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Seanad Éireann debate -
Wednesday, 31 Oct 1984

Vol. 105 No. 13

National Economic and Social Plan: Motion (Resumed).

Debate resumed on the following motion:
That Seanad Éireann approves the policies set out in the National Economic and Social Plan —Building on Reality.
—(Senator Dooge).

Yesterday evening I was speaking about the 4 per cent cut which has taken place in the health service over the past two years or so and of the detrimental effect this particular cut has had on this service, not alone on the health care of the community but with special regard to the physically and mentally handicapped people of this country. If ever there was an area where it could be said there was no room for us at the inn, this is the particular area. Despite pleas and efforts from health boards very little, if anything at all, has been done to alleviate the problems which confront not only the parents but also the medical staff, who are trying their utmost to help the physically and mentally handicapped people of this country.

In my honest opinion any Government, if they were serious about producing a plan with a view to the reduction of unemployment would take a very serious look at the retail and distribution sector within the commercial sector in the country and see what is happening and what has happened. The ordinary hardworking family type businesses are being taxed out of existence. It is a surprising statistic that over a number of years family retail businesses have been closing down at the rate of 1,000 per annum. It is an alarming statistic. If this trend is to continue it certainly will erode the moral fibre of the community.

What have the Government offered to these people who give a service, who pay their taxes and who give employment? They have offered a reduction in the price of spirits. They take down the price of spirits with one hand and put up the price of bread with the other. I would ask what is the motivation behind this generous offer of a reduction in the price of spirits? It is certainly not the good will of the Government towards the ordinary publican. It is merely to ensure that the revenue which was being lost will be collected. There is something to be said for it, but to reduce the price of spirits and to leave the ordinary hardworking man's drink, the traditional Irish pint, at the scandalous price it is today just does not make sense. I wonder if this Government are serious when they state that they will keep publichouses open until 2 o'clock in the morning. The publichouses in this country are empty for 80 to 85 per cent of the day. To expect publicans to employ extra staff in order to stay open until 2 o'clock in the morning is ridiculous while the present system of taxation is in existence, and to pay the present VAT rate and PRSI contributions is ridiculous. In my view the idea behind this measure is to halt the flow of traffic across the border, but there is no motivation in this plan to improve the lot of the business sector.

We hear a great deal of talk about the tourist industry. We have been told that the number of tourists visiting this country is growing and the amount of money they are spending is increasing, but so far that business has not even been tapped, let alone run properly.

Members of all parties are members of Joint Committees, and we have worked very hard. The suggestions made by these committees should be taken by the Taoiseach, but the Government decided to completely ignore the reports of the Joint Oireachtas committees. That is why we have this haphazard financial statement which has been called the greatest national plan ever. What this Government have done is to financially strangle the local authorities, abolish the Land Commission and the old age pensions committees, reduce the standards of hospital and health care services, penalise recipients of social welfare benefits by purposely excluding the long-term unemployed and those on disability benefit from the free fuel scheme and now they are, I believe, in the process of closing down the Oireachtas restaurant. We will probably be the only Houses of Parliament without proper facilities to cater for their Members. Is the Taoiseach serious when he asks us to endorse this plan, which is a typical financial document with a typical Alan Dukes touch?

Since the publication of this plan it has been analysed, discussed and criticised from many points of view. Everyone will make his own judgment as to how much of that criticism has been informed and how much uninformed, how much has been objective and how much partisan, how much has been constructive and how much has been unhelpful, but one of the surprising things to me has been the extent to which this plan has been criticised on grounds that reflect the strength of the plan, the appropriateness of the plan and the necessity of the plan. I want to deal with a few of these points.

This plan has been denigrated, almost sneered at, as being a compromise. Similarly, it has been dismissed as being irrelevant to our economic development because it is a political document. It has been brushed aside as containing largely an element of book-keeping. Each of these three cases — a compromise, a political document and sound book-keeping — reflects a strength of our national plan. I want to join with what Senator McGonagle said last evening and expressed so well, that is, that one of the first realities we must face is that our economy is a compromise between inflexible central planning and unbridled capitalism. We are, like so much of Europe today, a mixed economy and we must realise this in any planning for economic and social development. What we are concerned with here is not a compromise in any sense of a sacrifice of principle, but what we are concerned with is a compromise with the very facts of economic life.

While doing some reading in connection with the plan I was interested to come across a statement made many years ago by Pierre Massé, who was the director general of the French plan in the immediate post-war years which was so much responsible for giving France back its spirit, of giving a lead to post-war development. I want to quote from a foreword which Massé wrote to the classic work of economic planning in France by John Hackett and Anne-Marie Hackett. Massé had this to say:

Extreme solutions are always more pure from a doctrinal point of view than those intermediate solutions expressing compromises which, in turn, vary from one period to another and from one country to another. And they are consequently easier to explain and to defend. But life itself imposes a compromise. Thus there is no such thing as a 100 per cent liberal economy. Everywhere the State has had conferred upon it a more or less wide range of responsibilities in the economic field. Doubtless, a 100 per cent imperative type of planning does not exist either. It is universally recognised that a measure of individual initiative is a factor generating economic progress. Being realistic, French planning is less a theory than a practice, less a codified charter than a set of usages in constant evolution. It is, above all no doubt, a state of mind.

I join with what Massé said 20 years ago and with what Senator McGonagle said last night. This is the first reality which has to be faced. If we do not face this reality, we cannot plan.

I will deal now with the second point — the plan is being dismissed as a political document. Surely that is what we wanted above all. We wanted an exercise in political will. We wanted someone to take what had been said by the experts and semi-experts and to see how much of this was really relevant to the realities of the next three years and to weld that into a political document. This is the key factor. We had the report of the planning board where the experts had their say. I should like to quote from a review of the report which appeared in the Irish Banking Review of September 1984. It is a review of the proposals for a plan but it was issued before the actual political plan emerged. This article was written by a person who has studied the question of Irish economic development for over 30 years. I refer to Sir Charles Carter who, when he was Professor of Economics at Queen's University, Belfast, helped greatly our first attempts at economic development as a member of the Capital Investment Advisory Board. He said in the preface to this article in reference to the proposals for a plan prepared by the economic experts:

But the key questions are outside the field which the National Planning Board could properly discuss. Will politicians in the future destroy the basis of rational policy by short-term measures which curry favour with the electors?

That question has been answered by the publication of this plan. The answer to the second question is the one that confronts us now and which must engage our efforts. The next question that Professor Carter asks is,

Is the trust in Government adequate to sustain national morale through a long period of unpopular measures?

This is the key question we face as the plan goes forth to be a public document. It behoves all of us to discuss this plan in as objective a fashion as we can, given our preconceptions and our prejudices. If public morale does not prove adequate in this regard, then this political effort will result in failure and the country, and not merely the Government, will suffer in consequence.

There has been a tendency to label the Government in what they have said as being mere prophets of gloom. Occasionally one even sees the description applied that they are Cassandra-like. I urge anyone who makes that remark to go back and read that excellent play by Euripides, "The Trojan Women". Let us remember that the essence of the tragedy of Cassandra was not that Cassandra spoke of what was to happen to the Trojan women and what was to happen to Troy; the essence of that notable tragedy was that Cassandra was not believed but was correct in every respect.

It is futile merely to dismiss statements that are realistic about the consequences of inaction and of raising false hopes as being Cassandra-like prophesies of gloom. That will not be helpful to the debate. Of course this is a book-keeping exercise, the most remarkable book-keeping exercise that has ever been made in this country. Why not? We know in the recession we have been going through that many an owner of a small business only realised the importance of good book-keeping and good financial analysis when the liquidator imposed them on what was left of his business after it had failed. Do we want to make the same mistake on a national scale? Surely we do not. This is a political document and is the result of political will. That political will is necessary to carry it through. If the Government do not show the same degree of political will in the implementation of this plan as they have in its formulation, then indeed it will fail.

People have tended to dismiss this plan by saying, "another plan". We had the programme for economic development and we also had our second and third programmes but where did they leave us? That is a question that should be answered. We should look back at what happened in these cases. We had the First Programme for Economic Development and it was a most remarkable effort. I think it is right that we should pay tribute to the Minister who was involved, the late Jim Ryan, and the civil servant who was primarily involved, Dr. Kenneth Whitaker. I hasten to add I think I am entitled to mention them because they are both former Members of this House.

That document was quite remarkable and it had a remarkable effect. It pulled our country out of the doldrums but then we seemed to lose our way. I suggest that the success of that First Programme for Economic Development, in contrast to the comparative failure of the second and third programmes, can be traced to the characteristics of that first document. It had two characteristics above all, although they were connected: it was modest and it was realistic at the same time. That programme represented a new departure. I suggest that the plan we are discussing today represents a second new departure and that it may well be that what we are concerned with here is an attempt to find the path we were on some 25 years ago and to return to it.

Senator Lanigan spoke of the need to give hope. I believe this plan does give hope, a hope based on facing reality and winning through but I want to say with all the firmness at my command that the greatest disservice that anyone could do to the people of the country, and above all to the youth, would be to delude them with false hope. That must be avoided at all costs. I suggest we could well look back to the First Programme for Economic Development and see the trap that was avoided then, the avoidance of which led to the success of that programme. I should like to quote from paragraph 2 of Conclusions in the document entitled Economic Development, published in 1958. The paragraph is under the heading “Employment Considerations”. What was said then in that document about the appropriate approach is still relevant today. It stated:

It would have been quite unreal to approach the question of development from the aspect of employment, that is by setting out the number of jobs required and then attempting to plan how these might be created. There is no sure way in which development works can be planned to produce self-sustaining jobs for a specified large number of individuals of varying capacity and skill. The number itself would be a formidable one if it were to cover not only those now idle who are able and willing to work in Ireland but also those who add to the potential labour force every year but are at present involuntary emigrants. Self-sustaining jobs, i.e. jobs producing goods or services saleable at competi-tive prices cannot be created to order. The jobs that can be created, to a limited extent, by public works have no lasting basis; they add nothing to the national output of saleable goods and services and they can survive only as long as the works themselves last or other works, involving a similar redistribution of the community's income, are substituted for them. In any case, the capital available for public works of any kind is not unlimited and can be used for one purpose only at the expense of others. In a very real sense the direct provision of work on unproductive schemes prevents the provision of lasting and useful work in as much as scarce capital is used up for wasteful ends, the burden of taxation is made heavier, costs are raised and productive enterprises hindered and discouraged.

It would have been easy to say, when that appeared under the Fianna Fáil Government of 1958, that this was a failure to face the problem, that this means giving up and saying there was no hope. But that is the policy that stopped the haemorrhage of emigration in the early sixties. That is the approach that set us on the right road, not looking for the illusory short term, but laying the solid foundation. I believe that in this plan we are back on that road again and nothing should deter us no matter how the winds blow. Let us put our heads down and make sure we do not wander off that road.

This plan has got the elements right. The architecture of the plan is a suitable one, but the implementation will not be easy. The Taoiseach spoke here yesterday on the need for control. He quite rightly pointed to the fact that, in regard to the basic national finances, budgets have been adhered to and, in the same way that budgets have been adhered to in the last two years, that same determination must be used to ensure that this plan is adhered to. There must be control, not only at the centre, but there must be control throughout our economic system.

Speaking in this House over 20 years ago I criticised the Second Programme for Economic Expansion. I made the very point that this element was lacking in it. If, in fact, we are to implement this plan as it must be implemented for the country's good, then there must be control throughout our economic system. This plan has made that possible because this plan has provided the decision makers at all levels with the information for three years ahead within which their strategic planning can be done. There is nothing that kills initiative more than uncertainty, and this plan has removed a large measure of the uncertainty that was bedevilling us.

It is a basis of "rational policy", the phrase that was used in Economic Development. It is now up to all of us, in our respective spheres, to match both the industry and the courage that was shown in the Cabinet in the preparation of this plan. The Government have made their own strategic decisions for three years ahead. In consequence, others can now make their strategic decisions. It is only if they do this, and if the Government show the same courage in the implementation of the plan, that we will win through. I am confident, not that this is certain, but that it is possible and in human life that is all one can ask for.

I am a little confused as to whether I have the right document, the same paper my colleagues on the other side of the House had all day yesterday and will have all day today. Senator Dooge in his lovely flowing fashion has told us how marvellous this is, but he did not finish by saying how difficult it will be to sell it. Senator Dooge had better get into the Merc with the four other lads and go down the country. I would prefer him to try to sell it in rural Ireland than I.

Even when I had a car it was a Ford, not a Merc.

Whatever he had, he will hardly see it again anyway. He referred to documents, committees, papers and plans. I find it very hard to accept this document, as I have said to my colleagues on all sides of the House during the past few days, and to call it a plan. I call it another paper. One side of the Coalition seem to have the edge on us as a party in their magnificent PRO job. I deliberately say one part of the Coalition Government because the others, for some of whom I have the greatest respect, have not matched the PRO job Fine Gael are capable of and the selling job they can do.

The Taoiseach, with due respect to him, said at the commencement of his master paper Building on Reality that it ceases to be merely a Government document and becomes the property of the Irish people. Could you imagine anybody being so far removed from the Irish nation as to say that he is handing this over to us, that it is to be the property of the Irish people, and how well off everybody down the country and, indeed, on the east coast will be by having this paper?

I cannot say that I wish success to the four Ministers who are going to take to the country to try to sell it. It is interesting that only one party in Government have announced so far that they are going to go down the country and do a selling job and another PRO job. The Labour Members and the Tánaiste have not decided to do this yet, although having listened to Senator Ferris yesterday evening I think he is about to begin a campaign around the country. I understand that a bound version of this infamous document was issued to Members on the Government side of the House. It was bound in black covers probably with lovely gold and silver lettering. I did not see one.

Does the Senator want a copy?

I do not. I do not think any of my colleagues on this side have said this yet, but it was wrong to issue that document in that form to Government Senators and not issue one copy to a Fianna Fáil Member. It was wrong. It was undemocratic. Perhaps the people in Mount Street paid for it, but it was really the taxpayer who paid for that document. We, as elected persons to this House, were entitled to a copy of it. I know what is in it. Senator Ferris quoted it ad lib yesterday and he is waving it at me now. All the goodies were in it. This is what the lads were to sell at Fine Gael meetings down the country. I really would not want it. I would not have much in common with the niceties in the great paper, anyway.

The Senator does not like the goodies.

On policy, for a service company or business to give sufficient income in earnings to one employee so that he or she will have an extra £100 in his or her pocket, the firm must generate an extra £1,100 in revenue to cover overheads, VAT, PRSI, PAYE and corporation tax. Therefore, no initiative for the individual to work or to work overtime is generated there. There is a growing, impossible task for private firms both to motivate and reward their staff. They are not achieving the growth and earning levels required to survive. The obvious increases in liquidation are only the tip of the iceberg. The worst is yet to be seen.

A leading accountant and tax consultant at a recent seminar in Galway on the subject, "Taxation as it affects You", demonstrated clearly to a supposedly educated and tax-conscious audience how in certain circumstances up to 100 per cent of her listeners' incomes could be lost through direct taxation, without adequate forward planning. When asked by one of her stunned audience what type of business she would recommend for her own children, she replied without hestitation, "Set up a capital intensified, totally export orientated manufacturing business with no employees." Where does that leave our thousands of unemployed and hundreds of thousands of highly educated and unemployed children? Of course, the emigrant ship, as is being talked about by Members of the other House to whom I should not have referred, was at one time disease-ridden and dangerous. Now we have the jumbos and the jets carrying away our emigrants.

Last week, the President of the United States said to his opponent that he would put down some of his opponent's mistakes to youth and inexperience. I do not know about youth in regard to Deputy Dukes, but there is a great deal of evidence of inexperience. It just shows how long you should serve in a Government or in public life before you get the portfolio for Finance because he is something else and I suppose that at the next election the Fine Gael Party will know about it.

I have read chapter 2 again and again. Is there any clear example I can be shown in the midst of all this verbiage of how the existing state of affairs will be changed in any way whatsoever? I quote from page 31:

To move towards a situation in which everyone who wants a job in Ireland can get one is not a question of establishing numerical goals.

What does that mean? Do we move or do we not move towards all our trained and expensively educated children getting jobs or not getting jobs? The document talks about the goal of this policy of unreality being definable or not definable. It further states:

For practical, down to earth solutions to achieve rapid employment growth in Ireland, we must establish the conditions under which Irish workers can effectively achieve their productive potential. This means, for example, encouraging a degree of initiative.

The only places that I know of where at the moment Irish workers can use the said initiative are either in Boston or Bahrein. The document talks of "where possible, profitability." Of course, the absence of profitability means bankruptcy. What a positive, confident manner the document has in approaching the solutions of our nation's economic problems and the awful problem of unemployment.

I could continue, sentence by sentence. The more I try to read the document and understand what is not in it, I am convinced of one thing — that the Coalition Government must have imported Humphrey from "Yes, Minister" to write this self-defensive epistle, but you would need Peter O'Toole to do it justice.

We will not booh the Senator for that.

On transportation, near to my constituency, traffic in Shannon has increased and traffic in Dublin has decreased. Shannon's only usable runway gets a cosmetic covering of asphalt to keep it usable for the time being. An essential cross-runway and the lengthening, widening and provision of the central runway lighting is knocked on the head by the Government. Yet, at the same time, they give £30 million for a new runway at Dublin Airport, which I understand — and I believe it is true — will be 2,000 feet longer than Shannon's main jet runway. What does that mean? Is Dublin then, at long last to handle the direct transatlantic traffic? This is something on which I have commented over and over again. Even when Fianna Fáil were in power, we had to fight hard to keep Shannon as the main transatlantic airport. We intend to continue doing so.

The summary of the document refers on page 2 to establishing the National Development Corporation to give a new commercial and strategic trust in public investment in industry. We all know that is only a sop to the Labour Party to keep them quiet. Senator McGonagle, for whom I have the greatest of respect, talked yesterday about how marvellous this National Development Corporation was. However, that is not here, it is merely in the plan. He went on to say that we are going forward. I do not know. Perhaps he is going forward with this plan. The summary states on page 3:

While improving the efficiency of the youth employment services. . .

Where does this leave the famous Youth Employment Agency?

On page 6 it states:

The 1 per cent special income levy will be phased out as soon as resources permit."

What about all the other levies? Are they going to be phased out? There is, again, confusion about where the money is going and nobody is too clear about it. The poor Minister of State, always seems to be at the receiving end when I am on this hobby horse of money. For the life of me I have no confidence. Ministers come in here with documents and speech after speech. Let the Minister of State not tell me, now that he has the report on his desk, that the terms of reference of this committee were to create jobs. That is a different ball-game, so do not let anyone come back and tell me that the Government are going to come up with the answer for jobs for our young people. That is not in the terms of reference of that committee.

The report says that the new child benefit scheme in 1986 will rationalise the structure of child support payments and give particular help to the families of low paid workers. What does that mean? It means that the children's allowance of today is not taxed, but it is true that from 1986 the new child benefit scheme will be taxed? Is that what is on the cards there?

Senator Ferris in his defence of the document yesterday evening had a different slant on the local charges from what I and many of my colleagues have. I will be honest and say that maybe the rates should never have been abolished, but last year we had a £30 water charge. Next year it could be £50 and in four years' time it could be £100 or £120. I tell Senator Ferris that I am not talking about mansions. I am talking about the ordinary small house in the town of Ennis. Senator Ferris said something for which I checked him yesterday evening, and now I am trying to draw him to answer me, but he will behave himself and I know he will not answer me here.

I will refrain from answering.

Senator Ferris said yesterday evening that the county councillors and local authority elected persons had the final say in these charges. They do not.

On a point of order, I never said that.

I thought the Senator did.

I think Senator Honan has drawn fire as she often advises us not to do here.

I would like her to check what I said. I would like her to read the record.

He said that it was a managerial function in the end and that the councillors did not have the final say.

Thank you.

We finish up with colossal charges for water. We all realise the value of water. We have not had any hassle in Ennis about this water charge except for a slight hassle in one part of the town, because we realise the cost and how important water is to us. We also realise that our friends up the road outside the boundary must pay a water charge. My worry is how much the water charge will rise. Eventually we will finish up with greater charges there than ever we would have had from the original rates. I voiced that concern at the time, as I would have done if a Minister from my party had brought in the same type of charges. My worry is how high the charges may go and that the managers could overrule any decision we as councillors made, and I have been told in this House that that could be so.

I will make only short reference to the farmers. You have to be terribly careful with the farmers, and I am sure that my two colleagues in front of me will have a great deal to say about them. The PRO job that was done on the farmers by the Government was lovely. Poor Joe Rea down in Cahir lost his head one week. He was even going to unseat Fine Gael TDs and Senators, and the next week he was gone underground completely. We did not hear a word about him. By God, whatever job was done on him, my brother over in Buswells certainly shut up Joe Rea. That was the end of him and his protest. There was no marching. Everybody was happy.

That is good.

The only thing that worries me about land tax or not land tax or taxing the farmer or not taxing the farmer is that the big fellow who never voted Fianna Fáil is the guy who is going to get away because he was always with the lads who are in power at the moment, with the bigger side of the Coalition Government. He always voted their way and always will vote so. We had always the small man. That is my concern. I wonder if that is why everyone has shut up on us. We do not hear any more about tax and not tax. I am not saying but that everyone should pay his fair share, but the silence and the way the President of the IFA was quietened overnight have me baffled and, mind you, it is not too easy to baffle me.

We all accept that the percentage of GNP that will be spent on the health services has reached an excessive level, and it is up to all of us to try to ensure that the funds are spent to the best advantage. Health boards are wrestling with not enough money allocated to keep the services that are there. I may have quoted Senator Ferris incorrectly a few minutes ago but I think I am quoting him correctly now. He said yesterday that he was a little bit worried that money was not being shared out equally between health boards.

That is right.

I hold that also, and I have proof of it. It worries me. At least the Senator and I agree on that. Management of the health services is now big business, and we must all ask ourselves if we are satisfied that management of health services has moved with the technology and techniques of our time. Indeed, it behoves the Minister to ensure that the managers of our health services are adequately trained whether they are at a lower or a higher level. As the health service is a labour-intensive one with many grades of professional, technical and administrative levels supplying a personal service to customers of all ages and conditions, it is necessary that the investment in training to deal with the above is always there. I ask here that public and elected persons serving would be given the chance of a stronger voice and being listened to before further legislation dealing with health comes on stream. For all of us involved and interested in health service I suggest that an amount of the information given is insufficient. While the information published by the Department of Health is informative for Deputies and Senators, I would welcome an annual report by each health board and health agency. It would make the job of public representatives much easier by providing regular updates on activities, waiting lists, costings and areas or services needing attention.

I must refer to the mentally handicapped. I understand that there is a need to plan for future development of the services for the mentally handicapped. I am concerned that there are indications that financial assistance from the European Social Fund for that area will be reduced. Any such shortfall must be made good by the Government. It is essential that steps be taken now to ensure that alternative sources of funding are made available. The cost of the health service here is frightening. We spend an unusually big proportion of our GNP on health care compared with other EEC countries. However, we do not provide the type of care commensurate with such an expenditure. Other EEC countries give their population better coverage for a lot less, and I should like to know why that position exists. I should like to refer to the worries people, like myself, who pay big VHI contributions have. We all worry about the day when a member of the family might be detained in hospital for a long time. I have been a member of VHI since that organisation commenced business, and this year coverage for my husband, our two children and myself amounted to more than £600. It worries me that the Minister has some reservations about that scheme. There are rumours circulating that he is about to do something about it. Perhaps he will be good enough to fill me in on his proposals. People who are paying a lot of money annually to VHI are always concerned that a member of the family will suffer a long illness. There is no way the average person can afford to pay for hospitalisation and consultants without such cover. It appears that there is a move to do away with VHI. There is something in the air that I am not clear about, and I hope the Minister will clear it up.

