I move:
That Seanad Éireann notes the supply services and purposes to which sums have been appropriated in the Appropriation Act, 1988.
Appropriation Act, 1988: Motion.
I was hoping that the Christmas holiday would have a setting effect on some of the Senators who continue to disrupt the Order of Business here but obviously that is not the case. I hope we will not continue, in this present session, with the same king of futile, irrelevant, repetitive arguments that we have had in the last session. It is unfortunate that this House should be brought into disrepute. I hope that in this session we will see a more orderly Order of Business each day and that Senators will allow the Cathaoirleach and the House to proceed with its business without unnecessary interruptions.
The Appropriation Bill gives us an opportunity each year to examine the performance of the Government in office. Today we can state categorically that the present Fianna Fáil Government since they came into office in 1987 have been the most effective administration in many a long year. We must remind ourselves that it is not yet two years since the outgoing Coalition Government reneged on the responsibilities and shied away from the harsh decisions that were required in order to put the ship of State back on course. Of course, the Labour Party had already opted out of Government, leaving Fine Gael to carry the can. It was then left to the new Fianna Fáil Administration to pick up the pieces and launch their plan of action to put this country back on the road to economic recovery.
The consistent sound management of this Administration has succeeded in restoring business confidence. This, indeed, is in sharp contrast to the general feeling of despondency and lack of hope experienced at the end of 1986. Interest rates have fallen by up to 6 per cent due to firm Government action on public expenditure. This has encouraged many young people to buy or build their own homes and has saved existing mortgagees many hundreds of pounds in interest repayments. At the end of 1986 interest rates were almost 14 per cent. Industrial output and export growth are continuing very strong. The balance of payments will remain in surplus in 1989 for the second year running. This contrasts with a deficit of £513 million in 1986. Inflation is now running at 2 per cent, its lowest level in 25 years, the average rate for 1986 was 4 per cent. Borrowing has been reduced by a third to under £1,200 million. This compares with a borrowing figure of £2,145 million at the end of 1986. The budget is fully on course to achieve its targets. Temporary tax incentive schemes have ensured significant progress in the collection of tax arrears. Indeed, the tax amnesty introduced by the Government has been a great success and has succeeded in bringing in £500 million extra for the Exchequer. The 63 per cent of taxpayers, almost two-thirds, are now paying at the standard rate of tax.
We have heard much recently about the new Structural Funds. In that regard the Government have set up seven regional committees to utilise to the maximum effect receipts from EC Structural Funds up to 1992. Those regional committees are actively involved in preparing projects in their regions which they hope will qualify for Structural Fund grants and create additional jobs in these regions. Those major improvements in the economy during the past two years are positive proof that this Government's plan of action is bearing fruit. I know that if further action is required to prime the engine of State, the Minister for Finance, in his budget next week, will do just that.
We have a long way to go yet but I am satisfied that this Government have the commitment, the political will and the determination to surmount any obstacles that might come in the way of achieving their targets as set out in the Programme for National Recovery. The twin evils of unemployment and emigration have still to be solved and the upturn in our economic fortunes has not been translated to the extent we would like into increased levels of job creation. The recovery in all sectors of the economy is evident but it is especially evident in industry. In the past year manufacturing output was 12½ per cent higher in the first nine months of the year than in the first nine months of 1987.
There has been a marked improvement in the international competitiveness of Irish industry due to favourable developments in inflation, interest rates and industrial costs such as electricity and telecommunications. An increase in industrial output of 10 per cent in 1987 continued in 1988 with an increase of over 15 per cent in the first four months of the year. A figure of 9,500 jobs have been created in industry and in international services in the first six months of 1988 in line with the overall jobs commitment given in the Programme for National Recovery. Thirty-seven projects have been approved for the financial services centre at the Custom House Docks site with an employment content of 1,000. Twenty seven new industrial projects were announced in September which will create 2,250 jobs with an associated investment of £55 million.
This year also we have seen a rapid recovery in agriculture after two poor years, 1985 and 1986. This is very encouraging because we all know that agriculture represents a vital part of our economy. It accounts for 10 per cent of our gross national product, 20 per cent of our total employment and 30 per cent of total exports. Last year was extremely successful for Irish dairy exports which, at £1.2 billion, showed an increase of 26 per cent on 1986 levels. Some 7,000 dairy farmers in the more severely handicapped areas will now qualify for increased grants of £70 and £66 on beef cows in dairy herds which should help to increase cattle numbers. Higher prices have been paid to cattle producers during 1988, particularly for well finished animals. Prices have remained consistently strong and are in the region of 7 per cent higher than in 1987.
Sheep farming remains a very attractive farm alternative and the value of this sector's output in 1987 was £113 million. Indications are that the 1987 levels will be exceeded in 1988 and exports for the first half of 1988 were up 16 per cent on 1987. In addition to the payment for their output, sheep farmers will have received some £62 million in ewe premium payments and nearly £12 million in headage payment grants in 1988. The revised western package will give a much needed injection to cattle investment of around £200 million in disadvantaged areas. The western package will now apply to all the designated areas which cover nearly two-thirds of the whole country.
The new approach adopted by the Minister for Agriculture and Food to the eradication of bovine TB is very welcome. The problem of animal disease has plagued Irish farmers for the past 30 years. Vast amounts of taxpayers' money have been used to eliminate TB from the national herd, but unfortunately, the incidence of the disease is still too high. I hope that the setting up of the eradication of animal diseases board will finally get to grips with this problem and achieve their target of reducing the existing levels of bovine TB by half in four years. Adequate funding has been guaranteed by the Government for their programme. This is very important for the working of the board, because far too often in the past we have seen programmes launched which due to lack of finance fell asunder and did not achieve what they set out to achieve. I hope this new board will be successful.
We who have an interest in agriculture look forward to the day when we can say that the incidence of bovine TB has now been reduced to acceptable levels. The Minister has already adopted the recommendations of the new board. The main feature of these new measures is to increase the level of reactor grants and a move away from the existing flat rate of depopulation payments to a system where varying rates of grants are paid depending on the type of animal. This is a major step forward because the system of payment for reactors was a bone of contention with farmers for a long number of years.
Another great step forward by the Government in the past year is the extension of the social insurance scheme to the self-employed, including farmers, from last April. Until now up to 70 per cent of all self-employed people had to fall back on means-tested assistance payments in their old age. Farmers and the self-employed can now build up entitlement to a guaranteed basic pension for old age and survivor's benefits. They will no longer have to worry about the visit from the social welfare officer and the means test when they reach the age of 65 or 66. When they have paid their PRSI for the ten years preceding that age, they qualify and that is it. In that connection I would hope also that the Minister would be able to do something for farmers in the 56 to 66 year age bracket who are prepared to pay an extra premium to benefit in full from this scheme. I know it is not easy to satisfy every need when resources are scarce, but in spite of that scarcity the Government have maintained the overall value of all social welfare payments by the payment of a 3 per cent increase in July. The total increase for social welfare recipients in 1988 was £101 million.
In spite of all of that, there is still poverty in our society. There are still families who are at their wits end trying to provide the essentials of life on a very low income. This stress on family relationships often leads to alcoholism, drug abuse, homelessness, violence and family break up. This poverty is often not of their own making but is thrust upon them through circumstances well outside their control. It may be that the breadwinner has lost the job, a fate which very many families have experienced in recent years, resulting in loss of income and hardship.
The Programme for National Recovery pledged that greater social equity in terms of access to social benefits and to health and education services is a prime object of Government policy. I hope the Government will fulfil this promise by adopting the values of equality and equity as central operating principles. This will demand policies which would guarantee every citizen a right to an adequate income related to prevailing living standards, and to equality of access to health care, housing and education. The Fianna Fáil Government have always been noted for looking after the less well off people in our society. I am sure they will not be found wanting now either, and as the resources become available I know they will have regard to the submissions made to the Government by various groups such as the Combat Poverty Agency and others who have made a submission to the Minister for Finance and have set out their priorities in tackling this problem. I am sure the Minister will take note of those submissions and act on tnem as the resources become available to him.
There have been many other noted improvement in the last year-and-a-half since this Government came into office but I will not list them all here today. I have, however, highlighted the main achievements of the Government, the reduction in interest rates and inflation. We are satisfied that the economy is on the upturn. I hope that this Government — even though they are in a minority position — will continue with their Programme for National Recovery, that they will not be put off course by any groups, be they political or otherwise, and that they will continue to build up the economy.
We know harsh measures have to be taken to get the country moving once again. As I said, there is a huge number of young people unemployed but I believe there is now a light at the end of the tunnel. We will shortly see the day when those young people will have the opportunity to get a job in their own country, to build homes and make their future here. That is what we are working towards. I hope this Government will get the opportunity to implement all the objectives set out in their programme for Government two short years ago.
As I am the first from my party to speak on the debate proper. I would like to extend my welcome and my congratulations to Senator Bromell and wish him well. As a veteran of six or seven years in this House, I sincerely hope he has a long and satisfying career here.
As I have often said in these debates, I speak for my party on agriculture, and in this debate I will confine myself almost exclusively to that subject. The Minister for Agriculture and Food contributed to the debate on the Appropriation Act in the Dáil. As the Minister of State, Deputy Treacy, did not refer to agriculture in his opening speech in the Seanad on 16 September last, I will deal with what the Minister, Deputy O'Kennedy, said in the other House on the same day.
He spoke glowingly, in his usual political terms, about the agri-industry over the last two years. He spoke of the industry being in a depressed state up to 1987 and said that in the last year he found it "vigorous and buoyant". He said agricultural income in 1988 would top the £3 billion mark, an increase of 8 per cent over 1987 and also spoke about family farm incomes realising about £1.5 billion, an increase of 16 per cent on the 1987 figure. What he conveniently forgot to say was that the 1988 farm incomes barely reached, in real terms, the 1984 level, and 1984 was not a bonanza year. This is the dishonest exercise this Minister started in 1987 when he compared the figures for that year, which were relatively favourable, with 1986 which with 1985, were absolutely disastrous years purely because of the weather. The improvements in agricultural output and income in 1987 and 1988 represent nothing more than the weather-related and, to a lesser extent, favourable market-related improvements. These two elements alone, which no act, word or deed of the Minister or the Government had any influence over, led to the better position in which agriculture finds itself today.
The Minister admitted when he spoke in the Dáil that almost all the increase in the value of agricultural income in 1988 was accounted for in the substantial and unexpected increase in milk and beef prices during that year. Milk prices improve because the external and Community market for dairy produce increased arising from the super-levy working its way through the Community milk production. This significantly reduced output throughout the Community and also reduced the butter and skim milk powder mountains throughout the Community. These positive factors — and we welcome them — started to bring real market forces back to the Irish and European dairy markets for the first time in more than a dozen years. Hence the buoyant market for milk at co-op level during the year.
For much the same reason, the beef industry was buoyant, indeed to a remarkable level, during 1988. We owe this to the decline in our cattle numbers. The forces of supply and demand gave us this buoyancy. That is fine for the present but it bodes disaster for the future as our national herd declines over future years. Teagasc predict an 8 per cent drop in marketable cattle for 1989.
When speaking in the Dáil the Minister failed to say that net profits to beef producers, when all input costs were taken into account, was only 5 per cent in 1988. That is exactly what the return to beef farmers was in 1987. Teagasc predict a margin of 5 per cent for these farmers in 1989. The returns from beef production in Ireland in 1988 were as low as £300 per hectare or about £100 per acre, the lowest return in the older EC. Let us not forget that beef production is the largest single component in Irish agriculture.
