Seanad Éireann debate -
Tuesday, 19 Dec 1989

Vol. 123 No. 14

Appropriation Bill, 1989 [Certified Money Bill]: Second and Subsequent Stages.

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

Minister of State at the Department of Tourism and Transport (Mr. Lyons)

The Appropriation Bill is an annual piece of legislation which formally appropriates the departmental Estimates for the supply services, both capital and non-capital, and all Supplementary Estimates which have been approved by the Dáil since the previous year's Appropriation Act. The appropriations for the various services in the Bill this year, as set out in the Schedule to the Bill, amount to £6,452,474,000. This comprises net Estimates totalling £6,376,111,000 as set out in the revised 1989 Book of Estimates, published after the 1989 Budget and Supplementary Estimates, totalling £76,363,000 as passed by the Dáil this year. The Bill also authorises £619,444,000 in departmental receipts to be used as appropriations-in-aid.

Another very important function of the Bill is its use in providing a statutory basis in 1990 for the "four-fifths" issues procedure. This procedure, which is authorised by the Central Fund (Permanent Provisions) Act, 1965, permits the Minister for Finance to make issues from the Exchequer towards the cost of services in 1990 prior to the adoption by the Dáil of the individual Estimates.

The Bill also affords Seanad Éireann an opportunity of discussing economic developments of the past 12 months. I am happy to report that we have had yet another very successful year in which we sustained, and in many cases bettered, the very positive performance of 1988. The outcome has been increased employment, the continuation of the downward trend in the live register, major growth in investment and a current account surplus on the balance of payments for the third year in succession. Following on an annual average growth rate of 3½ per cent in 1987 and 1988, the economy is forecast to continue with a similar strong rate of growth this year.

Manufacturing output growth this year is expected to reach 12½ per cent, similar to that experienced in 1988. A most encouraging feature of the recovery in manufacturing output is the fact that it is broadly based, with contributions to growth coming from the traditional sectors as well as the high technology ones.

After a long period of stagnation and decline, the construction industry has entered a strong recovery phase with growth in the sector forecast at about 7 per cent in 1989. This, I might add, bears out what the Government have consistently been saying; that recovery in the building industry would follow closely on a general economic recovery.

Exports of goods and services, which grew in volume terms at an average annual rate of over 11 per cent in 1987 and 1988, are expected to increase by a similar amount this year. Overall we expect a trade surplus of about £2 billion in 1989, much the same as last year's performance.

For the third year in a row, the current account of the balance of payments will be in surplus, something that has not happened since the Emergency when abnormal conditions prevailed in international trade. The significance of this achievement is best demonstrated by the fact that from the beginning of the 1980's up to 1986, the annual deficit on the current account of the balance of payments averaged over 8 per cent of GNP, whereas over the past three years we will have experienced an average surplus of about 1½ per cent of GNP.

The recovery we are witnessing is not confined to the manufacturing and exporting sectors alone. Growth in consumption and investment are also contributing. The volume of investment is expected to rise by over 8 per cent this year. As already mentioned the building industry is recovering strongly. Machinery and equipment investment, the engine of industrial expansion, is forecast to rise by about 10 per cent in 1989 following on a 3 per cent volume increase last year. Consumer spending growth is expected to accelerate from 3 per cent in 1988 to 4¾ per cent this year. This compares with stagnant personal consumer spending in the first half of this decade.

Unfortunately, because of international factors, inflation this year will average about 4 per cent compared with just over 2 per cent in 1988, which itself was the lowest level since 1960. At 4 per cent nonetheless our inflation rate is still below the European Community average and will be well below that of the UK, our main trading partner. Inflation will moderate next year and by the end of 1990 it should be down to about 3 per cent.

This low rate of inflation coupled with moderate wage increases, has made us much more competitive. Competitiveness of course is essential for growth and the maintenance and expansion of employment.

One of the most encouraging features of the economic recovery has been the improvement in the employment situation. The most recent labour force survey indicates that the recovery in private non-farm employment continued through 1988. In the 12 months to April 1989, there was a nett gain of 6,000 jobs in manufacturing. In 1989, non-agricultural employment is projected to be up to 13,000 higher, on average, than in 1988, reflecting strong job growth in the private sector. Over the two years, 1988 and 1989, private sector non-agricultural employment is forecast to increase by well over 30,000. The developments are a direct result of the policies the Government have been adhering to.

Registered unemployment fell on average by 6,000 in 1988. This downward trend is expected to accelerate to an average fall of 10,000 this year. Unemployment remains, however, at an unacceptably high level. It is the Government's vowed intention to bring it down as rapidly as possible by increasing employment opportunities.

In this regard I would remind Members of the House of the package of measures announced last September designed to stimulate employment and help the disadvantaged. These measures will work in two ways to help the unemployed. The PRSI exemption scheme, increased employment incentive scheme allowances, and increased enterprise allowances will encourage the creation of permanent private sector employment. The number of places on training schemes and on direct employment programmes have been increased by over 1,300 places and the attractiveness of these schemes has also been enhanced.

European interest rates have increased sharply this year and Irish interest rates had to move up in line with them. Recently the weakness of sterling has put further upward pressure on Irish interest rates. Despite the interest rate increases this year we should not forget that Irish rates have fallen dramatically, relative to rates abroad since March 1987. The differential between key Irish and UK interest rates has improved by up to 6.5 percentage points since 31 March 1987. During this period the differential with German rates has also improved, by about 5.5 percentage points. This dramatic improvement in our competitive position is a reflection of the better management of the Irish economy during the period.

One of the biggest problems facing the Government since 1987 has been the size and rate of growth of the national debt. In the Programme for National Recovery we set ourselves the target of stabilising the national debt-GNP ratio by 1990. This we achieved in 1988 when the debt-GNP ratio fell marginally from 131.4 per cent of GNP to 131 per cent of GNP. The medium-term target, as outlined in the National Development Plan, is to reduce the national debt to 120 per cent of GNP by 1993. This target, too, looks like being comfortably met ahead of schedule. The emerging end-1989 national debt-GNP ratio is set to produce a very substantial reduction on the end-1988 ratio of 131 per cent. Continuing the downward trend in the debt ratio remains central to Government policy as it is one of the keys to releasing scarce resources from debt servicing to more productive purposes. To further minimise the cost of servicing debt, the Taoiseach has recently announced that a national debt office is to be established and legislation setting up the office will be introduced in the next Dáil session.

This year has seen a continued improvement in the public finances. It is now very apparent that the budgetary outturn for 1989 will be much better than was envisaged at budget time. The trends reflected in the end-September Exchequer returns indicated that the level of borrowing by the Exchequer this year would probably be of the order of 3.5 per cent of GNP, as against the budget estimate of 5.3 per cent. Developments since then suggest that borrowing could be even lower than this, possibly around 3 per cent of GNP. This will mean that the underlying Exchequer borrowing will have been reduced to less than one-quarter of its 1986 level in the course of three years. This ranks as a truly major turnaround in the public finances.

The continued disciplined control of public expenditure is ensuring that non-capital supply services expenditure this year will be broadly in line with the budget target. There will in fact be significant savings in the major area of current spending — debt-servicing costs borne by the central fund. On the capital side, Exchequer borrowing for capital purposes will be lower than anticipated because of higher capital receipts.

However, the main contribution to the strong budgetary performance this year is clearly coming from the buoyancy of tax revenue. This reflects in particular the much stronger upturn in the economy, in both investment and consumption, than had been predicted. Consumer expenditure has boosted indirect tax receipts. Other tax headings have also performed well. Apart from the impact of stronger economic growth, revenue receipts are continuing to benefit from the much improved régime of tax collection and enforcement now in place following the measures taken over the past couple of years.

As Senators are aware, the 1990 Abridged Estimates and public capital programme were published a month ago. The expenditure allocations contained in these documents, of course, deal only with part of the Government's overall budget strategy for 1990.

We must await the Minister for Finance's Financial Statement early in the new year before we see the full budgetary picture. The Government's initiative in publishing spending Estimates some months before the beginning of the financial year ensures that there will be informed public debate both in the Houses of the Oireachtas and elsewhere on the general thrust of spending policy. The procedure followed in settling the 1990 Estimates was the same as that used in the 1988 and 1989 Estimates. The expenditure review process was used successfully once again in the early summer. This was followed up by an in-depth consideration by the Government of the Estimate for each Government Department during October.

What the published allocations show is that the Government have set expenditure at a level consistent with continuing downward pressure on the 1990 Exchequer borrowing requirement while, at the same time, making additional resources available in selected priority areas.

Exchequer funded net non-capital supply services show an increase of just 0.4 per cent on the 1989 post-budget Estimate, while overall Exchequer funded non-capital and capital spending is up just 1 per cent on the corresponding 1989 figures. This level of increase is considerably below the projected inflation rate for 1990 of about 4 per cent. Within this low level of overall increase we have directed additional resources to the health sector and to the security sector and have modestly boosted the Exchequer-funded public capital programme.

