I move:
That Seanad Éireann takes note of the 1988 Estimates for the Public Services (Abridged Version) and of the 1988 Summary Public Capital Programme.
I reserve the right to speak to the motion later.
1988 Estimates for Public Services and 1988 Public Capital Programme: Motion.
It is right that Seanad Éireann should have an opportunity of discussing the Government's expenditure plans for 1988 and of considering its position relative to the broad national consensus which is emerging or the approach to solving the serious problems facing this country. It is not my right to intervene but when one sees the debate that took place in the Dáil last week and the fact that the Seanad was seeking a debate at the same time, the Seanad made the wise decision in having their debate this week. In the light of all that has happened since the publication of the Estimates and with the considered opinion of the Dáil and outside views, the Seanad is now in a position to give probably a much more informed and enlightened opinion of what is proposed in the 1988 Estimates.
The Estimates for 1988 have been published well in advance of the next financial year so that they can be properly debated and to ensure that Departments and other bodies administering public funds have advance notice of their allocations and are able to plan their expenditures accordingly. They offer the clearest possible signal of the Government's continuing determination to take the necessary action to restore order to the public finances and to set the economy on the road to recovery.
The actions taken by this Government since March amount to a significant change in economic policy. The problems of the economy are being tackled and confidence is returning. We are working our way towards a better future, increased employment and improving living standards.
The action taken by this Government in the 1987 budget and now proposed for 1988 must be set against the background of the state of the public finances inherited by the Government when they took office last March. In 1986, the current budget deficit had reached a record level in both cash terms — £1,395 million — and as a percentage of GNP — 8.6 per cent.
This appalling performance in 1986 was the culmination of the progressive deterioration in the public finances under all Governments since 1973, the last year in which there was a balanced current budget. The figures speak for themselves. Total non-capital expenditure — supply services and Central Fund — was 29 per cent of GNP in 1972-73. By 1986, it had reached 50 per cent of GNP. The national debt was almost trebled as a percentage of GNP between 1972-73 and 1986 — growing from 59 per cent to 151 per cent. Most significantly of all, unemployment increased from 70,000 to almost a quarter of a million.
In the last four years alone the national debt doubled from £12½ billion to £25 billion. We are now paying over £2.1 billion or nearly the whole of the revenue collected from PAYE just to service the debt. The debt is now £28,000 per household, the equivalent of a substantial mortgage. There is very little to show for all that massive borrowing. The unemployment situation deteriorated, emigration soared and taxation increased to excessive levels.
The massive size of the national debt is the cause of many of our present difficulties. It is the principal reason for our present high tax rates, rates which involve 44 per cent of income taxpayers now paying at more than the standard rate. It is one of the reasons for our high real interest rates which, despite the recent reductions, are still excessive and are an impediment to investment. This, combined with our high tax rates make us a high-cost economy, which constrains growth and development.
Fiscal policy followed in recent years did not achieve either its budgetary or its economic objectives. The current deficit was, as I have said, at a record level and the economy was virtually stagnant, even though the economies of many other countries continued to grow. This Government's priority, on coming in to office, was to reverse this position by making the changes which would enable Ireland to benefit from the opportunities for growth which exist.
To do so, we had to deal with the root of the problem — excessive public expenditure. We acknowledge that many public services are beneficial to society. However, public expenditure is often a consumer — not a generator — of wealth. We had reached the stage where, because of its effects on taxation and interest rates, the level of expenditure was choking our capacity, as a nation, to create growth and wealth. To ensure future progress, we had no option but to make major cuts in expenditure. These cuts will have to continue until the public finances are restored to viability.
This strategy offers the only realistic prospect of getting the economy out of its difficulties and onto a higher and sustainable growth path over the medium term. To continue with previous policies would involve a major risk, if not certainty, of plunging the economy and society into disorder, and decline.
The 1987 budget was the first phase in implementing our strategy and made significant progress towards our objective of reducing dependence on borrowing. In the three weeks between taking office and introducing the 1987 budget, public expenditure allocations proposed by our predecessors were reduced by a further £120 million.
Settling the Estimates for a year is only part of the task; the next, equally important step, is to stay within the allocations decided. As I have indicated in connection with the recent Exchequer returns for the end of the third quarter, the 1987 budget is still on target. The House may rest assured that I am absolutely determined that this will remain the position at the end of the year. This, too, is a departure from the all too frequent over-runs of the past.
These expenditure reductions, together with the strong and equitable measures which I took to increase tax revenue, were intended to ensure that the 1987 budget would be seen as the turning point in the restoration of the economy. The reduction in borrowing which the budget will achieve this year, and which I am confident will be realised, is the largest reduction projected in recent memory. This is no small achievement. Because of this dramatic reversal of the slide to disaster there has been a significant response throughout the economy; lower interest rates and reduced capital outflows; substantially increased exports and a greatly improved balance of payments. Confidence is slowly but surely returning right across the board.
We recognised from the outset that our strategy would have to be maintained over a number of years if it is to be fully successful. For this reason the Government set about preparing their expenditure plans for 1988 immediately after the budget. The first step in this process involved an in-depth review of all existing spending programmes. This exercise was the most thorough examination of Government expenditure ever undertaken. Quite literally, every single expenditure programme was examined to see if it was justified both on its merits and in the context of the Government's overall objectives for the economy. Where programmes failed these tests we decided either to eliminate them or to reduce their allocations.
The 1988 Estimates show that the Government have succeeded in their main objective of finally arresting the upward spiral in public expenditure. We have reduced expenditure — in cash terms — for the first time in almost 30 years. We have managed to make major cuts — £285 million non-capital and £200 million capital — while ensuring that an adequate level of services is maintained particularly for those dependent on social welfare.
The overall full-year effect of the non-capital reductions made in the 1987 budget, and the 1988 Estimates combined, has been to reduce expenditure in 1988 by about £650 million below what would otherwise have been the case, that is, a cut of about 10 per cent in real terms. This is a massive reversal of previous unsustainable trends.
In setting the 1988 Estimates, we made every attempt to streamline public service administration and to increase the cost effectiveness of public expenditure. Examples of the measures taken to this end include the merger of various State agencies to eliminate duplication, and reduced grants to other State agencies to ensure that only priority activities are funded. The extent and nature of the reductions have made redundancies unavoidable and foreseeing this we introduced the voluntary redundancy scheme some months ago.
The 1988 Estimates also reflect the Government's view that economic activity must not be over-reliant on the State. Much private sector activity is, or should be, sufficiently profitable to develop without State aid. It is particularly necessary at present to focus limited resources on those sectors and activities with the greatest impact in terms of economic growth and job creation. We have also examined whether recipients of economic services should contribute more by way of charges to the cost of these services. A willingness to pay is an indicator that the service is worthwhile and that the public expenditure it involves is not wasteful.
At times of retrenchment there is a particular need to consider the interests of the poorer sections of the community. We are absolutely determined to protect the disadvantaged. The continuation of essential services for this group can only be maintained through savings elsewhere. We have sought, therefore, to eliminate scope for the abuse of social services so that scarce resources can be devoted to those most in need — contrary to what is claimed in the amendment to the motion tabled by Senator O'Toole.
There has been some criticism of the distribution of the balance of our expenditure reductions as between current and capital. It was necessary to make reductions both on the current side and on the capital side if we were to achieve our overall target. In this year's budget we reduced the current budget deficit by 1.7 percentage points from 8.6 to 6.9 of GNP. It is now at its lowest level since 1980.
When we were examining capital expenditure programmes, we looked carefully at their economic and social justification and based our decisions on our findings. We reduced the provision for health capital, for example, because we have had enough of the situation where new hospitals were built, but left unused, because the finance to run them was not available. We reduced the provision for primary and secondary school building because the fall in the birth rate means that to keep on building as before would leave us, in a few years' time, with a large stock of unwanted or under-utilised schools. We reduced the provision of local authority house building because of shorter waiting lists and reduced demand.
Since then the Minister for the Environment has announced that private lending institutions are to take over part of the home mortgage scheme currently financed by the State and administered by local authorities. The total provision for local authority house purchase loans, which we had decided should be £155 million in the Estimates for 1988, can now be reduced to £100 million as the banks and building societies have agreed to finance £55 million worth of mortgages previously arranged by local authorities. While this will reduce the public capital programme by some £55 million it will not adversely affect the level of building activity, or prospective householders, in any way.
The 1988 Estimates are an integral part of the 1988 budget process, which will be completed on budget day next January. While not all the elements in the budgetary equation have been finalised, it is clear from the 1988 Estimates that the budget will achieve a further significant reduction in Exchequer borrowing consolidating further the progress begun in the 1987 budget. The future welfare of the nation depends on adhering to this course of action.
"A fiscal policy which faces the financial realities is the key to putting the economy back on the path to long term sustained economic growth". This statement from the Programme for National Recovery recently agreed by the social partners, reflects agreement on the broad financial objectives which we must pursue. In particular, we have achieved consensus that the relationship of national debt to GNP should be stabilised and that Exchequer borrowing should be reduced significantly. The fact that the programme was agreed shows that it is possible to create a broad front to tackle our current economic and social difficulties, to moderate the pursuit of sectional interests and to combine all our energies to tackle our difficulties effectively. This Government believe in the need to resolve our problems together through co-operation, rather than through confrontation.
The NESC report Strategy for Development 1986-1990 represented agreement in principle between the social partners on what needed to be done. The Programme for National Recovery carries that consensus a major step further by setting out in more concrete terms how the principles articulated by NESC are to be implemented.
The programme covers the key areas of economic and social policy, namely, macro-economic policies, tax reform, the achievement of greater social equity and the creation of sustainable employment through policies for economic development. In particular, the programme provides that the Government will maintain the overall value of social welfare benefits and within the resources available, will consider special provision for greater increases for those receiving the lowest payments. Given the necessity for continuing expenditure restraint this commitment underlines the importance which Government attach to the achievement of social equity. We will also be taking specific steps towards greater tax equity, and the achievement of the Fianna Fáil objective of bringing two-thirds of taxpayers onto the standard rate of income tax. The Government have clearly set down in the programme specific development measures to improve the performance of the economy and to contribute in an important way to increased job creation.
The programme confronts all the major obstacles which have been identified as inhibiting employment: the uncertainty associated with persistent budgetary imbalances, industrial costs, high interest rates and personal taxation. Moreover, the sectoral development approach which has been adopted in identifying job creation opportunities means that the targets are more firmly grounded than in many previous exercises. What is more, the policies which will be adopted in the main sectoral areas have been set out. For example, in manufacturing and services, the State agencies will be rationalised and re-organised and State aid will be made more closely dependent on actual employment creation. The programme envisages a targetting of Government support on areas where there are evident deficiencies, such as marketing, management and technology. We aim to achieve the maximum employment gains from the exploitation of our natural resources, such as food, horticulture, forestry and the marine.
The agreement on pay is of major importance and benefits both the public and private sectors. A global approach to pay is the only sensible approach and the only one which offered hope of success. In the context in which pay was being discussed and the general objective that was being sought, it is unrealistic to suggest that particular groups should have been singled out and asked to forego pay increases over the three year period of the agreement. That suggestion illustrates a lack of knowledge of the realities of industrial relations in Ireland, and a failure to grasp what has been achieved. Putting it briefly, what has been achieved is that the parameters for pay have been set at generally acceptable levels for all sections of the economy from now until the end of 1980.
This situation is in sharp contrast to that obtaining in recent years, when the Government of the day were unable to settle the Exchequer pay bill either at a satisfactory level or for such a long time ahead as the following figures for general increases show.
|
Agreement |
Duration (months) |
Annualised increase |
|
24th Round (June '84-December '85) |
19 |
3.8 per cent |
|
25th Round (January '86-June '87) |
18 |
4.7 per cent |
|
Programme for National Recovery (July '87-December '90) |
42 |
2.5 per cent (1988-1990) |
I was interested to note in the international papers this morning that there is grave concern in the trade union movement in the United Kingdom because the United Kingdom Government are talking about the possibility of only a 4 per cent increase in incomes. We in this country have been criticised for having an agreement for three years which gives us an annualised increase of only 2½ per cent, which has been the best since annualised agreements came into operation many years ago.
One of the attractive features of the draft agreement, from the Government's point of view, is the deferment of special pay increases until mid-1989 at the earliest and, even then, implementation is to be on a phased basis. In the past the payment of special increases has created major difficulties for the planning of the Exchequer finances — the full cost, for example, of the recent teachers' special increase was £60 million, equivalent, in itself, to over 2 per cent of the Exchequer pay bill.
I am satisfied that the pay elements of the programme represent a reasonable outcome for all concerned. In so far as the public service is concerned, the moderate pay increase negotiated combined with the voluntary redundancies envisaged will help contain the public service pay bill, the biggest single element of Government current expenditure.
I have already given my reaction to the amendment to the motion tabled by Senator O'Toole. I would like at this point to comment on some of the other amendments which appear in the Order Paper. The amendment proposed by Senators Manning, Bulbulia and Daly would weaken rather than strengthen the public finances. It is the function of the Government, under our constitutional system, to make proposals on the Estimates and for the Dáil either to approve or to withhold approval from the Government's expenditure plans.
This system has worked. It has never been seriously suggested before that the Book of Estimates, as tabled by the Government, should be, in effect, no more than a working draft, to be subject to possibly major change by the Oireachtas. Such a procedure would not be desirable at any time but certainly not now when our public finances are in serious imbalance.
The amendment put down in the names of Senators Ferris, Harte and O'Shea fails to recognise that the action we are now taking to restore the public finances is absolutely necessary to protect the basic structure of the services we have built up and to ensure that we will be able to keep them financed in future years. The choice is between providing a level of services that we can afford to pay for, or keeping a structure that would soon collapse because it could not be sustained.
The Estimates for 1988 are an essential step towards restoring the country to economic health. If we fail to take these steps now, the hardship will be much greater in the long run, and the impact much more severe on the least well off. Contrary to the impression some attempt to create, the 1988 Estimates will allow us to maintain a sound educational system, an excellent health service, an extensive and caring social welfare system and a reasonable provision for the maintenance of other essential services.
It is never easy to reduce expenditure.
Difficult but necessary choices have to be made. The Government have shown a willingness to make these choices after exhaustive examination of all possible options. The package of measures produced is a genuine attempt to spread the burden fairly across the board. Undoubtedly, many will disagree with particular measures adopted by this Government, but it is already clear that most will see the unavoidable necessity of the overall package.
The policies being implemented, and those now proposed, are dictated entirely by the fiscal and economic realities facing us. They are in line with the best advice available to us at home and abroad. The 1988 Estimates and the Programme for National Recovery build on the strategy enunciated in the 1987 budget and represent two further steps on the road to recovery. There is already a large degree of acceptance of the approach we must take, as was clear in the debate in the Dáil on this motion and in the willingness of the social partners to agree to the Programme for National Recovery. I hope the debate in this House will extend and strengthen that consensus.
I move amendment No. 2:
"After `Programme' to add `Seanad Éireann notes in that under the terms of the Estimates, major reductions in the level of public services will occur, and will, therefore, undertake an in-depth examination of the Estimates as presented by the Government with a view to allowing those Members objecting to individual proposal to put forward fully costed alternative proposals which will yield a similar saving in this and subsequent years.' "
I was interested in hearing the Minister's comments on the amendment where he stated that this approach would weaken rather than strengthen the public finances and that it was the function of the Government under our constitutional system to make proposals on the Estimates. I am not happy that this is the case. We are at the moment facing an unprecedented situation. The public finances are in the most extraordinary and indeed frightening disarray. Fresh approaches and the collective intelligence of all legislators is called for in the consideration of how we should proceed in extracting ourselves from a very difficult problem. A situation like this calls for greater inputs from legislators.
I would remind the Minister that he is in power on the basis of a completely different analysis of the economic situation. It is extremely tempting to remind him and his Government of all that was said prior to the general election which saw this Government accede to office on the slimmest of margins. It is precisely because of their sudden and dramatic conversion to financial rectitude and to management of the country's finances to get them into some sort of shape that many of us who have held this analysis to be the case for years, are extremely unhappy about the unco-ordinated incoherent, ill-thought out way in which decisions are being made. We wish to have a greater input into the decision-making and an opportunity to analyse and assess the impact of the various cuts which have been proposed, on the community and on individuals whom these cuts will so dramatically affect. In marked contrast to the Labour Party amendment which is all huff and puff and no substance, our amendment is coherent, well thought out, and intelligent. It seeks to make inputs into thinking on the grave problems which confront this country.
The Fine Gael Party are not surprised at the size of the cuts. We have had a responsible, consistent and intelligent approach to the country's finances for a number of years. The cuts are something in the order of £485 million. On a number of occasions throughout the year, we stated that cuts of the order of £500 million would be required to make the kinds of inroads which would be necessary in order to control our national debt in 1988. We have been, and we are, utterly consistent in our approach to this grave economic crisis. Consequently we shall not oppose the motion to note the Book of Estimates but we will strongly press our amendment as a reasonable way of proceeding in the face of this grave crisis which the whole country faces.
The total amount of money provided for the supply of Government services is all that our country can afford during next year. However, we will not have the full picture until budget day and we have already made clear our criteria against which we will measure the budget. Our party leader in a brave, innovative and responsible manner in his Tallaght speech firmly and courageously set out the criteria against which we would measure our support for the budget. It is worth restating what he said, because there has been inference — indeed it has been stated — that the Government have been offered a blank cheque by Fine Gael. That is not the case. Our support is conditional and these are the conditions: we want to see the 1988 budget open the way to a reduction in taxes and particularly to a reduction in personal taxes; we want to see that budget bring about a significant reduction in the current budget deficit below the figure targetted for this year; we want to see that budget holding out a strategy for real employment expansion in future years and we want to see that that budget does not add to the burden of debt service costs in future. Only if those criteria are met, will we support the general thrust of Government policy.
Despite the fact that the Government inhabited some sort of economic wonderland while in Opposition and frustrated every reasonable, well thought out action by the Coalition, the Irish people were not entirely fooled by the propaganda and lack of reality. The people are, in the main, at this stage, prepared to accept a degree of hardship because they understand that economic chaos cannot be allowed to continue. The Government will get support as long as the measures are fair and as long as the twin objectives of righting the economy and creating jobs are seen to be clearly in the Government's sights.
People also need to see and understand the policy guidelines and the thinking behind the cuts. I confess to having problems and indeed my party have problems with this latter aspect. Many of the cuts, as we perceive them, are arbitrary and lack any sense of coherent social planning. In some instances they are downright unintelligent. At a local level where their implementation is beginning to be felt they amount, in some cases, to a farce. I will illustrate that with the situation in Waterford which I spoke about last night on the Adjournment. We have a South Eastern Health Board faced with massive cuts, and a painful decision was taken to reduce bed numbers by 45 in Waterford's Regional Hospital at Ardkeen. Then at central Government level, the Department of Health withdrew funding from Waterford County and City Voluntary Hospital and forced its closure, to take place on 31 October. The next thing that happened was that the South Eastern Health Board met again and decided to restore the same 45 beds which they had solemnly, seriously and painfully decided to remove from people only a matter of months beforehand. That is the sort of incoherent, uncoordinated, unintelligent and inept approach to planning which is part and parcel of Government strategy at the moment. It is a particularly telling example and one which is not lost on the people of Waterford and indeed which I hope will not be lost on the people of this country, as it illustrates the lack of overall social planning which is part and parcel of Government attitude. It gives the impression of a disorderly rather than a planned, carefully evaluated reduction. It will hardly inspire confidence in Government action.
The Minister in his speech, pointed to the Programme for National Recovery as the overall plan which backs up the cuts in the Estimates. It is not a plan. What it is, is a totted up public service pay deal. An agreement has been reached with the unions on public service pay but can it be afforded? The Minister, in a departure from his script, spoke about the 4 per cent offered in the UK. I put it to the Minister that such a comparison is not valid. We are dealing with a completely different economy. There is greater stability already in the UK. I take it that is a stage at which we hope to arrive, but we are not in a position to afford the pay increase given to the unions. It is being done on the backs of the poor, the old, the disadvantaged and the school children. The price is too high and the unions were sold a pup. In accepting this, they have lost credibility. They are now implicated in the decision to have massive cuts into which they had no input, the kind of input the Fine Gael amendment to this motion requests to have.
In general terms the Estimates are vague. We will find out little by little and painfully what they will mean in every day terms. The health cuts to which I have already referred in my Waterford based illustration, are enormous and are opening up a gulf between those who can afford to insure themselves against illness and those who are totally dependent on Government services for health care. If you are insured or if you have money you can have any procedure, any operation, anything you like as quickly as you like and where you like in this country, right now. If you are dependent on the public services for health care, you can stand in line and queue, and you can wait for a hip replacement, or a consultation. The only thing that will guarantee you will be seen immediately is if you are a casualty or if the matter is of extreme and utter urgency. Decisions are being made every day which are undermining the health of hundreds of thousands of people and the long term effect of this will be incalculable.
Local authorities are currently getting to grips with the Estimates and they are in a total quandary wondering how they will cope with such a massive reduction in the rates support grant. It is inevitable that local taxation will be introduced in some instances or increased where it is already in place. The alternative is unthinkable, because it would be a decimation of essential services at local level. Education is in a ferment. The reduced allocation there means no new school buildings and increased pupil teacher ratios. Many of my Fine Gael colleagues will speak here today and concentrate exclusively on specific programmes to point out where there is an absence of planning or where the emphasis is wrong. The Minister cited the emerging demographic structure as a reason for not proceeding with the school building programme. In many of our major urban centres and Waterford is no exception to that children are housed in school buildings which are unfit, unsanitary, and totally inimical to any sort of modern education system.
There are a few minor cuts to which I would like to refer. They are the unkindest cuts of all and they are inexplicably mean. They illustrate a lack of planning and coherence in Government. The National Social Service Board has been cut by £580,000. This attacks the core of the voluntary caring community commitment. It takes away from people their right to information about entitlement, the only independent source of information which was available to so many hundreds of thousands of people. This is an unpopular cut. It is not considered an acceptable cut. This morning as I travelled in I heard the voice of a member of the National Social Service Board speaking on that popular radio programme "The Gay Byrne Hour". That individual, a Donegal man by the name of Noel — I have forgotten his surname — has become synonomous with the National Social Service Board in giving information and advice in a totally independent fashion to so many people. I am shocked that that voice will be silenced and that the voluntary and caring organisations and the advice centres and the training and inputs that were given by the National Social Service Board are to be sacrificed for a mere £580,000 and that the slack — and there will be a lot of slack — is to be taken up by a Government Department. It is unacceptable.
Anti-poverty schemes are to be cut by £300,000. The Ombudsman's office is to be cut by £96,000 and only last year we supported measures to increase the remit of the Ombudsman. Despite this, his office is to be slashed. It is a cut at an office which is seen to be on the side of the citizen in protecting and guarding against abuse.
The Health Education Bureau and An Foras Forbartha are jointly to be cut by £3.37 million and they are to be absorbed by the Department of Health in the one instance and the Department of the Environment in the other. These are unpopular cuts. In the context of a national debt amounting to £24 billion, they are mean, ill-considered and unhelpful to people. I am convinced that the damage that will be done by this kind of decision making is vastly disproportionate to the savings that will be achieved.
The cuts I have outlined, the unkindest cuts of all, are small, but they are in an area which is the hallmark of a civilised society. I mourn the fact that the Government decided to expunge them from what is offered to citizens. As spokesman in the Seanad on co-operation with developing countries. I will make reference to the cuts which have affected this programme. Since this Government took office we have seen very little action, and I can now understand why, in the area of development co-operation. The cut in the overseas development programme in 1988 is approximately of the order of £11 million. Most disturbing is the fact that the Vote for the Department of Foreign Affairs is actually increased by 3 per cent. This means that the full brunt of the cutbacks in this Department landed on development aid. The Irish people have left nobody in any doubt as to where their sympathies lie. There has been a massive response on every occasion that it has been required to Third World programmes and projects. This cut will be very ill-received by people. The largest cut in this area has fallen on bilateral aid, that is, the aid the Irish Government give directly and voluntarily to the Third World.
The provision for disaster relief is £1,000 compared with £505,000 in 1987. This is a derisory amount, given the alarming reports from many parts of the Third World and the very real prospect of renewed famine in Ethiopia next year.
The contribution of £1.5 million to the world food programme which provides food aid in the case of famine which the Government pledged in March 1986 will not be paid, according to the Estimates. The situation in the Third World, particularly in Sub-Saharan Africa and Latin America, has deteriorated dramatically in the eighties and has been produced by a combination of factors. Notwithstanding the crisis which we face and notwithstanding the very real hardship which we all have to face in the context of these Estimates, we have to remember that Ireland is the 27th richest country in the world, and we are not being aware of the far worse difficulties being faced by people in the Third World. The primary reason for aid to the Third World is a moral and an ethical one but we might also remember that there are self-interest reasons why we should give, but I will not develop that aspect of the debate.
In moving the Fine Gael amendment — and I have only scratched the surface of the many areas which will be taken up individually and specifically by my colleagues — I would like to say that we approach our national problem in a totally realistic manner. We wish to exercise our rights of representation and our rights as legislators duly elected to examine the Estimates in depth. Because of the publication of the Estimates well in advance of the budget there should be more than just a debate. There should be a possibility to examine, consult, consider and bring forward a better way of doing things. One is tempted to repeat the slogan: "There is a better way", but not the better way that was trumpeted about by Fianna Fáil prior to the election. The better way is the way we would advance the situation were we to succeed in having this amendment passed and have an opportunity to examine the Estimates in depth so as to be in a position to bring forward fully costed alternatives.
