Seanad Éireann debate -
Wednesday, 26 May 1993

Vol. 136 No. 7

Employment Through Enterprise: Motion (Resumed).

Debate resumed on the following motion:

The Seanad Éireann

—notes the publication ofEmployment through Enterprise setting out the response of the Government to the Culliton report;

—approves the decisions to implement changes recommended by the Culliton report in accordance with the suggestions of the Moriarty Task Force; and

—asks the Minister for Enterprise and Employment to report on a six monthly basis on the progress made in achieving the implementation of changes that have now been mandated by the Government.

—(Senator Wright.)

Mr. Farrell

I welcome this document; it is a good response to the Culliton report which we discussed here some time ago.

It is amazing that we have so much unemployment because we never had so many agencies and organisations trying to help people. Despite Eolas and FÁS, we have not overcome the unemployment problem.

Something about the problem struck me very forcefully a couple of days ago. The county council has spent a lot of money over the past three years on my village but in that time, not one person asked me about getting a job working on the roads. I questioned the area supervisor and he said that nobody looks for work on roads nowadays. That amazes me, because years ago so many people were looking for jobs on the roads that even on minor relief schemes there was a rota system — week on/week off. With so much unemployment, why are people not looking for work?

A factory in my area was looking for ten workers — men and women — and they advertised through an RTE programme promoting jobs. They only got two people — one lad from Limerick and another who returned from England. However, at county council and health board offices there are often a couple of hundred people going for a couple of clerical jobs.

It is time for a proper survey of the types of employment available and the jobs the unemployed could do. We should categorise all our unemployed people, to see how many of them are bricklayers, computer operators, etc. We could then see exactly what kind of jobs we should be trying to generate. This could alleviate the problem because there are jobs people do not know about, and some people are looking for jobs for which they are not suited.

An entrepreneur embarking on a project should be able to get a list from either Eolas or FÁS of the number of electricians, technicians, etc., available in the immediate area; the list should detail the nature of unemployment in that area. We should encourage business people and entrepreneurs to create job opportunities for the people who are unemployed.

We should also develop the old technical school concept of work experience during the last year of a course, in other words, on a four year course, in the fourth year emphasis was put on on the job experience. Training moved from practical work to the theory of woodwork, metalwork, home economics, etc. Perhaps, we have too many people who could write 40 foolscap pages on the shape of the new penny and never say it was round. It is time for a return to practicalities.

Many of my contempories made a success of their lives and of their businesses. It amazes me that people are not more successful today. Perhaps we should return to the day when there was not so much red tape or as many inspectors. Mr. Campbell of Campbell Catering said recently on television that if he was starting in business today he would not be nearly as ambitious, or start as big as he did, because the system would not allow it. I could not agree more.

When I started in business in the early sixties a person who had saved some money, went to the bank manager for financial backing. It was easy to start a business because there were few bureaucratic procesures, such as planning reports, environmental impact studies, reports for the Revenue Commissioners and so on. A notebook of creditors and debtors was maintained and these were dealt with as they arose.

It was a simple system that made money and created employment. Today, however, there is too much streamlining and bureaucracy. There is too much time spent obtaining tax numbers, VAT numbers and so on. Any firm starting up today, unless it is a big operation, cannot afford the administrative costs involved, despite the assistance through State sponsored agencies. For example, an inspector called to my garage when I was repairing a car. I undertook to provide him with the information he required within two months. However, I decided to close the garage and I told the inspector that, as a result, two men were out of work, that I would continue to make a living but that nobody like him would be telling me what to do.

This story illustrates what is wrong today in business. There are far too many people creating bureaucratic red tape. If we want to encourage people to create work we must simplify the procedure. There is far too much bureaucracy involved in starting a business and I note that a person of the calibre of Mr. Patrick Campbell takes the same view.

If a business employs three to four people, one will be working for the Revenue Commissioners keeping the books, the second will be working to maintain the business and the employer is lucky if the remaining employees are working to repay the bank and the overheads. The book keeping and other procedures in business are excessive and must be curtailed. A person I know flew back recently from a small airport in Greece no larger than the airport in Sligo. There are 36 flights a day from that airport although they are at the stage of development at which we were 20 years ago.

