I move:
That Seanad Éireann notes the supply services and purposes to which sums have been appropriated in the Appropriation Act, 1999.
Appropriation Act, 1999: Motion.
I am glad to have the opportunity to come back into the Seanad and resume debate on the 1999 Appropriation Act. Although the Appropriation Bill was passed by this House and the Dáil and enacted at the end of 1999, it was agreed that the Members of this House would be given a further opportunity to discuss the Act when business resumed in the new year.
When I addressed this House on the 1999 Appropriation Bill at Christmas, I outlined in some detail the purpose of the Bill and the various provisions in it. I am sure Members will be relieved to hear I do not intend to go over the same ground again today. The Bill is a routine and somewhat technical piece of legislation to give statutory effect to the 1999 spending Estimates. However, it does provide an appropriate context in which to discuss the broad thrust of the Government's general expenditure and budgetary and economic policies. Needless to say, I am always happy to have the opportunity to outline the considerable success which this Government has achieved in pursuit of its ambitious plans to sustain and advance the unprecedented economic and social progress of recent years.
I will begin, therefore, by briefly summarising recent developments. In 1999 the economy grew faster than expected by the Department of Finance and all other commentators. GNP is expected to have grown by 7.5% in 1999, broadly in line with the average of the exceptional growth since 1994. Employment for the year as a whole is estimated to have increased by 74,000 or 4.75%. Employment has risen by over 150,000 over the past two years. Unemployment has fallen and now stands at 5% compared to 10% when the Government was formed. The increase in employment, the fall in unemployment and the increase in disposable incomes show that this Government's policies are working. The economy has been transformed and this Government has succeeded in building on the economic achievements we inherited.
The public finances have also been transformed. The general Government surplus was over 1.4% of GDP in 1999. Our debt-GDP ratio continued to fall in 1999 and was around 47% at the end of the year. Our current economic situation has created great opportunities for our society but it also presents a new set of policy challenges. This Government is taking positive and determined action to address these challenges through the review and ongoing implementation of its Action Programme for the Millennium, through the implementation of its budget strategy, the national development plan and its efforts to successfully negotiate a new national agreement to which I will refer later.
Rapid economic growth is leading to problems. Labour shortages are emerging in the economy and the cost of child care has become a significant issue. Congestion is increasing in our towns and cities. House prices have also risen but show signs of stabilising. As already mentioned, the Government is taking action in all these areas to reduce the pressures which are emerging and which, if left unchecked, could pose a serious threat to economic growth.
The Government is fully aware that it must also prepare for the future. Economic growth will inevitably moderate over the next few years. The Department of Finance now forecasts that the economy will grow at 6.25% in GNP terms in 2000, decelerating to 5% by 2002. These forecasts present a very favourable assessment of our future prospects. Of course, a shock to the economy would upset this scenario and adversely affect the public finances. A prudent policy is, therefore, to run a substantial surplus now to prepare for a period of slower growth. This is a key element of the Government's budgetary strategy. This strategy foresees continued surpluses and reduction in debt levels as a percentage of GDP. In that context, it will be possible to devote substantial resources to further tax reductions and improvements in public services without undermining stability. This approach also ensures that we manage our economy in such a manner as to ensure that our current economic success is consolidated and continues in future years.
I referred earlier to the importance which the Government attaches to the successful negotiation of a new national agreement in the context of the many challenges which our current economic success is now posing for us as a nation. The successes achieved by this country over the period of the four national programmes are well known to everyone in this House. Those in employment, those seeking work and those relying on the State for assistance have all gained from social partnership. Our record speaks for itself.
We can all recall the period before we embarked on the national consensus approach to economic and social planning. In the early 1980s Ireland faced a quite depressing situation of economic decline, high emigration, escalating unemployment, high inflation, rising interest rates and fiscal stagnation. There was no national or social consensus on the way forward, only conflict and divisions among all the social partners. However, in the mid-1980s we succeeded in arresting the decline and laying the foundations for turning the situation around. It was at this stage that the forging of a national consensus, through the co-operation of all the major groups in our society, became so important. Over the past 14 years or so, successive Governments have, in conjunction with the social partners, put in place a series of measures which, when taken together, have transformed Irish society and the whole economic outlook.
