this should be rectified. Again, I am not blaming the present Government because during the term of the last Government I made on a number of occasions the very same case. Unfortunately, it fell on deaf ears.

Now that farming is in a more precarious and difficult situation, I would ask the Government, in their introduction of a policy which is badly needed, to have a sympathetic look at the problems and at the operation of the disadvantaged areas scheme. As a matter of fact, in the review of the Government's White Paper on land policy the only point that has not clearly emerged in the national newspapers is the fact that this land policy proposes a 50 and 60 per cent surcharge or new tax on certain categories of people who traditionally were in the market place to buy land. In addition, it introduces a new land tax of £5 for poor law valuation. Having regard to the present state of agricultural incomes we should object to this. My own belief is that the farming community is incapable of absorbing more taxes at the present time.

It is true to say as we move towards Christmas and come to the close of this year that very many people will be glad to see the end of 1980. I believe that this has been a disastrous year for very many people. In January of 1980 there were 86,200 people registered unemployed, in February the figure rose to 86,900, in March to 88,200, in April the figure of unemployed rose to 90,600, in May to 94,300, in June it rose to 99,600, in July we had 103,400 unemployed, in August 107,000, in September 110,000, in October 115,000 and now the figure is in the region of 120,000 or 125,000. This affects every part of the country. I think it is going to take a united effort on the part of all sectors of the community to reverse that trend.

For some inexplicable reason, at least to me, it seems that people who are unemployed, or too many of the people who are unemployed, are quite complacent about it. The loss of job opportunities is not looked upon with the same fear it evoked some years ago. It is not uncommon to meet people who are distracted by the prospect of either redundancy payments or pay-related benefit and in the short term they do not object to the loss of their jobs. This is very short-sighted and it is a point that has to be corrected. The country cannot continue in the present trend where unemployment figures are rising rapidly. It is not just affecting any one particular sector of the community. There are all kinds of industries and job opportunities involved. In Laois and Offaly we have somewhere between a 7 per cent and 11 per cent industrial labour force — a very low rate — but seven or eight places of work or factories have closed in the past six months. This is most distressing. The number of opportunities for the school leavers is indeed again a very severe problem.

Looking at the economy as we move towards Christmas we have this spectre of unemployment, we have severe difficulty in finding jobs for school leavers and we have high prices. We recall the many promises but we are still left with prices that are rising. There is also the major problem of interest rates. Many people will say we should be proposing solutions. Our party have looked at the problem and we have advocated that the Government should embark on a short-term policy for agriculture which was enunciated by the leader of the party last week. It called for the abolition and refund of the resources tax, the repeal of the bovine diseases levy, the abolition of rates on agricultural land, the introduction of capital allowances for breeding stock, an interest subsidy for farmers and for the reduction of stamp duty on the transfer of agricultural property to young farmers. We believe that that package, in the short-term, will go a long way towards alleviating some of the stress, strain and hardship that the present economic difficulties are creating for the rural community.

Because of the lack of very clear and concise policies the country is just barely ticking over. Last night Senator McGuinness spoke about apathy, that young people are wondering whether studying for exams is worth while when there are not sufficient job opportunities for them. Politicians, and indeed the Government, must clearly indicate the way. There has to be a solution to the economic problems but it can only be brought about by clear, determined and brave measures by the Government. The Government are elected to rule and to govern the country. Nobody can deny that they certainly have a mandate, if you are to count the number of seats in the Dáil and yet we have not got the policies. The policy document, the manifesto on which the Government got their mandate has, I suppose, been shelved. At least the promises have not been kept. We need policies which take into account the present situation, which clearly recognise the problems of the eighties and which will enthuse a young population. A large percentage of the population will be in the younger age group. They will have new priorities of their own and they will be looking at things from a different perspective. Therefore, there must be a reordering of the priorities of the Government and this must reflect the views and the aspirations of the younger people in the community. I ask the Government, starting in the New Year, to give priority to a set of proposals that acknowledge, first of all, the grave difficulties that people find themselves in — which I hope are in the short-term — and secondly, which will give leadership to the entire population, whether they are in the private sector or in the public sector. They should encourage people to put their backs willingly into the task of getting the country moving, so that we can sustain, with a reasonable amount of comfort, our increasing population and that the infrastructures necessary to bring about that kind of Ireland will be provided without gimmicks and without the present showmanship.

There is absolutely no problem in getting one of the 30 Ministers to open a new factory or a new place of work — I know that there were not many — over the last number of months. It is more difficult to get a Minister or a Minister of State to meet a deputation from an industry or work place that is under severe difficulties. This is something that should be rectified. Instead of celebrations, the Government should take on the heavy task of supporting the work places that are in difficulties.

Mr. Cooney

This debate traditionally gives us an opportunity to range very widely over the whole political and economic scene. There are so many things that could be discussed. It is very difficult to make a choice so as to confine one's contribution within limited time, especially mid-day on the last day of the sittings in the week before Christmas. One is very conscious that, possibly, at this stage of this debate, the only person not bored by the contribution is the speaker.