This is a good report and contains many fine ideas. However, we must tackle the problem of high taxation. For example, an employee must earn approximately £240 per week to take home £160 and this costs the employer approximately £300 per week. It is not possible to maintain a business, incur those kind of overheads and comply with all the bureaucratic rules and regulations now in force. For every one Government Department offering assistance, there are two Departments ensuring that the business will fail.

Ms Honan

I welcome the Minister to the House and the opportunity to discuss the Government's response to the Culliton report set out in the document Employment through Enterprise. I agree with the point made by Senator Hillery when discussing this report two weeks ago that solving the unemployment problem will be the bottom line for the Government.

There is general agreement that unemployment is at the core of the State's most serious social and economic problems. Because of this, the Culliton report has been welcomed and accepted as the most serious attempt for decades to develop a strategy capable of resolving these problems. The Culliton report is seen as the means by which a spirit of enterprise can be encouraged. It is generally agreed that this is needed more than anything to solve the problem of unemployment. I agree with the point made by Senator Farrell about the difficulty of getting involved in enterprise. The task of the Government is to encourage people to become involved.

The Government and the Minister accept the broad thrust of the Culliton report and have promised to improve the environment in which enterprise might flourish. While I accept a number of the issues dealt with in this report, such as training and education referred to by Senator Henry earlier in this debate, there are two issues which would do more than most to improve the environment in which enterprise might flourish. However, the Government has abandoned these two issues and because of this has failed to provide convincing evidence of its determination to introduce the reforms necessary to create this culture of enterprise.

One of the most stark issues is the tax system, which the Culliton report described as oppressive, unfair and likely to stifle enterprise. The other key area in which Culliton has been ditched is the proliferation of Government Departments and agencies dealing with industry, rather than their integration and reduction as recommended by the Culliton report. Senator Farrell appears to agree with this. It is too difficult today for people to get involved in industry or to set up on their own in industry and they will not become involved until it is made easier for them.

Regarding the recommendations of the Culliton report on taxation, I am unable to understand how the Minister can advise that the Government accepts the broad intent of these recommendations because the reality is that after this year's budget every worker, from those earning below the average industrial wage, is paying an extra 1 per cent levy in tax on their income. This is on top of the 7.75 per cent already taken by PRSI, the health levy and the youth employment levy.

The Culliton report concludes that in no other single area does the Government have at its disposal the tools to make as far reaching and effective a reform to support an enterprise economy as in taxation. I believe that on the taxation agenda, the Goverment intellectually accepts the key recommendations of the tax reform philosophy contained in the Culliton report. There are two such recommendations, that tax be collected on a sufficiently broad base and that the tax system be drastically simplified. I cannot understand how the Government can assert that it accepts these recommendations and yet in this budget it introduces a fifth tax on work, on everyone whose income exceeds £173 per week. This figure is less than the average industrial wage. It flies in the face of the Culliton report.

The one commodity that appears to be taxed as a luxury in this country is work. This Government, which intellectually accepts the Culliton report, but proceeds to do the opposite of what it recommends, penalises everyone earning less than the average industrial wage through the new employment levy. It is the single greatest measure in this year's Finance Bill of the contempt which this Government has in practice for the tax reform philosophy contained in the Culliton report. It is not good enough for Ministers to say they accept the recommendations in Culliton and then do the opposite.

For the first time in six years this budget has ensured that the tax position for workers at the average industrial wage has disimproved. My colleague, Deputy Cox, when speaking on the budget in the Dáil, gave an example of a married man with four children currently earning £8,000 per year. The tax and welfare system ensures that this man's disposable income, through a variety of means such as the family income supplement, the medical card, local authority rent allowance and so on would be greater than his gross earned income. The example also illustrates that if the same man was in a job with a gross income of £15,000 per year, which is £7,000 more than he was previously earning, he would be £200 worse off under our tax and welfare system.