Those at work have received significant increases in their take-home pay. The increases in real income have been particularly high over the period of Partnership 2000 – some 15% compared with approximately 5% during each of the first three programmes, the Programme for National Recovery, PESP and PCW. Since 1993 there has been a 25% increase in the number of people at work in Ireland and a fall in our unemployment rate from approximately 15.5% to 5%. There is now net immigration, whereas not so long ago thousands of our young people had to emigrate to find work.
Employment creation remains the most effective route out of poverty. Progress made in that regard has transformed the poverty position during the recent years of social partnership. There has also been significantly increased spending on social inclusion measures and public services to the benefit of all citizens. It was only by turning away from the old approach of uncompetitive and inflation-creating income increases that scope emerged for employment gains. In addition, pay moderation allied to employment growth enabled tax reform which produced still stronger gains in take-home pay for all. It is this interdependence between different groups in society and this interaction between different elements of public policy that is at the heart of social partnership, and at the root of the improved living standards delivered over recent years.
This Government is strongly committed to social partnership and is determined to negotiate a new agreement to succeed Partnership 2000. I am aware that social partnership has its critics but I believe the vast majority of people will freely acknowledge the role the social partnership approach has played in the past in tackling the problems of unemployment, inflation and the public finances. Social partnership is also the way to address the new challenges facing us such as problems associated with rapid growth, maintaining our competitiveness into the future and sharing the fruits of that growth.
Faced with these challenges, we need to ensure that we retain the true spirit of social partnership with its inherent mutual commitments and trade-offs. Therefore, the best way to proceed and the way which is most in keeping with the problem-solving approach which has underpinned social partnership is for all the social partners to engage meaningfully, creatively and intensively in discussions to achieve a successful outcome in their negotiations on a successor to Partnership 2000. The overriding consideration for all involved must be the continuation of sustainable economic growth. Our successful performance to date is testimony to the sound economic policies we have put in place. If we can agree a new national programme based on implementing, in a realistic and balanced way, the vision and strategy in the recent NESC report and the Government programme, we should be well placed to meet the challenges ahead. That should allow us to continue on a relatively strong growth path capable of delivering further solid increases in employment and living standards.
As the talks on a new national programme enter a crucial phase over the coming few days, I conclude by appealing to all parties involved to explore all possible avenues to overcome whatever difficulties and seemingly insurmountable differences with which they may be confronted. The risks to our continued economic success of a failure to reach agreement cannot be underestimated. However, the rewards for achieving a successful outcome will be great for all. I look forward to hearing the other contributions during this debate.
I welcome the Minister of State to the House. We are discussing the Appropriation Act which gives statutory effect to departmental spending. The figure of £14,248 million, generated entirely by the taxpayers, is not insignificant. Credit for this must go to the present Government, the previous Government, the social partners and all who contributed to this great achievement.
I have identified two factors that have contributed enormously to underpinning this great economic advance, that is, social partnership and the tax regime which has been in place for many years, particularly for foreign industrialists. Tax rates are very favourable to foreign companies coming to this country. Many local authorities, including my own, gave them the added incentive of tax relief on their property which was not insignificant in many instances. They benefited in many areas from the tax regime and the attitude of local authorities in attracting foreign industrialists to the country.
We may well say that the aircraft which takes us up to the stratosphere also takes us down to the ground. If there is any cloud or negative factor on the horizon, it is possibly our over-dependence on foreign industry. Thousands of foreign industrialists are generating massive job opportunities and income. This may be distorting GNP figures by way of what could be euphemistically referred to as colourful accounting with multi-national companies. These companies are essentially the engine which is driving this economic miracle machine into the stratosphere. This must be preserved and maintained to ensure nothing happens by way of an increased explosion in wages. There is a serious labour shortage in the economy which is being reflected in higher wage inflation. There is a virtual explosion in the public sector pay bill which has doubled since 1995. Teachers and other professionals are demanding further increases.
A minimum wage Bill is being introduced. I agree with the principle of a minimum wage, even though this will impose considerable hardship on many small businesses, particularly in rural Ireland where there is depopulation at present, despite the Celtic tiger. Depopulation in rural areas is having a detrimental effect on the viability of many small businesses. The minimum wage will contribute to this demise because many of these business would not be able to bear it. If we contrast this with teachers and others earning £40 per hour and demanding an increase, we can detect an imbalance creeping into the wage structure in the economy. The Government must be extremely vigilant and firm in its response to these demands because, if conceded, they could take us out of the stratosphere and bring us quickly to the ground.
