Seanad Éireann debate -
Wednesday, 30 Oct 1991

Vol. 130 No. 3

Programme for Economic and Social Progress: Motion (Resumed)

The following motion was moved by Senator O'Toole on Wednesday, 23 October 1991:

That Seanad Éireann supports the following key objectives of the long term strategy for the nineties outlined in theProgramme for Economic and Social Progress:

— a substantial increase in employment;

— a major assault on long term unemployment;

— the development of greater social rights within our health, education, social welfare and housing services;

— the promotion of collective and individual social responsibility in relation to discharge of tax liabilities, fair conduct in business dealings, sensible treatment of the environment and reasonable use of public services and

— the development of worker participation, women's rights and consumers' rights; and

supports the implementation of the agreement on pay and conditions;

and calls for the immediate implementation of the improvements recommended in the areas of education, health, employment creation, taxation and legislative reform.

Debate resumed on amendment No. 1:

To delete all words after "Seanad Éireann" and substitute the following:

"Supports theProgramme for Economic and Social Progress as the means to maintain a competitive, low-inflation economy giving faster economic growth, increased employment and greater social equity;

emphasises the following key objectives of that Programme:—

— reducing the national debt to GNP ratio towards 100% by 1993 and achieving broad balance on the current budget;

— a substantial increase in employment;

— a major assault on long term unemployment;

— the development of greater social rights within our health, education, social welfare and housing services;

— the promotion of collective and individual social responsibility in relation to discharge of tax liabilities, fair conduct in business dealings, sensible treatment of the environment and reasonable use of public services; and

— the development of worker participation, women's rights and consumers' rights;

agrees that all objectives of the Programme must have regard to its overriding public finance objectives if the beneficial results in growth, employment and social equity are to be attained; and

accordingly, supports

— the approach being adopted by the Government in relation to the particular difficulties which have emerged for the Exchequer whereby discussions on the issues involved have commenced with the social partners under the aegis of the Central Review Committee of theProgramme for Economic and Social Progress; and

— the consensus process inherent in this approach and in relation to the Programme generally.

—(Senator O'Keeffe.)

Mr. Cosgrave

I welcome this opportunity to speak on this matter. I have to compliment Senators O'Toole and Ryan on a very broad motion with which all of us are very concerned. The only pity is that it is difficult in the time available to adequately cover all the items encompassed. I am sure in the light of events in other places today, there will not be adequate attention given to the proceedings in this House. That is unfortunate because any one of these items, education, health, the creation of jobs, taxation, legislative reform, is more than deserving of an hour and a half or three hours debate over a period of two weeks. It is time, in the light of events of recent weeks, that we focused on the real issues. That is not to minimise problems which have arisen in other places but the public believe that not enough attention has been given in recent times to the matters mentioned in the motion.

There are a few items which I intend to deal with but before doing so I would like to formally welcome the Minister of State to the House. However, while intending no disrespect to him, I must say it is a disappointment that for such an important motion the Government do not see fit to send in a senior Minister. That is said with the utmost respect to Deputy Brady with whom I have always had a cordial relationship.

Mr. O'Toole

He can give us the programme of legislation for the next couple of months.

Mr. Cosgrave

Perhaps when he is replying, he would give us the programme. We are more than anxious to initiate certain legislation here given that he and his colleagues may be dealing with ongoing matters for the foreseeable future in the other House.

When the Programme for Economic and Social Progress was discussed in the other House it was the Fine Gael Party alone who voiced certain reservations and voted against it on the grounds that matters which were involved in the programme had not been fully discussed, had not been brought before the party, had not been before the Dáil and had not been adequately discussed in relation to costing, to the whole question of pay across the board, and to all the matters involved. We have had good industrial relations, we have seen progress over the past number of years because we had agreements in place and that is why mutual trust and agreement achieved as a result of long negotiations and good faith should be adhered to. It should not be a case of quickly agreeing matters based on wrong figures, on wrong ideas, on wrong discussions and on wrong forecasts. In the light of recent events, one would hope that the present Minister for Finance, perhaps when other events unfold, will be better at counting heads than he has been at forecasting budgetary procedures and how this country is being run. The reality is that at the moment this economy is going steadily downhill. We have only to see the lengthening dole queues, the many young people continuing to emigrate, the many young people leaving school or university and going into long term unemployment. Many others have entered into various commitments and suddenly find themselves unable to meet those commitments. The misguided policies, the misguided forecasts made by the present Minister and the present Government have resulted in great social upheaval and more and more people on the dole with no prospect of getting employment in the future.

All of us in our constituencies have people coming at an ever-increasing rate in relation to the many social problems. In Dún Laoghaire, week in and week out, people are coming to my advice centre indicating they are now unemployed, indicating that they have several children now at home. What we are gradually seeing develop in many areas are ghettos where people have no work and no job prospects. People are finding it more and more difficult to provide for their families, to give them an education, to give them decent health standards. Their parents, people who served the country well, are being thrown out of hospitals. I had a case recently of a person in Loughlinstown Hospital who was unconscious. The hospital authorities contacted the family and asked them to remove their relative because they needed the bed. It is important that we take note of the various serious matters which are now bedevilling this country under a Goverment who are losing their authority to govern but who because of a recently scrambled together programme are going to totter on. It is important to remember that there are two sides to this Government. One side are particularly vocal and are very well versed in PR when it comes to displaying the good news but when it is the bad news they say, "Well, the senior partner in Government are responsible for that problem and they are responsible for the low standards in high places which we have seen". It should be remembered that there are 15 people around the Cabinet table and all of these people make the decision. There is such a thing as collective responsibilty and maybe it is no harm to remind the public of this in relation to our Progressive Democrats who at times parade their whiter than white souls in relation to their good deeds etc. I am sure Members opposite would concur and agree with me in relation to this.

In the light of recent happenings the part of the motion dealing with collective and individual social responsibility in relation to discharge of tax liabilities, fair conduct in business dealings, sensible treatment of the environment and reasonable use of public services is very pertinent and that is why, when some of our colleagues mentioned that this should be given an early hearing, we supported them. We will continue to do that and I would think that the Government, considering that they have not too much more legislation before the House, should make time available for this matter to be discussed at the earliest opportunity. The various matters dealt with in relation to that would have the support of Members of this side of the House and also of the Fine Gael group. There may be amendments to parts of legislation and so be it. At the moment the body politic in relation to how we are viewed outside this House is suffering almost terminal decline. As was stated earlier in relation to the matter dicussed this afternoon in the light of what has emanated from the debate which took place the week before last it is to be hoped that this House can restore certain standards.

This broad motion before the House deserves more attention than it will get from the national media. Any one of its items deserves all of our attention. This country is at the crossroads. If we do not respond positively in the case of unemployment, health, education, social welfare, the environment, in maintaining standards in relation to public office then our democratic system will be undermined. That is why we will be supporting the motion.

Éamon Ó Cuív

Cuireann sé an-áthas orm labhairt ar an rún seo agus tacaíocht a thabhairt do rún an Rialtais. Is dóigh liomsa go bhfuil istigh sa phlean a foilsíodh seachtain ó shin bunús maith oibre go cionn dhá bhliain go leith. Anois, níl aon amhras orm ná go bhfuil go leor fadhbanna ann go bhfuil an tír agus an Rialtas ag streachailt leo faoi láthair, agus go bhfuil sé éasca a rá céard iad na rudaí ar fad ar mhaith linn iad a fheiceáil déanta, ach go bhfuil sé i bhfad níos deacra tabhairt faoi na rudaí seo a dhéanamh.

Mar a dúradh anso cheana, caithfear smacht a chur ar an méid iasachtaí atá an Rialtas ag tógáil. Bhí sé de thuairim agamsa riamh nach raibh an rud á dhéanamh i gceart, agus seasaim leis sin. Mar sin, tá áthas orm go bhfuil spriocanna cinnte leagtha síos sa phlean atá foilsithe le smacht a choinneáil ar mhéid na n-iasachtaí a bheidh an Rialtas ag tógáil as seo go ceann cúpla bliain. Mura ndéanfaimid é sin beimid ag maireachtáil ar airgead ár gcuid gasúr.