This example underlines the inadequacies in our taxation system. A woman to whom I spoke recently got an increase of £30 per week from 1 May 1993. As a result her weekly earnings went above the £173 mark and she now earned £185 per week gross. This £30 a week gross was costing her employer, almost £34 a week with the 12.2 per cent PRSI rate. Yet, all she was getting out of that rise was £13.50, with which she was not too pleased. The employer was none too pleased either since it was costing him £34 to grant the increase of £13.50. There are many situations involving small enterprises employing three or four people, where so much is being paid back to the State because of the difference between what an employee takes home and what it costs the employer in wages, that an extra three or four people could be employed if those costs were less. We must look at this seriously. It is difficult for the ordinary PAYE workers to believe that the Government is in favour of encouraging people to work when some people would be almost as well off staying at home on unemployment benefit.

On the issue of agency integration, the reality is that Culliton is not being implemented. Instead of the one-stop-shop agency for indigenous industry which Culliton recommended incorporating the IDA, Eolas, FÁS and An Bord Tráchtála, we will have an even greater multiplicity of agencies under this scheme. When the network of county enterprise boards is added we will have reached a level of bureaucracy that even the former communist rulers of eastern Europe would envy. I cannot understand why we make it more and more difficult for people to set up in business. I agree with Senator Farrell that people who set up in business feel they will be haunted by so many State agencies that they would be better off leaving their moneys in the bank, or sending it abroad and gettting the benefit of a 15 per cent tax amnesty when they bring it back. It is no good saying we accept something in principle and then in practice doing the direct opposite.

The proposed bench-marking of prices and services from State agencies, many of which enjoy a monopoly, is welcome. It is a good idea to compare prices in the telecommunications and energy fields with similar services elsewhere in Europe with a view to making our services more price competitive. However, this is another example of saying one thing and doing another because in this year's budget telephone charges have risen by 5 per cent. We will be dealing with the big hike in telephone charges later today during Private Members' Business. What does the Government intend to do to encourage private enterprise? The reality is that work is taxed which means that enterprise is also taxed. The time for harding thinking and reform is now, if we want to end the unemployment crisis and reduce the number of people out of work. We have to make hard decisions now.

Mr. McGowan

I agree with Senator Honan's remarks. I find it hard to pay my taxes, and it hurts me to pay 48 per cent, like most Members of this House. It is certainly not done with ease or pleasure. I support the motion and feel we must monitor the situation. Everyone accepts that we have a crisis with large numbers of young unemployed people. I do not believe that Culliton or anyone else, has a magic wand which will eliminate unemployment. Technology is being developed which eliminates jobs. I was in America recently and visited a warehouse covering 40 acres, not a single person was working there. Everything was done by robot and computer control using bar codes on products stored there for dispatch. There was only one worker driving a fork-lift loading the containers at the door. If I could have filmed the scene it would have been a frightening picture to show to people at home who are hoping to develop their technology and know-how.

Everybody, including the trade unions, has a big responsibility in this regard. Irish Picture Mouldings had three factories in Donegal, Mount Charles and Glenties employing nearly 1,000 people but has now closed because of a dispute. There was a number of factories in the industrial estate in Gweedore. GT Carpets employed nearly 1,200 people. The famous Crolly Doll factory as well as numerous bakeries have now closed. There is only one bakery left in County Donegal and we have to buy bread baked in other counties. We are destroying jobs. We are all in this together, but nobody is saying that taxes are too high. One has to be realistic and ask who will provide the £30 million per week needed for social welfare payments. We have serious problems and I know that the Minister of State and Members of both Houses of the Oireachtas would dearly like to solve them. Unfortunately, this is a major task and the situation must be monitored carefully.

More jobs should be provided in agriculture as the numbers have decreased dramatically. Ray MacSharry was right in wanting to change the incentives and supports for agriculture by providing more for the small producer. He wanted to get away from a situation where 80 per cent of EC funding went to large factory farms and co-ops. He wanted to give money to the producer but his offer of assistance was resisted vigorously by those who wanted to maintain the income for the 20 per cent who were receiving the lion's share. That was a fundamental mistake, because it meant forcing traditional small farming families off the farm and into looking for jobs in hotels and offices away from their environment.