There was an announcement yesterday by Coca-Cola, a major global company, that it is to reduce its workforce by 20% worldwide. I have a particular interest in this company because one of the largest manufacturing outlets in the world is located in my town of Ballina. I am pleased the announcement by the company does not affect the Irish operation at present. However, initial announcements from such companies usually do not give the full picture and more information is added as time goes by. I hope nothing is added to the initial announcement from Coca-Cola about jobs in this country, but the announcement underlines what can happen. I am interested in Coca-Cola and traced its history one night on the Internet. I found a growth pattern throughout its existence since the last century and now it has been hit with this hiccup. Nortel, Intel and other multinationals are here in a vibrant, buoyant and expanding market, but history has proven that such markets do not continue indefinitely. Technology changes and companies that do not adapt usually go out of existence. In this regard the Celtic tiger is riding on the back of our Celtic technology, so to speak, which has been built up by our graduates and others.
The labour shortages emerging are affecting local authorities, as there is a shortage of engineers and architects. The length of time it takes to get a project from the design stage to moving contractors on to a site is getting longer due to the labour shortages in these critical areas and that will slow up the implementation of the national development plan. The money is there to be spent but at present we do not have the capacity to spend it. Our infrastructure is underdeveloped. We have poor roads, traffic congestion and poor port facilities.
Our ports are not well located and in that context I extend my congratulations to the new Minister for the Marine and Natural Resources, Deputy Fahey. I note he is from Connacht and hope he devotes considerable energies to rectifying the situation on the west coast, where there is no major deep sea port. Dublin and Cork are clogged with articulated lorries, yet there is deep water along the west coast where a major deep sea port could be developed, yet nothing is being done. We should see this in the context of a £280 million stadium in Dublin that will only be used, I am told, by the IRFU for five or six games a year. That is very hard to justify when we in the west are looking for funding for small projects that would cost £20 to £30 million, such as a port development, and which would revolutionise and facilitate the growing commerce in the west. Companies such as Coca-Cola must export products through Dublin Port to the entire world, which is a major shortcoming. I hope the new Minister for the Marine and Natural Resources dedicates himself to some of those deficiencies in the west of Ireland where there is rural depopulation while Dublin and the main cities expand at a major rate.
Inflation is rising, which is a serious matter, although we are substantially protected by the euro. We should, therefore, have a stable currency for years to come but if chilly economic winds blow across Europe that position could change. We may not always have low interest rates. In ten years – not a long time in economic terms – we may not occupy the favourable fiscal position we do now.
The Government must take cognisance of these matters. The seeds for a future downturn are there, but we must ensure those seeds do not develop and grow. The Government must be particularly vigilant and firm on public sector pay in coming years. I mentioned the serious labour shortages in critical sectors within local authorities. A bypass has been on the design board in Mayo County Council for ten years and it was only last week the compulsory purchase order for that project was published in the newspaper. I asked why the CPO and the project was not proceeding two years ago at the council and was told there were shortages, that the design was not ready and had to be changed and that the route had to be changed. The route was changed three times, but all those changes take time and we are years waiting for those projects to come to fruition.
This is a major problem with the national development plan. The money is there, as is the Government's commitment to spending it, but in many areas we do not have the capacity to spend it. That may be a strange irony, but it is a fact.
I was disappointed to note that this year's allocation to Mayo County Council for both improvements and maintenance for the roads is down on the 1999 allocation. That does not suggest improvement or progress to me. It is bad enough to have the labour shortages I referred to, but when one matches that with the decrease in funding, it does not augur well for infrastructural development, particularly in County Mayo.
I welcome the Minister of State, Deputy Cullen, who, as I have said in the past, always has a good brief when he comes to the House and today is no different. He did not repeat what he said before Christmas, but he opened a new page, which is very important. I compliment him on that.
We can talk about the budget and related issues, but it is important to look to the future. We can look to the future from a sound foundation resulting from a co-operative economic approach dating back to the 1980s. During the 1990s, in particular, that approach was adopted by the political parties and the social partners. We as a nation can congratulate ourselves on that. We have looked on ourselves as a people who could play a role in the international scene, particularly in the European Union, and we have achieved that.