Much play has been made of the fact that the amount made available for social welfare next year is some £100 million less than the 1989 budget provision. I want to emphasise to the House that in settling the 1990 Estimate for Social Welfare no measures were adopted which would affect entitlement to or levels of payment in social welfare schemes. The reduction in the Estimate simply reflects the fact that PRSI income is expected to be much more buoyant next year and the Government's decision to amalgamate the occupational injuries and redundancy and employers' insolvency funds with the social insurance fund. I might add that the 1990 published figures for social welfare do not include anything for budget day improvements which the Minister for Finance will make next year.

The expenditure allocations for 1990 also reflect the impact of the Community Structural Funds. As Senators know, the Community has made a commitment of £2,860 million to Ireland over the 1989-1993 period. Aid from Community initiatives yet to be announced should bring the overall assistance total to over £3 billion.

The Community commitment is set out in the recently published Community Support Framework. It sets out both the levels of assistance to be provided and the sectors to which it will be channelled. The Community Support Framework will be followed up by a series of operational programmes. These will set out in more detail the particular measures which will be implemented in each sector. They are currently under discussion with the Commission and some of them will be finalised shortly, with the remainder being agreed early in 1990. Like the Community Support Framework, the operational programmes will also be published when they have been adopted.

Ireland's assistance from the Structural Funds in 1990 will be £539 million. In addition, some £18 million of commitments from the Social Fund in 1989 will be carried forward to 1990, giving total assistance of £557 million. This represents an increase of over 20 per cent on 1989 which itself showed a significant increase over 1988, when commitments were £361 million. The 1990 figure therefore shows an increase, in nominal terms, of 54 per cent on the pre-1989 position.

The turnaround in our economic fortunes over the last few years has been remarkable. We have restored confidence in the Irish economy both at home and abroad. We have endeavoured to reduce the constraint on economic progress imposed by high debt and its associated debt-service costs through strict control of the public finances and that is continuing into 1990. We have achieved and maintained a low rate of domestic inflation to the benefit of our international competitiveness and we have commenced a significant reform of the taxation system so as to stimulate growth and so to promote employment and equity.

This economic strategy was first set out in the Programme for National Recovery in 1987. It was reiterated in the National Development Plan and indeed has been further articulated in the Programme for Government in the National Interest 1989-1993. The strategy we have pursued since 1987 is evidently the right one and that is the reason it has been adhered to consistently. It is the only way in which sustained growth and increased employment can be achieved.

I commend the Appropriation Bill to the Seanad.

Mrs. Doyle

At the outset I wish the Minister and his Department a very happy Christmas and a prosperous 1990. I hope many of the figures he has talked about here this morning will apply to him personally and to the rest of us as well.

Mr. Fallon

A good start.

Mrs. Doyle

The greatest tragedy of the debate here this morning relates to the huge numbers and categories of people to whom this Bill is totally irrelevant. These people come from all sectors of the community, all the various constituencies. Perhaps the only word the Minister did not use in terms of economic jargon and economic buzz-words is the word "poverty". I stand to be corrected but I did not hear or see it anywhere in the script. It is still the biggest tragedy in this country that while so many of us are enjoying increased living standards — we do not deny that there are great sectors of the population enjoying increased living standards — there are still shamefully large numbers of people who would be classified as poor.

Poverty is caused by lots of different reasons but we all know the type of poverty we are talking about. We are talking about the poverty that Sr. Stanislaus referred to this morning on the media which is adverted to in the Focus Point report, the poverty of the young and those without homes in Dublin and the bigger urban areas over Christmas, those who have no future and no path in life, those who have been failed by the education system over the decades, the old and those with drink problems, social problems and other family and marital problems, the people who have been failed by legislators over the years. We have all contributed to that in some way because at different times many of us have been on different sides of this House and indeed the other House. I would like to know what is the Minister's concern for the poor.

I accept fully that the economy is well positioned. I take the Minister's point and I do not argue too much with the macro-economic indicators he has given us this morning. We can all quote balance of payments figures, export figures, interest rates, inflation figures and all the other macro-economic indicators which have come round in the last three years and we will all, when it suits us, claim our share of the credit——

Mr. J. Ryan

The Tallaght Strategy.

Mrs. Doyle

I am coming to that, Senator. I agree with you fully. We will all claim our share of the credit in relation to turning the ship around, a ship that was heading in the wrong direction for too long.

Mr. Lyons

It had no captain.

Mrs. Doyle

That is a matter of opinion. Some of us have confidence in different captains. If we were to bring it down to the captains this morning, it could descend to a rather personal debate. If one goes back over a couple of decades, there are a lot of things that would be better unsaid, with the Christmas spirit in the air, when it comes to captains.

Mr. J. Ryan

The admiral of the fleet.

Mrs. Doyle

I think the Minister has recognised, in various points which he made in his speech, that the turnaround started in the mid-eighties. Certainly the increase in personal consumer spending began in 1986 and it has increased apace. This year it is up again and that is perhaps the single most important indicator of our material standard of living. Apart from personal consumer spending, there has been a boom in real estate. Certainly there has been a buzz in that area for the last year in particular and it seems to be on the up and up. That is a fairly firm indicator of confidence in the economy.

The single factor that has led to the confidence that has thankfully come back in our economy was the extremely responsible role taken by the main Opposition party, the Fine Gael Party, during the last Government. We have had only six months of the present Government and they are continuing pretty much in the vein of the last Government, notwithstanding their uncomfortable bed-fellows. Perhaps they are no harm in curbing the excesses——

Mr. J. Ryan

They left the bed and left the room.

Mrs. Doyle

Perhaps they are no longer curbing the excesses in certain areas but they are continuing the general thrust of the economic policies of the previous Fianna Fáil Government who were in office for two and a half years. Even with the consensus of the social partners, Fianna Fáil alone would not have achieved what they have achieved without the role played by the main Opposition party. The expression the "Tallaght Strategy" is bandied around by people when it suits them and used as a derogatory remark and insult. People have used the expression in different ways but I want to put it to the Minister that without the support of the main Opposition party in ensuring that there is a secure and united way forward from the Houses of the Oireachtas, Fianna Fáil would not have got the consent they got from the different unions and social partners. We were not providing a fall back for them to run to when they were perhaps unhappy with some of the difficult measures which had to be taken. The cutbacks all across the various public services and different Departments hurt, and some of them are still hurting, but it would not have been possible to achieve these were it not for the role played by Fine Gael, as outlined in what became known as the Tallaght Strategy.

I must put on the record of this House the wisdom, foresight and political bravery shown by Deputy Alan Dukes in sticking both his and the party's neck out, just after he was elected leader of our party, in supporting what were a very unpopular Government. We decided to support them for the good of this country. Times have moved on and we are facing the first budget since the general election. As I have said, after having teed up the economy with the support of the Tallaght Strategy over the last two years, the indicators are not good. On paper, the figures look good to the economists and business correspondents but I want to ask the Minister what plans he has in relation to the poor. What is the Government's attitude to tackling the problems of the poor? The Minister dealt with the social welfare figures for next year. I sincerely hope the Minister is right and that he will not need the £100 million he has deducted from the Social Welfare Estimate but what are the true plans of this Government when it comes to removing the causes of poverty? It is not enough to just throw a few bob at the poor to keep the problem down and hope it will go away.

The economy has been teed up with the support of the Fine Gael Party for many years and now thankfully the business sector, the commercial sector and the industrial sector are reaping the rewards. The Minister quoted the word "manufacturing" about four times in his speech, for example, manufacturing growth, manufacturing output, the manufacturing and export sectors. What does the Minister for Finance mean by the word "manufacturing"? Perhaps the Minister of State can tell us here. According to recent media reports, the Minister for Finance, Deputy Reynolds, is not happy with the present definition of manufacturing. If the Minister is going to redefine the word "manufacturing" in the budget, particularly as it applies to corporation tax, where will we end up? Will we slash these figures? Will the FII, Fyffes and all the other companies who come under the definition of manufacturing at present be excluded? The Minister has weighted many of the points in support of this argument on the success of the manufacturing sector. Will all those companies who are now defined as manufacturing companies continue to be defined as such? This is a most important point as all of us look to the manufacturing sector to contribute much to GNP and the economy generally. If there is to be a radical change in the definition of "manufacturing" from a taxation point of view the figures we will be looking at next year will be totally different and we will no longer be able to look to this sector for the support and contribution they have thankfully made in increasing amounts during the past few years.

I mentioned urban poverty and the Focus Point report. We could all mention different aspects of urban poverty but what can we say to the farmers and the agricultural sector who are looking for disadvantaged area classification under the less favoured areas directive? Will there be an appeals system for those who are left out? When will the Government submission go to Brussels? Will our case be accepted in Brussels? Are the Government committed to increasing the headage payments and the various subsidies to all those who will be classified and all those who will be re-classified. If not, there will be major social problems for 80 per cent of our farmers as we face into the nineties, particularly post-1992.

Farming is not just about commercial farming and development; it is a way of life for people in this country. The vast majority of our farmers are small family farmers to whom the Minister's speech would be quite unintelligible. These farmers do not know where they stand in relation to GNP, export figures, the Structural Funds and so on. The Structural Funds might be of some assistance to them but they do not understand them. What is the commitment of this Government to the future of the family farm in Ireland? There are very few people in the Houses of the Oireachtas who are more than one generation removed from a small farm in rural Ireland. Thankfully some small farmers became big farmers and their attitude towards farming as a way of life changed to economic and industrial farming but not enough farmers were able to do that. Many farmers are living in poverty on small holdings of below 50 acres.