Ruairí Brugha

Not at all.

Mr. Cooney

Bearing that in mind, I will be brief. What depresses me most on the present political scene is the failure of the public to realise the dire economic straits of the country. This failure is due to the deliberate Government policy of masking the truth from the people. That is an understandable political stand but I suggest that it is not a responsible political attitude for the Government to take.

The country can only come out of its economic difficulties with the full co-operation of all the people and that full co-operation can only be forthcoming when the people are really aware and, indeed, painfully aware of the necessity to give that co-operation. I do not think that they are so aware, and that is a deliberate tactic on the part of the Government. The present economic difficulties are constantly being played down. No later than yesterday in the Dáil, the Taoiseach, in opening the debate on the Adjournment of the House, made a speech that was — one might nearly say — optimistic, with regard to the present state of the economy and its prospects for next year. He is the only economic commentator who is optimistic in that regard. His colleagues in this House who have spoken have pursued much the same line of looking for rays of sunshine, or even of less than dark sky, grey sky, in the economic scene and presenting that in the general nature of the economic position.

Unfortunately, all the indications are that the economy is in a severely depressed state. The balance of payments is seriously wrong. Inflation continues to run at a rate that will put our competitiveness into serious jeopardy. The rate of investment has fallen, without any sign of an upturn, though the Taoiseach, in his speech, said that the economic common sense of the Government — and it took a nerve to say that in the present time — enables our economy to maintain levels of investment which are among the highest in the Community and the OECD area. He was shy of giving the figures, and I do not know what they are. I understood, however, that the rate of investment generally in the western world has not been proceeding at anything like a satisfactory rate and that the present lack of investment will prolong the present recession beyond 1981 and into 1982.

The Taoiseach continued in somewhat contradictory terms later in his speech. In speaking of the growth in unemployment which he was constrained to describe as "a sharp rise", he said that this is a symptom of the lack of sufficient investment in the past to generate the level of jobs necessary. That was coming nearer the mark, because one of the depressing indicators in the present economic scene is the lack of investment, the unwillingness of people to invest and unless people invest, the source for our future growth is missing. It is understandable that people do not want to commit funds, possibly borrowed funds, to a new plant, a refurbished plant or buildings, when there is no clear indication that they will get a return on this investment. There is a vicious circle of lack of confidence, lack of investment, and this will maintain the economic recession for longer than is possibly thought at the moment. That brings with it the hardship of increasing unemployment which, in turn, can bring with it dangers of social unrest though that danger is, to some extent, obviated by the pay-related system of social benefit. That system has been criticised as being, to some extent, a disincentive to harder work, an incentive to milk the system and, undoubtedly, there are some unscrupulous people who will take advantage of a generous social welfare regime and use it dishonestly. On the other hand, a society that should have the proper measure of compassion for those out of work has a duty to cushion those people against the rigours of unemployment.

The principle of providing proper benefits for unemployed people cannot be quibbled with. It is very important in this day and age, the age of the agitator, in so far as generous levels of benefit can purchase social peace. I take some pride in the fact that the Government of which I was a member introduced the principle of pay-related social benefits. Socially it was a good thing. It is a pity that some people abuse the system but it would be wrong to condemn it because a minority abuse it. The system can only continue to act in case of the unemployed when the Exchequer is in a position to fuel it and the Exchequer can only finance it when it, in turn, can get contributions from the part of the community gainfully employed. All the signs are that the downturn in economic level will leave the Exchequer finances in a perilous condition next year.

One very important economic indicator is the level of cement sales. I do not know the up-to-date figures but in the NESC report it was disclosed that the level of cement sales was down 15.4 per cent between the last quarter of 1979 and the first quarter of 1980. I believe that trend of dropping cement sales is continuing. This again shows a downturn of basic infrastructural activity which is a very bad omen indeed. Building output in 1980 is down 2.5 per cent on 1979. This is beginning to have effect in areas of expenditure where people have high expectations.

The education expenditure this year is down substantially on last year. Capital expenditure on health is down 15.4 per cent this year on last year. I believe next year we will see a continuation of this downward trend in social spending because the country cannot afford it. The expectation for a high level of spending in these areas is still there. That expectation is there because the Government have failed to make the people aware of what is the true state of the country's economy. I blame the Government for this because they have a duty not to hold on to office by any means. They are entitled to be political but not at the expense of concealing the whole truth from the people. They cannot rectify the country's economy without the full co-operation of the people and they cannot expect to get that if they lead the people to live in a fool's paradise, lead them to believe that everything would be all right if the Minister for Finance, whoever he might be, was not so mean and if the Government were not so obdurate in refusing to spend what they secretly have.