It is well established that this island of five million people is a major player in the European context and our international standing was never higher. Our desire to play such a role was innate in our psyche but we were never in a position to express it. While we have talked about this country's role in the past as an island of saints and scholars, we have never had an international role to play except in some historical events.
The position is different today. There is a new situation which has resulted from good housekeeping since the 1980s, investment in education, social partnership and our wish to be a major player in a European context. We have achieved those four objectives and it is a matter of building on them. That is in line with what the Minister of State said. Since 1983, 150,000 more people have secured employment, the rate of unemployment has fallen from 15% to 5% and our economic standing on the world stage has never been higher.
What approach should we adopt into the future? Should we make this country a place to which people can retire and relax in or should we achieve what we are capable of for our young people and future generations? We should look to the future and avail of the opportunities presented to this lovely island. The Government is not resting on its laurels but looking to the future and reinvesting in what is important – education, infrastructure and the creation of opportunities.
The national development plan, which will span the next seven years, has the potential to take us to a new plane but it will involve more social partnership and the Government taking more initiatives. I hope we can achieve that over those seven years. It involves £40 billion worth of investment in creating opportunities and developing infrastructure. That is a massive amount of money and only 7% of it is made up of European Structural and Cohesion Funds. We are on our own to a great extent and that is why private and public sectors must gell together to bring this nation up to the level it can attain.
The Minister of State mentioned labour shortages, child care facilities, congestion in our towns and house prices as important issues. Addressing them is within our grasp. This nation has an opportunity it did not have previously. We have highly educated and well motivated young people. No other country in Europe has such a well motivated, young population. I am very much in touch with what is happening. My family are teenagers and have completed second and third level and I know what young people are thinking. An opportunity exists for this nation that did not exist during the mid to late 1960s. I congratulate all those who contributed to developing it. That involves all the social partners.
Henceforth, there are two possible scenarios. Greed could take over and people might want a bigger slice of the big cake, but they might want to eat it now. The other side of the coin is that people may agree to take what they believe is the right amount and allow the country to go forward and create opportunities for the next generation. That side of the coin is the one on which we should focus. I support what the Minister of State said. I hope social partnership will continue, good sense will prevail, that people will say the future is important and will invest in it by entering into a new agreement on wages and structures and that the nation will progress along the lines provided for in the national development plan.
It would be a poor democracy if it we did not have an Opposition. Irrespective of whether we talk of the Opposition in this House or the other House or among people outside these Houses, there is a consensus among the people that we should not waste the opportunities presented. That is the view I encounter no matter where I go. Irrespective of Government, how can political parties tap into that resource to encourage young people to become involved in public life to help this country progress over the next decade and throughout the century?
If we do nothing in first year of this millennium other than express our wish that we must progress on the basis of social partnership and agreement on Northern Ireland, which is vital at this time, we will do well. The potential of the Good Friday Agreement has probably received more recognition outside the country than here. It is vital we take advantage of the potential afforded by the Agreement, the good relations between the people of Northern Ireland and the people of the 26 Counties and between the islands of Britain and Ireland and their islands.
Where is the European Union to expand other than in the direction of the Urals? Which are the English speaking nations of the European Union? The islands of Ireland and England. That presents these islands with an opportunity and the two islands should co-operate as their interests are equal in the context of European Union enlargement. The interests of the two islands should complement each other. There is no great need for division or acrimony at this time between the island of England and the island of Ireland. I come from a very strong republican background on my mother's side but not on my father's side. If I had made that statement or if such a statement was heard in our house when I was 17 or 18, somebody would probably have broken all the delph, but there is no problem in making such a statement today.
An enormous opportunity is presented to the country at this time. The Government of Fianna Fáil and the Progressive Democrats has its finger on the pulse. If one were to probe the Opposition deeply on this issue, I do not think one would find any great conflict as regards where we are going as a nation. There is opposition to policies and some matters are a cause of conflict. However, in the bigger picture, it is not an issue. When that is the case, two things can happen. One is that complacency can arise and things are allowed to slip. This would be a mistake. The second is that we actively pursue each other's policies. Now is the time to actively pursue new ideas and new thinking on the future direction of the country.