Rural poverty is spelt out in the document which was recently launched by the IFA in Wexford with the help of Teagasc and Dr. Brendan Kearney. The document deals with incomes and living standards on small farms in County Wexford. I put it to the Minister that when it comes to agriculture the impression is that Wexford is a model county, that we have no problems and that dole for farmers is unknown there. This is not the case and while we all boasted about the improvements in the economy and the various economic indicators during the past two years, farmers' dole became a reality in County Wexford for the first time. This report published in the past month by the IFA and Teagasc says that of the 200 farms sampled in County Wexford, the model county, 50 per cent returned incomes of below £5,000 and only 20 per cent returned incomes above £10,000, including the off-farm incomes of sons, daughters and wives in some cases who were working. Fifty per cent of the farmers in County Wexford whose farms are under 75 acres received less than £5,000 in a year. If, tragically, farmers' dole is a reality in County Wexford on the east coast, what must be the position of farmers in other counties which traditionally were not assumed to be favourable for farming? If we do not get our act together on the future of the family farm there will be a tragedy in this area. If the Government are telling small farmers to get off the land and on to the dole queues, that they will get a few bob more in next year's budget, then the Government should be honest about that. This is not Fine Gael's attitude and it does not behove any of us to support that type of attitude towards the roots of this country if I may so refer to them.

What will the fishermen say about the Minister's speech when they read it in the business supplement of The Irish Times or some such publication? I know that the poor Minister for the Marine, Deputy Wilson, was up all night but he has precious little to show for being out of bed all night. Will the fishermen in Counties Wexford, Waterford and Wicklow whose fleets and trawlers were ravaged by storms get licences to replace their tonnage? On a strict interpretation of the present rules and the necessity to reduce the GRT, which is what Brussels and the Department of the Marine are at, they will not. Their quotas are being reduced in Brussels. Will any of them need licences? Is there a future for the fishing industry in this country, an island nation surrounded by water?

In the past two years much play has been made of our natural resources. The Taoiseach and others who have gone on TV and opened conferences, such as the IMI Conference, have referred to our natural resources. Our Minister for the Marine is out in Brussels at present battling to prevent a reduction in the quotas. Our GRT has to be reduced because of some mix up in the original figures which were submitted. This sounds a familiar story but it is effectively the truth. Our system is only being computerised now and we do not know what our actual registered tonnage is. None of the good and productive industrial fishermen can trade up. They cannot increase the size of their boats unless they scrap the ones they have. What kind of future have they in what should be a major natural resource? The Minister of State can send the Minister for the Marine all our support in Brussels, even if he has to stay there until Christmas, but he must not come home with a reduction in any of the quotas. We started off with a handicap because of the way the quota was negotiated by the then Minister for the Marine, Deputy Brendan Daly, but we should not now be put at a greater disadvantage via-à-vis other countries in the Community. As an island nation we have a special claim to be allowed to fish the various species of fish off our coast. The Minister needs all-party support to deal with the impossible job he is facing.

The Minister mentioned health once in his speech, just a brief mention in passing. No other topic dominated the general election this summer like health. In fact, any other portfolio was superfluous. Health was the only issue raised on the doorsteps and in the media and it continues to be the single major issue in this country among the ordinary people. They are afraid that if they get sick they will not get treatment. Dental treatment has got to the stage of being a joke. We do not have the dentists to provide the treatment, even if the Minister was willing to provide the funds. What about the general health of the nation and the panic among the old, the infirm, the unemployed? When and if they need it, the State will not be there to help them. What causes most anguish in all sectors is the fear about health care. Without our health we do not have anything. Without our health we do not need education or industry. Nothing is relevant unless we look after the health of the nation, unless we look after the old, the children and the sick. I was disappointed that the Minister made only one brief mention of health in his speech.

Will the Minister tell us what 1990 will bring in terms of the Government's commitment to improve our health services, of increasing the number of beds in the greater Dublin area and other major urban areas? Will he ensure that the health boards have sufficient funds? I do not mean they should have luxury budgets; we are not talking about providing for extras. Health boards should have budgets that will enable them to provide a basic health service, thereby ensuring that everybody has access to the service they require. Those who want to pay for private care can do so but they should not be allowed to step ahead in the queue for those who genuinely deserve the service but cannot afford to pay for it. A good private sector relieves the public sector. We must ensure that the public sector is not disadvantaged and that we do not have a two-tier health system under which those who cannot afford to pay must wait in pain while those who can afford to pay are treated on request. The private sector helps but at present it is being brought into disrepute because of the waiting lists for elective surgery and other procedures in the public sector. That should not be tolerated and it is not acceptable in a Christian democracy. The Government should look at that immediately and resolve the enormous problems that exist in the health services.

There are many ways we could increase employment. We have all heard about the targets but if we take emigration, the number of school leavers joining the labour force and the number who are unemployed, we are talking about well in excess of 200,000 people our of work for many years to come. We must do more to create jobs. Fishing and agriculture could help if we got our act together. The position in regard to those industries is a disgrace. We have an enormous problem in regard to agriculture in that we have the "haves" and the "have-nots." At last, the dairy farmer with a reasonably viable quota having worked seven days per week for 52 weeks of the year, has a good income. The sheep farmer who is a specialist and knows what he is doing also has a reasonable income but the tillage farmers, the dry stock farmers and those with small enterprises, are living at subsistence level.

I have quoted the figures in regard to Wexford and the Minister should bear them in mind. Wexford farmers got into dairy farming late and we have very few large quota holders. We are a dry stock and tillage county and that is why most of the farmers in that county are on the economic borderline. Other Senators will have examples from their counties but I will refer to what I know best which is the position in my county.

I should like to put a number of questions to the Minister concerning the off-course betting tax. I accept that when one takes into consideration health and education it is not a major issue but we are a horse-loving country. Every person, from those living in the smallest house downtown to those living in the largest house on the outskirts of our towns, loves horses. One does not have to own a horse to love horses. People watch horse racing on TV at weekends and often gamble on it. I should like to ask if it will be possible to reduce the off-course betting tax and make a 2 per levy available to fund the racing industry. Those proceeds should be used to fund the prize money and help racecourse owners to improve the tracks and accommodation. Most of our rural racecourses are in imminent danger of closure.

It should be borne in mind that 50,000 jobs are directly related to the horse industry. I am referring to those who provide feed, the small farmer breeder, those who work in stud farms, the lads in the yards, the trainers, the jockeys and those employed at racecourses. There is an enormous hidden employment factor around the Irish thoroughbred. It should be noted that I have not referred to the half-bred animal. We are the Mecca of the horse racing industry. The Taoiseach, some years past, took a wise decision in exempting stallion fees. We have attracted investment in the horse industry. I have no doubt we could increase the number of people employed in the horse industry to 100,000 in three years if we stimulated the racing industry by changing the off-course betting tax and substituting a levy to be paid to the racing board. I asked the Minister to consider such a move last year and I am extremely disappointed that Deputy Reynolds, the Minister for Finance, did not do so. I accept that that industry is close to his heart. I am not very worried about the level of the betting tax but I am concerned about creating jobs. I have no doubt that we could create jobs if we targeted some money directly to the horse industry rather than to the coffers of the Exchequer.

An Cathaoirleach

I hestitate to interrupt the Senator but I must remind her that taxation matters are outside the scope of the Bill.

Mr. O'Toole

On a point of order, I should like to point out that the Minister in the course of his speech made four references to taxation.

An Cathaoirleach

It is in order to make a passing reference to taxation. Senator Doyle should continue without interruption.

Mrs. Doyle

I should like to stress that I am disappointed the Minister for Finance did not take my suggestion on board for which he would have had all-party support.

My colleague, Deputy Jim Mitchell, highlighted a problem some weeks ago that is worth referring to today. He asked if a person on social welfare should consider taking on a job if offered it. We must address that problem immediately. Let us consider the case of a married couple with four children on unemployment assistance. I do not think it would be worth their while working if they took a job at the average industrial wage because they would lose their medical card and if they were on differential rent their rent would increase, We must remember that school transport, the free fuel scheme and so on are hitched to medical cards and if such a couple lost their medical card they would suffer badly. The net loss would be far more than appears from a first reading of the figures. Will the Minister outline the Government's plans in terms of next year's budget to rectify that enormous problem?

If there is no incentive for couples with more than three children to work, how can we hope to achieve the targets referred to by the Minister and the Government? We cannot expect an overnight doubling of the average industrial wage because the manufacturing sector which is contributing so much to the other indicators could not afford it. They would have to shed half of their jobs if they had to give a sizeable increase in pay to the other workers.

We should look at this area immediately. The medical card has become a most valuable tool, particularly to those less well-off in our economy. There is security in having a medical card — at least there was when one could get treatment instantly — and that security will continue. Will the Minister consider basing eligibility for a medical card on net income for those on low incomes rather than on gross income? There is a lot of money involved in such a move and I do not have time to go into the figures now.

There is a major problem in regard to this in that the person who brings home £130 net pay does not have a medical card while the person in receipt of £130 net from social welfare has a medical card. The reason is that the gross pay of the person at work may be £160 per week and that figure precludes him from entitlement to a medical card. Eligibility for a medical card is assessed on gross pay. That is one of the greatest anomalies and inequalities in the social welfare system.