Another reason why I believe the serious times will continue is because of the unusually depressed state of agriculture. Many economic commentators do not give sufficient importance to the place of agriculture in the Irish economy. The money earned by Irish farmers, which will be spent by them finds its way into every corner of the country. Every town, village and crossroads in Ireland benefits from agricultural money and from farmers spending. It is defused right through the economy in a way that no other sector's earnings can be. Consequently its accelerated effect on the economy is that much greater because it fuels the purchasing power of the shopkeeper, increases the demand on the wholesaler and increases what the manufacturer has to manufacture to meet that demand. At the moment farmers do not have money to spend. That will lead to an even worse position next year because the forecasts are that the agricultural economy will not take an upturn next year.

A frightening statistic, and one which has not got the attention that it deserves, is that cow numbers are now at their lowest level since 1972. We breed cattle from them and it is our exports of cattle and meat that contribute so much to our economic health. They contribute to the well-being of farmers. Their purchasing power is spread throughout the community. Even more significantly, cattle form such a significant part in our exports that any serious downturn in cattle, as a percentage of our exports, will put our balance of payments position into a very difficult state next year. That will impose economic restraints on growth. I do not know how we will come out of that.

The Taoiseach said there will have to be a major programme of investment. I do not know where he will get the money because there does not seem to be any will to get it from the only place it can be taken with economic sense at the moment, from within the economy. That would be politically painful, but having regard to the life of this present Oireachtas and how near an election must be, obviously the Government, whose one ambition is to remain in power, will not do anything that may be politically painful even though all the indicators are that it is the only economic way forward for us. It seems there will be more borrowing. I suppose the sleight-of-hand whereby borrowing abroad will contribute to our reserves and give them an unreal but more healthy appearance may be the tactic. If that money is to be borrowed and invested and this investment creates more demand, and that demand has to be satisfied by increased imports, what way will the balance of payments be next year, bearing in mind that one critical part of our exports, cattle, will not be there in the same value as in the previous year? Will we find ourselves locked into a vicious circle? I fear that we will.

I blame the Government for not making the facts abundantly clear. I can understand why the Government do not want to do that at this time but there are other voices in the community that have been remarkably silent about our economic plight. I recall the last recession in 1974-75, a short lived recession, and a NESC report. The NESC issued another report on the present state of the economy, a most gloomy report, advocating belt tightening. There is a great contrast between that report and the report which they issued in late 1974 in which they urged Government spending and indicated that borrowing externally was feasible and was the proper thing to do. The NESC at the moment and the ERSI are about the only two bodies which made efforts to draw attention seriously to the plight of the economy.

I recall during the last recession that captains of industry, princes of commerce and mandarins of the banks, every time there was a dinner or cocktail party in a chamber of commerce, were making speeches about the mal-government of the country and the dire state of the economy. I find it puzzling that these people are not now fulfilling their civic duty of drawing attention to the state of affairs in this country, the failure of the Government to run the economy in a proper way and why they are not trying to alert the people to the serious state of the economy. Perhaps they got tired or perhaps there are other reasons. Perhaps there are political reasons influencing them, also. Of course, the Government are not united. I think that this divisiveness and lack of unity in the Government must have the effect of enervating the will of the Government to do what has to be done.

We all know that there was a coup this time last year when the present Taoiseach acceded to office. Indeed, it amazes me why the Fianna Fál Members of this House do not have votes in elections within their parliamentary party. Are they not full members of the parliamentary party? I venture to suggest that if they had had votes at that time——

An Leas-Chathaoirleach

The Chair is slow to interrupt the Senator but this hardly arises on the Appropriation Bill which deals with administration and Government policy.

Mr. Cooney

I was coming around to indicate that one reason for our poor position is the divisions within the Government. I wanted to get those divisions within their historical context. I was making the point that if Senators had had votes the outcome of that election would have been different.

Ruairí Brugha

Purely speculative.

Mr. Cooney

Has Deputy Brugha taken the shilling too? There is no doubt that the disunity within the Government is notorious and it must be enervating on the will of the Government to tackle the problems that are here. The present incumbent in the office of Taoiseach wants to hold on to that office and will not do anything that would be in any way politically inappropriate no matter how economically desirable it might be. He makes no secret of his contempt for some of his colleagues in the Government. There are others in the Government who make no secret of their intense dislike for him and who are prepared to articulate this dislike. That is the state of the administration in charge of the country at this critical time.

Those people, for their own political reasons — the Taoiseach and his followers want to maintain office — do not want to be the ones to lose. They will not reveal the true facts to the country. Those who uphold the Taoiseach and who in their hearts would dearly love to see him lose the next election are afraid to strike, and consequently they find themselves locked in a hypocritical position in which they prefer to be bondsmen in Government rather than be honourable in Opposition: they prefer to serve with some- body whom they not merely dislike but detest.

That is the personality of the present Government; full of divisions, full of enmities, full of dislikes. They are the Government who are charged with running this country at this time of economic crisis. It is no wonder that the facts are being concealed from the people for differing reasons on different facts.

I hope that the election on the horizon will be brought forward as soon as possible. Something has to be changed in this country: something has to be done to get across to the people the serious state to which their affairs have been let drift. There are people in the Government who would dearly love to see an election in the dear hope that they would lose it, because at this stage it is the only way in which they can get rid of their Taoiseach. But they are not prepared to make that move because they are prepared to continue in a false position in Government rather than adopt an honourable position in Opposition. That is their choice but it devalues them personally.