Tá roinnt rudaí ráite sa phlean atá thar a bheith bunúsach. Tá go leor cainte ann faoi dhífhostaíocht; tá go leor daoine ag moladh go gcuirfear task forces agus a leithéidí sin ar bun. Ach, mar dhuine atá ag plé le fada le ceist na dífhostaíochta agus le ceist chruthú fostaíochta, sílim gurb é an rud deireanach a theastaíonn ná tuilleadh cainte faoi seo. Tá gá le hathscrúdú iomlán a dhéanamh ar an bpolasaí tionsclaíochta atá ann. Tá sé ráite agamsa go minic go raibh locht bunúsach ar an bpolasaí tionsclaíochta sin mar nár fheil sé ach do thionscail ardteicneolaíochta agus nár fheil sé go mórmhór do thionscail a bhí go brath ar acmhainní nádúrtha mar bhunús leo agus nár fheil sé do thionscail ina raibh séasúr go mór ag baint leis, mar shampla, tionscal déantúsaíochta na mbróg agus an tionscal éadaigh. Tá gá le hathbhreithniú iomlán a dhéanamh ar an bpolasaí tionsclaíochta. Is ceart a chinntiú go bhfuil toradh ar an gcaiteachas airgid atá ann maidir le cúrsaí tionscail. Tá gá freisin le féachaint an bhfuil bealaí níos fearr ann chun cuidiú le tionsclóirí seachas trí dheontais.

I have long been of the view that there is a need for a total review of industrial policy as we have it. I am disappointed this has not taken place to date but I am delighted it is incorporated in the Government's plan of action. I think it is about time we examined all the grants, subsidies and tax breaks that are given to industry to see whether this is the most efficient way of helping the creation of employment or are there other ways that would have greater effect.

I have long maintained that the money now being put into some of the schemes would be better spent first in providing the basic infrastructure that any type of development of the economy needs, for example, roads, water and sewerage schemes and, secondly, that it would be better employed in ensuring that our energy costs and our telecommunications costs are kept down. When you reduce your unit costs in that way everybody in business benefits and you also have the huge advantage that there is no cost of applying and you do not have a whole bureaucracy built up around it. Therefore, this is something that is fundamental to the two and a half year programme and is something that must be welcomed. It will mean, of course, that some very uncomfortable decisions might have to be made affecting some of the semi-State agencies, decisions that they, I would be afraid, might oppose because each agency, as far as I can see, tends to protect its own little bailiwick.

On the question of tax reform and tax collection, the introduction of an ID for everybody in the country is very important. It will protect those on social welfare who are entitled to social welfare: in fact, it will have the effect of ensuring speedier payment and processing of their claims. It will also have an effect in reducing the chances of fraud in both the tax and the social welfare system. One thing that tends to get overlooked in social welfare fraud or in tax evasion is the fact that it actually leaves less money there to provide for those who are genuinely entitled to these services.

I have always maintained that those who are entitled to social welfare should have no hang-up about their entitlement to these things. I am very glad to see that the Minister for Social Welfare over the last number of years has instituted a total change and a total revolution, quietly but steadily, in the way that social welfare services are delivered to the clients of that system. There is a much greater openness in the system to give information. There is a much greater privacy being in-built into that system and generally the people in receipt of social welfare are being treated in a much more humane way than heretofore. Step by step, year by year, they are being provided with a better service. As somebody who has many constituents in receipt of payments in one way or another, I would have to say that the delivery of the service to them has improved radically over the years and I would like to see this continued. I would like to see our whole approach to employment and to unemployment given a radical review.

Mar shampla, i gcás an iarthair, tá go leor daoine ansin atá ar shochar leasa shóisialaigh nó ar an dole, mar a thugann siad féin air, i ngeall gur feirmeoirí beaga iad nó iascairí beaga nach féidir leo dóthain ioncaim a shaothrú as a gcuid imeachtaí. Is é an tuairim atá agamsa ná nach bhfuil siad seo dífhostaithe — cinnte níl siad díomhaoin. Is é fírinne an scéil ná nach bhfuil dóthain ioncaim as a ngnóthaí chun iad féin a choinneáil. Ach tá difríocht bhunúsach idir bheith dífhostaithe agus bheith gan ioncam. Bheinn ag súil, san athbhreithniú atá geallta sa chlár seo agus san fhorbairt atá geallta i gcúrsaí leasa shóisialaigh, go bhfeicfimid go gairid córas nua do na daoine seo, córas in a n-aithneofaí, nach dífhostaithe atá siad ach go bhfuil ganntanas ioncaim orthu agus faoin a dtabharfaí an Family Income Supplement mar chuidiú dóibh, rud a bheadh níos feiliúnaí i gcás na ndaoine seo.

Tá fadhb mhór dhífhostaíochta ann i láthair na huaire. Bhí beagáinín iontais orm an cainteoir deiridh a chloisteáil ag tagairt don imirce. Is é fírinne an scéil — agus cinnte is é an scéal atáimid ag fáil aniar — ná go bhfuil cúrsaí gnó go dona i Sasana agus go bhfuil go leor de na himirceoirí ag brath teacht abhaile. Feicim dúshlán sa mhéid seo. Caithfimid, os iad ár muintir féin iad, féachaint le hobair fhónta a chur ar fáil dóibh agus don dream atá sa bhaile. Is dóigh liomsa gur diúltach an dearcadh é breathnú orthu seo mar ualach ar an eacnamaíocht. Sílim féin go gcaithfimid anois breathnú orthu mar shaibhreas, mar acmhainn go bhféadfaimid a chur ag obair. Tá go leor de na daoine seo go bhfuil scileanna acu, go mórmhór in obair thógála, tógáil bhóithre agus an cineál sin oibre. Creidim féin go gcaithfimid bealaí a scrúdú chun gur fhéidir linn na scileanna, na hacmhainní agus an saineolas atá ag na daoine seo a chur ag obair sa tír seo. Déanaimid dearmad go minic go bhféadfaí a rá cuid mhaith go raibh páirt mhór ag Éireannaigh i dtógáil chuile mhótarbhealach a tógadh i Sasana le dhá scór bliain, agus is trua é nach féidir linn anois tabhairt faoi na daoine seo a chur ag obair len a scileanna, ag tógáil a leitheíd de chóras sa tír seo. Tá cás ann le hairgead a thógáil lena aghaidh seo.

Dúirt mé i dtosach báire go raibh mé glan in aghaidh airgead a thógáil ar iasacht don chuntas reatha, ach sílim go bhfuil cás ann anois, go mórmhór san éigeandáil atá ann i láthair na huaire, ó thaobh chúrsaí dífhostaíochta, féachaint le hairgead a thabhairt ar iasacht chun bunstruchtúir na tíre seo a fheabhsú. Níl aon amhras ormsa mar thionsclóir atá ag feidhmiú ar an gcósta thiar gurb é ceann de na fadhbanna is mó dá bhfuilimid ag streachailt leis ná an easpa bhunstruchtúir thionsclaíochta nó an bunstruchtúr bunúsach atá ar fáil do thionsclóirí atá ag iarraidh feidhmiú lasmuigh de na cathracha móra. Tá gá leis na bunstruchtúir sin a chur ar fáil agus, a thúisce is a chuirfear ar fáil iad, is túisce a thiocfaidh borradh ar eacnamaíocht na gceantar sin. Chuirfinn cur ar fáil na mbunstruchtúr sin i bhfad níos airde ar an agenda ná mar a chuirfinn cuid mhaith scéimeanna eile a bhíonn á moladh ó thráth go chéile.

Maidir le bailiú cánacha, tá feabhas mór le feiceáil ó tháinig Fianna Fáil i gcumhacht i 1987 i gcóras bhailiú cánach. Ach é sin ráite tá sé an-éasca anois ag daoine dearmad a dhéanamh ar an gcaoi, bliain i ndiaidh bliana ón am sin, gur éirigh leis an Rialtas níos mó airgid a thabhairt isteach ná mar a bhí curtha sna Meastacháin go dtí an bhliain seo 1991. Tá gá leis an gcóras a shimpliú, leis an ráta cánach a ísliú ar láimh amháin de agus na heisceachtaí nó na bealaí éalaithe as cáin a laghdú agus a dhúnadh. Is é an t-éileamh is mó ag an gnáthphobail ná go mbeadh an córas cánach intuigthe, sa chaoi is go m'fhéidir é a oibriú go simplí agus go mbeadh daoine cinnte cá seasann siad. Tháinig bean go dtí mé le déanaí agus de bharr éileamh cánach nár thuig sí, bhí £200 cá ach íoctha aici nar ghá di a íoc. Lena chearta a thabhairt don oifigeach cánach, nuair a mhínigh mé an scéal dó thug sé aisíoc di.

Caithfear an córas cánach a shimpliú ionas go dtuigfidh gnáthdhaoine é. Ní mór freisin gníomhú láithreach — agus tá sé seo luaite sa phlean Programme for Economic and Social Progress— ionas nach mbeidh trasnáil i gceist idir an córas leasa shóisialaigh agus an córas cánach. Ní fheicim ciall ná réasún ag baint le daoine ag íoc cánach agus ag fáil cúnaimh Stáit in aon tseachtain amháin. Is drochchóras é aon chóras atá eagraithe ar an mbealach seo.