There was another negative feature of the Irish beef market in 1988. The slaughter of prime steers in numerical terms fell by 4 per cent over 1987 but live exports of cattle, from which we got no downstream benefit, increased by 3 per cent over 1987. On top of that, the numerical output of cattle in Ireland in 1988, owing to slaughter in our meat plants and to live exports, fell by 3 per cent over the figure for the previous year. We got an increase in the value of beef output in 1988 from two very vulnerable sources. First, the value increased because there was a significant increase in the carcase weight of the steers presented for slaughter during the year, as high as 6 per cent over 1987. This came about because in 1988 we had for the first time in a decade an early spring with excellent grass growth. In April, May, June, July and August there were higher than average temperatures, and hence excellent grass growth and for the remainder of the year the soil temperatures were higher than usual. This precocious growth gave us better returns in terms of heavier animals leaving the fields for slaughter. By the law of averages, we will have to wait another decade for the forces of nature to smile so kindly on us again, and the forces of nature have a lot to do with farm incomes.
The other reason for a buoyant beef market in 1988 was a local shortage of supply in Ireland and in the market of one of our major customers, the United Kingdom, and the fact that the common agricultural beef intervention régime was by and large benign. Those days are ending. Early in 1988 we entered a new round of GATT talks in which the Americans put particular pressure on the European Community to dismantle, as far as possible, the propping up of beef prices. The Commission has proposed to reduce very significantly the amount of beef that may be allowed into intervention during the current year of 1989. We did not have those factors working against us in 1988. Of course, they had a major influence on the way the market moved during that year but we will have negative elements moving against us in the coming year.
As I have already stated in relation to milk, we get an 11 per cent increase in income from this sector in 1988 purely because the super-levy policy had moved the unwanted mountains. Our creamery milk intake in the current super-levy year is down to about five billion litres from about 5.3 billion litres in the previous super-levy year.
Of course, the rise in dairy farmer incomes is not all related to a better market for milk products. At least some input costs to dairying, and above all the volume of inputs for dairying, declined in 1988 for a number of reasons and this is estimated to account for about three of the 11 percentage points of increase in income to that sector that year. Politics certainly had nothing to do with that. We will be very lucky to get these factors working for us again next year, and the best expert advice warns us that an increase of 3 per cent in volume of gross dairy output is the most we can expect in the current year of 1989.
Sheep did extremely well in 1988. There is no denying that. Unlike cattle, we had a big increase in flock numbers, up by 17 per cent on 1987. Slaughterings for export were up by 10 per cent and we had a price increase to the producers of about 4 per cent on average for the full year. The size of the flock continues to expand and there are indications that the national sheep flock will increase by possibly 9 per cent in 1989. All this good news is in response to market conditions and market forces. The EC sheepmeat supply/demand situation is still below par, but the day of market equilibrium is approaching.
The sad thing is we are losing out on a great deal of sheepmeat income because of the Minister's inaction in setting up a classification régime for lamb in our factories. This would encourage more of our farmers to produce more lambs of correct weight and conformation for the lucrative French market. It is generally estimated that lamb exports would be £15 million more valuable to us now had we animals suitably prepared and produced for the Paris market. When, we ask the Minister, is he going to move on setting up a lamb classification scheme? If the Minister for Agriculture and Food is not here to reply to this debate, I ask the Minister of State who is standing in and who may be replying to answer that question.
The Irish pig industry remains an area of unrelieved gloom and near disaster. Pig numbers and slaughterings continue to decline. We now have barely two million pigs in our national herd. We had 2.25 million in 1984 and 2.5 million pigs in 1974. In recent years we have expended enormous sums improving our slaughtering facilities. In fact, we improved slaughter capacity by about 50 per cent. Yet, only two-thirds of our slaughter capacity is being used. The producers have become more and more hard pressed. Recently the American drought gave them another big hike in feed prices. In this country, we have a much lower feed efficiency than is the norm among our competitors in Europe. The pigs we produce are too light and preponderantly geared to the low return cured bacon market. The Dutch are beating us blind in world markets because they produce a much better mix of pig weights and consequently far more diverse pork products that fetch much better prices on world markets nowadays. Dutch producers' feed costs are also almost 10 per cent lower than ours.
What is the Minister doing while this once very valuable industry falls apart, bringing millions of pounds of recent public investment down with it? The answer is absolutely nothing. He made not a single move in 1988 to help this sick man of Irish agriculture, if I may slightly misquote Gladstone. He made not a single, useful, intelligent suggestion. Could we appeal to him from the floor of this House to move away from his usual woolgathering on this subject? He might listen for a change to the advice and warnings of the IDA ane Teagasc about this industry. For heaven's sake, let him do something.
Let me comment on the performance of agriculture as a component of our food industry in the last year. To save time I will confine myself to our main horticultural product, that is potatoes. When this Government came to office they made a huge propaganda brouhaha about growing all our own food, especially vegetables. Potatoes were singled out as representing a particular national scandal because we were importing potatoes at a rate on average of 50,000 tonnes per year. An Bord Glas were set up and a Minister of State put in charge to set all these wrongs to rights. We were promised new market organisation, controlled imports, new strains of early varieties, and all kinds of market incentives — free grants, free advice, etc. What happened? What are the results? The results are an unmitigated, unholy mess and a ridiculous disaster. By June 1988, the Central Statistics Office enumeration showed a decline of 10 per cent in the acreage under potatoes last year and yields in the first half of that year down disastrously. The first half of the year is the time we must get our production up to ward off imports. In the second part of the year we produced this huge glut in the autumn, giving an annualised drop in price to producers of 15 per cent. Unless the Minister of State, Deputy Kirk, wakes up very soon, and more so the Cabinet who give him the policy and the money, we may very soon be importing 100 per cent of our potatoes. I might mention to the Minister of State because he is shaking his head, that the last year for which we have completed figures for potato imports is 1987. In that year we imported 52,000 tonnes, 2,000 tonnes above the average we were importing up to 1986, and the figure will be the same in 1988.
Let me come away from the various sectors and their performances and look at the Common Agricultural Policy and developments in 1988. The Brussels Summit of February 1988 effectively froze the amount of money to be spent in future on the price guarantee side of FEOGA. However, they decided to double the funds to the guidance side of FEOGA between now and 1992 and they changed the collective name to "Structural Fund". Under this new umbrella we have the old Guidance Fund that gave various grants to the backward and less favoured areas — for instance, cattle and sheep headage, building grants, land improvements, some pollution control and formerly, drainage grants — the Social Fund, which is the largest component is used for industrial training, agricultural training and education, and the much vaunted Regional Fund. Under these latter headings we got something over £300 million in 1988, if my figures are correct, and we got about £1.1 billion out of the price guarantee side in 1988.
Assuming that in the year just gone, 1988, we got £300 million plus under the structural headings, we should get about £600 million plus by 1992. Let me ask the Minister, how much of this £600 million, £650 million or whatever the various indices for inflation may fix the figure at by 1992 will he get for agriculture? Has he taken into account that agriculture in Ireland may have lost £500 million in guarantees with the continued squeeze from all sources on intervention buying by 1992? If that has happened, we certainly will not have got a very good bargain.
What guarantees has the Minister for the small farming sector to deal with that kind of eventuality? Can he guaranteee the less favoured areas a doubling of the paltry amounts they receive now because they are going to need it? Can he guarantee a doubling of the livestock headage payments as an income supplement to these people and as a fillip to the national herd? Can he guarantee grant-aid for farm improvements like pollution control, better livestock housing and land improvement like drainage on which the Government I might say sold us down the river — that is, on drainage grants — at last year's farm talks? I hope the Minister has his eyes open at the Cabinet table and that he is saying to his colleagues that the reason we are getting a doubling of the Structural Fund is to compensate for the gradual dismantling of the intervention system under the Common Agricultural Policy and to cushion the underdeveloped areas and regions against the problems caused by freer trade.
I do not know if the Minister for Agriculture and Food is aware that some of his colleagues are going around the country throwing millions of this increased Structural Fund after everyone they meet. His colleague, the Minister for the Environment, has already promised millions of pounds to almost every parish in County Mayo. On his travels throughout the country he appears to have this ubiquitous supply of confetti to throw around from what he calls the Structural Fund. Everywhere his colleague, the Minister for Education, goes nowadays it is like a wedding because she is always more than well supplied with this Structural Fund confetti for her travels. The little effort of the Minister for Agriculture and Food of going around with a few thousand pounds led by a brass band, or was it a pipe band, from village to village in Tipperary is a tawdry joke when compared with the flambouyant extravagance of some of his colleagues spending the Structural Fund.
There has been a much publicised debate recently on the level of poverty here and much of it concentrated on urban poverty, which is often very apparent in poor housing estates and in blighted areas of unemployment in the towns and cities. There is no doubt that this mass deprivation exists. Nowadays, 35 per cent of the population are on or below the poverty line and so it qualifies to be called a mass problem. There is no doubt that the monetarist policies pursued with such zeal by the Government have made the deprivation more acute for those who are already in the poverty trap but the number of people reduced to the level of poverty in the past two years has increased significantly also because of the assaults on welfare, the health services and so on. In all this debate there is one sector of poor people seemingly forgotten, and they are the poor people and families found on small farms scattered all over the country but especially in ther less favoured, backward and declining areas.
The Combat Poverty Agency, in a recent report, reminds us that the ESRI report on poverty reveals that 23 per cent of poor households, that is, where the weekly income for every adult equivalent in a household is £40 or less, were engaged in farming. The Conference of Major Religious Superiors in another recent report on poverty stated that many farm families are totally marginalised from the benefits of the Common Agricultural Policy by pointing out that for every two farms who had an increase in income in 1987 — remember what I said earlier, that these income increases were purely weather-related — one farm in this poor or marginalised category had a decrease in income. Will the Minister bear these figures and people in mind as he and his colleagues work out the priorities for distributing the Structural Fund?
In 1988 we got no hint of a land policy from the Minister. May I ask — again, I want a specific answer to this question, please, in the Minister's reply — what proposals, if any, the Minister, and the Government, have in this important area? Have they any proposals for assisting the small to medium-sized enterprising farmer to augment his farm size to increase his family income or is he to be left forever to the ravages of the marketplace to get his additional land, that is, if he wishes to increase his acreage to stay in farming? Will the Minister reply to that specific question because those farmers were told very often by Fianna Fáil in Government and when in Opposition, that they would not have to wait forever, that there would be a land policy to assist them. There used to be an old shibboleth in Irish politics to the effect that small farmers were the backbone of Fianna Fáil. When I look at some of the assaults that have been carried out by the Government on the interests of small farmers, assaults, indeed, that have got rid of many of them, I conclude that if the small farmers were the backbone of Fianna Fáil that party should now be very much an invertebrate creature.
One of the most unpopular moves by the Government in the agricultural arena in 1988 was the forced marriage of ACOT with AFT. In this House — and on this side of the House, too — we vigorously opposed that move and we are proud of that. I, and my colleagues, pointed out in that debate that the drastic budget cut of 43 per cent, the hamfisted and hurried manner of the marriage and the getting rid of half the staff could not work and I now regretfully say, with the benefit of hindsight, that we were absolutely right. Farm advice is no longer existent except for the top category of commercial farmers. We warned that some of the best people working in advice and on research would leave both bodies under the new umbrella and they have. Training for young farmers has suffered and, of course, farm research has suffered terribly. Research stations at Belclare and Creagh have been closed. Those stations carried out research into livestock enterprises — cattle and sheep — particularly in the area of twinning. Their work was very appropriate to the west and the shameful, lame excuses of Mr. Joe Rea, the new Chairman of Teagasc, as he tried to defend his actions and to shield the Minister, are absolutely disgraceful. It is something which makes every farmer more than a little sick.