Possibly I am not being fair to them. Maybe they have other tactics pending. We will have to wait and see.

Mr. Dowling

Everybody hates Fianna Fáil but the voters.

Mr. Cooney

That is something we are waiting to see. One reason why the voters like Fianna Fáil is that Fianna Fáil have bribed them over the years with goodies and as a result, we are in the economic difficulty we are now in. Unemployment is rising, our inflation is high, our exports are dropping, many of our farmers are in poverty as a result of Fianna Fáil policy which obviously commends itself to Senator Dowling. If the result of the policy is to buy power, so be it. No other end matters. That is the ethos of Fianna Fáil.

Miss Harney

We have had a very thorough debate on the Bill, but there are a few points I should like to make. Opening the debate, the Minister said he looked forward to a constructive debate. I am sure he must be very disappointed with some of the contributions from the Opposition who have painted a picture of gloom and doom so far. Senator Cooney must not think very much of the Irish electorate when he said they were capable of being bribed by Fianna Fáil. That is a very sad reflection on the people who go out to vote in general elections.

I am very happy that yesterday the Minister for Education published his White Paper on the future development of education in Ireland. Unfortunately, during the years of the Coalition, it was not possible to produce a paper of this nature because we did not have census figures on which we could decide, or know, the number of people involved in the different sectors of education in the future. I am happy that the Government have now put forward their ideas in a constructive way on how they foresee Irish education will develop in the next decade. I am very pleased, at a time when our economy is changing and developing, that we are putting an emphasis, in our educational system, on the technological area, that preference will be given to students who want to pursue courses in any of the technological skills. This is something that is necessary if our young people are to have secure futures and some chance of employment, because the old traditional areas of employment are changing. We are a new and developing economy and we must be able to take our place among the other economies of the world. We cannot do that unless our educational system provides us with the type of people who have the necessary skills and training to take up the jobs.

This has been all part and parcel of Fianna Fáil policies since the sixties when the late Donogh O'Malley introduced free post-primary education. We have continued along these lines to the development of the regional technical colleges. Yesterday the Minister announced his hopes that he will be able to build four more of these colleges in the Dublin area.

All this is part and parcel of our desire to make sure that we achieve the desired goal of the Fianna Fáil Party, that of full employment. Unfortunately in the past year, due to the world recession and the increases in the price of oil, the unemployment figures have not been as good as we might have wished. We must realise that we now have a very fast growing population. Many of the people who in the past took to the ships and the aeroplanes to go abroad to find their future in foreign shores are now staying at home looking for jobs. They are presenting us with many new social and economic demands, problems we did not have in the past. This means that we must look to new ways to provide them with some chance of employment and a secure future in the next decade.

Not only must we look at new ways of developing our economy but the Government and all political parties must look at the many social problems that are currently confronting us.

In particular, in the next decade, alcoholism, now of major proportions, must be tackled seriously, whichever party are in Government.

Allied to this is the very serious problem of marital breakdown. Marriages are breaking down at a very fast rate, particularly among young people. This is putting tremendous pressure on local authorities to provide housing for deserted wives, separated wives, unmarried mothers and so on. Through the educational system, the State, not just the Church, has a role to play in making sure that our young people are adequately prepared for the equal partnership that marriage should be. We must make sure that the most important decision that any two young people make in their lives, that of deciding upon their marriage partner, is made only after getting all the expert professional advice that should be available to them so that when they get married and come up against the many problems they will obviously come up against — because marriage is, after all, essentially about human relationships and they will obviously come up against many problems — they will have open to them, through the State, the professional counselling that should be there to help them in difficult situations. Unfortunately, in the past that role has been left to the Church. It is not good enough in the Ireland of today, with such a large young population, to leave the Church to look after this very important area; it is the responsibility of the Government.

Allied to this is the whole role of women in our society. I hope that many of the areas of employment, which in the past have been closed to women due to financial restraints, will now be open to them. I hope many of our young girls will pursue courses in mathematics and science in our schools and go on to develop these and enter the technological area which they have been reluctant to do in the past. It is the duty of the people involved in education to encourage young women to think in different ways about their future. In the past a girl's future on leaving school was seen in terms of a very short period in employment and then to take on the responsibilities of marriage and parenthood. It is no longer necessary for a woman who gets married to give up her job. Thankfully, she can combine a very successful career with that of being wife and mother. In fact, the two can benefit as a result. Women must take a more active role in the fields that have been traditionally closed to them. Women have been very reluctant to take any role in any of the decision making bodies of our country. Many people have criticised this. But if the Government do not provide the facilities like crèches and so on so that married women can have their children looked after if they go out to work, women are not going to make the contribution they are capable of making to our society.

There is legislation on the Statute Book that has been criticised by many men and women involved in social affairs. That is the legislation known as the tort of criminal conversation. In 1980 this is a degrading piece of legislation to have on the Statute Book. It is an insult to Irish women and a stigma on them. It implies that they are second-class citizens and merely the property of their husbands.