I accept that if we were to change it we would bring many more people into the medical card category. However, if those on social welfare, which is a net take-home payment, are given a medical card on the basis of their benefit, surely those with the same amount of disposable income should be assessed in the same way. Their living standards are similar. In fact, the man or woman working would perhaps have a lower living standard if he or she had to do without the medical card and yet have the same amount of money in his or her pocket each week.

We have been expecting a lot from the Structural Funds. I hope the Structural Funds live up to even half their promise. I am afraid we may be using them as a massive pain killer to dull the senses to the real problems we face. No money is being made available from the Structural Funds for coastal works. There have been calls for major capital schemes under the Coast Protection Act, but as far as I can ascertain, nothing has been mentioned about spending money on coast protection over the next four to five years when we will get large amounts of money from the Structural Funds. This needs to be clarified. There have been major problems along the east coast, particularly in the last few days, and there have been ongoing problems at Greystones and Rosslare Strand for over two decades. Maintenance moneys are being spent each year. If they were capitalised we would be able to fund a capital scheme under the Coast Protection Act if the commitment was there for the Government to do so. The Government should consider providing money for coast protection from the Structural Funds.

In conclusion, I hope the Structural Funds will be used to light productive fires in our economy, not just once off spending on capital schemes. I hope following the three or four years of heavy investment from Europe and Ireland, we will have something to show and there will be ongoing jobs coming from the priming catalyst that, hopefully, the Structural Funds will prove to be.

Mr. Fallon

I suppose the Government would decribe this as a state of the nation Bill. For most backbenchers like myself it presents us with an opportunity to touch on most aspects of Government life and on the Estimates as we see them, and to talk about where we are going. When we talk about what the future holds it is no harm to look back at where we have come from.

In 1987, a minority Government took over a country which, in my opinion, was in very poor shape and did not seem to have a very good future. At that time 250,000 people were unemployed and the number was rising. The economy was static and interest and inflation rates were very high; they are still high. Generally, the public finances were out of control. As Senator Avril Doyle said, a minority Government came into office and they received the help of their friends on the other side. The Tallaght Strategy also was a help. I often think that that strategy was twofold. Perhaps it was used to give the newly elected leader of the Fine Gael Party a breathing space to build up his party. He was probably correct in doing so.

Today we could probably agree with a phrase which was used at that time: we did have an economic miracle. This phrase has been used by many commentators and it is not inappropriate. Our financial standing has been restored, employment is increasing and unemployment is falling. We have achieved a rate of economic progress that is among the fastest in the industrialised world. In spite of our financial difficulties we have improved the position of the less well off and the disadvantaged, who were referred to by Senator Doyle. The position of the long-term unemployed and low income families has also been improved, not solved. I intend to deal with this matter at some length later.

It is no harm to look back at where we have come from. I think the Government will continue the successful policies implemented by the previous Government. As we know, the Programme for National Recovery and the National Development Plan were prepared and implemented by the previous Fianna Fáil Government, and it is the policy of this Government to continue to implement them. In the discussions on the formation of the Government there was an additional agenda but there is broad agreement on policy. These policies are compatible with the existing policies and programmes to which both parties aspire.

Great progress has been made during the past two and a half years in restoring confidence and obtaining growth in the economy. It is very important that I mention that this was worked for. The trade unions, the farmers, the employers, the Government and other interested groups agreed on a programme and worked to implement it. Our country, on the edge of Europe, far from many of its markets, is still relatively underdeveloped, but we can win for ourselves the material standards and the social and cultural amenities we aspire to if we put all our resources to work with firm, agreed objectives in mind. We must continue with this approach and negotiate a new agreement to take us well into the next decade.

What we must do now is translate economic growth into more jobs, as clearly the provision of jobs should be our first priority. It is, I believe, a priority of the Government. One way to combat poverty and reduce emigration levels is by providing extra employment. We must all work for this. The growth we have achieved should lead to substantial increases in employment in the years ahead. Most of what is needed is now in place. For example, the public finances have been put back on a sound footing and confidence has been restored both at home and internationally.

Despite the recent increases, interest and inflation rates are still at very competitive levels. However, both must be carefully monitored and kept at low levels. We are told that inflation to mid-November 1989 stood at 4.7 per cent. This is good by European standards, and is well up on the figure of 2.5 per cent which obtained in 1987 when the Programme for National Recovery was agreed. Various economists are saying that it will peak in early 1990 at 5 per cent which is still a relatively low figure. They are also saying that by this time next year it will have been reduced to 3 per cent or 3.5 per cent. That would be good by any standards. As we are aware, most of the increase in inflation has been imported. There can be no domestic control over money and energy costs, the two classic examples, but political action can be taken to minimise the risk of a rise in costs in other areas, such as calling for pay restraint and having a taxation policy. It is going to be hard to convince workers in the public and private sectors that pay moderation might well be in their best interests. That is a theory I would agree with, but as I said it is going to be hard to get that message across. It is vital that the Government keep interest and inflation rates down to allow economic growth to be achieved.

Interest rate increases are imported. We all know that there have been four increases since April. High interest rates are part of the inflation package. Increases in interest rates also impinge on the Government finances in that they increase the cost of servicing the national debt. The bigger the national debt the more difficult it is to provide tax cuts and other improvements. I would stress that interest rate increases were imported. Many people thought that the July increase would not have come about. Strangely enough, I spoke to many experts in the field at the time and they said that .5 per cent might have been from external forces and that the other .5 per cent came about because we had not formed a Government at the time. We will have to continue to monitor interest rates. I agree with many people who expressed surprise at the Central Bank decision of two weeks ago to increase interest rates by one per cent. We know that was caused by the massive outflows of money as a result of the fall in sterling. We can all agree that that was the proper decision because we now find that within a short period much of that money has come back.

When speaking this morning the Leader of the House said that during this debate we should talk about the Estimates, as indeed did Senator Doyle. Looking at the Estimates it is obvious that they reflect the determination of the Government to tighten Government spending and to make economic progress. Examination of some of the spending areas reveals the caring approach of the Government especially in the area of health, despite what Senator Doyle says. The 1990 allocation for health is almost £100 million higher than the budget provision last year. That will allow health boards to at least continue their services and hopefully to improve their services, something to which we would all aspire. There should be more money for health and when the economy improves increased contributions should be made towards health.

The question of social welfare was touched on by the previous speaker. Here again, spending on social welfare illustrates the Government's commitment to protect and where possible improve the position of the underprivileged. Over the years, Fianna Fáil Governments have maintained their commitment to social welfare in periods of otherwise severe Government expenditure reductions. The Estimate for Social Welfare this year increased by £135 million for improvements in payments introduced in the 1989 budget. The Minister, however, did say that the nett sum might be down because of PRSI revenue buoyancy and other once off factors within the Department of Social Welfare. In the area of social welfare the Fianna Fáil Party in Government have shown themselves to have a deep caring social philosophy. When resources were available in 1980, 1981 and 1982 we gave 25 per cent increases in social welfare benefits. Despite the financial difficulties during the past two years, the level of social welfare benefits were not only maintained but improved in a number of ways.

Recently I read in Topic, a local newspaper in Mullingar, a three page exposé on moneylending, which has caused the breakup of lives, marriages and homes. The article described families and people fleeing the town for fear of the Mafia-type tactics of these illegal moneylenders. The legislation dealing with moneylending goes back to 1900 or 1933 and the fines for offences are nominal today. This legislation needs to be totally updated and I would ask the Minister to examine this area. More properly it is within the ambit of the Minister for Justice. I know that the Minister for Social Welfare gave the Society of St. Vincent de Paul an extra £200,000 by way of a loan guarantee fund to deal with this problem.

Moneylending is a fact of life. From time to time we all borrow money but most of us tend to borrow from credit unions, banks and so on at reasonable interest rates. The illegal moneylenders are charging excessive rates and this is something which must be examined. The reporter who wrote the article in Topic also wrote to me detailing the interest rates they found, ranging from 251 per cent to 3,500 per cent, to 73,000 per cent as verified by a chartered accountant who had been employed to examine the figures when researching the article that was produced. That is horrific and it should be investigated. I know the Minister is keenly aware of the problem. As far as I know the appropriate interest rate should be in the region of 39 per cent, but in this case things have got out of hand. I urge the Minister for Social Welfare and the Minister for Justice to come together to introduce legislation to stamp out this horrific abuse.

In relation to the environment I would refer to the question of roads. In fairness, since this Government came to office they have been more than generous with roads allocations when compared to the previous Coalition Government. In their last year the figure for county roads was something in the region of £4.5 million. On coming to Government the Minister, Deputy Flynn, gave £10 million immediately and the following year it was £15 million. This year the Government are providing £415.7 million, current and capital, for roads in 1990 compared with £194 million in——

Mrs. Doyle

Who is providing it?

Mr. Fallon

The Government are. This is the highest allocation made by any Government for roads. It will allow significant progress to be made on the development of our national roads. This development is long overdue. In Athlone, for instance, I can see the benefit of the money. There is a £35 million by-pass, the money being provided by the EC.