We cannot support the Labour Party amendment to the motion because it is unreal and unrealistic. It is totally negative in tone. It fails to grasp that there is a problem, a difficulty, that it is real, that it must be addressed and that there is an onus on people to bring forward alternatives. This we are prepared to do. This is what the thrust of our amendment seeks to do. For that reason I proposed the amendment and I support it.
I am very glad to see the Minister of State with special responsibility for development co-operation here and I am sorry he missed that aspect of my speech. My timing or his timing was slightly out of kilter. While he is here I would like to refer to an aspect of the Estimates which is just a tiny element in the whole of the cuts. The impact of those cuts on volunteers, on services which have been put in place and, most important of all, on the most deprived people in the world will be enormous. I do not think that cut would have the support of Irish people if it was spelled out to them exactly what it means to the poorest and most deprived. I look forward to what other people have to say during the course of this debate.
Is the amendment seconded?
I second the amendment.
I welcome the opportunity to comment on the Estimates for 1988. I listened to what has been said by the leader of Fine Gael, the leader of the Labour Party, the leader of the Democratic Socialist Party, economists and commentators on the Estimates for 1988 and all of them agree they are necessary. But all of them have their own version of how the Estimates should be implemented. The comments made by the last speaker are no different. Senator Bulbulia said they realised that it is necessary to have economic change and to have measures to rescue the finances of the country but they would do it differently. She finished up by saying they would not support the Labour Party motion. That is typical of the kind of criticism we are getting right across the board. Everybody agrees that it is necessary for the Government to take action but not the way they decided to do so.
Senator Bulbulia said the cuts are unacceptable and cruel and impose hardship on certain sections of the people. She also said they were unplanned and ill-considered. A sensational speech made in the Seanad might come across well if it got into the local paper because it would demonstrate the Senator's concern for Waterford hospital or for whatever special project she is interested in. I am sure the Senator has an obligation to express what she feels will be most acceptable to that section of the community who sent her here in the first place. I am sure if I am representing the Opposition I could highlight many areas where extra funds should and could be provided and where hardship is being imposed.
However, the overall global situation is that people now have to face the reality of having to effect economies right across the board. Even if the national debt was not an issue and never came into focus, as a small nation we were spending so much money and had so much duplication in administration that we were putting ourselves our of business. Perhaps there are sections in the community who do not care how much we spend and who laughed at the amount of our national debt and say it is for the birds or for somebody else to deal with it. They are concerned only with next week's wage packet. Perhaps there are people who believe that but unfortunately, those who are saddled with the responsibility of Government have to govern in a difficult international climate.
The value of the rationalisation and the effect it has on economies is very important because for the first time it corrects the line of thought of young people who believe we are living in utopia. It makes them realise that we have got to pay for the Army, the Garda, social welfare, educational programmes, health improvements and local authority houses. The money to pay for all these services does not fall out of the sky. This is an important time for the country and, in particular, for young people.
Everyone of us can single out areas where cuts should not be made. I have been a member of a local authority for a long number of years. I will be attending an estimates meeting next Monday. The county manager will produce his estimates and tell us he has to cut back and restrict expenditure in different areas. Every local authority member will have to say to the county managers that economies have to be effected in line with the national programme. In some areas these economies were overdue. I have been looking at the areas where we could save money. This has been brought home to all of us fairly effectively. Economies can be effected in many areas. If they are not made the future of our young people will be at stake because they are the people who will have to pay the price.
Most local authorities including, my own in Donegal, have duplication of staff at senior administration level. We have got to rationalise and ensure that there is no waste of senior staff. We have got to make those people with good secure jobs realise that they have got to work. This country has no future if we do not work as hard as the people in Holland, Germany and elsewhere. It is said that we are at the bottom of the league, that too many people have medical cards, and so on. Statistics will be quoted to indicate that Ireland is a poor country. It is a poor country only because we are lazy people and have got too much for too long too easily. The Estimates have wakened people up. Because of this, the country will be a healthier and a better place.
We are spending money in too many areas. We could continue to cry and to appeal for more funds for local authorities, health boards, educational programmes and so on and no doubt every member of every local authority and health board will indicate areas where he or she would like to have more money spent. I have seen sheer waste in the development of schools that might not be used in the future and in the development and extension of buildings by health boards just because money was readily available and easy to secure.
Rationalisation in the educational programme has been long overdue. We discussed this in the Seanad last night. There are many areas where there is over expenditure and unnecessary development. Most counties have fairly good schools. However, we never see those projected on television: we see the ones where the roofs are ready to fall in, where there is dampness and where there are prefabricated buildings. That has been going on for a long time. There are very few counties which do not have a large quota of good quality secondary and primary school buildings. It is the areas where expenditure is needed that are highlighted when the Government's policy on finance is being challenged.
All of us must realise that waste has to be eliminated. Otherwise, the future for our young people will be a bleak one. There can be no tax increases for any section. Some people in the Labour Party have called for increased tax on farmers, small business and so on. I come from an area where there are many small farmers. If the tax on farmers was increased life would be made more difficult for them and very few people would remain on the land. All of them would be pushed into the position where they would have to draw the dole. The pressure of taxation on small farmers to keep books and to contribute to the tax take is forcing them off the land.
In County Donegal there has been publicity about cases where the Revenue sheriff called on a number of businesses in Ballyshannon, Letterkenny and St. Johnstown and closed them down. If the Revenue Commissioners figures show that a substantial amount of money has to be collected the Government is answerable for that. They have to respond to those who call for a greater effort to collect tax. I am not advocating that they should not be determined to collect tax that is rightly due but in many cases the amount of tax is estimated and the overall figure does not indicate the actual amount due. I do not think the farming section and people in small businesses in rural Ireland should have more severe taxation imposed on them.
The PAYE sector are saying they cannot pay any more tax. Those paying PRSI cannot bear any more in that respect. If somebody who starts up a small business employs one person he will automatically have to pay about £17 per week by way of PRSI contribution. This is a deterrent to anybody in the matter of employing young people. Many young people who are drawing the dole and working at the same time are forced to do so because of the high amount of PRSI contribution. I would like to see the Government looking at the possibility of exempting young people from having to pay the PRSI contribution for the first four years after they get jobs. I do not believe that the PRSI contributions can be continued at the present high level because this is not conducive either to young people or to business people.
Senator Bulbulia said that prior to the general election Fianna Fáil told the Government how to develop the economy and run the country. They also expressed dissatisfaction with many areas. I, too, could have been one of the people who complained about the lack of funding and the general programme of financing but we were totally misled. We were living in a utopia where money was being expended and development programmes were being carried out while nobody told us that we did not have the funds to pay for these programmes. The previous Government introduced house improvement programmes for which they did not have funds. They also introduced programmes which involved substantial financial interests but they did not have the finances available.
When the Coalition Government assumed office Deputy Garret FitzGerald stated that his main concern was going to be the balance of payments, that he was going to put that right. After four years in Government the ordinary person in the street knows exactly what had happened but they did not know the position in regard to the state of the finances. Many people, looked for improvements in the health services, the schools programme and the building programme. The Government were spending money and nobody questioned where it was coming from.
Senator Bulbulia spelt out the conditions under which her party would support the Government. It was totally unnecessary for her to do so because every Government supporter and every individual in the State knows the length of time that the Leader of Fine Gael or any other political party will support the Government is up to the time when they believe that they have a reasonable chance of getting an increased majority.
The people who put down motions calling for a review, and substantial alterations to, the financial programme must spell put where the savings can be made. If one wants to save a hospital in Waterford one must say what other financial savings can be made to pay for that hospital. It is far too simple for people to state that the Estimates have been badly planned and ill-thought out. Those people who criticise the Estimates must indicate where the savings can be made and they must do so in a way that the ordinary citizen will understand.
There is no point in the other parties telling people how badly off they are and that if they were in power that such a school would be built and that the health services would be improved. The fact that even the movers of the motion today could not support the Labour Party's amendment indicates crystal clear the confusion between Opposition parties. Very few of them have the courage to say: "Yes, we support the Government because action was necessary". They want to accuse the Government of doing a U-turn.
People are aware of how necessary it was for the Government to take positive action and I would encourage the Minister for Finance to proceed along the course he is taking and not to be deflected because of the outcries from many areas. I hope that he will continue further the rationalisation programme for the small groups who are duplicating functions and using up funds unnecessarily.
It was a bit much to hear the Minister for Finance assure us that confidence is returning at a time when the stock market is tumbling down around our ears. Confidence may be returning to some people whose interests are going to be well protected by this Government and by the major Opposition party. At this stage it is difficult to decide who to be more critical of. The Government made a U-turn and then pretended that they did not know about the state of the finances before they got into Government. The idea that Fianna Fáil did not know the state of the public finances at a certain date last January and discovered it only two days later because they went from Opposition to Government is difficult to believe and I think many of them will concede privately that they were playing games with the electorate. Of course, they were playing games with the electorate because traditionally they have protected certain sections of our population.
Having said that, I want to address a criticism to the part of the political spectrum in which I reside, the left. There has been a tendency to pretend that the debt problem does not exist or if it does exist to blame it on nasty capitalists. It may be true that capitalists by and large are extremely nasty, unpleasant and self-interested. As The Irish Times quite rightly said, business in this country is rarely motivated by either patriotism or politics, it is motivated by self-interest and the Stock Exchange is motivated by greed and fear. Those are not the things on which a country should build its future, its confidence or its economic prospects.
Nevertheless, it is true that we have a problem with our national debt. There are a variety of ways in which to deal with that problem. One solution, which I do not yet accept because it is a difficult one, is the Raymond Crotty solution to renege completely on it. It may be a totally unacceptable solution but it should not be treated as an absolute which cannot be looked at because one of the interesting features of the debate about the national debt and the Government revenue problem is that people are being told things which are not entirely true. They are being told, for instance, that the reason we have a crisis in our public finances is that we are being too generous in the services we provide for ourselves in the areas of health, welfare, education and so on.
The truth is — and this is the correct figure to the best of my knowledge — that next year of the totality of Government expenditure, £2.4 billion will be spent on interest and debt repayment. If that figure is deducted from the projected Government expenditure, the revenue that the Government will get from the present levels of taxation will exceed the expenditure in all the other areas, where we are supposed to be indulging ourselves so much, by £1.2 billion. That does not suggest that a country whose taxation as a percentage of gross national product is approximately 33, 34 or 35 per cent, which has a tax revenue of a relatively low level and is generating a surplus in the area of transfer funding and all the normal areas of public expenditure, is living beyond its means in terms of what we regard as an acceptable quality of public and social services.
We are not. We ran into a crisis of interest rates and exchange rates which made a manageable debt problem into an unmanageable one. If we had real interest rates at the level they used to be, a couple of percentage points above the rate of inflation, we would have a far smaller debt problem. The problem is that massive real interest rates — real interest rates being the extent to which interest rates exceed the rate of inflation — have greatly escalated what was already a large national debt. We are paying the price for Government mismanagement and a profound change in the international financial marketplace which pushed up real interest rates dramatically.
The first thing we should do in dealing with this problem is to stop apologising for ourselves. We did not award ourselves excessively high levels of public service, we did not award ourselves excessively high levels of pay increases, we were quite reasonable and moderate, though not moderate enough, and we are paying the price now, because of the state of international interest rates, in huge debt repayment bills. I need to say that because it appears to me that we have begun to believe some of the methodology being perpetrated or being imposed upon us by economists who have a clear ideological position. The ideological position being not that public expenditure is too high because of the state of Government revenue but because public expenditure is a bad thing in itself.
I invite Members of this House, the Minister for Finance or the Government to read the writings of those people because they do not just talk about the need to get public expenditure into balance. They talk at length about what is wrong with the concept of public expenditure, what is wrong with the concept of public health expenditure, what is wrong with the concept of public social expenditure, what is wrong with the concept of public education expenditure. They have written at great length and their campaign is not simply a well intentioned campaign to rectify public finances, it is a far more sinister campaign that that. It is a campaign to persuade us that the idea of public expenditure, as a way of providing services for ourselves, is a bad thing and since there is overwhelming evidence all over Europe that they are wrong they have perpetrated honest myths about the United States and about South East Asia to advance their own ideological position. It is an extremely dangerous, extremely sinister, position where we have substitued one set of magicians for another.
We used to be accused of being priest ridden and dominated by their capacity to frighten us into a particular way of thinking. We have now got rid of them and we have substituted economists as the profession with a particular ideology who are now able to frighten us into believing things that are totally at variance with the facts and with international experience. The first thing that I, as an engineer, have to do when I deal with a problem is to make sure I know what the problem is. I do not presume to assume what the problem is. That is a very fundamental position and I know the Minister, who is an engineer too, will agree with me totally. The problem in this country is not a problem, as I keep saying, of us giving ourselves a high standard of living, it is the problem of an extraordinary high interest rate on what would have been anyway a relatively high national debt. It is the accumulation of interest on the national debt that has produced the crisis we are experiencing. That needs to be said.
Senator McGowan and others are trying to persuade us that we have a huge amount of "fat" in the public service. Of course there is waste. There is waste in all large organisations. I heard an executive of ICI saying not many years ago that if they hit 60 or 70 per cent efficiency they would regard themselves as doing extremely well. There is no large organisation whether it be a private or public organisation which is 100 per cent efficient. There is no such thing as the achievement of 100 per cent efficiency, there is simply a continuing process of reappraisal of improvement and of identification of areas of modification. It is not an absolute, it is a continuing process and therefore inevitably there will always be areas needing improvement in management, in control and in planning in the public service. That does not prove that there is anything wrong with the concept of public expenditure or a public service. It simply proves that like all large organisations the public service needs to be managed, staffed, planned, controlled properly, efficiently and imaginatively. That is not being done at present.
There is no doubt that the quality of management, for instance in our health boards varies from bad to appalling. Therefore, there is a very real need for proper management appraisal of these things but that is not the problem. The suggestion that the problem is one of wasteful expenditure is not true and it is dishonest. Because we are not providing a particularly extended public service we have the most poorly funded primary education system in Europe. We have relatively low per capita expenditure on health services contrary to what people would say.
Health services are expensive and there will be comparable international costs. Our expenditure per head of population is quite low, our expenditure as a percentage of gross national product is quite high but that is because to deliver a good health service in a relatively poor country costs a larger proportion of our income. That is the choice we made and it is a choice which is reflected in some very important indicators. We have for instance, a remarkably low infant mortality rate, substantially lower than the richest country in the world — the United States. That is something people ought to know about. The economist myth that we have provided more and more money for health services and produced nothing in return is no more than that. That is not to say there is no waste but the idea that our decision as a nation to pay for a good health service for all the people has been a pointless or a wasted decision is wrong. One simple indicator is that a country with a remarkably high birth rate, a country with a remarkably high incidence of births among women later in life with all the extra risks that that involves, still has a remarkably low infant mortality rate. We do not allow, for instance, the termination of high risk pregnancies but we still have a remarkably low infant mortality rate. That is because we decided we wanted that. It is something that is worth holding on to. I will be watching with considerable apprehension over the next number of years what happens to our infant mortality rate. It has already been one of the great legacies of Ronald Reagan in the United States that an already unacceptably high infant mortality rate, a shame on a country that is so rich, is going up under his alleged economic miracle.
So any cutbacks that are introduced are going to be painful. There cannot be cuts in public expenditure at the levels that we have in service delivery which will not be painful. Neither can there be any suggestion that you can cut public expenditure and not affect the poor. The idea that preserving social welfare protects the poor from the cuts is a load of rubbish. If we cut expenditure on the two important areas of education, and health, the rich, the well-off — and I include myself in that category — will be able to pay to make up the difference in the service whether through education, through beginning to pay for our schools, whether by way of voluntary contributions or compulsorily, we can and we will have the disposable income. We may complain about it and we may feel it is wrong but we have the cash to do it. Those who are dependent on low incomes and those we are dependent on welfare will not be able to pay so they will suffer, not directly and immediately in the level of income they have but, in the number of things they need to pay for to maintain even the same miserable standard of living they used to have. They will suffer and will be penalised.
I have not got as far as I intended in the time available to me. I want to take up a challenge that has been thrown down to the Left very often. There is no good telling us what is wrong with the present situation and that we have to produce an alternative. I will endeavour to produce an alternative. It is an alternative which is based in each case on evidence from an independent source. While taxation is relatively high it is nonsense to suggest that in a country that is in a crisis of the scale this country is in, and which we all agree is a considerable crisis, the one option that cannot be considered is any increase in taxation. It is true that there are areas of taxation which cannot be increased. To that extent I will identify in particular personal income tax and its application to relatively low incomes. I qoute from the NESC document, Strategy for Development — this is a fine document taken in toto but it is being abused by various interest groups, particularly on the Right — to demonstrate that the unions in particular are seen to have agreed to things that they never agreed to. I qoute from Chapter 4, page 69:
The proportion of total tax revenue accounted for by taxes on personal income increased from 38.7 per cent to 40.5 per cent between 1980 and 1986, or by an amount which was almost fully counterbalanced by the diminished share of corporation tax.
Let me quote what they have to say about capital taxation:
In relation to CGT and CAT it should also be noted that, as in the case of personal income tax and corporation tax, the base is narrowed by the existence of a multiplicity of exemptions and reliefs.
In the case of corporate tax they say:
The corporation tax base is diminished by the existence of reliefs, allowances and exemptions in much the same way as the personal income tax base.
In each of these cases we have been told that there are exemptions and allowances which reduce the revenue from areas like corporate tax and capital tax. If the country is in a crisis of the scale that it is supposed to be in and if personal income tax cannot be raised — and I accept that — then I would like to know why other areas of taxation cannot be raised.
There are two arguments. One is that to raise taxes in those areas would reduce enterprise and employment. Let me get this right, because that is based on the assumption that there is a correlation between the level of taxation and the level of enterprise. Anybody who looks at the OECD figures for taxation as a percentage of gross domestic product or of gross national product, depending on how you want to measure it, will realise there is no correlation between the level of taxation and the level of economic growth. There are countries with high levels of taxation with quite remarkably high levels of economic activity and there are countries with low levels of taxation with far from impressive records of economic growth.
There is no reason in principle to believe that increasing taxation in certain areas will reduce enterprise any more than there is any reason to believe in principle that reducing taxation in certain areas will increase enterprise. Let us not forget that over the past number of years we have seen the level of VAT, on hotels, for instance, reduced dramatically. We have seen the level of VAT in areas of the motor industry, particularly in motor repairs and spare parts, reduced dramatically. We have seen the VAT levels on various labour intensive activities reduced in one of the more recent budgets. Nobody yet has suggested that any of those reductions have generated any more jobs. The strategy for economic development has to go much more fundamentally than simply saying we will leave lower taxes to the entrepreneurs and that will create wealth.
We have not addressed a very fundamental fact, and one that is clearly outlined in that chart of the Economic Review and Outlook of the Department of Finance for 1987, which illustrates graphically the difference in performance between high technology industry and the remainder of industry. The truth is, regrettably, that almost all high technology industry is foreign industry and foreign investment. In the period of this country's greatest crisis, output from those areas of industry has increased by about 24 per cent per annum and exports from those areas have increased equally dramatically. We as a nation have not benefited from that and indigenous industry has either dwindled or stagnated in the same period. That is the fundamental problem. The problem is not our levels of taxation, the problem is the lack of inidgenous enterprise in this country, a much more fundamental one which will not be affected in the least by whether personal income tax goes up or down or whether corporate income tax goes up or down.
There are a number of other things to be said, among them the fact that farming generates a net income of about £1,000 million a year — it varies from good years to bad years — and they pay virtually no income tax. That is unjustified. There are a number of other areas of tax revenue that could also be identified. All of those things together are quite small but put in sum they would represent about a halving of the current deficit. Linked to a proper strategy for developing indigenous industry which would produce economic growth, we could deal with our problems, and we would not have to do what we are now doing, namely, create a propaganda myth that cutbacks are necessary in the course of which the poor will suffer an almost irreparable destruction of their services.
One of the more encouraging developments in this country at present is that there is now a widespread understanding of the critical state of the public finances. There is a new sense of realism reflecting the realities of the late eighties. I do not want to engage in party political point scoring, but when the Government took office a mere seven months ago we had a record level of debt, record tax levels and, I am afraid, very little to show for that. During the past five years, for example, unemployment increased by 100,000, the economy was virtually at a standstill and confidence — that ephemeral, very important quality — was at a very low ebb and this made new investment very difficult. This, in essence, was the scenario that faced the Government when they took office in March.
The Estimates represent tough, indeed radical, action. Putting the public finances on a sound footing is vital to everything to which we, as a people, aspire. Confidence is essential in importance to national recovery and to real economic growth. The Government's determination to manage the public finances properly is essential to the achievement of confidence. The Estimates, tough though they are, represent an explicit demonstration of Government leadership in tackling the critical state of the finances. Public finances have been too high, public spending has been too high and this has led inevitably to very high taxation and a very high level of borrowing.
Political leadership today must forget about short term goals and gains and take the necessary action to deal with the new world of the late eighties. Already there is evidence that confidence is slowly but surely returning to the country. This return in confidence has already been facilitated by the reduction in Exchequer borrowing and the emphasis that has been given to Government policies to attract funds back to the country which took flight under the previous Government, and particularly last autumn. Importantly, a majority of the public recognise the necessity to improve the public finances and despite the severity of the reduction in expenditure in places there is, I believe, public support for the general thrust of economic policy.
The debate today is a welcome one. It is made possible because, for the first time ever, the Estimates for public spending have been published so early. Savings are being made right across the board. The sense of equity that is perceived by the population makes the cuts that much less harsh and that much more acceptable. Some of the savings are painful but there is no alternative. There is, indeed, a conscious effort to maintain social welfare levels and on the social welfare issue, of course, abuses are being curbed as a matter of deliberate Government policy.
To those who say there is an ad hoc unplanned approach to the Estimates, I think that is selling the Government very far short of what actually has been happening. There has, of course, been very careful planning and an in-depth review of all spending in the various Departments since the budget. The Government and their Departments have been working flat out for several months before finalising these Estimates. A most detailed review, I submit, of the entire range of Government expenditure has been undertaken over a period of several months. There is some pain, some irritation and some disappointment, but there is also a widespread appreciation that what has to be done is being done by the Government.
I want to refer to the Programme for National Recovery. Despite criticisms in certain quarters, the three-year Programme for National Recovery which has been drawn up on a consensual basis in consultation with the social partners, is a significant agreement. Unlike its two predecessors, The Way Forward in 1982 and Building on Reality in 1984 which were prepared by Government acting alone, we now have a programme to which all the social partners have committed themselves in advance. Clearly this augurs well for its implementation over the three-year period.
The programme covers a range of issues, including pay which is obviously a very important component, and a number of non-pay issues. It has been concluded without affecting or deflecting the single-minded determination of the Government to restore order in the public finances. I agree entirely with the Minister in his opening statement that the next critical step after the publication of the Estimates is to ensure that the Government stick to the Estimates.
I want now to focus on that key element of the programme, namely, the public service pay agreement about which there has been a fair bit of comment and a fair bit of criticism. It is true that these pay proposals are moderate but in line with the realism of the late eighties they are realistic. The trade unions are realistic and understand the national situation too.
At the outset provision is made for a pay pause of six months after the expiry of current pay agreements in the public sector. The Estimates before us were based on the assumption that no further general increases would apply in 1987. The pay agreement as proposed will mean that that assumption is fully realised. A limit of 2.5 per cent is placed on pay increases for the next three years. This is a modest level of increases but, with the tax concessions included in the programme, the purchasing power of most wage and salary earners will be kept intact for the next three years. The pay limit contained in the agreement will enable the Government to plan realistically for the next not one but three budgets. Furthermore, trade union commitments not to engage in industrial action in pursuit of claims in excess of the pay terms of the programme should make a significant contribution to industrial peace. That remains to be seen. I hope the realism as demonstrated in the drawing up of the agreement will continue in the years ahead. That realism is necessary if we are to achieve our national objective at this difficult juncture.
One of the main trade union aims in the negotiations was to cater for the lower paid. This also has been accommodated in the programme. An agreement on pay — and I want to dwell on this for a moment — is of central importance to an economic programme, not least because salaries and wages represent 80 per cent of gross national product. Furthermore, and this is particularly important in the context of the estimates of public expenditure, pay represents almost half of all Exchequer expenditure. It will, of course, be necessary to ensure that the provisions of the programme especially in relation to pay are implemented as now agreed. There is no point in drawing up an agreement of this sort and trying to plan on it if, in fact, it goes wide of its targets.
Public service pay for 1986, for example — and I want to underline this — exceeded the target in the Coalition proposals in Building on Reality by £127 million. This was largely responsible for the massive overrun on the current budget deficit in that year. Special pay increases so characteristic of the past, and in particular of the growth and heady days of the seventies, have to be looked at extremely closely now and there is very little room, indeed, for anything on top of the basic increases. In fact, one could go so far as to say that there with be no room. Care is, therefore, required to ensure that only the pay terms of the agreement are, in fact, awarded. As I have already said, the fact that the programme, including the pay agreement, has been agreed in advance by the social partners will certainly enhance the prospects for its implementation.