Research in the area of agricultural economics has suffered even more. The Rural Economy Centre in Dublin had an outstanding record in the old days of An Foras Talúntais in compiling the annual farm management survey. That was a marvellously informative, objective and comprehensive document. It was completed using the principles of scientific certainty and total professional detachment. Its findings were not what the Minister of the day wanted to hear or what he wanted the farmers and the public to hear. In short, they told it as it was — as they say in the United States — and they were always objective and accurate. No longer can that happen because of the 75 researchers and field investigators that were there in 1987 only 35 are left. Agriculture never before operated in an era where there is, and will be, a rapidly changing economic and policy environment. The Common Agricultural Policy, the cornerstone and indeed very often the crutch of Irish agriculture for the past 15 years, is changing fundamentally and as a support mechanism it is disappearing.
The pressure on agricultural supports — I mentioned that before — coming from the GATT negotiations also threatens the certainties and all the we relied on and looked upon as certain in the past. We never needed more than we do now the services of a high powered economic and market intelligence unit to advise us and chart our future, yet the Minister with the compliance of the new chairman of Teagasc sacked half of the rural economy research unit and closed down vital research stations from which came a whole range of innovations and discoveries which had a profound effect on the agri-food industry in recent years. It is no wonder that the Minister did not want watchdog committees like the old ACOT committees, comprising of public representatives and representatives of the various farming interests, on Teagasc. All the Minister wanted was a compliant chairman to decimate the research, educational and training services relating to our most important industry. The Minister wanted somebody who would take the public flak for this outrageous policy debacle and he certainly found that in Mr. Rea.
We do not argue with the Minister in his review of the year on 16 December last when he speaks of the increases in beef and milk prices in 1988. That was the result of an unexpected but fortunate market upturn. Our argument relates to the total lack of policy to boost agricultural output and to develop downstream food processing industries. The Minister conveniently forgot to say in the Dáil review that there was no expansion in any of our farm enterprises in 1988 except in sheep and poultry. All other enterprises have declined or remained static. The gross value of our agricultural output reached £3 billion but the total volume of all agricultural produce declined by as much as 2 per cent in 1988. That is the fundamental weakness of Irish agri-business. Had commodity prices in 1988 remained as they were in 1987 there would have been a significant fall in farm incomes last year because of the fall in output. At this early stage the portents for 1989 are that there will be a major assault on the Common Agricultural Policy's beef regime. Unless the Minister asserts the national interest as Deputy Austin Deasy did in 1985, the largest component of Irish agriculture, the beef industry, will be in serious hot water before the end of the year.
We cannot expect benefits this year as a result of terms of trade because input prices have declined relative to the price value of output. In normal years the relationship between output prices and input costs has been fairly consistent, but in the last two years input prices have declined while market forces have forced up the prices of our main commodities to an unusual degree. This windfall on the terms of trade will not continue in 1989 because imports are already rising as a result of the US drought and increases which we already know about, will come in fertiliser prices.
Agricultural incomes in 1988 were also boosted by subsidies which were not related to increased production. In 1987 £180 million in such subsidies was paid out to farmers. These subsidies increased to £260 million in 1988. They came under the heading, livestock headage which remained the same in 1987, but the increased subsidies were for the milk cessation scheme, the linear reduction of milk scheme and the EC special beef premium scheme. There is every indication that these payments will not be as high this year and that they will bring another down pressure on incomes in 1989.
The Appropriations Bill gives us an opportunity to review the events of the past 12 months as well as giving the Minister the appropriations necessary to deal with matters in the year ahead. Last year was a year of exceptional economic progress. It exceeded the most optimistic expectations. There is now a confidence that we can overcome the economic problems of this country. The Programme for National Recovery has been the key to our success. The programme is unique and has worked well. It is based on commonsense, realism and the participation of the major representative groups in our society. We have had our best year of industrial peace since the sixties and the lowest inflation rate since the early sixties. Our 2 per cent inflation rate is below the UK, the EC and OECD average. Low inflation gives us reduced costs for energy, telecommunications, transport and infrastructure and allows us to be more competitive in the export market.
The Government were exceptionally successful last year in collecting outstanding taxes. I am proud to be a member of a party and of a Government who finally took decisive action to collect outstanding taxes. The total amount collected was in the region of £500 million.
The total national debt is still in the region of £25 billion and it costs us approximately £2 billion every year to pay the interest on that debt. This annual interest payment is equivalent to nearly £2,500 annually per taxpayer. It presents major difficulties for real economic development. Strict discipline must be maintained in relation to our public finances. The improvement in public finances has contributed to lower interest rates which are at least four or five points below our British counterparts. Lower interest and mortgage rates have been of great benefit to every sector of the economy. The lowering of interest rates has allowed us to release exchange controls with little or no disruption.
Last year the Government honoured their social welfare commitments. There was a general 3 per cent increase in social welfare payments in the budget. There was a 6 per cent increase in child dependant allowances and an 11 per cent increase in payments to long-term unemployed people. The Minister should give special attention to needy groups, especially the long-term unemployed.
The Government have honoured their commitment to tax equity. It is not possible to achieve tax equity unless everybody is paying his fair share of tax and in this area the Government have been extremely successful. The introduction of the tax amnesty and self assessment were major factors in helping the Government in tax reform.
The Government are to be congratulated on their efforts to reduce unemployment. The increase in employment by 6,000 in the year to April 1988 is the first significant increase since 1980. The aim of the Government is to achieve a significant reduction in unemployment figures. The committee set up to monitor progress, under the Programme for National Recovery, have reported progress in job creation in all sectors targeted by the programme.
Fresh evidence that our economy is picking up is contained in a report published by Dun and Brad-street. The report states that a total of 10,132 new companies were launched last year — the highest number in a decade. With economic activity on the increase there was a slowdown in company failures last year. The number of firms going to the wall dropped from 869 to 803. Irish companies in receivership fell by almost 48 per cent, from 132 in 1987 to 69 last year, while winding-up petitions dropped by 21 per cent, from 81 to 64. The slow-down of failures among limited companies, coupled with the fall in receiverships and winding-up operations, is evidence of businesses expanding and an improved cash flow position. In 1987 our exports exceeded the £10 billion mark. In the first ten months of 1988, to October, our exports exceeded the £10 billion mark and there are indications that they will reach a figure of £12 billion in the full year. A balance of trade surplus of £1.7 billion was also generated in that year and it is expected that the final figure for that year will be even higher. Exports overall showed an increase of 14 per cent. It is particularly satisfying that indigenous companies' returns show an increase of 16 per cent.
The construction industry has experienced a tough time but, with the introduction of the provisions of section 23, lower interest rates and reduced inflation, is showing signs of recovery. I would ask the Minister to seriously consider extending the provisions of the business expansion scheme in the forthcoming budget. Considerable progress has been made within a short space of time. There is now a commonly held belief that we can overcome our economic problems through a combination of reduction in Government spending and effective collection of outstanding taxes — giving us all hope for the future.
I do not propose to speak for very long. My colleague, Senator Connor, dealt at great length with agriculture. In passing I should say it is my belief that there has been great movement in the agricultural service sector over the last couple of years. The evolution of the public limited companies from the larger co-operatives constitutes a timely and welcome development. The co-operative movement, as envisaged by Horace Plunkett and the people who built up that movement and rendered such tremendous service to Irish farmers in the last 70 odd years is not as effective or efficient once its units become larger and individual members become numbers in a computer. At the same time the contribution made to our economy by individuals or firms such as Goodman International is without doubt, unprecedented. Their competitive approach to business has been of tremendous benefit to our farmers and agriculture in general. Large agricultural co-operatives — such as Kerry and Waterford and Avonmore PLC — have by their forward planning rendered modernisation easy for thousands of farmers who can avail of new development opportunities despite the difficulties imposed on them by quotas, restrictions and levies of one kind or another. The Goodman entrepreneurial spirit has been a beacon of light in what would have been otherwise a very dull period in Irish farming. Their investment in agriculture and success in developing markets in Europe and in third countries — have provided competition within that service sector on the domestic scene and constitute a completely fresh approach to inputs and outputs in agriculture. This has been to the benefit of farmers and farm prices, remembering that, in general, farmers have endured considerable difficulties in recent years.
The Government decision to abolish the county committees of agriculture indeed almost to abolish agricultural education or research as we knew it, is much to be regretted. Research has been affected adversely by the closing down of so many research stations. If we do not carry out research into the effectiveness of, say, sprays, manures or the performance of new varieties of seeds or whatever what will be the effect on the competitiveness of our producers in the coming years? I am convinced that the Government decision vis-à-vis An Foras Talúntais will cost us a tremendous amount. We must remember that individual firms or big multinational firms supplying sprays — all of which are extremely expensive — carry out research into their products but their motivation is to make a profit. They do not care what happens so long as they are not sued at the end of the day. One would need much time to read thoroughly all the small print on the litre or five litre can of spray. Inevitably one finds they blame the weather, the operative or the method of application, but there is very little room for blaming the fact that the chemical in the can did not do what was expected of it. Such large companies have themselves well covered.
Over the past 20 years farmers have depended on the agricultural institute — as we know it — to carry out such trials. I would suggest it constituted a foolproof system.
How farmers can operate without that back-up service is something that has not yet been acknowledged. I wish the new organisation Teagasc well. I hope they will be able to fill that gap. However, having regard to the resources allocated to them, I predict they will not be able to provide the same as did An Foras Talúntais and the county committees of agriculture in the past. I predict that that loss will be felt most severely by smaller, marginally economic farmers. For example, whether one calls on an adviser for five acres or 500 acres the fees appear to be the same, which is somewhat unfair principally on the smaller uneconomic farmer who needs that advice and the back-up service to eke out a livelihood.
On this subject of the role that the agricultural institute played the Government took a decision recently to allocate all the cut-over bogs — which amount to over a quarter of a million acres — to the new forestry organisation, Coillte Teoranta, in the teeth of 25 years of research on the part of An Foras Talúntais, and that is an extraordinary thing for any Government to do. There is well documented research on the use of peat lands for forestry and for the last 40 years the Department of Forestry have planted trees in all types of soil. Even though they know exactly the type of peat required in which to grow trees, they have now decided that they are going to allocate the whole lot for forestry.
Seven years ago the biomass experiment, which cost the EC almost £5 million, failed. How can a Department of State take such an economic decision having regard to the information before them or do they not read their files anymore? I would like the Minister when replying to address these very serious questions. In the midlands, not to mention the rest of the country, there are 200,000 acres of cut-over bogs. That is a large amount of land. Parts of it should have been allocated to the small farmers from whom it was compulsorily acquired for as little as half a crown an acre from 1932 on. It is nonsensical to give this land to Coillte Teoranta and leave it to them to decide what to do with it.
Coillte Teoranta have been given 33,000 acres of forest in Laois-Offaly — or is it in Laois alone? On this huge amount of land they employ 50 people with almost half of these posts being managerial posts. If we were to talk about creating employment, surely it is possible without any great help to devise a plan on the usage of this land which will give a greater return in employment, while not completely ignoring the possibility of increasing the acreage of many small and medium sized holdings adjacent to these boglands.
An Foras Talúntais have very clearly indicated, in their research, that it is possible to reclaim, for summer grazing purposes, cut-over bogs at a cost of something like £400 per hectare. This works out at a little over £200 an acre which is extremely good value having regard to the fact that land on the open market is realising between £1,500 and £2,000 per acre in the midlands at present. If it is possible for him to do so I would like the Minister to respond to some of those points because I believe there are opportunities open in all of the counties in which Bord na Móna have established operations since the enactment of the Peat Development Act of the mid thirties. I take it we will have an opportunity later to develop this argument when the new legislation dealing with Boad na Móna comes before the House.