Mrs. Doyle

The EC, yes, of course.

Mr. Lyons

That is not all of it.

Mr. Fallon

Yes, but is certainly the majority of it. The work at present in progress on major projects throughout the country is much needed. We have work on the Navan Road, the western by-pass and so on. They are all very important. In the Minister's constituency there is work on the Cork-Mallow road and on the Glanmire by-pass. A sum of £51 million will be allocated to county roads. The Minister for Finance said last year on the budget there was the element of movement and flexibility about. The Government have acted wisely in regard to this important problem.

Another area of local government which interests all of us is the natural environment. When we talk about that we really mean the air we breathe, the water we use, the seas around us, the lakes and rivers that belong to us, not to a Government or any section. We all have a direct interest in their preservation. We need a greater, newer, better awareness in the community that our environment is under pressure. Each and every one of us in his or her own way can contribute to maintaining and improving our heritage. We should endeavour not to damage our heritage and environment. The need to protect our natural environment should be given high priority, as indeed it is by the Government.

Over the years the Government have brought in new measures that were important. The Air Pollution Bill controlled harmful emissions. A new Water Pollution Bill provides many heavy penalties. We have controls over CFCs to protect the ozone layer and that is being done in collaboration with our European partners, and there is a tax incentive scheme in regard to lead-free petrol. I am amazed that the usage of lead-free petrol in this country is only about 11 or 12 per cent because it is much higher in other countries. Apart from all that, it is much cheaper than leaded petrol. There should be a greater awareness programme in this area.

Awareness in regard to urban renewal schemes, better planning and better understanding of the problems could improve our position in the years ahead. Under the Fianna Fáil-Progressive Democrats joint Programme for Government we will have a full independent environmental monitoring agency who will provide the information to enable the Government environment impact assessments to be made. The Minister with responsibility for this matter, Deputy Mary Harney, has a flair for this type of work, is committed to it and I think she will, in time, get the desired results.

I will mention something with which most of us agree. Over the years successive Governments have paid lip-service to reform of local government. I urge the Government to press ahead as a matter of urgency with reform of the structures and finances of the system before it is too late.

Education is surely of importance to us and I am sure Senator O'Toole will agree with this.

Mr. O'Toole

It was not mentioned in the speech, as I will point out shortly.

Mr. Fallon

Despite the position we find ourselves in, which it is to be hoped will improve dramatically, we have the best educated generation of young people in most countries of the world. Our educational standards are better than those in most countries and I think that is accepted. This year the Education Estimate has been increased. It reflects high ESF receipts which are expected in 1990 but gross expenditure on second and third level education will increase by 4 per cent and 13 per cent respectively and this will allow for overall increases in the numbers entering the system, particularly at third level. When we consider what is being done at present in the knowledge that the economy is improving, we can say we are doing fairly well.

What I like about the Estimates this year is the fact that the educational opportunities scheme is being expanded. I think we will have over 300 places by the end of 1990. The scheme allows for long term unemployed to return to full time education while retaining their social welfare entitlements. Other measures I welcome which are reflected in the provision this year are the appointment of extra remedial teachers and other teachers in disadvantaged schools.

I think we have succeeded in creating levels of educational standards and educational opportunity which very few countries with greater resources have achieved. The excellent standards of education achieved by our young people perhaps is not admitted at home but it is often commented upon by many leading businessmen and industrialists who come here. Indeed, in the past they have been here head-hunting for the very best talent we have available. Education is the key to social justice and this Government's commitment to education is strong.

The opening up of third level educational establishments such as the RTCs and the National Institutes of Higher Education which recently have gained university status are important advances in meeting the educational demands of modern society. The number of our students qualifying for and attending higher education is higher in percentage terms than in most developed economies.

The question of Structural Funds has been touched on. They have placed a significant role in helping to finance Government development programmes over the years. This year the Community have made a commitment of, I believe, almost £3 billion. That is important in the whole domestic and international development of this country.

We can say with certainty that the prospects for the Irish economy continue in the main to be favourable. This has to be contrasted with the economic stagnation of the early part of the decade. The evidence is clear all round. Apart from the recent increase in inflationary pressure, the experience of the Irish economy over the past three years had been encouraging. It is highly desirable that the process of fiscal adjustment be continued so the gains made to date can be consolidated and extended in the coming years.

Senator Doyle rightly asked what it all means to people on low incomes, the disadvantaged, the poor, social welfare recipients. They could not care less about GNP or past or current deficits. Unless and until we get our public finances back on a sound basis, until we get full confidence in the economy restored at home and internationally, unless and until we get continued economic growth, we will not create jobs in the public or private sectors, and if we do not succeed, the better way of life we aspire to will not be achieved.

I do not, for one moment, profess to be an expert in the field of economics, but my gut feeling tells me, and the natural instincts of the Minister — I am not saying we were comparing notes — tell him that the Government must put their House in order. The Programme for National Recovery has shown what can be done when Government, the trade unions, farmers and other groups, reach a consensus on economic and social objectives. If the position of the poor, the less well off and the disadvantaged is to continue to improve, the momentum of The Programme for National Recovery must continue. If we want to provide better health, social welfare and education services — I am not forgetting measures to relieve the heavy burden of personal taxation for those at work — and achieve those aspirations, it is highly desirable that the process of fiscal adjustment be continued so that the gains to date can be consolidated and extended in the coming year.

Acting Chairman (Mr. J. Ryan)

I now call Senator Joe O'Toole. The Senator has 30 minutes in which to make his contribution.

Mr. O'Toole

It is interesting to reflect on some of the comments made by the previous speaker. I wish to place firmly on the record the disgraceful fact that the Minister did not see it important enough to make even a passing reference to education in his address. The Minister of State at the Department of Education would feel this is a disgraceful omission. It is quite difficult to take some of the views, particularly some of the concluding remarks, and I quote: "the turnaround in our economic fortunes over the last few years has been remarkable."

I would like somebody to tell the poor, the unemployed and disadvantaged and the emigrants about the remarkable turnaround in our fortunes at a time when unemployment is showing no improvement; the poor are getting poorer and more and more are emigrating.

Because of the limited time available to me I intend to deal with those aspects of the Appropriation Bill which refer to education at primary level. I am sure that will not come as a surprise to anybody. We have heard down the years from the parties in Government that the formula for success would be to achieve the equation of control and reduction in inflation, interest rates and the national debt. Government policy and financial stringency was directed at the control and reduction of inflation, interest rates and the national debt. The case was made that all would be well if inflation, interest rates and the national debt were brought under control. It was as if the whole nation was shooting up on heroin — everything would be great when we controlled inflation, interest rates and the national debt. We have done it but there have been no improvements for those on the periphery of society.

At present the options for the poor are fairly restricted: a living death, death itself or leaving the country. It seems to me that the problems of the under-privileged, the marginalised and those who are discriminated against in our society are well reflected in the cavalier and irresponsible attitude of this Government to primary education.

In primary education no group are getting the necessary resources to do the job. Primary education is under-financed and under-resourced at every level. It is important to put some of Senator Fallon's comments in their proper context. The cynicism and hypocrisy of the Government are well reflected in the manner in which new jobs are brought to the attention of the board of management of primary schools. The Minister referred to the Programme for National Recovery. I want to give an example of how the taxpayer is being blinded by the whole situation. Following the process of negotiation of the Programme for National Recovery the Government gave a commitment to the disadvantaged that a certain number of extra jobs would be available in primary schools in various parts of the country — schools that were entitled to extra staff and which had been identified as under-privileged, disadvantaged and not having the appropriate staffing level to deliver the service.

Earlier in the summer the Minister gave a commitment that the jobs would take effect from September, but this did not happen in September, October or November, and only now are they in the process of being filled. The cynicism of the operation to which I want to refer is that in each of the 100 extra jobs, the board of management received a notification of the appointment of an extra teacher from their local Fianna Fáil TD. Not content that the taxpayer is bearing the burden of cutbacks and economic stringency, the Government are also making them suffer delays while the local Fianna Fáil TD, by the good grace of the Minister, informs the local school of the appointment of an extra teacher and gets credit for doing so. This has nothing to do with the local Fianna Fáil TD and is the result of negotiations by others.

It is a disgraceful reflection on our society that it now becomes the norm for every administrative and executive decision of Departments to be conveyed to the local interested parties by their local Fianna Fáil TD. I would like the Minister to explain why that should be the case and why the normal day to day decisions have to be conveyed via the local politicians. I make this point very firmly. I spoke strong words in this Chamber last week, with which a great many people took umbrage, on the extent to which clientelism is rampant in our democracy. People have been tempted to take me to task over the past week on various aspects of what I had to say. Everything I read on the Estimates and the Appropriations-in-Aid shows that they are designed to allow the development and support of the system of clientelism, which has now been brought to a fine art. Just this week, a teacher in a south side school telephoned me to say that the school had just received a letter from their local Fianna Fáil TD telling them they were getting a part-time clerk-typist under the auspices of FÁS.

Mr. McGowan

Good for them.