An Cathaoirleach

The Senator should not discuss legislation on the Appropriation Bill.

Miss Harney

In discussing the Appropriation Bill we are looking at the overall policies of the Government and in that regard the policies of the Government in the social area are very important. It is important that the legislation we have on our Statute Book relating to women and men in our society should be relevant to the eighties.

An Cathaoirleach

That is right, but the Senator cannot advocate legislation on the Appropriation Bill.

Miss Harney

Perhaps I could advocate the removal of legislation rather than proposing it.

An Cathaoirleach

No.

Miss Harney

I will end by saying that I hope that, in all aspects, the Government will continue to pursue the policies they have pursued in the past to make sure that men and women have equal status in our society, that they are capable of taking their place in our economy and of giving to Ireland the type of imput that will be necessary if we are to continue to grow as a small open economy in a very difficult world that is suffering from recession. We must tackle not only ecomomic problems — we most provide jobs. In addition, we must tackle the very serious social problems that are now confronting our new young population. If we do not, the problems that we will be discussing in the Seanad in 1990 will be of gigantic proportions and we may not be able to solve them. Unless we set the plans forth now to make sure that they do not, the problems may grow to such a serious extent that we will not be capable of tackling them.

Professor Doolan

Tá sé de pribhléid agam, mar Bhall nua, labhairt sa Teach seo don chéad uair. Tá ceithre pointí agam le lua.

Firstly, I would like to refer to the political matter of greatest priority in the opinion of myself, my party and the Members of this House. That is peace and reconciliation, and looking towards new structures of this island which may give expression to the unity of our island and the bringing together of our people. Initiative lies with and has been taken by our Government. In many ways they have more freedom to act than other parties in relation to this particular problem. In the first instance, such initiatives taken by our Government in Dublin, are with the other sovereign Government in the situation, the British Government. The record shows that, increasingly over the last decade, the Government of Ireland has been recognised as having a role to play in the resolution of this problem. Indeed, last week this proper approach to the problem has been taken one important step further.

At the same time we must not neglect the development of contacts at every possible level with the North, in the political area, in the economic and social areas, in the cultural, educational and sporting areas. Such contacts have been inadequate in the past. All of us must endeavour to strengthen them with a view to the resolution of this first and most important national problem which is the concern of the Oireachtas. Over a year ago I derived great personal satisfaction and pleasure from my own work with North-South Committee of the then Taoiseach in examining the problem and in making contact at many levels with the North. We must take every opportunity to build those bridges. On this, the first opportunity I have taken to speak in the Seanad, I want to stress the primacy of this matter and my personal dedication to so all I can to contribute to its resolution.

As to the news of the termination of the hunger strike, we can only express profound thankfulness that this dark cloud which hung over the North and over this island has passed. One prays that it has passed for good. One adds a prayer too that all the men of violence will permit this country constitutionally to advance to a solution to this problem as we look towards the new year.

Secondly, I would like to refer to economic matters. I would like to link the word "social" with this. The whole purpose of economic policy is to achieve social betterment for all our citizens. Countries throughout the world are going through a serious recession at present, triggered off by one factor more than any other: the oil crisis. Even though we in Ireland are suffering economically from this, I believe that ours is a country of great potential in different economic sectors. It is certainly true in the field of agriculture which is better organised than it has ever been, notwithstanding current depressions in price, and I believe it is poised to take advantage of improvements that will come. The agricultural sector has within it the seeds of great growth and perhaps that is proportionately more so in the west than in any other part of the country.

In the field of industry we have had a remarkable record of growth in output and employment in recent years. It can truly be said that as far as Ireland is concerned, in the economic and particularly in the industrial sphere, small is beautiful. It means that we can increase our output and gain markets for it internationally without disturbing in almost any way the international price system for those products. Perhaps our record, notwithstanding the recession, is proof of our capacity to advance industrially. There is further room for development in the field of agricultural processing. We have a great foothold, and in some ways lead Europe, in certain spheres such as electronics. We have had significant developments in the field of pharmaceutical products, as also in the medical and para-medical fields. The interest that has already been taken in the field of biotechnology will give us, first of all, a toehold and then a proper footing in this new area of industrial development which will be one of the important industrial sectors of the eighties and nineties.

Notwithstanding this potential that one sees and our capacity to meet it confidently, the state of our economy at present is, for reasons external and other, not as we would like to see it. We have been living beyond our means; we are suffering high inflation; we have levels of unemployment that we wish to reduce. In order to bring this about we may have to tighten our belts.

As far as the question of inflation is concerned, we may need to look more carefully at the operations of the Employer Labour Conference and the role therein of the public sector representatives. A very high proportion of employees are in the public sector—I am one of them—and gain benefits of almost automatic application as a result of national wage rounds and also enjoy parity of pension rights which many in the private sector do not enjoy. It may well be that one has to look again at the public employees during the negotiations with a view to mitigating, if one can, the rate of inflation we have experienced to the extent to which it has been fuelled from this source.