In looking at the Vote for the Department of the Taoiseach let me say that while I can accept there is a scarcity of funds in every Department and that money must be made available to every sector, the time must come, and economists must surely accept this, when the reductions and retrenchment must stop. Otherwise, our infrastructure and the services we provide will deteriorate.
Let us start with the Department of the Taoiseach, and again this has a bearing on the Minister's Department. I hope that greater funds will be made available to ensure adequate infrastructural maintenance of the National Gallery. I cannot help noticing the building because my office is situated alongside it. I am not a critic of the Board of Works but ongoing repairs must be carried out to ensure that pictures are safely stored there.
I would hope that adequate funds — I do not know what the appropriate figure is — would be made available. We should protect our national heritage and ensure that the premises are maintained to a satisfactory standard and that we, as legislators, cannot be accused of allowing a valuable portion of our heritage to be destroyed through neglect, decay or dry rot. I hope the Minister will take a special look at the National Gallery, which is provided for under the Vote for the Department of the Taoiseach.
Vote 16 covers the Farm Classification Office. I presume it relates to spending agreed to in a previous year because I cannot imagine that there are people still working in the Farm Classification Office since it was disbanded the month after the Government came into office.
Let me refer very briefly to Vote 20 which covers the Department of Justice. This is a Department that the Department of Finance should have a certain amount of respect for. When James Dillon was Leader of Fine Gael he very often quoted Edmund Burke who said that all you need for security and peace is eternal vigilence. I am horrified by the discovery of arms and ammunition in the midland counties. It is a matter of some concern to people who want to live in peace, harmony and security that there have been several arms finds of late in the midlands. I appeal to the Government to strengthen the management within the Garda. Because of the embargo and cutbacks far too many management positions in the Garda Síochána have been left unfilled. Far too many posts of superintendent have not been filled. While there may have been a saving the Garda, whether the numbers are adequate or not, will be certainly less effective if there is no proper management. As citizens of this country we are entitled to believe that the forces responsible for the preservation of law and order and justice are up to an adequate standard. Recently there have been arms finds in the midland counties — in Counties Offaly, County Laois and County Kilkenny. Every vacant post of superintendent in those counties should be filled without delay. The embargo should be abolished although I believe there must be some order of priorities. It is frightening that there seems to be a sleeping cell of terrorist activists across the midland counties although there are no visible signs.
I want to address my remarks to Vote 22, particularly the subheads on prisons and places of detention. This is a very difficult area and is one to which, I as a visitor to a prison, have a small social input. I should like additional resources to be made available for both educational and remedial facilities in prisons. There is a limit to what can be achieved, but a very high proportion of prisoners appear to be illiterate or, at best, semi-literate. Much can be done for those prisoners even if they are only serving a few months. I make a special appeal to the Government to allocate greater resources to the Minister for Justice so that these people can be given a second chance and to make available to them every possible modern facility to improve their educational standards.
There is another point I should like to make. Over the Christmas I was rather saddened to hear a senior Minister commenting on the parole system in Northern Ireland and on the situation in the Northern jails, while at the same time very few, if any, of our prisoners — and certainly none of the long term prisoners — were released on parole. I am sure many applications and representations were made on behalf of prisoners. We should avoid hypocrisy in this area. It is difficult enough to operate in this area and we need a very clear and unbiased approach to this problem. This is not the kind of subject I like to debate in public, but I believe there is much we can do to improve the situation and to offer some hope to our overcrowded prison populations. I look forward to greater resources being made available in the present year for the upgrading of accommodation at least in the prison I am most familiar with.
I want to refer to Vote 26 for the Department of the Environment. It is very difficult being a member of a local authority at present. Individual members of local authorities, irrespective of what the party they belong to, or even if they do not belong to any party, are embarrassed because for some years there was no money to provide and maintain the services we have enjoyed for many years. I think there were only five new house starts in my county last year. If that rate continues during the coming year, it will mean the return of housing lists and all the hassle involved in the allocation of scarce housing resources. In fact, in my county the local authority do not even have sufficient funds for maintenance. Last year the council took a decision to maintain or repair houses for old age pensioners only. I do not know where this is going to end if the proper financing of local authorities is not tackled head on. I do not think people will offer to serve on local authorities if they are not given the authority and power to have an input into the provision of services in their areas.
Looking at this Appropriation Act we can see that the appropriations for the year in question have not been satisfactory and I hope the Minister can do something to redress this problem. The budget will be introduced next week and I hope the increased resources we have read about will be made available to upgrading local authority services and the health services. The estimates for the health boards are being considered at present, and again the Government are asking for considerable cuts in the health area. The health board in my area have been asked to reduce their expenditure by £1.2 million. It is very difficult to know where to start to do this. In 1984 the cost of running the services in the four counties in the administrative area of the Midland Health Board was about £64 million or £65 million — I think that has been reduced to £49 million this year.
That is a huge reduction. I was passing the mental hospital in Portlaoise last night and could not see any light on in there. I thought they were all on strike or dead.
Maybe the wrong people were out.
Senator McDonald without interruption, please.
Those of us who serve on these boards with some misguided idea of being public spirited, find our efforts are being frustrated. I do not know what kind of service the Government are aiming at, but if the Department came up with a long term plan and said exactly what kind of service we were aiming at, that would be all right but we have created the situation where the CEO says there will be 120 more job losses and this effects every employee in the service. This is creating unnecessary hassle and apprehension in the service. I do not want to develop that. As my colleague said, we will have an opportunity at the health board meeting to go more fully into it.
During this debate we should indicate to the Minister the things that we as public representatives find very difficult to handle. I appreciate that there has to be an order of priorities. I appreciate that there must be a budget. I certainly appreciate the public's difficulties in accepting the idea of a higher percentage of general overall taxation. Nobody wants to advocate the introduction of new forms of taxation; nevertheless, we must stay on an even keel and there must come a time when the service is tailor-made or reduced to a position where it should level off and is absolutely stabilised. I would suggest to the Minister that we have reached that position now, certainly as far as the health services are concerned and especially where the services provided by county councils and local authorities are concerned.
With those few remarks I would like to express the hope that the Minister, or his colleagues, will be able to advert to one or two of the points I have made.
I welcome the opportunity to speak on the Appropriation Act and to compliment the Taoiseach and the Government on the exceptional year 1988 was in every way. I can say, without exaggeration that 1988 exceeded everybody's expectations. If there was one little hiccup in 1988 it was that Galway beat Tipperary in the All-Ireland hurling final. Apart from that one would have to say it was an exceptional year. I want to state that I expect 1989 will be a little better in that we will overcome Galway in 1989 and win the All-Ireland and that the economy will go from strength to strength in the meantime.
The confidence that has been generated in the future of the country is great and numerous people who, a couple of years ago, did not see any hope or any light at the end of the tunnel now are beginning to think differently.
On the whole problem of emigration, I had occasion over the Christmas to meet a number of people in London who saw in the upturn of the economy reason for great hope. Heretofore they felt that the chances were that they would have to make their homes in London and in other places. Now they are the development of infrastructure and investment by different companies in the economy here at home and many feel that there will be opportunities for them here in the not too distant future.
The whole economic scene in the past two years has really turned around and investment has been accelerating at a very fast rate. I would sound a note of caution by saying that we still have a long way to go, but the important thing is that we are moving in the right direction. All our problems have not been solved. To relax the restraint and discipline at this stage would undo the great work that has been done heretofore and put at risk all of the gains we have achieved so far.
We must build on our success. If we are to solve the major problems of unemployment, emigration and taxation as proposed in the Programme of National Recovery we must stick with the targets we have set ourselves. It strikes me as somewhat peculiar that the various pressure groups and interested organisations who were vociferous in their condemnation when the Government undertook the programme with the help and co-operation of the social partners and stated ad nauseam that this approach definitely could not and would not work, are the very ones who are now advocating that we should loosen the purse strings and dish out moneys here, there and everywhere. The very people who gave advice in one direction a couple of years ago are giving advice now in a different direction as to what should be done with the money, whereas they could not see the approach that was being adopted working in any way whatsoever.
The Programme for National Recovery was a unique programme. The social partners and the Government combined and the results of that combination has been, to say the least, absolutely fantastic. As other speakers have already mentioned, we have the lowest inflation rate since 1960. It is below the UK rate. It is below the EC rate and the OECD national average. We have, to a very great extent as well, industrial peace. We have a huge surplus in our balance of payments and we have substantial economic growth in a number of different areas.
It is important that we realise the Government cannot give in to the pressure groups I mentioned earlier. To do that would undo all the good work that has been done. Effectively, that would mean that we would have to start increasing borrowing and again lose the confidence and the good reputation we have gained on the international scene.
One has to be aware of the huge effect the tax amnesty had in bringing in the £500 million. As has been mentioned by the Taoiseach and by a number of Governement Ministers and other people here today, it was a once-off effort and the likelihood of that happening again is very remote. Having said that, one still has to accept that the national debt stands at £25 billion. Senator Cullimore mentioned that the annual interest repayments are in the region of £2 billion which is £2,500 in annual interest per taxpayer. Those statistics in no uncertain terms, show how they would affect our ability to allocate resources for social services and economic development. Every single sector is seeking increases in their allocations and they will all give very reasonable and adroit arguments as to why those increases should take place. One should stand back and question where all those increases are to come from. In a situation where we have a national debt of £25 billion where in God's name is the opportunity when, on the one hand, you are trying to reduce a debt of that nature and on the other hand you are giving increases in many different areas. Everyone recognises that increases in a certain number of areas would be more than welcome and everyone would be hoping that that could take place but we have got to create the environment and the conditions where one can afford to make those increases without having an adverse effect on the overall workings of the economy. That is extremely important. I fail to understand why people are so vociferous in condemning the Government for not doing X, Y or Z. It would be hard to believe that such people do not understand exactly what would be the difficulties involved in complying with the various requests made.
Obviously, all we can do is expend what we can afford to pay for out of the goods and services we produce. The simplest way of all is to relate it to a household budget. A household can spend X number of pounds each week and has to live within its means, if it does not it gets into difficulty and gets into debt. I know it is a simplistic approach but it is an easy way of explaining exactly what one has to do.
The Government are laying the foundations for future progress and are creating the economic environment. That is extremely important. If the economic environment is not there we are wasting our time. We have got to create confidence. We are a small open economy and it is important that people would be aware of that. We depend to a large extent on selling our goods abroad. We must have investment in our own products if we are to increase our sales. We should pass a vote of congratulations to the industry side. In the past two years there have been enormous increases in our balance of payments surpluses as a result of the energetic approach industry has adopted. Having said that there are difficulties involved in giving increases and in allocating resources particularly in social areas which are non productive in the sense that they do not generate their own income. The Programme for National Recovery recognises the need to improve the circumstances of the poorer sectors and also recognises the need to make progress on tax reform.
In relation to the educational sector, in which I am directly involved, I take this opportunity to congratulate the Minister for Education on upgrading the NIHE in Limerick and in Dublin to the status of university. It is a fantastic achievement on their part and is well deserved. I am more au fait with the situation in Limerick than in Dublin and I have first hand knowledge of the fantastic developments that have taken place in the NIHE in Limerick since the early seventies. This upgrading is extremely important, perhaps not to any great extent on the home front because everybody is aware of what the National Institute for Higher Education means both in Dublin and in Limerick, but for the graduates of the establishments who go abroad. It appears that they did have some difficulty in explaining exactly to our European partners and to others what a degree from the National Institute for Higher Education meant. In other countries establishments which might have the same name tag would not be capable of bestowing the same type of degree on graduates as are those two institutions. The Minister, too, should be complimented on this move. As a pointer to the Minister we would hope that she would keep an open mind regarding the regional college in Thurles. This is an area in which I am very interested. When the time is right I trust she will consider reopening the files on the regional college in Thurles.