With regard to education I should like to point out that the Minister gave a commitment at the press conference when this famous plan was unveiled — that unveiling was done with all the style of Mr. Prendergast and the other actors — concerning remedial teachers. The Minister said that the number of remedial teachers would be increased by 125 over the period of the plan. That contradicts what is contained in the programme for action for 1984-87 which was introduced by the Minister for Education earlier this year. In that programme the Minister undertook to investigate the possibility of sharing remedial work in schools between a number of teachers. I spoke to many teachers about that proposal — I am directly involved in three schools — and they told me that they cannot deal with that and that they are already overburdened. According to the plan 125 extra remedial teachers will be taken on in the period of the plan, but the programme for action states that existing teachers will be asked to deal with remedial teaching.

I should like to suggest that in the field of education educational psychologists be engaged rather than health psychologists. I have seen reports from health psychologists on children in the educational system and they do not compare with reports issued by educational psychologists. I do not wish to sound derogatory about health psychologists, but they cannot do the job in the same way as educational psychologists. The Government will have to take a serious look at this, because I understand that we do not have educational psychologists.

The question of pupil-teacher ratio is causing concern. In some rural areas one teacher has to take responsibility for two classes for one subject. That results in one teacher having to take care of about 76 children. I am not alleging that that goes on throughout the day, but on occasions it happens for one subject. We must consider that in 1984, 754 new teachers qualified and at present 612 of them are unemployed. Something will have to be done about that. The programme for action, which I expect is incorporated in all the Green Papers and White Papers, deals with in-service training. That is badly needed, but I expect it will not be introduced because of cost. The Minister is more optimistic, because she expects it to become a reality.

I should like to refer to the contribution of Senator Dooge. I accept that the fact that I quote him regularly gives him extra coverage, but I could not let him away with his views on the report of the forum because of his slant. This morning he told us that if we do not all support this document the public will consider that we have done an injustice to our country. He said that we should all go off in coaches or Mercs and tell the people that the plan will save Ireland. That is not correct, and the more the Government proceed with that type of approach the more the people will see the reality of the position. Senator Dooge let the cat out of the bag this morning by rooting up past policies of Fianna Fáil. He referred to a former Minister for Finance for whom I have the greatest respect, Dr. Jim Ryan. If one reads carefully what Senator Dooge said about Dr. Ryan one will see that the Government copied part, if not all, of his proposals which were put forward in 1958. Fianna Fáil were so long in Government that most of the documents on record were prepared by them. It would be easy to read the proposals put forward by the Coalition, because they have been in power for a short time only. Senator Dooge came close to admitting that the plan amounts to a brushed-up version of Dr. Ryan's proposals of 1958.

Is that why the Senator is against it?

So now it is out, the Government thought that by copying Dr. Ryan's 1958 policy they would be away with it.

And it appears that the Senator is against it.

For the sake of order in the House I will behave myself, although that is not easy when Senator Ferris is around. Senator Dooge referred to The Irish Banking Review September, 1984. This publication would not be in my field at all with the few pounds I possess. He quoted the earlier part by Sir Charles Carter, but he should have continued to page 31 where there is written:

The system of national accounts currently in operation in Ireland was not devised to deal satisfactorily with these issues, indeed it was devised at a time when these issues were of little significance. Consequently the national accounts data currently available are distorted in several important respects and fail to convey meaningful information about the nature of economic activity here.

Senator Dooge omitted to quote the end of page 31.

I shall refer now to something which I regard as appalling, which is tourism and the closure of the tourist office in Ennis. We have been told how important will be tourism to the nation, probably the second most important sector to farming, in future years. Yet on last Tuesday morning the Ennis tourist office was closed, and the Nenagh one on Friday last. It should be remembered that in one year the Ennis office had 15,000 personal inquiries, which amounted to a turnover of 4,000 bed nights in Clare. The other sad aspect of this is that, before we regionalised tourism, there was a tourist office in Clare. Nobody knows better than the present Acting Chairman that tourism is immensely important to Clare. I understand that we are today the only seaboard county or constituency without a tourist office. Some Minister may reply to me and say: it is in Shannon. In my opinion that is not where it should be; the Ennis office should remain open and be properly staffed. We shall probably also be told of the cost involved because there is a new landlord. There is alternative accommodation being offered to the tourist office at the same rent as obtained last year, so there is no escalation of cost involved. Therefore, there is no excuse to be advanced for the closure of the Ennis tourist office if tourism is as important to the nation as this Government and their Ministers tell us.

Traditionally the mid-west region has drawn its tourism through its natural beauty and hard slogging, both from the point of view of selling and "on the ground" working. Now, under this Government's so-called plan, they have closed the tourist offices in Ennis and Nenagh. The question must be posed: what does this mean? It means transatlantic traffic routed directly into Dublin, with an extra £30 million poured into the construction of a new runway there, tourism being controlled directly into Dublin and the closure of offices in the west. Yet they have the nerve to describe that as building on reality.

I read this plan some weeks ago, when published, with a sense of great dismay. Any further analysis or discussion in which I have engaged in the intervening period has, if anything, intensified that feeling. Like all planning documents published here over the last 20 years it seems to me to be virtually valueless as a prescription for coming to grips with our economic difficulties. Senator Dooge, the Leader of the House, put his finger on the matter this morning. This plan relies on some form of deus ex machina. Certainly there is nothing in it leading one to expect that the targeted outcomes will come to fruition. Like all similar Government publications during that 20-year period it seems to me that this plan has more to do with politics than with the requirements of good political economy and of society at large.

In saying what I have to say about the plan I want to make it clear that nothing I shall have to say should be interpreted as being supportive of the main Opposition party. I am as aware as everybody else in this House that that party contributed massively to the creation of the present economic and financial crisis during the period 1977 to 1981. I am aware also that, since 1981, right up to the present day, that party has demonstrated no sign that it has the first idea about how this economy can be retrieved from the precipice. As far as I can tell, it has no policies on the subject beyond opposition for opposition sake or beyond the requirement of a cynical opportunism, a characteristic central to its political nature and which is not confined to economic matters alone, as evidenced by its contortions on, for example, marital breakdown, contraception and last year's Constitution amendment campaign, not to mention Northern Ireland. I regret to say that I believe Fine Gael now manifest the same cynical characteristics as Fianna Fáil, and on the same issues. Their contortions on the liberal issues I have mentioned are well known. Their cynicism on economic matters was evidenced by their Election Manifesto of June 1981 and, in particular, by the stark contrast between what was said in those manifestoes and what that party are actually doing in Government.

In that context, in addition to the crises of Northern Ireland and the economy I believe that we, in the Republic, now face a crisis of political alignments as potentially de-stabilising of our democratic system as the other two I have mentioned. This belief arises from the fact, recognisable since the late seventies, that the country now contains two "catchall" parties at the centre, each roughly equivalent in size and professionalism, each similar in ideology, following a virtual convergence on Northern Ireland policy, each now in effect pursuing broadly the same short and medium-term economic policies with some difference in emphasis dependent on whether they happen to be in government or opposition at any given time. In this connection one need only peruse The Way Forward published by Fianna Fáil, in Government, to see the similarity in thought and prescription between them and the policies put forward by Fine Gael in the period since 1981-1982.

It is my view that as long as our political system is dominated by two centralist "catch-all" parties we will never face up to the other crises in our society I have mentioned, because both those parties stand paralysed on the same electoral ground incapable of acting in the national interest, even if perceived by themselves in their less cynical moments, by the fact that they can compete only on the basis of unfulfillable promises on the one hand or of failing to act on the other. Therefore I believe that Deputy John Kelly is basically right, that the time has come for all serious politicians to seek to force a realignment in Irish politics between left and right so that the electorate can be spared the present form of politics, which amounts to image without substance, promise without fulfilment.

It appears to me that the alternative to such realignment is continuing cynicism at both political and public levels together with a continuing drift towards the breakdown of the democratic system itself against a background of intensified crisis in the economy and in Northern Ireland. Let me give one example which is both simple and important in the macro-economic sphere of where the cynical competition provoked between the two major parties has brought us. Since 1977 successive Governments have operated pro-cyclical policies in our economy which began in the 1977 budget, compounded by Fianna Fáil in the implementation of their political manifesto of that year and pro-cyclical policies now endemic in the system we have because of our accumulated debt, or at least endemic on the basis of conventional economic analysis.

We are now at a point, thanks to the competition provoked by the two major parties and the cynicism with which they have acted, when counter cyclical policies which are essential to economic management are no longer a viable option. That, at one level alone, is the point to which our former level of politics has brought us and it is why realignment is necessary.

Turning to the plan document itself, the first comment I would make about it is that it is not a plan at all in any sense that I would recognise. One reasonably could be expected, given the scale of the present economic and social crisis as well as our historically poor economic performance, some significant restructuring of economic policies and a radical redistribution of incomes, wealth and opportunities in society. One could justifiably have expected a serious analysis of and response to the consistently high unemployment level. One easily could have expected some proposals designed to increase output and to ensure that the benefits of output growth would remain in the Irish economy, which they largely do not at present.

These questions are not even addressed in the plan, never mind answered. Instead, the plan is no more than a rolling together of three years' budgets with the entire edifice built on some notional idea of what the current budget deficit and the public sector borrowing requirement should be in 1987. I do not deny the importance of those variables and I do not share the Fianna Fáil view when in Opposition that they are irrelevant. Far from it, but to construct a plan which in essence is content with attempting to create and to meet targets on these variables alone and to do nothing else is unacceptable.

In relation to the current budget deficit and public sector borrowing requirement I would ask the Minister who will be replying what he intends to do, either later this year or next year, should it become clear that the Government's financial targets are not being met. In that situation, what is to give way? Will the financial targets be modified or will we be asked to accept further cuts in public spending, on public services and employment? That is not an academic question. It is one that can justifiably be asked and must be asked because it is not answered in the plan. I hope the Minister wil see fit to reply to it at the end.

The targets for the current budget deficit and the public sector borrowing requirement constitute the only substantive policy decisions in the plan. Everything else is built around these. The possibility of meeting these targets depends on two critical assumptions in particular, given the nature of the planning exercise. The first is that the US dollar rate and the dollar interest rate will fall significantly and that such limited US-led recovery as we have had will continue until 1987. What does the Minister intend to give way on if the first and second assumptions do not materialise to the extent predicted in the plan? As I understand it, the plan envisages a very significant fall in the dollar and the dollar interest rate in 1986 and 1987. If these do not happen to a sufficient degree and if the world economic recovery pans out and the world economy turns down, will employment and public spending be reduced further or will the public sector borrowing requirement be modified? The answer to this question is important to the Labour Party because the outcome in relation to unemployment, for example, predicted for 1987 is unacceptable. However, if it turns out that the financial predictions in the plan are wrong for 1986 and 1987 will the Government modify these or will we have to bear more unemployment?

The second principal assumption in the plan is that public sector pay and public service job numbers can be tightly controlled over the period, particularly in 1985. Indeed the public sector pay bill constitutes the principal means of adjustment, in 1985 in particular but throughout the period of the plan. I wish to make a number of points about this.

I have no objection in principle to a tight public sector pay policy in the present circumstances provided it is part of an overall incomes and tax policy and that it is intended to use the resources saved to generate output and employment. The fact is that there is no incomes policy or tax reform policy in this plan. I will refer to taxation later, but the absence of a policy on incomes, and I mean all incomes, not just PAYE, is both inequitable and unjustifiable in economic terms. Instead of a comprehensive incomes policy designed to meet output, employment and social objectives, we have pay restraint in the public service for financial reasons and no incomes policy for the rest of the economy, including the owners of capital. The absence of an incomes policy in a comprehensive sense and the failure to link such a policy to taxation reform will mean that the real incomes of public sector workers will fall gradually over the period of the plan and the real incomes of most employees in private indigenous enterprises will fall rather more rapidly while the real incomes of employees in multi-national enterprises will rise, perhaps significantly. At the same time, the incomes of companies and the owners of capital will remain uncontrolled. This multi-tax system is patently unjust, and in my view it is a central flaw in the plan.

Similarly, the failure to link pay moderation in the public service to employment creation in that sector is misguided. The overall effect will be deflationary and will lead to further job losses in the private economy as well as in the public sector. In this regard I fail to see the logic of shedding 8,000 to 9,000 full time jobs, on my calculation, in the public sector during the life of the plan while at the same time creating 10,000 part-time jobs largely in local authorities. The net saving to the Exchequer will be negligible if not negative, and the net consequences in the labour market can only be highly negative.

I should like to turn to three areas of policy that should have been central to the plan but which, unfortunately, are not. Two of these, output growth and employment, are treated as residual or irrelevant. The third, tax reform, is avoided for purely political reasons, all having to do with the political requirements of Fine Gael and their political constituency and all of which, equally, would be shared by Fianna Fáil for the reasons I mentioned earlier.

I will start with the question of output growth. Since the late fifties the conventional wisdom has been that growth in the economy could best be achieved by attracting foreign investment through the conventional IDA industrial policy. The idea behind that policy was that foreign owned companies would generate high levels of employment and at the same time contribute significantly to growth, both directly and indirectly, through sub-supply industries and services and through the normal multiplier of income expenditure and re-investment. The potential for utilising foreign investment in this manner has diminished substantially for external economic reasons. First of all, the accession of Greece, Spain and Portugal to the European Community will mean that Ireland no longer will be as attractive as it has been for multi-national company investment. In any event, and this is not peculiar to Ireland but to the whole of Europe, the world economic axis has changed away from Europe to one based on the US and the Far Eastern economies. One way or the other, I am suggesting that multi-national investment will tend to fall in the foreseeable future.

In any event, IDA-style policy has not lived up to expectations in either the employment or the growth sides. The industries set up have been more capital intensive than expected while rapid productivity increases have reduced employment numbers. In addition, sub-supply industries and linkages with the main economy have not materialised on the scale expected. In addition, given the absence of an effective corporate tax regime and the failure of multi-national companies to re-invest here, the principal benefits of their output have accrued abroad in the form of repatriated profits, a phenomenon central to social economic theory but one which has been discovered only recently by conventional economists following the so-called "black hole" controversy. The plan and the White Paper on industry policy implies some understanding of the failure of the foreign investment strategy in this regard but fails to act on it. The White Paper strategy states: that policy will seek to retain within the economy wealth generated by industrial development. That is a fine sentiment and an appropriate one, since all we are getting now from industrial policy based on multi-nationalism, is low numbers of expensive jobs because profits are repatriated and linkages to the domestic economy are minimal. Neither the plan nor the White Paper on industrial policy provides a policy solution to give effect to the worthwhile sentiment which I have just mentioned.

There are three adequate means of securing the wealth generated by industrial developments for the domestic economy. The first is to increase corporate taxation, secondly, through public ownership of industry and, thirdly, through domestic private ownership. The value of the last of these is dubious. A priori, in a free capital market, private capital owned and based in Ireland should not view investment in Ireland any differently to investment elsewhere, assuming there is no geographic constraint implied. The State should expect to have to pay the same price to Irish owned and based capital as it does to foreign owned capital to encourage investment or reinvestment in Ireland. In practice, the large investment overseas of indigenous Irish companies in recent years underlines the ability and the willingness of these companies to re-invest overseas rather than at home.

A shift from foreign to indigenous private industry can only significantly affect the intention of industrially generated wealth in the economy if Irish private capital is effectively constrained by exchange controls, so that profits must be retained in Ireland. While the present operation of exchange controls constrains investment institutions it has a much reduced effect on industrial companies and private individuals, a matter which is not addressed at all in the plan.

As for the other two methods I mentioned by which industrially generated wealth can be retained in Ireland, corporate tax reform is ignored in the plan despite the fact that we now know that the combination of grant and tax incentives to foreign industry is excessive while the public ownership issue is effectively ridiculed. Increased corporate taxation of industry is an obvious means of increasing the linkages between industrially created wealth and the rest of the economy. Recent trends in industrial output, productivity and employment indicate that most, if not all, of the real increase in value added by industry will accrue to capital rather than labour. Virtually nonexistent corporate tax, has, therefore, been the major factor in the very low multiplier effect of industrial export growth within the economy.

At present Irish taxation is preponderantly based on employee incomes and on the expenditure of employee disposable income. Therefore, the total tax take in the economy is directly linked to the growth of employment. However, GNP is now growing significantly faster than employment so that there is a strong built-in tendency for the tax take to decline as a percentage of GNP while, of course, the tax will continue to be loaded on the PAYE sector. In other words, we can expect a decline in tax revenue over time as a percentage of GNP while the PAYE sector will remain buried under that tax. The obvious answer to this serious problem is to substantially increase direct taxation on non-invested business profits. The fact that we are a small open economy model makes it all the more important to tax the profits of the tradeable sector, since a significant proportion of these will leak away in imports or capital outflows otherwise. In this regard a tax rate can be chosen which is competitive with other EEC countries. But, as I have said, the matter is not addressed at all in this document.

Greater public ownership within the industrial sector as a means of retaining a larger share of industrially created wealth in the economy is effectively ridiculed in the plan. The role of the State in directly generating wealth is ignored on ideological grounds, despite the fact that we know from experience that no matter how much grant aid is thrown at the private sector it will not create output or employment on the scale required.

The ridiculing of the potential role of the State in industrial wealth creation on grounds of ideology is wrong-headed and potentially disastrous. If the Telesis analysis is correct, as I believe it is, who else but the State, with the information it has accumulated through the work of the IDA and CTT among other public agencies, is in a position to pick winners in the sense of large scale industrial projects which are domestically controlled or to fund their development? Who else but the State is in a position to see to it that, for the first time in our history, we set about achieving high value added in our natural resources of land, sea and other natural resources?

The fact is that the days when we could expect to rely on foreign investment for development are gone, if they were ever here. Similarly, the days — short lived though they were — when we could stagger through on the basis of non-earmarked borrowing have gone too. We are now left in a position where we must rely on our own resources and talents to generate wealth and employment if we are to survive. There is no recognition of this basic reality in the plan. There is no recognition that in these circumstances the State's role cannot be confined to regulating the current budget deficit or the public sector borrowing requirement.

The State, in our present position, cannot adopt simply a regulatory role in fiscal matters and a passive role in developmental policy. I would have thought that by now we would have learned that supply side economics do not work and that in so far as they do work, for example, in the United States, they do so because of the large scale self-reliant nature of that economy and a price — in terms of human misery — for those who cannot get employment or whose employment future rests in Kentucky Fried Chicken outlets or in McDonald's hamburger joints.

It is because Labour understands the nature of the Irish economy and the essential dynamic role which the State must adopt in development that we have proposed consistently the creation of a well funded national development corporation. This proposal is also, in my view, treated with derision in this plan. The purposes we conceive for the national development corporation are twofold. First, it is to create a means by which the wealth created and manufactured in Ireland is retained in the economy. I have dealt with the importance of this already. Secondly, it is to identify and develop — either by itself or in joint venture with the private sector — large scale manufacturing enterprises, while at the same time getting politicians and bureaucrats off the backs of the commercial State sector.

I do not imply that the commercial State sector has not made mistakes, and sometimes serious mistakes. Of course they have. Where they are culpable, the board and management of these companies should pay the normal price paid in the commercial world as individuals. It must also be said that these companies have been subjected to interference by politicians and administrators, both in terms of day to day activities and in terms of long-term planning. In this regard, I refer to the Sugar Company's experience in relation to its mandate to keep the Tuam factory open. There may well be social reasons why the Tuam factory should be kept open. If there are, then the cost of keeping that company open should not rest with the Sugar Company to the point where it puts the whole operation of that State enterprise at risk.

One can look at many examples where commercial State enterprises have been interfered with, have had decisions imposed on them which were not in their commercial interest, and have not been allowed to carry on as normal commercial enterprises should. It is for this reason that we suggested a means by which politicians and bureaucrats would be taken off their back. The institutional means we have suggested is the creation of a national development corporation which would be a holding company for all State commercial enterprises, which would comprise and be staffed by commercially efficient people and which would be immune to interference from Government except within the context of a broad national economic plan where targets and guidelines for the entire economy were set down. The national development corporation which provides, in my view, the only means by which we can rationally organise the State to engage in wealth creation has been effectively undermined in this plan and in the White Paper which preceded it. It is hoped that it will be possible to get that particular idea back on the rails again when legislation in relation to the development corporation comes forward.

The plan proposes that by the year 1987 we will end up with approximately the same level of unemployment as we have now. That is based on optimistic assumptions within the plan itself both in relation to manufacturing, employment growth and growth in private services. It is notable that total reliance in the plan for the creation of employment rests with the private sector. So far as public sector employment is concerned there will be a fall in the plan of 5,000 jobs, a minimum of 7,000 to 8,000. Why is it that the private sector is, in the midst of recession, going to produce these significant numbers of new jobs? In the case of manufacturing the plan suggests that there will be 12,000 to 14,000 net new manufacturing jobs during the period. In the case of services the plan talks in terms of a net increase of 13,000 a year. What reason is there for this to happen on the basis of past experience particularly in relation to manufacturing or on the basis of IDA projections? I do not understand the basis of these figures. They are, I suspect, what Senator Dooge described as being to do with some deus ex machina, some lucky break which we cannot foresee at this stage. Yet we are going to go through years of continued recession, continued depression, continued tightening and cuts in the public sector area and at the end of it all end up precisely where we began. In my view it is not good enough. I would not mind going through the kind of period that we are going to go through in the next three years if I felt there was some plan for employment and reducing unemployment at the end of the whole thing. If somebody said that under this plan we are going to increase rapidly value added from agriculture, to increase rapidly the value of agricultural output itself, or that we were going to do something serious for the first time in our history about the fishing industry, or that there is something serious to be done to make tourism viable as a growth sector for employment, my attitude would be different. Tourism, which provides a real possibility for employment growth, is dealt with in three lines in the plan.

Unemployment and employment are treated very much as residuals in the plan. There is no policy towards them nor any suggestion as to how we take down this massive unemployment figure. I do not believe that the answer will be easy. I have suggested some approaches. It is true also that we will have to face up to creating a new policy in the area of jobs, taxes and welfare payments to do with job sharing, not just sharing work but sharing incomes and taxes. We are going to have to devise a package that will give worthwhile employment to people in the period ahead.

I consider the emigration figures proposed in the plan to be understated. If emigration is very high in the period ahead, the projected unemployment figure may turn out to be somewhat right but that will be because of emigration.

On the question of taxation, it is here one feels the most outrage in many ways, because it is in this area that something can be done easily and effectively by taking a decision to do something. The proposals in relation to taxation are such that they freeze the present taxation profile. Let us be clear that the indexing of tax allowances and tax bands is no more than freezing the present tax profile within the PAYE system. Similarly, there is no sign of any redistribution of tax out of PAYE across into capital, property, self-employed schedule D incomes or into farm income taxation.