Thirdly, referring to educational matters, it is true that a growing industrial economy needs more applied skills than we have provided so far. I do not think we should or can take a narrow view of education. I would propose a far broader approach to it. Education is for life as well as employment. Speaking as one who has spent almost half his life in business before going into academic life, I say firmly that a narrow view must not be taken of our educational system. While developments in the technical and technological fields are desirable, necessary and to be encouraged, we must not lose sight of education for the whole man or woman. Regarding development in technological education, as someone from a university I assure this House that from my experience there is a willingness among my university colleagues to play their full part in meeting the nation's needs technologically and in every other way. The publication of the White Paper yesterday gives us all an opportunity to look at this problem with a broad view, looking to the future and the needs of our country in the decades ahead.

Fourthly and finally, I refer to international relations. When that ringing phrase that with independence Ireland would proudly take her place among the nations of the earth, a new era arrived in the history of our country and we have an extremely good record in the role we have played in different international organisations. Our current membership of the Security Council bears witness not just to our capacity to win votes to secure such a seat but to the respect in which we are held internationally. Those of you, like myself, who have been around the world know that the name of Ireland is held in respect all over the globe and this is something which permits us to play a meaningful and appropriate part in the community of nations to secure world peace and co-operation. We are rightly preoccupied with the problems in our own island between North and South, but were we less preoccupied with them we might more clearly see the role that we could play in the international scene, first in Europe, where we are playing it very fully but in the world at large as well.

When it comes to the underdeveloped part of the globe—the South as it may now be called—we have a role to play. The work that voluntary organisations have done has been admirable and is to be encouraged in every way. So, too, is the work that is financed out of public funds, and I welcome the undertaking given by our Minister for Foreign Affairs that by the end of this decade of the eighties we will increase our contribution to attain the target of 0.7 per cent of 1 per cent of GNP which has been set as a target for contribution to the underdeveloped world from Government or public sources from the more developed countries, of which we are one. I suggest to my fellow Senators that there be an all-party committee of these Houses on aid to the underdeveloped world.

Minister of State at the Department of Finance (Mr. McEllistrim)

The Appropriation Bill gives Senators an opportunity for a wide ranging discussion of Government expenditure and financial policies, and this year Senators have undoubtedly made full use of this opportunity. The issues raised cover a very wide area and it would not be possible for me to deal adequately with them in my reply. However, Senators can be assured that the points which they have made will be brought to the attention of the Ministers concerned.

Many Senators, including Senator Connaughton, Senator Whitaker and Senator FitzGerald, have raised the question of Government borrowing.

First, I should set the record straight about the level of borrowing for current purposes in the early seventies for Senator FitzGerald. The current deficit in 1972-73 was £9 million and in 1973-74 it was £10 million. The first year in which a substantial current deficit was incurred was 1974 when in the nine-month period from March to December 1974 the current deficit was £92 million. It rose to £259 million in 1975.

As regards the level of Government borrowing at present, this Government's attitude has been clearly stated. The present level of borrowing, particularly borrowing for current purposes, is too high and must be reduced. The 1980 budget was designed to make a start towards this objective. The actual budgetary developments which have emerged during the year diverge somewhat from what was envisaged at budget time and the level of Government borrowing will exceed the budget target. There are a number of factors which have influenced this developments which could not have been accurately foreseen at budget time, particularly the extent of the global slowdown in activity, rising international unemployment and a set-back to confidence internationally. Since we, in particular as an open energy-dependent economy, could not hope to insulate ourselves from the effects of international developments, the Government's aim was to minimise the damage. We saw our main tasks in the economic area this year as being to preserve to the greatest extent possible the significant economic advances of recent years, and also to strengthen the productive capacity of the economy, so that it would better be able to take advantage of the renewal of worldwide economic growth which we believe will come during the next year.

The Government could have chosen the course of pursuing inflexibly the budget objective of reducing the level of Exchequer borrowing in isolation from the underlying economic situation. We could have maintained severe restraints on public expenditure or increased taxation when the drift from the budget targets emerged. But this would have added to the deflationary forces already at work in the economy. The Government have to take an overall view and strike a balance between the various factors. In the short-term, given the economic difficultties which we face and the greater room for manoeuvre which the improved balance of payments gives, the Government consider that the higher level of borrowing which is emerging is a more acceptable alternative.

We have sought to give priority to capital investment, as evidenced by the recent announcement of additional capital expenditure of £97 million this year, but we recognise that this will continue to be possible only if we can reduce our borrowing to finance current expenditure. The gap between current revenue and current expenditure is undoubtedly too high at present and it limits the Government's scope for engaging in productive capital investment. There are no easy ways of narrowing this gap — it will require either curbing the growth of current expenditure or raising additional taxation, or a combination of both.

As a nation, we must accept that we cannot continue to enjoy the rapidly increasing level of public services which we have experienced in recent years without paying for them through taxation. If we do not accept this and continue to seek rapid increases, it will damage our potential for future growth, as the resources which should be channelled into productive investment will, instead, be diverted to paying for current services.