Má táthar ag smaoineamh ar rátaí cánach a athrú agus a ísliú, ba cheart díriú i dtosach báire ar an dream is lú pá. Ní ceart go mbeadh duine singil a thuilleann faoi bhun £100 sa tseachtain ag íoc cánach. Tá £60, má chuirtear an deontas breosla san áireamh, le fáil ag duine i dteideal sochair dífhostaíochta fadtéarmaí agus seasann an leibhéal díolúine ag £65 nó £70. Tá an dá leibhéal sin ró-ghar dá chéile agus chuideodh sé go mór le daoine dá mbeimis sáste na leibhéil ag a dtosáionn daoine ag íoc cánach, a árdú go mór. Cuireann sé iontas orm go minic ná déantar níos mó tráchta ar sin ach b'fhéidir nach mbíonn an oiread céanna plé le daoine in íochtar ag daoine eile agus a bhíonn agamsa. Tá go leor daoine ann gur beag an cháin a íocann siad agus ba mhór an faoiseamh dóibh é dá dtógfar glan amach as an gcóras cánach iad. Táim ag glacadh leis freisin, dá scorófar an íosleibhéal £100 do dhaoine singil go mbeadh gá len a dhá oiread sin do lanúin phósta.

Chuirfeadh an gníomh seo athrú bunúsach ar an gcóras agus bhainfeadh sé amach na daoine nach cóir dóibh a bheith ag íoc cánach. Chinnteodh sé freisin go mbeadh am ag na húdaráis cánach dul sa tóir ar dhaoine a bhfuil cáin le n-íoc acu ach nach bhfuil á íoc. Ghlanfadh an t-athrú seo morán riarachán gan tairbhe as an gcóras chomh maith le spreagadh a thabhairt do dhaoine chun fostaíocht a lorg. Bheadh an-tionchar ag an athrú seo ar chúrsaí fostaíochta agus tá súil agam go gcuirfidh an tAire Airgeadais leis an obair atá déanta aige cheana sa treo seo ionas go dtabharfar i gcrích é.

Mr. Costello

Could I ask an Leas-Chathaoirleach what length of time remains for contributions?

An Leas-Chathaoirleach

Senator Costello has 15 minutes and I understand the Minister will speak then and Senator O'Toole will then conclude.

Mr. Costello

Senator Murphy and Senator Norris also wish to make contributions. Is 15 minutes the maximum time we have? I would like to divide my time with the other two Senators.

An Leas-Chathaoirleach

I understand the Minister wishes to speak for approximately half an hour so the Independent Senators have 25 to 26 minutes between them. Senator Costello has 15 minutes and then Senator O'Toole has 15 minutes in which to conclude. It is a matter between the Senators.

Mr. McGowan

I was hoping to have a few minutes.

An Leas-Chathaoirleach

I would like to facilitate every Member of the House but rotation demands that it goes back to Labour Senators now and they will have 15 minutes. It then goes back to the Minister. I do not know whether Senator O'Toole wants to use his 15 minutes.

Mr. O'Toole

I do.

An Leas-Chathaoirleach

Senators Costello, Norris and Murphy have 15 minutes between them.

Mr. Costello

I will take five minutes.

An Leas-Chathaoirleach

I take it that Senator Costello is sharing his time with Senator Norris? Is Senator Costello going to share five minutes of his time with Senator McGowan?

Mr. Costello

What I am saying is that if we had 20 minutes each speaker would have five minutes.

An Leas-Chathaoirleach

I am sure the Minister and Senator McGowan will be able to arrange their time between them. Senator Costello is taking five minutes now, is that right?

Mr. Costello

Thank you for the arrangement, much as I would like to have 15 minutes. I will start by quoting the introduction by the Taoiseach, Charles J. Haughey, to the Programme for Economic and Social Progress:

This Programme is a strategy to accelerate economic and social progress in the nineties. The strategy is simple. It is to maintain a low-inflation economy with a stable exchange rate which can compete internationally and give us the highest standards of living and improved social services to which we aspire.

To secure such an economy we need this partnership in commitment and co-operation between the Government and the principal economic and social interests in our society. With agreement on the objectives and means to develop our society, which this Programme contains, we look forward to a decade of progress, growth and reform.

And then he goes on to say:

It is the outcome of prolonged negotiations between the Government and the social partners entered into constructively by all concerned in the interests of all our people.

He ends by warmly welcoming it and congratulating everybody. That being the introduction to the programme it seems not just a terrible shame but political, economic and industrial suicide now to seek to undermine what had been negotiated over such a long period of time. It had been agreed as the way forward following on the previous programme that had brought industrial peace to the country. We are now just eight months into the new term and already the Government are indicating that they want a renegotiation of the programme.

I would like to make it clear that the ICTU have no mandate to renegotiate as things stand. All the unions voted in February to accept the programme put before them. They did not vote for changes, amendments or future renegotiation. Any matters to be ironed out were to be done by the central review body but there was no mandate sought or given to renegotiate the Programme for Economic and Social Progress. A unilateral statement has been issued by the Government but it is not and cannot be in negotiation to change the terms with the ICTU.

This is a particularly unfortunate state of affairs given that it was the trade union movement, over the previous three years, 1987 to 1990, that bore the burden of pay restraint to get the nation's finances back in order. It is unacceptable to suggest that having done that they must now once again tighten their belts and forego any pay awards granted. I object to the fact that the amendment proposed effectively eliminates any reference to pay and conditions in the original motion. The first page of the programme states what the pay awards will be, 4 per cent in 1991, 3 per cent in 1992 and 3.75 per cent in 1993 so pay and conditions were part and parcel of the agreement made. What the Government should be addressing in this document is tax collection and job creation. It is a dangerous precedent to come out of the new revised deal between the Progressive Democrats and Fianna Fáil that they are going to focus on tax reduction rather than tax reform. The MRBI poll in the middle of the month showed that 65 per cent of people did not want a renegotiation and the latest Exchequer figures for the past nine months show the figures are approximately £200 million better than estimated which is a considerable improvement in the situation. This has been one of the lowest imbalances in Exchequer figures in the whole of the EC.

I do not think the Government should be scared and certainly they should not be seeking to renegotiate a deal that is just eight months old which is an agenda for the next three years and also a policy agenda for the rest of the decade. I exhort the Government to put all of this panic and allusions to renegotiations aside and to accept the deal for what it is, a minimum blueprint for future development which the country requires in matters of education, social development, health and so on. They will have the co-operation of the social partners and they should now be trying to overturn something that was constructed over a long period of negotiation and that will be of enormous benefit to the community if it is allowed to stand as it is.

Professor Murphy

As Senator Costello has said, the amendment is unacceptable because it implies renegotiation which is simply not on. We have heard the predictable response from the nurses' organisation, from teachers in inner city schools; if there is no money there to pay these people how do you explain the millions that have recently been wasted, embezzled or whatever? There is no point in politicians saying "We did not do that"; they were responsible for it. The recent scandals have compounded people's refusal to believe that there is no money there. In a way it is poetic justice for our people because all along there was a kind of peasant culture said, "Ah well, if they can make money, more power to them." There is now a very different mood in the country.

Both the motion and the amendment say they hope there will be a more fair discharge of tax liabilities and fairer conduct in business dealings. What is unacceptable here is not alone that there have been scandals but that no tax has been paid. This highlights again the tax burden of the PAYE worker. It is the brazenness of politicians and of business people when confronted with these scandals that takes the breath away. There is a scene in some movie where a marriage partner is discovered in flagrante delicto and he says, “I know what you are thinking but I can explain everything.” That seems to me to sum up well the brazen attitude of politicians and businessmen in this matter.

I want to draw attention to Senator Costello's motion earlier today which was not taken. Not until people are prosecuted and not until they face jail — the unthinkable has never happened in Ireland; people have not been put in jail for evading taxes — is there a fair prospect of getting a reversal of the present situation.

Last night the Minister for Industry and Commerce who has not spoken a great deal lately, said he hoped the revised Programme for Government would help to defuse popular cynicism and that people would begin to trust the new march of progress. I hope he is right but it may not be a radical enough measure.

Senator Ó Cuív reminded us that many disgruntled emigrants are coming home now. It was interesting, by the way, to hear him take a different line from the Taoiseach who recently expressed annoyance that returning emigrants were coming home thus upsetting calculations about public finances, social welfare and so on. It is these disgruntled emigrants among others who will make up a very angry people. It may well be that the revised Programme for Government will not go far enough.