The farm tax is too little, too late. The reality is that if farmers paid the same proportion of tax as they paid in the mid-seventies they would be paying £85 million this year instead of £30 million. Under this proposal they may or may not pay £65 million in tax under the farm tax in 1986-1987. There is no significant gain there.

In relation to capital taxation, if the owners of capital paid the same levels of taxation now as they paid in the mid-seventies, which were not seen to be particularly radical years, they would be paying £85 million a year instead of £30 million. The failure to reform tax is a failure of political will. It seems that that failure is politically based. It seems that Fine Gael will not take on the farmers, but I am not picking farmers out in particular. Fine Gael will not take on the onus of capital or the onus of companies who pay very little tax on their profits. They will not take on the self-employed in the schedule D category, many of whom are professional people and most of whom support that party at elections. We are not talking about a technical difficulty or about some very difficult task like reducing unemployment, we are talking simply about a failure of political will. I do not know why the PAYE sector or why the labour movement should be asked to put up with it. Despite the best efforts of the Labour Party in Government, in a minority position, we are about to waste three years in addition to the seven years wasted already.

If one looks back over the last 20 years one finds that we have tried foreign investment as an answer to our problems and that we have tried borrowing but we can try neither any longer. We are back to ourselves, and that means new policies, new methods of restructuring the economy, new methods of redistributing incomes, wealth, opportunities and jobs, but there is no sign of any of these things in this plan. Despite the best efforts of the Labour Party, which indeed were significant in that they managed to preclude the elimination of this budget deficit by 1987 which would have destroyed the economy altogether, despite our best efforts as a minority in Cabinet it is a dismal failure.

I welcome the opportunity provided to debate this plan. It is very important that there should be sufficient discussion on these sort of issues because, human nature being what it is, it is unrealistic to expect that in a democracy everybody is going to agree on the right way forward or how to build on reality or unreality or anything else. Clearly, then, one expects to get a variety of responses to any proposals of this nature. Equally we cannot just simply catalogue everything into boxes and say "well, that is what you would expect the right wing to say, that is what you would expect the left wing to say, that is what you would expect from this party or that party." There is always the danger that that will happen because, under modern conditions, when any event occurs, whether it is the publication of a plan or any other major happening, the nature of communications is such that many people are forced into instant comment or response. The quickest response is always the safe one. If we are really going to make progress over any sustained period of time surely the whole of human history tells us that we will have to be prepared to change. We will have to be prepared to break away from the prevailing attitudes and the conventional wisdom if we may call it that. The search is always, then, to decide which are the best changes to make. How should we move away? How should we depart from the prevailing consensus?

I do not want to take up the time of the House too long because I know many other people want to speak and I will try to confine myself to a few of the main themes as I see them, much though I am tempted, I must confess, to pursue quite a number of the comments that have been made in the course of the debate here yesterday and today. I suspect I will lapse once or twice but I will certainly try to keep to the main themes.

The first question is whether we should have a plan. There is one school of thought that says it is pointless to try to plan an economy, and indeed if you go far enough out on the right wing there are people who say that all Government intervention and economy is bound to end up being counterproductive so the best thing the Government could do would be to mind their own business. It is usually summarised in a famous 19th century saying "That Government is best which governs least". If you want to subscribe to that point of view then you would take that attitude and say we do not want to plan. Let us go further and note that even if you do not share that particular ideological position there are very powerful short-term political reasons for not wanting a plan. All practising politicians know that if they make commitments for some future period of time they are giving a certain number of hostages to fortune. So of course the smart thing is not to be committed to anything. As the fellow says, "of course I have a policy, it is to make it up as I go along." We have seen plenty of examples of the doctrine of highly flexible response in Ireland in recent years and I have no doubt we will see a lot more of it, because such is the nature of our electoral system and the level of political awareness among our people. That is part of our reality.

Part of the Irish reality is that people who try to make commitments and stick to certain viewpoints or policies are far more likely to end up in more political disfavour than those who bend with every wind and who shift their opinion to try to identify whatever they think is going to be the popular cause. Whether it is for ideological reasons or for short-term practical, political considerations of course there will be a lot of people who will not want a plan or anything which appears to commit them to a certain point of view for any length of time.

I do not share that view. It may be a useful way of promoting your short-term political prospects, but anyone who engages in public life because they have any genuine concern with what is happening to their country must discard that attitude. This leaves the ideological position - should you reject the plan because it is going to be useless or even counterproductive? It depends on how sensibly your plan is constructed and this brings us closer to what has been happening.

There is one major area where the plan needs to be developed because having asked whether you should have a plan, the second important question is how do you have the best prospects of success in a democracy with planning? I believe — and I am using the word "believe" because there are matters ultimately of judgment; they cannot be proved by appealing to any particular political theory — that the best way forward is by trying to forge a sufficient degree of consensus in democracy, and not unanimity. You are not going to get 100 per cent. One of the greatest reasons why anyone living in a democracy is suspicious of some of the socialist states is when they read about these elections where 99.9 percent of the people are alleged to go out and vote for one candidate and so on. I never want to see that, but I want to see democracy being sufficiently stable in the sense that there is enough agreement as to how we ought to go forward. Applying that sort of test it could be said that this plan strikes the right balance because it has been criticised from the right. I am using the terms right and left in a fairly general sense. It has been criticised from the right in the sense that the Government have not done enough to cut down on Government spending or borrowing. They are not going to restore financial stability or bring down inflation sufficiently quickly, and so on that view the plan is too left wing.

If one listens to the left one can hear the contrary view. The plan is too obsessed with financial considerations. It does not do enough to tackle unemployment. It does not do enough to bring about tax reform or to help those who are more heavily burdened. It does not do enough to protect the weaker sections of the community and so forth.

If the balance of comment was to be weighed up in the last few weeks it would be found that on the whole there is a fairly substantial weight of comment which has taken both of those forms. Therefore it might be argued that it appears to be broadly right in a democratic sense in that it must be somewhere around the centre. It does not really appeal to the right and it does not really appeal to the left. That might well qualify it for one step in the formulation of a consensus. I would not fault it on those grounds. If I had the time I could indulge in the sort of detailed critique which we have heard not only in this House yesterday and today but have read in outside comments and so forth. Of course there are are always things that one does not agree with personally, where you would want to see more of this and less of that and so on. I will dispense with all of that on the ground that there has been enough of it elsewhere.

While it may indeed be a plan that builds on reality in the sense of not sketching out too ambitious targets and not suggesting that too much can be done, it may well be that that would be the view that would eventually gain the maximum support. Better to be modest in one's ambitions and therefore have the best chance of fulfilling them. This is where I would find myself parting company because while of course it is more comfortable to settle for modest targets and feel that you have a very good chance of achieving them we have to ask ourselves is that enough in the present context of our country. I think one can make a case for saying that it is enough if one wanted to because again, it partly depends on the perspective one takes. We have been listening to people talking about the burdens of taxation, the high levels of unemployment and so on — I will be coming back to that — but if I had the job of trying to defend a modest plan of this nature with modest targets I would say: Look at it in a longer-run historical context. Unemployment has risen, indeed employment has fallen in a few years, but we are still in the position, if the statistics are broadly right, that there are more people at work today than there were, say, ten years ago and that is taking it on the basis of decades. That is the first time since our independence that there has been an increase in employment. If we look at the previous five decades, from 1922-23 right up to the seventies we will see that there was a fall in the number of people at work. Similarly, if we look at it in population terms, we all know how severely the population fell more or less continuously from the time of the famine up to the 1960s; now it is growing and growing quite steadily.

We have a country then which in the last two decades has managed to have a rise in population, which in the last decade has managed to have more people at work and which despite the impact of the two oil crises in the 1970s manages to have a higher level of output and income today than it did then. So, if you are talking about living standards for this greater number of Irish people you can say; "We are better off despite the problems we have, despite the headaches and so forth we have in material terms." People are better off today than they were in any of these previous periods. So, there is a case for saying that while things are by no means as good as we would wish, they are by no means disastrous, as the more gloomy critics would suggest. I am sure that case can be made but I have not heard it made yet. I will wait for somebody on the Government side to get around to that. I am clearly in the camp, and have been for quite a long time, which says that I do not think it is good enough to go for these modest targets and to have these rather modest goals for improving employment and so forth because again, looking at how rapidly attitudes, values and behaviour have changed — not just in Ireland but lately throughout the whole world and certainly in all the democratic countries in the last two or three decades — I think we ought to ask ourselves how stable can a democracy be if we are content to allow certain problems to build up.

May I interrupt? The President of the European Parliament is in the House and I would like to welcome him.

Thank you. If we look at the way in which attitudes, behaviour and values have changed in the last few decades there are some areas in which we must ask ourselves serious questions. I want to focus on one of them. It is very much a question of employment because in the Irish case given that we have got this population change, we all know by now that we have not just a rise in population but a rapidly rising proportion of young people in our population. They have grown up in this modern environment where they are bombarded with a lot of information and certainly a lot of arguments and views day after day, and that at a time when the acceptance of traditional values, traditional loyalties and so on has been drastically weakened. So we have to ask ourselves how much loyalty or commitment will young people in Ireland feel to this State or this democratic way of life if when they grow up and go through schooling where by and large they are told continually that they are the real wealth of the country, that they are our hopes for the future that they are the foundation on which we want to build and this is why we try to provide the best educational and other opportunities for them, and then when it comes to the day when they step out into the world they are more or less told: "Sorry, we would like things to be better but they are not, and realistically the prospect is that many of you are going to be unemployed for very many years to come."

I do not want to paint a really gloomy picture in any sensational way but it is fair to argue that in those circumstances while of course there will be many young people who will cope with and accept and adapt to that situation there will be very substantial numbers also who will either weaken in the sense of lapsing individually into drugs, drink, crime and so forth and there will be the others who will go for the more angry response and who will say that if this is what our democracy is promising us or holding out to us, let us get rid of that democracy and replace it with something better. That is the real danger. We cannot content ourselves with simply saying that things are bad on the employment front, that we would like to do better, that we will make some modest progress but for a long time to come you had better accept that a lot of you will find yourselves without some reasonable place in the employment market.

It is important to find them a place not just for income reasons. I know there is a contrary school which says that if we cannot provide them with jobs surely we can provide them with money, that is, improved social welfare benefits and so on. I have never subscribed to that viewpoint because I do not think it is a question of simply meeting the immediate material needs of people. We have to provide people, especially young people, with a sense of belonging to their own country and a sense of contributing to its wellbeing and that is why we must hold out some reasonable prospect that they can find some opening in their own country. I am not suggesting that we can find everybody the type of job that they wish for — that is totally unrealistic and Utopian. I am suggesting that we have to look very hard at the way in which we organise our affairs so that we can provide some form of employment. Of course those of you who are familiar with me will know that this is by no means a new theme on my part; it is one that I have been advocating for almost a decade now but I find no reason to change it.

Since so many people keep hammering the awful period of 1977-81, could I first of all split it into two periods, 1977-79 and then 1980-81 because there is a very profound difference between the two periods. In that first period, we only have the statistics from April to April, so I have to take the three years April 1977 to April 1980. There was an increase of 80,000 in the number of people at work. There was not a significant increase in borrowing and especially there was a very little increase in foreign borrowing. In fact, it was virtually nil in the first two years. We had some foreign borrowing in the immediate aftermath of the second oil crisis in the spring of 1979. Yes, it happened just as it happened after the first oil crisis in 1974/75 whereas from 1980/81 onwards that is when the really severe increase in borrowing, especially foreign borrowing took place. That is when the fall in employment and so forth took place because that was when there was a change in policy. As it has been openly said by people, they threw out the policies that had been practised up to then. It depends on which policies you want to retain and which policies you want to throw out. I will make no apology for arguing that you should try to retain a policy which seeks to maximise employment.

Our colleagues in the more left wing will say that that is not on in a free enterprise economy. We heard Senator O'Mahony a few minutes ago making the point that in the United States the much wanted improvement in employment is really associated with hamburger joints and so on. It is not as simple as that. It is true that that is what has been happening there. But you could look at another capitalist economy such as Japan and you would find full employment and a faster rise in living standards, faster than in the United States. We can all pick countries to suit our cause, though I have to confess I cannot find a country on the socialist side which combines full employment with sustained increases in real income for any length of time.

But the point I wanted to make is that when you look at the numbers, what has happened in Europe, in the EC, by comparison with what has happened in the United States or Japan, is that while in general we have been able to enjoy fairly substantail rises in output and therefore in living standards, they have all been captured in gains of income for those who already had found work. You only have to look at the statistics for it to jump out clearly that whether you take periods of one, two or three decades the figures that emerge show that in the United States any growth in income was shared more or less 50-50, half going for financing more employment and the other half going in income increases for those in employment. But when you look at Europe, especially if you look at the period 1960 to 1983, you find a nil growth for employment for the EC area and all of the rise in income, which is almost 3½ per cent per year on average, being absorbed in income increases for those in employment.

That is the real nub of the issue we have to face in democracy, whether we can succeed in developing arrangements and systems that can ensure that our technical ability to increase output — which we all know is growing every day; we are fed up listening to talk about technological revolutions and so on — will have the other beneficial results we want is another matter. We have the technical ability to increase output, to raise our living standards. What we have not succeeded in doing yet in this part of the world is finding ways of ensuring that that ability to raise output is shared in the form of bringing in the people who have not got jobs and giving some of the output and income to them and the remainder of it by way of rises in income to those already in employment. If you look at the Japanese case you find that gets closer to raising the employment and also raising the income levels. Even the United States, which has had much smaller improvements in income than Europe, managed to do something similar.

That is the problem for Europe and even on a bigger scale especially for Ireland, because what is true of the other EC countries is even more true of us, given our rapidly rising population. The way in which we have tended to cope with that problem is by having the income increases for those in employment and then taking more and more money away from them in taxes in order to finance the social welfare benefits and other necessary programmes for those who are unemployed. I would argue that we have to try to go more directly at it. We have to try to provide a consensus which will get a more direct income-sharing. There is nothing new in that, coming from me. That was the basis for what became known as the national understanding in 1979. Unfortunately, just as it was getting off the ground the second oil crisis intervened and that attempt at policy formulation was abandoned from 1980 onwards. It is the area in which I find greatest disappointment with this plan. While there might still be differences as to whether the targets are modest or whether they could be more ambitious — I will come back to that in a few moments — the real disappointment to me is that there is talk about how to achieve a better balance in finances and so on, there is no suggestion as to how this is to be brought about by any form of democratic discussion and participation which would involve the various interest groups, the employers, trade unions, the farmers and so on. Surely the experience of the last couple of decades has shown us — and indeed we all know that there have been much more recent examples of it — that you find these interest groups very willing to fight their own corner, very willing to push for policies which will suit their immediate interests even though they may be highly damaging to the long-run wellbeing of the country. What we have to do is try to develop arrangements that will avoid that sort of sectional conflict. In my opinion that is one of the areas in which we should be more ambitious in this planning. We should try to set about rebuilding some form of national consensus. A crucial part of it has to be the way in which we share incomes, whether for those in employment or those in the agricultural sector, the business sector or whatever. This is one of the areas in which I disagree with some of the, if you like, more left wing comments which I notice in many instances keep saying that wage costs and other costs are not a significant factor in our problem. They are. If we are going to make our way in the world we have to be able to pay our way in the world. We are not going to be able to pay if Irish products are too costly in comparison with others. I do not even want to try to develop that argument; we have all heard it before.

The more immediate point I wanted to try to develop is that while there is something we can do domestically to help ourselves, through building a new consensus, a national understanding, to hold down our own costs, there is another area in which a Government could be active, and that is in the EC. We have been told in the plan how important it would be for things like interest rates to come down. Apart from sitting back and waiting to see what happens in the United States, there is also a very strong case for going to our EC partners and saying: Even if you are the most right wing economists under the sun, the calculations show that in Europe unemployment is well above what right wing economists call "the non-inflationary rate of unemployment", and therefore there is scope for an expansionist policy in Europe, not on the same scale as the Reagan expansion of a few years ago, but nonetheless significant. There is also the financial ability to do that in Europe without having to run the big budget deficits which the United States have.

If you look at the statistics there, while most of the countries, France, Germany, the United Kingdom, still have small budget deficits in cash terms, when you correct for inflation and ask what is the size of the real budget deficit you find that taking the EC as a whole for 1984, there is a real budget surplus of the order of more than 1 per cent GDP. There is no financial argument against an expansionary approach. In other EC countries; not Ireland, we have a budgetary problem, but looking at the stronger, better financially-managed countries, such as Germany, France and so on, there is scope. If you could persuade our European colleagues to move in that direction it would help the prospects for Irish growth in employment. You could do another thing in Europe; you could say, as part of this, will you please take the next step towards using this European currency, the ECU which was introduced as part of our European monetary system? If you started launching that for many of your international transactions we could perhaps break this incredible cycle that has been going on for three years where the greater the America deficit, the greater the amount of money it sucks in from Europe and the rest of the world. If you really want to bring down interest rates you should be trying to make Europe more independent of the United States. You should be trying to launch its own currency in the world markets. I would suggest that there is ample scope for doing that. That coupled with a more expansionist approach for European policymaking, would give scope for a more expansionist policy for output in Ireland. I suggest that that be allied to the development of some form of national understanding in Ireland which would ensure that we did not have a repeat of the awful experiences of 1980 and 1981 where the response to the oil crisis was, in effect, for everybody to say, "Somebody else can pay the bill but not me, I still want my pay rise." That simply guarantees more inflation and less security at the end of the day. We want to become more cost conscious, consensus conscious and more ambitious. Do not be afraid of not reaching targets. The last thing anyone should expect is that any set of targets will be achieved exactly because anyone who can foretell the future with certainty can make himself a fortune any day.

We all know that setting targets is not an attempt to tell people what the world will be like in two or three years time. What it should be is an attempt to say here is what we think will follow if certain steps are taken. If you have a high degree of uncertainty about the future, what is wrong with setting out two or three possibilities? If I were making practical suggestions for Building on Reality I would say let us start with that as a point of departure. This is a more modest, realistic type of approach. If you feel it is not good enough, let us see if there is scope for doing better and what steps would we need to take in order to expand more rapidly than the plan envisages. That is the direction in which we should be seeking to move.

Whatever its limitations and defects — we could pick holes in particular numbers, that is a game we all know how to play quite well — we must get rid of the notion that not having a plan is a good idea. That is summarised in the old view that if you do not know where you are going any road will take you there. There are plenty of people who are quite happy to allow themselves to be led up and down different highways and by-ways but anyone who is seriously concerned about what happens to the country ought to have enough courage to commit himself to a somewhat more positive course of action. Making that commitment means that you should also be prepared to accept that you will not be right all the time so that when things go wrong say so and say, "It has not worked out the way we expected, now let us find out why and let us make the necessary changes to set ourselves back on the best road as quickly as possible". That is one of the other great virtues of having a plan: it provides a series of bench marks and you can see then how far ahead or how far behind you are. It gives scope for trying to establish why your actual behaviour or performance differs from what you had expected. If you do not know what to expect you cannot be either agreeably or disagreeably surprised.

We need the discipline of some form of planning framework. I should like to see that aspect of it stressed more fully. We do need a discipline. We need some simple approach to managing our financial and other affairs but we also need a bit more courage to be willing to tackle some of the very serious problems that will still remain if this plan is to be fully achieved.

The best area in which to make that more courageous advance is in the area of unemployment. I do not need to spell out how that could be done. My thoughts on that were adequately put forward at the time of the national understanding. They are also contained in various other speeches and documents so there is no need to detain the House on that issue on this occasion. What is important today is to try to settle on the strategic issues. Do we need a plan? If so, what kind? Where do we think we want it to take us in the next few years? We must recognise that we will not have initial agreement. Let us try to identify the areas where we can make some practical progress towards overcoming this initial doubt or disagreement so that we can have the stability of a consensus which is born out of free discussion and, therefore, conviction arrived at through persuasion and not through any attempt to ram doctrines of one kind or another down our democratic throats.

I am conscious of the fact that other Members are anxious to speak before the debate concludes at 5 p.m. so I will be very brief. I will deal with the plan under a number of different headings. Firstly, I will deal with the background to the plan and the political aspects of it, particularly those referred to by Senator O'Mahony this morning. I will refer to the questions of unemployment, taxation, public finance and national consensus which was so beloved of Senator O'Donoghue.

The background to the plan is the deterioration in the employment profile in the country or, as more accurately analysed by Senator O'Donoghue, a disimprovement in the unemployment profile which represents our inability to create sufficient jobs for the increase in our population which has taken place over the last few years.

I cannot accept the analysis of Senator O'Donoghue with regard to 1977-81. Politically it is possible to divide that period into two and I understand well what Senator O'Donoghue is saying. The message is received and understood. I am sure it is received and understood by his colleagues on that side of the House also. There is a certain element of truth in it. It is reasonable to assume that, irrespective of the change of leadership which occurred during that period, this change would have occurred anyway. The type of policies pursued after the 1977 election would inevitably have led to a rapid increase in the number of people at work followed by a slow decline as the adverse consequences of these inflationary, expansionary and undisciplined policies were imposed upon a community which was not ready for the consensus which Senator O'Donoghue said was a necessary part of the structure. It is not good enough to say that in an ideal situation if you pump up the economy in this way eventually you will get the right answer if everybody behaves rationally. We have to assume that people will behave as they normally behave, not as we would like them to behave or as we think is rational for them to behave. That was the basic problem which occurred in that period. However, that period is now long past. There is no point in talking about it. We must talk about the present.

As regards the political reality of the plan, I refer to what Senator O'Mahony said this morning. It is quite obvious that Senator O'Mahony is on the left of the Labour Party. It is a very comfortable place to be because the left of the Labour Party has the privilege of being permanently in opposition. It is never in Government. It is always in opposition. They have their own way of criticising the leadership of their own party. They have their own way of expressing their disagreement with what the vast bulk of the Labour Party parliamentary members believe and the ordinary members of their party also believe. They have their own way of saying it.

In the present climate the way of doing it is by attacking Deputy J. Bruton and Deputy Dukes. The way you criticise Deputy Spring, the Tánaiste, is by attacking Deputy Dukes. You do not ever mention Deputy Spring because he is a popular figure. He is recognised to be a popular figure and, therefore, you do not criticise him. You suggest in some way that he is so weak that he cannot handle himself in the Cabinet with these awful people Deputy J. Bruton and Deputy Dukes. That is exactly what Senator O'Mahony did this morning. He built on an imaginary foundation that the Labour Party had an existence outside the members of the Government and that it had a reality other than what it actually has. This is the kind of nonsense which so sorely tempts and trys the patience of Fine Gael supporters.

I agree with many of the views of Senator O'Mahony but his overall analysis is essentially left-wing and is not shared by the majority of the members of his own party. The majority of the members of his own party are far too right wing to be members of Fine Gael. That is the reality. The majority of the members of the Labour Party would not comfortably fit in as members of the Fine Gael Party. You can see that in any social legislation which goes through the Dáil. A much smaller proportion of Fine Gael are on the extreme right than are a proportion of the Labour Party.

The problem is that people like Senator O'Mahony do not recognise the reality of the party to which they belong but pretend that it is something else. They do not recognise the reality of the trade union movement to which they claim affinity because it is a very right wing movement, very much involved with the rights of its members at work and very uncaring about those who are not at work.