The modest but realistic pay increases in the programme must lead to an improvement in our international competitiveness over the next three years. We hear quite a bit of talk about competitiveness but, of course, to be competitive, particularly in labour costs, is vital if we are to continue to sustain our level of exports and to increase them in the years ahead. There is intense international competition for trade and wage costs competitiveness, together with an improvement in the public finances, will increase confidence and make a significant contribution in reducing our own domestic interest rates. It is one area where we can make a specific contribution to reducing interest rates while admitting that interest rates more generally, of course, are subject to international developments.
Taxation is excessive. It is a major disincentive. Again this vexed issue of taxation is addressed in the Programme for National Recovery. In this way the combined pay and tax concessions in the programme will keep the purchasing power of most wage and salary earners intact. Taxation now amounts to 38 per cent of gross national product. There is no question but that rates are too high and are a serious disincentive to enterprise. The Government agreement, therefore, under the programme to reduce income tax by £225 million over the period of the programme is a step in the right direction.
Farmers will now be taxed also on the same basis as other self-employed income taxpayers. The Government have already allocated additional resources to improve the system of tax collection and enforcement. There is a perception, justified obviously in some cases, that there is quite a lot of tax evasion. The Government have demonstrated, through the allocation of resources at a difficult time and a number of other measures, that this is being realistically tackled.
Conscious of the time I will just summarise what I have been saying. The national imperative is the restoration of order in the public finances. The Government have faced this challenge head on by taking charge of the management of the economy, by taking tough, difficult but necessary decisions. There has been a positive response to the policies of the Government in that there is clear evidence that confidence, which is vital for investment and economic growth, is slowly but surely returning to the country. Despite the severity of the cuts in places there is widespread support for the general thrust of Government policy. The Programme for National Recovery which includes a public service pay agreement is a document based on consensus, an agreement among the social partners. This augurs well for its implementation. I do not share Senator Bulbulia's view that the trade unions have been sold short and wrong footed in the course of concluding this agreement.
Trade unions have long experience of negotiations. They have considerable skill and they know the score exactly. That is why this consensual agreement has been reached at this point. The proposals in the programme are particularly important because pay represents almost half of Exchequer expenditure. The pay terms of 2.5 per cent per year preceded by the six month pay pause, when combined with the tax concessions of £225 million over the next three year period, will mean that purchasing power, so important to employees, will be maintained in the period concerned.
The Government are doing their duty. It would, of course, be easier to take softer options but they are not on at this time. This duty requires tough and difficult but fair decisions which must be taken in the national interest. The Government deserve the support of the House.
This is my first opportunity to welcome the Minister of State, Deputy Calleary, to the House. I wish him well in the difficult and challenging years ahead, especially for those who hold ministerial office.
I too would like to welcome the Minister of State, Deputy Calleary, to the House for this debate. It is a debate on a varying range of amendments to a Government motion. I realise that only one amendment can be before the House at any particular time and at present it is the Fine Gael amendment. I would like to address myself to the Labour Party amendment which will be formally moved and seconded at the end of the debate. Our group have spelled out in detail the consequences of such drastic cuts in public expenditure, cuts of £485 million in the revenue budget and £249 million in the capital programme, together with a hidden figure of almost £100 million which will be required to compensate public sector employees who will be made redundant arising out of this set of figures published by the Government.
Before I spell out in detail the Labour Party's attitude to these figures and our considered opinion of the results of these figures, I warn the Government side not to link the Estimates with the Programme for National Recovery they negotiated with the social partners and with other sectors of the economy. In fairness to those who were involved in those negotiations they were not privy to the Estimates the Government announced. It is highly dangerous for the Minister for Finance in his opening speech and, indeed, for Senator Hillery to link the two together. Let us not be unaware of the problems people will have in selling the Programme for National Recovery at various places throughout the country, places where individual members may still vote on them. If people on the Government side are linking the Programme for National Recovery with the Estimates then they are making it difficult for the partners who sat down in good faith with the Government and discussed the interest of their members. I am saying that as a word of caution and I do not want to refer further to the Programme for National Recovery because that will be dealt with by trade union members and others throughout the country. I notice that the employer side have accepted it.
I want to deal specifically with the implications, as the Labour Party see them, of the figures, that are published in the Government's programme of Estimates, capital and revenue. I want to put on the record what we consider to be the implications of these Estimates. Whereas we can all note the Estimates, we note in particular that under the terms of these Estimates 16,000 to 20,000 public service jobs will be lost. This will affect the extent and quality of the public service. The live register will rise to 256,000. At least 1,200 additional hospital beds will be closed and other essential health services will be dismantled. The pupil-teacher ratio in primary schools will worsen dramatically but this is the subject of a separate Private Members' motion. The vital services provided by the National Social Service Board, the Health Education Bureau and An Foras Forbartha will all disappear. Young people will be discriminated against in their access to training, education and welfare services. Expectant mothers will be deprived of certain maternity payments to which they are now entitled. People suffering disability will be deprived of long duration payments and will pay tax and PRSI on benefit for the first 13 weeks. I will elaborate further on that point in the course of my contribution. Child benefits will be cut. As a result of these Estimates there will be a crisis in both the public and private sector of house construction. Ireland's contribution to the Third World, which is already small and significantly incomparable to that of other nations, will be cut by 28 per cent. Bishop Casey and other leading Church members have expressed dismay at the level of cutback in that service. I regret I was unable to attend the meeting of Third World agencies last evening. The role of the Ombudsman will be greatly reduced. We are all aware of the success of that office and perhaps because of its success it has been singled out by the Government through these Estimates to provide a service and we reckon the office will be unable to provide that service.
The ability of agriculture, our largest industry, to contribute to the development of our economy will now be seriously weakened by the removal of essential advisory and research services by the amalgamation of the two bodies, An Foras Talúntais and ACOT. We realise that the amalgamation of those two bodies was welcome but we are dissatisfied that as a result of the allocation for the amalgamated bodies, up to 50 per cent of the staff involved in the advisory service to the agricultural industry will be decimated at the stroke of a pen. We also are concerned that the capacity of our tourist industry to grow will be greatly inhibited. The possible contribution to State led industrial development will be drastically reduced. Accordingly we suggest that these Estimates will promote deflation — which is admitted by many Government speakers — and will cause further unemployment. All Government Ministers have admitted that these Estimates will cause unemployment in the public sector. There will be redundancies and although the majority of them will be voluntary, in the agricultural sector with the amalgamation of An Foras Talúntais and ACOT, there will be many compulsory redundancies. I think that is an unfair way to treat this sector who have given a lifetime service to agriculture since 1908 when the county committees of agriculture were first established.
If this Government talk about accepting deflation and unemployment what are these figures all about? We have to address the fundamental issue of the provision of equitable financial resources which will meet the cost of essential economic and social services. The Labour Party amendment deals with that issue. I am sorry that the main speaker for the Fine Gael Party considered that this amendment was huffing and puffing and not really applying itself to the problem. Obviously my colleague, Senator Bulbulia, must have been qouting from this month's Economist which refers to Fine Gael's huffing and puffing over these figures. Perhaps she like other Members who spoke last night may have decided to be more socialist in outlook because the Labour Party are of the opinion that far from huffing and puffing we are addressing the problem in a constructive way which we as a small party in Government have always done. We have been consistent in our view and have always accepted that there are fundamental difficulties. The budget deficit was not started by the Labour Party but by a Fianna Fáil Government. This morning the Minister for Finance admitted that 1973 was the beginning of deflationary budgeting and deficit budgeting, and that in 1977 the Government of the day wiped out a whole range of income from the private sector and property owners in the interests of returning to power. That was the beginning of the failure in trying to balance the budget. I suggest, being consistent with the Labour Party's view, that there are people who do not pay their fair share into the coffers of the State which would enable us to give a service to the less well off and the underprivileged in our society. The Labour Party have a responsibility to the underprivileged but we are rarely compensated by the electorate for recognising that. But that does not remove the responsibility to point out to the Minister and to the Government and to anybody else who wants to support the Government that there are inherent risks in the drastic curtailment of public expenditure because the first to suffer will be the poor and the underprivileged. The Government blame the Fine Gael Party which had just left office, but Fine Gael honestly suggested to the electorate that things had to be done in a different way. This Government when in Opposition said they would not address the problem by cutbacks, there was another way, they would create buoyancy and growth in the economy. Moments after entering office the Taoiseach accepted the Fine Gael figures, which had been rejected by the electorate and implemented them. We gave the Government time to look at The Way Forward, the policy advocated by the party but they seem to have lost touch with it. Unfortunately the problems have not been addressed but become worse and many people are suffering. I know and am personally aware of it. I am not a scaremonger but when hospitals close, and beds are not available for sick people; when people are unable to be cared for in their homes; and there are no community welfare services; when public health nurses are precluded from visiting old people in their homes between now and Christmas, then you run the risk of neglecting the poor whom you do not want to have institutionalised. I agreed they should be cared for in the community in so far as possible, but budgeting at health board level is dictating policy, and we are heading for trouble.
Recently I was trying to get a hospital bed for a man in his late seventies, his wife is also in her late seventies, and both of them are extremely ill. In the opinion of the acute medical hospital he could be discharged because beds were scarce and no other geriatric bed was available. His unfortunate wife was seriously ill at home and was unable to look after him. He, a person of sound mind was admitted to a psychiatric hospital because no other bed was available in County Tipperary. We can huff and puff but those are the facts. I can give the Minister the names and address and the hospitals concerned. That happened only last week.
In our amendment we have deliberately not spelled out our abhorrence of the major cutback to local authorities because we are anxious to have an orderly debate. This House discussed and voted on the funding of local authorities last week. We felt it was inappropriate to spell out in our amendment something that was dealt with a week ago. We are aware, that the cutbacks outlined in the Estimates will face all local authority members, in the next four weeks and will cause a serious diminution of essential services at local authority level. We reject totally the Estimates as published and announced in this House by the Minister for the Environment Deputy Flynn. The massive reductions, can only lead either to a curtailment, a diminution of service or a major loss of jobs in the local authority area. We say that in the knowledge that no alternative system of funding has been outlined by the Minister. We are prepared to accept our responsibilities at local authority level but certainly we must have some guideline from the Minister as to how we should go forward.
The Minister Deputy MacSharry, in his introductory remarks today blamed the previous Government, blaming one another for past inactivity, overspending or otherwise is a national political pastime. While the Labour Party were in Government, we were accused by various Members of doing various things. We had to have regard for the overall consequences on the people we were elected to represent. If at any time we wanted to ease the curtailment of expenditure that had an implication at the social level, then we used whatever influence we had to do that. We were consistent, as Senator Brendan Ryan, has suggested. We always insisted that people should pay their fair share. We know that a whole range of people are relatively untouched by taxation and have devices and facilities available to them which eliminate some of their contribution to the national Exchequer. If the Minister accepts that a figure of £300 million to £600 million is outstanding in debts to the State, then we suggest it should be collected.
I am not in a position to decide whether the Minister figures are right in this area but we suggest that before he cuts back on public services he should make some effort to collect the moneys outstanding. The previous Government set in place a task force and a new category of sheriffs to collect money. We know that improved the intake into the coffers of the national Exchequer. We suggest that if the Government are really serious in applying themselves to providing the service, then their first obligation to the State and to the weaker sections is that sufficient money is available to provide this service. The Minister also mentioned the Labour Party amendment put down in the names of Senators Ferris, Jack Harte and Brian O'Shea. The Minister said the Labour Party amendment fails to:
... recognise that the action we are now taking to restore the public finances is absolutely necessary to protect the basic structure of the services we have built up and to ensure that we will be able to keep them financed in future years.
That is untrue. We suggest that because of the Minister's inability to provide sufficient funding and to collect the money due to him from sectors which have been proved to owe money, he is unable to maintain the structures that we gave a lifetime in political activity to build — community services, particularly hospitals, schools and local authority services. Once they are taken out it will be impossible to put them back in place again. If we do that because of financial rectitude, then we are letting down a whole generation who have given a lifetime of service to the community and have made major contributions by way of PRSI and PAYE. They have always paid for the services which are now being taken out, hospitals closing and schools not being provided simply because the Minister wants to balance the budget. The Minister in his speech said:
The 1988 Estimates show that the Government have succeeded in their main objective of finally arresting the upward spiral in public expenditure. We have reduced expenditure — in cash terms — for the first time in almost 30 years.
The Minister mentions the figures of the cuts I have mentioned already, £285 million in the non-capital and £200 million in the capital programme. The Minister is almost boastful of the fact that he has managed to achieve that instead of accepting his responsibility to ensure that he collected sufficient money so that these cutbacks would not take place. The Labour Party have also been constructive in that wherever there was waste we wanted to cut it out. We do not accept that essential services can be cut out at the point of delivery. This affects the older and the poorer people and those who usually cannot defend themselves.
I am concerned also that the Minister of Health announced two days ago that if patients are sent by their own or another doctor outside of their own area for attention for medical reasons they will now have to pay for that service in another hospital. I do not know what legislation permits the Minister to do that. He has also tinkered with the refund of drugs scheme.
The Minister for Social Welfare is extremely touchy at present because we mentioned the fact that there are changes taking place in the area of social welfare. We suggest there are changes. The Minister says the Government will maintain the levels of payments at their existing level in line with inflation. Of course he will but he is making it more difficult to qualify, because he is raising the qualification period from four to five years. The Minister is insisting that employers pay the first 13 weeks of pay-related disability benefit simply because if that happens it will be taxed and the Government in refunding it to the employer will retain the tax. The Government are, by sleight-of-hand, taxing pay-related benefit and disability benefit for the first 13 weeks.
We will be formally moving and seconding our amendment at the appropriate time. We want to give notice of the facts. We have had a change of Minister of State at the Department of Finance and Deputy Treacy is now in that position. The Minister's Department is not exempt; and will lose about 150 workers. I do not think the Minister welcomes that either. We certainly would not stand over it and we will defend his right to collect the money the State is owed.
Tuigim go bhfuil cúrsaí dian go maith sa tír faoi láthair agus go bhfuil an t-airgead an-ghann ach cuireann sé an-imní ormsa gur deineadh gearradh siar chomh mór sin i gcúrsaí fiabheatha, go háirithe os rud é gurb í seo an Bhliain Chomhshaoil. Molaim an tAire as ucht greim scórnaigh a fháil ar chúrsaí mar atá siad faoi láthair agus molaim freisin a mhisneach ó thaobh chuid den gearradh siar a rinne sé. Ag an am gcéanna, iarraim air gan an timpeallacht a thachtadh ar fad agus féachaint chuige go mbeidh dóthain airgid ag an Rannóg Fiabheatha, go bhfuil sé féin i gceannas air, chun a gcuid oibre a dhéanamh i gceart.
B'fhéidir go bhfuil dul amú orm agus nach bhfuil na figiúirí chomh dona agus a cheapaimse. Má tá, is cinnte go gcuir-fidh an tAire ar shlí an eolais mé. Tá súil agam go dtuigeann an tAire nach bhfuil i gceist agamsa anseo ach sláinte ár dtimpeallachta agus is ionann sin domsa ar chaoi ar bith agus náisiún sláintiúil idir thalamh agus daoine.
My song will sound a little out of tune with the general tone of both sides of the Seanad orchestra. The cuts in the Wildlife Vote 10 subhead (1) are given as 57 per cent. I understand that £650,000 of this was capital expenditure for the acquisition of land. I would like to ask the Minister if there is any money available for land acquisition in 1988? If we are to plan for the future and if we are to preserve those areas which are not alone of tremendous scientific importance but are also part of the landscape which is so typical of our country and which tourism demands, we must have a reasonable budget in order to protect those areas. If we wait for a better financial climate many of the habitats which the wildlife service have already surveyed will have been lost forever. If this happens who could blame future generations for regarding politicians as very short term animals indeed.
Our boglands have been very much in the news in recent months because people are beginning to realise what we stand to lose by destroying these important habitats. I am particularly interested to know if the bog survey which has turned up so much useful information on our disappearing boglands will be continued. It would be impossible to plan an acquisition programme if we do not have this survey. We are extremely lucky that the people of Holland set us a generous example recently by buying some areas of peat-lands that we were in danger of losing but it is very unlikely that either Holland or any other country will make us a present of any more of these habitats or any other habitats.
Trying to sell the environment message when hospitals are being closed down is a very difficult task and it might seem quite unreasonable to some people. However, with so much unemployment and with the amount of time people have for recreation as well as the demand by tourists for a clean, unspoiled environment the countryside has recently taken on a new importance. It is well worth whatever investment we can put into it.
First, I congratulate Senator de Buitléir on what I believe is his maiden speech in the House. I suggest that it is important that people with such expertise and commitment should be recognised and represented in the Oireachtas.
In seconding amendment No. 2 to the motion on the Order Paper, I make the point that Fine Gael are not just shadow boxing. We are making a genuine effort to contribute our experience and capacity to ensure that this Government meet the very necessary deadlines in savings with the minimum damage to the structures in the country. This Government have applied a very blunt axe to expenditure in the Estimates and no allowances whatever have been made. The Government saw only cold clinical figures. No discretion was used on how the cuts or the total abolition of services would affect the people and communities throughout the country.
In my contribution I will look at how we arrived at where we are and discuss what should be done in the areas in which I have responsibility. In planning for this debate I was reminded that my first speech in the Oireachtas was made during an Estimates debate also. I recall at that time 1981, underlining the need for restraint in public expenditure and expressing the hope and belief that all Members of that House would accept with honesty and openness the dire straits of the country. Crippled with unemployment as we then were, and we now are, high taxation, high budget deficit, the Coalition Government of that time had a difficult role and were sincerely committed to bringing the economy around to viability, but it was a Government, I am afraid, with a low political blood count and proved to be vulnerable and, as we saw, was defeated on its first budget. What happened in the intervening time is history. A Fianna Fáil Government, like the previous Coalition Government only limped along and fell within the year.
If we look back to the autumn of 1981 which seems a long time ago little has changed except that our debts, unemployment and other problems have increased. We have had six years of further growth in borrowing, interest liabilities, unemployment, and taxation together with the added heartbreak for families which was only just beginning then if it existed as a social problem at all, the personal trauma of emigration of our young people. We are a sad and pitiful country. We have for far too long spent more that we own or more that we can produce by our own efforts. We have a hypocritical approach to efficiency, hard work, punctuality and service. Then when things go wrong, as they have, we tend to prefer to blame soneone else and to look for a scapegoat.
This is the time for all to see the real conditions as they prevail rather than as we would like them to be.
Along the way it is easy to recall the milestones of deterioration in the economy. We all expected and in too many instances took great whopping pay increases in the seventies. The EC was a new entity to be exploited to the full. If times were good in the seventies I suggest they were not so good that we could have afforded to reward ourselves as we did with pay increases in the order of 20 per cent or higher. In addition we had the Fianna Fáil disaster election of 1977 with the package of promises which plunged us inexorably into such an economic morass from which the country has never recovered. That Fianna Fáil Government from 1977-81 with its extraordinary majority in the Dáil was probably the worst administration in recent decades and stands as a testimony to the damage that a majority Government of that size can do. I am not going to persist tediously with what happened in 1977 but only in the context of getting us to honestly accept our obligations to cope with the problems.
We are a race generally given to oppose too much, to squabble and disagree too much and to be suspicious of one another. Never was this more exemplified than in the last Dáil. The Fianna Fáil Party who are now in Government are entrusted with the awesome job of reducing public expenditure, reducing unemployment, reducing emigration and taxation, worked very hard in Opposition to create the gigantic difficulties they, and all of us, now face. What was their message during that Dáil? I am afraid it was "spend, expand" and, indeed, they taunted with slogans of Thatcherism and monetarism when any of the Coalition Ministers, the former Taoiseach, Deputy Garret FitzGerald, or Deputies John Bruton or Alan Dukes suggested adhering to financial targets. They were the centre of easy political answers, the mandarins of magic tricks for those individuals or institutions who wanted to be fooled.
There will always be people who want to be fooled and not have to accept the reality of the economic situation. Fianna Fáil were calling a tune of free and plenty. People asked "what were those tedious Fine Gael and Labour people going on about? We can have lower taxes, better health services". Remember the assaults that were made on the then Minister for Health, Deputy Barry Desmond, both inside and outside the House. At the same time Fianna Fáil were saying that we could have more jobs, that we did not need the cutbacks and that tax could be reduced. They wanted to have everything altogether without indicating how this could be done. No Government could work in that climate. Fianna Fáil know they played a shameful role in Opposition in those years, 1983-1987. Nothing excuses their conduct. I know that in time they will pay for it.
This country is fortunate now to be seeing a degree of political maturity from the main Opposition party that few would have believed possible a few short years ago. It is not weakness; it is not capitulation; it is a constructive and creative Opposition role by Fine Gael because we put our country first and know our supporters. A wider constituency than our supporters in the past will understand and co-operate. There is no copper-fastened guarantee given. I quote from the speech made by our Leader, Deputy Alan Dukes, in Tallaght:
This approach to politics is the right one. It is in marked contrast to the approach adopted by Oppositions in the past, particularly in the last five years. I am taking this approach because it is constructive. I am taking it because I believe that it is the interests of the Irish people. I am taking this approach because I believe that it is the kind of politics which we need and which is relevant to the condition of the Irish people today.
I have been struck by the extraordinarily destructive effect of old style Opposition over the last five years. An Opposition which knows very well the depth of our problems but which encourages every interest group to oppose the Government is betraying its political role. An Opposition which acts in a way that makes every step forward more painful than it needs to be is perverting its function. An Opposition which tries, in our times, to say that corrective action is unnecessary is betraying the Irish people.
Those words of Deputy Alan Dukes ring very true today when we see the fruits destructive Opposition in the last Dáil have brought.
Deputy Alan Dukes, is a young man of our time. He is a man of intellect, compassion and talent. He has no axe to grind with any person or personality in Irish politics. His lead is a courageous and challenging one. Not for him the "easy-nomics" of Fianna Fáil; not for him a betrayal of the principled politics of Dr. Garret FitzGerald and his Government.
I believe that the new dimension Alan Dukes has brought to this Dáil will set a pattern for others to follow, even for those outside these Houses. No other group has been so consistent in their policies and pronouncements as has Fine Gael. We went to the country putting forward the only economic agenda that could save this nation, although we knew we would possibly pay a high price at the polls for our honesty. What did others do? As I said, Fianna Fáil masqueraded once more as a party that could bring back the good old times which the Coalition had ruined. The Labour Party went out of the last Dáil, and the last Cabinet, with the deficit figures and the runaway borrowing marked indelibly on their consciousness and they proclaimed to the world that none of the hardship was really necessary and that they could not preside over cuts of such magnitude — more mandarins of magical economics.
What about the other party, the wonder party, the PDs? They committed the gravest disservice. With knowledge aforethought, they told the electorate who, naturally, wanted some knight in shining armour to save them from the tough reality and the tough road that seemed to be indicated ahead, that they would give them everything. They went to the electorate with a "hello-money" manifesto which would bring income tax down to 25 per cent and abolish PRSI. Can anyone really blame the electorate for falling in the way they did for the message that they exploited to such an extent? Many say that it was the innocence or greed of people that made them fall for these promises. I cannot blame them for falling for it. I blame the people who put forward that manifesto and knew in their hearts that it could not possibly be delivered.
The same party have shown themselves to be a narrow, right wing party disinterested entirely in the disadvantaged and socially marginalised. They have demonstrated by their voting patterns that they stand for anything as long as Fianna Fáil are against it and they stand against anything as long as Fianna Fáil are for it. This is a rather sad and pathetic way to represent themselves in the Oireachtas. While we in Fine Gael have accepted the need for substantial cutbacks, and will not oppose for the sake of opposition, Fianna Fáil are to be condemned for their reckless trail of destruction since coming into office. If they purposely set out to do so, no one could have devised such a cumbersome and blundering approach. It seems to me that Ministers handed over glibly to the Civil Service and willy-nilly agreed to whatever was put before them. They slashed first and looked at the reactions afterwards. Otherwise how could they have come up with some of the things they have done, such as closing hospitals and hospital beds, ending schemes such as maternity services in so many hospitals, and thrown old, ill and recuperating people back into communities, which at the best of times were ill-equipped to deal with the ill or the handicapped?
I am afraid in this country sufficient attention was not given to finance/to building up community services. People who are ill, handicapped or socially disadvantaged are being thrown back to the community which is already underdeveloped in its caring services but added to that is coping with local or regional cutbacks from an inadequate budget. How could this Government have done the type of things they had done, such as abolishing the HEB which has for so long been involved in preventative health care and education about very necessary measures such as immunisation. They have abolished the NSSB about which my colleague, Senator Bulbulia spoke earlier. It is absolutely inexcusable. It is entirely beyond comprehension how this board could have been abolished. In this context I would like to read to the House a report in The Irish Times today of a father who went to buy food for his family with a forged cheque. This is the kind of thing that is happening. This is where, at community level, the poor are being hit. They do not know where to go and cannot get help. It is very sad to read a report like this:
A 33-year old unemployed man who tried to get food for six hungry children with a forged cheque, was given £100 from the poor box in the Dublin District Court yesterday.