I cannot anticipate what the Minister for Finance will do in his forthcoming budget. He will weigh up all the issues, including the underlying needs of the Irish economy and the likely economic prospects, and make a judgment on the desirable level of Government borrowing for 1981.

Some Senators implied that housing development has ground to a halt, which is completely untrue and incorrect. In the area of private housing, the success of various Government measures is reflected in the fact that the number of completions steadily increased from 18,215 in 1977 to 19,371 in 1978 and 20,330 in 1979 and indications are that completions may be even higher this year. In contrast, completions fell under the previous Administration, that is the Coalition Government, from 19,510 in 1974 to 16,737 in 1976. As to local authority housing completions in 1977, there were approximately 6,300 houses completed and the programme has been maintained at a steady annual level of approximately 6,000 to 6,200 local authority houses since then. Thus, total house completions have increased from 24,548 in 1977 to 26,544 in 1979, and are likely to be even higher this year.

As to local authority house purchase loans, in which Senator Connaughton showed particular interest, expenditure on these loans will have increased from approximately £17 million in 1977 to £65 million in 1980. This involves a substantial increase in real terms, as Senators will see from the fact that while 4,800 loans were advanced in 1977 it is expected that over 7,000 loans will be paid out at the end of this year. In addition, the loan and income limits were increased on three occasions in that period by a total of 166 per cent and 134 per cent, respectively. By contrast, the loan and income limits remained static between September 1973 and July 1977 under the Coalition Government despite the fact that house prices and earnings more than doubled during this period.

I would also remind Senators that under the present Government a temporary subsidy was introduced this year which enabled building societies to increase their investment rates and let mortgage rates stand at 14.15 per cent. With the general downward movement of interest rates, there is now no need for the subsidy. Furthermore, the amount of personal interest, including house mortgage interest, qualifying for income tax relief has been increased from £2,000 to £4,800 for married couples and, of course, the increase in expenditure on housing grants has increased dramatically since 1977, from about £4 million in 1977 to £27 million in 1980.

Finally, as an indication of the enormous commitment of the Government to housing since 1977. Senators might like to note that total public expenditure in relation to housing will have increased by 105 per cent since 1977 from approximately £130 million in 1977 to about £266 million in 1980.

As regards Senator Connaughton's point about the publication of planning papers, the Minister for Finance stated in the Dáil on 18 November — as reported at column 658 of the Official Report — the Government's intention to have an investment plan for the economy for 1981 ready to be published soon. This investment plan will be followed by a paper dealing with economic development over the medium-term. The Government's continued commitment to planning will be quite evident from these papers. I would say, however, that, as regards planning papers in general, both the kind of papers that it would be useful to produce for planning purposes and when they should be published will be decided by the Government at the appropriate time. There is nothing immutable about the previous time table of the cycle of Green and White Papers.

Some Senators spoke adversely about the amount of money allocated for roads. In fact, however, expenditure on roads by this Government has increased substantially since 1977. The total allocations granted by the Department of the Environment to local authorities increased from £31.6 million in 1977 to £58.5 million in 1980, and this represents an increase of 85 per cent over a three-year period. The Government recognise the importance of an adequate road network as part of the State's infrastructure, and Senators can be assured that it is the Government's intention to provide resources to improve this vital national asset.

Senator Whitaker suggested that there is a need to modernise the way in which the Government's finances are published in documents such as the Appropriation Accounts and the Finance Accounts. I agree with the Senator that it can be difficult for the public to follow the intricacies of the various areas of Government. While there are no plans to change the present system, the Government finances could perhaps be made more accessible to the general public by issuing, in addition to the present documents, new publications which would convey information in a more simplified form. This is something which we will bear in mind. Senator Connaughton, Senator McDonald and Senator Cooney remarked on the poor state of Irish agriculture at present and the need to help this sector. The Government have announced an extensive series of measures to aid agriculture in recent months. These followed close and frequent consultation with the farm organisations. The Taoiseach has met the farming organisations six times this year. The then Minister for Finance, in speaking on a motion in the Dáil on agriculture last week, gave details of all of these measures but there is no harm in listing them once again.

The Government have announced the abolition of the resource tax with effect from 1981. The second moiety of rates for farmers in the £40 to £60 PLV category has been waived, with the Exchequer making good the loss to local authorities. In fact, the Government have instructed the local authorities that no farmer in temporary financial difficulties should be pressed for rates this year, and that interest should not be charged on outstanding amounts.

The Government also authorised the ACC to borrow £50 million abroad for on-lending at low interest rates, at present 12½ per cent, with the Government covering the exchange risk. Despite what Senator Connaughton said, the take up of these loans is most satisfactory. Similar approval was given to the associated banks for an equivalent amount of borrowing — making £100 million in all. In the case of existing borrowings, both the banks and the ACC, following discussions with the Government, have indicated their willingness to take a positive and constructive approach to the restructuring of loans where farmers are faced with serious repayment problems.