Senator O'Mahony mentioned the question of increased public ownership of the means of production. The experience we have had of that has been disastrous. It is all very well for him to say that we can remove political interference from it and it will be all right: it will make a valuable contribution towards increasing employment. That will not happen. In reality that is not what occurs. What occurs is that once a production capacity comes within public ownership it becomes subject to overwhelming pressures when it is necessary for it from time to time to increase employment or decrease employment. It becomes fossilised. Social considerations are imposed upon it which are not imposed upon any other productive section of the economy. As a result, the system does not work. It is good with regard to the question of maintaining unemployment but it is very bad with regard to the question of actually producing wealth for the country and distributing it properly.

On the plan itself, there is a reasonable point in what Senator O'Donoghue said with regard to the objectives being rather too modest. Take the area of employment. The proposed profile of employment and unemployment disclosed in the plan and discussed in page 26 in Table 1-2, shows a disappointing profile in a number of different areas. The proposed reduction of 5,000 in the number of people employed in the public service shows a lack of determination which is unfortunate. The public service area is seriously overstaffed. There are merits in reducing that from the point of view of the effect that that reduction will have on the taxation necessary in order to finance the day to day activities of the State. That is a disappointing aspect of the plan.

What is also disappointing is the question of the total number of unemployed expected at the end of the period. It is too simplistic to say that we can automatically do something about that. We are part of the European Community and Continent whether we like it or not. Trends have emerged, which are very worrying, with regard to the world-wide distribution of employment and an increase in unemployment in the various sectors referred to by Senator O'Mahony as a change in the access of power from the American-European axis to the American-oriental axis. That is true.

If one looks at the figures in the OECD Observer, No. 130, dated September 1984 one will see that unemployment in North America over the last nine years, 1975-83, has virtually been stable and went from 8 per cent to 10 per cent. In Japan it has hovered around 2 per cent but in the European section of OECD the increase has been really dramatic. The increase from 4 per cent to 10 per cent in that period has taken place in a variety of countries with a variety of economic systems. In a table on page 6 of the document to which I previously referred, the OECD Observer, one can see that an increase in unemployment in a place like Sweden, which is a highly controlled, centralised economy, is almost identical to the increase in unemployment which has occurred over the same period in Ireland. It is interesting to note that the increase in unemployment in places like France, which has a socialist Government and in places like the United Kingdom which, from time to time has had socialist Governments, has been dramatically greater than the increase in unemployment that has occurred in either Sweden or Ireland. Against that background, we must recognise that the problem we are confronting on unemployment is a European problem. It is a world-wide problem, but specifically it is a European problem.

We should take seriously the suggestion made by Senator O'Donoghue with regard to approaching the EEC in relation to the creation by the EEC of a policy to reduce unemployment generally within Europe. Our only hope of making a substantial reduction in employment is by a change in the economic activities in the European continent which would have a direct and significant effect on all employment.

The second area which I would like to consider is the question of taxation. The decision not to implement the proposals in the report on taxation is a bad decision. The Government have failed to tackle this problem. The marginal rate of 65p applies to a considerable number of people — and I am not talking about well-off people but about single people earning £11,000 or £12,000 a year. They are subject to a marginal tax rate of 65p plus another 11 or 12 per cent in respect of social welfare charges of one kind or another. This rate of taxation, varying as it does, depending on the individual, from 65 per cent up to 77 or 78 per cent is quite unacceptable. The very excellent suggestions in the report of the Commission on Taxation have been cast aside by the Government. To write off their suggestions in that fashion is far too flippant indeed. It shows a narrowness of approach in the Department of Finance which I would not have expected from a Minister of the ability of the present Minister for Finance.

In paragraph 6.5 of Building on Reality the Government clearly commit themselves not to introduce the main central proposals of the Commission on Taxation. That is quite unacceptable.

There are a number of other proposals which the Government should consider. They should consider the question of stabilising excise duties as a percentage of the retail price of the goods to which they refer, so that any increase in the manufacturers' price will automatically give rise to a similar and simultaneous increase in excise duty. This would have the effect of changing the necessity for the annual adjustment of these taxes. It would also have the effect of showing the manufacturers of spirits and beer the effect of any increase in cost which they proposed to pass on to the consumer. The piecemeal approach to the adjustment of VAT rates is not correct. I do not see any good reason why VAT on newspapers should be reduced from 23 per cent to 18 per cent until such time as there is a general reduction in VAT rates. The idea of introducing a VAT rate of 15 per cent on everything, including food, is good. If one wants to exclude food and make it 17 per cent or 18 per cent, it is still good. It is a good approach and it is something which should be seriously considered. It is a gimmick to reduce VAT on newspapers and we should not pretend it is anything else.

The proposals about farm tax are good. The Government's approach on this is to be welcomed. They have constructively met the case with regard to the various difficulties involved in taxation in the area of farmers.

I have already referred to the question of public sector employment. The proposed reduction of 5,000 is not enough by any stretch of the imagination. When a Government talk about cuts — this applies to Fianna Fáil, Fine Gael and the Coalition — sometimes they mean the introduction of new charges. I am not against the introduction of charges. The introduction of charges, at local level is to be welcomed, but we should not regard transferring taxation from a central to a local level as being a cut. That is not a cut. That is merely a change in the system of collecting taxation. A far more radical assessment than that which appears to have been carried out of Departments which spend money is necessary. I recognise that hidden in these figures are very many decisions, which will emerge over a period of time, and which are necessary in order to enable the targets for expenditure within this plan to be realised.

As regards public sector pay, I have no sympathy with those who feel that the public sector are being badly treated. Public sector rates of pay have expanded dramatically. Capital sums, retirement and inflation-proofed pensions are items that must be carefully considered as they are imposing an impossible and increasing burden on the community.

I do not want these criticisms to cloud the fact that I share with Senator O'Donoghue the view that the putting down on paper of a plan is a very good exercise. The Government were right, in the circumstances, to abandon their previous position of eliminating the current budget deficit in five years. Their targets in that way are sensible. They are adopting a flexible and sensible approach, which I hope they will continue to adopt if circumstances outside their control make changes necessary. It is important that where the plan is within their control they should stick to it, but obviously circumstances can change. For example, international interest rates and various other things can change which will either allow greater flexibility because they might move in our favour or, on the other hand, require a reassessment of the various targets involved in this plan.

I do not believe that we should await a national consensus for the implementation of this or any other plan. Senator O'Donoghue has eloquently laid out the benefits to be gained from a national consensus. He went on to state that each of these groups to which he referred, the trade unions, the farmers and the various other interest groups selfishly pursued their own ends. People do not want a consensus. They want a Government to govern. They do not want to call in the trade unions. The Irish Congress of Trade Unions sent us a framework for a national plan called Confronting the Jobs Crisis which was a load of waffle. It did not contain anything constructive and was a very poor presentation. It failed to tackle the problems. It showed that while the Irish Congress of Trade Unions in theory subscribe to a left wing analysis of the problem, they are unwilling to implement policies which are consistent with that public position.

The Government are right to produce a plan and not a White Paper. This is a testing time for the Government. The contribution of both the Fine Gael and Labour Parties to this plan has been significant and welcome. I do not want to differentiate between them. I disagree fundamentally with the view, that, in some way, the Labour Party Ministers protected the people from the excesses of Fine Gael monetarism. As I said, most of the members of the Labour Party would be far too right wing to be comfortable members of the Fine Gael Party. The Leas-Chathaoirleach who was not present for my earlier comments finds that amusing. I find it amusing too, but it needs to be said even though it is amusing.

You should be honoured.

They would have to form a party of their own. I do not think they would be comfortable in the Fianna Fáil party either.

I am sorry Senator O'Mahony is not here.

I invited him to stay. I told him I would mention him by name. He was shy of the praise I was going to heap on him. I recognise the very substantial contribution both parties made to the creation of this plan. I recognise that the same interplay between the two parties in the production of the document took place as takes place within parties. I am not privy to what happened at the Cabinet table but I am quite sure that disagreements which existed within the Labour Party and the Fine Gael Party were every bit as fundamental and severe as the disagreements which existed between one party and the other as cohesive units.

The reality is that in terms of the broad stream of the bulk of the members of the three major political parties, their economic analysis, in terms of right and left, is almost identical. The parties have other distinguishing characteristics but that is a true statement. I welcome the plan and I wish it every success. There are things which are not in it which I would like to have seen in it, such as the commitment to tax reform. There are things in it, which I am sure, other people object to. By and large, it represents a very real effort by the Government to lay aside the day to day problems of determining where they are going so that they can concentrate on the long-term objective of curing the economic mess which was left by the policies which were commenced in 1977 and which continued in an unbroken line until the change of Government in 1981. For that reason I welcome the plan and support it.

Listening to Senator O'Leary's contribution one can understand the difficulties the Government had in trying to bring this plan to fruition, in trying to get agreement between the two parties in Government and the different ideologies of those parties.

The plan is a clever political exercise because it succeeded in cementing together the two parties who form the Coalition. A couple of weeks ago it seemed as if the marriage of those two parties was well and truly over but then the plan came along and it seemed that overnight the problems of the two parties in Government were over. They were going to stick it out come hell or high water. Unfortunately for the country, when the plan is fully analysed it becomes apparent that it does nothing to tackle the serious social and economic problems that beset the country at present. It succeeded for a short while in taking the people's minds away from the present problems and focussing on 1986 and 1987 when everything promised in the plan is to come into effect.

There are no solutions for the immediate problems. It is a case of live horse and you get grass. There is nothing in this plan to inspire confidence or special efforts. There are no worth-while prospects for our people which could motivate them or even motivate them into accepting the discipline imposed. All it offers is a continuation of the present gloom and depression.

For the past two years the Government have made financial rectitude their top priority. We have been told that they were devoting all their energies to getting the public finances right, that foreign debt was to be reduced and so on. Our people would accept the disciplines required to achieve those objectives if the Government policies succeeded but unfortunately the records show an entirely different picture.

Today our foreign debt is more than two-and-a-half times what it was three years ago. This document stipulates that the current budget deficit will remain at its present level of about 7½ per cent of GNP not just this year but next year as well. It seems that in spite of all the hardships imposed by the Government in the name of financial rectitude and of the sacrifices made by the people, the Government are as far away as ever from achieving any kind of order in our public finances.

In the next three years we will see further cuts in services and further hardship for an already hard-pressed population. Those cuts will weigh heaviest on the poorer sections of our community, a section who have already suffered by the halving of the food subsidies, inadequate social welfare provisions and the imposition of tax on clothing. To add to the hardships I have already mentioned, the Government now propose to tax child benefits and short-term benefits. That is a sign of their concern for the poor and the under-privileged.

The Minister for Health is prepared to axe 3,000 jobs in the health services, reduce services and the number of hospital beds. The situation in many hospitals is chaotic. Sick people have to waste long hours at outpatient clinics for treatment. In the Galway Regional Hospital we have a classic example of Government blundering. The new maternity unit which is fully equipped is still closed even though there is a great need in the western region for the services that that unit would provide. Because the Minister and his Government colleagues refuse to sanction the staff required for the unit the women of the west of Ireland are being degraded and allowed to suffer.

I cannot understand why a socialist Minister like Deputy Desmond can preside over the Department of Health and carry out those draconian measures with a ferociousness unprecedented since the foundation of the State. For a man who professed during his years in Opposition to be concerned for the poorer sections of society, one can only conclude that power has gone to his head.

The most disheartening feature of the plan is that it has no proposals for the development of our natural resources such as agriculture, fisheries and forestry. Agriculture has always played a major role in economic development and still remains a major part of our economy. Today about one-fifth of our labour force works on the land and a similar proportion of our industrial jobs are in industries directly related to agriculture. More than one-third of our total earnings from exports comes from the sale of farm products. The future growth of our economy is more dependent on the development of agricultural policies and markets than is the case with the great majority of our fellow members of the OECD. The process of utilising the true agricultural potential of our land resources must continue. We have a strong vested interest in the future development of agricultural policies and in the efficient functioning of markets for farm products.

Measures that deal with national policies and with general market developments must take account of the special problems of farmers and their families in disadvantaged agricultural regions. In this plan there is more emphasis on the imposition of a land tax than on the provisions of funds for the proper development of agriculture. One wing of the Government, Labour, are claiming the imposition of this tax as a victory for their members, while the other wing, Fine Gael, gloat that it will not affect their traditional support among the large farmers, that is those farmers with more than 80 adjusted acres. The latter will now be better off because they can offset their land tax against their income tax. The net results will be that those farmers will be paying less to the Exchequer. The farmers of between 20 and 80 adjusted acres will pay land tax at the rate of £10 per acre regardless of their circumstances. If we take a farmer with 50 adjusted acres, according to the farm management survey his family farm income in 1983 would be £4,895. If he is married with four children he would be liable under the income tax code for £208, taking his personal allowance and £300 for life insurance or other allowances. Under the land tax regime he would pay £500 whether it was a good year or a bad year, regardless of whether he made a profit. The result is that under land tax he will pay almost two-and-a-half times his income tax liability. If that same man had a job in a factory and earned £4,895 per annum he would not be liable for income tax as neither would he be liable for land tax or rates. Yet we are told that land tax will bring equity into the tax situation. I cannot understand where the equity lies in that system.

Of course a case can also be put forward by the farmer with 21 adjusted acres. He will be liable for £210 in land tax while his neighbour across the fence, with 19 adjusted acres, will not be liable, even though he may be in a better position to pay than the man with the 21 adjusted acres.

Any tax which does not take account of a person's ability to pay is a bad tax. Of course once the principle of a land tax is introduced the rates will be increased each year thereafter. VAT is a typical example of what can happen. It started at 2½ per cent and is now about ten times that. There are many other hidden taxes which a farmer has to contend with, one of which is included in the plan. It is proposed to take £7 million from farmers between November 1984 and November 1985 under the bovine disease eradication levy. So also will farmers be paying more at the factories and the marts at a time when there is a great uncertainty in the cattle trade, when our trade with Libya is in jeopardy because the Government are not prepared to sit down and discuss the situation with the Libyan authorities. It is a well known fact that farmers at present are accepting huge losses on cattle which they purchased last spring when prices were soaring.

Why then is there so much uncertainty in the trade and what are the Government doing about it? The imposition of a further levy will not help. Some members of the Government seem to think that farmers are making a fortune. They have no idea of what life on the land is like. The costs, the interest rates and the imports costs are all increasing while the profit margins are getting smaller daily. I understand that the price of fertiliser is set to increase again by about £30 per tonne, adding still further to the farmers' nightmares.

Great play is being made by the Government of the increase in the level of grant aid under the disadvantaged areas scheme from £32 to £70 per beef cow in 1986. If costs continue as they are today the value of that £70 will be completely eroded by 1986. The western drainage scheme which brought so much hope to western farmers and enabled them, through the provision of a decent rate of grant, to drain 250,000 acres of derelict land has been allowed to grind to a halt.

There is little use in providing additional money under this plan when the scheme that is there at present is allowed to flounder. Contractors who purchased machinery under the western drainage scheme are disposing of it because of the lack of work. All the scheme needs is a commitment from the Government and an injection of capital to ensure that the work is allowed to continue. The additional acres drained would make a significant contribution to the economic development of the western region. While the Government boast about the additional millions provided in the plan for increased payments under the headage scheme, sheep farmers in the western areas are owed millions of pounds under the sheep schemes. This money has not yet been paid to sheep farmers. In fact, the inspections have not yet been carried out. Is it any wonder then that the farmers are cynical of the promise of increased grants? We have witnessed the blundering over the super-levy and the loss to the country of millions of pounds as a result of that blundering. The country has overpaid the EEC to the tune of £17 million and £500 million has been lost by way of the black hole. One wonders if there is anybody in charge of our public finances or if there is anybody accountable for this fiasco. The Government lecture our farmers on how to run their farms but if farmers ran their farms the way the Government run their business I am satisfied that the farm gates would have been locked years ago. The Land Commission who have provided a useful service to the farmers over a number of years have been abolished and no other agency have been set up so far to replace them. I wonder what all those officials who were employed by the Land Commission are to do. Why are the Government not directing their energies to the division of commonages in the west? It was part of their plan when going into Government.

The farm modernisation scheme is non-existent. Indeed, the allocation of funds provided for under this plan is far short of the amount required to make it the vibrant scheme it should be. Our application for an extension of the severely handicapped areas has been delayed. We will be lucky now if we have a decision by 1986. My information from the Commission is that the necessary back-up details have not been supplied by the Government. The British, the Dutch and the Italians were able to reclassify their areas. Again this will result in a loss of millions of pounds for our western farmers.

In other areas of social and economic activity the same tale of woe could be recited. At a time when there are 214,000 people unemployed in the country I cannot understand why the Government would not give an injection of capital to the building industry. This does not require the setting up of new agencies as the structure is there already. It needs only capital and it would immediately reemploy thousands of workers.

The Government's plan to provide £5,000 to tenants of local authority houses who wish to build their own houses will not attract the volume of applications to make any significant difference to the building industry. The plan we are discussing will not resolve the greatest social evil affecting this country, that is, the problem of unemployment. If I thought for one moment that it would, I would welcome it with open arms but unfortunately it will take something far more revolutionary than this plan to provide jobs and hope for our young population. That is why the plan will fail. It sidesteps the major social problem of unemployment. It will be seen by our young people for what it is, a cosmetic political exercise.

If I were to identify the immediate short-term benefit of the Government's economic plan and, indeed what I regard as a major long-term benefit, I would express it in just one word and that is the word "hope." I believe that for the first time since we sank into the depths of the recession the man in the street, and surely this is the person about whom this plan should really be, has been given real hope for the future. What I particularly like about the plan is that such hope is solidly based. The plan is pragmatic and realistic. It sets down targets which are realisable and achievable. It sets down dates and deadlines within which these targets are to be met. It is designed to refloat our flagged national morale, to restore our pride and our fundamental belief in ourselves to solve our own problems and to get us out of the economic quagmire into which we have so unnecessarily sunk. Some people have chosen to refer to the targets as being too modest.

The Taoiseach in his opening address alluded to this observation. It was a point re-echoed particularly on the other side of the House. I listened to the well-structured contribution of Senator O'Donoghue. He said that the plan in its targets was too modest and did not go nearly far enough. In the present economic climate one cannot regard these targets as being too modest. Anything that is remotely achievable in the present economic morass is a quite substantial achievement. The targets as set down in this plan are bold targets and will do a lot to resurrect our national pride when they are realised. Targets such as those set down are not modest in the wake of an era, not so long ago, when budget projections were notoriously and invariably much wider of the mark. I would totally reject the scathingly derisory dismissal of the Government's economic performance so far in their 23 months in office.

This Government inherited a mess which made it totally impossible to do any planning until basic sorting out was done in basic elementary areas of the economy. It is the quite substantial achievement of improved performance in some of the key economic component areas that has enabled the Government to launch forth an economic document of this magnitude with reasonably optimistic prospects of success.

I would draw the House's attention to the quite dramatic recovery in some of the vital areas of economic activity. For years we have been fed regular diets of the belief that inflation was the major millstone around our necks with consequent effects on our competitiveness. Yet in merely 21 months inflation has been reduced from 21 per cent to 7.9 per cent. We still have, admittedly, some considerable way to go. I submit that the greater part of the inflationary battle has been well and truly won. Again there has been a complete turnabout in our balance of trade figures. For most of the past 12 months we have become net exporters. This is the first time we achieved this since 1974. This feature is bound to yield significant long term dividends if the pattern can be maintained. Furthermore we have seen an end to negative growth figures. It is from such positive achievements and such basic framework areas that this initiative has been optimistically launched.

Without doubt, however, the single greatest challenge facing this Government or any administration is the point so rightly identified from all sides of the House, the question of unemployment. We all collectively stand indicted if we fail to do something tangible or worth while in this respect. It is to the eternal shame of all of us that we have frittered away our potential and that we have allowed the situation escalate to its present dangerous explosive level. There is no use in blaming Seán Citizen for his greed or lack of foresight or his vested interest. Though he must take a portion of the blame. There is no use laying the blame on international factors. The lion's share of the blame must rest fairly and squarely on previous administrations which got it monumentally wrong. We must place the blame on previous administrations which adopted a policy of creating jobs for the sake of jobs without any firm economic base for them. The blame must lie particularly on the pumping and priming exercise of 1977 which was designed to catch the rising tide. It was fine had it done so but it did not do so and landed us in the passive fools' paradise, the sea of tranquility of the seventies and the economic stormy recessionary winds of the eighties.

This plan gives hope. It gives hope for employment. It has been castigated in certain quarters in that it does not reduce substantially the present unemployment figure and that there is a tacit acceptance in the plan of the 1984 end of the year figure as the norm. Assuming that an unemployment figure of 220,000 by the end of 1984 will actually be the figure and that there is an achievement of an actual reduction in this figure to 210,000 by the end of the plan in April 1987, allowing for an intervening growth of 135,000 in the workforce in the three years, this is a very significant achievement. As Senator McGonagle has said, there is no other practical plan. If there is a feasible, realistic, achievable alternative then let us have this alternative and not just global assertions. Let us hear fleshed out the A, B and C of such a workable alternative plan. It would be grand to aspire to many of the targets, ideas and objectives set down by Senator O'Mahony but it simply is not on and there is an onus and an obligation on such critics to come up with a detailed plan which will work as an alternative rather than indulging in sniping references, vague generalisations or woolly ideology which simply are not achievable.

At the outset I said that this plan gives hope. As I have already outlined, there is hope particularly evident in this key test area. This plan sets out to ensure that there will be a net growth in employment of 33,000 from 1985 to 1987. In other words, not alone the intermediate pupils of 1985, 1986 and 1987 but their leaving certificate counterparts of the same years can now look forward to the job market with a confidence that was sadly denied their predecessors of this year and not so long ago. Any vested interest should think long and hard before jeopardising the realisation of that stream. Surely nobody, employer or trade unionist, would deny the making of a short term sacrifice in order to enable thousands of their unemployed colleagues to get back into employment?

I welcome the introduction of the new social employment scheme for the employment of 10,000 each year at the half weekly wage of £70. Of course there is no permanency of tenure in such jobs, but it is galling to listen to the dismissive comments that such jobs are not real jobs. Try telling that to the people who will be afforded the dignity of earning a wage by the sweat of their brow for the first time in years albeit in the short term. The scheme is imaginative and I would like to see such a spirit of adventure extended to other Government Departments where there is badly needed scope for such imaginative initiatives.

I confess, however, that I am disappointed by the omission from the plan of any reference to the introduction of early retirement. Like others here, I have had the experience of sitting on interview boards in order to select people for jobs, in my case, mainly for the teaching profession. I have had the experience of seeing up to 80 highly qualified, highly principled, fine people by any standards, apply for just one job, in some cases a temporary teaching job. I have listened to people of up to 28 years of age who have never taught for more than a few months at a time trying to summon up the necessary energy and enthusiasm to give it one more go and go through one more hopeless interview. Their valuable talents, their expensive training and potential lie unexploited and rusting.