Philip Griffiths, of Mount Olive Road, Kilbarrack, pleaded guilty to passing the forged cheque for £65 at Crazy Prices, Edenmore on 23 June last.
Detective Garda John Frewen said that when arrested the defendant explained that there was no food in the house that Monday morning and his kids were starving.
Detective Garda Frewen agreed with defence solicitor, Mr. Fergus Fahey, that the items obtained were all foodstuffs which included bread and meat. He also acknowledged that the mother of the six children — who are aged between seven and 14 years — was recovering from an addiction to tablets and had had a nervous breakdown. She was now receiving treatment with the Trans Release group, the court was told.
Mr. Fahey told the court that his client was a diabetic who had not received disability benefit although his claim had been cleared by the health board last May. He was at present in receipt of £93 a week in assistance.
District Justice Desmond Windle commented that the defendant must have known he would be caught as he was easily recognisable and had gone to his local shopping centre. "It is a dreadful thing to be put in that position and be forced into such a silly crime".
After hearing that the defendant had no previous convictions, District Justice Windle imposed the Probation Act and ordered that Mr. Griffiths be paid £100 from the poor box to tide him over until his disability benefit was granted.
That kind of report is very sad. It is a great indictment of us that such a thing should happen in our courts. The courts and the poor box are having to respond to the needs of obviously a very sad family in hard times. The structures of our State have somehow let this family slip through. This is an indication of what is going to happen in situations of desperation.
The abolishing of these very important boards, such as the NSSB which gives information, is supportive and reaches down into the community, is to be condemned. It took a long time to develop this board and to develop the community information centres. They cannot continue to survive and do the excellent work they have been doing if the proposals that are now being put forward for them are carried through. I firmly condemn the Government on this measure. The Government could have taken a different route while adopting the overall strategy.
Who will take up the slack for the cutbacks? It will be women such as mothers, sisters, daughters and unpaid carers of the old and the sick. It will be taken up by an army of voluntary workers such as those in the St. Vincent de Paul Society and those providing Meals on Wheels. This is consistent again with the image Fianna Fáil have of women and their place in society. They are a reserve workforce to be responsible for the community, the aged and family care. This is a view that has been presented to me by a number of women's organisations. It is very sad that at the end of such a long period of building up of structures in the community — which could have been a basis for meaningful community services — this Government have in one fell swoop, disposed of these vital and important structures.
I welcome the general thrust of the Government's economic policy. At long last there is a feeling that we have a Government who have admitted the mistakes of the past. This is implicit in their determined attack on public expenditure. The Minister made that point in his opening remarks this morning. In admitting those mistakes, this determined attack on public expenditure is laying the foundations for a more prosperous future. Naturally, critics of Government policy will point to the cuts in the current Estimates and cry "foul". They would not be in a Opposition if they did not do so.
I look to those critics and ask: what has this country to show for the efforts of successive Administrations, who instead of attempting to grapple with the underlying problems in the medium to long term, always went for the short option. When, as happened with the last Administration, the majority party attempted to put order into the public finances — and I would acknowledge their efforts in that regard — there was a perception in the public mind that that Government were constantly undermined by their minority partners who, it seems to me without being politically contentious, would find their policies much more acceptable to the majority of the Irish people if they were to come down from their ideological cloud cuckooland and lived in the real world for a while.
I know there have been many attacks on the private sector, particularly from Members of this House and the other House. I do not deny that the private sector has failed in many cases to produce the type of enterprise which results in long term, guaranteed employment. When contrasted with the success of some of our semi-State bodies, many of the Government subsidies to the private sector are inhibiting some Irish companies from getting off their rear and propelling their goods and services into the international market place. Again this point was touched on by the Minister.
Business needs a stimulus. In most modern democracies that stimulus is usually provided by the Government of the day. Witness the chaos of the world's Stock Markets in recent weeks with billions of pounds being wiped off the value of companies and all because the American economy has gone into a severe deficit. In other words, America is spending more that it earns despite the perception that its underlying economy is sound, resulting in many thousands of our young people emigrating there. Who will Wall Street turn to in their hour of need? They will turn to the White House.
As in 1929, the world's mightiest industrialists are waiting for some sign that the American Government will take firm action and reduce their deficit.
To students of Irish politics all that sounds very familiar. For the past ten years we have been spending more than we earn. As the Minister pointed out earlier, our national debt has doubled in the past four years so that today every household owes £28,000. This state of affairs just cannot go on. If this Government did not indulge in a root and branch reform of public expenditure our very structures — health, education and social welfare — would have collapsed under the weight of the accumulated profligacy at Government level since 1972-73. It should be a salutory reminder to those critics of the Government's present economic policy that if spending on the very areas on which they have been expressing concern such as health, education, environment and social welfare had continued at the rate that it had been over the past decade, all of these much cherished areas of our society would have been wiped out, and the situation would be much worse in the years to come than it has been or as is suggested that it will be as a result of these Estimates.
Firm action had to be taken on the Irish economy. Anybody with the future of this country in mind has been pleading for something to be done. The day of reckoning has now arrived. Since Fianna Fáil took office a glimmer of hope is now on the horizon. There is a glimmer of hope for those who have lost their jobs through redundancy because there was no confidence in Ireland Incorporated. There is a glimmer of hope for our graduates educated, according to the very same Wall Street Journal, by a superb Irish education system. Those same graduates, in a recent survey, are opting to stay in Ireland and are finding the jobs commensurate with their skills.
There is also a glimmer of hope for our school population and those now living and working in London and the United States. This has been done before, albeit for a short time. The Fianna Fáil Government of the sixties created that climate of confidence necessary to entice back our emigrants in the seventies. I was one of those who came back. The economic momentum created and maintained through the sixties and early seventies was, I am sad to say, dissipated by incompetent Governments run by incompetent politicians. As a new Member of this House and like many of my generation who stood back over the last ten to 15 years and watched successive politicians looking after the affairs of this country in an incompetent way, I make no apologies for saying that. That is why we are in the state we are in today.
The engine room of the Irish economy, however, is up and running again, this time on new power. This time once the head of steam has been built up there will be no going back. Indeed, there cannot be any going back. The indicators are positive. Interest rates are down significantly and look like falling some more. Exports are at an all-time high. Inflation is at manageable proportions and a start has been made on reducing that appalling budget deficit. Who has any right to cry "halt" to a nation at last on the move? What sectional interest, be it political or otherwise, has a right to say, "my case and my case only has a greater priority than the central one of putting this nation back on its feet?"
While we maintain such a huge deficit Ireland will never see a prosperous day. Of course, any reduction in public expenditure is painful. What politician likes to be publicly pilloried for asking the public to swallow a bitter economic pill? However, is Charles Haughey, the Taoiseach and the man who introduced some of the most innovative social welfare legislation in the history of this State, a private political masochist who delights in such policies? Indeed, there are many who have criticised him for being profligate with the nation's finances in the past, but the more intelligent of those critics recognise and applaud the new realism — indeed, some of them in private — while those who have always wished to make political capital still refuse to accept that it is a brand new ball game. Yes, the rules have changed. I would hope, in common with many other people, that the end result will be a victorious Ireland.
However, Ireland Incorprorated cannot act in isolation. We are responsive to the trials and travails of the world economy. In this context it is revealing to learn that due to computerised technology we can no longer refer to the European, or American or Far Eastern markets. It is now a global market operating 20 out of 24 hours a day. Although as a trading nation world markets must be stable, only 8 per cent of our exports are to America, 40 per cent of our foreign borrowings are in dollars and, of course, we buy oil in dollars. So as the old saving goes, there is a silver lining in every dark cloud. If the present trend continues, as seems likely, the short term benefits to this country will be substantial. It is in the long term that we must think and in order to increase prosperity for our people the American economy must grow.
However, things change and all eyes are now on Germany and Japan. As full members of the EC during its most exciting period leading up to the completion of the internal market in 1992, Ireland must be economically healthy enough to grasp the challenges presented by the concept of a full, free internal market of 320 million people, the largest in the free world. Towards this end the continuing refusal of Great Britain to enter the European Monetary System is a cause for concern. While sterling remains outside the discipline of a fixed European Monetary System the consequences for Irish manufacturers and the Irish economy in general remains fragile. Indeed, Ireland alone among the other 11 member nations suffers the greatest from the volatility of sterling, a point acknowledged by the Commission President as late as yesterday.
I would like to refer to a number of specifics included in the Estimates that are of particular interest to me. As a former emigrant who maintains links with the Irish in Britain, I wish to acknowledge the efforts of the Minister for Labour, Deputy Bertie Ahern, in ensuring that the annual grant to the Dione Committee on Welfare Services abroad has been maintained at £250,000, the same level as in 1987 which in turn was an increase of £100,000 over 1986. In the present economic climate that is an astonishing and applauded achievement.
Not wishing to make a political point on this important issue of emigrant welfare, this debate gives me a first opportunity to pay tribute to the former Minister for Labour, Deputy Ruairí Quinn, whose commitments to the welfare of our emigrants in Britain should be acknowledged and I am pleased to do so. In this context of emigrant welfare, might I suggest to the Minister for Social Welfare that he give favourable consideration to the proposals soon to be put before the EC Council of Ministers which will give free travel throughout the community to old age pensioners? The Irish Pensioners' Action Group in London have been lobbying unsuccessfully for free bus travel in Ireland for Irish old age pensioners wishing to visit here on vacation. It is a laudable aspiration and despite the difficulties pointed out by the Minister that because of our commitment within the EC if he were to give such a concession to Irish old age pensioners living in Britain it would have to be extended to all old age pensioners within the Community, the answer given in the European Parliament yesterday on this point by the Commission executive committee sounds promising. I hope that when the issue comes up the Minister will take it on board. Indeed, the initiative taken by the executive committee of the EC Commission in this regard is to be welcomed.
I would also like to echo the sentiments, if not the remarks of my colleague, Senator Ferris, on the question of overseas aid. Unlike Senator Ferris, I was present at yesterday's meeting organised by MEP, Niall Andrews. Indeed, Bishop Casey and Ciaran McKeown of Trocaire and I had plenty of opportunities to discuss overseas aid, as I was the only Member of the Oireachtas present. In fairness to my Dáil colleagues they were present in the other House on a series of divisions at the time of the meeting, which was perfectly understood by the people present. I am disappointed and, indeed, dismayed that Ireland's official contribution to improving the lot of our less well off brethern in the Third World has not been increased. Who in the world will dare criticise the generosity of the Irish people as a whole which per capita has exceeded that of the richer countries in relation to Band Aid and other international appeals in recent years? I do not doubt the care and the compassion of our Government in relation to overseas aid but I have to accept that our problems are so severe that the reduction in this aid is inevitable but, I would hope, short term.
I would like to turn now to the question of the library service. As the Seanad representative of the library association in this House I am naturally concerned about the trend in the library service over the last number of years. The reduction in finance to this essential service is a matter of concern and various submissions have been made by the library interests to the Minister for the Environment and to successive Ministers for the Environment. There is a report on the library service on the Minister's desk. I would hope that he would give it sympathetic consideration, particularly in the light of the increasing problem of adult literacy. Figures bandied around suggest that over 400,000 of our people have not got a basic literacy standard. This is an appalling figure in a developing country, a country which prides itself and which has been acknowledged as having a superb education system. If the library service is to be structured in such a way as to inhibit and discourage from availing of its services, by increased charges or by other prohibitive charges the people for whom it has been set up, then the future looks bleak indeed. I would hope that the Minister, despite the severe economic difficulties that are presented to him and his Government, will not marginalise the library service or push it to one side. It is, and should be, a central part of the whole educational and social structure of this country. It has served this country well. The sentiments being expressed by librarians nationally are such that the warning bells are being sounded that any further deterioration in this service is going to create enormous difficulties in the future.
Finally, I would like to refer to the Irish film board and its demise. This has generated a great deal of comment over the last number of months. I was one of the people who complimented the Government earlier this year on their initiatives under the Finance Act. However, the debate has gone on unabated with a great deal of charge and counter-charge being levelled at the Government and by critics of the decision taken earlier this year to wind up the Irish film board. It is timely in this debate to remind the House and the public of comments made by the Minister of State at the Department of Foreign Affairs, Deputy Sean Calleary, in replying to the Adjournment Debate on the Irish film board in the Seanad on 14 July at column 2340 where he said:
Within the past two weeks the board members have advised the Department of Taoiseach, the parent Department of An Bord Scannán na hÉireann that they
"wholeheartedly welcome the important initiative taken by the Government in the matter of film finance that will result hopefully in the securing of financial investment from the Irish private sector".
The Minister of State Deputy Calleary went on to say at column 2341 that:
While the board expressed some regret at the decision to wind down Bord Scannán na hÉireann the whole tenor of correspondence from the board has been positive and forward looking as to the appropriate role for the State in seeking to develop the Irish film industry. That role is to enable the development of scripts to the point where they can become the basis for a production and that takes care of one of the major planks and arguments that have been used
Deputy Calleary went on to say that he could:
reassure young film makers that they will still be able to get any available assistance.
Deputy Calleary pointed out:
that the Arts Council promote activities relating to film script development. The Council have expended close on £1 million in the period 1981-87 in film-related projects. It will be facilitated and encouraged to continue that work.
He then went on to make reference to section 35 of the Finance Act and said that it would be of tremendous benefit to the film industry. He wound up by saying at column 2342:
The House can draw its own conclusions as to why the board failed to quantify their achievements when asked to do so. As long ago as 10 March 1982 the board's chairman indicated that Bord Scannán na hÉireann did not see themselves as being in the hand out business.
Deputy Calleary also said that public moneys had been spent on loss making ventures and that the fact that only £67,400 had so far been repaid to the board of the approximate £2 million advanced as loans not grants, meant that the board had a policy of writing off each year 50 per cent of the token value of their loans.
The final point in relation to this film board controversy was made by Deputy Calleary when he said:
that the Arts Act, 1973, gave power to the Arts Council to promote the film industry. The Council have done this expending, as I said, approximately £1 million ... Section 35 of the Finance Act permits corporations — that was the important thing — to invest up to £100,000 each year in an Irish film production company or companies. Previously, only individuals received tax relief for such investment,
and he drew attention to a little publicised fact that in June/July RTE held a seminar for Irish freelance film and TV producers and offered them an opportunity to produce £1.8 million worth of programming in the coming year. The Deputy, quite correctly pointed to the fact that very little media comment had been made on that. I draw these facts to the attention of the House in this debate because there has been a great deal of misinformation in relation to the motives and to the consequences of the decision to wind up the Irish film board. As a film buff, like many of my colleagues, I am concerned that the future of the film industry would be secured. Many of us have asked why can Ireland not produce films of an Irish cultural identity. Despite the winding up of the film board I have every faith and confidence in the Taoiseach's Department which will ensure that the future of the film industry here is in sound hands, like the economy in general. I welcome the Estimates.
The 1988 Estimates for public services and the 1988 public capital programme highlight the very fundamental fact that instead of being committed to national recovery this Fianna Fáil administration in Government are indeed committed to the development and encouragement of an uncaring society. These Estimates highlight the fact that what Fianna Fáil says in Opposition places no obligation whatsoever on what that party do in Government. For, no political party in the history of Irish politics ever promised so much as Fianna Fáil in Opposition, and no political party ever failed so dismally to honour these promises as Fianna Fáil in Government. What was wrong in 1985 and 1986 is right in 1987 and what was hearsay in 1985 and 1986 is in fact dogma in 1987.
This Government's conversion has been nothing short of dramatic, but the zeal of the convert, of course, can be a very dangerous thing and so it is with this Administration. A perusal of these Estimates clearly shows that there is no vestige of hope or incentive, or any suggestion of national recovery in the offing. The guts of £100 million is to be taken from local authorities in 1988 between the current and the capital output of the local authority system. The rate support grant which is absolutely essential for the provision of local authority services will be reduced by £31 million or 11 per cent plus the 2 to 3 per cent which will be necessary to continue in real terms the scale of this year's spending in local authority services.
Today local government has no champion at the Cabinet table and the performance of the present Minister for the Environment, Deputy Pádraic Flynn has been a dismal failure. Behaving in a role and in a manner appropriate to a liquidator, he has run down his Department in the past few months and allowed it to be almost decimated. The overall capital programme has been reduced by 22 per cent from 1988 and we are witnessing the demise of the construction industry and the prospect of a public stone not being put upon a public stone in 1988. The national road building programme is in tatters. The Minister for the Environment now proposes to replace the three year programme that expires at the end of 1987 with a 20 year programme. This surely, is aspirational planning, and he might as well have produced a 100 year programme. This Minister bears a very heavy burden of guilt for not defending the interests of a public capital programme and the interests of the economic and social infrastructure of this country.
We also have the vicious and unprecedented attack on the primary school sector, with a staggering decrease of £43 million in the allocation for primary schools, a massive disimprovement in the pupil-teacher ratio and the laying off of 2,500 primary school teachers over the next 12 months. The Minister for Education said in the Dáil on 8 April 1987 that she proposed to give a particular priority to primary education and that the primary focus of any education authority or any education Department must be on the first level. The same Minister said on the same day, in the Dáil: "I am not a woman of empty promises". This is the lady who for 4½ years as education spokes-person for Fianna Fáil opposed all and every measure, whether reasonable or not, taken by Fine Gael Ministers to improve the efficiency and the logic of the educational sector. Never was there such a betrayal of trust and never was there such a cynical misuse of democracy as the performance of Deputy Mrs. O'Rourke before and after the General Election of February 1977.
In addition to the monumental and gigantic deductions in areas such as education, health and the environment, we have the cynical cutbacks in relation to small independent organisations and institutions, which have provided vital services for the public, organisations such as An Foras Forbartha, the National Social Service Board and the Office of the Ombudsman. One of the undoubted successes in recent years has been the operation of the Office of the Ombudsman, which has been most effective in redressing wrongs, in pointing up maladministration and in seeking to remedy the very genuine grievances of very many members of the general public. It is clear that Fianna Fáil, and, indeed, some high people in the general administration, never wanted the Office of Ombudsman, for in one fell swoop they have reduced by 16 per cent, from £576,000 to £482,000, the allocation to provide the salaries for the investigators of the Ombudsman's Office. Then, of course, there is the further massive reduction of £72 million in the allocation for vital health services.
This comes from a party whose senior spokesman over the past number of years castigated and berated the previous Minister for Health in respect of essential pruning and trimming of health expenditure. On 2 June 1983 Deputy O'Hanlon, speaking in the Dáil had this to say:
Our responsibility here is to ensure we provide proper health services. Because of their strict monetarism, this Government are not in a position to do that and it is not enough to hide under the umbrella of what the WHO prophesy may happen by the year 2000.
On 1 March 1984, the present Minister for Health, Deputy O'Hanlon, told the Dáil:
Our concern is to ensure that an adequate health service will be provided. In view of the massive cutbacks for which this Minister is responsible this is not possible in 1984.
On 19 November 1984, another member of the present Government, Deputy Woods, had this to say:
I believe this is a tight-fisted, Scrooge-like, heartless Coalition who will stop at nothing to meet the requirements of the economists who are quite disinterested in the realities on the ground.
That was from Deputy Michael Woods, the present Minister for Social Welfare. On 4 December 1986, the present Minister for Health, Deputy O'Hanlon, said:
Has anybody looked at the cost, first of all, in human terms, to the patient of those long delays of, say, 13 weeks waiting for a hospital appointment...
Then we had the Fianna Fáil election promises, vividly depicted on election posters and material all over this country entitled, "There is a Better Way". All these promises now ring hollow as our health services, education services and our local authority services are reduced to a state of crisis and shambles. For all these reasons I condemn the preformance of this Administration and the various Ministers I have named and I support the reasonable amendment tabled in the name of the Fine Gael Party.
From the very beginning there has been a slight air of unreality about the debate today. Fine Gael do not know exactly where they are going in terms of what is happening in the country, and Labour definitely do not know where they are going.
The Independents do.
I did not refer to the Independents yet. Yesterday I just happened to read The Economist intelligence unit's report on the Irish economy for the second half of the year, and a phrase that was used by Senator Bulbulia in her opening remarks, that the Labour motion was full of huff and puff and no substance, was used there. Senator Bulbulia said that the Fine Gael amendment was the only amendment that should be considered. The Economist's review said that during his term of office, Dr. Garret FitzGerald talked much of fiscal rectitude but achieved little and that with a smaller Coalition Labour partner opposing any serious cuts “Fine Gael huffed and puffed but failed to blow the deficit down”. This is part of the debate that is going on here today. The Coalition Government in their term of office spoke about the problems created by the deficit but they never did anything about it. Since this Government came to power they have performed exceptionally well against a tide in the international scene, which has been against it.
The Opposition have problems because for the first time in many years there is a Government addressing the problems of today by redressing the problems of the past. If the Government did not address the very serious problems we have had over the past number of years, there would not be a future for ourselves or our children.
Much has been said about spending cuts in the public service and there is a lot of ill-founded comment on the effects these cuts will have, particularly in the areas of health and social welfare. It is being suggested that because of these cutbacks people will die and the underprivileged will become more underprivileged. That is not a fact.
Recently at the PD Ard Fheis a doctor from Kilkenny had the audacity to criticise the South Eastern Health Board saying that, because of the cutbacks a patient of his had lost his leg. He said that because gangrene had set in this man lost his leg because he could not get to hospital in time. The man was a patient of the doctor who made the statement for over 18 months previously. He had been referred to the Kilkenny County Hospital in March 1986 and had been referred to a hospital in Dublin. The patient was not heard of by the South Eastern Health Board until the doctor sought his admission, suggesting that it was urgent but that it was not of a dire necessity. The patient was admitted to the hospital six days later in a deplorable condition. It was quite obvious the doctor did not have the patient's good at heart. The patient was in a very bad physical condition and he had to have his leg amputated, but it had to do with neglect which had nothing to do with the South Eastern Health Board or with cutbacks.
If I might intervene, I am not aware of the details of this case, but as a professional person it seems remarkable that the Leader of the House could make such clearly professionally damaging remarks in a forum in which the doctor concerned has no redress. I would like a ruling on this matter.
The doctor made the statements on television and repeated them on radio. The remarks he made are patently wrong and because we are speaking about the cutbacks and their effects they have to be refuted.
What I am referring to is the fact that Senator Lanigan said the doctor had no concern for his patient. He is not in a position to know whether or not the doctor had concern for his patient.
I do not want to get into an argument on this but, if he had more concern for his patient the patient would not have been in the condition he was in when he got to hospital. A number of statements have been made by people who want to make capital out of the fact that there have to be cutbacks in public spending. Those of us who are in business have had to face these cutbacks for the pat number of years. We have had to face them since 1980. Harsh decisions have had to be made by small companies. Spending has had to be cut. Unfortunately, people have had to be let off work. It seemed to many people in the private sector that people in the public sector were being cushioned, that there was no attempt to cut back spending in the public scene, whereas every small company had had to face up to these difficulties for a number of years. It is difficult for an employer to lay off people.
It is difficult to have to say to somebody that there is no work for them. It is difficult for people who have been in business for a long number of years to have to suffer the problems associated with the downturn in the economy. People have ended up in psychiatric hospitals because of their worries about their business. People have ended up in psychiatric hospitals because they have lost their business. People have suffered and are in psychiatric wards because they lost their jobs. The public sector could not avoid becoming involved in cutbacks, any more than the private sector. It has been said over and over again, that there would be no future for this country because of the mounting burden of debt. The Minister in his speech this morning said that every household had a debt of over £28,000. That is a frightening figure and it is more than the average mortgage. Something had to be done about that. I am glad the Government are facing up to the challenge.
The Taoiseach said that, in arriving at the proposals which were made, every option which would create the atmosphere for change had to be considered. A lot of comment has been made on the elimination of certain programmes. Everybody says that the cutbacks are ad hoc cutbacks and that there is no planning behind them. Nevertheless, if one looks at the overall situation it is obvious that there was total duplication in many areas. Schemes being run by various Departments only benefited the people who were working in these Departments. The money allocated was spent on administration and duplication. That was true of many schemes.
The Taoiseach said that a radical approach should be adopted and that no expenditure should be regarded as sacrosanct and immune to elimination or reduction, and that we do not want a series of justifications of the status quo or special pleadings. Indeed, in the past, it was acceding to special pleadings that got us into some of the difficulties, when the sectional interests overrode the common good. I do not suggest that in the past we in Fianna Fáil did not fall into this trap but the buck has now stopped and special pleadings are not going to be allowed. Public finances must be and are being brought under control.
The Exchequer returns for this year are good. This year, for the first time in many years, the Government will achieve their budgetary targets. The attaining of the budgetary targets will not be without pain but it is better to have the pain in the head at this stage rather than have pains all over the body in the future. The targets are tough and will have to be met. Redundancies in the public service are unpalatable but they are inevitable. If some sectors of the public service had been in private business they would have been closed down years ago. In the public service redundancy package, there are redundancy terms which are, by private sector standards, very good. That does not mean they can compete with the Waterford Glass redundancy package. It would not be expected that the public service redundancy package could achieve what has been achieved in the Waterford Glass redundancy package which is, possibly, a short term package, because apparently no attempt was made by Waterford Glass to invest in different industries or to find out if they could become successful in industries other than high class market in which they have been involved.