We would also expand the fishing industry which has not yet reached its full potential. We produce fewer than 1.5 onshore jobs per fishermen compared to an average of six onshore jobs per fisherman in the rest of Europe. At the same time, it is not long since fish were dumped and destroyed with oil poured on them all over Europe, while our totally undeveloped fishing industry remains a potential development area for our young people. We should look at areas of job potential such as agriculture, fish processing, storage and sales. There is also a major potential for jobs in the tourism industry. The Minister of State is aware of our hotel training college in Killybegs with 400 students. I am pleased that we have a 100 per cent uptake from that college, which means that it must be a growth area.

We must see where jobs are readily available and develop that sector rather than being negative. Many negative people here would rather dispise and criticise. Some people with jobs are paying very little tax and are complaining about this 1 per cent levy, but many young people are condemned to collect a small amount of money on the dole every week. I sympathise with them. Across the Border in Strabane and Castlederg, young single people get £32 per week on the dole; some of them are moving to Donegal to get £57 per week.

Apart from natural gas, Ireland has no great wealth other than the resources of our young people. We must encourage them to help them by providing them with jobs. However, the areas where we can provide jobs are restricted. The Irish clothing industry is competing with countries which use slave labour. At one stage we had woollen mills including the Blarney, Convey and Foxford mills. At present no woollen mill in Ireland is producing yarn. I fail to see the reason for that. We have millions of sheep and huge amounts of wool but there is not one job in the wool industry. Has enough research been done? What were the finding of such research? This is a major task and should be the Government's top priority.

I ignore those who sit back, complain and criticise. Those people are going nowhere. The average radio listener or newspaper reader has the IQ to assess matters. As I said there is no magic wand to provide a solution via the Culliton report or any other method. I welcome the input of everyone who has a positive contribution to make. I am barely touching the problems but I would like more time for discussion and positive suggestions.

I ask the Minister to look for areas where there is potential for job creation, such as tourism. More young people should be trained to become first class workers in the tourism industry. Whether they are chefs, managers, housekeepers, etc., they should be as good as any workers in any country. Jobs will only be found in Ireland when we train our young people and encourage them to be as good as anyone in Europe. There is also potential for job creation in fishing and agriculture.

It is upsetting to see people from Taiwan or Pakistan finding and providing jobs in Ireland. In Donegal several foreign owned industries are doing well and providing jobs. Our people must realise tht no one will provide jobs for us; we must do it ourselves. We should encourage each other and not be criticising continually.

Mr. Farrelly

I welcome the Minister of State to the House. There are many proposals in the Culliton report presented by the Minister but I would like to know which proposals have been omitted. The Government missed an opportunity to implement the report and go some way towards changing the existing system that has not worked.

We have been told a person earning £8,000 per year is better off than someone earning £15,000 per year. If that is the case, questions must be raised. Why is there no adequate response to the problem? The proposals that have been presented will not solve it.

The budget as enacted by the Finance Bill, 1992, was the most anti-business measure introduced since I become a Member of the Oireachtas. It was anti-enterprise and opposed people who wished to do something for themselves. Not until long after that Finance Bill was passed did business people realise how severe its provisions were.

In September 1992 we experienced the currency crisis which continued through the election campaign up until February of this year. Was the best advice available to the Minister for Finance that we not devalue? Was it said that if we devalued our interest rates would not come down? How many heads have rolled because of that decision not to devalue when the United Kingdom pulled out of the ERM? That was a fundamental mistake. It cost the State about £300 million and it cost people living here hundreds of millions of pounds over five months.

Repercussions from that débâcle still cause immense damage to many businesses. Today a major international company announced that it proposes to close its factory with a loss of 400 jobs. I intend to raise that matter in this Houe tomorrow. At the time of the currency problem, the company was losing substantial amounts of money weekly. As a result, it was unable to compete for orders it could be supplying now. If the Government had devauled in time, these problems would not have arisen.