Mr. O'Toole

It is bad enough to see Departments operating in this way, but now it has been extended to FÁS. Where does it go from here? When I point out how our whole system is being manoeuvered in order to supplement this level of clientelism it is considered an inappropriate comment. Were it not for the time constraints I could go on at some length in this area. Everything I see in the Estimates supports what I say. I want to make some comments on the Education Estimates, aspects of which were very discriminately neglected in Senator Fallon's comprehensive contribution.

I should like to point out some of the difficulties in primary education and go through them very quickly. We have a huge involvement and commitment to the level of investment in preparing young teachers, probably at a cost to the State of about £30,000 each. There are now many unemployed primary teachers propping up the infrastructure of the UK, the US, Canada, Australia and many other places, representing an investment of the order of £60 million by the Irish taxpayer. This £60 million was invested by the Irish taxpayer to improve the Irish primary education system. As soon as the teachers come on stream, the Minister closes down the job availability and the teachers are doing anything and everything except what they were educated and trained to do, which is to reduce the class sizes in primary education and to deliver a quality service.

The substitute teachers in primary schools are paid so little that they are better off working in a burger joint or in a lounge bar. While that might be hearsay, I can give conclusive evidence that a substitute teacher working every day of the school year would be paid £10 less per week than a cleaner in the public service — that is no reflection on those workers in the public service; I merely want to put in context how we are treating these young professionals.

We now come to the class teacher who copes, without support, with indiscipline, litigation threats, stress and other difficulties that come from the home and the community into the classroom every Monday morning.

Remedial teachers are in very short supply. I can give national, international or any other kind of statistics to support that statement but I do not think anybody would disagree with me. On the Government benches today there are people representing many small local communities. The system of appointment of remedial teachers is weighted against minorities and small schools. It is very difficult for the small school to have access to the remedial teacher for the simple reason that they work on the basis of one per a certain number of pupils. In most cases they have to be shared over a number of primary schools and because the area is too wide these small schools do not have access to these teachers. The child in the small rural school or in the small minority religion school in need of remedial teaching does not have access to it. As a rule of thumb remedial teaching is required by 10 per cent of the school-going population. We do not even have 50 per cent of the number of remedial teachers we need to provide even the basics for these children.

Special class teachers are being told to integrate. I met a parent last week who has a Down's syndrome child who tried to find a place for her child in the local area. She has been told by the Department of Education that the School Attendance Act does not apply to her child. That is incorrect. It shows how these people are being treated and the attitude in the Department is to bring them to their local school and to integrate them into the normal community. That is an acceptable and commendable aspiration, except that the resources are not there to do it. One cannot bring a child in a wheelchair into a school without ramps; one cannot bring a spina bifida child into a school where there are no changing facilities and so on. This is how we treat our minority groups.

Almost 3,000 primary schools have a teaching principal, in other words, a teacher who, in addition to opening the school, checking the heat, making the system operate, trying to maintain and administering the school, and trying to enforce discipline and looking after the special needs of the pupils, has to teach a class. He is asked to do the impossible.

The administrative principal in the larger school, when the appointment of such is allowed, has to deal with increased indiscipline problems, increased parental involvement and pressure, which is recognisable and acceptable, and increased social problems; he also has to be the caretaker, typist, secretary, receptionist and educationalist. He too is expected to do the impossible. This is how we work. I will refer in a few moments to the lack of caretakers and clerk typists and I will ask the Minister to explain how he or she can justify the huge investment on buildings and then leave them without proper maintenance.

In relation to back up services, there is no school psychological service at primary level. The Minister has been promising to set up one for the past two years. She said this service will be advertised next month, and a pilot scheme will be put in operation next year, but it still has not happened. Even if it does, we are talking only about a pilot scheme of two, three or four psychologists.

What does one say to the mother who comes to the school and has to go through the trauma of hearing from the teacher or principal that her child needs some sort of special attention and needs to be assessed, but that it could take two years before the child will be assessed? We are not talking about a replacement hip but two of the most formative years of a child's life which can never be replaced. Yet we tell them they have to wait, unless they go to Fitzwilliam Square and buy the services of a psychologist. That is what is happening in the two-tier system.

School inspectors are being told to restrict their school visits because they have used up the money devoted to expenses for this year. This is how our system is operating; not even on a shoestring. I invite anybody to walk into the Department of Education and see what the officials are trying to do. In my experience over the past ten years the number of officials has halved and the amount of work has doubled. It is as well to put that on the record because very often it is the civil servants and the public service who are blamed when the service is not efficient. They too are trying to do the impossible.

I have discussed the unemployed teacher who does not have a future at work, the substitute teacher who is wondering when he or she will be paid, the class teacher coping with the impossible, the remedial teachers in short supply, the special class teachers who are told to integrate pupils without support, the teaching principals doing all the jobs necessary to keep the school in operation — including teaching, the administrative principals barely able to cope because of the pressure of work, and the inspectors being restrained and restricted in their work, the Department officials who are under-staffed and overworked and not getting the support they need. What is the Minister's response? In this year's Estimates — with all the improvements referred to by Senator Fallon, the Minister's response is to increase by 77 per cent her international activities for next year. I should like to put that in context.

While the whole teaching and education service is trying to cope with an under-resourced, and underfinanced system — the worst financed educational system in western Europe — the Minister's only response is to increase her overseas activities by 77 per cent for the coming year. I am not going to throw out simple percentages which do not mean anything. This brings me back to the matter of funding. The Minister is spending more on international activities — which means foreign travel — in the next year than the total amount paid to the pupils in the Minister's constituency, in the constituency of the Minister of State at the Department of Tourism and Transport, Deputy Lyons, or in the constituency of the Minister of State at the Department of Education, Deputy Fahey — both of whom were here a few minutes ago. More money will be spent on foreign travel out of the Department of Education's budget next year than the total capitation grant for running the schools in any constituency in Ireland.

I will put that in context, the amount allocated for foreign travel next year is £500,000, the total grant available to schools which have 20,000 pupils. Is there a constitutency in Ireland with 20,000 primary school pupils? It does not exist. I will explain what that means. The Minister for Education in each year will decide on a certain amount of money to operate primary schools based on a grant per pupil.

At present the State grant is £25 per pupil per year to run a primary school but they cannot operate on that kind of money because it is not enough. In every case of which I know the total State grant is not enough to pay the insurance and heating bills in a school and it will not go anywhere towards financing all the rest of the functions a school management board are supposed to carry out — heating, cleaning, lighting, dusting, washing and all that goes with it, as well as the provision of school equipment and minor grants for school requisites. This means that all schools operate an interminable round of fund raising from a sponsored spell to a sponsored walk, sweepstakes, draw, raffles and race nights. You can be sure that anything you mention has been ingeniously adopted by a board of management as a means of raising money. It is no more than a further educational tax that local people are being asked to pay in order to keep their primary schools operational. Why is this necessary? It is necessary because of the Government's attitude. It is necessary because, for instance, there are only about 200 caretakers in primary schools, despite the fact that there are 3,500 primary schools in the country.

What does that mean? It means that we spent the necessary couple of hundred thousand pounds to build a primary school, give it to the local community to look after but we do not give them the funds to do so. Then they set about their fund raising to provide whatever they need, and for which they do not have a grant. Whatever the principal objection that many of us might have to this compulsion to raise a further education tax in order to run the primary school, can I ask the Minister what he says to the communities when they do not have any extra discretionary money to provide extra funds for the local primary school? Let me tell the House what happens in that situation; they do without. Consequently, when you go into the disadvantaged or under-privileged area you will see a drab, shabbily presented school with no money for paint, cleaning or extras. Worse than that, if you look closely and if you discuss it with the teachers you will find a restricted level of educational activity, a less comprehensive school tour, a shorter book list and fewer extra subjects or activities being offered because they do not have any money. In the well off areas if they want to provide any kind of extra sporting activity they simply collect from the parents who can afford to pay the bill.

What happens in the area where there is 70 per cent or 80 per cent unemployment? They do without. That is what happens, even though the turnaround in our economic fortunes over the last few years has been remarkable. If the turnaround has been remarkable who is gaining the benefits? The poor have become poorer, the disadvantaged have become more disadvantaged and the under-privileged have become more under-privileged.

As Senator Fallon said, we have a level and quality of primary education of which we can be proud and which compares with any place in Europe. This is because of the extraordinary investment that this country has made in terms of talent, energy and commitment to primary education, the Irish primary teacher is, without doubt, the cream of Europe's teaching talent. That is not in any sense a nationalistic or a narrow chauvinistic view. It is the perception of educationalists in the community.

In this country we get the best quality young people, train and educate them to be primary teachers and then put them into the job with little or no resources so that we have all this talent invested in the primary school——

Mr. McGowan

Where is this happening?

Mr. O'Toole

——and all the energy and all the commitment of those people which makes the system work. The Irish primary teacher with the largest classes in Europe, the fewest resources in Europe, the lowest level of finance in Europe, is far and away the most productive teacher in Western Europe. That is how we manage to have a quality service in this country at primary level. That is the investment and nobody will doubt that. Now I will tell the House about the cost. The cost is career burn out and teachers leaving the system because they are unable to cope with the levels of stress and demands on their time. The Irish primary teacher is now at the top of divison one of the stress related illnesses. That is a fact, I am not making it up. We are bringing the primary education system along on the backs of a burned out, stressed teaching force and it is time that we recognised that.