The past few days have seen dramatic falls in the Stock Markets around the world. Ireland, like many other countries, saw the effect of this and millions of pounds have been written off the value of shares. This is not a bad thing from the industrial point of view, because many of the excess profits made in the Stock Market over the past couple of years had nothing to do with the business being done by the companies in which investments were made. They had to do with the greed of a small number of individuals. The legislation which was brought in recently to establish the financial services centre in Dublin represents an imaginative and welcome advance. There is no doubt that irrespective of the slight hiccup, in one sense, or in another sense the major hiccup if you are involved in the market, that that financial services centre will be a success. I am delighted that the proposal to go ahead with the building was given effect to yesterday and that it is an Irish-backed consortium who have got the contract to build the financial service centre.
I know that in certain areas in Dublin there are fears that the Dockland site will become a yuppie one. The Government have given as many guarantees that as many people as possible from the area in which the centre is based will be employed there. It is obvious that it is an area of much deprivation so whatever happens in the area cannot be anything but good. However, not everybody who lives adjacent to that area will be able to get employment. Nevertheless, the fact that it is going into the area will give an economic boost to the area and hopefully the shocking statistics of unemployment and deprivation in that area will disappear over the next couple of years.
The Estimates show that there are to be major cutbacks and that these cutbacks are going to be on both the capital and non-capital side. There is no doubt that much heat has been generated about cutbacks in the educational sphere, particularly on the capital side. There is no country in the world, taking the demographic situation we are getting into, that could sustain the continuous building of schools in areas in which the population was dropping. In a very short time we would find ourselves in a situation where we would have more schools than pupils. The growth spiral in this country in population terms has decreased and within the next number of years there is to be a dramatic fall in the number of children who will be available for schools. This does not mean that the Government are avoiding or evading their responsibilities to children.
This week the Kilkenny People ran an article which suggested that vocational schools in Kilkenny were going to close because of cutbacks. In Kilkenny Vocational School, which is a school based on a pupil population of approximately 450, the number of children at present is approximately 289. It is obvious that there were too many teachers in that school and that they had to be deployed throughout the county. This is going to create problems for some of the teachers but nevertheless it has nothing to do with education cuts, it has to do with the fact that there are not enough pupils in the school to sustain the number of teachers who are there.
An indication that the economy is begining to take off is that in the first six months of this year, for the first time in a long time, there was an 8 per cent increase in the value of capital goods, machinery and equipment imported. At the national ploughing championships in Tullamore this year, there were indications that, for the first time in many years, farmers are beginning again to invest in equipment. The distribution of equipment for farmers was an area which provided many jobs. That does not mean that the situation is in any way buoyant within that industry. Indeed it is sad to think that in 1987 the same number of mechanical vehicles have been imported for agricultural use as were imported in 1947. However, because of the actions of the Government there are signs of growth and this means that confidence is being restored.
There is no doubt that the actions taken by the Government are the correct ones. They are not palatable to me, to the Government or to anybody in the short term but if they were not taken there would be no long term prospects for this country and what we would see is a dormitory for other countries. We are providing a level of education, health care and social services which to many people outside the country are far in excess of what this country can be seen to afford. We are prepared to continue to provide services for the underprivileged. We are going to continue to provide services for those who are sick and we are going to continue to provide education. Nevertheless everybody will have to realise that the day of the belt tightening for sections of the community is gone, that it is the time of belt tightening for everybody. Anybody who has been involved in the belt tightening exercise will realise that the day they will be able to let out that belt is the day that the relief will come. If we did not tighten our belts there would never be relief in the future.
I am confident that the Government are addressing the problems in a structured and balanced way which will ensure that there will be growth in the economy in the future and that Ireland will be a better place to live in as a result of the belt tightening that this Government have embarked on during the past few months.
My remarks should be placed in the general context of a limited congratulation to the Government on their clear determination to face a very difficult economic climate. It is necessary that people who are independent of party political affiliation should be honest in approaching these circumstances. When one criticises the Government it should not be in terms of a blanket general criticism which thereby becomes discredited and leaves one open to the argument which seems to me to be quite proper, that is, that while one accepts there is a difficult situation, accepts the necessity for cuts, on every occasion there is a cut one comes in and opposes and attacks the Government. I do not wish to place myself in that situation.
I congratulate the Government on the broad arithmetical outline of their attitude in this matter. They have tackled the problem head on and they are, generally speaking, on the right road. I have spoken during a number of debates on these matters and I do not intend to rehearse them in great detail. They are on the record so it would be tedious and irrelevant of me to rehearse them. I have spoken on the education cuts, the health cuts, the film board, the Metropolitan Streets Commission and so on. These are not all areas in which I have a limited special interest but areas in which I believe that the principle which must be addressed is that the Government's responsibility does not just end with putting a price tag on cuts; there must be some elucidation of the principals by which these cuts can be successfully undertaken.
I believe very strongly that it is not doing justice to what used to be called the plain people of Ireland for people in this House to engage in cheap political point scoring. There is no doubt that we are in a difficult political and economic situation. I have with me the document entitled Programme for National Recovery, the first section of which deals with the situation we are in. We have a national debt of over £25 billion, the servicing of which consumes annually one-third of Exchequer tax revenue; an Exchequer borrowing requirement of 10.7 per cent of gross national product in 1987 to finance both current and capital expenditure; high nominal and real interest rates and so on. It is a catalogue of near disaster.
Why are we here and how did we get here? We got here because of the operations of the political system and because there was to a certain extent, if not collusion between the principal political parties, at least a situation where the public were subjected to the indignity of a Dutch auction at every general election. I am very glad that we are now in a situation where there appears to be some degree of national unity, even if it is unofficial, with regard to the necessary measures.
While I say I welcome the broad outline of the Government's strategy, I would certainly still maintain that there are problems with it and, in particular, problems with regard to the most vulnerable sections of our society. I want to use this occasion to appeal to the Government, on behalf of the sections in those areas where it is still possible, to think again on this matter. This morning it struck me that the words, almost three quarters of a century old, of a distinguished former Senator of the House, the late William Butler Years were appropriate in his poem "September 1913" which says: "What need you being come to sense but fumble in a greasy till and add the ha'pence to the pence and prayer to shivering prayer until you dried the marrow from the bone." That is the problem. There is necessity for fiscal rectitude, balancing the books and all these accountancy terms. One must be very careful however that in that process of adding the greasy pence together one does not dry the marrow from the bone. I cannot agree with some of the other Senators who maintain that the vulnerable sections of this community are not prejudiced by certain areas of the Government's strategy in a way that is not necessary.
I have spoken already on education. I do not think there is much point in my going over that. However, because of the dwindling school and university populations and alas because this country is once more seeing the steady stream of emigration from our shores, the least we can do is give these people a proper, appropriate and adequate education for the more sophisticated environments into which they will travel.
With regard to the film board, I was astonished to hear Senator Mooney speaking on this and describing himself as a film buff because it is clearly an area in which he knows very little. I would have to say that on the motion on the Adjournment the Minister's reply, characteristically, ignored the substance of the case made by myself and another Senator. If one is in any doubt with regard to the attitude of the chairman of the Film Board, I suggest that he be applied to directly. This is an area of very small cutback where clearly damage is being done to an important national industry, not just financially, but in terms of our capacity to control our image abroad.
I want to repeat one argument. If the film board are gone, as we know they are, the Government must provide some limited budget for research and development at one end and for marketing and distribution at the other. It is vitally important for this industry. If anybody expects the Arts Council to seriously invest in the film industry here, I would suggest they go back to the leaders of that industry and the extraordinary talents that we have but which we are neglecting and seek their views. They will be unanimous in their opposition to the abolition of the film board. I know this because I have sought their views.
The Government must be congratulated on the financial services centre. It is a remarkable achievement. I believe it will do nothing but good for this capital city of which we would like to be proud. However, I have some further comments on that. It is unfortunate that to date the people in the surrounding areas, particularly in areas like the Sheriff Street Flats, have not been sufficiently drawn into consultation. I would like an undertaking that this will be done because there is no doubt that if you look at other areas in the world where similar dockland developments have taken place, you will find that of course it raises the surrounding areas and in particular, land values, but very often at the expense of the original inhabitants. The effect of the forcing up of land prices, has almost universally been to the detriment of the original inhabitants. It is vital that people like Mick Rafferty from the North City Centre Community Action Programme should be consulted as should the people from the local area in order to make sure that paradoxically by improving this area of the city we do not disimprove the lot of those who are already disadvantaged.
I also feel, in combination with this, that there must be some commitment towards the restitution of something approximating to the Dublin Metropolitan Streets Commission because one has three out of four pieces of a jigsaw puzzle but one is now missing the essential fourth element, which is the Metropolitan Streets Commission. Much of the work has been done, the report exists and all it requires is governmental will. There would be very little expense involved in the implementation of that plan. It looks as if some moves are being made in that direction and I wish to encourage those.
With regard to the health cuts the broad outline of the Government's strategy is appropriate, but I certainly have reservations about the methodology by which it is being implemented. The Minister may be aware that I raised the question of the closure of Dr. Steeven's Hospital, and demonstrated through an examination of the records, that there has been a U-turn by the Government. I welcomed that U-turn because it was in the interests of the patients. It seemed very clear that no systematic forward planning of a sufficient degree had been undertaken. Within a few days of the closure of the hospital, which had actually been required by the Government despite denials by the Department of Health, they had to appeal to the board of the hospital to keep the hospital open. It is clear that there is here some degrees of U-turn.
It is a great pity that so much of our qualified medical staff and front line troops are being laid off and so little of the administration. I appeal to the Government to ensure in every area where this is possible, that the essential personnel are not laid off; it is the bureaucracy in which one should look for the fat. Although there have been cuts and there are clear financial advantages from the point of view of the Department of Finance, it seems to me and many people in the various professions that what is so often being cut is the lean and the fat is being left in place. This is highly dangerous because if one hands these cuts down from on high as a general package with a price tag on them and leave them to administrators to administer, the people who are not going to provide a plan which axes them are those items of fat, if I may so describe them, who can cancel their bulk behind an administrative desk. It is a moral responsibility on the part of the Government to make sure that the cuts cut the fat and not the lean. I want to say how appalled I was at the axing of the National Social Service Board. This clearly comes in on a debate on the Estimates because there was something churlish in the way this was made known to members of this body to whom the entire population of this country should be grateful. It was in the Estimates that they first discovered that they were being axed. I understand that the terminal date is 31 December.
With all the fury and impotence of an Independent Senator, who unfortunately, realises he is not a one-man Government, I must demand on behalf of the people that that decision be rethought. It simply must be because the Government are penalising the most vulnerable people in this country. I thought this Government, particularly under the leadership of Deputy Haughey who has a reputation as the man who introduced free travel, who was a caring Minister for Health with an interest in the elderly and the sick and who had a very high reputation, would be more compassionate. The Government simply cannot afford the obloquy and shame that will result from the miserable and penurious axing of this board which can be demonstrated to have saved money.
It is extraordinary that in a press release on 15 October 1987 the Minister said that the community information centres throughout the country would continue to operate as heretofore with the support of the health boards and other public authorities. The Minister believes that these centres are of considerable value to the public, giving as they do information and advice on a comprehensive range of services and entitlements. How does he know they are going to continue if he is not going to pay anything towards the central body who service their requirements, and is not going to pay their wages? How can he possibly assure the Irish people that this body will continue when he has effectively cut out the core section that makes them efficient, their information distribution network? If you destroy the source how can they possibly continue to function and why should they when they are being attacked in this way? There is a secondary attack on these community information services which is an absolute nonsense.
The Minister's statement which really tacitly acknowledges a wide variety of services are going to be destroyed in a very penny-pinching way, suggests that these services are going to be continued, but by whom and at what cost? Who is going to pay for them? So far it has merely been indicated that the Government intend to ask health boards to give grants for community information services. The National Social Service Board have said that this is a dicey enough prospect and I would have to say to that, "indeed".
It is worth reading into the record the kind of work that has been done by the National Social Service Board. In addition to the 100,000 or so queries which have been dealt with by the community information centres which are directly serviced by this body, between 5,000 and 6,000 queries a year have been handled by the NSSB information officers. They also publish booklets dealing with, for example, information on entitlements to the elderly. Those are the really vulnerable people and I believe — I hope I am wrong — that somewhere in Government there is a really nasty mind who hopes that by starving people of information about their entitlements they will get a kind of unspoken cutback because the most vulnerable people will not apply for what they are entitled to because they will have been deprived of sufficient information. I see the Minister shaking his head. I hope what I am saying is getting through to him and that there will be a serious rethink on this issue.
The NSSB have also, for example, organised an insurance scheme on a group basis which is used by over 200 voluntary organisations which saves them large sums of money. It is cost efficient and it is saving the State money. They are giving training courses. They are providing courses on running the various voluntary organisations and so on. I will give one further example. Today on the radio I heard a representative of this excellent group speaking. It was very clear from this programme that many frightened and vulnerable people listening to radio programmes like this may be confused about their entitlements. They may have a low level of literacy, they are clearly incapable of dealing with the bureaucracy which surrounds their legitimate entitlements and the service provided by this group to the most vulnerable sections of our society is universally welcomed.
The most telling argument I can make is to say this will be the single most politically unpopular move that has been made and it will reach right across the country. I say to the Government, it is tactically wiser to appeal to self-interest in political parties and it is in your own interest, in terms of voter returns, to be very careful before you take this atrocious and uncivilised step. The Minister must be able to answer two questions: first, who will provide the services that are being callously destroyed and, secondly, if anybody has the gall to maintain that these kinds of services are not going to be essentially affected why on earth abolish the body and disperse the staff who have had the flexibility and expertise to develop this range of service and who know the ropes and pitfalls?
I want to put my criticisms of the Government into perspective. In summing up what I wish to say I would again, because it is only correct, congratulate the Government. I do not accept what Senator Lanigan said that they were in particularly difficult times. This has been a particularly fortunate Government. First they came in at a juncture when they could not possibly have faced the kind of opposition they might have some years ago. Secondly, a number of the international indicators are now in favour of the kind of move that the Government are, quite correctly, making. I say in an unpartisan way, thank God for it. If in servicing our debt we can benefit from a weak dollar I do not care whether it is Fianna Fáil, Fine Gael, Labour or a Coalition of all three who do it.
On behalf of this country I welcome any moves made by any Government that will provide hope and the prospect of employment to the young people. In general, the Government's moves are correct but there are clearly individual instances in which the direct application of policies can be damaging, non-productive and can be negative even in economic terms. I have instanced a couple of them, the Metropolitan Streets Commission, the film board and in particular, and I most urgently press this case, the National Social Service Board. I look forward to an answer to this with some degree of hope because of the positive track record of many members of this Administration.
I welcome the opportunity of speaking on this very important motion dealing with the critical state of the public finances. The Government and all those in public office have a duty to clearly communicate to the general public and to make them aware of the serious problems facing this country today.
Since taking office the Government have acted swiftly and decisively to tackle these problems. In the March 1987 budget the first decisive step was taken in setting financial targets and these targets, in the interests of our community and our country, must be adhered to. The fact that this year the Government have set a precedent in publishing the Estimates well in advance of the next financial year ensures that all interested parties will have adequate time to properly debate the issues and Government Departments know in good time the amount of their allocation and will be in a position to plan accordingly. This is a most important precedent and I hope future Governments will adhere to this principle in the years to come.
One of the main objectives of the budget is to reduce our dependence on borrowing which has been the trend since the seventies and has left the country in a sad state. In the early seventies the Government of the day made a decision on our behalf to maintain our standard of living by borrowing abroad. In all fairness, nobody objected to it at the time. Because of this policy of budget deficiting we find ourselves now with a national debt of £25 billion.
We are well aware that this debt has, unfortunately, doubled in the past four years from £12.5 billion to the present level. It is costing us in excess of £2 billion per year, which is almost the total receipt from PAYE, to service the debt. I read recently in some reports that this means every household is in debt to the tune of £28,000, which is a staggering figure. What have we to show for these massive borrowings? Unemployment and emigration are at an all time high and have reached record levels and company and personal taxation is stifling investment. It is widely accepted that the steps being taken by this Government are essential and already in the short time since taking office significant progress has been made. If this trend is to continue public finances must be brought under control and the targets that have been set must be adhered to.
In this regard the Programme for National Recovery is a major initiative which will address our economic and social problems effectively and instil confidence in our economy. The responsible approach taken by all parties in the negotiations to formulate this plan, which clearly lays the foundations for national recovery, indicates that all of the social partners recognise the extent and nature of our economic and social policy problems. I would like to put on record a vote of congratulations to all those concerned in these negotiations.
The extent of our problem was clearly stated last year in the National Economic and Social Council's study. Recommendations were made to deal with excessive public expenditure, the development and promotion of manufactured goods and services, the introduction of a more equitable tax system and the removal of social inequities. The study recognised that the steps necessary to correct the serious imbalances in the public finances will require significant sacrifices from the public at large. It is the Government's responsibility to ensure that these sacrifices are shared equally by all.
Some of the major points in this report were incorporated in the Fianna Fáil election programme, in particular the great need to stabilise the national debt in relation to the gross national product ratio. The report was endorsed by the Taoiseach in the Dáil on 10 March this year. I am confident that the Programme for National Recovery, in conjunction with the NESC study and the implementation of Fianna Fáil's own programme, has laid a firm foundation to tackle a very difficult economic problem facing the country. However, success depends on the co-operation of all sections of the community to face up to the economic situation and make the necessary sacrifices required in the short term to restore stability and growth to the economy.
Borrowing and the cost of servicing the national debt must be reduced. There is no doubt that to achieve these aims cutbacks have been made right across the board with no section being asked to accept more than their fair share. There is an exception to this, in so far as for the less well off people in our community, the people on social welfare, there has been an increase in the allocation in that Department. I am particularly pleased that the living standards of those on social welfare will be maintained.
The number of people dependent on social welfare benefits has increased substantially in recent years. This naturally presents a major difficulty in managing the budget. At present social welfare recipients are the most vulnerable members of society and the Government are to be complimented on shielding them from the sacrifices now required from us all.
I notice in the social welfare field that the free fuel scheme has been extended to include those in the rural areas and the long term unemployed. This is a particularly welcome initiative. I also hope the Minister can find money in the Estimates to maintain, if not increase, the Christmas bonus. He has extended the alleviation payments to the end of the year. These payments as set out by the previous Government were to be terminated on 17 November. This is a welcome initiative taken by the Minister for Social Welfare to extend them to the end of the year. I hope that if they have to be phased out this will be done on a gradual basis.
I would like to speak about industry and commerce as that is my area of responsibility in the Seanad. In the Department of Industry and Commerce the 1988 Estimates represent a reduction of 9 per cent on that of 1987. The IDA capital budget has been reduced by 12 per cent to £117.8 million. The Minister is determined to be more cost effective in applying available resources and to get better value for taxpayers' money but he has also guaranteed that no worthwhile project will be lost as a result of these measures. This is to be welcomed. I am particularly pleased that in future performance clauses will be introduced linking grant-aid to actual job creation and policies implemented shifting State support away from fixed assets. Also greater emphasis will focus on weaknesses in marketing technology and management.
The Minister recognised that the IDA landbank of almost 6,000 acres and 2 million square feet of empty factory space is excessive and accordingly he instructed the IDA that in 1988 a sum of £5 million must be found for the Exchequer from the disposal of land and factory space. The IDA administration grant has been cut by 16 per cent to £13.36 million. However, the Authority has accepted that the financing, while tight, is sufficient to meet anticipated needs.
The grant-in-aid for CTT has been reduced by £3 million in 1988 on the 1987 allocation of £23.022 million. To offset this reduction CTT have been instructed to charge for certain services which will realise earnings of £1.3 million in 1988. I welcome this and I am sure that firms who avail of the valued service provided by CTT will accept that a good service must be paid for particularly during this period of economic difficulty. The provision for the IIRS and the NBST shows a reduction of £1.5 million compared with that provided to the two bodies in 1987. The Government have decided to combine into one organisation the functions of these two authorities. I believe the merger is a step in the right direction and will provide a unified support mechanism for industry and will also make the operation more efficient and cost effective.
Reductions, unfortunately, have also been effected in grants to NADCORP and the Kilkenny Design Workshop. However, the Minister is confident that the overall reduction in his Department's allocation will not hinder the future development of our industrial base. Since 1980 Ireland has lost almost 40,000 jobs in the manufacturing sector. There are many reasons for this. Poor industrial performance due to lack of investment in new technology and machinery, poor research and production standards and loss of competitiveness as the growth in labour utility and interest costs outstripped those of our competitors. The situation has now been somewhat stabilised. With the right policies in place we can now look forward to achieving real and sustained growth in this vital area of employment.
The Minister has recognised that one of the most important elements for national recovery is the creation of a suitable environment for employment and the development of business enterprise both in the State and in the private sector. Since taking office the Minister has introduced an extensive programme of company legislation which includes a number of very important Bills which will contribute to a better business environment. These Bills include the Companies (No. 2) Bill, 1987, and the Restrictive Practices (Amendment) Bill, 1987. It is generally believed that the number of recent company closures could have been averted if these Bills had been enacted sooner. The setting up of the Office of Trade and Marketing is another welcome initiative. It has made a significant contribution particularly in the export field since its formation.
Ireland's export figures are encouraging for the year to date. The latest figures to September show that exports for the first nine months of 1987 amounted to £7,746.9 million while imports were £6,695.9 million — a record trade surplus of £1,051 million compared with the same period last year.
Since last year exports are up by 12 per cent and imports are up by 5 per cent. This is an area that is somewhat disconcerting. The whole area of import substitution must be studied. The import penetration level is 53.4 per cent compared with an EC average of 28.5 per cent which indicates considerable scope for improvement.
The Government are conscious of the need for Irish firms to develop the domestic market and as a result no reduction has been made in the allocation to the Irish Goods Council. This will be welcomed by everybody.
The Minister has also established a task force within his Department to carry out an indepth review of the IDA's small industry programme. This is an area where real growth can be achieved. Small companies have been identified and given the support to invest in modern technology and machinery. This has already resulted in increased employment. These companies have gained access to the lucrative UK and European markets.
The financial services centre with the development of the Custom House Docks site will involve construction valued at £250 million and at the peak, give 1,500 jobs in the construction field. It will result in the creation of 750 permanent jobs and will establish Ireland as a major international finance centre.
The Government strategy for industrial job creation is set out in the Programme for National Recovery. I am confident that the target set will be achieved. Generally I am happy that in the Department of Industry and Commerce the Minister has accepted the cutback and the Department have applied themselves to the job in hand. I believe they will achieve the targets set out and that Ireland will develop as a strong economic nation.
I would like to say a few words on the very topical health cuts. This is an area in which we are all anxious to maintain a very high standard of service. We must look at the cost involved in running and maintaining such a health service. In 1974 it cost £147 million to run our health services; last year it cost £1,298 million. This year the Government have allocated an additional £16 million to run these services. The problem occurred, unfortunately, in an over expenditure which occurred in 1985 and 1986 of £55 million. The £16 million additional allocation this year is not enough to keep pace with inflation. I am confident that the Minister is studying the area with the intent to maintain the service we have come to enjoy. The Minister has already identified areas of overlapping and duplication. I am confident that the service which we have come to expect will be maintained.
In conclusion, I welcome the opportunity to speak on this very important motion. It is generally accepted by all parties that the course the Government have taken is the only course if we are to maintain our economy for future generations. If this course of action was not taken our national debt could double in a very short space of time to £50 billion. If we allowed that to happen the workforce would not be large enough to service such a debt and the country would be taken over by international monetary agencies. That is something none of us wants to happen. I am confident that the Estimates have been supported by a majority in the Dáil. It is the right decision even though we are all unhappy that cuts are necessary but we realise there is no alternative.
There has been much talk of late particularly amongst the national media of the so-called new found consensus in Irish politics. The Minister in his speech earlier this morning said:
There is already a large degree of acceptance of the approach we must take, as was clear in the debate in the Dáil on this motion and in the willingness of the social partners to agree to the Programme for National Recovery. I hope that the debate in this House will extend and strengthen that consensus.
As far as I am concerned the only consensus that has emerged is — as a result of the Government now conceding as all other parties have done for the past number of years — that the public finances were in a state of disarray, that grave economic problems existed and that corrective action must be taken. In doing so they have admitted that there was no better way, as we were led to believe, and that there was no easy automatic free-spending solution to our problems.
While this unprecedented and unbelievable U-turn will be welcomed by many people it will leave others even more cynical about the role of politicians. In Opposition they promise so much and in Government do the very opposite to what they promised. They do exactly what they promised they would not do. After promising every sort of corrective measure they gave a liberal dosage with strength and gusto that people did not expect. However, it is welcome that the Government have arrived at the conclusion which they have arrived at. It is a conclusion which we in the Fine Gael Party have been preaching for a number of years. It is welcome that a genuine attempt is now being made to tackle the country's problems. It is welcome that we had this morning a mature political discussion on the problems which face the Government on the Estimates programme for 1988. It is welcome also that the Estimates were presented in such good time and the Government should be commended for that. However, my general welcomes end there.
There is a grave fear that the newfound austerity approach by the Fianna Fáil Party may not bring us back from the edge of the economic cliff but instead, unfortunately, and I believe unintentionally, push us over it. It would be unfortunate if the patient was killed rather than cured by the medicine of this Government; medicine which we know from our work as politicians is accompanied by extensive surgery or cutbacks. That is why we must be extremely vigilant in nothing the Government's Estimates and that is why the amendment put down by the Fine Gael Party to this motion is not just timely and relevant but important and worthy of support.