Mr. Norris

I am grateful to my colleague Senator Costello for allowing me to contribute to this debate. Like most people of this country I am not well versed in economic strategy or the language of professional economists but I know enough to know that money is largely a fiction, a symbolic expression of power. One does a certain amount of work and payment is represented by little pieces of paper or coinage. I work for my money and most people who do are amazed that sections of this society appear to have endorsement for the notion that by some kind of abstract manipulation of market and by speculating in an area where virtually no energy except some minute form of intellectural energy is expended they can reap enormous sums of money.

My first point is on the subject of scandals and I do not intend to go into them in great detail. We have spoken about the renegotiation of the Programme for Economic and Social Progress and the only difference between the two almost identical versions of this motion is the question of renegotiation which is not acceptable. People have witnessed a group of privileged people lend themselves taxpayers' money and then make an enormous profit which is being placed offshore so they do not have to pay any income tax on the profits they have made out of the taxpayers' money. They are legitimately entitled to avoid paying tax on these profits and I understand that the exposure of these four people who made £8 million profit was no more than £20,000. For £20,000 expenditure they can make £8 million profit using the money of people like a single mother who has to start paying tax if she makes anything over £6 a week. That is the morality of the present situation and anybody who in that context asked me to support renegotiation of the Programme for Economic and Social Progress, I say to them, like Marie Antoinette, “Let them eat caviar”. I have not the slightest intention of supporting this.

One of these economists placed a gloss on a letter that unfortunately made its way to the public and revealed that he was getting large sums of money for certain services, by saying that in terms of the tax considerations, his client, Pernod Ricard, would achieve a higher rate of speed with which the process would be brought to bear by the Revenue Commissioners. I would like the Minister to comment upon this notion. It ill-behoves Fianna Fáil, the Republican Party that we have now moved into a two-speed society, with one speed for those who have £2 million to grease the paws of those who are familiar with the way in which the Government of this country apparently operate, and another speed for the unfortunate ordinary people, the Seán Citizens of this country.

That explains the failure of this Government; it is not a unique failure. This afternoon I was given a book by Professor Kevin McHale from the College of Surgeons; a collection of essays, entitled Imminent Peril: Public Health in a Declining Economy. Health is one of the issues being addressed here. This quotation from the book seems very appropriate to Ireland. It is from Governor Cuomo of New York who said:

I will talk to you about failure. Think about this. The best thing you have been able to do for four years is win a war. The best thing you have been able to boast about is destroying 100,000 lives and dropping bombs down smoke stacks. Think of this. You want to talk about failure. You cannot stand up and say to the American people: I gave you better health, I gave you more housing, I helped you build roads and bridges, I helped you educate yourselves, I lifted you from the ghettoes and gave you the same kind of opportunity I had. You cannot say that.

Neither can the Government say that, despite all their vaunted concern for the poor, sick and the elderly whom the health cuts hurt.

It is regularly raised in both the Seanad and the Dáil that elderly people with a short life expectancy cannot get cataract operations. There is a two-speed health service. We could look at the health of the Government and I am not surprised that they are under some strain at the moment. Should any of the Cabinet have a recurrence of any of the numerous serious illnesses which members have had, there is no question that they would be kept waiting. They would march straight to the head of the queue because they are able to pay for their health service. "Politics" as a representative in the United States, Barney Frank, said, "is about who gets what and when." We know who is not getting what and when they are not getting it; it is the Irish people. The golden circle of people who are ethically if not criminally corrupt are in a position to grab what they can and run and that it why it is not satisfactory in this economical and philosophical climate for the Government to seek renegotiation. They have a lot of explaining to do to the Irish people.

An Leas-Chathaoirleach

I understand that the Minister will give four minutes of his time to Senator McGowan.

Mr. McGowan

Senator Norris has done a couple of orbits of the globe to establish a political case and that is his entitlement. All Labour Senators and labour leaders and especially Senator Joe O'Toole who is to the fore in this motion, are entitled to make their case. Few people are involved in the recent abuses and in the cartel which does not prevent most ordinary citizens and workers from realising that the Programme for Economic and Social Progress is very important. The Taoiseach's introduction was accurate; it is important to have a mechanism which allows for negotiation because we do not live in a utopia where agreements do not need to be adjusted in the light of outside pressures. We are no longer a little island unaffected by Europe and by world trade. One would be going up a blind alley if one did not accept that an ordinary worker, such as a roadworker in Donegal, has an IQ so that he can think for himself and I believe that he would recognise that valuable safeguards have been built into this agreement.

Workers in this State are well paid, whether they are in the Army or the Garda, doctors, teachers, nurses or any other category. I am in a good position to know that because I live beside the Border. Our social welfare payments are better than those in Northern Ireland. People living in the North are abusing our social welfare system, drawing pension here and paying rent for a house they do not occupy to entitle them to draw a higher pension in Donegal than they can get in the North. We are not giving second class treatment to our workers in this programme. We do not have enough jobs. We have serious unemployment and other problems but scaremongering and waving a flag to say that the rich are getting richer and are playing with millions will not blind people to the usefulness of the mechanism contained here. It is not only useful but vital. There must be provision for renegotiation in the light of any outside developments whether it is an oil crisis or a war or inflation, any situation like the Gulf crisis or whatever. If Senator O'Toole does not recognise it I venture to say the people that he represents recognise it.

I accept that Senator O'Toole is doing a first class job for the teachers, and I compliment him on it, but teachers know that stakes must be set high and he is doing that and the best of luck to him. On the ground nobody is being fooled. This country is going well at the present time considering the inflationary situation prevailing in Europe. Workers are getting harder to con and they are reasonably well off.

Mr. O'Toole

I will tell you about road-workers in Donegal.

Minister of State at the Department of Finance (Mr. V. Brady)

I can see that in this House one has to watch one's time very carefully; the minutes seem to slip by. In replying to this motion, on behalf of the Government, I would like to begin by outlining the very significant economic achievements which have been made since 1987.

The Programme for National Recovery was put in place in 1987. During the period covered by the Programme for National Recovery, substantial economic progress was made. The economy grew strongly, while our inflation rate was amongst the lowest in Europe.

The exchange rate was stable in the EMS.

Mr. O'Toole

Well done, workers.

Mr. V. Brady

The balance of payments showed a healthy surplus. So, what were the factors which led to the strong growth over the period of the Programme for National Recovery between 1987 and 1990?

Robust growth abroad certainly helped. This was of particular benefit to our economy, which is so dependent on international trade. It enlarged the size of our potential markets. In addition, inflation and interest rates were lower internationally and less variable than earlier in the decade. However, the real transformation stemmed from our own better handling of our economic and financial affairs.

For example, we greatly improved competitiveness vis-á-vis our trading competitors. Moderation in the Programme for National Recovery pay agreement gave us the kind of competitiveness gains that our employment needs require. At the same time, workers' real take-home pay increased substantially.

We depend for jobs primarily on what we sell abroad. Unless we can keep our cost trends in line with, if not better than, those of our competitors, we will sell less and we will allow our competitors to take more of our home market. The moderate pay agreements associated with the Programme for National Recovery contributed greatly to the progress we made on the export front.

Another key contribution to progress has been the reduction in Exchequer borrowing. Taking real control of the budget was the key development in strengthening the economy. We should not forget the scale of the improvement in Exchequer borrowing that has already been achieved. In 1986, the Exchequer borrowing requirement amounted to almost 13 per cent of GNP. We were borrowing at the rate of one-eighth of our total national production; piling up commitments and storing up trouble. Firm action was taken which reduced spending and improved tax collection. The EBR in 1990 was down to only two per cent of GNP.

In common with several other EMS countries we have had to face serious budgetary difficulties this year. 1991 has been a year when the startling pace of recent economic growth has faltered. Growth in GNP is estimated to have averaged almost six per cent in 1989 and 1990; it is likely to be marginally over one per cent in 1991. This significant slow-down in growth mirrors the experience of some of our major trading partners. Indeed, the US and UK economies have had a much worse experience than our own with recession, involving a fall in both output and employment in those economies.

Experience in the industrialised world this year has not been uniform. There are probably three distinct groups of countries. First, there were economies like the UK and the UK which were worst affected by the slow-down. Secondly, continental European economies such as France and Italy experienced slow growth but not outright recession. Finally, strong growth continued in Japan and in Germany which continued to see the impact of unification.

It is a testament to the improvements in Irish economic performance in recent years that we followed the middle course of most of our continental EMS partners in avoiding outright recession but with growth slowing in late 1990 and early 1991. This year, growth in output is likely to be only about 1.5 cent. This is disappointing compared with the relative boom of recent years. It is less than we had expected at the beginning of the year. However, the economy has not gone into reverse, as has happened elsewhere; in fact, our growth this year is likely to be in line with the average across the EC. That is a considerable achievement.