Since then there has been a budget. The proposals in that budget are far removed from those the Culliton report suggested if we are to make real progress. Since the budget a 1 per cent levy on employment has been imposed. It has been called a "temporary little arrangement", to use the words of a famous Member of the Oireachtas. Why has the levy been linked with other taxes and not specifically identified on every person's pay slip? It has been included with income tax and the other levies. It would appear the levy is intended to be a long term measure.

The budget provided for an increase in VAT on clothing and many jobs have been lost as a result. Companies were close to being able to compete with the foreign companies who can provide goods much cheaper than we can. Then the Government increased the VAT rates and as a result many jobs in the clothing industry are lost.

Recently it was proposed to levy VAT on telephone charges and to increase the price of local calls. The Minister for Transport, Energy and Communications said that this proposal was recommended in the Culliton report, he has also said only 25 per cent of people will be affected. First, Mr. Culliton has denied he made any proposals to reorganise telephone charges. Second, to which 25 per cent of people is the Minister referring? Every indigenous industry seeking business and customers throughout Ireland and other parts of Europe will be asked to pay an extra £34 million. This proposal is supposed to change the system in line with the Culliton report although Mr. Culliton denies it will make a difference.

What is the position regarding the County Enterprise Partnership Boards which were initiated by the Fianna Fáil-Progressive Democrat Government? One was established on a pilot basis in Galway but we have not heard of the others since then. Will there be an expansion of the county development teams to take on board the proposals of those boards? How long must we wait? Many people with good projects are waiting to see if assistance will become available. Six months after the formation of the Government the boards have not yet been established.

Proceeds from the sale of State assets could be used to develop jobs and industry. What a job we made of selling the State assets we recently put on the market. The Labour Party objected to the sale of the State's remaining shares in Greencore to ADM, a company which is already in business in this State and would have injected badly needed finance from abroad into the company in return for a part ownership of it; they could not have become full owners. However, we prevented them from purchasing shares in Greencore. We attempted then to sell the shares on the stock exchange market but handled the sale badly. Yet the Labour Party, a Government Party, tells the media they are opposed to the sale of any State assets.

Proceeds from the sale of State assets should be used for only two purposes, reducing the national debt or financing badly-needed investment in indigenous industries. I object to such proceeds being used to finance current expenditure as happened with the proceeds from the sale of 15 per cent of Greencore shares last year and £30 million of Greencore shares this year. This is the wrong policy to adopt. As someone pointed out on the RTE radio programme, "Morning Ireland", the British Government sold the majority of its State assets and is now in a bad financial position with debts amounting to billions of pounds. We should not squander such proceeds but use them to invest in job creation or reduce the national debt.

The Culliton report and the Government's response to it are the wrong way to deal with the problems of ordinary people to which Members referred both today and the previous day. The main problem is that too many people look to others to provide them with employment and too few people are prepared to create circumstances in which they can make money for themselves rather than for someone else.

Mr. Finneran

I welcome the Minister to the House and I am glad to contribute to this important debate. All of us in public life must take very seriously our responsibility to deal with the problem of over 300,000 unemployed people, the most important issue facing Ireland in the 1990s and beyond. In the mid and late 1980s there was great concern about our economic situation which was bedevilled by rampant inflation and soaring interest rates together with the fear that the International Monetary Fund would impose stringent financial conditions on us. Thankfully, those worried are now behind us and our economy is stable.

The Government has adopted measures, which I welcome, to resolve our outstanding employment problem. However a solution will not be found easily. I am glad the Government's report clearly states that the resolution of this problem is not the responsibility of any one Minister or Department; all have equal responsibility in the matter. Public representatives, State agencies, employers and business people also have a role to play in solving this problem. The infrastructural development needed to assist job creation opportunities is the responsibility of everyone.

The measures now being adopted will encourage development and employment creation. Unless we have a climate conducive to investment that yields an adequate return we will not generate employment. In the past it was believed that people who gained experience abroad could, on their return home, provide employment in Ireland. That is no longer a reality. There must be co-ordination between local, national, European and international job creation policies.