I believe that the vast majority of people who have been lucky enough to reach 60 years of age and who have worked for 40 years in secure employment in most cases would be more than willing to give up their jobs and to enjoy the benefit of well merited retirement. Such people would not be dispossessed against their will. It would be far more imaginative and sensible if the planners could see their way to transfer resources and to give the dole money, which is given to young unemployed graduates or people qualified for the public service, in the form of pensions to people who have gained the superannuation requirement years. Thousands of people could be taken into the professions and the Civil Service which would create some diffusion of the explosive situation that I have mentioned. I wish to record my disappointment in this regard and I hope that it is an area, notwithstanding the fact that it is not in the plan, which will be tackled by the Government reasonably shortly. It has potential and merit and it is acceptable.

As a Mayo man I welcome two areas of commitment to capital expenditure in my county, namely the new general hospital for Castlebar and the new regional technical college for the county. I am proud to be a member of a party who are in Government and giving tangible commitment to the west. Coupled with the £10 million mental handicap complex which is now in the course of completion at Swinford, County Mayo, which was launched by the Coalition's predecessor in 1981, it represents the greatest financial injection that my county has ever received.

The reintroduction of the western drainage scheme already alluded by Senator Hussey is a major boost to the west. The spending of £3 million beginning in 1985 means that 2,000 undealt with applications can now be processed and got under way, thereby bringing thousands of acres of waterlogged land into useful agricultural production. The enormous increase in the beef headage payments from £32 to £70 gives many farmers in disadvantaged areas such as Mayo their biggest income boost in history.

I strongly fault the plan in another respect. It has failed utterly to take cognisance of the role of the part time farmer in the west. I am not talking about social welfare recipients. I am speaking of people who in many instances are forced, because of non-viable holdings, to take up part-time employment in order to feed, clothe and educate their families. Yet this person cannot qualify for headage payments if his gross farm income or that of his wife is £3,500, in other words less than a mere £70 per week. I do not know who made this regulation but it is unjust and discriminatory. I did not agree with the introduction of the reduction of the threshold from £5,000 to £3,500 qualifying limit. When will people in power wake up to the realisation that part-time employment is an economic necessity for thousands of small farmers in the west? These people are an integral and vital part of the social and economic fabric of the west. I make a special plea for a sympathetic re-examination of the possibility in the short-term of increasing the non-farm income limit for headage purposes.

One of the most significant aspects of the plan, which I tried to maintain in my contribution, is the theme of hope. With the introduction of the new housing grant of £5,000, coupled with the £1,000 new house grant and the £3,000 mortgage subsidy, we are now talking about an actual cash payment of £9,000 to local authority tenants of three years standing to purchase their own houses. By any standards it is a significant figure towards the contribution and purchase of such houses. I can see it creating tremendous mobility. I can see it giving a vital injection to the building trade in that people will take into consideration the £16,000 SDA loan at the lowest rate of interest possible, 12½ per cent over 30 years, or the very attractive rates of repayments under the Housing Finance Agency. It marks a very positive and definite contribution towards resuscitating the building industry.

When one takes into consideration that in the plan the Minister has committed the same amount of resources to building the same number of local authority houses next year then I think the building industry is well under way again. I do not agree with the dismissive comments of Senator Hussey in this respect and when the statistics become available this will be seen as one of the major, most positive, most dramatic and most helpful aspects of the plan.

I am somewhat disappointed that horticulture has not received greater recognition in the plan. I concur to some extent with some of the comments regarding the lack of development of some of our natural resources. When we look at the figure for the food import bill for this country for last year — something in the region of £700 million — and when we look at a breakdown of this figure, we see that something in the region of £250 million worth was imported by way of simple table vegetables which we are capable of growing in this country. It is a sad indictment of our ability to organise and to harness our resources for our own benefit. It is an area that will have to receive far greater concentration in the future.

The land tax issue was an area that was anticipated with bated breath by people on the Opposition benches. To be honest, many of us on this side of the House did not know what was going to emerge either but we were very relieved when we saw it. As somebody from the west, an area which has quite a high concentration of congested holdings, I fear very little for the people of the west because the vast majority of western holdings will not be above the £50 adjusted acre threshold and, therefore, these people will rightly not be deemed liable for tax. I would, however, make one plea. There is a certain amount of merit in the point put forward by Senator Hussey in relation to the person with 19 adjusted acres who will pay no land tax although the person on the other side of the fence with 21 adjusted acres will have to pay £210 tax. The introduction of a waiver or sliding scale should merit a long, hard look before the tax is implemented.

The most positive ingredient of the plan is the element of hope that runs right through it and the fact that it is not a woolly document which sets down vague objectives which can be run away from if things do not turn out properly. The As, Bs and Cs are spelled out in quite dramatic detail and as a Government we stand indicted if they are not met. I have every confidence that they will be met, that many of them are the bottom line and that in April 1987, when there is a final reappraisal of this document, it will be seen as a document that resuscitated this nation and gave us a fundamental belief in our ability to manage our own affairs again.

Senator Dooge said that this plan was the result of political will. There are many of us who would suggest that it was the result of political necessities. The ship was on the rocks, the sands of time were running out, the angel of death was hovering over the national Coalition and this plan was patched together as they grasped for straws. It was a game played under compromised rules matched by a captive audience. The media in general heralded it with an auspicious welcome but I am afraid the man on the street - to whom Senator Higgins referred - was at least as interested in the jazz festival in Cork, and that is not to belittle that festival, as he was in this plan.

In the last century the medical profession were treating sick people as if the causes of the illnesses were all external. Gradually new perceptions crept into the medical profession and in the earlier part of this century they began to find reasons and look at the inner body. I am afraid this plan does not look at the inner body of the real problems besetting Irish society. It skims over the problems rather than treating the causes. As I said earlier, it was a matter of political survival. Survival was the motivating factor rather than a credible operation. Over the last century there has been a transformation in our society, people have been uprooted. In the earlier years 75 per cent of our people lived in rural areas and 25 per cent in the towns. This has now virtually been turned around the other way. Under the impact of that kind of change and changing values society in some ways is seen to be breaking down though perhaps this is a normal process for a developing industrial urban society. In that situation Governments, not just this Government, react to massive corporate interests and are not broadening out or trying to involve greater public participation. Perhaps one could say that politicians carry too much weight. Some of this is of our own making. Some of it is partly because of the multi-seat constituency pressures from our colonial history where too much is expected of the Government. We have succeeded in cluttering up the system of government and choked public and private initiative with a myriad of entangled, bureaucratic, outmoded procedures. I am glad to see that the Government are proposing to make changes in this regard and that accountability and the undoubted talents in the Civil Service can be used to take responsibility for their own decisions and not have minute detailed decision matter placed on the desks of Ministers every morning, with little or no opportunity to delve into fundamental policies and appraising situations in a way that top administrators should be in a position to do.

A striking example of this kind of paralysis is the ineptitude and the very slow response of the European Community to famine striken Ethiopia. We have had policies which have led to a massive buildup of surplus food. We spend enormous sums of money in intervention and storage and yet no food aid programme on a continuing basis has been developed for poorer nations. It was not until a television programme showed the stark, naked holocaust, the trauma and death which tore at the hearts of decency that we got any worthwhile response. The facts about famine and drought are not new. Trying to penetrate this maze of indifference, this paralysis, is a cumbersome, deadly slow process and the public at large are demanding, and rightly so, a faster response. We need a more sensitive structure which is capable of adapting not only to rapid change in society but in a particular way to help to alleviate this terrible suffering. Perhaps only two Continents, Europe, the USA and Canada, have produced sufficient food for their own needs. In many other Continents famine and starvation are a constant and recurring problem. I know that we cannot advocate production of food and its sale for half nothing, or that agriculturally based economies can indirectly support transferring food surpluses indiscriminately to countries where the responsibility more correctly lies with other more powerful regimes. Neither am I advocating the production of food which the market cannot take. We must tailor our own production line to market requirements and re-orientate our supplies to the greatest needs. The tragedy of Ethiopia would have been understandable 50 years ago when we did not have the surpluses, and even if we did we did not have the distribution network that would enable us to transfer foods to countries like Ethiopia. Now we have the surpluses and the network to airlift the food to save millions of lives. There is intransigence and lack of sensitivity. Governments, regimes and major powers fail to be sensitive to these problems at a time when billions of pounds are spent on the development of nuclear weapons.

The argument is put up that you cannot afford to supply this food. Which is more important, to save the lives of people who are starving or try to create weapons which will ultimately destroy life? Even young people in different parts of the world commit suicide because they are afraid of what would happen in a nuclear war. I am not condemning the Government. The Minister for Foreign Affairs has been quite successful in pushing other EC countries into a decision. This has been going on for months. It was highlighted two or three months ago, but it is only when the public exert pressure that the administration become alive to the necessity and can then find the funds. We have to be more alive to these problems when we have the surpluses and the resources and when vast sums of money are being spent on much less desirable projects all over the world.

I would put the question to people in government and particularly to the major powers: do they know what it is like to say to a child that they have no food for him or her? Do they know what it must be like to watch your own flesh and blood starve to death while mountains of food, cereals and lakes of milk are stockpiled in other countries? I will leave the answer to them.

I want to turn now to the plan. Senator Higgins concentrated on some of the better points but, towards the conclusion of his speech, he, too, saw the flaws in it. The best that he could attribute to it was the hope that it might give to society as a whole. In religious or moral terms, there is one word that usually comes in front of hope and that is faith. If Senator Higgins had been in a position to use that also, he would have been more comprehensive in his contribution. However, I welcome some of his very good comments.

Since the publication of the plan there have been serious doubts about the accuracy of some of the figures which underpin it. No sooner had we dragged our feet out of the £500 million black hole than we were drowned in the sorry spectacle of the milk quota "cock-up". More recently views have been expressed that the estimate of the value and volume of exports is seriously in doubt and may be considerably less than it should have been. Questions have been raised about the capacity of the Central Statistics Office to assemble this data and to translate it into actual detail. Perhaps we do not have sufficient personnel to collect enough data. We are clearly using outmoded methods of taking account of the various changes that are taking place and the new manufacturing and processing situations that are part and parcel of our economy, but which perhaps are only nine or ten years old. We need a more incisive system so that figures and projections will be accepted as accurate by the public. We all suffer from the feeling of public apathy and cynicism towards plans and promises because from time to time so many of them are unfulfilled. Therefore, it is crucial that when we have a plan the figures stand up and are underpinned by the facts.

The mounting challenge to society in the next three years or by the end of this decade, with an increasing population, with perhaps half a million houses and the same number of jobs needed, additional to the present level of job opportunities, to cater for our people, highlights the need for effective and united Government. That Government would have to be supported nationally and particularly by the parties within Government. I will give one or two examples of how united the Government are on some of the figures. At column 2600 of the Dáil Official Report for 17 October 1984, Deputy Taylor said:

On the question of public spending cuts, the Government have dodged hard decisions. They are relying on public service pay curbs, on a standstill in the expenditure of local authorities and on cuts in health services to bring finances into order.

Criticism has been made so far about the contribution of some Fianna Fáil members and how critical they have been of the plan. I have selected a few extracts, not from Fianna Fáil contributions, but from members of the Government party. At column 2787 of the Dáil Official Report for the same date, Deputy Prendergast said:

I should like to address myself to the part of the plan which refers to the public service and the question of pay restraint. The Government are making a very bad mistake if they hope to make the public sector the whipping boy for our present misfortunes and expect it to carry a disproportionate burden of the sacrifices needed to get the country back on the road again. By and large we have an excellent and efficient public service. Of course, as in most organisations there are areas where waste and inefficiency can be eliminated; but this can best be done through consultation and agreement with the unions involved. . . . .

At column 2790 of the Official Report for the same date, Deputy Prendergast also said:

I am strongly in favour of an expanded public service. The emphasis on job contraction is wrong. There are children in my city who have to wait for over a year to see a dentist under the public health system. The unions in the public sector are a reasonable, decent group of people. I am satisfied they would be prepared to sit down with the Government and look at this if it meant the protection of their jobs and the expansion of this sector.

I selected those extracts to indicate that not just Senator Higgins but a very firm body of opinion in the Coalition Government, and presumably in their parties, hold a widely different view from that being expressed in the plan.

Nearly half of the admissions to our psychiatric hospitals at present comprise people suffering from alcoholism. You can appreciate the consequent family and social problems that this entails. Nearly three-quarters of the beds in our orthopaedic hospitals are now taken up by accident cases of one kind or another. The majority of these accidents take place on the road. Recently the insurance companies estimated that road accidents cost this country in the region of £200 million per annum.

The national plan dropped the price of whiskey by the exact same measure or margin that it raised the price of a loaf of bread and proposes to open the pubs to 1 a.m. Is that not an indictment of Government thinking on a totally unnecessary, unsought and in many ways preposterous suggestion? It is no wonder that the public are cynical about it.

Another area where Members from all sides of the House have attacked the plan is on the question of taxation with particular reference to the PAYE sector. We have succeeded in developing a taxation system for all categories which has become very complex, less intelligible to the public and for some groups in society this is penal. Every year we keep on adding another rung to this ladder and making it more expensive for all groups, particularly small businesses, to cope with it. We now have six rates of VAT in the plan itself which recognised and stated this and suggests nothing more than perhaps a pious hope that something might be done about it. Our various rates of VAT are creating difficulties between trade here and the North and increasing our lack of competitiveness. It is also an expensive burden on small traders and business people and people that we want to encourage to set up new businesses with new ideas particularly for import substitution. Most people expected the plan to signal a reduction in the unfair burden of tax on the PAYE sector and generally to try to move towards a more simplified and incentive-orientated tax system.

From time to time — and I have raised this matter in other places — we have wanted for some strange reason to try to increase the enormous load of official documentation and so on that relates to tax and as a small employer myself — and I should say very small because I employ only one person — I received from the Revenue Commissioners, as did every employer in the country, a circular letter telling me that the P35 is going to be shortened by five inches. Most employers — if there are any present — will recall getting this letter because it was sent to every employer in the country. I am not condemning the individuals responsible for it; it may be that due to computerised systems and so on this sort of thing is necessary. There should be some other way of eliminating that sort of bureaucratic, red-tape, unnecessary, expensive way of spending public money.

One other area that has been high-lighted as being quite attractive is the £30 child benefit scheme. If one examines that in the context of the plan does it carry with it the advantages which it is supposed to have. I understand from the Ministerial statement relating to it that the child allowances, and food subsidies will be ended at the time that it will be introduced. If you take an ordinary person on 45 per cent tax it means that the £30 a week becomes half of that and if you subtract food subsidies plus the £100 child allowance then the £30 becomes virtually the equivalent of what you are receiving in children's allowance at the moment. I think Senator Higgins from his contribution would agree with me that all politicians and Governments should move away from the kind of cynical exercise which presents something to the public as being something great and when you examine it more closely there is absolutely nothing at all in it. I may be wrong but to me that seems to be the position.

Like Senator Higgins, I welcome the efforts being made to employ people who are on long-term unemployment. They are badly represented everywhere at the moment. I referred to corporate vested interests earlier in my contribution. I do not care whether it is large farmers, trade unions or the ESB complaining about their losses at present, and they were one of the first organisations to pay people to move from cramped and bad offices a few hundred yards down the street into new, luxurious facilities: I do not care if it is the vested interests that force that sort of payment on society, whether it is justified or not, but it is time that some efforts were made to find situations where some more of our unemployed can take up positions, temporary or otherwise. I know the accusation will be levelled and it was levelled against earlier administrations but there is no point in creating jobs just for the sake of them. But if we take into account some of the studies that have been done on unemployed people and take into account — though some of us do not understand it because we have been working all our lives and we do not have enough time any day or night or week — what it is like to go to bed at night because you have been doing nothing all day and have nothing to look forward to the following day and the moral degradation and the loss of dignity, not to mention and the loss of income to the individual concerned and to the country in a variety of ways in PRSI, income tax, product development and so on. We have to try to find interim solutions to slow down the escalation of this problem.

We tend to try to solve law and order problems with more law. We accept that in the light of events in India today it is terribly necessary to protect people. People should be unafraid to walk out on the streets and to live in their own homes at night time. We all have had the experience, particularly in the city constituencies, in canvassing even in the early evening of people being afraid to open the door at seven and eight o'clock in the evening. We obviously have to take cognisance of that and do something about it. In general, in that area of unemployment it is terribly easy for people to drift into criminality. All of us react differently to these pressures. The problems will not be solved with any real jackboot solutions. There will have to be a lot of understanding and a lot of effort put into devising schemes which will use their energies rather than have them dissipated in unemployment.

One area which the plan does not really address and one which every school and college and technical institute and any group of people or chamber of commerce should be conscious of is that of giving incentives to people who have new ideas about products and services and things that we can get people involved in. When you look at the range of our imports you find that there are £7,400 million worth of raw materials imported here, a great proportion of which could be replaced by import substitution and development of the same products here at home. Perhaps the emphasis in our education, drawn again out of our history, is more towards somebody else creating a job for me rather than I doing it for myself. We need to gear and revamp, change and encourage the kind of system where this will be more possible because these jobs are so vital at present. The Labour Party, after the food subsidies had been removed, had a very traumatic time and some of their main speakers made contributions which will be interesting in the historic context. I do not know if there are more suitable places than Seanad Éireann or Dáil Éireann where they could be portrayed — the theatre perhaps. One of the reasons why these were able to be stomached, if I could use that word, was because the family income supplement scheme would be brought forward by two months. Most of us still do not know what is in that scheme but the one thing that is certain is that none of the social welfare unemployed or groups in society in these poorer classes will benefit. From what I have been able to learn about it you would have to be employed, with four children, earning about £60 a week before you would get the maximum benefit and if there is anybody in Ireland today with four children getting £60 a week for that employment his employer should be before the court.

Reference is made by everybody to the development of our resources. This is an area to which the plan refers in a few paragraphs and mentions the National Development Corporation and some White Papers but time is being lost and the dynamic approach that any Government should make to this area is absent. One of the areas where this lack is shown is in our timber industry. We require to import 75 per cent of our needs for the building industry. Europe as a whole imports about 60 per cent of its timber requirements. We have abandoned the principle of acquiring and planting 10,000 hectares per annum. Arising from the efforts of earlier generations and earlier Governments in poorer times we have — perhaps uniquely in Europe — the potential not only to meet our own needs but to take a reasonable slice of the export market also in this area if we could harness and co-ordinate our resources and have a properly developed saw-milling industry. We should not find it necessary at this stage to have a White Paper on what should be done here. The opportunities are there; the manpower is there and the skills are there and if we can have them properly co-ordinated and properly managed we should be in a position to harness the tremendous potential for our country.

I would like also to welcome the £5,000 grants for tenants of three years standing who wish to purchase new or secondhand homes. It is scheme which will not only help the building industry but will help people to acquire their own homes and will release houses for local authority tenants. In the initial stages it may have the tendency to encourage people to go on to local authority housing lists rather than build for themselves. Perhaps this problem could be solved, but I would not like to condemn the scheme just because that ingredient may be in it. I think it should be possible to increase the £3,000 mortgage subsidy or the £1,000 new house grant to counter such a development. The plan, however, does not address the real problems as they affect local authorities. When we heard of the land tax many people serving on local authorities felt that whatever about the equity or otherwise of the land tax here was money that was going to become available to local authorities who were stretched to the last to provide the services that they are providing. Here again the small print in the plan shows clearly that the land tax is going to be collected by the local authority. First, of course, we all accept they badly need it but the bad news is that the rate recoupment which went to the local authority in respect of rates is to be scaled down to the value of the land tax which means that the local authorities' position does not improve.

While talking about local government I would like to suggest to the Minister that some consideration might be given to the question of the terrible burden on local authorities of servicing the loan charges on sanitary services, water and sewerage schemes all over the country. These schemes are very necessary for individuals and they are very necessary for encouraging industrial development, but the actual loan charges which are now accruing in the cost of these schemes is an enormous burden on the local authority. Our Government have, over the years, provided a 100 per cent subsidy for expenditure on housing. The subsidy on these schemes is only in the order of 50 per cent and perhaps something more could be done here where it would help.

With regard to the tenants of local authority houses it looks as if they are due for a large increase in rents in the coming year. When one takes into account that the local authority tenants who can afford it will leave the local authority houses with the incentive of the £5,000 scheme plus other auxiliary developments, the remaining population in the local authorities will be the more depressed, and the poorer group, and they are going to face increased rents, at a time when the repair schemes operated by the local authorities are being abandoned.

Having found some aspects of the plan which were encouraging and which do attempt to deal with some of the problems that I have referred to, overall I do not think it is going to act as the motivating force that is needed for the kind of demoralised society that is in Ireland today. Some areas, particularly the question of our natural resources, were not addressed in a vital and dynamic way and even some of the major strengths of the Joint Programme for Government have also been by-passed in this plan. The figures, as I indicated in the beginning, are being questioned: the plan has a very shaky foundation. I would like to be in a position to wish it well because outside in the community, particularly among people who are unemployed, there is a great need for plan; there is a great need for community co-operation and there is a great need for a sense of pride and nationhood amongst all our people, North and South, and I fear that the opportunity which the Government had did not bring about the kind of situation which I had hoped for.

Senator Smith in his very thoughtful contribution on the plan mentioned the situation in Ethiopia and there is not a single word of what he said that I would disagree with. He is absolutely correct. The ordinary members of the public are far more generous and spontaneous in their response to human degradation than indeed our Governments whether of the European Community or all round the world. I have felt since this situation began if they were white they would not be dying. That may not be a very palatable thing to say but that is my belief. I do not think it would happen to Italians, Danes, Dutch, Germans, French or Irish. It is just unfortunate that they happened to be in the wrong place and to be the wrong colour. In relation to his remarks on the situation in Ethiopia, I agree with him completely. He went on then to do the old selective Fianna Fáil trick of recalling some aspects of the plan; it would suit him to forget conveniently some of the aspects that do not suit. He mentioned that the plan was a compromise. I would have thought that that was commonsense because there are two parties in this Government. How could it be other than a compromise? It is the same compromise that Fianna Fáil, under the present Leader of the Opposition, was forced to make when they had the Workers' Party on their backs, and there were only two of them. They were compromising every day of the week. It is nothing new.

I would be very disappointed if this plan was a national plan produced by the Fine Gael Party, just as I am sure the Fine Gael Party would find it unpalatable to have a plan in toto produced by the Labour Party. My criterion on this as a member of the Labour Party was to see if it reflected the Labour Party input percentage that the people gave us. If the people wanted a plan from the Labour Party they would have given a Labour Party Government. If they wanted a Fine Gael plan they would have put Fine Gael into power on their own. They did neither. Obviously the document is a compromise. As far as I am concerned it is an honourable compromise.

I am satisfied on the position of Labour members of the Cabinet that they did ensure that a lot of the areas were considered. Let me be fair and say that Fine Gael and our selves have a joint concern about unemployment, for those people who are sick, and in regard to the building up of their country. We share that. On that basis the Labour Party and Fine Gael produced a document which was a reasonable statement of both parties' position in relation to the country as it now stands. It was an act of courage for a political party to put forward its projected budget for the next three years and to say: "That is what we are going to do and here is how we are going to do it." If this Government fall before their term of office is over then they have nothing to stand on but this plan. It is an act of political courage that this country needed.