I would like now to deal with some of the issues which concern me and many others throughout the country. I would like to deal with the Agricultural Vote. As a member of the Cork County Committee of Agriculture I am gravely disappointed by the fact that within the next few weeks the work and the role of these committees will come to an end. As a result of the limited amount of finance available to our committee in Cork over the past number of months we have met for our last number of meetings at the expense of the councillors, a fact which is neither noted nor appreciated by those who are quick to criticise the role and the work of local authority members. With the removal of funding from the committee the Minister has brought to a conclusion the work of an organisation that knew the problems at local level, proposed workable practical solutions and was a forum for all local agricultural groups such as the IFA, the ICA, the ICMSA, Macra na Feirme and so on to air the views and have their voices heard. The dissolution of the county committees of agriculture is a regrettable step.
The merging of An Foras Talúntais and ACOT will only be judged for its merits in future years but the cut in funding to the new merged body of 44 per cent will cause havoc to the overall structure of the new body. There is, at a time of food surpluses and general agricultural chaos at EC level, a clear lead for the best possible level of agricultural research and development in Ireland. As a result of this 44 per cent cutback these necessary developments cannot take place. I live only a half an hour's journey from Ireland's only dairy science research centre which is Moorpark in Fermoy. There is no doubt that the level of service provided by this centre will be endangered by the major staff cutbacks proposed. Because the dairy industry is changing so rapidly the expertise of Moorpark's 200 employees is essential to ensure that Ireland keeps up to date in agricultural developments.
Another area in the agricultural section which I am disappointed with is the decision to allow no funding whatsoever to be made available for an extension in 1988 of the disadvantaged areas scheme. This scheme, in the areas it is implemented in at present, is doing a wonderful job in promoting agricultural development and economic progress in our less well off areas of the countryside. Many rural communities in my local area presently outside the scope of the scheme have applied for inclusion and seem to fulfil all the necessary criteria to gain inclusion. However, all they need, as of now, to be included in the scheme is that the Government provide sufficient funding to match the funds which would be provided by the EC. With 50 per cent of the funding coming from the EC and the fact that one would be buying £1 for 50 pence, it is very good value and it is incorrect of the Minister to totally disregard this scheme for 1988. If this scheme was implemented in extra areas during 1988 there is no doubt that it would increase the economic well being of many local communities throughout the country. It would help to keep more people on the land. It would certainly help to reduce the numbers of people seeking employment which is scarce enough already. It would reduce the number of people leaving our land and taking the emigrant ship abroad. The benefits of an extension to the disadvantaged areas would mean a long lasting improvement in the overall economic wellbeing of this country. It makes no economic sense whatsoever to stand idly by and not to take advantage of the scheme. I would appeal to the Minister to rethink his decision on this.
When I came in here this evening I was just in time to hear Senator Lanigan say quite bluntly that there are no people at present suffering from Government cutbacks in the area of health. This is a ridiculous statement and a member of any local authority or any political forum who is dealing with people on any sort of regular basis would know that this statement could not be correct. You cannot take millions of pounds from a health service overnight and hope that there will be no problems. I would be the first to admit, and have done so since I become a member of a local authority two years ago, that there is not an endless amount of money available to the health services. I know that a careful analysis must be made of the amount of money being spent on health. I have always believed that we must not just question both how much money is being spent on health and how that money is being spent, but the Minister's policy of cutting everything that moves cannot be correct.
How can it be correct when patients from my local hospital in Mallow have been moved to the Cork Regional Hospital despite the fact that they are being kept in Mallow hospital at 60 per cent of the cost that it will be incurred in Cork? That makes no sense. How can it be correct to boast about extending the free dental and optical scheme to the wives of insured workers, which indeed is a measure that we would all support, and yet do nothing about the long queues which exist for those people already entitled to the scheme? I was speaking to a woman last night, whose son is waiting two years for specialist orthodontist treatment, and who does not think that the Government's policies are working. How can it be correct to close down Munster's only children's psychiatric unit at Sarsfields Court in Glanmire, County Cork, and send the children home? That cannot be defended. Surely, any Christian country must strive to ensure that there is an adequate level of health service available to their people. Unfortunately, it now appears that the Government's policies will result, and indeed are resulting in the sad fact that the state of a family's health is becoming more dependent on the size of a family's wealth. We cannot defend that and we must ensure it will not happen. I fully realise that the health budget is not infinite but yet the areas where savings can be made without either damaging the overall health structure or endangering the health of the people are not being tackled. I refer specifically to the GMS scheme where much room for improvement and savings exist to the system of the drug and medicine supply scheme where a greater use of generic drugs could make a major difference and to the vast and obvious room for improvement in health board structures. When health board structures are mentioned it is automatically assumed that people are in favour of perhaps decreasing the role of the local health board and of the local health advisory committees in favour of a greater central role for Government in running the health services. I was speaking quite recently to people who had been involved in the old system where health was administered by local health committees. I found from my discussions that in those days there seemed to be a far greater emphasis on a cost effective system, and a far greater reliance on the local people running the local services. They were better able to keep account of the bills, of where the money was going and how it was being spent. I certainly hope that rather than disband the local health advisory committees, the Minister would give serious consideration to giving them extra powers to run their own local hospitals. Local problems are best dealt with at local level. The community care area obviously needs to be addressed in greater depth than it has been up to now. There are many advantages in allowing for a greater degree of home care. We must promote policies that introduce a greater degree of flexibility along this line, not only will we save money but we will also provide a far better caring environment for the elderly in our community.
Senator Norris and I presume many other speakers referred to the abolition of the National Social Service Board. I would agree entirely with what they said. As a consequence of the Government's decision to scrap the NSSB the workload of local representatives, local councillors, even TDs, will automatically increase. People whose problems were dealt with by the National Social Service Board will go to their local public representatives in future. Obviously there is nothing wrong with this but at a time of economic crisis politicians must focus on policies and legislation in an effort to find solutions to the nation's ills. As a result of the scrapping of the NSSB, they will be taken up even more and more with solving problems which are not really within their sphere of responsibility.
Senator Mulroy mentioned the increased scope of the free fuel scheme and indeed it is welcomed that the free fuel scheme is available to more people this year. Unfortunately, however the duration of the scheme is one month less than it was last year, so while on the surface it may appear that there was a great improvement, unfortunately in practical terms there is no improvement at all, just a juggling of figures.
Last week we had a debate on the environment. Unfortunately with the number wishing to speak on the topic I was not able to make my contribution. I will refer briefly to the environment Vote which, of course, is down 11 per cent on 1987. Its effects will be felt in every local authority throughout the county. Already in County Cork we have been dealing with our own estimates which make dramatic and drastic reading. Again I realise that as with every other Department, there is no supply of endless funds but some specifics must be mentioned. It is regrettable that there will be no money provided for new housing in 1988. I realise that in some areas — obviously Dublin city is one — numerous houses are vacant and have been so for some tine but the whole country does not stop once you move outside Dublin. In every town and village throughout the area I represent, and I am sure in every town and village throughout the country, there are people crying out for local authority housing and it is wrong to leave them waiting another year. The lists will become almost endless but the problems will not go away. I am very unhappy with the amount of money available for housing. Similarly the sanitary services are being seriously affected. In north Cork alone 700 families have no water supply and it appears we will not be able to do anything for them this year.
In conclusion I admit that the Government's overall analysis of the problem is correct, nobody can argue that. The Government's actions in seeking solutions worry me. I am concerned that their actions may be of an over kill variety. We see daily the increase in emigration. Again we are almost making an industry out of emigration. I would certainly hope that we will try to do something about putting our people back to work. There was a figure of £28,000 mentioned here this morning as being the national debt per person. Even if everything goes according to the Government's plan that figure will increase by 1991. The only solution is to strive to put our people back into jobs. I hope we will concentrate our minds more fully on that in the next few months.
I congratulate the Government on the very efficient manner in which they have brought the Estimates before the Dáil much earlier than in previous years. This is something completely new but something which has been spoken about for many years. It took a Fianna Fáil Government to make it a reality. For the first time in the history of this House the Estimates were brought before the Seanad and we have an opportunity of debating them. That is also very important. There has been quite a good deal of criticism of the Estimates but while listening to the debate we discovered that much of the criticism was from vested interests and in some cases for political gain. Unfortunately, whatever Government are in power — and I have said this when we were out of power as well as in power — they are elected to serve all of the people, not any sectional interests, or individuals, or pressure groups.
The Government have examined every facet of expenditure. There is no question about it. We all knew only too well that unless some corrective action was taken this country would not be capable of governing itself much longer. We were going out of control. A very positive step has been taken to correct that slide. It is being corrected. Much of the debate so far has been based on "ifs" and "ands", but it is time we faced up to the facts of the financial situation at present. Servicing our national debt costs £2 billion, practically all of the PAYE tax. The only way to remedy the situation and get things back on the rails is to stop that haemorrhage. When our finances are in order it will be very easy to start to expand again.
Unfortunately, despite the fact that we have had a number of years of expansion which has made living a good deal better for many people, all of our people did not make as good a use of the good times as they should. We are not all built alike, some are better managers than others and those who are best at managing seem to do best. To be positive, this budget has taken a very reasonable approach because it has looked specifically at the problems of the less well off. It has not in any way hindered the poor in our society. Social welfare will increase, if anything. Indeed, the broad thrust of the strategy in the Government's Programme for National Recovery has been welcomed by all political commentators, by all economists, and by all people who are really interested in the country.
The Estimates for the Department of Social Welfare in 1988, provide £1.61 billion in respect of social welfare and this is not the complete picture. It does not reflect, as the Minister has said, the full extent of the moneys distributed through the various social welfare schemes and services that have been built up over the years. Social welfare expenditure in 1988 will amount to over £2.64 billion. That is a considerable amount of money but, yet, we hear of all the cutbacks and have crocodile tears for the less well-off. There is something positive being done for the less well-off in our society. We talk about tax by way of PRSI contributions from employers and employees, yet expenditure on services for the elderly now stands at an estimated £752 million or 30 per cent of the overall social welfare expenditure in 1988. Those are facts.
Expenditure on unemployment services will be an estimated £704 million or 28 per cent of overall expenditure in 1988. The Estimates represent a net increase of £12.7 million on the 1987 Estimate. We have all those crocodile tears for the effects of the Estimates on the less well-off, but the less well-off will not be affected. No one has any need to worry about this budget. We know it will not give as much to the better off as previously.
The emphasis in all the debates in this House so far has been on jobs but we must ask whether we are creating jobs or are we providing services? If we are providing services, then we must do so as economically as possible. The Estimates have set out to achieve economies. We had been expanding our economy for quite a number of years and now is the time to consolidate. There must come a time of levelling out but in the process of levelling out it is important to point out that there will be no great hardship because jobs will not be lost as voluntary redundancy will take care of the situation. I believe that when the voluntary redundancy package is fully exploited more jobs will be created for younger men to come in and take over where their seniors and elders have left off. As the year proceeds we will realise that the Estimates are not as severe as we imagine.
The Estimates take account of the changes in the schemes that have been announced in the past few weeks. The free fuel schemes have been rationalised and extended, and 210,000 people now qualify for a free fuel allowance. This includes 30,000 recipients of unemployment assistance benefit. That is a fact. Those are the positive aspects of the Estimates that we choose to ignore. I remember the days when we were increasing the Estimates, the very people who are speaking now, said "it is a step in the right direction" or "it is too little, too late." This is the jargon we were listening to in those days. Now depending on what side we are on, we do not want to see anything positive but only the negative aspects, I think it is time we started to look at the positive side of things and to be constructive in our criticism. We should not pick on all the minuses without taking cognisance of the pluses.
Included in the Estimates this year — which can only be regarded as a historic achievement for the Government — is provision for the extension of the benefit schemes to dependent spouses of insured workers. Dependent spouses of insured workers are entitled to claim dental and optical benefits under the social welfare benefits scheme on the same basis as insured persons. The extension of the scheme will benefit up to 330,000 people, mainly women working in the home. Is it not time that the woman in the home got more recognition? Nobody in our society today does as useful work or makes as valuable a contribution as the woman who stays at home. It is not the in thing today — you have to be very careful on the subject because you can be misconstrued — but a number of women prefer to stay and work at home and they are now recognised. That does not say we do not take off our hat to women who go out and work. They have a free choice to do so, but we should not neglect those working at home. Indeed, I would welcome a greater recognition of their contribution. Despite the severe financial constraints cognisance is taken of those very important points in the Estimates. It is a big improvement, which does not seem to be taken into consideration.
There has been a great deal of talk on health cuts. We have been listening to talk on health cuts since 1980 and we have seen all the scare headlines with news of the closure of institutions but no lives have been lost. The people who are looking after our sick are dedicated. We are providing the hospitals and services. We are extending the community care service, and that is a good thing we seem to be ignoring. In particular, psychiatric patients will no longer be locked up for the remainder of their days in an institution. They are now taken in and treated and those who have been there for quite a long time are now being released into chalets and homes in the community. Home care is being provided through home help and both health nurses and psychiatric nurses are working in the community. These measures are positive aspects of the Estimates. They are a positive indication of what we are doing to make our community and country a better place to live in within the means at our disposal.
I do not believe that the Estimates will result in any great hardship. For the first time we have had the opportunity to discuss the Estimates under previous Governments, it was three or four months into the year before cutbacks in the Estimates were discussed. At least now we are starting well in advance and all cutbacks will be made over a 12 months period rather than over a six or eight month period as in the past. This will ensure that no hardship will be caused.
I would like to assure everybody that we have no need to worry about the Estimates. The Government think of the less well off and have always made the less well off in society their priority. They are continuing to do so. I see no reason for the shedding of so many tears over any of these Estimates, and the same applies to all the portfolios. The Government have taken a very caring and responsible attitude and have brought the Estimates before the Houses of the Oireachtas in good time for the various bodies to deal with them on a 12 monthly basis. I am very pleased that the Estimates were presented so early. We have no need, in my opinion, to worry about the cutbacks. The crocodile tears need not worry us because they were never very serious any time they were shed.
The generality of the Estimates has been discussed by my colleagues on all sides of the House. The faults in the Estimates have been well dealt with by my colleagues. Because I speak on agriculture for the Opposition, I intend to confine my remarks to agriculture and to the damaging effects of these cuts. Many would use the world "Armageddon" to refer to the level of damage that will be caused to agriculture now and in the future as a result of what is taking place in 1988.
I would like to quote from the Government's Programme for National Recovery, paragraph 18, page 23:
The expansion of the agriculture and food industry is a central element of the Government's economic policy. Given the industry's dependence on export markets and the increasing restrictions on the EC support arrangements, a recognition of the importance of a market-led orientation is seen as an essential prerequisite for the further development of the industry.
If we turn to the Book of Estimates, published two weeks ago, and examine the proposals for agriculture in the light of what I have just read from the so-called Programme for National Recovery, we find a total and an utter contradiction of the aspirations contained in that paragraph. The total amount of money to be provided is reduced by 18 per cent compared with the expenditure on agriculture in the current year. On examination of the Estimates we see the average cutback over all Departments is about 6 per cent. If we look at those Departments who service the productive areas of the economy we find that the Department of Labour is down by 8 per cent, the Department of Industry and Commerce is down by 9 per cent, the Department of Tourism and Transport is down by 1 per cent, the Department of Energy is down by 9 per cent, the Department of Forestry is down by 9 per cent and the Department of the Marine is down by 13 per cent.
The figures for Forestry and the Marine are absolutely shameful given all the nonsense and all the hyperbole from the Government side when they were in Opposition. They spoke about targeting these industries for special attention and of using their potential as the prime motors in getting the national engine to move into top gear, or at least into a higher gear. That is now exposed as insincere blustering to catch the media headline or the cheap cheer from the supporter. Similiar remarks were also trotted out ad nauseam on agriculture. The Book of Estimates pins the lie. It is bad enough that the Department of Agriculture and Food suffered to a greater degree than all the other Departments that promote or service the productive sector of the economy, but the most galling part of all is the way the cuts have been made in the actual Vote when you go right down through the details.
The administrative side of the Department has suffered hardly at all in the cutbacks. The proposed budget for salaries and wages of all the civil servants under the direct control of the Minister is down by 2 per cent. The cost is £57 million as against £58 million in the current year. But in the funding of the Department's activities that directly service and promote agricultural growth we find the greatest piece of sabotage and indeed betrayal. I refer, of course, to the cut of 44 per cent in the financial support to ACOT and to An Foras Talúntais. Both bodies are now being merged and, on behalf of my party, I welcome that. These bodies, whether they merge or operate separately, have been and will remain the main arms of the Department of Agriculture and Food in the way they promote growth, development and prosperity in the nation's most important industry.
The Agricultural Institute, for example, have been in existence since 1958 and played an absolutely pivotal role in the development of the modern agricultural industry. Their charge was research primarily. Every area where they focused their inquiry has been a magnificent success. At Johnstown Castle in Wexford, which is for the chop, comprehensive research was carried out into the soils of Ireland. The research at Moorpark in Cork, referred to by my colleague Senator Bradford, closely examined dairying and all that goes with that very complex industry. Grange station in County Meath studied and published extensively on beef production. The centre in Belclare in Counties Galway and Mayo researched sheep and drainage. The other stations like Oak Park in County Carlow, Kinsealy in County Dublin and Dusany had their own areas of research and all operated very successfully. This research was done not alone to give us vital scientific information — much of it was new discoveries as a result of their inquiries — but also so that the findings of the inquiries would be applied directly and in every practical way to agricultural land and to farmers. That was to improve not just the income of the farmers but the national income.
If An Foras Talúntais are to lose about 500 of their staff, and the present total is about 1,100 personnel, a meaningful research and development body to service the most important productive industry will be as dead as a proverbial dodo. It is incredible that we should cut funds for research and development in this country which has the greatest dependence on the agri-food industry of all the northern community members, those whom we must compete with most directly because of a close similarity of commodity product lines. For instance for every £1 we spend on research and development the UK spends almost £5. We might remember that the contribution by agriculture to GNP in the UK is about 2 per cent; in this country it is 11 per cent. The Netherlands spend twice as much as we spend on research and development, Belgium two and a half times, France about one and a half times as much and Denmark equals us in terms of percentages. Their agricultural industry is already one of the most sophisticated and developed in the whole world. I might mention, for the purposes of the record, that these figures are based on reference to the amount of money spent on research and development per agricultural worker — farmers — in the countries I have mentioned.
If I could refer again to the Programme for National Recovery, in page 21 dealing with agriculture, paragraph 20, under one subheading, we find:
Integrated rural development programmes on a pilot area basis will be introduced to promote rural enterprise e.g. including agri-tourism and to benefit to the greatest extent possible from EC funding;
In another paragraph it reads:
Increased Community funding is being sought by the Government to enable EC structural measures including the Western Development Programme and the Disadvantaged Areas Scheme to be more effectively implemented and extended;
It goes on to say:
The Government will take the necessary measures to facilitate development of the rural regions by maximising the benefits to Ireland of three EC Structural Funds — ERDF, ESF and the guidance section of FEOGA;
If we are to have all of these programmes — and I particularly refer to the integrated rural development programme — they will, first of all, be subject to quite indepth surveys of the resources of the designated regions. That will be part of the necessary information we must submit to the commission to qualify for these programmes. These will have to be well researched, socio-economic surveys. Who, in the absence of AFT or, indeed, ACOT, will carry out these surveys if we effectively abolish these bodies by these Estimates? Who else has all the expertise? Who else has the bank of information? Who else has the wherewithal to do the job?
The annual farm management survey complied by the institutes is the only objective definitive document. This unique document does not just give us a global picture of the state of national agriculture on an annual basis. It is an indepth study on the income per farm size, per different enterprise and the income variations in the provinces. It provides the income variations in the various age groups of farmers. Not alone have we rightly had this survey annually for our own vital information but we are now bound to collect, to assimilate, to interpret and to submit it to those in the Commission who administer the Common Agricultural Policy. That is binding on us as part of our membership. When the effect of these Estimates halves the staff, who is to carry out the work? If the process gets rid of more than half the experienced experts, analysts and economists — because when you apply this kind of pressure it is always the best people will leave and more than half the best people will go — who will carry out this essential work?
Will any thought have been given to the fact that An Foras Talúntais have in recent years operated at 65 per cent State aid, while 35 per cent of their budget was earned outside the State from operating receipts and research contracts to agencies who have nothing to do with their work for the Government? This year alone the Agricultural Institute will have earned £2.5 million in research contracts with the EC. That is £2.5 million in direct transfer to this country by simply using spare capacity to good effect. Let us compare the madness of destroying this organisation by decimating its staff and operations with the decision to maintain, almost intact, the administrative side of the Department, especially those located here in the major offices in Dublin.
These are harsh words but I must say them. This administration in many ways has become moribund and indolent, simply because the personnel working in these offices are constantly in each other's way. Their role has been reduced to pen-pushing, paper-pushing and preserving civil servants' decision-making procedures that are often guided by the principle that the less you do the less likely you are to offend these antediluvian rules. Let not the Minister come back and say in his reply that there is parity, or some kind of equity or equality in the way staff reductions are being tackled in the Department of Agriculture or, indeed, in any other Department. That simply is not so.
If we go back to 1980 for a reference year and establish the figures for State grants to the Agricultural Institute it was £21,687,000 that year. If we go to salaries, wages and allowances for the administrative side of the Department of Agriculture the figure was £54,000,231 that year also. Let us say for simple reference purposes that each of these figures represents 100 in 1980. What do we find? We find that the cost of funding the administration in the Department has increased to 106 per cent what it was in 1980. The cost of funding An Foras Talúntais is now 77 per cent of what it was in 1980. The cost of funding ACOT is now 74 per cent of what it was in 1982, the last reference year that I have. In these seven years, in reference to AFT, we have witnessed a large percentage drop in our relatively small budget for development research and the advice elements that are so bound up with promoting growth and the national income. We have experienced an increase of 6 per cent in the administration of a Department, an administration that was deliberately bloated after the summer madness of 1977 and should have been in no position to absorb greater staffing after 1980, but apparently it did.
Could we for a moment take a look at ACOT and their role and achievements and at the mayhem that will follow from the Government's recent decision? ACOT presently employ 1,030 people. As recently as 1982 the staff level stood at 1,223. It is now 16 per cent less than that. They are not top heavy in the way that so many Government Departments and agencies are. Over 70 per cent of their employees are employed in the advisory and educational services, delivering directly their support services to the farmer in the field or to the young farmer in education or training. As recently as 1984 they restructured their advisory and educational services making their role even more cost effective and more effective in their delivery.
There is no need to go into the history and the role of this body or the role which they have played in the agri-food industry development in this State in the last 20 years of bewildering change and challenge. Figures can be confusing and, indeed, mind-boggling. So much depends on your original reference or point of comparison. It remains undeniable that the output per agricultural worker in this country since EC entry has increased by 150 per cent. ACOT and the AFT by their advice and their education and in all the other ways they help have had a major role in that achievement. On the other hand, the real income to people working on the land increased by only 33 per cent in real terms over the same period. However bewildering the change in the last 15 years and the major adjustment problems that we have had, the next ten years will be much more complicated and the pace of change will be all the greater. We will, as never before, need the support services of the kind that ACOT and AFT have given in recent years and, indeed, down through all the history of their existence. We will not need them to a lesser extent, I remind the House, but we will need them to a greater extent.
Consumption trends and surpluses have put more and more pressure on our traditional products. We can only overcome this by moving with technological change. We must continue to increase our performance and product quality. To achieve that we must keep in place a research, advisory and education service. Except to the totally blind that has to be crystal clear. We can save money on paper now by sacking 1,000 people in this vital area, 500 of them actually on the ground servicing the promotion and growth of the nation's keystone industry. In a decade or in a good deal less, we will wring our hands when we see the damage we have done, the way we have lost out on national income, the way have lost out on prosperity, the way we have lost on output, not to mention the lost employment or the employment that was not created. This was done because we were shortsighted and spending cuts were only applied to the soft targets with no planning, done in panic and done with that kind of zeal that we associate with mad communists. No examination at all has been carried out as to the relevant value or worth of the spending cuts as against the value of the spending being retained.
The Government seem to have forgotten the changed situation. We must adopt more intensive beef production based on better breeding and better stocking per area deployed. In the area of dairying, with increasing quotas on production, we must continue to research and inquire into lines of diversification and away from the traditional lines which have led us into a cul-de-sac. We must at all times keep our market and scientific information up to date and available to the farmers to whom it matters most.
These arguments are the same as applied to the other major enterprises like sheep and pigs, cereal production and horticulture. We must continue to research and have up-to-date advice on breeding stock, on the profligacy of our breeding herds, the efficient production systems and on improving the efficiency of the feeds we use. We must also improve our pre and post-harvest technology and press more for appropriate crops and enterprises in the appropriate places.
I am calling on Senator Jack Harte to conclude the debate on behalf of the Labour Party. He has 20 minutes.