Slower growth and higher unemployment have contributed to significant budgetary difficulties this year through substantially higher welfare payments and weaker than expected receipts from excise duties and VAT. Higher spending and lower than expected revenue put pressure on the Government's targeted EBR for the year. By July, the budgetary overshoot in 1991 threatened to be of the order of £200 million. Firm action was needed. Firm action was taken.

To contain the emerging overshoot on our own budgetary arithmetic, tough fiscal adjustment measures were taken with a view to limiting the total overrun on the EBR to about £100 million. The indications from the third quarter returns are that this revised target will be achieved or only slightly exceeded. The Exchequer borrowing requirement will thus be contained to close to 2.5 per cent of GNP. This does not take account of the £270 million receipts from the sale of Irish Life which will reduce the actual EBR to closer to 1.5 per cent of GNP. All in all, this must be regarded as a reasonably satisfactory budgetary outcome in what has been a very difficult year.

Our experience in Ireland in this respect this year was not unique. A number of our European neighbours have also had to take corrective measures when growth proved less than anticipated this year. For example, Germany, France and Italy have been obliged to introduce corrective packages to restrict budgetary overruns. Similary, in the UK, the half-year Exchequer returns released recently suggest that rising unemployment and lower than expected tax receipts will also take their outturn deficit ahead of the borrowing requirement they projected last March.

Senator O'Toole referred to the accuracy of economic forcasts for 1991. I would remind the Senator that in the budget the Minister for Finance emphasised the particularly difficult and uncertain international background against which this year's economic and budgetary polices had to be framed.

Mr. O'Toole

Have you checked them since?

Mr. V. Brady

A war was raging in the Gulf. The price of oil had more than doubled in the second half of last year and then fallen sharply in the first days of the war.

Mr. O'Toole

It is now $9 a barrel cheaper than it was in February.

Mr. V. Brady

That uncertain background was allowed for in the assumptions underlying forecasts made at the time.

The 2.25 per cent growth forecast on which the budget was based was in line with the forecast for Ireland by the EC Commission last December. It was slightly less optimistic than the ESRI's forecast of 2.5 per cent published the day before the budget. Forecasts by leading stockbrokers in January were in line with, or only marginally lower than, the Department's own forecast. For example, Goodbody were predicting 2.2 per cent; Solomons 2.1 per cent and Davys 1.8 per cent, later revised up to 2 per cent; Solomons 2.1 per cent and Davys 1.8 per cent, later revised up to 2 per cent. There was a general consensus — expressed in the post-budget comments of leading sectoral representatives — that the budget was prudent, not erring either on the side of excessive optimism or caution.

Since January last, virtually all major forecasters world wide have scaled back their forecasts for this year. The OECD have reduced their forecast for world growth from 2 per cent to 1 per cent. The EC Commission have reduced their forecast for the Community from 2.2 to 1.4 per cent. As I mentioned already, France, Germany and Italy have also taken corrective budgetary measures this year when growth turned out to be less than anticipated. We are not the only country to have to accommodate to changed circumstances due to external factors.

Senator O'Toole referred to the uncertainties inherent in economic forecasting. He even went so far as to suggest that in marked contrast to the position this year, current forecasts for 1992 might turn out to be unduly pessimistic. I would, of course, agree with the Senator that economic forecasting, particularly in a small open economy like ours, is very far from being an exact science. It depends on a wide variety of factors, including the assumptions one makes about external growth.

Mr. O'Toole

We should ignore them.

Mr. V. Brady

In this country we depend primarily for economic growth on what we can sell abroad. While the international agencies are predicting an improvement in world growth in 1992 compared with 1991, they still expect that growth in the two years 1991 and 1992 will be lower than they had anticipated at the start of this year. For example, the OECD's latest published forecast is for world growth of 4 per cent over the two years 1991 and 1992; at the beginning of this year they were forecasting 4.6 per cent. It is now predicted that growth in the UK, in particular, will be negligible over the two years 1991 and 1992 compared with a rate of growth of over 3 per cent expected at the turn of the year. Import growth in our other main export markets is expected to be lower than anticipated this time last year. In these circumstances, it is simply not realistic to expect that domestic growth here at home can be quite as strong as was anticipated when the Programme for Economic and Social Progress was ratified.

Apart from the lower revenue receipts which weaker growth will inevitably entail, the higher level of unemployment arising from reduced job opportunities abroad involves extra spending on social welfare payments. This year alone this extra spending will amount to some £75 million. There will be additional costs in 1992.

Senator O'Toole made the point that the debt GNP ratio will still fall this year despite the budgetary difficulties. This, of course, is correct.

Mr. O'Toole

Like everything else I said.

Mr. V. Brady

However, the underlying decline in the ratio this year, that is, excluding the once-off receipts from the privatisation of Irish Life, will be relatively modest. We should not forget that Ireland still has a very high debt GNP ratio by international standards. This leaves us very exposed to external developments over which we have no control. This is one of the major reasons why the debt GNP ratio should be reduced as envisaged in the Programme for Economic and Social Progress.

I need heardly remind the House that the Programme for Economic and Social Progress itself and, for that matter, the Government amendment to the motion, recognises the importance to the economy of continuing a responsible fiscal policy. One of the key objectives for which all partners to the programme have signed on is a reduction in the national debt to GNP ratio towards 100 per cent by 1993 and as part of this achievement of broad balance on the current budget. We cannot afford to lose sight of this objective.

To fail to reduce the debt GNP ratio as agreed in the Programme for Economic and Social Progress would risk undermining consumer and investor confidence. It could also result in higher interest rates. We must never be allowed to forget that the interest on increased borrowing has to be paid in future years and, ultimately, the extra borrowing itself must be repaid, leaving heavier burden for our children. Is this really what Senator O'Toole wants? I would doubt it very much.

Mr. O'Toole

You know what I want, Minister. I know how it could be achieved, as well. If you cannot do it, let some one else do it.

Mr. V. Brady

Despite the impact of the July package announced by the Minister for Finance to reduce the expected overrun on the Government's budgetary arithmetic, the task of framing next year's budget will still be very difficult. The outlook for the remainder of 1991 and for 1992 is still very uncertain.

While there is an emerging consensus among economic forecasters that the international economic climate for 1992 will be more favourable than in 1991, the extent of such an improvement is difficult to predict with any degree of certainty at this stage. In framing next year's budget, the Government's overriding concern is to continue the fiscal discipline for which we have all signed on which has proved so successful in recent years.

The three year Programme for Economic and Social Progress forms part of a longer-term ten year strategy. It is designed to promote economic and social development, to prepare Ireland Incorporated for the 21st century. It is based on the principle of co-operation with the social partners in achieving a consensus on the desirable ways and means of restructuring and modernising the economy. Such co-operation has served us well in the past. We proved the value of this approach in managing our economic affairs during the most difficult period of recovery under the Programme for National Recovery. I am confident that a similar approach will enable us to overcome our present difficulties while at the same time, maintaining stability all round.

It has been fully accepted by the parties to the Programme for Economic and Social Progress that macro-economic stability is vital to economic progress in a small open economy. Unless the growth potential of the economy is secured and strengthened by pursuing the sound macro-economic policies which I referred to earlier, our capacity to meet the very worthy social objectives set out in the Programme for Economic and Social Progress and referred to in the motion put down by Senators O'Toole and Ryan will be seriously diminished.

In their motion, they conveniently ignore the underlying economic and fiscal policies which are so essential to our economic well-being. The Government motion puts the record straight in this respect. A key objective is the reduction of the national debt to GNP ratio towards 100 per cent by 1993 and achieving broad balance on the current budget. Achievement of this objective underpins most of the other aims and objectives of the programme.

As the Taoiseach pointed out when he launched the programme last January, the improvement and advances in the different economic and social areas can only be undertaken if a growing economy provides the resources to pay for them. In fact, over the years 1991 and 1992 it is now expected that the loss of growth, against expectations, will be of the order of around one year's growth overall. For reasons mentioned earlier, the combined effects of this lower growth leading to revenue shortfalls and higher than expected expenditure liabilities from higher unemployment and other reasons have given rise to our present budgetary difficulties.

As the House will be aware, bilateral discussions with the social partners are currently taking place at official level to discuss the issues to which our budgetary difficulties give rise. These discussions are taking place under the consultation arrangements provided for under the Programme for Economic and Social Progress. They are continuing at present and it would be very premature and pre-sumptious of me to suggest what the outcome will be.