What the country had under Fianna Fáil prior to this administration was political cowardice of a very high order. First of all, you will recall that when the present Leader of the Opposition was Taoiseach he gave one of the most impressive, thoughtful speeches I have ever heard from a political leader in my lifetime when he addressed the nation on the problems facing this State. It was a speech which was thoughtful and courageous. It was a speech which demanded from the people tremendous sacrifices. Deputy Haughey then evoked, or at least attempted to evoke, from the Irish people a national response to what he termed a national crisis. I must confess I thought then, and I still do now, that the speech was brilliant. What was not so brilliant was Deputy Haughey's complete failure to back up that speech and put into operation the words and wisdom contained in it. There is no doubt that at that time his diagnosis of the problems facing the country was absolutely correct to most people's minds. The reaction the following morning to Deputy Haughey's speech was that he had got it right, that his analysis was correct; that the way he proposed to go forward with that Government was correct. We sat back waiting for action.

It is a matter of historical record now that Deputy Haughey as Taoiseach fell almost at the first fence. There was neither the will nor the political courage to carry through the promises he made that night on television to get this country into some sort of order and to move away from the banana republic status which we had allowed ourselves to drift into. He did not have the political will or the courage, and we suffer from that today. The level of debate both in the other House and in this House on the national plan from the Opposition would almost make one get up and attack the plan for the sake of pretending to be the Opposition. That is one of the problems for Fianna Fáil in even debating the national plan, They have had about four or five plans put forward by different persons within that party. It happened before when Senator Martin O'Donoghue was Minister for Economic Affairs when he said he had a plan. The plan was to fill the plane — we all remember his very colourful description — and send it off down the runway and then you were in business. Of course the plane crashed and then the pilot was shot, because the Department was demolished by the present Leader of the Opposition who did not believe at that particular time in his sort of economic planning.

The tragedy for this country is that Deputy Haughey did not believe in his own version of economic planning because, as I said, when he came up to the first fence he baulked and that was the end of that. I would sincerely say that if this Government lack the political will and the political courage to carry into legislation the programme they have outlined in the plan, they deserve to fall. If they do not have the political courage, having put the plan before all sections of the Irish people, to carry it through and baulk at any of the pressure groups that they will undoubtedly come up against, then they deserve to fall and to go into Opposition. At that stage I would feel extremely sorry for the country. If the Opposition is as bad as the Government that Fianna Fáil could provide, I shudder to think what would happen to the country.

I was listening to Senator Honan this morning talking about this document which was a plan. She did not mention The Way Forward, which was the major encyclical from Fianna Fáil on how things were going to go. Now it is dead and gone. Everybody wants to change it. Deputy Ray MacSharry has gone to Europe and he does not want to know any more about it. Certainly Deputy Haughey talks about its revision. Contained in The Way Forward was a lot of the material which is actually in the plan. Many of the suggestions put forward in the plan are contained in The Way Forward. The reason that they are in both documents is that they make absolute sense. The difference is, I hope, that this Government have the political guts and the political will actually to translate these proposals into solid action.

Many references have been made to unemployment. Again, no party — it is something that sickens me sometimes in the political arena — holds the Holy Grail in terms of concern for people out of work. That is a concern we all share irrespective of the political labels that we carry. There is not a politician in this country who would not put people back to work tomorrow if that were possible. There is certainly no politician who would back a policy which actually puts people on unemployment assistance. The reality for us is that there is no country, there is no other agency than ourselves at this particular time. We have to help ourselves. There is no easy solution to our problems whether in fact we have a Government such as we have or a socialist government as they have in France. President Mitterrand discovered that there were things which he could do and then he discovered that there were lots of things he could not do, for irrespective of the political complexion of a Government, any of the European Governments at this point in time, the unemployment problem faces them all equally and they are all trying to grapple with it in various ways, and all attempts to grapple with it are contained in their national plans.

Of course, as I said earlier, most of us would prefer if we could offer the old slogan about jobs for everyone and full employment. The young people are too well-educated to believe that sort of thing any longer. If you tried to offer that on the doorsteps in any election in the past few years or indeed in future years you certainly would not get their votes; you certainly would not get their trust.

The Labour Party's intention in this plan was to protect people on social welfare as a first priority, and we make no apologies for that. It was to get as many young people back to work, either in training or in full-time jobs, as was humanly possible, given the financial constraints. We have no apologies to make for that.

We could have gone a lot further with the question of land tax and farmer taxation. The Exchequer support for the agricultural sector should have been trimmed down by the precise amount they are supposed to get in 1986. I am disappointed with the farmer taxation. When Fianna Fáil brought in a resource tax, the farmers objected and they got back their money. That is the sort of political will that Fianna Fáil displayed in Government. One of the reasons why the chairman of the IFA is silent is that he tried a double bluff which did not come off. This Government will tax the farmers and this Government will collect the land tax. They will defend as they defended in the past, those farmers who need defending. They are the small farmers as sure as night follows day, whatever level the land tax comes into operation at per adjusted acre in 1986 they can look forward to, as the PAYE sector had to, reasonable increases year after year as the demands of society necessitates extra cash. They will be in the same position as the rest of us. There must be no doubt about it: if you can pay you must pay. We have no apologies to offer the farming sector for that.

Much has been written about the plan by economists. I am one of those cynical people who believe that, when you hear something from an economist and if you remain in the same spot for long enough he will come back again and say precisely the opposite. If one had the time to do research work, one would find that the experts contradict themselves on a regular basis. I do not have any faith in the gurus who would say that the plan cannot work because it is based on assumptions about the American interest rates and on an assumption that the public sector will be patriotic. Whatever about the American interest rates, the public sector has been a whipping boy of Irish politics for a long time. I have no doubt that there is a strong realisation among the people who work for this State that there has to be, over the period of the plan, a sense of responsibility and constraint. This was asked of them once before. Deputy Haughey as Taoiseach asked it of them but he did not carry it through. This request has been made to the public sector and they will respond positively. Other sectors of the economy — trade unions, employers or public servants — will respond to the plan because they have no ambition to see this country disintegrate into a third world status or to have it run by the International Monetary Fund. No Irishman or woman would want to see that evolve. Everybody will be determined to see that that never happens. Given sufficient support throughout the country, given the active co-operation of the elements I mentioned and given the benign Opposition we have had to date, I have no doubt that this plan will be brought to fruition.

Prior to the publication of this plan, many people in the Fine Gael and Labour Parties were convinced that the Coalition Government were falling apart and could not survive much longer. They were convinced that they were disintegrating by the hour. They were convinced that a general election was imminent and that it was only a matter of weeks rather than months until the Government would come tumbling down. The only possible ray of hope was that the promised national plan would contain the magic formula that would bind them together again. This was the first criterion the promised plan had to meet, as far as most Fine Gael and Labour people were concerned. They wanted a plan that would bind the Coalition together again, paper over the cracks and act as a unifying agent for a political alliance that was coming apart at the seams. They did not want an economic plan that would put the interests of the country first, because they knew that a plan could not be produced which would serve the interests of the country and the Coalition at the same time. It had to be Coalition before country. Eventually the long awaited document appeared and its launching was, without question, the most blatant and barefaced propaganda exercise we have ever seen.

Some of my colleagues have been critical of the use of the word "reality" in the title of the plan. I disagree with them. This is a plan which faced up to the political reality that the Fine Gael-Labour Coalition was in disarray and was disintegrating by the hour. The most pessimistic Coalition supporters were heartened by the way in which the plan faced up to that problem. The major problems of employment, rapidly falling living standards and an oppressive tax structure, had to take second place. The first priority was to give the Coalition the kiss of life. This plan will go down in history as the response of a discredited Government to this political reality.

As an economic plan it is a disaster. It contains no worthwhile proposals. There is nothing in it which will generate economic activity or give hope to our young people. There are no incentives in it to encourage investment or create a climate of confidence in which investment will take place. Without investment there will not be any real job creation. The proposals which the plan contains for worksharing and the proposed new social employment scheme are a very weak response to the unemployment problem. While the plan refers to a career break scheme in the civil service, I am disappointed it does not contain a proposal for optional early retirement. Such a scheme could be introduced at no great cost to the Exchequer, and it would have the potential to create many career opportunities for young people.

Many of the Members of this House are members of local authorities. Those who are not are aware of the disastrous financial situation in which most local authorities have found themselves over the past few years. Many services have had to be cut back and some services have had to be discontinued. In Roscommon at the moment one public light in every three has been extinguished in every town and village in the county. We spent years investing in the development of an adequate public lighting system and now that we have a sufficient number of public lights of an acceptable standard in most parts of the county and at a time when the ESB are producing more electricity than they can dispose of and are losing money, our financial situation has compelled us to extinguish one light in every three and to reduce the voltage of the remaining lights. Our county roads are in a deplorable state because of the lack of finance for proper maintenance. The Local Government (Financial Provisions) (No. 2) Act, 1983 ended the obligation on the Minister for the Environment to recoup to local authorities the full amount in lieu of domestic and agricultural rates. The amount of the domestic rates relief grant and the agricultural rates relief grant which is paid to each local authority is now at the discretion of the Minister. Almost every local authority has suffered as a result.

The vast majority of county councils are faced with serious financial problems, and the plan contains no prospect of an improvement in the situation. There is no joy in this plan for local authorities. The opposite is the case. When the Minister for the Environment spoke in this House last March on local authority financing, he stated that it was his intention to have the statutory demands on local authorities examined. I regret there is no indication in this plan that these statutory demands will be removed, despite the severe strain they put on the scarce resources of local authorities. On page 137 the plan states that the level of funding from central Government is considered to be too high and cannot be sustained. On the next page we are told that local authorities will be expected to meet any financial difficulties which may arise, by a combination of better management of available resources and the further generation of local sources of revenue. There is an implication in that statement that local authorities do not manage their finances prudently. I reject that. I reiterate what I said at column 567 of the Official Report on 21 March 1984, during a debate on a motion on local authority financing. I said:

I also believe that many Government Departments could learn a lesson from local authorities as regards the way in which they subject their expenditure programmes to the tightest possible scrutiny so as to eliminate waste, promote cost effectiveness and ensure that the available resources are deployed to the best possible advantage.

Regarding the further generation of local sources of revenue, I wonder how the Government can reconcile that with their statement on page 117 of the plan in the chapter dealing with taxation, that they are committed to measures aimed at halting the escalation of the tax burden and that there will be no increase in the overall level of taxation during the period of the plan. When the plan talks about the further generation of local sources of revenue, what is really meant is that local authorities will have to increase existing service charges and extend charges to whatever services, if any, they are not charging for at present. Let nobody tell me that these charges are not taxation by another name. When you take money out of somebody's pocket or out of his pay packet, what does it matter whether it is called PAYE, PRSI, a levy with some fancy name or a service charge? It is all taxation and it is all part of the taxation burden. It is dishonest of the Government to tell the people, on the one hand, that there will be no increase in the overall level of taxation over the period of the plan and, at the same time, to tell local authorities that they must raise more revenue through increased and extended service charges.

While I welcome the introduction of the grant of £5,000 for any local authority tenant who builds or buys a private house and gives up a local authority house, in the present economic climate the number of people who will be in a position to do that, without getting into serious and impossible borrowing, will be very small indeed. Such people will be very much the exception rather than the rule. As far as the vast majority of local authority tenants are concerned, another section of the plan will have much more relevance for them. I am referring to the section which states that the Government are satisfied that local authority rents should be raised progressively to a level more in line with the actual costs of local authority housing. In the past two years, the rents of local authority houses have been increased to penal levels. Further increases of the magnitude envisaged in the plan will impose a major hardship on this already hard hit section of the community.

I refer now to the sections of the plan which deal with education. On page 138 we are given some of the bad news. School transport charges will be raised. Students in all third level institutions, including the colleges of education and the colleges of home economics, will face considerably increased fees and charges. But that is not the whole story. The plan makes no commitment to improve the pupil-teacher ratio in primary schools. It merely provides that teacher numbers will increase to take account of increasing enrolments. The absence of any commitment in the plan to improve the pupilteacher ratio indicates that the Government have now abandoned their previous commitment in the Programme for Action in Education. Paragraph 3.7 of that stated:

It is recognised that the pupil-teacher ratio in National Schools compares unfavourably with that obtaining in other developed countries, and the Government remains committed to an improvement in the position as soon as financial circumstances permit.

It is now obvious that they have abandoned that commitment and that the situation where thousands of primary school children are being educated in oversized classes will continue for the duration of the plan while, at the same time, hundreds of qualified teachers will remain unemployed. On page 94, the plan recognises the definite need for more capital expenditure in education, but it is quite clear from the subsequent section that this will not take place. Inadequate accommodation and substandard prefabricated classrooms will remain a feature of primary and second level schools. The priority which the Government claim to be giving to education is not being backed up by positive action.

The second item on the Order Paper which is being debated in conjunction with this motion, refers to the Bovine Disease (Levies) Regulations, 1984. I will now address myself to these regulations and to the sections of the plan dealing with the disease eradication schemes. The regulations we are asked to approve provide for the doubling of the disease eradication levies, as outlined on page 139 of the plan. The relevant section states:

The Government have decided to double, from November 1984 to end 1985, the disease eradication levy paid by farmers to 0.6p per gallon of milk and to £3.80 per animal slaughtered or exported, to raise an additional £7 million in 1985.

Through the increased levies, farmers will in 1985 contribute approximately half the proposed total expenditure on disease eradication. The total of approximately £15 million which the levies will bring into the Exchequer is a significant amount of money. While nobody likes having to pay levies of any description, the levies we are talking about would be more favourably received if the farmers who will be paying them were convinced that there was hope of some improvement in the eradication of disease, especially bovine TB. They are not so convinced. It is regrettable that the same progress has not been made in the eradication of bovine TB as has been made in the case of brucellosis. It is true to say that the situation with regard to TB appears to be deteriorating instead of improving in many areas.

In some parts of my own county and in our neighbouring County Longford there have been serious outbreaks of bovine TB during the past year. Nobody appears to be able to explain satisfactorily why these breakdowns occurred. I do not accept that the farmers involved were in any way to blame, but they are the ones who really suffered as a result of these outbreaks. In some cases, the financial losses which individual farmers suffered and are suffering can only be described as horrific. I know cases of farmers who will never recover financially in their lifetimes from the losses they have suffered. In many cases, not alone have the farmers involved suffered financially but their health has suffered as well because of the worry and strain this imposed on them. Many were unable to provide for their wives and families from their own resources while their herds were restricted.

It is past time that a proper compensation scheme for reactor animals was introduced. The compensation which farmers are receiving at present is totally inadequate. This is particularly true in the case of small store cattle and dairy cows. Even if farmers were paid the full replacement value of their reactor animals, they would still be at a considerable loss due to the loss of income which results from having a restricted herd. At present, the compensation which farmers receive is in many cases only half the replacement value of the reactor animals. The extent of the total financial loss involved depends on the number of reactors in a herd. I know of two cases in the past 12 months where in each case the farmer was instructed to dispose of his entire herd of approximately 20 animals. The total compensation which each of the farmers in question received was only sufficient to purchase replacements for about half the animals they disposed of. Both farmers were under the impression that they would receive a special hardship or depopulation grant but to date no such grant has materialised. The loss and hardship to farmers with reactor herds is invariably exacerbated when a herd is restricted over the winter period. Often the farmer involved has not sufficient fodder to carry the animals over the winter. He cannot dispose of them except to a factory and only then if they are of a certain type. In other words, unless they are beef cattle suitable for slaughter the factories do not want them. Very often the farmers has no choice but to buy fodder to enable him to keep the cattle over the winter and this adds to the financial hardship which the person suffers.

I appeal to the Minister for Agriculture and to the Government to use some of the revenue which the increased levies will bring in to introduce a proper compensation scheme which will ensure that farmers will in future be adequately compensated for reactor animals. The introduction of such a scheme would contribute towards improving the perception that the majority of farmers have at present of the bovine TB eradication scheme. There is also considerable dissatisfaction that special compensation rates are paid in certain parts of the country and not in other parts. The farmers in the parts of the country where these special rates are not being paid feel discriminated against and that is adding to the dissatisfaction. Many farmers in my part of the country have lost confidence in the TB eradication scheme. There is good reason for suspecting that this is the situation also as far as a significant section of the veterinary profession is concerned. There is a great lack of confidence in the disease eradication scheme, particularly in the TB eradication scheme.

Farmers are demanding that there should be far greater research to establish the causes of outbreaks of TB in areas and herds that have been clear for years. Many farmers believe, rightly or wrongly, that certain species of wildlife play a major role in the spread of TB. This is one area that merits immediate and intensive research. There is a need too, for better liaison between the personnel in district veterinary offices and herd owners. A herd owner is entitled to be told more than simply the number of reactor animals in his herd and what he must do with them. There should be an acknowledgement and recognition on the part of the district veterinary office that in 99.9 per cent of cases the unfortunate farmer involved is an innocent victim who stands to suffer considerable hardship and financial loss due to factors completely outside his control. The results of his herd test should be interpreted for him. He should be given the veterinary reports on his reactor animals when they are slaughtered. He should be told the source of the infection in so far as this can be ascertained by the Department. He should be given guidance and advice on the most effective steps to take in order to contain the outbreak.

Recent rumours that the tuberculin which has been in use is now being changed have also contributed to undermining farmer confidence in the scheme. Neither is there any confidence in the 30 day pre-movement test. The general opinion is that the 30 day test has done nothing since its introduction to reduce the incidence of TB despite the expense and inconvenience it involves for herd owners. The two main reasons the 30 day test has proved to be so ineffective are, firstly, the vast majority of dairy and suckler cows are never 30 day tested and, secondly, in order to reduce the odds against a reactor showing up, it is now the practice to present animals in very small numbers for such tests. For example, if a farmer has 20 animals for sale out of a herd of 40 or 50, instead of getting the 20 tested together he will get them tested in four fives. In this way, if one of the 20 is a reactor at least he has an even money chance that the reactor will not surface in the first or second group that are tested. Therefore, he has ten or 15 animals sold before the reactor shows up. This can happen and I know of cases where it did happen. The people who purchase these animals complete with premovement and possibly export test certification are convinced that they have purchased animals to which there are no risks attached while the fact is that these are animals from an infected herd and may spread TB on the farms to which they are brought.

I support the recent recommendation of the Animal Health Council that the 30 day pre-movement test be abolished and replaced by more frequent round testing. I know that this recommendation has the support of the vast majority of farmers in the west and throughout the country.

The last point I want to make about disease eradication is in relation to the confidentiality of the records and files in the district veterinary offices. When TB testing was first introduced farmers were given an absolute assurance that any records kept were for the purpose of disease eradication only and that they would not be used or made available for any other purpose. This assurance was repeated by successive Ministers for Agriculture over the years. It is very regrettable that those records are now being used for other purposes, at least in my county.

I emphasise that this is not the fault of the personnel in the district veterinary office and what I have to say is in no way a reflection on the district veterinary office staff. What is happening is that a farmer who is an applicant for a medical card or whose medical card is being reviewed is requested by the Western Health Board to provide a certificate from the district veterinary office showing the number of animals tested in his last herd test. He must produce this certificate and, if he does not, his application is refused or his medical card is withdrawn.

I raised this matter at a meeting of the Roscommon local health advisory committee and the committee unanimously supported a proposal requesting the Western Health Board to discontinue this practice. It was pointed out that to insist on the production of such a certificate was, in effect, tantamount to subverting an assurance that had been given and a guarantee that had been reiterated by successive Ministers for Agriculture. It was also pointed out that to continue such a practice could have serious implications for the disease eradication scheme. During the discussion at that meeting it was stated that officials of the Department of Social Welfare had free access to all records in the district veterinary offices. I decided that if this was the case then the situation was more serious than most people realised. Consequently I decided to raise the matter at the next meeting of the county committee of agriculture. Again it was the unanimous view of the committee that what was happening was most undesirable and not in the best interests of the disease eradication scheme, for obvious reasons. It was decided to write to the Minister for Agriculture outlining the situation and asking him to request the Western Health Board to discontinue the practice of seeking such certificates.

We also made it clear that it was our view that the Department of Social Welfare should not have access to the records in the district veterinary office nor should they seek, either directly or indirectly, to obtain information from these records. In due course the CAO received a reply from the Minister's office stating that where a herd owner was prepared to certify that he had no objection to the Department disclosing to the Department of Social Welfare particulars as to the number of cattle in his herd, the Department would furnish the required information. The reply did not refer to the Western Health Board or the practice they engage in. In my view what the letter fails to recognise and deal with is the fact that this information is not being sought or provided voluntarily by the farmers in question. These people are under duress. The gun is being put to their heads. They are told that they have no choice but to produce whatever documentation is requested. I submit that the whole business makes a mockery of the supposed confidentiality of the district veterinary office files and records. It is only another short step until credit agencies and hire purchase companies and the like will be demanding similar certificates.

The records and files in the district veterinary offices should be for the purpose for which they were originally intended. They should not be available either directly or indirectly for any other purpose. The Minister for Agriculture should convey to the Department of Social Welfare and to the Western Health Board and to any other health board who engage in the same practice that this is the situation. No stone should be left unturned to put a stop once and for all to this practice.

Apart from the question of the confidentiality of these records I am convinced that the number of animals which any herd owner may have presented for a herd test is no indication whatever of that individual's income. However, there is a very real danger that a herd owner might be tempted not to present all his animals for testing in case his health or social welfare entitlements might be put at risk. This would be detrimental to the operation of the disease eradication scheme. That is why I am asking the Minister for Agriculture particularly to consider seriously the implications of the practices to which I have referred and to seek to have them discontinued.

As I said at the outset there are many weakness in this plan. There is a large question mark over the reliability of many of the figures on which it is based. Recent evidence indicates that certain statistics have been and are being manipulated in certain quarters and can no longer be relied on. The recent shambles in relation to the milk output statistics has done nothing to increase public confidence in the figures or statistics produced by Government sources. Many of the assumptions on which the plan is based are optimistic in the extreme. I am referring in particular to the assumptions in relation to interest rates in public service pay. The Government's public service pay proposals as outlined in the plan would condemn public servants to a serious decline in their standard of living. The standard of living of many public servants had already been seriously eroded in the past two years due to the failure of public service pay awards to keep pace with inflation and due to the penal levels of taxation.

I do not believe that the Government will succeed in imposing a pay freeze on public service pay. Any attempt to set aside awards made under the agreed scheme of arbitration will only lead to confrontation and serious industrial chaos.

This is a plan to which neither Fine Gael nor Labour fully subscribe. Neither party is fully committed to the implementation of all aspects of this plan. Many of the proposals which it contains are not palatable to the Labour Party and are there to satisfy Fine Gael, and vice versa. Many of the elements of the plan which Labour insisted would be included are not palatable to Fine Gael. The members of Fine Gael are boasting at meetings all over the country about how they forced Labour to accept proposals for a public service pay freeze and for the taxation of children's allowances under their new name and the short-term social welfare benefits. The members of the Labour Party are boasting about the fact that they insisted that the plan should include proposals for a land tax. They are comparing the proposed land tax to a tap which will be turned on progressively until the required flow is obtained. Anybody who believes that such a plan contains the solutions to any of the country's many problems is certainly not facing up to reality.

I shall not take up too much of the limited time remaining for this debate because for a plan which is going to cover three years it is important that everybody who wishes to contribute has an opportunity to do so. At the end of the day, because of the time constraints, some members may not have that opportunity.