Mr. McGowan

Will the Senator admit that we have one of the highest paid teaching——

Mr. O'Toole

A survey conducted for the European Community published in June 1988 proved beyond a shadow of a doubt that the Irish primary teacher was the lowest paid in Western Europe. I did not carry out that study. A teachers' union did not carry out that study. It was not carried out by teachers. It was published by the European Economic Community in June 1988 and was widely covered in the newspaper at that time. Those are facts which you may not like but they are facts.

Mr. McGowan

If they are so badly paid——

Mr. O'Toole

The teachers of Ireland are also suffering because of the lack of resources. How will we deal with the problems of primary education? We will deal with them by giving the Minister 77 per cent more to go travelling round the world next year. We will deal with it by recognising that there will be more spent by the Department of Education on foreign travel next year than will be spent in the Senators' constituencies for the capitation grants in primary schools.

Mr. McGowan

We are Europeans.

Mr. O'Toole

That is a fact. It may be important but Senators should talk to their constituents who have young qualified teachers without jobs——

Mr. Farrell

I do not hear it.

Mr. O'Toole

Try telling that to boards of management who try to run schools without funds; try to tell that to teachers who try to deliver a quality of education service without resources. It is inexcusable and unacceptable. We are all aware of it and the best thing to do is to go down to the local schools and get the information there. We have a system now where primary schools are wide open to a litigation conscious community and where teachers have developing and increasing discipline problems. In many parts of the country, teachers are spending up to 50 per cent of their time coping with discipline problems with no support whatsoever from the Department of Education. No resources are available to deal with discipline problems in primary schools; no resources whatsoever are being made available so that children with discipline problems can be helped. I want to make it clear that children, whether they have discipline problems or otherwise, are still entitled to the best quality of education that is available. School building grants have been cut back. The whole level of investment is not even keeping pace with inflation. The only significant increase in the Department of Education's budget for the forthcoming year is for foreign travel. I will finish with that single item. I went through the problems in education; I will not re-iterate them. They go through every level of teaching, from the pupil right up to the Department of Education. The Minister's response is to spend more on foreign travel next year than in capitation grants for primary schools in the whole countries of Donegal or Sligo.

(Interruptions.)

Dr. Upton

Perhaps I should start promoting boxing. We seem to have some keen contestants on the premises.

The Minister's speech is, in many ways, significant for what it does not stress. We are now developing a two-tier society with the wealthy getting wealthier and the poor getting poorer. The latest figures indicate fairly clearly — and they have not been effectively contradicted as far as I can see — that there are now about one million people, out of a total population of 3.5 million, living below the poverty line, that is almost 50 per cent of the population. It is really a shocking and frightening statistic. There is about 250,000 people unemployed and emigration is running at the rate of 40,000 to 50,000 per year.

These are facts which have not received very much emphasis in the Minister's contribution. They contrast sharply with the reality of the profits of the multinational companies which are increasing and, of course, being repatriated. The profits of the major banking institutions were never better. These are in sharp contast with what I have outlined. The multinational companies are creating jobs in their home countries— America, Japan and elsewhere.

We have the appalling problem of emigration. We have marched our way back to the fifties. The young are now emigrating as they went then, and they are coming back at Christmas time in their droves, as they did then. We do not seem to be doing very much about emigration beyond denouncing it; some of the other elements tell us that after fashion, it is somehow good and somehow desirable. I, for one, reject the notion that emigration on the present scale is to be anything other than deplored. There are two broad categories of people going from the country at present. One is the highly educated, the greatest resource this country could possibly have and that must be a matter of great regret as well as a serious drain on our resources. The other is the poor, the uneducated and those who are very poorly equipped to cope with life in foreign countries. These are the people who will be written about in the London newspapers. As the song by Ralph McTell says, "It's a Long Long Way from Clare to Here". Some of these people go away and are never officially spoken about again. What are we doing for these people? There has not been any mention in the Minister's contribution of providing resources to make life easier for them, to better equip them to meet the challenges which face them when they go off to foreign countries.

Our health services continue to remain in crisis. That is the reality from which there is no escape. In 1985, around 7 per cent of national wealth was spent on the health services. That has declined steadily and it is projected that in 1991 it will be less than 6 per cent. We have a large elderly population. We have a large young population. Then we have this group in the middle, the most capable and the most productive who are mining, who have emigrated. We see the problems of stress arising from unemployment. They manifest themselves in people taking drugs or alcohol and getting involved in anti-social behaviour.

In the health area there is the appalling problem of the mentally handicapped. The lack of resources for these people puts a terrible strain on their parents. During the last general election, this was one of the problems which kept surfacing as I canvassed through Crumlin, Terenure and Walkinstown. There is a major problem here. In the Eastern Health Board area alone, 328 residential places are needed now as a matter of urgency and it is expected there will be need for over 500 extra places after 1990. What are the Government going to do about that? It is dreadful problem. The resources which are made available for these people are grossly inadequate. I have had representations from people who have the greatest difficulty coping with their handicapped children who are now moving into middle age. As people these parents grow old and become less capable, they worry about what will become of their now almost middle-aged child.

In Dublin the accident and emergency services are used as a back-door to hospitalisation. It seems that elective procedures can no longer be performed. There is a great crisis in Dublin and throughout the country. In Country Clare, the Ennis Hospital and its future continues to dominate the political scene. It has been a key issue since before the last election, and I believe it was still being debated on Clare radio as late as Monday morning.

There is the problem of the Health Research Board with a cutback of £1 million in a total budget of something like £2½ million or £3 million. That means that, effectively, no new research can be carried out; effectively, our contribution and involvement with European research in the area of health would have to be very seriously diminished; our capacity to attract resources for research in health from Europe will be seriously diminished; and the capacity of our research workers to make contacts among their European counterparts will be seriously curtailed and that will be a particular problem in those areas of health research which are as it were, not very appetising from a financial point of view. Certainly money will be pumped in by the big drug companies in areas where one can see an immediate return.

The big potential in health for help for the public seems to be in the area of preventive medicine. We are doing very little there. It is in that area that the Health Research Board were particularly strong defining the causes of diseases, looking at the trends etc. It is not very trendy stuff, not an immediate money spinner, but a slow, tiresome process which will, in the longterm pay dividends. It is a matter of great regret that that Health Research Board should have been cut back to the extent it was. It is shocking that some of the leading members of the research board are threatening to resign and, one of them, the provost of Trinity College, has resigned as a result of those cutbacks.

I do not propose to be as comprehensive as Senator Joe O'Toole was on education. However, I want to echo some of the things he said. For example, in the primary sector I believe there is a planned cutback of the order of 1 per cent in real terms. Also in the primary sector class sizes remain unacceptably large. There are classes with 40 pupils presenting teachers with an unacceptable challenge/problem. There are constant demands from schools for funds. Hardly a week goes past without beleaguered teachers and parents' associations trying to devise some new fund-raising idea, ranging from quiz nights to race nights, voluntary contributions and so on.

I understand there is a freeze on the amount of money being provided for second level education resulting in teachers being lost. For example, in the Holy Faith Convent in The Coombe in my constituency of Dublin South-Central they are experiencing a very serious problem in that there are insufficient teachers, presenting a very serious crisis for the whole school.

There are also problems being experienced in third level education. The overall scene in third level raises serious questions in regard to equality in our society. Education was seen as a way of equalising, as it were, some of the social differences in society; it was regarded as a way up for people who happened to be born into under-privileged families. Anybody who has read Patrick Clancy's book "Who goes to College"— which perhaps should have been entitled "Who does not go to College" will realise that the under-privileged have a very poor or no chance at all of getting into college. Any society which fancies itself as being just and fair must begin to address such problems.

There is also the question of the points system and how people can make their way into college. People take more and more courses in order to gain extra points. I have no great objection to that, but I do object to the fact that those resources and facilities are available in a disproportionate manner. The poor simply are not at the races when it comes to having those types of facilities available. In a recent debate in this House — on the Trustee Savings Banks Bill — a Minister continuously used the term "a level playing field". I should like to see somebody take a bulldozer to Irish education, particularly at third level, levelling the field to the extent that the poor and under-privileged would have a level and equal chance of getting into college. That is a problem which should be addressed but it would appear that there has been no attempt to do so from the figures available.

There is also the problem of social welfare. I have already alluded to the fact that there are of the order of one million people, almost one-third of the entire population, below the poverty level. We seem to be able to take this for granted. This is appalling; it is shocking that of the order of £100 million less will be spent on social welfare in the coming year. I cannot understand why those £100 million available could not be put to developing some comprehensive social welfare facilities for the poorest, the most under-privileged elements in our society. For example, there are the problems of the allowances available to unemployed people for children between the ages of, say, ten and 14 years. If one calculates the relevant figures in regard to those allowances one discovers that the amount of money provided quite simply is not sufficient to provide those people with sufficient nutrients; they simply would not have sufficient to buy adequate food to supply children at that stage of development with their nutritional requirements. These are not my calculations; they are the figures of some of our top nutritionists.

I might give the House by way of an anecdote one example. Last evening at approximately 8.30 p.m., in the freezing cold, two youngsters of around seven or eight years came to my door begging. It is appalling that children of that age should be out on a night like that in those circumstances, unaccompanied by any adult. It is a terrible commentary on society that that type of thing takes place as we approach the year 2000.