What we are dealing with here is not necessarily the problems of the losses in education, agriculture and any other cutbacks or unemployment. What we are really dealing with are the broad effects of the private enterprise system. It did not just happen. It has existed for a long time and it will continue. There is no evidence in my lifetime of the private enterprise system ever having created a situation of full employment. Without full employment the spinoff into other areas is drastic. We are dealing with sorrows that we voluntarily imposed upon ourselves. People within the private enterprise system, in accordance with that system, have been warning various Governments down through the years as to what their code of behaviour was and where it was going to lead them, economically and financially. One of those people was the then Senator Ken Whitaker, former Governor of the Central Bank. On numerous occasions around 1977, he tried in this House and in many other places to get the Government to start changing their direction. However, it does not follow because I am quoting Senator Whitaker that I actually agreed with all he said. What he was saying was, within the meaning of the private enterprise system, that was the way they should have behaved.
I want to deal here with the background to this public finance crisis. When we look back over 30 years, budgets were balanced, public spending was paid for by revenue that was raised chiefly in taxation. In the Fifties, the Government began to borrow so that they could spend more than they raised in revenue. The borrowed money paid for capital spending, that is to say, the investment in factories, roads, ports et cetera which helped to increase production. Further taxation on increased incomes was extended to repay the borrowing. In 1972 a Fianna Fáil Minister for Finance, George Colley, first borrowed to pay for Government current or day-to-day spending on public services and welfare benefits. The current budget deficit, or the amount by which Government current spending exceeded revenue raised and which had to be met by borrowing was quite small that year. From 1973 to 1975 under the Fine Gael-Labour Coalition, Government deficits grew. The Government borrowed in an effort to counteract the impact of the world recession following the rise in oil prices of 1973. Government spending financed by borrowing was to replace depressed private spending. In 1976 when economic growth had resumed, the Coalition Government began to ease back on borrowing. Then Fianna Fáil returned to office committed to a policy of achieving full employment. They borrowed heavily to boost Government spending. Deficits and debts grew rapidly. That is a brief, recent history of the background to the present economic crisis. I did not exclude the Coalition Governments because they are equally guilty in the final analysis when we look at what the effects are today and where they led us to.
I do not disagree with the statement that continuous expansion of public debt is unsustainable. What worries me is the other arguments that people tried to put around. They try to tell you to leave everything to the free market system. They are going to say that about the airwaves. We impose these sorrows on ourselves by not paying attention. In the case of the airwaves we let people become illegitimate and suddenly we have to legitimise them. The reason we let them get illegitimate was because we believe in private enterprise and the free enterprise market, the cut throat competition and the war that goes on between them. We try to sort out the consequences of that by making things that are illegitimate, legitimate. It is the same in the argument over economics. We try to make arguments that are not legitimate legitimate when there is a chorus from all parties on cuts, et cetera.
It was said some time ago about the credit rating that up to 1984 the world banks were not unhappy with lending money to Ireland. The Department of Finance was able to negotiate loans on increasingly good terms. They were able to renegotiate loans concluded earlier on improved terms. Despite this, we had dire warnings from the conservative economists and politicians about the level of foreign borrowing, yet Euromoney, the magazine, ranked Ireland as high as 22nd amongst 112 countries as a low risk debtor. That was in October 1984. This was a slight improvement on the 1983 position when Ireland was ranked 23rd. When these statements were being made by this very influential magazine and other publications from Europe, the Minister for Industry and Commerce at that time, Deputy John Bruton, said that our per capita borrowing requirement was more than twice that of the economically crippled countries, such as Mexico, Argentine and Brazil. Euromoney ranked Mexico 48, Brazil 86 and Argentina 95 of the 112 countries. I cannot understand somebody being in office and making a statement like that when, in fact, the people in Europe can do the research and produce this evidence that we are not that bad at all. There are the means by which we can deal with the question of borrowing so that we will not have to impose drastic measures when it comes down to dealing with the more deprived in our society.
If we look back, could we take Mr. Bruton as an example and see if he was exaggerating the debt problem in order to obtain wage restraint and prepare workers for cuts in public services? Maybe the ground was being laid for us there. We did not compare at all with Mexico, Argentina and Brazil. The relatively rich in this society can always borrow a lot more than the relatively poor. They will always be taken on as better creditors. The EURO magazine is not the only one that quoted this. Ireland's credit worthiness was recognised by the Institutional Investor— a US based publication. They wrote in June 1984:
With low risk sovereign creditors few and far between these days, lending to Ireland sounds better all the time.
The magazine was describing how the Department of Finance had managed to renegotiate a loan on improved terms. A Japanese banker was quoted as saying:
Bankers are trying to find good customers and use their excess funds. Ireland is one of the best countries in the world from the lenders' side.
At the same time we were told by people such as conservative economists, that we are a bad risk, that they would only come in to turn the key on the door and lock us in, and that we would all have to weave a cocoon around ourselves on the island to keep ourselves warm. That is a lot of nonsense which we get from various conservative economists and Ministers in society. One wonders if this debate will get anywhere in the long run unless we can actually find out in the real sense can and should the Government go on borrowing abroad and, secondly, has high spending caused unemployment and, if so, could reduced spending solve the unemployment problem? Does the whole question of public spending necessarily lead to waste?
That is a very broad argument. With the limited time at our disposal we cannot go into it but that is the nature of the argument we will have to have in determining if we are on the right track with regard to getting our finances in order. I support the argument that we can borrow without getting into very serious trouble in this sense. It is not me who said this but others think it is a good idea, to. It appeared in The Irish Times of 7 September 1984 and of 10 September 1984 under the heading, “Only Kidding”. I quote:
Some people are naive enough to swallow the exaggerated propaganda about the foreign debt. Shortly after John Bruton compared Irish foreign debt to that of Mexico, Argentina and Brazil, Margaret Downes, a former president of the Institute of Chartered Accountants in Ireland, called for a moratorium on interest payments on the debt. The essential ingredients for survival, she said, were calmness and a plan, most likely including a restructuring of repayment arrangements and a moratorium on interest. The economic establishment which had put out the propaganda were appalled that anyone should take it so seriously as to go that far. This sort of suggestion would do nothing for credit rating. Downes' helpful suggestion was dismissed as "absurd" by the then Taoiseach, Garret FitzGerald, three days later.
Here was somebody who was seriously concerned about the economy, who recognised that there were problems and that the solution to the problems was not, in fact, to stop the borrowing at all and bring about these drastic sorrows that are imposed on society but that there was a way of dealing with the problems of the money owed, that there was a good credit rating and that support could be obtained from the banks in this area. For example, the question of the World Bank not lending Ireland money has been disproved by what I have quoted about our being good creditors. I shall give some more such examples. When the Japanese tell us that we are worth a few bob it is worth taking note. The suggestion by that lady was a good one and should not have been dismissed. We then had an outcry from different sources on the whole question of job cuts. It was a cuts chorus, and I quote:
If the Government were to drop its plan to control public expenditure, the result would be higher unemployment,
said Deputy John Bruton, Minister for Industry, Trade, Commerce and Tourism as reported in The Irish Times of 9 January 1985.
Another quotation:
It is not a question of the Government borrowing money to pay the wages for jobs which will either vanish themselves, or will, if taxation is ultimately raised to continue these payments, cause other jobs to be lost.
That is from the Government plan Building on Reality, page 32.
The growth of the burden of taxation in recent years both on the average income earner and on the economy has had adverse effects on the enterprise of the individual and on the competitiveness of the economy.
That is from The Way Forward, Fianna Fáil's economic plan, 1982. The employers said:
High Government spending, financed by unrealistic levels of borrowing and inappropriately high levels of taxation have resulted in an erosion of competitiveness which is showing
through in a higher level of unemployment than that of other member states of the EC.
That is from the Confederation of Irish Industry, Economic Trends, October 1983.
The Federated Union of Employers argue in the same vein I quote:
We must recognise that some decisions on the tax front in recent years have in fact been putting people out of jobs.
There are contradictions there. Some of them talk about overspending or tax, but none of them come up with any set of proposals that might take us away from the total dependance on private enterprise to solve all our problems. There is no evidence in the lifetime of the State that private enterprise has done that much to solve our problems.
When the whole question of public enterprises, State owned enterprises or semi-State enterprises is being knocked, and not being sufficiently used, it is well to look at where we stand in relation to that. In 1985 when assessing the top number of companies and the numbers of people employed by them, CIE, the ESB, An Post, Aer Lingus and Bord na Móna were in the top ten of employers. Account must also be taken that when we talk of the numbers employed by those companies we are also talking about the employment given in other areas providing services and products. For example, Aer Lingus, in 1983-84 paid £49.15 million to the oil companies for fuel. Over half the State's subvention to CIE was paid out to the private sector for goods and services. Many private enterprises depend almost totally on public enterprise for an outlet for their products or services. Dozens of provincial garages would have to lay off hundreds of workers if Bord Telecom cancelled their contracts for their services, maintenance and so on. The spinoff from public enterprise is not fully appreciated. Consequently, we keep falling back on the reliance of the private enterprise system to solve the job problems.
Finally, in considering the relationship — this is the Labour Party's view — between the educational system and the economy, we are guided by the view that the central institutions in every society are the economic institutions — those which organise the production and distribution of wealth. Other institutions are required to serve the needs of economic institutions. One such service and institution in modern societies is the education system. If we live in a society in which the economy is organised on capitalist principles then the educational system has to be seen to serve this. I will not go too far into that as it is quite extensive. The education system has got to be geared to society as a whole.
One has to look back over the history of the State and our failure to have full employment. The private enterprise system is failing. We need to be educated to develop new ways of running the country. At the moment we are only dealing with the results of a system that has become null and void. Perhaps some members from the teaching profession could expand on that theory in their contributions.
Senator Fitzsimons is prepared to allow Senator Eogan five minutes of his time if the House agrees.
Agreed.
In preparing for a short discussion on the Estimates one of the difficulties is whether one should get into the figures and discuss where they might be changed. I have come to the conclusion that that is not appropriate to the kind of discussion we are having today. I have an amendment to the motion on the Order Paper, amendment No. 3 which states:
"After `Programme' to add `but is appalled at the detrimental impact which they make on the poor and marginalised of Irish Society.'."
On further consideration and on reading in more detail the amendment of the Labour Party I would like, with the permission of the House, to withdraw my amendment and to support the Labour Party amendment which says in a more developed way that I intended to say in my amendment.
I compliment the Government on publishing the Estimates early: it is perhaps the only complimentary thing I will say all day. It is important and essential from the point of view of legislators in the Houses of the Oireachtas, to know where exactly the Government are going, and to be able to discuss it. There is no doubt in my mind, but that what we have seen in the abridged version of the Book of Estimates, shows an utter lack of imagination, an utter lack of any policy direction and certainly a lack of any kind of compassion.
At this point we should look at what we demand of a State and at the guidelines that should be there. It is essential to understand that there are certain areas in life in which the State must provide the services. Education is one such area. If we care about the quality of life of our citizens, access to health, education, to the law and courts as a means of redress, are things which should be available to people without reference to their ability to pay. This is lacking in the set of Estimates we are looking at today.
As far as I can see, the Government decided to cut back by a certain number of millions of pounds. They went from that point to take each Vote after the other and decided to cut 10 per cent, 20 per cent or 50 per cent off the allocations without any reference to the quality of service, or to the people who will suffer at the end of the day. To put that in context, of the total cutback in Education 10 per cent is taken from the primary sector. I appeal to the Minister of State to explain how that can be justified. I fail to understand how that can be rationalised, particularly when one sees that it is the area which deals with all people from all backgrounds without reference to their ability to pay. A cutback in any service which is available to all the population immediately hits the poor. I will develop this. Many people say that a cut affecting the whole population is a very fair cut because it hits everybody. However, if we cut back in education, and if education is not available to young people, the net effect of that will be that those families who can buy what they consider to be a better service or a topping up for their children will do so and those who cannot afford to do so will do without. That is one of the problems with the cutbacks in primary education. That applies to all the cuts.
In the area of early publication of the Estimates, the Government always made the point when in Opposition, that the idea of publishing the Estimates early was to give an indication of the Government's thinking so that there could be full discussion on it and so that they could listen to the views and responses of various people and react to them. It is quite clear that this is not the case. On the one hand we have the publication of the Book of Estimates but, on the other hand, we have had the clear outline of the cuts in each Department. If the cutback is made first and the Estimate next, there is not much point in discussing it or going much further with it.
May I make a comment? Senator O'Toole has made a good contribution. What we are doing is not good for education, and I am the first to admit that, but if we do not cut back, can the Senator give me an alternative to continuing to borrow an extra £2 billion a year?
An Leas-Chathaoirleach
The Minister cannot make a comment and the Senator should be allowed to continue without interruption.
I am never slow to interrupt and I am quite entitled to be interrupted. I welcome the intervention of the Minister. I also welcome the opportunity to answer the question.
An Leas-Chathaoirleach
The Chair does not share that view.
I have not the figures before me but in the past four years the State spent somewhere between £150 million and £200 million to bail out ICI. We handed this money over to a private company, to a bank. Will the Minister justify to me why we gave away four times the total cuts in primary education in order to bail out a banking institution? Can the Minister explain to me why the cost of bailing out the bankers and the financiers is now being paid for by the poor and by the national schools? That is my response to that question. The Minister may say to me, "Ah, but there is the difference; it was the other crowd". In fairness, there is one very honest and straight comment in what the Minister for Finance said this morning, when he spoke about "the appalling performance which culminated in a progressive deterioration in the public finances under all Governments since 1973." Let us not start making distinctions now. They are the words of the Minister for Finance this morning and let us stick with them. Let us take it a little beyond that. We live in a State where a phone call from Pittsburgh to a national newspaper on a Friday can have share prices zooming up on a Monday morning and people can be £10 million or £20 million better off. How can we live with that? Where will the money come from? Let me tell the House about the way we live. If I place a bet on a horse I will pay £10 to the bookie and £1 to the State. I am not objecting to that. That is quite right. It is part of the oods. If instead of going to the bookie I went across to Dawson Street to Davys and said: "There is £10. I want to back the same horses, but this time I am buying shares in classic thoroughbreds", I am taking a smaller risk, I am betting on the same horses, but I can win £5,000 this year before I pay one penny in tax. Can the Minister rationalise that one for me? This is the State in which we are living. If the Minister asks me where the money is to come from, I will go straight down through all the different variations in the taxation system. There is no point in the Minister shaking his head. The profit allowed on the Stock Market is £5,000 per year before you pay one penny tax on it.
An Leas-Chathaoirleach
The Senator should not invite a retort from the Minister.
You will pay tax to the bookie, because the small person will always pay at source. This seems to be the problem we are living with. For instance hospitals were being built or extended for the sake of those people who charge huge amounts of money without putting anything back into the State. When I went to third level education for the first time, I signed a commitment that I would work in the State for five years, that I would not leave until I had given five years to the State unless I got permission from the Minister for Education. What has happened to that attitude? How much does it cost us to put people through third level education and what do we expect to get back from them? I expect the State to get back what it invests in its young population through first, second, third or other levels of education. We should not give handouts to anybody. We are entitled to ask for the commitment of our citizens and similarly as citizens we are entitled to ask from Government, support, direction and clear and honest Government. That is precisely where we should start.
I can continue in that vein. The Minister for Health, for instance, says: "We will cut back on the National Social Service Board." Who costed that? There is one thing missing from these Estimates, the savings for Government. I challenge the Minister or anybody else, to tell me what they saved the State. I will give two examples since the Minister asked where the money would come from. About 52 per cent of the grant to the National Social Service Board goes on salaries. All those people are entitled to stay on in employment in the public service. A voluntary redundancy package will be offered to them so there is no actual saving to the State in terms of 52 per cent of the cost. The board are committed to a lease on their premises for five years, a lease which they tried to get out of 18 months ago and could not do legally. The State is also committed to it. That amounts to £25,000 a year for the next five years. Worse than that, and something that has not been dealt with is that they have dealt with 100,000 queries in the past year. How much per query would it cost the Department of Health to do the same job which is being claimed will be done? Not only is there no saving in that cutback, but there is a net cost to the State.
Let me give another example of lack of direction, imagination and understanding of where we are going. It has been said that a civil servant working in an office with secretarial support, telephone, copier, heating, lighting, rent of building and all the additional costs, is roughly costing the State twice that person's salary. I do not know whether or not that is true, but I have seen the various breakdowns of it. That is the net cost to the State of employing a civil servant. That might be an over estimation, but it is something of that order. In the decision to cut back primary teachers and civil servants there seems to be the same saving per capita to the State. Could the Minister explain how axing a group of workers who who work without a telephone cost, a copier cost, a heating and cleaning cost, bar 9p per pupil per day, without a maintenance cost of any significance, and who are costing the State their net salary only can save as much for the State as axing civil servants? Where is the distinction made in these Estimates? Show me where one cost shows a saving and the other does not?
There is no saving in taking a primary teacher out of the system. There is a cost to the State. A primary teacher on the maximum rate is earning something under £20,000 and taking home £14,000 after PRSI and tax. That is what it is costing the State at the moment to have that person in employment. Can the Minister explain this: to offer that person redundancy at the age of 50 or 52 years plus seven years enhancement so that he will retire with 40 years service means that that person will go out on a redundancy scheme with £10,000 per year pension. That will be the cost to the State in pension funds. That person will also get a lump sum of £30,000. Without being a financier, I can assure the House that if I get £30,000 into my hand I can guarantee to deliver to the State — because I would not be paying tax to the State — at least £4,000 per year. I am working that figure roughly at 14 per cent. Let us see what we have done. We have taken somebody who has cost the State £14,000 net per year. We have said: "Go home and sit down. We do not need you any more. We will give you £10,000 a year to sit down, and we will give you a lump sum of £30,000 which could be worth in terms of loss of income to the State of £4,000 per year".
In that equation there is a loss to the State. There is a loss to the State for every year of enhancement that has been offered. There is no saving to the State. It is a cock-up. There is no sense or direction to that kind of cutback. That is the point I am making. All my figures can be checked. They stand up. Nobody knows where the lump sum is to come from, in case anybody comes back——
I will come back to the Senator.
Somebody will surely come back and say we are getting it for nothing from the Central Bank, and I will want to know where money comes from for nothing. We are now taking people out of the system. The cutbacks in primary education in terms of redundancies or whatever else will not cost teachers in shillings. It will cost the pupils and the educational service offered in all schools. I want to put that in another context. The Minister, Deputy MacSharry, speaking on the "Pat Kenny Show" last Friday at 5.50 p.m. said: "We have had to have savings right across the board. We have been careful to ensure that the amount of savings would not impact on the weaker sections of the community and the necessary social services". That is utter rubbish.
The National Social Service Board is a clear example of a facility that was there mainly for those depending on social services, mainly the weaker sections of the community. It is just being wiped out. We are now being told that the Department can provide the same service more cheaply. I do not believe it, and I would like to see it costed. What are the savings to the State of taking people out of the system, particularly primary teachers, where you cannot add on administration cost, bar an insignificant amount? Where was this distinction made? I want to hear from the economists who planned this. It looks to me like the effort of an accountant.
An Leas-Chathaoirleach
The Senator has one minute left.
I think I have injury time, surely, on the basis of my response to the Minister.
On teachers generally, the Minister said that there are hundreds of teachers in some supernumerary posts that do not have classrooms, that do not have full time jobs, sitting there getting paid, and would anybody suggest that they should be left so. That is disgraceful. They should be kicked out. Neither myself, the INTO, nor any teacher union would ever say that people who are not doing their work should be a drain on the taxpayer. This is what the Minister said last Friday evening. I was on my way to the Oireachtas when I heard him and I nearly crashed the car with pure venom towards the man when I heard it. The Minister said that he thought that parents are not going to be affected in this issue at all. The Minister says we do not want teachers sitting around the place. What is he going to do — take them out of the system and put them, not sitting around in schools where they are doing some work, but sitting around at home? There is no logic in what he is trying to do. In these Estimates we have an absolute assault on the poor, an absolute assault on those dependent on the system and an absolute and utter lack of direction, lack of imagination and lack of planning. They are unacceptable, they are against the whole idea of a republic. They are a step backwards. They bring us back 30 years in many cases.
I agree that if there is fat it should be cut off. Nobody checked to see what is the net effect, the cost and the savings to the State. If that has been done let us see it.
We in Fine Gael believe that drastic measures were, are and will be needed if we are to curb public spending and tackle the central problem facing our community. The problem, put at its most simple, is the extent to which we are wasting our investment resources in meeting the Government's everyday outlay. That is the core of the problem and until it is tackled the growth which is so urgently needed cannot, and will not, become a reality. We realise, that achieving this objective requires a very delicate and sure sense of balance. It is a path fraught with difficulties and pitfalls especially for a Government which has had very little practice in taking hard decisions in the past.
Cutting public expenditure is by its very nature deflationary, and we are doing this at a time when we want to move towards that growth which alone can get us out of our present quagmire. In addition, however, cutting public spending can have social consequences out of all proportion to the gains made. The problem which any Government must face is the problem of whether to cut and by so doing not damage the growth upon which we depend to improve revenue and cut our budget deficit, and which alone can increase employment and help us stem the terrible haemorrhage of emigration. We must cut and at the same time maintain as much equity as possible to protect those in the weaker sectors. These are the problems which must face any Government intent on tackling this problem. These are the sole criteria upon which this Government's performance will be judged by this party.
For any Government, the scale and the nature of our problem is far greater than we have ever faced before in our 60 years of independence. It is certainly far greater than the problems of the depression-laden days of the 1950s because in those days, however depressing the environment and however little hope there was for young people, at least our national debt was not a significant factor in the overall equation. It was open to us to get ourselves out of much of the mess of those days, and indeed, in the sixties and seventies, to a great extent, we succeeded. That was possible for us because the national debt then was not a major factor, it was a small factor in the equation. Today, on its own, it constitutes a huge part of our problem.
The position of my party on this has been and will remain consistent. We want to see this problem tackled as a matter of national endeavour and we will play our part in that. It will be an active, critical, questioning part. There will be no strokes, or opportunism. It will be an act of principled patriotism which many may not understand and some will choose to misinterpret. If that is the case, so be it. This is the line which we have chosen to follow and it is a line to which we will stick with consistency.
I welcome the change of heart and policy by Fianna Fáil. I welcome if for one reason only and that is that it is in the national interest and in the interests of our survival as a nation. I welcome it with enormous reservations that I will number under three headings. Firstly, on their past record, can we believe that this Government will do what they are saying they will do? Past records suggest to most people that the Government should not be believed. The Fianna Fáil we have come to know, if not necessarily love, is a Fianna Fáil which has been more at home with strokes and hand-outs over the past number of years, with the buying of popularity and the staving off of the taking of difficult decisions by the easy option. That may be the case with the present administration, but on the issue of tackling our national debt, I am one of those who believe in the sincerity, certainly of the Minister for Finance, and the majority in the administration. I believe that there has been a firm purpose of amendment and I am certainly prepared to give the Government the benefit of every doubt on this matter so long as I can believe in this sincerity. I want to believe that the Government are serious and sincere in tackling this problem.
My second reservation, however, goes somewhat deeper and there is a great deal of bitterness in it. The price which this country has paid to bring Fianna Fáil to this position has been a huge price and one that will leave a lasting legacy of distrust as far as all politicians and political institutions are concerned. The four years of Fianna Fáil in Opposition were years of monumental irresponsibility on a national scale. All that mattered during those years was power and getting back to power, getting back at any cost. We all remember as well that no proposals from the Government had any hope during those years of ever being examined on their merit. Every proposal, especially every proposed cut was seen as an opportunity to further embarrass the Government at local and at national level. Every proposal during those four years was undermined almost at birth.
We all remember the language of those years, Deputy Gene Fitzgerald talking about Thatcherism and monetarism. Every small proposal for a cut was an example of the book-keeping mentality. This was the language which was thrown across the floors of both Houses during those years. It made me smile, to listen to some of Minister of State Fahey's remarks in his contribution, because he gave some of the prime examples of this type of language in the other House. To hear him today talking the language of what he than called monetarism and Thatcherism is indeed a sign of our changed circumstances. During those years every county council, every VEC and every health board became a forum for obstruction.
We all remember — and some of probably remember it better than most — the teachers strike. We remember the stance of the then Fianna Fáil spokeperson on Education, but we remember, in particular, the assurance given by Deputy John Wilson in the Dáil that the teachers claims would be met in full. We remember the atmosphere that was created during that time. The attitude was that there was a better, and by definition, an easier way; that we did not need painful surgery.
The attitude of obstruction during those years extended even to the Anglo-Irish Agreement when the Deputy Leader of Fianna Fáil went to the US to try to persuade leading members of Irish opinion there not to support the Anglo-Irish Agreement. It is ironic in the light of the charges being made this week about the very proper behaviour, of the British Ambassador in this country. We remember the posters in the last general election about the effect of health cuts and who they would hurt. That poster was one of the most cynical pieces of political propaganda any of us will ever see. I hope none of us will ever see the like again. I could go on this theme but the point I am making is that the whole campaign over those four years has had a profound effect on the way in which people look at politics and at the political system. Who can blame them for being cynical? Even though I profoundly welcome the change of heart, it has been bought at a great national cost.
The third reason for my reservation is the manner in which many of these cuts have been brought about and the nature of many of them. That is why we put down our amendment today. In putting it down we are being constructive, we are offering partnership to the Government in an act of national endeavour and are giving a concrete indication of our sincerity on a scale never before seen in an Irish Parliament.