There was a need for a plan. I do not think anybody would dispute that. I am not suggesting that this plan will cure all our ills. Everybody would accept that no plan produced in the past, no matter who produced it, cured all our ills. One could say that they created some of our ills. I am not necessarily saying this because I am on this side of the House: the plan is an honest effort to see what could be done in the future. The success or failure of this plan depends on the people in the street. It depends on the co-operation of the people.

There is a great obligation on Members on the far side of this House and of the other House also to help this plan to succeed. I have listened to many useful contributions from all sides of the House. Most of the Members on this side of the House were defending the plan, telling us all the good things that are in it. People on the far side of the House spent much time criticising the plan and bringing out its bad points.

I wish the plan well and I am confident that it will succeed. If it does not succeed or if it should run into difficulty in the years ahead I have no doubt but that the Government of the day will have to decide to change it. That would not be a strange thing to happen in this country. There have been many changes in policies and plans by many parties in the past. I hate talking about 1977 because it is water under the bridge. But we had a policy then which failed. The architect of the plan, Senator O'Donoghue has admitted that it failed and that perhaps it was necessary in mid-stream to have changed course. Since then we have had another document from the opposite side of the House - The Way Forward - and again that party considered it was necessary to change course from The Way Forward to perhaps the way sideways but certainly not The Way Forward. For that reason I had hoped that we would have had more than just criticism from that side. When I considered what was in the plan and talked to people down the country about it I did not feel that it was going to cure all our ills because when any of us produces a plan, even in our own businesses at home, it probably requires money to implement it and one has to ask the question: where is that money going to come from? I am not sure at this stage if Fianna Fáil were in power tomorrow what they could do.

I read in the Irish Independent recently that somebody in the Dáil asked how much the country owed in foreign borrowings. I could hardly read the figure that was given by way of an answer. There were so many noughts at the end of it, I was not sure whether it was thousands of millions or millions of millions, but I bet many people throughout the country did not read that reply. Unfortunately, there may not be many people concerned about it either. The people I talk to may be no different from the people most other Members talk to and they are just concerned about themselves. Not many people really worry about what the country owes at the moment or what our repayments are. If people have money themselves they are not concerned about what the country owes. Most of the money we gather in taxes is going to repay the interest, and nothing more, on that money. This is part of our trouble today. It does not matter what Government are in power, one thing that must be done is to spell out to the people the amount of borrowing that this country is involved in.

Senator O'Toole said last night that Fianna Fáil promised £170 million to the farmers in 1977. Perhaps they intended to fulfil that promise but I would ask him where they intended to get the money. Does he believe or does anybody on the opposite side believe that we should continue to borrow money? A few years ago people thought perhaps that everything was going to be for nothing. I think they are learning now that that is not the case. They are learning that if they want something they have got to pay for it because the money is just not there. In fairness nobody could or should say that that is the fault of the present Coalition who have been in office for 18 or 19 months. Surely they did not create all this problem. Surely all parties must have shared and shared alike in the problem we have today, but there is an onus on all parties to point out to the people that we cannot continue down this road. We could not do it in our own little businesses, be they farming or otherwise. If we continue to borrow and fail at all times to look at our borrowings to see if we can repay them at some time then we are on a loser.

For that reason it was necessary for the Government of the day to grasp the nettle, and that is never an easy thing to have to do in public life. One way to become unpopular overnight is to come up with something unpopular by way of extracting more money from the people's pockets. I am not sure whether that money is in their pockets, which is far worse, but the nettle has been grasped at this stage. Senator Mullooly talked about farmers' tax and turning on the tap and who was responsible for this and who was not. I will deal with that later.

As I am involved in agriculture I should like to say a few words about that sector and the prospects for it. Given the importance of agriculture to the Irish economy in terms of product, trade and employment significant national growth will be much more difficult to achieve if there is not a sustained growth in this sector. We will all have to agree on that. The Government consider that for expansion in agriculture to take place the first priority of policy must be to achieve stability in the national economic environment and in particular to reduce the levels of inflation and interest rates. They have been the two real problems. The impact in the recent changes in the four-year plan for agriculture and for improving efficiency in the advisory services will be put into effect and this will enable advisers to concentrate on their primary function of working closely with individual farmers to secure increased and profitable output.

Closer links between ACOT, the cooperatives and agricultural based industry generally will be developed so that more effective programmes can be established to increase agricultural output. A review of the role and functions of ACOT and the farm development services will also be undertaken to achieve the most effective use of the manpower available. Farmers who can afford to pay for an advisory service which is tailored to individual needs will be required to make an appropriate payment for that service. Farmers have accepted that at the moment, maybe reluctantly, but anybody who is asked to pay for something like that will usually do so reluctantly.

The comparatively low level of training among farmers has been a constraint on the development of a progressive agricultural sector. An adequately trained farm labour force is essential for further development, and in order to concentrate educational resources on those who need and will use them, the Government will give priority to satisfying educational needs of new entrants to farming and of farmers planning profitable business development. The recently established certificate in farming — the green certificate — is a step in this direction.

The Government accept that a certificate should be progressively recognised as a requirement for State development aid. With the progressive raising of the educational and training qualifications of the farming sector, the capacity of farmers to absorb new technology will increase. Both ACOT and AFT have important roles in helping farmers to increase productivity through the adoption of cost-effective new technology. However, because of the growing cost to the Exchequer of maintaining both bodies, it is imperative to ensure that the services provided by these organisations are fully co-ordinated and that the resources are used effectively in helping the agricultural industry to expand.

The system of investment aids operated by the Department of Agriculture has been a major influence on the development of many farms which have attained high levels of efficiency. However, the Government endorsed the view of the working group in the four-year plan for agriculture that if State resources are to be used efficiently, investment programmes must be carefully planned and appraised and the success measured by the level of profit returned with a view to ensuring a closer appraisal of farm interests in the future. Standard criteria are being drawn up to enable advisers to carry out a full economic evaluation of all investments.

Many Senators spoke here today about the amount of money being spent every year on the importation of all types of vegetables. It is sickening to hear of potatoes being imported on a large scale. This has been happening down through the years. Quite recently, in the all-party committee on small businesses, we discussed with some of the big chiefs of the multiples the question of potatoes on the shelves and I was saddened to hear that most of these are not Irish potatoes. Perhaps that may well be the fault of the farming community because of the presentation of these potatoes. The Minister and the Minister of State for Agriculture must tackle this problem. We cannot continue to spend hundreds of millions of pounds on imports of items which we can grow ourselves. It is something we could save quite an amount of money on.

Agriculture is still of major importance to the Irish economy in terms of output, trade and employment. Stability in the national economic environment and a reduction in inflation and interest rates are of major significance for future development. Continuing changes in the Common Agricultural Policy make clear the necessity for greater efficiency and competitiveness. Farming has now become a business requiring maximum attention for efficient production at farm level, needing adequate training and expertise and a close co-ordination between the producer and the processor to satisfy the needs in the market place of increasingly sophisticated customers. While direct employment must be expected to decline, the future development of the food industry, which requires careful planning at farm level, should be a major priority for the Government.

Controversies about the amounts contributed by farmers in taxation are not to be confused with the vital national need for the efficient productive agricultural sector. Much has been said here today about farmers' tax. Farmers have always said that they are quite prepared to pay their fair share of taxes. At no stage did the farmers ever say otherwise. The figures have shown that perhaps we did not get too much money by means of income tax from the farm community in the past number of years. Perhaps the reason for that has been the falling incomes of farmers. Many farmers whom I have spoken to were very anxious to get away from the accountants. I have heard figures put on the amounts that were paid to accountants down through the years and particularly in the past 12 months. I have heard figures of from £20 to £30 million. I heard lower figures than here in this House last night. My own opinion is that the figures would be high. I am not in a position to say the number of millions that would have been paid. But it is not necessarily the millions that were paid by farmers to accountants that they were objecting to. It was all the hassle, the process of preparing their accounts, that farmers objected to. I have heard of cases where £300 was paid to an accountant when the tax liability was £50. That sort of situation should not occur. I have no regrets about tax being introduced at the rate of £10 per acre because 90 per cent of the farmers at present are on this £10 per acre. Only 10 per cent are with the accountants. I am not satisfied that that 10 per cent were not taken away from accounts also. The farmer cannot be compared with anybody else, if you think about the number of hours he works. He is not a 40-hours per week person. For that reason he dislikes the accounts and all of the hassle that he has been put through to satisfy the tax people in relation to the amounts that should be paid.

There has been some criticism of the land tax, as to who was responsible for introducing it, whether it was the Labour Party or the Fine Gael Party. I do not intend to divide them up like that. The Coalition Government have introduced it. It is a system perhaps which many counties voted for some years ago when asked by the Government of the day as to the means they would like to use to pay tax. I am glad that they are getting this system now.

However, some farmers have fears about the tax. Senator Mullooly talked about this fear today when he referred to the tax being a case of the tap being turned on more when there was a greater need to collect more money. The Government have spelled out in the three-year plan that this tax will not be increased. We can put any name we like on the tax but that will make no difference to the people who have to pay it. What I like most about it is that it is the Government who are to decide whether the tax will be increased or decreased. I am quite happy that that would be done by the Government and not by the county councils because they, depending on their needs, could hike up the tax by whatever amounts they needed. There are county councils who are not top heavy with farming people and who might turn on the tap as much as they wished. It should be repeated that the proposed levy is intended to be for the life of this plan. We could not talk about much longer than three years at present in relation to this.

While farming in recent times, and perhaps since the kitty ran dry in Brussels seems to be facing a tough time ahead, most people thought when we joined the EC that there was going to be an endless amount of money for everything. Now people realise that it is going to be a tough fight, no matter what Government or Minister is over there, with the mountains of beef, milk and cheese, to ensure that we get our fair share. The sad thing is that their money has run out too. Most people thought that there was no end to the money in Brussels. Now they realise that the money is not there and that the Government recognise this and are trying to do everything they can for them. Farming is our greatest industry and for that reason every effort should be made to encourage them along that road.

I want to refer briefly to vegetables. Everybody talks about them but few people try to do anything about it. I ask the Minister to carry the message back to the Government that many people out there are very concerned about this. When one realises that we are importing vegetables to the tune of £700 million or £800 million there must be something for the Government to get their teeth into in the years ahead. It would be labour intensive also. A few people in my area were in this business and it is amazing the amount of employment they gave to some young people especially in summer holidays. They came from miles away and got a very good week's wages for fruit or vegetables picking.

Senator Mullooly and others talked for a long time about the TB eradication scheme. I will sound one warning about it. In the near future the Minister is considering changing the choice of vet scheme. The farmer will not be in a position to nominate his own vet in the days or the years ahead. It may be a very dangerous step to take at present. We had a very good Minister for Agriculture in the seventies who saw fit to take on the vets in a dispute that dragged on for 12 or 18 months. At the end of the day he did not win. If we start a fight with the vets there will be only one loser — the farmer. I am sorry to sound that warning, but we should go very carefully along that road and ensure that we do not have a fight on our hands with these people. I am not satisfied that they are the cause of the trouble. Having been a member of the Animal Health Council I found that the experts that I listened to for a few years had no real answer to the problem of the TB eradication scheme. Perhaps we do not seem to be improving our position but maybe we are not getting any worse. That might be some encouragement, but it is hard to point a finger at the farmers or the vets in this case to see who is at fault.

Another good thing about the plan is the raising of headage payments from £32 to £70 in the west. Perhaps if this was introduced in other parts of the country where possible — we talk about high percentage of herds in the west that are in suckling — there would be a high percentage there also. While I welcome it for the west and do not begrudge them anything, at the same time we can give them too much. Perhaps I have a chip on my shoulder about the west.

The Land Commission were abolished and as far as my county is concerned they were abolished years ago because they had not bought any land for years. Nonetheless they should be replaced by some other body, because in recent times I read that some syndicates were interested in coming to the country from Arabia and other places to buy tracts of land. I do not like to think that that should happen. The Land Commission should be replaced by some other body who would perhaps take a look at this and help some of the younger people who have gone through all these courses, obtained certificates, are interested in farming, quite able to farm and quite anxious to farm. Some type of grants and loans and incentives should be there for them to take over land.

I welcome the £5,000 plus the £3,000 and £1,000 which is a grant total of £9,000 for people in local authority houses who might decide to build their own house. Certainly I welcome that. Many of my colleagues in my home council feel that to expedite the housing programmes we would be happier if we got a set allocation of money every year, whatever that might be, and let the council get on with the job of building the houses rather than having the toing and froing to the Department which has happened down through the years as long as I can remember.

If somebody wants to build his own private house tomorrow morning he can have it built in six months or less, but if a local authority want to build a house tomorrow for somebody it will take nearer to six years. It is not always their fault. Local authorities have a staff of engineers and architects and people with the know how to build these houses. If the Government decided to give the allocations to the different counties and let them get on with their job it might be much better to let them know how much money they will get.

I want a message to be carried to the Minister for the Environment regarding group water schemes which have slowed down in recent years. I am saddened that this is so. Most Members of this House will agree that group water schemes are the best thing that ever hit this country because the people contributed more than the Government or the Department of the day. People contributed as much as £500, £600 and £700 to get water into their house. Every encouragement should be given to group water schemes and every step should be taken to ensure that there is no delay in getting these schemes going because the people are providing water for themselves which would not have been provided by the Government or by the local county council. I have been involved in group water schemes for many years which perhaps are responsible for giving water to the majority of people in this country. I read in a report from the other House that the Minister for the Environment was going to take steps to expedite matters in the group water schemes. I welcome that and I ask the Minister to carry the message back to him on that.

I want to talk about tourism. While I have praised almost all aspects of the plan one thing that "bugs" me is the idea of the licensing laws being extended for drinking until later hours, although I do not say this because I am a Pioneer. I am worried about that and I sincerely hope that it will not happen, because if it does, I would have second thoughts about many things. There is no clamour for this at the moment by anybody. The publicans do not want it. The majority of the people drinking do not want it and, to judge by the events of the past few years, there is less money for drinking and that is not a bad thing. People are going to pubs a little later and with a little less to spend. They want to be there at closing time for some reason or other. Old customs die hard. If drinking hours are going to be extended to perhaps 12 o'clock or 12.30 p.m. — I know the purpose is to facilitate tourists but they will all be tourists if the hours are extended — it is not going to help anyone.

I am often amazed when I go into houses on a Saturday or Sunday night and see young people sitting by their fireside at maybe 11 o'clock or 11.30 p.m. at night and when I ask them are they not going out to a dance they tell me there is no point in going out because nobody will be in the dance halls until the pubs close. If the licensing laws are going to be extended they will never go out.

I would be bitterly opposed to any increase in the times of opening because 11 o'clock at night is quite late enough for any decent man or woman to go home to their house and family if they are to get up in time for work in the morning. Late night drinking, when people stay out until the small hours of the morning, has certainly affected the work rate, and indeed if we think in terms of the numbers of people who do not turn in after late night drinking it would make the hair stand on your head. I know the reason behind it, it is to cater for these tourists who normally make for the hotels anyway as they can be served with a drink up to a very late hour. We should not change the laws just for tourists. I have some cuttings from newspapers which indicate that different organisations do not welcome it. The Irish Hotels Federation and The Irish National Council on Alcoholism do not think there is any need for this either. I hope the Government rethink this because many people are very concerned.

I believe the plan will succeed, even if the Government in one or two years' time have to change some parts of the plan. It is well thought out and a lot of work has been put into it. It is backed up by people with expertise and, for that reason, it deserves a chance. I appeal to everybody on all sides of the House to help to get the plan to work as it is in all our interests that it does.

On a point of information it appears that the Tánaiste will reply at 4.30 p.m. and there is reason to believe that I will not get an opportunity to make my contribution as is the case with regard to some of my colleagues and Senator McMahon and his colleagues. I wonder if it would be possible that this debate, which is probably the most important debate that will come before the House in the next three years, could be extended to next week to accommodate people who wish to make contributions. There are people on the Fianna Fáil side who also wish to contribute.

An Leas-Chathaoirleach

Would the Deputy Leader of the House indicate how I should reply to Senator McAuliffe-Ennis?

I appreciate the problem that Senator McAuliffe-Ennis has outlined. It was agreed between the Whips that the House would sit yesterday and today to discuss this matter. Agreement has already been reached and agreement in the House has been reached to conclude at 4.30 p.m. and arrangements have been made with the Tánaiste to reply to the debate. I am open to try to arrange a separate agreement if possible, but the House has already agreed even this morning at the Order of Business to conclude at 4.30 p.m.

It is obvious that many speakers want to make a contribution. In view of the time given, which after all is only two days and of the number of speakers who would be likely to speak in the House, a time limit should have been imposed if flexibility is not to be given in terms of continuing the debate.

An Leas-Chathaoirleach

We did agree this morning and again yesterday but could the Deputy Leader say if it could be raised at another time or could we have some agreement? We did agree to the Order of Business this morning, but would the Deputy Leader again try to help me out here?

I can only act on the agreement of the House, and if some other agreement is required it is then a matter for the Whips to decide if it is possible to extend the time. I would ask that you would leave it with me and I will contact both the Leader of the House and the Leader of the Opposition to see if it is possible to extend it into another week. I will do that now.

I do not want to take some of Senator Fitzsimons' time if there is not going to be an extension, but it seems extraordinary that the Whips could make an agreement in the light of the fact that there are very many Members of the House on both sides who wish to speak. Two Members of the Fianna Fáil Party have spoken to me recently and they were wondering if they would have an opportunity of getting in, and they are trying to assess the situation with the number of speakers offering. I wonder how the decision was arrived at to have the debate, so far ranging a debate, confined to 11 hours. One hour of that has been taken up by the Taoiseach and the Tánaiste. That is half an hour each, so it is really cut back to ten hours debate. It is the most wide ranging debate that we have been offered here during this term. It is extraordinary that the Whips should have arrived at this decision.

An Leas-Chathaoirleach

I will call on Senator Fitzsimons to continue the debate and I wonder would Senator Ferris try to get agreement. We would have to have agreement of the House. We did have agreement on the Order of Business this morning and again yesterday on the hours of this debate. I appreciate what my two colleagues are saying and how important the discussion on the plan is. Having said that, there are rules which I have to abide by and those would have to be rescinded now. While Senator Fitzsimons continues to speak perhaps the Deputy Leader, Senator Ferris, might talk to somebody and come back and indicate to me what the wishes of the House are. Thank you.

The plan entitled Building on Reality 1985-87 has been now discussed in considerable detail by Members of this House. Coming in, as I am, towards the end of the debate I will confine my contribution to those areas in which I have a special involvement or interest. I will take them in no particular order.

First of all I would like to deal with the construction industry and to deplore the fact that this plan does nothing for it. The state of the industry, as everybody knows, is very serious. In a recent paper, the managing director of the Construction Industry Federation said:

It is important to emphasise the continuing decline in employment and investment in the industry. Since 1980 construction workers have added 20 per cent to the growth of numbers out of work. Private investment in the industry is now less than half what it was in 1980. Public investment on construction work this year will be 25 per cent lower than the level two years ago. Output in the industry this year is estimated to fall by 8 per cent.

It is against such a background that the Government's Economic Plan must be measured. While there were some positive measures in the plan for the industry, much more could have been achieved without increasing public expenditure.

Referring specifically to the plan, he noted that the major positive initiatives affecting the industry relate to the housing sector although the emphasis is almost totally on the public housing sector. He said:

With regard to private purchasers there is no boost for the industry although the announcement that the £1,000 grant, the £3,000 mortgage interest subsidy and tax relief on mortgage interest will remain for the period of the plan will give some measure of confidence to the sector. However, the value of the grant and incentives continue to be eroded by inflation over time.

I should like to emphasise this aspect. While welcoming the decision to retain the £1,000 grant and the £3,000 mortgage subsidy, even with the limitation of application to first time house purchasers and against the recommendations of the National Planning Board which shows how much they were out of touch with reality, it is important to focus on the undermining of these incentives by inflation. One way to understand this is to refer to the house building cost index which takes into account the cost of labour and materials. The figures are worked out by the Department of the Environment and Dublin Corporation, and the index datum of 100 refers to 1 January 1975. In October this year the figure had risen to 382.1. The £1,000 new house grant originated in July 1977 when the index was 147.6. Therefore, the index rose by 382.1 minus 147.6 since then, an astounding difference of 234.5.

The five year mortgage subsidy scheme originated in early 1981. In February of that year the house building cost index was 254.3 and the increase since then has been 127.8. In the light of these figures I think the comparative values of the incentives at the times of commencement and now are shown to be grossly unrealistic. Even at this late stage, the Government should make some attempt to bridge this collossal gap. The plan notes that the recession has inevitably weakened the effective demand for private housing in recent years but of course the need for houses remains. If the situation is allowed to continue the cumulative effect will have serious social implications.

With regard to the Housing Finance Agency it is regrettable to say the least that no further funds are available for the remainder of this year. I want to ask why the Housing Finance Agency are not allowed to raise the funds necessary to meet the demand, since this would cause no expense to the State. I believe also it would be a considerable help to increase the maximum amount that may be borrowed and the proportion of the value of the house which is financed. The plan states that bridging finance is often a considerable expense in housing transactions. I think the appropriate adverb would be "always" instead of "often". At least that is my experience. I urge the Government to conclude the radical streamlining of house purchase procedures in consultation with the financial institutions involved as promised with all possible speed.

I also welcome the commitment to devise ways to reduce considerably the cost of conveyancing, and ask when it is expected that the proposed change will take place. The continuation of the subsidy of £1,000 for the provision of developed sites by local authorities to persons of modest means must be welcomed but I believe that this scheme has not been as effective as it might and an increase would make it that bit more attractive.

Anything that contributes to an improvement in the housing situation must be welcomed, and so I feel it would be ungenerous of me if I did not refer with some enthusiasm to the £5,000 grant scheme for local authority tenants and tenant purchasers. We have all been circulated with further details than are given in the plan. However, as the circular points out, full details of this scheme are only now being worked out and so it is possible to deal with only those aspects that have been covered. The plan states that the Government decided to introduce a non-repayable grant of £5,000 for a local authority tenant of three years' standing or a local authority tenant purchaser buying a private house and giving up a local authority dwelling suitable for letting to a housing applicant.

The circular strangely refers to the new grant of up to £5,000. I would like an assurance that there would be no backtracking on this commitment by reducing the £5,000 for any reason or in any circumstances. The effective date for the new scheme is 2 October 1984. This means that a qualifying tenant or tenant purchaser buying a house in the private sector would be entitled to the grant if the contract for the purchase was signed on or after 2 October 1984. Where the tenant or tenant purchaser is having the house built on his own site the requirement would be that the foundations were completed on or after 2 October 1984. A qualifying tenant or tenant purchaser will also be eligible for the mortgage subsidy of £3,000. In addition, if the tenant is a first time purchaser of a new house he will qualify for the £1,000 new house grant. It seems, therefore, and I would like to be corrected on this if I am wrong, that a tenant purchaser can only avail of the £5,000 grant and the £3,000 mortgage subsidy while the tenant qualifies for the £1,000 new house grant as well. Realistically, the tenant purchaser should not have less attractive terms, since in many cases such a tenant would do better financially by a straightforward sale.