The Government's decision to establish County Enterprise Partnership Boards is welcome because it provides a structure whereby the views, opinions and entrepreneurial spirit of local communities will be available to State agencies. I hope that when these boards are established they will not be replicas of one another but that each will reflect the unique circumstances of its county. For example, what would be the opportunities in the midlands vis-a-vis the opportunities in the south-western counties? The south-western counties lay a great emphasis on tourism which has been a traditional industry in the Cork-Kerry area while in the midlands, the River Shannon is a tourist attraction.

The development of our peat resources has been a major opportunity to create employment over the years. That should be reflected in the enterprise boards. Another opportunity for development is technology, which may be more important in one area than another. Regional technical colleges should be involved with the enterprise boards with a view to providing expertise and their courses should be geared towards industry in the area. There are many issues involved; only local involvement in enterprise boards can be successful, but not on the basis of each board being equal and of the same composition.

As regards employment opportunities under the proposed new IDA structure, it is important that indigenous industry has a body to look after it and that foreign industry is dealt with by a separate section. Indigenous industry has not received the necessary help in recent times. In particular, I am saddened about the plight of Bord na Móna and the way it has been neglected over the last few years. Granted, rationalisation was needed, but rationalisation cannot replace social concern and human cost. Bord na Móna was started by a few people many years ago and has provided opportunities for thousands of workers throughout the midlands, it held together the fabric of society in the midlands and provided opportunities and prosperity in those areas. So much so that small towns replaced villages.

Sadly, those opportunities are diminishing without, unfortunately, proper consideration being given to the alternatives. It is sad to see foreign companies, and some private companies, taking up the opportunities of Bord na Móna might have developed had there been enough foresight to support and promote the semi-State sector. If semi-State bodies are left to their own devices without proper Government involvement, then complications will arise and major hatchet work will be required at a critical stage to keep a company afloat. That is what happened Bord na Móna. It was suddenly realised that Bord na Móna had become practically insolvent and the only solution was to put thousands of workers on the dole and close down enterprises throughout the midlands. Hopefully, new thinking will be applied and Bord an Móna will be restored as a company that can diversify if given the proper assistance and back up.

I am not happy with the approach to training and apprenticeship. It is not enough to suggest that apprenticeships are available under certain circumstances. Those circumstances must be looked at as closely as the apprenticeships. A major problem with apprenticeships which has not been resolved in the recent proposals, is the question of sponsorship. For a scheme to provide apprenticeships in the trades to be successful, our State bodies, for instance the ESB, the Army and local authorities, should be involved. This would be ideal to avoid victimisation and provide proper controls and procedures. I ask that the Minister of State take this on board and have it examined with a view to providing opportunities and sponsorship through State bodies and local authorities. Perhaps local authorities would not be interested in this proposal, but I have no doubt that if some county managers were approached they could provide opportunities for sponsorship.

I welcome the Government's response to the Culliton report and the Moriarty Task Force. We are on the right track but we need to keep a close eye on what is happening. We need the involvement of people outside the Civil Service. Political involvement and the co-operative, cohesive involvement of all interested parties is required as unemployment is our major national problem. We must keep our noses to the grindstone over the next few years so that we can tackle this problem and create employment opportunities.

Mr. O'Toole

I will be brief as I must attend a meeting of the Committee on Procedure and Privileges shortly.

In discussions on employment and unemployment we have lost sight of our objectives over the last number of years. Each time we discuss job creation the figure of 300,000 unemployed is brought up. I find the number of people at work far more disconcerting. Time and again the growth in unemployment is illustrated. However, the real catastrophe is that despite the Programme for Economic and Social Progress, the Programme for National Recovery and the efforts of the 1980s before the Programme for National Recovery was introduced, we have failed.

The most startling fact about our employment creation achievements is that in 1981 there were 1.2 million people employed. Over the last ten years we have been told that the increase in unemployment was due to many factors, such as an increasing birth rate, more people coming on the labour market and job creation not keeping pace with the numbers coming on the labour market. There are 25,000 people coming on the labour market each year and only 10,000 to 15,000 jobs are being created. On those figures alone, unemployment would grow. It has also been stated that we had huge levels of emigration during the late 1980s. In the main, that was not the case and last year we had net immigration.