However, what we are offering is commonplace in many European parliaments where the rightful role of parliament is to examine public spending in a detailed way and to suggest where changes might be made, where savings could be effected or more importantly, where a lesser amount of hardship could be inflicted.
Within that context we believe that many of the cuts are badly thought out. Many are crude and self-defeating and this Parliament should be involved in the process of deciding who can bear to carry the heaviest burden, who are the people who need the greatest protection. Constitutionally this House cannot be involved in that but the other House can be. However, this House has enough expertise and goodwill on the matter to give every help it can.
What we are proposing in our amendment would make a reality of parliamentary reform. It would try to get as high a level of consensus within the overall community for what has to be done. It would introduce a new openness where reasons would need to be given for the cuts and where alternatives could be examined in an open manner. It would bring a note of commonsense which has been so lacking in many of the cuts. For all of these reasons — better consensus, strengthening of Parliament, the injection of commonsense and a greater degree of openness — we are proposing the amendment we have on the Order Paper today.
It is ironic that when the Taoiseach and the Government could engage in dialogue with the social partners, they are utterly reluctant to engage in the same dialogue with the parliamentary partners and especially with those who are trying to achieve a degree of national consensus on this fundamental matter. These cuts are being carried out by a Government who did not do their work in Opposition, who were a lazy, unthinking Opposition and who today find themselves with no clear vision of where they are going. That is why so many of the cuts are so arbitary and unplanned.
We can see this lack of planning in the unnecessary and brutal chaos in parts of the health service. We can see the confusion over An Foras Forbartha, who were abolished as a macho stroke and we now realise that the savings will be very small and the loss to the environment will be highly significant. There has been a crude shedding of staff in the ACOT/AFT merger. ACOT were founded by Fianna Fáil who opposed a unified farming structure just ten years ago. They are now giving us just that but in a very brutal, chaotic and unplanned way.
We can see it in the abolition of the National Social Service Board. The latest costings here show that overall savings on this will be less than £100,000 a year. Once again there is no sense of planning and no indication of who will carry out the vital functions hitherto carried out by the NSSB. We have been told by some people in Government that the health boards will do the work. We know that this is nonsense. The health boards have more than enough on their plates already and they are not equipped to carry out this vital function.
Only yesterday there was a court case in the city where a man who was found guilty of a crime was awarded £100 out of the poor box in court. This man did not have enough to feed his family and he has been waiting for six months for paper work in the Eastern Health Board to be cleared up so that he could get a small increase in the weekly allowance for his wife and large family. The Government expect the health boards to move in where the NSSB have been doing a very good job already. One could go through the list of cuts.
The allocation for the Ombudsman's office was cut to achieve a small saving. This will have an enormous effect on the most vulnerable in our community. The cut in adult education, especially the programmes to impart basic learning skills to people who did not have that opportunity is small and again those who are being affected are the most vulnerable.
There is nobody in any party in this House or the other House who would stand for the cutting of these schemes but all of us would strive to find other ways where cuts could be made and where these services could be preserved. But this is not the way of this new Government of accountants, Thatcherism, monetarism and the rule of the accountant, the accountant rules OK. What I am saying will strike a chord with every elected Member of this House and the other House because we know the problems better than civil servants, better than the experts, the gurus or the three wise men who are brought in to advise the Government as to where the axe should fall. One could go through the list. It is a depressing list.
I want to return to the fundamental point on which I started. We in Fine Gael realise the size and the scope of the problem the Government and country face. We know why we have these problems but frankly we are more interested at this stage in our history in getting to the root causes of the problems and in sorting them out to the best of this country's ability. That is why we are making in this House today, as my colleagues in the other House made last week, an offer unparalleled in its generosity in the history of Parliament in this country. We are offering a way which would involve Parliament, which would mean more openness, which would mean more commonsense, which would mean more humanity and more equity in the way in which we are trying to achieve a consensus as to what needs to be done to get to the root of the problems which we as a country face. It is a way which offers a sense of national cohesiveness which has not existed in this country for decades. That is the offer. It is neither a stroke nor a way out; it is a generous offer which, if accepted by the Government, would have enormous implications for the development of Parliament in this country.
Whether the Government accept our offer one thing they can be certain of is that our opposition over the coming months will not deviate from the principles laid down by Deputy Alan Dukes in his speech in Tallaght in the early autumn. We have taken our position on that. We are engaged in constructive patriotism in our commitment to get to the root cause of the problem. But that does not mean that it will not be a vigilant, tough and detailed opposition. There will be no complacency. We will follow the Government in every way, down every alley and we will continue to put forward our own proposals. We are asking the Government to accept our amendment and to do something which was never done before but which could be the beginning of bringing about a sense of national cohesiveness, of working together, of community, of seeing our problems in a common way which this country has not seen in our 60 years of independence.
I listened with great attention this morning to the Minister's speech and to his analysis of the serious financial problems that face the country. It is vital for all our futures that the public finances be ordered and controlled. The overall problem is, by common consensus, exceedingly great. However, I will confine my remarks very briefly to what I describe as a sectional issue, that is education and even to a subsection of that issue.
The area of education has been debated in this House on more than one occasion. Surely this is due to the importance of the issue which is the exploitation to the fullest of the talents of our people. I was pleased that the Minister stated in his speech this morning that the 1988 Estimates will allow in the main a sound educational system. Education like everything else will I am sure have to share in the burden of the cuts. It would be rather innocent and naive to ask for special treatment for education but nevertheless I hope, in view of its nature, that the burden can be cushioned as much as possible.
My comments more specifically arise out of the higher education section of the Estimates. As most of us know, during the past few months universities have had a major reduction in their grants. This has been as high as 10 per cent in some instances. When one takes into account inflation and pay awards, the percentage will rise higher still. Such institutions have been in no way irresponsible in their use of finances. Indeed, they have been very careful to husband the slender finances they have had. They have achieved economies and attempted to generate funds. For instance, in University College Dublin the percentage of running costs provided by the State has dropped over the past few years from 85 per cent to 65 per cent today. It is also a fact that university education in Ireland costs about half that in Britain.
However, despite that the high standards are being maintained in the most cost effective way. In this connection, the universities have, of course, contributed in an indirect way to this low running cost. For instance, evening lectures, lectures leading to evening degrees and much post-graduate work takes place in the evenings without any additional financial burden. Of course, this is as it should be. It is vital for these institutes of higher education to provide a service to the people and to the community and one cannot just think solely financially about that.
The importance of education is that it brings about a creation of knowledge and a creation of knowledge leads to what we are debating here today, the creation of wealth. But cuts will provide major difficulties. We all understand that no section can have immunity and we appreciate that the Minister is, as he said, making a genuine attempt to spread the burden fairly across the board. I hope that the burden the higher institutes of education will have to bear will be much less than the 10 per cent that some of those institutions are at present bearing. A burden of that sort will seriously damage the future fabric of higher education and there will be a deterioration in quality and in quantity too. This is vital to the survival of higher education as we understand it today.
While we trust that some effort will be made to maintain the cuts at as low a level as possible, I also trust as do the various institutions who may have to implement them, that this will be done in a fair and sensitive way and that no section of those institutions will be unnecessarily penalised.
I understand that the debate will be concluded at 5 p.m. and the Minister wants to speak so that, unfortunately, does not allow me time to make a lengthy contribution.
I am rather disappointed with the contributions from the Opposition benches. It is very easy to govern from those benches. It is a case of the hurler on the ditch. As the Minister told us, this is a significant change in economic policy and I agree with the Minister that we have broad national consensus. The previous Government put their finger on the problem.
Senator Manning asked a number of pertinent questions. He stated at one stage that Fianna Fáil in Opposition did not do their work. The reality was that the previous Government did not do their work in Government. One commentator at the time said unkindly of the Taoiseach, Dr. Garret FitzGerald, that he was a man of great intellectual capacity but limited intelligence. There were others who said it was a case of the tail wagging the dog.
When this Government came to power they diagnosed quite correctly that major surgery was necessary. As I said on a previous occasion, the disease was terminal. The whole country is behind the Government's policies. Senator Manning also said that we should strive to find other ways. It is very easy to be critical in that sense. I failed to come to any conclusion as to propositions or ideas in the contributions of the people who spoke. It is very easy to knock and we are very good at knocking.
I had intended to speak at some length on the housing policy because that is the area I am involved in. Unfortunately I do not have the time to do this. I commend the Government with regard to the disabled person's grant. The Government are doing a very good job in this area. I am glad that this grant is being retained. There is a maxim grant of £5,000 or two-thirds of the cost, whichever is the least. I ask the Minister to take into consideration these people who qualify for a disabled person's grant and have to get planning permission: in cases where a septic tank has to be provided, could some help be given to them with regard to the planning application, the provision of site maps and ordnance survey maps because these cost money? Perhaps I will be able to develop this at a later date. In the meantime I ask the Minister to look into the situation of disabled persons' grants and see if people could be helped with regard to planning applications where these are necessary.
The subject of today's debate is of importance to the future well-being of the country. The 1988 Estimates and Public Capital Programme form a central element of this Government's plans to achieve economic recovery. They mark a further stage of the strategy initiated in the 1987 budget: a strategy aimed at a better future, increased employment and improving living standards.
The critical importance of the approach we adopt to overcoming the problems facing us have been acknowledged by many speakers today. I welcome the broad support shown here for the Government's plans. It mirrors the support received in the Dáil and, I believe, the widespread acceptance and acknowledgement of the community at large. The problems we are experiencing affect all sectors and the solutions we propose merit the approval of all sectors.
It is hardly necessary for me now to remind this House once again of the gravity of the economic and financial situation which has faced the Government from the day that they took up office or of the developments of recent years which led up to this situation. They have already been mentioned particularly by the Minister for Finance in his opening speech and also by other speakers. There are some fundamental points to the Government's approach which I believe merit reiteration.
The priorities are to reduce dependence on borrowing which has been crippling our efforts to get adequate growth in the economy; to improve the environment for investment and consequently create greater employment; to reform the taxation system and protect the living standards of those on low incomes; and to develop natural resources properly.
Confidence in the economy and real economic growth depend upon a clear demonstration of Government determination to manage the public finances properly. Public spending is too high and the inevitable consequence of this is high taxation and high borrowing. There have been outflows of capital from the economy over an extended period on a scale that we simply cannot afford. Interest rates have been intolerably high and this of course, has been a serious deterrent to productive investment. The focus of Government policy is to lay the basis for secure growth in the economy in the medium and long term. This policy will entail short term costs. It would be totally unrealistic to expect that the acute problems which now exist and which have been developing since the early seventies could be solved within a short period of years. Preoccupation in the past with short term goals and the immediate impact of policies failed to improve the position even for the short term and stored up the major problems which now must be faced.
Excessive public expenditure is at the root of our problems and curbing this expenditure is an unpalatable but necessary element of the solution. The 1987 budget made significant progress towards this objective. Our work in preparing the 1987 budget showed us that expenditure would have to be reduced further in 1988 to halt the deterioration in the public finances. Ministers, therefore, initiated an indepth review of all spending programmes in their Departments immediately after the budget.
The Government are committed to containing expenditure at or below 1986 levels as a percentage of GNP. Government expenditure, which was 56.6 per cent of GNP in 1986, has fallen to an estimated 55.2 per cent in 1987 and the Government are confident that the reductions they have decided upon for 1988 will result in a further fall next year. This sustained fall is in contrast to the upward trend of earlier years. Over the period 1972-86 Government expenditure rose steadily from 38 per cent of GNP to 56.6 per cent of GNP. The nominal reduction on 1987 is £412 million and the underlying reduction is closer to £500 million.
Cutbacks have had to be made in all areas of expenditure. No one section should have to bear the brunt of expenditure reductions but neither should any areas be exempted. We have, however, been scrupulously concerned to ensure that the burden of adjustment is borne by those better able to bear it. There has been criticism here today and elsewhere of specific measures decided upon. Nevertheless, I am confident the 1988 Estimates comprise a balanced package which accords priority to the maintenance of essential services.
In particular, expenditure reduction measures in the social welfare area have been kept to an unavoidable minimum. The 1988 social welfare estimate as shown in the abridged Estimates volume is based on current welfare rates and does not include any provision for an increase in 1988. Any such increase would be a matter to be settled in the context of the 1988 budget. Nor do the allocations shown for 1987 or 1988 include any provision for payment of a Christmas bonus. These are matters for decision at a later date.
The overall structure of the present welfare code is being maintained and where policy changes are proposed these are essentially intended to tighten up access to schemes while still protecting those who are in most need. Details of some proposals have already been published, such as the intention to introduce a scheme of statutory sick pay, the extension of social insurance to farmers and the self-employed, the overhaul of the treatment benefits scheme and the extension of the free fuel scheme to the long term unemployed. Certain other schemes, including disability and maternity benefit will be subject to minor modifications.
In recent days, there has been extensive and, I might say, mis-informed speculation — particularly by the Labour Party — about "hidden" cutbacks in welfare. This scare-mongering has focused particularly on unemployment benefit and child benefit. The only savings in unemployment benefit will accrue from anti-fraud controls and from the positive effects of the ongoing job search programme. The estimate as published contains no plans to cut child benefit and the 1 per cent decline in expenditure in 1988 is due to lower numbers of children as the birth rate declines. As I said before, the overall structure of the present social welfare code is being preserved.
In the health area we propose to continue the strategy begun last year of reorganising the health services to deliver a more efficient service. To that end we have reshaped the role of some of the semi-State bodies in the health area such as the Health Education Bureau and the National Social Service Board by amalgamating them with the Department of Health. Senator Norris was critical of the abolition of the National Social Service Board and inquired as to how its functions are to be continued.
I want to make it clear that the functions of thse bodies are not being abandoned. Arrangements for the transfer of the functions of the National Social Service Board are at present being discussed with the relevant bodies. We have every confidence that the health boards and the other agencies will more than adequately fulfil the role of the other bodies.
The new agreement with the Federation of Irish Chemical Industries will ensure savings on drugs purchased by the State. The Minister for Health will also be reviewing the various schemes for the supply of drugs to ensure that they are operating in the most efficient way possible. He has also established cost containment units to ensure that hospitals and other institutions are run as efficiently as possible.
Given that almost 80 per cent of health expenditure is on pay any serious attempt to reduce expenditure in this area must be tackled. As in other areas this will be done through a combination of natural wastage and voluntary redundancies.
I do not accept, as Senator Bulbulia claimed, that rationalisation of the health services widens the gap between those who can afford private medicine and those who rely on the public service. Our major concern is the provision of adequate public care to those who need it. Sufficient resources are being made available to achieve this. More than one third of the population are covered by medical cards and as such enjoy totally free health care. All emergency cases are dealt with immediately.
Another main area of Government expenditure is the education sector. Gross overall spending on education amounts to almost 18 per cent of total Exchequer spending. Thus, if the imbalances in public expenditure are to be tackled in a realistic manner in 1988 the education area, being such a large spender, must contribute its share to these reductions.
At present we have almost one million people receiving full time education. To cater for this huge number we have provided excellent buildings and equipment at all levels of education. We can take considerable pride from this. However, the situation has changed dramatically over the past seven years. The number of births in Ireland has fallen from 74,000 in 1980 to 62,000 in 1986. We must take account of this trend, which is likely to continue, before we spend many millions of pounds on the provision of new and expensive educational buildings which will last well into the next century. Even if the Exchequer position was more favourable the Government could not defend continuing a programme of building into the nineties at the same level as previous years.
It would be folly to invest in new buildings while others empty as the number in our schools decline. Therefore, the Government are restricting the amount allocated to education in the Public Capital Programme to £55 million in 1988. The effect of this allocation is to allow, in general, only those projects which are contractually committed to proceed, in 1988. At present, new policies are being designed to take account of demography in the first and second level sector. When these policies have been finalised the building programmes will reopen. It is likely that expenditure under these new policies will be substantially below the levels of recent years.
Expenditure in the education sector has had to be cut in 1988. The decisions which the Government have taken were made in such a manner as not to damage the essential fabric of our education system and also, as far as resources permit, to ensure that the burden of these measures does not fall on the disadvantaged.
The planned merger of AFT and ACOT is part of a response to a clear need for a major rationalisation of State agencies and services. The structures that have grown up in many areas over the years have become far too cumbersome with too much overlapping and duplication. There are simply too many State agencies and authorities each with their own heavy burden of administration overheads. In some cases they are carrying out tasks in an elaborate environment that could be much more economically performed as normal functions of their parent Department. In other cases they were set up for purposes which have long since been accomplished.
In some economic and social areas there are a number of agencies doing basically the same job. We simply have not got the resources to support this elaborate super-structure of agencies. The Government, therefore, in the course of their examination of spending programmes were particularly concerned to eliminate duplication, overlapping, waste and non-essential activity in the State sector.
There has been criticism of the loss of public sector jobs envisaged under the Estimate. The losses are a regrettable but inevitable consequence of the expenditure reductions. We cannot continue to employ more people than we can afford to pay. It is intended to achieve the reduction in numbers on a voluntary basis by means of a package of measures which involves: a continuation of the existing embargo on recruitment to the Civil Service; a more flexible approach to redeployment; job sharing and career breaks; and voluntary redundancy for which generous financial terms have been announced.
It is difficult at this stage to provide a precise forecast of the reduction in staff numbers or of the costs involved, pending the take-up of the voluntary package. However, it is estimated that, to reach the expenditure targets set in the Estimates, the public service workforce will have to fall by about 7,000 next year. A significant proportion of these will, of course, be retiring or otherwise leaving in the normal course of events, but several thousand redundancies will also be required if the targets are to be met.
The Government are committed to bringing about this reduction in the number of public service employees. It is central to the achievement of our budgetary targets and the objectives of the Programme for National Recovery recently agreed by the social partners. Coupled with the moderate pay increase negotiated under the programme the reduction in numbers will make a major contribution to restoring stability to the public finances.
The public service pay agreement is very realistic having regard to the general economic situation and the state of the public finances. The public service pay bill for 1987, which had already been decided by our predecessors before we came into office, is 6 per cent above the figure for the previous year, 1986. Contrast this with what has been achieved in the recently negotiated agreement. The public service pay bill next year, inclusive of the cost of the increases negotiated, will not exceed this year's figure.
It is nonsensical to criticise a provision in the programme which imposes a limit of 2.5 per cent on pay increases throughout the economy for the next three years. This definite limit enables the Government to approach the next three budgets with one of the principal elements satisfactorily settled. The agreement of the trade unions not to engage in industrial action in pursuit of claims in excess of the pay terms of the programme will contribute greatly to industrial peace throughout the nation. The pay provisions of the programme contain a clear bias in favour of the lower paid. This is the first time this has happened for many years.
The pay element of the programme provides certainty for both the public and private sectors. In the private sector which is facing increasingly competitive trading conditions, certainty about the evolution of pay over three years in an atmosphere devoid of industrial disputes and unrest provides the best possible basis for investment in and the development of enterprise. This firm planning basis coupled with lower interest rates now provides the best opportunity in a decade for investment decisions leading to greater output and efficiency and increased employment.
The agreement on pay is an important element of the Programme for National Recovery but it is by no means the only element as has been suggested by some speakers. The programme constitutes an integrated set of policies to deal with our current problems in the areas of macroeconomic policies including public expenditure control, the reform of the taxation system, the promotion of economic development and the progressive removal of social inequities.
It is because the programme constitutes a comprehensive and integrated approach to our difficulties that it has received the support of the social partners. Consultation by Government with the social partners has ensured the widest possible support for the steps which must be taken.
In conclusion I remind the House that this Government are the first Government to bring forward a Book of Estimates so early to give an opportunity to the Members of Parliament to discuss them. I listened with great interest to this debate. There have been many positive contributions but the parties who were in Government in the previous four years failed to recognise that when in Government they failed to deliver. They blamed all and sundry for that failure. Indeed, one might be forgiven for thinking that they were not in Government at all. The position is, we are in Government, we are in control, we intend to move quickly and decisively, we are dealing with the problems of the economy and we expect that all elected people to the Houses of the Oireachtas will play their part in ensuring that we can bring about economic viability.
There is now a clear realism that we will have to look to our own efforts to overcome the serious obstacles which at present exist to our economic and social development. There is general recognition that the Government's firmness is creating the confidence that our problems can be resolved. The Estimates for 1988 illustrate clearly the Government's determination to get the public finances back into order. The Programme for National Recovery provides the framework under which economic progress will be made. The strategy to overcome our difficulties has been set and will now be pursued resolutely by this Government.
Amendment put.
The Seanad divided: Tá, 13; Níl, 24.
Tá
- Bradford, Paul.
- Bulbulia, Katharine.
- Connor, John.
- Daly, Jack.
- Doyle, Joe.
- Fennell, Nuala.
- Hogan, Philip.
- Kelleher, Peter.
- Kennedy, Patrick.
- McCormack, Padraic.
- McMahon, Larry.
- Manning, Maurice.
- Reynolds, Gerry.
Níl
- Byrne, Sean.
- Cassidy, Donie.
- Cullimore, Seamus.
- de Buitleár, Eamon.
- Doherty, Michael.
- Eogan, George.
- Fallon, Sean.
- Farrell, Willie.
- Fitzgerald, Tom.
- Fitzsimons, Jack.
- Hanafin, Des.
- Haughey, Seán F.
- Kiely, Rory.
- Lanigan, Mick.
- Lydon, Donal.
- McEllistrim, Tom.
- McGowan, Patrick.
- Mooney, Paschal.
- Mullooly, Brian.
- Mulroy, Jimmy.
- O'Connell, John.
- O'Connor, Nicholas.
- Ross, Shane, P. N.
- Ryan, William.
Tellers: Tá, Senators J. Daly and Bradford; Níl, Senators W. Ryan and S. Haughey.
Amendment declared lost.
I move amendment No. 1:
After "Programme" to add "and Seanad Éireann notes in particular that under the terms of the Estimates 16,000-20,000 public service jobs will be lost, which will seriously affect the extent and quality of the public services; the Live Register will rise to 256,000 monthly average in 1988; at least 1,200 more hospital beds will be closed and other essential health services will be dismantled; the pupil teacher ratio in primary schools will worsen dramatically; the vital services provided by the National Social Service Board, the Health Education Bureau and An Foras Forbartha will disappear; young people will be discriminated against in their access to training, education and welfare services; expectant mothers will be deprived of certain maternity payments to which they are now entitled; people suffering from disability will be deprived of long duration payments and will pay tax and PRSI on the first thirteen weeks; child benefit will be cut; a new housing crisis will develop, with both public and private home construction halved; Ireland's contribution to the third world, already small, will be cut by 28 per cent; the role of the Ombudsman will be greatly reduced; the ability of our largest industry, agriculture, to contribute to the development of our economy will be seriously weakened by the removal of essential advisory and research services; the capacity of our tourism industry to grow will be greatly inhibited; the contribution possible through State-led industrial development will be drastically reduced. Accordingly, Seanad Éireann, in noting the Estimates, declares also that these Estimates will promote deflation and further unemployment in our economy, give rise to inequality, injustice and poverty; and because they fail to address the fundamental issue of the provision of financial resources on an equitable basis to meet the cost of essential economic and social services".
I second the amendment.
Amendment put.
The Seanad divided: Tá, 4; Níl, 24.
Tá
- Ferris, Michael.
- Harte, John.
- O'Shea, Brian.
- O'Toole, Joe.
Níl
- Byrne, Seán.
- Cassidy, Donie.
- Cullimore, Séamus.
- de Buitleár, Éamon.
- Doherty, Michael.
- Eogan, George.
- Fallon, Seán.
- Farrell, Willie.
- Fitzgerald, Tom.
- Fitzsimons, Jack.
- Hanafin, Des.
- Haughey, Seán F.
- Kiely, Rory.
- Lanigan, Mick.
- Lydon, Donal.
- McEllistrim, Tom.
- McGowan, Patrick.
- Mooney, Paschal.
- Mullooly, Brian.
- Mulroy, Jimmy.
- O'Connell, John.
- O'Connor, Nicholas.
- Ross, Shane P.N.
- Ryan, William.
Tellers: Tá, Senators Harte and O'Shea; Níl, Senators W. Ryan and S. Haughey.
Amendment declared lost.
An Leas-Chathaoirleach
The question is: "That Seanad Éireann takes note of the 1988 Estimates for the Public Services (A bridged Version) and of the 1988 Summary Public Capital Programme."
Question put.
The Seanad divided: Tá, 24
4; Níl, 4.
Tá
- Byrne, Seán.
- Cassidy, Donie.
- Cullimore, Séamus.
- de Buitleár, Éamon.
- Doherty, Michael.
- Eogan, George.
- Fallon, Seán.
- Farrell, Willie.
- Fitzgerald, Tom.
- Fitzsimons, Jack.
- Hanafin, Des.
- Haughey, Seán F.
- Kiely, Rory.
- Lanigan, Mick.
- Lydon, Donal.
- McEllistrim, Tom.
- McGowan, Patrick.
- Mooney, Paschal.
- Mullooly, Brian.
- Mulroy, Jimmy.
- O'Connell, John.
- O'Connor, Nicholas.
- Ross, Shane P.N.
- Ryan, William.
Níl
- Ferris, Michael.
- Harte, John.
- O'Shea, Brian.
- O'Toole, Joe.
Tellers: Tá, Senators W. Ryan and S. Haughey; Níl, Senators O'Shea and Harte.
Question declared carried.