We are not told if the scheme applies only to new houses but I am reliably informed it will apply to secondhand houses as well. I would like clarification on this point. There are different views to be taken into consideration. The primary objective is to get people out of local authority houses so that they would be available for redistribution. To maximise benefit to the economy, vis-à-vis the construction industry, the scheme should apply to new houses. If, however, the Government want people to move out of local authority houses and, in addition, boost the construction industry it is likely that the people involved will be on a low income. As there is at present no indication that there will be provision of suitable financing, they will have to avail of the Housing Finance Agency loans. In any event, if there is a choice most people might opt for the purchase of secondhand houses, as they are cheaper than new houses. There is much to be said in favour of new houses, thinking in terms of maintenance costs alone. This consideration should be highlighted. On the other hand in built-up areas and where people for very valid reasons might not wish to leave a locality, the only suitable house available might be a secondhand one. Some suitable compromise might be made by confining the scheme to new houses or secondhand houses requiring renovation.

In any event if both types are included I believe there should be a greater financial inducement to move to new houses. At present a tenant is cushioned to some extent by the differential rent system against unemployment or sickness. Will those who avail of this scheme enjoy the same benefits? If the scheme is to be a success they should enjoy the same benefits as part of an overall attractive package. To this end any features inbuilt to the local authority system should be carried over. As the plan puts it, local authority housing is an expensive social resource. I believe to make the scheme work not alone is the composition of the cake important but the icing on the cake as well. Before leaving this area, with regard to the Housing Finance Agency I believe that well over 50 per cent of the money they advanced is spent on secondhand houses. The Government include the Housing Finance Agency allocation in the public capital programme, but because most of it is not used for new investment, this should not be so.

I welcome the assurance that the provision of residential accomodation for private renting will be supported by an extension of the relevant tax incentives to be effected in next year's Finance Bill. This will apply to the refurbishing of houses now or previously let in multiple occupation. It is hoped that this proposal will benefit inner city areas where nearly all new housing in recent times has been provided through the local authority housing programme. I would like to know if this will apply to buildings in the inner city which include a shop on the ground floor with flats or stores overhead. These are generally run down with — in some cases — the top totally derelict. This support should extend to all areas of any buildings that were previously residential.

I welcome the commitment to further promotion of joint venture housing and investigation of other forms of tenure which might relieve the housing situation. Consideration might also be given to encourage an increase in the supply of service land for housing and permission for higher housing densities, particularly in urban areas.

I welcome New Housing Ideas, a book promoted jointly by the RIAI and the Department of the Environment which will have an important impact on future housing.

The plan states that with regard to existing houses a policy for conservation, improvement and best use has been adopted. No reference has been made to the existing house improvement grant scheme. The amounts payable at present should be increased, but more importantly I believe that the regulations regarding the commencement of the work should be changed. These state that it is an absolute condition of eligibility that work must not commence before the Department's inspector visits the house and that a grant will be refused——

I am sorry to interrupt the Senator, but it was agreed this morning and yesterday morning on the Order of Business that the Tánaiste would get in at 4.30.

I understand that an attempt was being made to extend the time.

I can only enforce the decision of the House. The decision was made this morning on the Order of Business and it was also made clear yesterday morning on the Order of Business that the Tánaiste would reply at 4.30 today.

It seems extraordinary that the Whips should make the decision to limit the amount of hours——

That statement is not right. It was the House that made the decision this morning and yesterday morning.

I understand that, but I am wondering how the Whips came with that decision or recommendation to the House. We are not all here, and if we are all here at the commencement of business on any day it is very difficult for us to know how many will be offering to speak. I would have seen this as a very wide-ranging debate. Most Senators would want to make a contribution and then the Whips, having made the decision or the recommendation, to put to the House the proposition to sit only for a day and a half, 11 hours, one hour of which is taken up by the Taoiseach and the Tánaiste leaving ten hours for Seantors——

That is not right either. The Taoiseach — from memory — spoke yesterday for 25 or 26 minutes and the Tánaiste has less than a halfhour to reply. They only took up an hour between them.

That is what I say. An hour can be taken off that for the Taoiseach and the Tánaiste. There was no attempt made to limit the time each Senator would have. A number of Senators have had all the say and other Senators are being denied an opportunity of speaking.

It was agreed on the Order of Business this morning and yesterday morning. My job is to carry out the instructions the House gives. Nobody objected; nobody asked for a time limit on the speeches. Nobody suggested devoting another day to the debate, and at this stage everybody would be inconvenienced. People have other commitments.

I think arrangements could be made that would not inconvenience anybody, because the House is not sitting next week. We could have a further sitting day next week to complete the debate. An appeal was made to the Whips half an hour ago by myself and another Labour Senator. At least two Fianna Fáil Senators approached me in the last hour wondering how many speakers we had and if they would have an opportunity of getting in.

I have no other option but to call on the Tánaiste. To raise this five or ten minutes before the debate concludes is not being fair.

It may not be fair but we have no way of knowing whether we are going to get in or not until the time arrives. It is only in the last half hour or hour that many of us have got anxious about the time factor.

You will not run a House like that. It should have been raised this morning or yesterday morning. I have no alternative. I will call on the Tánaiste to reply.

On a point of order, I have sympathy with Senator McMahon and with Senators on my side of the House who want to speak but the Order was made this morning. I do not want Senator McMahon to be putting all the blame on the Whips. First, we are consulted by the Leader of the House and it is what the leader usually wants that we agree to. The blame should not be put on the Whips. I am sure the Fine Gael Party had a meeting yesterday as we had, and knew the length of time the debate was going to take. It is a pity that some Senators spoke for too long. Otherwise, every Senator might have got in.

An Tánaiste to reply to the debate.

I am glad of the opportunity to reply to the debate in relation to the national plan, Building on Reality and the many important issues raised by Senators in the course of the past nine and a half hours of debating. Before I get into the main discussion we must look at the background to the development of the national plan, the areas where the Government drew advice from in the course of the preparation of the plan. I can assure Members that the Government drew advice from many sources, in particular from the National Planning Board and reacted on a significant number of recommendations, but it is fairly evident from the plan that not all of the recommendations made by the National Planning Board were acted on. We also called upon internal expertise in the public service and we listened to and took careful note of the views of the social partners, the trade unions, employers, farmers and those involved in social policy over the last two years during various discussions.

We considered the ESRI report on employment and unemployment. In addition to these consultative steps which we undertook, the Government evaluated carefully the impact of the necessary corrective measures which had been taken since we entered Government in 1982 and the impact resulting from the subsequent budgets.

The plan contains a series of decisions and represents a statement of the Government's general policies to be pursued over the next three years. Difficult choices had to be made. There were, and are, no easy answers, irrespective of the ideological perspectives which different parties bring to the debate. We have not brought forward any instant solutions for the unemployment problem. In a democracy such as ours and given the financial constraint which rules out reliance in the short term on major public expenditure expansion there are no magic formulae available to Government. The plan is sober and realistic in its targets. It is conscious of the necessity to protect the weak, underprivileged and the poor in terms of keeping social expenditure up and offers a stepping stone to rebuild our economy over a three year period.

The phased correction and careful planning of the public finances have been, for a number of years, and still are of vital importance to this country. There are and will continue to be major constraints and limitations on policy and on the choices that can be made. These arise from the effects of recession, from the burden of accumulated debt — both domestic and foreign — and from the necessity to halt the growth in the overall level of taxation.

At different times in the course of the past 22 months the Government have been criticised for being over-concerned with book-keeping, with balancing the books, with being obsessed with numerical financial targets, rather than the real problems of our people in their daily lives. The facts have never sustained this line of argument. On the other hand, the Government have been criticised for not taking more severe action on the public expenditure side. Very often the people or interest groups making this criticism have done so on a general basis, without being specific on where and how public expenditure is to be cut or, if they were specific, the direction favoured for cuts has often been — at least by implication — those services in the areas of welfare, health and other areas, services vital to the poor and disadvantaged in our society. In addition, calls for reflation — from some quaters at any rate — have been accompanied by clear signals favouring major and indiscriminate restrictions in the social services. The Government have rejected this approach.

In relation to the assumptions upon which the plan has been based — assumptions which have been checked and counter-checked and evaluated against the best information available — some Senators have queried the validity of these assumptions. These assumptions are outlined in paragraph 1.9 of the document. I think it is quite natural for Senators and other professionals in the media and elsewhere to be concerned about the assumptions relating to the world economic environment, to exchange rates, interest rates and so on. In fact I think it would be remiss of them not to evaluate and examine carefully the assumptions upon which the plan is based.

Since the oil crisis in 1973 projections and forecasts for the future have become more hazardous, after two decades or more of relative stability. At the same time we in Ireland — since the peoples' decision to join the EEC by referendum in 1973 — have become even more fully part of the international trading economy.

In any serious planning it is necessary to make assumptions about the external environment. We believe the assumptions in the plan are reasonable, though of course the international outturn could be significantly different from the assumptions made. The Government will monitor and review the evolving international situation. What will not change is the priority objective of increasing sustainable employment.

The central issue of employment creation has been referred to by many Senators yesterday and today. Some Senators — including Senators Ryan and McGonagle — have referred to ideological aspects of this debate. Senator Ryan rightly stressed the importance of public sector employment and referred to the fact that if we want a wide range of public services, a high level of taxation is essential to pay for them and that the Government should trust the people in this respect. He also referred to the ESRI report of early this year, noting — in his view — that the Government took on board part of its recommendations relating to public sector wages but not the expansion of public sector service employment, narrowly defined. However, he did not point out that the ESRI generally favoured the elimination of the current budget deficit by 1987, a view which I and the Government reject on grounds of being excessively deflationary and with damaging social consequences. I believe that the ESRI view generally — other than in the non-commercial areas which is a separate issue — was that public sector service employment growth could only be reviewed when short term corrective action has been taken.

Senator McGonagle referred to the importance of commercial public sector employment through the establishment of a national development corporation, noting the importance of the State companies in a mixed economy in this context as the application of two political philosophies. Legislation to establish the national development corporation is being prepared at the moment. The corporation is a primary instrument in translating into practice the Government's philosophy and approach to direct State involvement in industry. The NDC will have a wide ranging mandate on industrial development. For example, it will have key functions in the development of structurally strong Irish firms, in initiating new commercial job creation projects and in stimulating projects involving productive employment in the existing public sector and in acting as a State investment company in existing or new private sector enterprises or in joint ventures with the private or co-operative sectors, particularly in the advanced technology area. The corporation will become involved in natural resource based industry, in stimulating the development of food processing, in forest products and in high technology projects. The NDC will deal only with commercial operations and will strengthen indigenous industry and enterprise. The Government will be ready to make funds available to the NDC for commercial projects as and when needed.

It is clear that more enterprise and innovation is required if we are to get the sustainable jobs that are needed for this country. The plan provides a framework aimed at creating favourable conditions for investment and growth and should assist the private, co-operative and the commercial public sectors to create more productive jobs in the years ahead. The corporation will need time to develop its expertise to get suitable projects together but I have no doubt that it can be made to work and that it can re-introduce the ability to take risks to the commercial public sector, bringing a new dynamism to the task of job creation.

In this respect I would like to talk about the semi-State bodies, those that deal in goods and services in the commercial sector of the economy. As is well known to Senators many of these enterprises have experienced serious difficulties in recent years, arising particularly, as in the rest of the economy, from the effects of recession and adverse cost movement. However, in different enterprises other factors have compounded the situation, for example, confusion about objectives and about the commercial, social and strategic roles of various organisations, deficiencies in planning, project design and execution, the expectation by boards, management and employees that Government would in the end support clearly non-commercial operations and honour debts and a lack of flexibility in adapting to market situations. In the Government's view commercial public enterprise has a key role to play in the future. This means addressing the weaknesses that have arisen and laying major emphasis on developing modern industry, on commercial viability and on the earning of adequate profits. As stated in the plan, capital investment must be more carefully directed, with returns clearly sufficient to justify the allocation of resources to new projects.

I would like to refer to the many thousands involved in health, education, the local authorities, the Garda and Army, those working in Government Departments and in public administration generally. Most of these workers provide services that are absolutely essential for the community at large and they do so with dedication and integrity. They work in areas where market forces — either from the nature of the activities involved or by deliberate choice — do not in fact operate. This does not render their work any less valuable or important. In fact any honest evaluation would suggest that in many cases the contribution to society made by the public service far exceeds that of many types of activity in the market sector of the economy. This Government are not anti-public sector. I want to stress this very strongly. But there is definitely need for more effective management and efficiency in the public sector and better co-ordination in relation to procedures. I believe that we can make steady progress in this area over the period of the plan.

As I have said, the issue of employment is the central concern of the plan. Since 1980 there has been a decline of some 40,000 in the numbers at work. We are now at a turning point and prospects for increased employment are far better.

In all sectors of the economy there is need for greater initiative, innovation and managerial effectiveness. Competitiveness is vital to the success of the plan but this concept must be applied far beyond comparisons of movement in money wage rates. While in the short term with a given technology, movement in money, wage rates greater than those of our competitors will tend to reduce investment and increase unemployment; critical additional factors at the level of the enterprise included efficiency in production, adequate quality control, marketing skills, good customer service and a capacity for research and development in new products or methods of production. In both the public and private sectors there is need for adequate and mutually understood structures for communication and consultation between management and employees. In the modern enterprise, survival is often dependent on a willingness to develop a commitment to flexibility and change whether in methods of production, work practices or product innovation. The main responsibility in this respect lies with management; its quality and capacity for leadership are critical. In this context also the plan recognises the importance of good industrial relations between management and employees; it refers to discussions on industrial relations reform currently in progress and notes that the aim is to achieve shortly the maximum possible degree of consensus. The Government intend to introduce new company legislation to deal with malpractices in the management and direction of companies and to act by legislation on the Fourth EEC Directive on Company Law.

A continuing strong export performance is of great importance to the success of the plan. Therefore, as part of the new industrial policy, State assistance will be directed away from fixed-asset investment and towards support for export marketing and the acquisition of technology from abroad. In summary, manufacturing industry is expected to contribute some 13,000 net additional jobs in the period 1984-87 and private services, where employment has held up well even during the recession, a further 22,000 jobs without including employment in the new schemes started this year and planned for the future.

The plan stresses the importance of a strong food processing industry which will require close co-ordination between the producers, the processors and the relevant research organisations to satisfy the needs of the market place. The development of natural resource industries such as forestry and fishing is essential and studies and reviews in these areas are nearing completion. I foresee as evolving there a role for the national development corporation in many of these activities. The expansion of the roads programme which has a substantial employment content has been generally welcomed. We are all well aware of the necessity of improving the infrastructure generally in relation to the capacity of this country to improve structures and to get produce to market and to compete with our neighbours on the Continent.

The maintenance of housing incentives, the £1,000 grant and the £3,000 mortgage subsidy, in current conditions are important both socially and for the construction industry. In addition Senators have generally welcomed the new £5,000 non-repayable grant which will be available in certain defined circumstances for local authority tenants or tenant-purchasers buying a private house. A range of supplementary measures to aid employment creation have been devised or are already in operation. The enterprise allowance scheme introduced this year is proving a significant success in providing opportunities for unemployed people to start their own enterprises. The Youth Employment Agency are involved in co-ordinating the vastly expanded training and employment schemes for young people under the age of 25. The employment incentive scheme has recently been revised and improved.

The plight of the long term unemployed is of major concern to the community and to the Government. In the plan the Government specifically reject the false view held by some sections of society that unemployment is in some sense the fault of the individual involved. The Government have announced a significant initiative in the plan, a social employment scheme directed to offer an element of opportunity and hope to significant numbers of long term unemployed people and in addition have decided to introduce a special scheme entitled the alternance scheme offering a combination of appropriate formal training with an element of on-the-job placement in a public or private sector firm or organisation.

The measures in the plan and other decisions by the Government in the last two years are aimed at halting and eventually reversing the upward trend of unemployment. Already this year the rate of growth of unemployment has slowed significantly. The first task is to get overall employment rising again and the Government are confident that this will be achieved. Experience in other countries of the European Community whether they are ruled by Governments of the right, left or centre shows that there are no easy remedies, no painless solutions to the unemployment crisis. The Government are determined to avoid bogus optimism; rather the policies and the plan are based on realism and offer a measure of hope that as a society we can gradually but decisively again increase the number of our people at work and begin to grapple with the problems of economic and social organisations of the last decade and a half of this century.

The plan does not offer remedies for the immediate future; rather sober three year targets and a firm framework of decisions. In fact the plan, along with the statement of the Government's industrial policy which preceded it and other Government decisions in the course of the last year, contains a wide number of new and creative measures aimed at employment creation. For their successful implementation widespread support and understanding in the community is vitally essential.

As I said at the outset of my contribution, the desirability of consultation with the social partners and with various bodies right throughout our society has been recognised by the Government as being important to the implementation of this plan. We also drew on advice from expert sources in the preparation of the plan, both from within the public service and from the National Planning Board and further views from social partners. In the final analysis, the Government are accountable for the decisions taken and the policy thrust of the plan. However, other experts and interest groups will have different and varying views on the best evolution of policy. While a common basis of analysis may be agreed, trade unions, industrial, employer and farm organisations, for example, can be expected to advocate different choices in many areas both in the broad thrust of policy and on the details of individual decisions. The Government are seeking the maximum consensus for the implementation of what is a national plan and are conscious of the need for appropriate consultation in the implementation of chosen policies.

In the reconstituted National Economic and Social Council, the representatives of the main economic and social interests, will have an effective influence on the development of economic and social policy. This forum will provide an opportunity for regular consultation with Ministers on economic and social policy. However, direct bilateral contacts and meetings between representative interest groups and the Government and individual Ministers will continue to be necessary and appropriate from time to time to discuss policy measures.

I would refer briefly to some general policy issues in the social policy area. The plan recognises that society needs a unified and integrated economic and social policy and that economic growth can be self-defeating if its effects are to maintain and reinforce injustice. Poverty and inequality are still widespread in Ireland and even in times of severe financial constraint social progress is essential. The plan states some general principles underlying the Government's approach. While there will continue to be access for all, irrespective of income, to certain specified services, it is recognised that Government assistance in the social area where possible and justifiable should become more specific and more carefully aimed at and delivered to the poor and underprivileged instead of using generalised measures. There must be greater efficiency and cost effectiveness in the administration of the social services and it is important that all involved, the recipients of the services, those in the public service administering them and the taxpayers who finance the services, should be prepared to accept the changes over the years. Nevertheless any necessary restrictions of allocation in areas of main social spending Departments and any decisions on increased charges have been chosen with care so as to minimise hardship and protect the basic fabric of the system built up over the years.

Some Senators have referred to various aspects of social policy in their contributions. In regard to social welfare the Government have committed themselves to keeping long-term payments at least in line with inflation and short-term unemployment and disability payments in line with take home pay. Any savings in the financial sense by reference to the estimated outturn in 1984 as distinct from the 1984 Estimates arise from the fact that unemployment will not be as high in 1984 as a whole, as objective analysts believed it might be when the 1984 Estimates were being drawn up.

As the House knows, it has been possible to again arrange for the payment this year of a double week at Christmas to certain social welfare recipients. It is fair to say that while the living standards of many of those on social welfare are far too low we, unlike many other countries in Europe and elsewhere, have sought to protect their level of benefit to the maximum degree possible. I should like to nail another myth. There is no question at the end of the period of the plan of leaving taxation on short-term social welfare recipients unless their total income makes them liable on the same basis as other taxpayers.

In 1986 a new child benefit scheme will be introduced to unify, in a single payment, support towards the cost of rearing children. This will integrate the present child support schemes and will be treated as assessable income for tax purposes. Furthermore, reductions in food subsidies will be deferred until the introduction of the child benefit scheme to ease the impact on low income families of increased cost of basic foodstuffs. The Government will establish a permanent combat poverty organisation to develop community action against poverty.

Primary education will be a priority for expenditure, including special funding for disadvantaged areas. The major thrust of policy at second level will be in the area of curriculum reform. At third level, real resources will be increased by 1987 and the maintenance elements of grants and income limits for eligibility will be increased. Three new Bills in relation to the care and protection of children will be presented and brought to fruition during the period of the plan.

The development of health policy will be based more and more towards a preventive approach and on the provision of community care. There will be no charge for public ward treatment. The provision for development aid will be increased by 47 per cent from £34 million to £50 million by 1987.

As I conclude, I should like to put on my other hat as Leader of the Labour Party. It is obvious to anyone who wishes to read this plan that it is the work of two parties, both contributing their own ideas in a certain measure. It is capable of being seen as the result of constructive and creative interaction between the parties and ought perhaps to contribute to the notion that such interaction is possible. I have said previously that it is not always the case that the best decisions are made by preserving the facade of spurious unity. Frequently the best decisions come from a trenchant working out of the arguments on both sides. The Government, composed of two different parties, both determined to preserve their independence, share at the same time a common analysis of the seriousness of this country's problems and a common commitment to solving them.

As Leader of the Labour Party, I welcome the commitment to social and economic change embodied in this plan. I am satisfied that it is right that the Government should take the important step down the road to tax equity envisaged here. I am convinced that the Government's preception of the important role for the public sector in combating unemployment is the right one. The Government's commitment to the elimination of poverty and the strengthening of justice and equity in our society is real.

Let me say this and let me say it carefully in its proper context: the plan sets out a number of steps which have to be judged against the background of the financial constraints in which they were formulated. They are all steps along a road. The achievement of them will not absolve my party or the Government from the rest of the journey. I am talking here about a journey to a totally different society, a society that does not settle for caring for its poor and handicapped but recognises the right of every individual to sustenance and to dignity, and a society where wealth is distributed in a way which recognises equity rather than perpetuates inequality.

I commend this plan because I see it as a step on that journey and one which, with all its risks, is well worth taking.

Question put.
The Seanad divided: Tá, 31; Níl, 14.

  • Belton, Luke.
  • Browne, John.
  • Bulbulia, Katharine.
  • Burke, Ulick.
  • Connor, John.
  • Conway, Timmy.
  • Deenihan, Jimmy.
  • Dooge, James C.I.
  • Durcan, Patrick.
  • Ferris, Michael.
  • FitzGerald, Alexis J.G.
  • Fleming, Brian.
  • Harte, John.
  • Higgins, Jim.
  • Hourigan, Richard V.
  • Howard, Michael.
  • Howlin, Brendan.
  • Kelleher, Peter.
  • Kennedy, Patrick.
  • Lennon, Joseph.
  • Loughrey, Joachim.
  • McAuliffe-Ennis, Helena.
  • McDonald, Charlie.
  • McGonagle, Stephen.
  • McMahon, Larry.
  • Magner, Pat.
  • O'Brien, Andy.
  • O'Leary, Seán
  • O'Mahony, Flor.
  • Quealy, Michael A.
  • Robinson, Mary T.W.

Níl

  • Ellis, John.
  • Fallon, Seán.
  • Fitzsimons, Jack.
  • Hillery, Brian.
  • Honan, Tras.
  • Hussey, Thomas.
  • Kiely, Rory.
  • Killilea, Mark.
  • Lanigan, Mick.
  • Lynch, Michael.
  • Mullooly, Brian.
  • Ryan, Eoin.
  • Ryan, William.
  • Smith, Michael.
Tellers: Tá, Senators Belton and Harte; Níl, Senators W. Ryan and T. Hussey.
Question declared carried.
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