There is also a growing crisis in housing, with something of the order of 1,500 houses being predicted to be built in 1990, in sharp contrast with the 7,500 built in 1985. For those in the private housing sector mortgage interest rates are rising, presenting a serious problem for people with limited means. Quite a number of people now experience great difficulty in meeting their mortgage repayments. It appears that that trend will continue and that mortgagers will continue to experience the same serious problems in the year ahead.

Also in crisis are the local authorities; for example, Waterford Corporation hit the headlines over the past weekend. Their whole system appears to have broken down. There appears to be an inability to resolve the problems politically. I believe, a Leas-Chathaoirligh, in your town of Nenagh a similar crisis is manifesting itself, another example of the manner in which local authorities are starved of funds and are now unable to meet the basic requirements of the communities they serve.

I might make a brief comment on agriculture. Senator Doyle spoke about agriculture, the problems being experienced by small farmers and so on. Funds for Teagasc, the agricultural training and research authority, have been cut back by an amount of the order of seven per cent. I understand that top class Irish farmers have attained a technological competence comparable to the best anywhere. That technological competence was brought into this country by the staff of Teagasc. Teagasc have experienced a very difficult time over the past four or five years. In many ways they have been demoralised or denigrated by people who should be ashamed of the way they have behaved. They have been treated in a disgraceful manner. We should remember that it was the people in Teagasc who built up our farmers enabling them to adapt to current technology. It is disgraceful that that organisation is being subjected to another ferocious cutback on top of a series of others. What will become of small farmers who can no longer afford the fees being charged by Teagasc? The most awful aspect of all has been the chairman of that organisation describing the people working there as——

Mrs. Doyle

Cattle.

Dr. Upton

——cattle huddling together in bad weather, making for the cowhouse, or some similar comment.

Mrs. Doyle

That was his reply to a question I asked him in Wexford at the launch of the survey on farm incomes.

An Leas-Chathaoirleach

Senator Upton, without interruption.

Dr. Upton

It was an appalling reply and constituted a terrible slur on and insult to the people who have supported our farmers since the foundation of this State. That appears to be the attitude of the chairman of that organisation.

Mrs. Doyle

Hear, hear.

Dr. Upton

That that should be the attitude of the chairman of that organisation to those people who went to American universities, learned the relevant technology, brought it back here and adapted it to our needs——

Mrs. Doyle

Well said.

Dr. Upton

——I really do think that comment was truly appalling. I want to briefly mention overseas development aid. I might describe it as one of the tracks of my LP which I intend to keep playing. Senator Farrell will recognise the tune already. Our overseas development aid to the Third World now stands at 0.13 per cent of GNP whereas the United Nations target is of the order of 0.7 per cent of GNP. We are able to look at the awful problems in Ethiopia and the Government appear to be able to restrain themselves from responding. That is an appalling commentary on our values and the way in which we view our fellow men who are under-privileged.

It is also very foolish and short-sighted not to increase this aid because money spent on overseas development will repay itself many times over in the fullness of time. There is a great level of good will towards us, and our clerical and lay workers have a tremendous history in helping to develop Third World and under-developed countries. Even if we cannot, out of a sense of morality, reach the targets which have been agreed by the United Nations, then we should try to bring ourselves to meet them out of a sense of self-interest.

Seán Lemass made the famous statement that "a rising tide lifts all boats". Senator Doyle referred to the Tallaght Strategy and took a certain amount of credit for it. That is fair enough but there is a down side to the Tallaght Strategy which Senator Doyle did not mention. Perhaps it is for people like me to mention this down side.

Minister of State at the Department of Agriculture and Food (Mr. Kirk)

Why has it been abandoned?

Dr. Upton

That is a very good question and I will give the Minister an answer to it as best I can. I think the reason it has been abandoned is that Fine Gael are looking around for new votes. They have gone to their local shop — I suspect it is a paint shop — and bought a can of social democratic paint. They are coming home now and taking out their paint brush and sizing up the joint. I think Fine Gael will be given a social democratic coat of paint before the next election and they will be trying to take our chunk of the market.

Mrs. Doyle

That is not quite right. The Senator is warm but not hot, to use children's speech.

Acting Chairman (Mr. Naughten)

Senator Upton, without interruption.

Dr. Upton

We will get back to the just society and that sort of stuff. However, people with a good long memory will be able to recall the Tallaght Strategy, getting the books right and so on and the poor——

Mrs. Doyle

They will remember the political sacrifice we made for the country's sake rather than our own. The Senator can play his LP and I will play mine.

Dr. Upton

I did not play mine when the Senator was on her feet.

Acting Chairman

Senator Upton, without interruption.

Mrs. Doyle

I accept that I did not take on the Labour Party.

Dr. Upton

These people had been forgotten and to some extent have become unmentionable. We say the rising tide will lift all boats but many people are being tossed out of the boats into the chilly waters of unemployment and waters which are infested with loan sharks, etc. More people have been swept out to sea into other countries to either build up those countries or, if they go wrong, be cast aside. These people cannot be mentioned back home.

There is a consensus that the poor must wait and that they must be pushed aside while those who are doing well continue to get all the attention. It is the job of our party to highlight the problems of these people and we will continue to do so as vigorously and powerfully as we can.

Minister of State at the Department of Agriculture and Food (Mr. Kirk)

First of all I thank the House for enabling the Government to get the Appropriation Bill through before the Christmas Recess. I also thank those Senators who contributed to the debate and I look forward to the resumption of the discussion in more detail in the New Year. Some of the points which have been raised here today will be addressed at that stage.

In closing the debate today I shall make a few general points and on behalf of the Minister for Finance strike a note of caution about next year's budget.

An examination of the various economic indicators over the past few years clearly shows that the economy is improving and tremendous progress has already been made. In his introductory remarks the Minister of State, Deputy Lyons, pointed to some of these achievements: economic growth has resumed, investment has taken off, employment is growing and unemployment is falling, albeit at a slower pace than the Government would wish to see.

Notwithstanding all of the excellent advancement we have made over the last few years further progress must however be made. To put this in perspective despite the improvement in the public finances new borrowing will still amount to some £600 million this year. This will add to our debt-servicing costs in 1990 and subsequent years. This will continue to be the case as long as the absolute level of our debt continues to grow. Similarly, while the debt/GNP ratio has been stabilised and is now beginning to move downwards, it is still exceptionally high by EC standards. This underlines the burden and constraint still imposed on the economy by the overhang of borrowing and debt.

We must continue the downward pressure on borrowing and debt and debt-servicing costs. In this regard the Government will be reviewing the latest budgetary developments as well as economic prospects both at home and abroad with a view to setting a new, more ambitious medium-term target as soon as possible. It is against this background that the Government are approaching the preparation of the 1990 budget.

Even with the disciplined approach taken in the Estimates for 1990 the room for manoeuvre next year will again be narrow. There will be heavy carry-over costs of about £160 million from the tax and social welfare concessions given in this year's budget. The recent increases in interest rates will impact significantly on the cost of debt-servicing and the extra costs involved will have to be allowed for in the budgetary arithmetic. Provision has also to be made for recently agreed special public service pay increases. This is all before we consider income tax and social welfare concessions or any moves towards EC tax harmonisation.

The various factors involved will have to be weighed carefully so as to arrive at a balanced package which will ensure further budgetary progress and stable development of demand in the economy next year. I am fully confident that the Minister for Finance will achieve this balanced approach and that the economy will continue its recovery next year.

Finally on behalf of the Government and on my own behalf I wish all members of the House, the staff and the press a happy and peaceful Christmas and a prosperous New Year.

Mrs. Doyle

On a point of order——

Acting Chairman

Senator Doyle on a point of order.

Mrs. Doyle

Before I make the point of order, I should like to thank the Minister for his good wishes to us all and for his courtesy in replying. The Minister should perhaps have prefixed his remarks by apologising for the non-attendance of the Minister for Finance or the Minister of State at the Department of Finance during this debate today. Is this another example of the cavalier disregard shown by the Government for Seanad Éireann. There is no point in talking about reform of the Seanad unless we operate it as it should be operated. There may be good reasons — and perhaps we might be told — why neither the Minister nor the Minister of State at the Department of Finance felt it was worthwhile addressing this House today.

Acting Chairman

That is not a matter for the Chair.

Mrs. Doyle

I wanted to make that point. It is not a personal remark to the present Minister because I recognise the rent-a-Minister syndrome, having been a Minister of State myself.

Mr. Farrell

It was very unfair of the Senator to criticise the Minister who is present. It was tantamount to saying this Minister is not capable of replying to the debate.

Mrs. Doyle

No.

Mr. Farrell

The Minister of State, Deputy Kirk, is quite capable of dealing with this Bill. It is sad that this——

(Interruptions.)

Mrs. Doyle

I made a half-hour contribution and none of my questions was answered.

Mr. Farrell

Perhaps this is the reason the Senator is in this House.

Mrs. Doyle

None of my questions was answered. I accept the Minister of State is not in a position to answer my questions but I expect them to be answered in a reply.

Acting Chairman

Please, Senator Doyle.

Question put and agreed to.

Agreed to take remaining Stages today.

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