In relation to tourism the whole mid-west region is now under the operation of the Shannon Free Airport Development Company. In that particular region we are unique in that we have a State agency responsible for industry and that it has now taken under its wing the area of tourism. That will result in enormous benefits for the whole mid-west region particularly the are where I live which is on the shores of Lough Derg, on the Shannon. The facilities and the opportunities for tourism development in that area are enormous. If I do have one misgiving — and I spoke here at length about it almost 12 months ago in relation to that area — it would be à propos CIE and in particular the rail service which is provided for that area. I would like to reiterate the argument I advocated at that particular time for a train service to the mid-west region. There is a train service from Dublin to Limerick and to Thurles for people who live in the northern part of Tipperary. I have in mind areas such as Nenagh, Roscrea, Cloughjordan and Birdhill which have only the services of one train each day to and from. We have a difficulty in that we have to change trains at Ballybrophy on the way down. In their wisdom or otherwise CIE see fit that one of the inter city trains which they provide leaves Heuston Station at 5.40 and does not stop at Ballybrophy. It has all the facilities of modern conveniences including dining cars etc. At 5.45, five minutes later, a commuter train leaves for exactly the same destination. The difference between the two trains is that there are no facilities on the 5.45 train and it stops at Ballybrophy. That is the service that is provided for people who are travelling from Birdhill, Nenagh, Cloughjordan and Roscrea and all that area who depend on that service. I cannot understand why CIE cannot organise the inter-city train which leaves Dublin at 5.40 to stop at Ballybrophy as it would take only two to three minutes. I have had numerous representations on umpteen occasions asking if the inter-city service could be provided, because the train people are forced to use on the service at present must be from the Dark Ages; there are no service facilities whatsoever on it. In these modern times people expect some comfort when travelling by train. I ask the Minister to have a chat with the Minister for Tourism and Transport to see if he can influence CIE to change the scheduling of that train service. It would be of great benefit to the people of north Tipperary and parts of Galway also. If a proper service were provided, far more people would use it. There has been a lot of controversy in recent times about the competition with private bus owners etc. If CIE want to compete with private operators, they will have to provide a proper service. An additional stop would mean that a train stops in a particular place for five minutes. I do not know how that time difference would have any great effect on CIE's scheduling. If that were done it would help the tourism potential in that area enormously and would increase the revenue to CIE.
I want to reiterate what has been said on the economic recovery and the Government's achievements in the past two years. With reference to Senator McDonald's point on local government financing, everybody recognises the difficulties in providing finance. If the finance is not there, there is very little that can be done. However, there was a unique development at local government level this year that was an outstanding success — the tenant purchase scheme. The Minister is to be congratulated on bringing this scheme forward. The scheme gave people, who would otherwise not be in a position to do so, an opportunity to buy their own houses. I, and I am sure all politicians, have had the experience where houses which were being sold by local authorities for a minimum of £4,000, having made allowances for all the relevant discounts, were being insured for a minimum of £20,000. That was an enormous benefit to people. This was a big advantage for those on a differential rent scheme.
Where people were not in a position to buy the house outright under other schemes — and quite a majority of them were not — and if they were now getting loans from the county councils, within a very short time buying out of their house would cost less than they would pay under the differential rent scheme because of the fixed rate of repayment. That was of enormous benefit. When people own their own house they take greater pride in it. I can see enormous benefits coming from this scheme and the number of people who applied prove how successful it was. I welcome this opportunity to say a few words on the Appropriation Act and I look forward to a very successful 1989.
I want to make an observation on one of the points Senator McKenna raised about many people not being able to understand certain things. The fact of the matter is that we can understand an awful lot but certainly there are an awful lot of things we cannot understand. Speaking for my humble self and fellows like me, I can never understand why there has always been a poor and underprivileged class and why under the capitalist system it seems necessary to perpetuate it. This has puzzled me all my life. That is not just an off-the-cuff remark but is my serious concern about the society we live in.
Let us have regard to what brought about the formation of the Labour Party in 1912, a time when there were many underprivileged people, and the run into the 1913 strike; but right into the twenties and thirties we always had this big social gap between peoples. There were some adjustments in the sixties and the seventies when wages were higher. Although profits and wages were higher, there was not one extra person at work at the end of that decade. That is a fact of life. There were 1.5 million people at work in 1970 and at the end of the decade, when everyone had done well both in wages and profits, the same number were still at work. In effect, the system we work under either by design or by accident seems to believe in the perpetuation of an underprivileged class. To add substance to my point, I would like to quote from the 1941 Labour Party document Labour's Constructive Programme for an Organised Nation. The paragraph, which refers to a capitalist revolution, is very close to what we are seeing at present. It is very relevant. The paragraph states:
Ireland is in the midst of a Capitalist Economic Revolution. No matter how it may be looked at, the economic change that is taking place before our eyes is capitalist in conception and in design. It will provide profits for capitalists and owners of wealth but it will also increase... and extend the dimensions of the propertyless class who will be the victims of unemployment, bad housing, poverty and disease. And be it always remembered that Capitalism is the most foreign thing in Ireland. It is vitally important that we should take stock of the position before the vested interests develop their strangle-hold on the people, and that in the building up of the Nation's industries and in the development of its resources, steps shall not be taken which will afterwards have to be retraced. It is important, too, that Ireland should benefit from the experience of nations which have long since passed through the same stages of capitalist development and now afford a striking illustration of its folly.
At the present moment the country is definitely committed to a policy of building up a capitalist economy with all its evil influences and soul-destroying effects and to the making of all the mistakes which have already been made in Great Britain, in Germany and in America. Political and economic history will have been written in vain if we in this generation, when laying the foundations of our social life, model our structure on a design that has nothing to recommend it except greed and the glittering wealth it produces for the few at the expense of the many.
Are we not in this day and age talking about the very same thing with a little change in emphasis? Are we not at that stage again? With regard to the present situation, we in the Labour Party would like to make two essential points on the whole question of the Estimates and the Appropriation Act. First, the public who pay the bills are entitled to know how their money is spent and to see that it is well managed, efficiently distributed and not wasted. Secondly, the revenue which finances essential programmes must be contributed fairly by every sector of the community. Let us look at the whole question of whether the money is being well managed and efficiently distributed. There is a debit and a credit side. Let us take the financial recovery first. Inflation is at a 20 year low of 2 per cent; Exchequer borrowing is at 4 per cent of gross national product; interest rates have fallen from 14 per cent in mid-1987 to 8 per cent; the trade surplus for 1988 is £2.3 million; the debit GNP ratio has been stabilised; GNP has grown by 2.4 per cent in 1988; there is a substantial balance of payments surplus; domestic trade has benefited very considerably from lower energy costs; the mortgage rate is at its lowest level for almost 20 years and farm family incomes have increased by 17 per cent over 1987. That is a lovely picture.
We will now examine whether the money has been well managed and fairly distributed and whether everybody is paying his fair share. The price we have had to pay is that the unemployment figure is over 230,000; nearly 19 per cent of the labour force have no jobs — if the true figure was known it could be nearer 20 per cent; 36 per cent of our young people and families are emigrating every year; 1.3 million people live on or below the poverty line; environmental services have deteriorated; health services are being denied to those in need; there is a two-tier health care system in hospitals; there is less access to education and the resources in that area have been cut; social welfare entitlements have been reduced and overseas development aid is being denied to those who are starving.
We should have regard to the fact that we are a little cynical about whether you can deal effectively with ensuring a fair distribution of wealth. In order to ensure a fair distribution of wealth there should be political will-power and also the belief that it can be done. I do not know whether the will-power exists or whether the desire is strong enough to distribute the wealth of the nation in an even way. With every passing day there are more signs of divisions and alienations. That is not just expressed by way of hospital waiting lists, closed wards or the numbers of people leaving the country; it can be seen from the large numbers of people, young and old, who are always asking where it is all going to end. After the next budget that same question will be asked and will be asked more frequently.
It is a cruel irony that that does not have to be the case. We do not have to copy the British solutions or the tenets of Thatcherism. Their approach is a very crude one and should not be copied. Down through the years we have copied the British to a great extent, particularly with regard to so-called economic development. There is a consensus in the Dáil in favour of that approach but that does not mean that they are right or that it should be accepted. If the argument is made that the position was never any different and that there will always be a two-tiered system, the consensus that is operating at present, particularly in the Dáil, with regard to social and economic policy is wrong.
In the final analysis when we look back at the history of the State, the economic developments and the distribution of money, the people have been excluded to a great extent, there is no room for people. I hope that is a fair statement. It is not meant to be derogatory in any way but it seems that is the position. We took many things for granted, things which we believed had good effect. The fallacy that all public spending is bad is the one matter that has been exposed. It has become almost a cliché in Irish life that the only thing we need to do to solve our problems is to cut public spending. Regularly we hear on radio programmes that the climate for enterprise will be improved, the economy will start to grow, unemployment will drop rapidly and we will all have more money in our pockets.
That is a simplistic approach and for that reason it is obviously attractive. Many people who believe that believe also that public spending is the root of all evil but that is not the case. The mentality of an acquisitive society has been at work down through the years and has not changed very much. By generating the idea of materialism, as expressed through the media, we have added to that mentality and we now accept than there is no blood being shed. There is a similarity with the North. We have a clear polarisation of the working classes versus everybody else. I am not suggesting that there are only two classes. There is a class in the middle that will very shortly, if we are not careful, become the new poor and this is also of concern to us.
What we never seem to get across is that public spending represents such items as wages for nurses and teachers, children's allowances and the various support schemes for the unemployed, the handicapped and the ill. We must remember that when we cut public spending we cut essential services. This never comes across on the radio. You hear the argument I have mentioned about a reduction in the number of beds etc. but it never seems to come across to people that in essence when you cut public spending you are cutting off essential commodities that we are entitled to take for granted because there was enough money to go around if it had been properly distributed.
The public become aware that public spending is not such a bad thing after all only when they lose something they have been dependent on. At local level that fact stands out sharply. A constituency that has been badly affected by the cutbacks illustrates very well the impact of the present policy, as it is described. I do not describe it as a policy — I describe it as a programme. Old people are informed they must make their own way to a day care centre because the ambulance service which they had relied on for months or years is withdrawn because of the public cutbacks. Then people realise that public spending is not such a bad thing.
We cannot work on the basis of calling cutbacks policy and suggesting that by cutback measures we are going to solve all our ills. The effects and the consequences of such practice are sometimes invisible and probably remain so for years but they are real and they are frightening to us in this House and to anyone who understand what is going on. For example, you can create a housing crisis if you go too far on cutbacks as happened in the sixties. Then we told ourselves that problem was dealt with. It is happening all over again. In some cases we have got more houses available than are needed and in other cases we are well on the way to resurrecting the crisis; we are on the way back to all the bitterness that arises from the family stress that results from cutbacks in the housing area.
In education we may have had improvements over 15 years or so but, suddenly, due to a mere cutback notion, these improvements are wiped out almost at a stroke. The child-centred curriculum is in the process of being substituted, so to speak, by a system of overcrowded classrooms staffed by teachers who are under stress. Again this is a result of describing cutbacks as policy. It is not policy. It is a programme similar to the one being followed in Great Britain which results in crisis after crisis in working class areas. It is widening the gap and will continue to do so unless somebody's mind is made up that the programmes are a poor substitute for good, detailed economic planning that will ensure that the money collected in tax is well managed and distributed efficiently.