A whole range of additional expenditure measures, totalling some £36 million were also announced. These included an additional £23 million for capital grants under the farm modernisation scheme, bringing the total provided this year for the scheme to £59½ million. Substantially increased grant rates under the disadvantaged areas scheme were also announced. On 1 August last increased rates of £22 and £18 were announced. Some two months later these were increased by £10 each, bringing them to £32 and £28 respectively. The extent of the increase can be gauged by the fact that the corresponding rates in 1979 were £17 and £13. The increased rates are expected to increase annual expenditure on the scheme by some £11.3 million.

As a further incentive to increase the breeding herd a new beef suckler scheme has been introduced. Under the terms of the scheme a grant of £13.18, financed by the EEC, will be paid on cows in beef suckler herds in all parts of the country.

In addition, a further £12 will be paid out of national funds on each cow in a beef suckler herd at the two inspections under this year's scheme over and above the number at the time of the 1979-80 round test for TB. Also, under next year's suckler scheme, a national grant will be paid on extra beef cows over the number at the inspections under this year's scheme.

These measures represent a further significant encouragement to expand the suckler herd. They represent a grant of £25.18 on each additional beef cow outside the disadvantaged areas and, with the increase in the rates of headage grants which I have previously mentioned will bring to as much as £57.18 the grant in the disadvantaged areas for each additional cow that also qualifies for these grants.

During the past several months a number of other measures over and above those which I have already mentioned were also announced. A sum of £1 million was made available to finance incentive payments to farmers for fertiliser usage and first-time silage making. Exchequer grants were made available to maintain the cost of warble fly dressing at the level applying in 1979. The Mountain Lamb Extension Scheme was reintroduced and grant rates under the scheme were increased while the period of operation of the Lowland Hogget Ewe Scheme was extended to the end of the year. State finance was made available for a new Agriculture Exports Co-Ordinating Group. The annual grant to Macra na Feirme was increased substantially in the current year, with a commitment to provide further moneys in subsequent years, in order to enable Macra to organise and co-ordinate the establishment of local farm relief services on a group basis.

In addition to the national measures which I have outlined, my colleague, the Minister for Agriculture, with the approval of the Government, has presented a package of further measures to the EEC, and these are being discussed at present.

By the additional measures which the Government have introduced, the additional finance which they have made available to farmers, their continuing efforts to promote farmers' interests at EEC level and their commitment to maintain consultation with farmers' organisations on all aspects of agricultural policy on both the domestic and EEC planes, the Government have made crystal clear their view on the importance of getting agriculture moving again.

Senator Robinson and other Senators also questioned the Government's policy on combating poverty. Fianna Fáil have a long tradition in providing for the least well-off members of our society and this commitment is reflected in the present Government's wide-ranging programme for increased investment in job opportunity together with specific welfare programmes on health, housing and social welfare which absorb a growing proportion of available resources. The major improvements in recent years, particularly in the level of social welfare payments, are an earnest of the Government's commitment in this regard. For example, the average level of welfare payments have increased by almost 5 per cent per annum in real terms since 1977. This is far higher that the annual increase recorded in the 1973 to 1977 period.

Senator McDonald referred to funds for school building. The provision for capital expenditure on education in 1980, including Supplementary Estimates, is £59.5 million, the highest ever. At primary and post-primary level contracts were placed or tenders invited during 1980 in 176 cases. In the case of primary schools, the provision of £23.25 million is an increase of more than 36 per cent on the 1979 out turn of £17 million.

Senator FitzGerald seemed to imply that higher income groups could recoup the full cost of their medical expenses from the Revenue Commissioners. This is not so. Along with all other taxpayers, where their medical expenses exceed £50 for a single person and £100 for a family and where these expenses are not reimbursed by the VHI or otherwise, a tax allowance may be claimed for the excess. The amount that can be recovered depends on the taxpayers marginal tax rate, so the maximum amount that can be recovered from the Revenue Commissioners is 60 per cent of the excess over £50 or £100.

Senator Hussey spoke about accommodation problems for members and staff of the Houses of the Oireachtas. We are all very conscious of these problems and an outline scheme has been drawn up for the utilisation of the College of Art premises to provide additional accommodation. The Oireachtas authorities have been asked to have the scheme considered by a committee comprising representatives of both Houses and the Office of Public Works. Progress will of course depend on the speed with which the college vacate the premises but I am hopeful that part at least will be released in the near future. This will enable some relief to be provided fairly soon and hopefully a solution to all the overcrowding in the longer term.

I think I have dealt with most of the problems raised and I should like to recommend the Bill to the House.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported without recommendation, received for final consideration and ordered to be returned to the Dáil.

An Cathaoirleach

Ba mhaith liom Nollaig shona a ghuí ar na Seanadóirí go léir, ar an Preas Gailearaí agus ar na daoine go léir a bhí ag obair.

The Seanad adjourned at 1.30 p.m. sine die.

Seanad Éireann debate - Friday, 19 Dec 1980