Mr. O'Toole

I will tell you what the outcome will be. There is no doubt about it.

Mr. V. Brady

However, I am heartened by the co-operative approach being adopted by all parties to the programme to the serious financial difficulties with which all of us are faced.

In tandem with these discussions, the Government are continuing with their review of every aspect of public expenditure, as part of the process of agreeing spending Estimates for 1992. The 1992 expenditure Estimates will have to be consistent with the Government's underlying macro-economic policies which I have mentioned earlier.

I would like now to refer briefly to some of the specific points put forward in the motion by Senators O'Toole and Ryan.

Acting Chairman (Mr. Mooney)

Minister, I am loath to interrupt you but as Senator O'Toole has been interrupting you during your speech so far, as you are now going into specific points may I remind the Senator that he will have an opportunity to respond to the Minister when he has finished his contribution. I do not wish, in any way, to inhibit the spontaneity that we all know Senator O'Toole to be capable of in this House. I am just making the point that it is discourteous, if nothing else, to interrupt the Minister in the course of his contribution.

(Interruptions.)

Mr. V. Brady

Despite the unfavourable international conditions, to which I have referred, employment this year will be higher on average than in 1990. This is a considerable achievement and a measure of our success in getting the economic fundamentals right. If these improvements had not taken place, employment in Ireland would probably now be falling, and might, indeed, be falling fast.

Although not all sectors are faring equally well, there is little doubt that total employment in the year to date has been higher than even the high level achieved in 1990. This is shown by the strong increase in employment-related revenue so far this year as compared with the same period of 1990. Even after taking account of increases in pay rates, these figures indicate that employment has increased. Receipts from PAYE up to end-September and from the training and employment levy up to 11 October were up by no less than 8.2 per cent and 6.7 per cent respectively over the corresponding period of 1990.

However, despite employment growth, unemployment has unfortunately risen steeply this year; more steeply than anyone expected. But let us be clear what are the reasons for this higher unemployment. It has been due to a cessation, if not indeed a reversal of net emigration. It is not the result of a fall in employment.

Unlike the 1980s, the higher unemployment this year is not due to net job losses. Instead, it is largely the result of our demographic structure; some of the more dramatic increases in the live register this summer have been due to students temporarily signing on the live register because they could not get summer jobs abroad.

Unfortunately, many people equate an increase in unemployment with a fall in employment and consequently fear for their own jobs. As a result, they become more cautious about borrowing or spending money. This accounts for some of the slowing in the growth of consumer spending this year, despite more people being at work and at higher rates of pay than in 1990.

In order not to miss any opportunity to reduce unemployment, the Government set up the task force on employment to draw on the knowledge, experience and ideas of all of the social partners to produce new ways of reducing unemployment. The task force's proposals will be considered by the Government and it would be surprising if some worthwhile measures did not emerge.

However, we must face the reality that, because of the growth in our labour force, the unemployment picture will remain very difficult for some time to come. While the infrastructure of the economy is being developed to the size we need to cater for all of those seeking work at home, part of any fall in unemployment will inevitably be the result of emigration. If, however, existing policies are continued and a strong consensus is maintained to improve our competitiveness and build on the gains already achieved, we can look forward to a greater share of any reduction in unemployment coming from employment growth at home.

While unemployment can only be effectively tackled by creating the general macro-economic conditions for sustainable economic growth, the Government and the other social partners want to ensure that the available employment opportunities are spread as widely as possible.

It is generally recognised that long term unemployment is a major problem, affecting both urban and rural areas. Where long term unemployment is particularly high in one area, there is a serious danger that a cycle of poverty and unemployment will be established which can be very difficult to break.

Long-term unemployment is a complex problem which is being tackled on a number of fronts. Where people have lost the skills that would allow them to regain a place in the labour market, education or training courses have to be established to provide them with those skills. One person might benefit from a return to the education system to acquire formal qualifications. Another might benefit from a FÁS training scheme of work placement.

It is also essential that any opportunities for employment creation in the local areas are developed to the full. The area-based strategy to combat long term unemployment will work on all these levels. At present, it is operating on a pilot basis in 12 selected areas of high long term unemployment. The companies will assess the needs of the long term unemployed and integrate the provision of services.

The intention is that the companies, with local knowledge and the assistance of locally based voluntary and community organisations, trade unions and private sector companies, as well as the local representatives of Government Departments and agencies, will be better able to plan and implement programmes for the long term unemployed for their own areas.

The companies already established are at present carrying out assessments of the needs of the long term unemployed in their areas on which they will base an appropriate programme. I am sure the implementation of those programmes will provide significant benefits for the long term unemployed and will also show that the partnerships established nationally by the Programme for Economic and Social Progress can be effective at all levels.

The Programme for Economic and Social Progress and its predecessor the Programme for National Recovery have made significant contributions to the protection and improvement of the position of the less well-off, the deprived and the disadvantaged in our society.

For the past number of years, basic social welfare increases have been above the rate of inflation, with special higher increases for those on the lowest payments. A key objective of the Government is to continue to protect social welfare payments against inflation and to achieve the priority rates for all payments by 1993. Progress in relation to these objectives, however, will not be easy given the current difficult position of the public finances. Further social welfare improvements, and indeed improvements in all policy programmes, will have to be consistent with the medium-term budgetary objectives of the Programme for Economic and Social Progress.

The substantial progress which has been made in improving social welfare payments over the past four years is due in no small way to the success of the Government in securing more effective control of the public finances. The biggest obstacle to further progress in social welfare would be a breakdown in public financial discipline that has been established. We cannot and will not allow this to happen.

It is worth pointing out that in discussing the social dimension of the Programme for Economic and Social Progress we are not talking just about commitment for the future; we can already point to a range of solid achievements in the course of the programme's first year.

In the education sector the Programme for Economic and Social Progress has already improved the quality of the education system nationwide by reductions in the pupil-teacher ratio, and in particular has allowed additional resources to be directed to disadvantaged pupils. At primary level, an additional 480 teaching posts were created in 1991: this greatly increased employment opportunities for young teachers. Of the total, 144 posts were specifically reserved for teachers of remedial and disadvantaged pupils, and for special education. At second level, a total of 310 new posts were created of which 60 were assigned to schools with a high proportion of disadvantaged pupils.

Under the Programme for Economic and Social Progress a disadvantaged fund has also been established. In 1991 an additional £1 million was provided for relevant initiatives. This enabled the Minister for Education to increase the provision for free school books at both primary and post-primary levels, and to introduce new measures to improve the staying-on rate of pupils from disadvantaged backgrounds.

Mr. O'Keeffe

Senator O'Toole, are you listening carefully?

Mr. O'Toole

£1 per pupil.

(Interruptions.)

Acting Chairman

May I have the attention of the House, please. We were moving along pretty well and I would have thought Senator O'Keeffe should not encourage Senator O'Toole as he was—

(Interruptions.)

Acting Chairman

As you are aware, figuratively speaking, Senator O'Toole prowls in the backbenches waiting for such an opportunity, so please do not encourage him.

Mr. O'Toole

That is grossly unfair.

Mr. V. Brady

Some of the contributors to last week's debate mentioned the pay levels of the lower grade staff in the Civil Service. The Government accept as an employer, that they have to pay rates to Civil Service staff which are attractive enough to recruit, retain and motivate staff of sufficient quality to ensure that they are in a position to deliver the range and quality of services which the public expects from the Civil Service. These rates are competitive. In talking about rates, however, let us not forget the major concessions which have been made on the income tax front in recent years and the special arrangements made for lower paid workers in recent pay agreements. Let us not lose sight either of the limitations and discipline forced upon us by the fact that the pay and pensions of public servants in 1991 amounts to £3,422 million and amounts to over 55 per cent of current voted expenditure. The increase in the figure for 1992 will be higher still.

The contributions to last week's debate included reference to the Revenue 1990 Statistical Report. In particular, comment forced on the small number of self-employed taxpayers recorded in the recent Revenue 1990 Statistical Report as having incomes in excess of £25,000. These figures do not give the full picture. For example, firstly——

Mr. O'Toole

They got more in the West Stand last Sunday than the number you got for the whole year.

Mr. V. Brady

——they relate to income arising in the year ended 5 April 1988; secondly, they deal with a taxpayer's, "total income" which is a technical concept——

(Interruptions.)

Acting Chairman

Senator, please.

Mr. V. Brady

——which does not fully reflect a taxpayer's basic income since it allows for certain deductions, such as capital allowances; thirdly, they do not include proprietary directors of incorporated family businesses who are akin to self-employed but are taxed under PAYE.