Another effect of the cutbacks is that people without education have to go abroad. I do not know too much about the American scene but on the English scene a great number of Irish people must out of necessity squat in council houses. These people have not the education to enable them to pick up the jobs that are there. Generally speaking those who are not resourceful enough to squat are living very rough indeed. I am not suggesting that everyone who emigrates does so because he has not got a job, but the bulk of working class people who emigrate do so. People who have left primary school and who have no secondary education emigrate out of necessity. Because they have not a skill, because they cannot be afforded a higher standard of education due to family circumstances, they have to go out to look for a shilling or else leave home to allow the loaf to be shared among the rest and they end up in Great Britain, particularly in the London area, living rough or squatting. Generally speaking, they become dropouts from society.
I do not know whether this hand to mouth basis of dealing with the economy will ever enable us to solve the unemployment problem. In the final analysis if the whole question of job creation was properly pursued without the State being at the centre and not just providing the means, and I do not mean through agencies, we might arrive at a solution. However, I do not think that will ever happen. I think we will go on taking decisions in an ad hoc, arbitrary way. If we are to have good Government we must talk about the consequences as well as the benefits. Some good things are happening, as has been pointed out. There are the debit and credit sides. Governments must be concerned with the consequences of what they are at. Consequently, I would be more than delighted if what they are at will lead to a fairer distribution of the wealth of the nation and will allow the whole question of tax to be dealt with in a way that will bring about that improvement. However, on the basis of experience I have doubts about it.
I have known men in this city who have never had a fulltime job in their lives, who went to their graves as unemployed people. They may have got three days' relief work on and off, but they stood around corners and I know for a fact that never in their lifetime had they a full, secure, pensionable job. Their work was casual, such as loading furniture vans or digging the roads for the Corporation on three day relief. There is no change really. You can be poor now in a different way from years ago when people did not realise that lack of education, hospital facilities etc. was poverty. At that time people believed that those who could only afford to give their children bread and dripping were poor but not destitute. Those who gave a down-and-out a place to sleep on their landing in their tenement house, as was common in those days, were considered generous and to be expressing concern for other people.
However, there is so much greed about today, with the profit motive being everything, that the poor are not as generous towards other poor people as occurred in the twenties and thirties. It is not surprising that people are getting angry. I do not wish to be the person to spread alarm and tell the Government that we have reached a crisis but it is no harm to point out that in the fifties when 57,000 were unemployed people lay on O'Connell Bridge in protest. I do not know if we will have similar protests, and I hope we do not. I hope my fears will be proved unfounded. It is important that the Government should not cut back on spending without taking into consideration the question of distribution among the poor and so on. My ego will not be dented if I am proved wrong and I will be pleasantly surprised if in 12 months time I can be told that there has been a marked improvement in employment. I hope I will be told that instead of cutbacks the Government will be easing the people back into the comfortable standard of living they enjoyed some years ago. There is no reason why that should not be the case and it could come about if the Government managed the State's finances efficiently and distributed the wealth equitably.
There was not an increase in child benefit in 1987 or 1988 and, as a result, many families are suffering. The Labour Party are concerned about that because we were responsible for the introduction of that scheme in 1986. I am saddened to think that the Government's attitude of cut, cut, cut has resulted in many families struggling to survive. Under the long-term disability scheme a person is required to have 260 stamps, or five years constant employment, to qualify compared to 156 stamps in January 1987. That has resulted in a saving of £9.25 million but thousands of people are suffering. I understand that 40 per cent of all disability benefit claims are of more than one year duration and subject to rigorous medical examination. Those basic entitlements were improved by the Labour Party and that is why we are concerned about the changes in them.
In order to be entitled to unemployment benefit, maternity benefit or disability benefit the number of paid or credited contributions has been increased from 26 to 39. That affects 12,600 adults. In the seventies and early eighties the Labour Party fought hard to improve those entitlements. A widow, a deserted wife, an unmarried mother or a prisoner's wife is no longer entitled to claim the half-rate payment or the disability benefit, maternity allowance or unemployment supplement from this month. The Labour Party were responsible for the introduction of those benefits in the seventies. Optical treatment benefit has also been cut.
The amount paid under the social employment scheme was reduced in 1987 from £70 per week to £60 per week, a retrograde step. I could quote such statistics all night. The Government attempted to abolish the National Social Service Board but, fortunately, reversed their decision. I am not claiming that the Labour Party were responsible for that but we did campaign against that move. Since the thirties the Labour Party, in Opposition and in Government, have pioneered the development of a modern comprehensive system of social welfare and in doing so from time to time have overcome the many influences who opposed progressive measures to eliminate poverty in our society. Once again it falls to us to defend the hard-won rights of the poor. We will do that in the work-place, at union meetings, among community groups, in our social contacts but, most of all, in the Houses of the Oireachtas.
I am concerned about the decision to abolish pay-related benefit and not to pay child benefit in respect of the first child. I understand that as a result of those decisions 475,000 families will suffer. I was disturbed to learn of the decision to withdraw child benefit from families with a gross income of more than £15,000 per annum and the increase in the number of waiting days under the disability benefit scheme from three to six. There is a lot of concern about the decision to cut the duration of unemployment benefit from 15 months to 12 months, with effect from 1 April for new claimants. I understand this will affect 15,000 families. I understand that it is intended to cut what has been described as the "heating season" by one week at each end of the season without any increase in the amount of the fuel voucher which now stands at £5.
All we have had from the Government's policies are decisions that make the poor poorer and there is no evidence that the Government will not continue that pattern in 1989. It is easy for Members to ask the poor to hold their fire and to tell them that when the economy improves a lot more will be done for them. We all accept that our economy is in a bad state and that there is a need to adopt stringent measures. We have been able to overcome many problems but we have never managed to be able to have a fair distribution of resources. We never seem to be able to find a way to use the free market enterprise system to create sufficient jobs for the people who have become redundant from the land and to facilitate people who have lost their jobs as a result of higher technology. We have never been able to cope with the rate of change in a way that would reduce unemployment, and as yet we have no hope for the future.
The fact that services and social welfare benefits for the poor have been cut makes us cynical, as do the numbers of redundancies notified to the Department of Labour in 1988. These facts must concern us. The report of the central review committee on the Programme for National Recovery does not comment widely on the extent and nature of the redundancies notified to the Department and the projected 20,000 jobs for 1989 are not definite. They might be an aim of the Government but so far they have not been confirmed and there is no real evidence to suggest that the estimated expansion of employment in the services sector will not level off in 1989.
The Congress of Trade Unions who are a party to the Programme for National Recovery agree that it is now clear that the rate of job creation over the past year is insufficient to meet our problem. It is also clear that creating the right environment is not enough. Obviously, this is a party to the national agreement who are not happy with the efforts being made to combat unemployment and so on. What might be the answer to our problems? Because of the high level of unemployment which persisted through 1988 it is clear that we need a radical policy of private and public investment if we are to have any real impact in maintaining and creating jobs. The people who talk about creating a climate for job creation are not phoney but they are following a wrong system which cannot solve our problems. However, it is fraudulent for the masters of industry to suggest that the present way is the way forward and that it will create jobs. The high level of unemployment is of grave concern and there is no real evidence that the level will be reduced.
What are we going to do about our problems? Should we put more emphasis on wealth creation and on the fact that wealth should be retained in Ireland and put to work for the people? Are we going to halt redundancies in the public service? Are we going to halt cutbacks in basic services such as school transport and so on? Are we going to do something to increase public construction projects? Are we going to do anything in those areas to increase employment? I know that road building alone will not solve our problems because with the type of machinery being used nowadays the same numbers of labourers are not required. The same applies to the building industry in general.
Are the Government prepared to consider the suggestions of the Commission on Social Welfare and ensure that a single person gets £60 a week and that a married couple get £96 a week? That will not make people rich, it will just make their problems less acute. Are the Government prepared to increase the child benefit scheme by at least 25 per cent? Will the Government tackle the family income supplement in order to try to bridge the gap between the haves and the have nots and will the Government do something about the long-term unemployed? If we are serious about tackling poverty will we make more money available to the Combat Poverty Agency and highlight the extent of the poverty problem? Are the Government to pay any attention to the submission of the Simon Community or the submission of the Catholic Social Services Centre?
We need an investment of about £100 million, for instance, in local authority housing in 1989. If we do not make that sort of allocation this year we will be faced at the end of the year with the same numbers being unemployed, if not more. If we do not do something about income tax and try to bring some equity and relief for PAYE workers, the jobs situation will get worse. So far, under the commitments made in the Programme for National Recovery the status quo has been maintained in relation to the PAYE workers, and that is the most that has been done for them.
So far as the Labour Party are concerned, we feel that the public who pay the bills are entitled to know that their money is well managed and efficiently distributed and we also feel that the revenue to finance essential projects must be contributed fairly by every sector. If we do not work towards change in all the areas I have mentioned, we will remain static in relation to poverty and unemployment; in fact poverty may increase to a stage where there was more than one in three people living below the poverty line.
I should like my contribution by way of appeal to be taken on board. We are not saying there are ready-made solutions to all of our ills. In recent months many socially concerned bodies have advanced substantial, detailed proposals that would alleviate some of the poverty being suffered at present and help us to be more tenacious about the question of job creation, thereby rendering the overall problem less acute.
Generally on the occasion of the debate on the appropriations we range over a very wide field but, this evening, Senators will be glad to hear I propose to be very brief, at least I intend to be very brief.
Some of the topics which absorb a lot of my attention — such as Anglo-Irish relations, North-South relations, constitutional issues, all that area — have been debated at considerable length in the last term before Christmas with their various issues and motions which gave us generous opportunity to talk along those lines, and I am not going to deal in any sense with those topics tonight. I want to confine my remarks, very briefly and cogently, to central issues of our economic situation.
May I say first of all that I share the general admiration for the good job which is being done by this minority Government within the policy and philosopical limits they have set themselves, within the constraints of our membership of the Community and within a whole lot of other parameters, some of which are voluntary, some of which are involuntary but which limit the Government's activities. In the job they have set out to do since they took office, in the fervour of Pauline conversion with which they embarked on putting our fiscal affairs in order, then it is generally conceded that a good job is being done. It is true that we do not see any of the larger consequences of that job as yet. But they have to be complimented on being a good Government in that sense and on having a good Opposition because, in Irish political history, we are in the centre of a unique political experiment in consensus. The motivation is not always altruistic perhaps but, nonetheless, let us give credit to Opposition as well as to Government. This could not be a good minority Government unless they had a responsible Opposition.
On a personal level I feel compelled to dwell a little for a moment on the irony of the fact that the Taoiseach is experiencing perhaps his golden age as a political leader in his political career. There is an irony in this fact because he is doing that as the Leader of a minority Government, whereas it is no secret that his burning ambition as a politician was to do something he has not yet achieved, that is to say, to lead a majority overall Fianna Fáil Government. He has not done that yet, he may never do it and suddenly it does not matter any more.
But again, he may.
Suddenly it does not matter any more because, if this Taoiseach is to be remembered in the history books for certain achievements, I think it is now that this is happening. Maybe in the end this is only poetic and historic justice because, again, it is generally agreed that one of the best Governments in the history of the State was run by his father-in-law in the early sixties, and that also was a minority Government. I think there is a strong political moral there.
Having said that I wish to confine my remarks to one or two aspects of Government policy and briefly to mention education. I agree with Senator McKenna in congratulating the national institutes on attaining university status. In fact, the governing body of University College, Cork yesterday unanimously expressed their congratulations to our colleagues in Limerick. We would hope that, although there will be consequences and shakeouts that we yet cannot anticipate as a result of the conferring of University status on the two National Institutes for Higher Education, in the end it will be beneficial. With respect to Munster, we hope that the issue would not be one of acrimonious conflict and competition for declining student intakes as we move into the nineties, dwindling Government grants and so on, but rather that the keynote would be co-operation, co-operation perhaps along an axis running from Cork to Limerick, to Galway, and balancing out the heavy metropolitan advantages of third level institutions in this area. But that remains to be seen.