Returning to my basic point, there were 1.2 million people employed in 1981 and there are fewer than that employed today. The last ten years have been a disaster and it is time that this was made clear. We are so focused on the needs of the 300,000 unemployed that we have failed to note the fact that there are fewer people working today than ten years ago. Therefore, the questions of emigration or the numbers joining the labour market are only tangential. We have failed to make an impact. There has been a slight improvement in the numbers employed over the last year but even if the figure were to increase from 1.2 million to 1.3 million, it would reduce the number unemployed by 33.3 per cent. However, we failed to do that. Each year we make decisions which are a disincentive to job creation. A classic example is the 1 per cent employment levy introduced in this year's budget. The Governments needs must be seen in the context of the Culliton report and the discussions on job creation over the last six or seven years.

The tax system is not conducive to job creation and people coming into the workforce. It is a disincentive to employers creating jobs and to employees taking up jobs. The 1 per cent employment levy has exacerbated the situation, it is and will continue to be a disincentive to job creation. The Government must remove this 1 per cent levy because it is at variance with the policy of different Governments and their programmes over the last five or six years.

The number of people in employment is decreasing while the number of unemployed is increasing. Some 50 per cent of unemployed people have no qualifications beyond primary level. There is a need, and Senator Finneran mentioned this, for training apprenticeship schemes, etc. However, we must look at those who in the future will create jobs.

Our educational system focuses on the three "r's", on a narrow band of experience and learning. If the system continues to develop in this way we may have a generation who are good at the three "r's" and little else. Those who provide employment will have creative ability, leadership skills and who have learned to take risks. They will have had experience, at school and other levels, in putting forward proposals, using their judgment and accepting the accompanying responsibilities. We must ensure that people who may not be good at central things but who may acquire leadership skills through sports, creativity in art and self-expression in drama are encouraged.

Some 50 per cent of the unemployed have no qualifications beyond primary level. Therefore, there must be something wrong with the educational system. It is important to intervene at primary level to ensure that people leaving primary level education benefit from post primary education, proceed to third level or seek training and apprenticeships, etc. If people fail at primary level they will continue to fail.

Unemployed people tend to come from families in which parents have had similar experience. They have no trust in the system because it does not meet their needs. We must ensure that the skills of people from disadvantaged backgrounds are harnessed and used efficiently.

We must ensure that we do not produce a generation of clones, a generation of "safe" people. The education system must produce a generation of risk takers, people who will have learned self-expression and acquired leadership and creative skills. These people will create employment.

The Culliton report over-emphasised the importance of training to the detriment of what education might bring to a new generation. It has failed in this area. It did not recognise the fact that 50 per cent of the unemployed do not have any qualifications beyond primary level. These people will neither gain nor create employment. We need to change the educational system, that must be a priority.

Mr. Ross

The reaction to the Culliton report is puzzling. The unanimous welcome it received from all political parties, industry, trade unions and different groups is difficult to accept in the context of the culture of business as we know it. Traditionally, business has been divided and ideas on business have been divisive.

It seems that Culliton is the God of industry. Everybody, from the Labour Party to Fianna Fáil, thinks it important to be onside, understanding and seen to implement the Culliton report, which has acquired extraordinary stature, unprecedented in the history of such reports. Why? I do not fault the main principles of the Culliton report. However, I question some of its details.

The reason that Culliton has become the be-all and end-all of industrial policy is because we were bankrupt of ideas and principles to tackle these vast problems. Most political parties were bankrupt of ideas as to how industrial policy should develop. It was self-evident, not only to the Labour Party when it came to office, that industrial policy had not worked, that the State had too great a say in what was happening, that unemployment was allied to industrial policy and that taxation policy was proving a disincentive to work.