Allowing for these factors the number of Schedule D taxpayers, including proprietary directors, with gross incomes in excess of £25,000 for the year 1988-89 was 16,000, or 9 per cent of the total. The corresponding figure for the current year is estimated at 28,000, or 14 per cent of the total.

I think it is appropriate for me at this stage to remind the House that there have been some substantial income tax improvements in recent years. These include special provision for the low paid, extension of the standard band by over 40 per cent and reduction of the top and standard tax rates by 6 per cent in each case. These improvements have been of considerable benefit to the ordinary PAYE taxpayer.

In tandem with these improvements, major reforms have been made to the corporation tax system in recent years. These were aimed at reducing distortions in the use of capital as against labour, and at improving overall equity and efficiency. Accelerated capital allowances are being phased out, restrictions have been placed on tax-based lending and self-assessment has been extended to companies. At the same time, the corporation tax rate structure has been simplified, with the standard rate now at 40 per cent. As the effects of the reforms work their way through the system, the aim of an increased yield from the corporate sector is being achieved. Corporation tax receipts, as at end-September last, show a year-on-year increase over 26 per cent.

The recent review of the Programme for Government sets out the Government's intention to endeavour to achieve the objectives of a standard rate of 25 per cent with a single higher rate of 44 per cent in the next two budgets, involving a systematic curtailment of exemptions, shelters, allowances and concessionary tax rates.

With regard to the Greencore affair, and the reference which Senator O'Toole made to possible taxation issues related to it, the Government have requested the Revenue Commissioners to carry out a complete investigation into all matters which come within their jurisdiction. The Government have also requested the Central Bank to examine the exchange control aspects of the matter at issue. It would be inappropriate for me, therefore, to comment further on this matter, pending the results of this and all other aspects of the Greencore affair which are currently the subject of investigation.

The Government has already achieved a great deal in all the policy areas referred to in the motion put before this House by Senators O'Toole and Ryan. I find fault with their motion in one major respect. That is their total disregard of the facts of economic life that there is no such thing as a free lunch. By ignoring the fiscal imperatives that underpin the programme, by even suggesting that we should behave recklessly in so ignoring the nation's ability to pay, they do us all a disservice.

The Government must live in the real world. We must ensure that the country's best interests are safeguarded by prudent management of the economy. Under the programme we have embarked on a major and ambitious restructuring of society over the next ten years in consultation with the social partners. In order to achieve these ambitious goals we must live within our means.

The Government remain firmly committed to the consensus-based approach which has served this country so well in recent years. This commitment is borne out by the recent initiation of discussions with the social partners on our budgetary difficulties. Hopefully, from these talks will emerge a structured response to these difficulties which will ensure cohesion between the various elements in our society and enable us to maintain the stability which is so necessary to our economic well-being.

It is a little soon to talk about paying, or not paying, the pay increases that have been referred to in this debate and I will explain why, very briefly.

Mr. O'Toole

That is an improvement.

Mr. Wright

That is on the record.

Mr. V. Brady

The reality is that public service pay costs are set to increase by well over 10 per cent next year. There are obvious dangers to the financial stability of the programme if public service pay costs were to continue to grow at such a rate. Increased pay spending of this order on a continuing basis can only be afforded at the expense of other desirable public spending.

There is widespread acceptance that corrective action is needed to meet next year's budgetary problems and to avoid worsening the situation. The Government are facing up to the expenditure implications of this at present. In parallel with this process they have commenced a dialogue at official level with the social partners about the issues involved. Until these issues have been teased out fully, as was indicated earlier, it would not be appropriate for me to anticipate or comment on the precise measures required. It is not appropriate that when things are not going quite as well as expected with the fiscal objectives set out in the programme, the signatories should reflect on the issues involved and make their contributions to any necessary solutions.

Serious budgetary problems such as these were faced up to by the social partners on a consensus basis before and during the Programme for National Recovery. That programme put the Exchequer finances on a proper footing, a footing on which the Programme for Economic and Social Progress itself was constructed. I have every confidence that the same consensus approach will prove equally successful on this occasion.

Finally, I am sure that this House will join with me in hoping for a very successful outcome to the discussions which will, no doubt, be very mature and responsible, and in doing so, will support the amendment.

Acting Chairman

I know Senator O'Toole has been "raring to go". For the benefit of the other Members of the House, the Senator has his stipulated 15 minutes.

Mr. O'Toole

Whoever put this speech together, to make the point that I did not understand underlying economic directions and so on, has not put any economic concept into it. I will just draw two points to the Minister's attention. The price of oil on Budget Day was approximately $29 a barrel. They are now hoping to hold it around $21. It is lower now than it was then. That is the reality. Who is to be thanked for what?

The Minister said "the substantial progress which has been made in improving social welfare payments over the last four years is due in no small way to the success of the Government in securing more effective control of the public finances." That shows a disgraceful lack of consideration for the people who made it possible for his Government to do whatever they have done: public servants, workers in the private sector and those people who are prepared to forego increases and improvements in their conditions of service, salaries and wages over the last four years. That co-operation, not Government thought, is what provided the progress——

Mr. O'Keeffe

What about economic——

Mr. O'Toole

——at the end of the day we got the old hoary chestnut here again——

Mr. O'Keeffe

This is totally out of order. I suggest Senator O'Toole is being selective.

Mr. O'Toole

——that the difficulty about unemployment is a function of emigration. The reality, Minister I can tell you, without looking at any figures, anywhere, is that your Government is producing, on average, 10,000 to 15,000 jobs per year and the labour force is increasing by 20,000 to 25,000——

Mr. O'Keeffe

One of the basic reasons the economy improved here——

Acting Chairman

The Senator really cannot interrupt Senator O'Toole. He has the floor. I am afraid, whether you like it or not, you will have to listen. Senator O'Toole, without interruption, please.

Mr. O'Keeffe

——fiscal economic policy——

Acting Chairman

I must ask the Senator to desist.

(Interruptions.)

Acting Chairman

I would ask Senator O'Toole to ignore the barbs.

Mr. O'Toole

——which was full of statistical inaccuracies, particularly in the Government, projections of growth over the next four years, which are completely and utterly wrong. I told you then, check them again. This thing of standing up and making a speech——

Acting Chairman

I would ask the Senator to address his remarks to the Chair. I would also ask Senator O'Keeffe and the Members on the other side of the House, please, not to encourage cross debate. This is not the proper forum for that type of debate. Senator O'Toole, you have the floor. I would ask you also, please, not to encourage cross debate.

Mr. O'Toole

They have nothing to say. They are simply trying to string a speech together with interruptions. Sitting in the Leader's seat at the moment Senator McGowan made a reference to Donegal road workers. I took much of my early thinking from one very famous Donegal road worker navvy who found the time over the course of the century to put many of his thoughts on paper. Mr. McGill has had a profound influence on my thinking, I have to say and I do not denigrate Donegal navvies or road workers. I respect them, I reflect their views and I represent their point of view in what I am saying here tonight.

That is the reality of it. The reality is that when people on that side talk about renegotiation of the Programme for Economic and Social Progress, when they had the audacity to put in an amendment that was afraid to address the issue of pay and conditions of service of public servants, what they are really saying is that in order to pay for their problem they are going back to the teachers, the gardaí, the nurses, the public servants, the Defence Forces, the civil servants, okay you pay——

(Interruptions.)

Mr. O'Keeffe

On a point of information——

Acting Chairman

I am sorry, Senators, there is no point of information. I appreciate the frustrations on the Government side of the House. However, I also must defend Senator O'Toole's right to continue without interruption.

Mr. O'Toole

Thank you very much. If anybody has anything of significance to say I am prepared to hear it, but I have not heard it so far. I am not inviting comments at this stage. In terms of the latest figures we are hearing from the Minister, and the Exchequer returns in September for the third quarter of the year, he goes on to express satisfaction that in this very difficult year Exchequer borrowing can be expected to turn out close to 2.5 per cent of GNP. The Minister in his speech talked about the OECD figures, about economic growth in the world, but he refused to tell us what the normal GNP percentage is in other countries. Let me quote from some of your friends in the stockbroking side of things.

(Interruptions.)

Mr. O'Toole

I have always had this very close interest in what the other side are at, I can tell you. This is Davy's Stockbrokers in their latest edition: Fiscal Policy, Public Finances. I know the Minister does really like to hear this, but I would ask him to take it on board. In absolute terms he is talking about an Exchequer borrowing requirement of roughly 2.5 or 3 per cent of GNP and how we need to improve on it. I just want to quote what the experts are saying. They are saying in absolute terms an EPR of 4 per cent of GNP would still compare favourably with the ERM average. Just for the record, that is a reality. It compares favourably.