I want to make one simple point however about education in general. It is simply to endorse the complaint, appeal — or whatever you like to call it — of bodies such as the Conference of Major Religious Superiors who, in a booklet published a few months ago, put no tooth in one of the central defects of our whole educational policy, that is its gross inequality. They ask, in a catechism fashion; has any progress been made over the past 25 years in education? The answer, of course, is "yes" in terms of access to post-primary education and so on and in the elimination of primary school terminal leaving, which was a working-class phenomenon. That has been ended and that is some social progress. The other major question is: has equality of opportunity — which after all was the aspiration in the 1916 Proclamation, in the 1919 Democratic Programme and of successive native Governments — been achieved? That answer is clearly not. This is still an unjust society obviously in the economy, but just as clearly in education. The inequalities of opportunity in education at first, second and third levels anyway, perpetuate the unjust society that we have.
I welcome the fact that the Conference of Major Religious Superiors — which is one of the aliases of their Lordships, the Catholic bishops of Ireland — have taken the initiative in sounding the tocsin against this blatant injustice in our educational system and the basic inequalities in our educational structures. Perhaps I would not have expected this some years ago but I welcome their eloquence and passion in hitting out at this inequality — equally their similar preoccupation with the fact of poverty in our national life. It is a change — as someone said — it is a profound change that the belt of the crozier should now be feared for its social repercussions, no longer for infringing the moral code but for the Government's failure to meet the fundamental problems of poverty and social justice. I am very glad to welcome the Catholic Church into the area of social reform. Considering that in the thirties, forties and fifties too often they lifted their voices against reform, against overt interference by the State in the social and economic field, now they are demanding that the State intervene to take action in those matters. I am very glad at the change that has come about, which, indeed, some of us have been calling for a long time.
What I want to do here is to endorse the calls now being made from all sides in recent weeks that the budget should address above all, as a matter of absolute urgency, the question of poverty. I want to confine my remarks to that simple issue. I do not need to go into the details. They have been spelt out by such bodies as the Conference of Major Religious Superiors, the Combat Poverty Agency, the Society of St. Vincent de Paul, the Irish Congress of Trade Unions and a wide spectrum of political opinion. They all have the same message — that we have a scandalous situation where people have not got enough to eat. This calls for immediate action. The Government, I understand, have already drawn up the main lines of their budgetary policy but it is not too late to make the most generous adjustments to deal with this scandal in our community. A Fianna Fáil Government particularly has a historic obligation to do this, to act not only for humanitarian reasons, but out of enlightened self-interest. Senator Harte referred to the fact that sooner or later the one-third who suffer this indignity and deprivation are simply going to do something about it; with far less justification perhaps in the fifties they took political action of a certain kind.
While the Government should act out of enlightened self-interest they should also act, being a Fianna Fáil Government, in accordance with their historical tradition. One of the reasons for their foundation was that they should be a socially reforming, populist Government, that they should put an end to tophattery and social privilege and should give a chance to the poor man, the man perhaps if not of no property, the man with very small property. No historian would deny that Fianna Fáil have reneged on that tradition for several decades now and it is time they should get back to that. As I say, I suspend judgement on all the wider implications of economic policy and economic philosophy. I am pleading for a relief of the most pressing problem — an gad is gaire don scornach.
This is a fertile land. It is inexplicable and scandalous that anyone should go hungry in this fertile land. We referred at the outset of the proceedings to the fact that next Saturday will be the 70th anniversary of the convening of the first Dáil Éireann which on its first day presented for adoption a radical programme of social reform — the Democratic Programme. I corrected Senator Ryan's enthusiasm this morning when I pointed out that, alas, the Deomcratic Programme was not really an integral part of what that Sinn Féin revolution was doing but they were making a gesture at least for people's craving for social equality and social justice. I cannot think of a more appropriate way to mark next week's commemoration of the 70th anniversary of that Democratic Programme than to try to begin to realise some of its principles. A budget in January 1989 which would be generous, imaginatively generous, to the poor in our society would be the fittest tribute one could pay to the Democratic Programme and to the convening of the first Dáil. Let the Government begin to end poverty in the budget next week and it will have done the finest deed of its period in Government to date.
I welcome the opportunity to refer to the broad spectrum of political activity that has been addressed here today and, indeed, on the last occasion on which we discussed this subject, and to say that it is significant that there is a fair measure of agreement that a certain amount or a good deal has been achieved, depending on which side of the House the contribution is made. In general the main thrust of what is being said here today is that a lot has been achieved and that the ship of State has been, at least for now, steered off the rocks. It is interesting to note that Professor Murphy referred to the first Dáil. I looked at some of the literature issued during the course of the second election campaign quite recently and one of the posters issued stated in a graphic way that the ship of State was on the rocks. I think that is the difficulty that this particular administration was confronted with on taking office some 18 months ago. As I said at the outset, a lot has been achieved and this fact appears to have been recognised not just in this House or in the Dáil but indeed by the public, if one can attach any credence to opinion polls. We are all aware of how fickle they can be but at least it seems to be recognised by the general population that a reasonably good job is being done. As a representative of the Government party in this House I think an exceptionally good job is being done in difficult circumstances.
Professor Murphy was probably correct in saying that it has not been a drawback to the Government that they are a minority Government. They have received a fair measure of co-operation from the Opposition, who have acted very responsibly. I think that fact should be recognised and it is significant that it has been recognised by a number of speakers today. A certain number of the Government's measures, if not all, have been very effective and have produced the intended results. Of course, the next phase is to maximise the benefits to be gained — to use the much hackneyed phrase — by putting the State's finances back in order. The question now is: in what direction do we go from here? The Government are obviously pursuing many programmes, and as I said, these have met with a lot of success, but this Government will be judged on what they do from here. I think that there are a number of areas — the Government identified these on coming to office in their own Programme for National Recovery— that can derive the benefits from whatever economic development takes place in the wake of the current wave of stringent activities on the part of the various Government Departments.
Many speakers today touched on the impact the cutbacks have had in various areas, be it health, education or local government. Indeed we are all aware of the impact they have had on the quality of life of so many of our citizens. There is no doubt about this and, of course, those on the Government side of the House have taken the brunt of the criticism. The last administration, obviously, also had to face this criticism. The public have had to suffer a great deal of discomfort but by and large they have taken it on the chin and they are to be congratulated for this. As I said, there is a fair measure of agreement on what has been achieved, but they need to see some light at the end of the tunnel and they need to be assured that as a result of the sacrifices they are being asked to make benefits will accrue for them and for their families.
The public are expecting a fresh and imaginative approach to be adopted in tackling the problems confronting this country at present. A number of approaches have already been touched on and I will not go into them in any great detail this evening. Certainly one thing we need to do and this has not been touched on to any great degree here today, is to reform local government. If there is to be real democracy in this country it has to percolate down and affect every citizen but at present that is not in evidence on the ground. Indeed successive Ministers for the Environment and Ministers for Local Government, before we changed the label on that Department, had promised imaginative change but, of course, we did not get it. The present Minister had also undertaken a detailed examination of where he believes these significant changes need to be made, and I believe they very definitely need to be made.
The Minister has approached the whole phenomenon of housing development in an imaginative way. Local authority householders have been encouraged to buy their own houses. This was an extremely imaginative initiative and the consequence of it is that something in the region of 43 per cent of local authority tenents will own their own houses by the end of the year. These houses have been offered to them at what can only be described as a knockdown price. Of course, in the long term this will have the effect that Government housing stocks will be significantly depleted. I suggest that what will be a good development in that the time will then be ripe for an appraisal of where we should go next in relation to our next public building programme, and there will be one. If we continue to dispose of as many houses as we are currently disposing of, then that vacuum will have to be filled and I believe it will be filled in the next phase of development.
I know that the number of houses being built this year is insignificant — that is the only way one can describe it — but it has to be contrasted with the fact that in many urban areas large numbers of houses are unoccupied and recently Cork Corporation had to take steps to reduce the impact of vandalism in vacant houses. This area needed to be addressed and because many local authority houses are now being disposed of and Government housing stocks will be depleted we will need a new housing programme.
I hope that in 1989 the Minister will bring forward the concept of a new public housing programme. Not alone will it cater for the housing lists which will again start to build up as a consequence of not enough houses being built this year but, of course, it will also mean a significant capital injection into the building industry. Of course, local authority building programmes made a considerable contribution to the building industry in this country over many years.
I hope that in the coming year the Minister for the Environment will address the whole problem of housing grants. I think everybody would agree that the concept of the last housing grant scheme was an excellent one in that many people availed of the grant and improved the quality of their houses; in some cases beyond recognition. Of course, the tragedy of that concept was that it was too generous; and many people did up their summer homes, took out teak windows and replaced them with PVC and aluminium windows. I believe that very often these improvements were unnecessary and as a consequence the bill for this scheme went through the ceiling. On coming into office the present Minister had to face a bill of something in excess of £160 million and even when he stopped the scheme there was still a tag of £150 million to be addressed. Because of that situation we lost sight of the fact that tragically many people in this country could not afford to do up their own houses, and still cannot do so today because there is no Government assistance available at this time to people whose houses are in a deteriorating condition. That is a serious anomaly in local government administration and it is an anomaly that needs to be addressed. I have no doubt the Minister will address this subject in the months to come.
Obviously the next programme will have to be a less grandiose one than the last one. I do not think anybody should have been entitled to get a grant to do up a summer house or a second house. That was never intended to be the idea but, of course, like every scheme it was open to abuse. Now that a two year period has elapsed during which no reconstruction grant has been available to anybody I believe, the time has now come to fill that vacuum.
In the general context of local government, I believe there is a need to give back a greater say in the administration of local democracy to county councils and corporations. The development post-1977 of the removal of rates and so on contributed to a gradual decline in the impact local authority members could make on the quality of life in their own areas. They were dependent entirely on the Department for block grants for housing, roads, sanitary services and so on and, as a consequence, they had very little input into where the various appropriations should go. We are aware that the Minister is carrying out an appraisal of the need to change local government.
I believe it is vitally important to improve the status of local authorities so that once again they can be a decision-making group. Public confidence in local government is being eroded by the minute and one has only to attend public meetings to witness the deterioration of the public's perception of the effectiveness of local authorities and their members. This problem needs to be addressed. Many other European democracies, particularly our EC partners, have already addressed this subject and one has only to read the extremely imaginative way the Danes addressed this subject in the early part of this decade and by transferring a significant amount of national administration back down to local regions to realise that we need to do the same here. We have only to look at the historical contribution local authorities have made in this country to know that we would be leaving that administration in good hands by giving it back to them. We need to do that.
There is more centralisation taking place in the distribution of our allocations from the various European funds at present. The hand of the Department of Finance is in everything; everything has to be channelled through that Department. When one asks local organisations or groups to make submissions as to how various schemes should be funded and so on, it is disconcerting to find that at the end of the day somebody 300 miles away will ultimately decide how they should be funded. This phenomenon of centralisation has slowly but surely been creeping into various Departments of State and it needs to be addressed. I have absolute confidence the Minister for the Environment has the imagination to address this subject in a meaningful way and not just to make passive adjustments and allow county councils to increase service charges and so on and make the difficult decisions. If we are going to have local administration let us have meaningful local administration. It is one of the priming pumps needed to dovetail with the Government's thrust forward in this area.