The Culliton report recognised that the problems of industrial policy and the economy were deep and that there were no short term solutions. That is something which politicians should recognise. We are coming around to that point of view in terms of employment, grants and State aid. Mr. Culliton said, and it is better that he said this because most politicians will not, that unemployment is a long term problem and will not be resolved by "quick fix" solutions. He then espoused an important philosophy, shared by most Members of the Government and most people, a philosophy of self-reliance to which we all adhere. The problem with the Culliton report then emerged. Having established those principles and having said how they would affect industrial policy, the Government decided to publish its reaction to the Culliton report.

The great disappointment of the Culliton report is the Government's response because the most notable phrase at the press conference, given by the Minister of State at the Department of Enterprise and Employment, Deputy Brennan, and the Minister at the Department of Employment and Enterprise, Deputy Quinn, was that the Minister "intellectually accepted" the Culliton report. That is the same as saying, "I like what he says but I will not do as he says".

The Culliton report pointed the way forward to remove restrictions to growth, to improve enterprise and remove restrictions and obstacles to unemployment. Having read the report the Government and the Minister said they thought he was right and that they "intellectually accepted" it but, in practice, very few of the recommendations have been accepted. They have implemented minor parts of it and have been highly aspirational in their determination to implement other parts while rejecting those they find politically impossible to implement. That is the way of politics but it does not make it less disappointing.

An example is the various interpretations of Culliton in the last few days and the principal example is in telecommunications. Culliton advocated more competition in telecommunications but was forced, because of misinterpretation, to write a letter to the Minister about the statement of the Minister of State at the Department of the Taoiseach, Deputy Eithne Fitzgerald, on "Questions and Answers" about the telephone charges. This is not a criticism of the Minister of State, but it is a classic example of how Culliton has been interpreted and picked at by those who want to prove they are on the side of the report. He has such a status that no one is prepared to say he was wrong in certain aspects — which undoubtedly he was — and people are prepared to interpret what they are doing as part of his proposals and programme, when it is not.

I wish to read a letter from Jim Culliton to the Minister of State at the Office of the Tánaiste, Deputy Eithne Fitzgerald:

Dear Minister of State, On John Bowman's programme "Questions and Answers" last evening, when you were answering a question about the new Telecom tariff, you gave the clear impression that the Culliton group had recommended a rebalancing of charges or increased charges to the domestic customer. Our group did no such thing and I would refer you to the attached photocopy of pages 46-47 of the report. In fact, we called for downward pressure on pricing and greater competition. What the Moriarty group recommended is a separate matter and indeed, this group was set up after we had submitted our report.

That is very important because it points out the principal flaw between the recommendations and the implementations of the Culliton report. The Moriarty report, although a good report as far as it went, diluted and interpreted Culliton and only recommended certain parts of the report, and then the Government interpreted Moriarty. At the end of the day, some of Culliton is being implemented by the Government, while other parts are being rejected, ignored or gathering dust on the shelves. That is disappointing because Culliton stated that all the package, and the philosophy behind it should be taken. He said that you cannot pick and choose, that there are checks and balances in this package. There is a serious philosophy behind the report. It may not be an acceptable philosophy but at the moment, it is a fashionable one of self-reliance and of enterprise.

The Government has failed to implement Culliton's recommendations in regard to broadening the tax base. I salute the courage of the Ministers of the Labour Party for defending the tax amnesty in the Dáil against the wishes of their allies in the trade unions. That was possibly not part of the Culliton report and although this measure will broaden the tax base, I do not think that is what he intended. He called for a broadening of the tax base by means of increasing the standard rate of income tax and reviewing the possibility of a property tax. He did not advocate the imposition of a 1 per cent income tax levy. He recommended that semi-State bodies should have a clear mandate and access to capital. It is a pity that the Government has not tackled the difficulty, to which Culliton referred, the schizophrenia of semi-State bodies, of being partly a commercial body and partly tools of Government policy. The Government must tackle this problem because the crisis there is getting worse every day.

Minister of State at the Department of Agriculture, Food and Forestry (Mr. O'Shea)

I thank the Senators who took part in this debate. I am sure that the Minister for Enterprise and Employment, Deputy Taylor, will consider the many points made.

Question put and declared carried.

Sitting suspended at 5.05 p.m. and resumed at 6 p.m.