I can also tell the House that in the latest figures put out by, dare I say, NCB, that stockbroking company Dermot Desmond was formerly running, Pádraig O'Connor in his latest forecast said just a week ago that this country could easily deal with a figure of 3 per cent in 1991-92. It is also worthwhile putting on the record that from 1987 to 1990, when all the economic objectives were exceeded, we started off in 1987 with a debt-GNP ratio of more than 130 per cent; it is down now to closer to 100 per cent. I could go back and read again from the CII, from Davy's, from any of the stockbrokers, from any of the economic commentators and I would ask the Minister to answer the question he did not address. He used the phrase which we all used, that we would like to have the debt-GNP ratio at 100 per cent by 1993 but he did not have the guts to stand up and say what he thought it will be by 1993. I can tell the House what Davy's, who are no friends of mine, will say. I can tell the House what Goodbody's will say. They will say that, including the payment of the Programme for Economic and Social Progress, it will be less than 105 per cent.

The reality is that we have taken it from 150 per cent in the mid-eighties down to the current rate, closer to 100 per cent. When we exceeded all expectations in the late eighties we did not come back to the Minister with a begging bowl saying, "More". We stuck by our commitments and the Minister must stick by the Government commitment to pay on this one when there is a slight deviation. He has not given any figure tonight of Government costs which were not known in January of this year. All the costs, down to the last penny, were available to us. We knew the costs of the specials, we knew the cost of the increases. There has been no change in the forecast of public service costs, not one penny extra——

(Interruptions.)

Mr. O'Toole

The reality is that somebody is making a judgment of priorities. If you are saying to me that there is a banker in Switzerland who is sweating it out because we might not be able to pay him a few shillings next year, I will say to you, Minister, there are also teachers, gardaí, nurses, civil servants, public servants, workers and PAYE workers. They are also worried about getting their increase next year. I ask you, Minister, to make your judgment as to where the axe should fall. Let the Swiss crowd wait for a couple of more years. Yesterday, we had the latest figures of the Confederation of Irish Industry: growth and manufacturing output up this year, and forecast to be up again next year; improved international climate, export growth up to 7 per cent by next year. If you look at the business sections of today's British quality newspapers, all of them are carrying the latest figures from the Confederation of British Industry which shows a marked improvement, that we are out of what will prove to be the shortest recession in post-war history.

The reality is that there is not the problem with the economy that the economists have asked us to believe there is. I agree, they could tell us all the problems. The problem for the stockbrokers is very simple: that they had made a certain judgment on the value of their stocks based on a certain set of figures coming out next year. That has not happened and the way they are going to lose out is that their stocks will not be of the same value. The Minister has talked about threats to the the economy; about instability in the economy but he has failed to outline what will be the detrimental results of the blip that will be caused by an increase in public service finances next year, what that will do in the long term. I will wager the Minister that his forecast that we are going to lose one year's growth over the next five years will not happen. I would be prepared to put money on that. There is no question about it. The economic growth for 1992, 1993 and 1994, despite what Senator O'Keeffe said last week, will be of the order we expected it to be and that we will see economic——

(Interruptions.)

Mr. O'Toole

The ERSI, for instance, Senator O'Keeffe, as a matter of interest are forecasting on economic growth in 1992 of 3.7 per cent; 1993, 4.3 per cent; 1994, 3.3 per cent; 1995, 3.6 per cent. You have forecast stockbrokers who have got it right.

(Interruptions.)

Professor Murphy

On a point of order——

Acting Chairman

I am sorry, Senator. I am not recognising points of order or points of information. Forgive me. Senator O'Toole without interruption, please.

Mr. O'Toole

It is clear that Fianna Fáil have nothing to offer on this issue on the realities of it. We are heading into an area of economic growth. I have indicated that we are into an area of improved exports. I have referred to the fact that we have never had an improvement as we had over the period of the PNR. I have indicated to the Minister that this was done on the backs of workers. I have also indicated that there is no way that he will now further deepen and extend the period of attrition by coming back to the teachers, nurses, gardaí, the public servants, civil servants, including his advisers, who we would wish to see get their full pay and their full increase. A country that can put people behind bars for not paying for their washing machine, for not paying for their TV licences, for not being able to pay their car tax, a country that can deal with and apparently tolerate the levels of fraud, misappropriation of funds, the levels of tax avoidance and tax evasion, is not going to be bailed out one more time and a poor administration will not be bolstered up on the back of the people who are achieving whatever improvement there has been over the past four years. It just is not on.

The question of renegotiation is not a realistic option for you at this time. I think the Minister should end the uncertainty, calm the fears of public servants, of people in the private sector and PAYE workers, and say "Yes, we will now pay this money." The only thing I welcomed in his speech was the commitment to say it was not clear whether the Government wanted to renegotiate away the money that is due and has been earned and is owed to those people.

Acting Chairman

Is the Senator finishing on a positive note?

Mr. O'Toole

Here is what the positive note is: that at the end of the day there will not be any attempt to put the hand one more time into the pockets of those workers who are giving all the improvements which the Minister did not recognise came from them over the past four years. He is now going to endanger that. He will put under threat the stability of national negotiations, he will undermine the credibility of unions and management, employer and Government negotiators if he does not pay up on this one, honour his commitments, give those people what they are entitled to and ensure that we can continue a period of stability. The cowardly and outrageous amendment which abrogates completely the Government's responsibility to pay public service workers is totally unacceptable. There is just no way that that is ever going to be acceptable. I want to run your members into the lobbies——

(Interruptions.)

Mr. O'Toole

——so that it can be seen that they would threaten the teachers, gardaí, nurses, public service workers, PAYE workers. Therefore, I will be opposing the amendment.

Question put: "That the amendment be made."

The Seanad divided: Tá, 26; Níl 15.

Tá

• Bennett, Olga.
• Bohan, Eddie.
• Byrne, Hugh.
• Cassidy, Donie.
• Conroy, Richard.
• Dardis, John.
• Fallon, Sean.
• Farrell, Willie.
• Fitzgerald, Tom.
• Foley, Denis.
• Haughey, Seán F.
• Honan, Tras.
• Keogh, Helen.
• Kiely, Dan.
• Kiely, Rory.
• McCarthy, Seán.
• McGowan, Paddy.
• McKenna, Tony.
• Mooney, Paschal.
• Mullooly, Brian.
• O'Brien, Francis.
• Ó Cuív, Éamon.
• O'Keeffe, Batt.
• Ormonde, Donal.
• Ryan, Eoin David.
• Wright, G.V.

Níl

• Cosgrave, Liam.
• Doyle, Avril.
• Hourigan, Richard V.
• Howard, Michael.
• Kennedy, Patrick.
• McMahon, Larry.
• Murphy, John A.
• Neville, Daniel.
• Norris, David.
• O'Toole, Joe.
• Raftery, Tom.
• Ross, Shane P.N.
• Ryan, Brendan.
• Ryan, John.
• Upton, Pat.

Tellers: Tá, Senators Wright and Fitzgerald; Níl, Senators O'Toole and B. Ryan.

Question declared carried.

Question put: "That the motion, as amended, be agreed to."

The Seanad divided: Tá, 26; Níl 15.

Tá

• Bennett, Olga.
• Bohan, Eddie.
• Byrne, Hugh.
• Cassidy, Donie.
• Conroy, Richard.
• Dardis, John.
• Fallon, Sean.
• Farrell, Willie.
• Fitzgerald, Tom.
• Foley, Denis.
• Haughey, Seán F.
• Honan, Tras.
• Keogh, Helen.
• Kiely, Dan.
• Kiely, Rory.
• McCarthy, Seán.
• McGowan, Paddy.
• McKenna, Tony.
• Mooney, Paschal.
• Mullooly, Brian.
• O'Brien, Francis.
• Ó Cuív, Éamon.
• O'Keeffe, Batt.
• Ormonde, Donal.
• Ryan, Eoin David.
• Wright, G. V.

Níl

• Cosgrave, Liam.
• Doyle, Avril.
• Hourigan, Richard V.
• Howard, Michael.
• Kennedy, Patrick.
• McMahon, Larry.
• Naughten, Liam.
• Neville, Daniel.
• Norris, David.
• O'Toole, Joe.
• Raftery, Tom.
• Ross, Shane P.N.
• Ryan, Brendan.
• Ryan, John.
• Upton, Pat.

Tellers: Tá, Senators Wright and Fitzgerald; Níl, Senators O'Toole and B. Ryan.

Question declared carried.

An Cathaoirleach

When is it proposed to sit again?

Mr. Fallon

At 10.30 a.m. tomorrow.