The other areas identified by the Government on coming to office were tourism and fisheries. I will not dwell too long on these areas now but I should like to touch briefly on them. The Government have had significent success in their efforts to resolve the deterioration which was creeping into the tourism industry. Successive Governments and two Government White Papers, one in the seventies and one in the early eighties, identified very clearly the need to resolve the single fundamental difficulty which had confronted the tourism industry for many years, that was the expense of getting here. Every expert who was employed to find out why we were not getting our share of the expanding tourism cake identified the expense of getting here as the main reason for this. Fortunately that has changed very dramatically and, in fact, this year it was a good deal cheaper to bring a husband and wife and three children to Ireland on some shipping routes than it was in 1981. The same theory was applied in relation to the request to the hotel sector to keep their prices down and there has been no significant increase in hotel prices now for almost two years. The budgets have not significantly increased drink prices over the past three years. All these things have occurred in response to the constant complaint we had from the tourists that it was too expensive to get here and that we were basically an expensive destination. Ireland will remain a relatively expensive destination but having said that, the type of specialist tourist we are now beginning to address is prepared to pay that little bit extra. It is not comparing like with like. We cannot compare ourselves with the sun spots of Spain or the Canaries. The Government have had significent success in that this market is now at least accessible.
There are a number of other things that need to be done and it is an opportune time to debate them on the basis that they can be tied in to the submissions that we are currently making under the European Social Fund, Structural Funds and so on. We have a golden opportunity here and it is appropriate that the Minister of State of this particular Department is here this evening. The Office of Public Works have an amount to contribute in this area, and I am happy to say that they are already doing so, in identifying significant aspects of the Irish tourism product.
We will have to resist the temptation, going into the nineties, to adopt a kind of pepperpot approach to various schemes, giving £1,000 to this festival and £500 to somebody else and to Mickey Mouse schemes all over the country when what we need to do is to focus on five or six sizeable national projects. We have already embarked on one in Limerick in a sizeable urban renewal programme that was launched there in the last few weeks. That is the kind of concept that will attract tourists into this country in the future. We must stop measuring ourselves against Corfu, the Canaries and Marbella and these places. There is no comparison. We cannot offer what they have got and they most certainly have not got what we have to offer.
We must focus on the need to develop items of significant historical interest. We are lucky in that many of these are still sufficiently well preserved to be of great interest to tourists. Our environment generally has an important role to play. It is not enough for the Minister to bring in environmental campaigns, such as the anti-litter campaign, if funds are not provided to carry them out. The same applies in the area of agricultural pollution. We are trying to bring in tourists to fish, but quite often they find long stretches of the rivers, they can get access to at present polluted. We have been stabbing at this, but we must create the awareness among the public that we cannot be indifferent to its future just because we have a relatively unpolluted environment.
If there is any single aspect of life in Ireland that will deter tourists in the future it will be our indifference to preserving the environment. We only have to come to the periphery of any town at present to see indiscriminate dumping and litter. We have problems but, slowly but surely we are solving them. Apart from our desire to improve the quality of life for our citizens, the contribution it will make in the development of the tourism industry is significant. As I said in the beginning of my contribution in relation to tourism, we must focus nationally on five or six or maybe ten big programmes every two or three years, set them up and fund them properly and finish them. Then we can say with certainty when we invite tourists here, when we circulate brochures internationally and participate in international trade fairs, whether in Dusseldorf or New York, that such a facility is in place in Wexford, or in Connemara or in Glengariff or wherever. That is the only way it will work.
We need to address our shortfall in the area of wet-day facilities. We have seen where a Dutch pension company can come to Trabolgan in Cork and set up a facility. We have been talking about it for the last 30 years, and they can come in overnight and make a success of it. That is the kind of thing we need to address. As I said here before Christmas there are three and a half million registered hill walkers in the UK alone. There are not even a dozen packages available in this country at present to attract hill walkers; yet we have the finest hill walking terrain and environment in the world here and we have not addressed that subject yet.
There are many aspects of this tourism product we need to develop. The Government have addressed successfully surface and air transport problems in a reasonably successful way but other aspects need to be addressed now and we are anxious to get European funds to assist us in developing because we cannot do it on our own.
We have three million tourists a year visiting the Mary Rose. We have many of those wrecks off the coast of Ireland that could be brought ashore. There are many examples but I will not labour this point this evening.
In relation to the fishing industry, again it is not enough to talk in pious platitudes about a desire to improve fishing. It is significant that BIM have produced a very comprehensive programme in the last few months which, if it is realistically funded, can be significant and successful. It can only work with funds and it is not enough to say that the fishing industry has got a realistic chance to provide jobs onshore and so on. We must address it and address it seriously. At present the bulk of our mariculture product is being shipped to the fresh markets of Europe. That is good in itself, but there must be a contradiction in terms there somewhere when we are not processing onshore ourselves.
Mariculture is a relatively new phenomenon here and there is no excuse for shipping that product to the UK or to France to be processed for their markets; we should be doing it here. In Denmark for every one job at sea in the fishing fleets there are eight jobs ashore. We have got less than one and a half here. It is not enough to identify the growth potential of fisheries if we are not prepared to put the funds into it. I am satisfied that the Minister and his Minister of State are addressing it in a realistic way, but we must create confidence in the industry itself. We must be conscious of the dangers of monopolies getting into some aspects of our processing industry where in excess of 70 per cent of the processing of one species of fish is owned by one company. That is the kind of thing we have to be careful to avoid in the future.
There is a particular need to develop our mariculture industry. We have a unique environment particularly on the western seaboard and in the south-west where the benefits of the Gulf Stream make it a particularly important location for the development of mariculture. Of equal significance is that we have so many inlets where it could be of benefit to the small farmers of the area to general off-farm income. There are a number of species of fish that we have not even looked at yet apart from the ones that we have been developing like mussel rope culture and oysters and so on, species that we are aware of. There are many others like velvet crab that has only been recently introduced here from Brittany which are going to be huge if we provide onshore processing, if we provide facilities for these inshore fishermen to develop relatively small farms. It has been very successfully done in the west of Scotland. I know our own Department have been looking at it and I hope we will have a meaningful approach to the whole business of mariculture. It is not enough to talk about it, we must provide the funds as well. I have no doubt that now that we are getting this degree of stability in the economy the various Departments in 1989 and 1990 can look for realistic budgets to address these particular subjects.
In conclusion, I would like to touch very briefly on the Department of Energy and to say that there is a great need to develop a coherent energy policy. I refer particularly to our dependence on the importation of oil. We do not have national oil storage facilities. We are dependent on storing oil abroad. That is not a healthy situation for this country to be in. We all saw in the mid and late seventies the type of crises that were created in this country because of oil shortages and so on. We are all aware of the volatile nature of politics in the Middle East and it would take only a minor upheaval out there to upset the balance of our oil supplies. We have a need to develop our own national oil store; we have one in my constituency and I hope that in 1989 we will see a reopening of this facility from a national point of view, apart from the obvious boost it would be to the local economy. I am aware that negotiations are going on at present and I hope they will come to fruition in the near future.
In conclusion, I would like to congratulate the Government on having got this far. It has not been easy. Indeed, it has not been easy for the Opposition either and it has not been easy for the public who must be uppermost in our minds. They have taken a lot of this on the chin and have been very patient. We are aware of the difficulties created in the health services and in some facts of our educational service and so on but this is the only way to proceed. The public and the Government recognise that as do the majority of the Opposition parties. Slowly but surely we are getting back on the rails. It is important now that we have one foot back on the rail, that we do not become overtly generous and that when funds become available to the various Government Departments they will be used in a meaningful way.
Having listened to the last two contributors I am not sure that I live in the same country as they and that we have the same Government. I congratulate the Minister, wearing his Board of Works hat, on what has been announced in the House today regarding the advances that have been made on the restoration of the Seanad Chamber. In his other capacity he is here as a representative of the Government and anything critical I may say of the Government would be intended to be helpful to the Minister.
The last speaker referred to two matters; one was that people acknowledge the position we are in and are prepared to take it on the chin. I can assure the Senator that there are people taking it in places that are more hurtful than on the chin and are still reeling and bent over after some of the blows that have been administered on them by the present Government. He referred to the ship of State having been on the rocks and slowing getting off the rocks. During the reign of the Coalition Government, who were trying to keep the ship off the rocks, Fianna Fáil, in Opposition, were acting as a tug pulling it onto the same rocks. They continued in that vein throughout the term of that Government. If one looks back on the record one will see that they did not want this country to be saved. They wanted to bring down that Government at any cost. When they talk about redeeming this country from the state it was in they are really talking about redeeming this country from the state they contributed to driving it into even when in opposition. The opposite is the case now when the Opposition are making a positive contribution.
It has become customary in this type of debate, for one to make a state of the nation speech as one sees it and from the point of view of which side of the House one is on. I see it as someone from County Donegal would see it though I do not intend to be parochial because the state of the nation so far as I am concerned is the state of the people I represent at another level as well as the state of the people I live among.
We had a reference to tourism by the last speaker. On this day last week a deputation from Donegal had a meeting with the second in command in Bord Fáilte in an effort to persuade him and the board that Donegal has not been getting its fair share of tourism in bad times. The published figures suggested that there was an increase in tourism last year but Donegal did not benefit from that. I venture to say that if you went through this city and lifted at random 20 tourist publications — whether tourist guides or advertisements — you would hardly see a reference to any part of Ireland north of the Dublin-Galway line and certainly not north of the Sligo line. This is so true that it is damnable and yet we in Donegal would claim to have some of the nicest beaches in Ireland, some of the best golf courses in Ireland and numerous middle standard golf courses that would be very attractive to middle handicap or high handicap golfers. Tourists claim that we are flying in people to four major courses in Kerry and that that is what is harnessing that golf potential. In Donegal we do not see it that way. While we would have three or four courses that would rival the three or four courses in Kerry we also have ten, 11, 12 or 16 smaller courses but the golfers are not getting to Donegal. It has become clear that in Donegal we must bring tourism up to some acceptable standard. An airport is needed at Letterkenny. The present Taoiseach, both as Leader of the Opposition and as Taoiseach has said he would see to it that funds were provided for such airport. I believe he will. I am asking the Minister to bring that request to the appropriate authorities and to the Taoiseach because the county needs an airport.
We realise we have disadvantages not least of those being our proximity to Northern Ireland and the general conception of Donegal as being that far north. One could get to Donegal and be half way back again quicker than one would get to Dingle but people do not see it that way. The fact that Northern Ireland lies between us makes the distance appear longer but there is the real difficulty of Donegal being surrounded by British camps. I am not talking politically about the Northern Ireland situation or about Britain but the presence of these camps generates a fear to the extent that people are reluctant to pass through the various checkpoints. The only way we can get them in is to fly them in for their first trip so that they can at least see Donegal once and then make up their minds as to whether they want to come back. I note that time is running out but I will move on quickly to the matter of housing.
The last speaker referred to housing in Cork where, he said, there was a surplus of housing. Senator Harte referred to a surplus of housing in this city. The situation in Donegal is that there are 1,500 applicants at present seeking local authority housing, that represents approximately 5,000 people. The last speaker said the Minister for the Environment was imaginative. The Minister, Deputy Flynn, has an imagination and a very healthy one, if he thinks that the housing problem is being solved either by stopping the construction of houses at local authority level or by selling off the housing stock. I am not sure that it is a good thing to sell off housing stock, whatever private benefit there may be to the individuals concerned to become the owners of their homes. In fact I suspect it is very bad. When the tide rises people in those situations will eventually purchase their own houses and move into private housing. Then those other houses will be vacant for rehousing those on the housing list. The present Government on taking office promised an injection to the construction industry and what they gave them was a lethal injection.
Debate adjourned.