My comments perhaps are not entirely related to the Appropriation Act, but they are relevant on the basis that the Act gives effect to the budget and the annual expenditure of billions of pounds. It is also tied to the national plan which has been decided by the Government. It creates different regions and gives Objective One status to one area which has been the Cinderella region for many years. It will redress the imbalances between east and west and the Border area and the south. It is good in the overall context and it must be considered in terms of the broader picture.
I compliment the Minister of State, Deputy Kitt, who is from my old constituency of Roscommon-East Galway. The first time I ever canvassed for votes was with the Minister of State for his brother, Deputy Micheál Kitt, following the death of their father many years ago. Things have changed a great deal since then.
They certainly have changed.
It is a great time for this country and young people. I hope that those of us in public life use it to the advantage of future generations. We should not in any way feel complacent about the current state of affairs. We should strive earnestly to ensure the country progresses further.
I welcome the Minister of State, Deputy Kitt, and the earlier contribution of the Minister of State, Deputy Cullen, particularly in light of Senator Finneran's comments. The Minister of State said that over the past 14 years successive Governments have, in conjunction with the social partners, put in place a series of measures. He was willing to note the role of other Governments in the current success and this is an occasion on which to congratulate ourselves as a nation for what we have achieved.
I returned late last night from Arizona where I attended a conference on food. I was impressed by the respect Ireland now has in the eyes of the world. Senator Finneran referred to this aspect. There is huge regard for and recognition of the fact that we did it ourselves. We should be proud of that and I am delighted to hear the self-congratulatory terms used in the debate. However, I was reminded of another aspect during Senator Caffrey's contribution because among the people I was with at the conference were the new bosses of Coca-Cola. I was reminded that things can go wrong with any company; some of them are within their own control, but many of them are outside their control. This is relevant to what is happening to our economy. Some of the influences are within our hands but others are outside our control.
There was not enough emphasis in the Minister of State's speech on the dangers and threats we face. I wish to focus on inflation, the greatest challenge to our economic success and future. It is the greatest threat to the health of the Celtic tiger of which we are all so proud. From talking to some of the British representatives at the conference in recent days, I was reminded that five or ten years ago there were jokes about Irish people. The Irishman was always the butt of the joke, but there has been none of that in the last two or three years. It appears the recognition currently afforded to Ireland has many other implications. The Irish success story has had effects in many other areas, including culture, art, music and sport. The future is in our hands but the Minister of State did not refer in detail to the threat of inflation. It is the greatest threat to the opportunities now available to us to create a better country in the future.
I wish to focus on the conspiracy of silence about this threat. In spite of the abundance of writing on the wall, almost nobody wants to know about it. It does not appear to be getting the attention it deserves. Consumer inflation is now more than double the EU average. It is by far the highest in Europe. Ireland is so far out of line on that indicator that if it was to apply for membership of the euro mechanism now, it would not qualify. Ireland would not fulfil the Maastricht Treaty criteria but nobody, including the Government, seems to care. The Minister of State barely mentioned it in his speech earlier.
The latest wholesale factory gate inflation figures were released this week. These figures are most important and they show that the current rate is 5.1%. This rate affects our exports and the foundation on which the economy is built. The figure of 5.1% should stop us in our tracks. We should be considering the danger to our exports posed by inflation, but nobody appears to care. We do not hear much about it.
The reason the factory gate wholesale figure is so important is that if Ireland is to continue its export led success story, we must ensure that we control anything which affects it. This is the case because the strength of sterling is giving many Irish companies a competitive advantage in the UK. The current rate is 77p but in the past we paid dearly for our over-dependence on the UK market. It could go wrong overnight if sterling changed direction. This has happened many times over the past 30 years. For example, in 1993 Ireland had to spend £50 million in a couple of months trying to bail out Irish firms who lost their competitiveness because of currency movements.
Asset inflation continues to rip ahead at a totally unsustainable rate. We appear almost proud of the fact that house price inflation is only 17%. It is trumpeted as good news. However, it is not good news. Admittedly, the level of growth has decreased. It is slackening but the key point is that house prices are still going up. After several years of the rate almost doubling, we are pleased that it is increasing at the slower rate of 17%. However, houses price figures do not show up in the consumer price index and that is particularly worrying. We are fooling ourselves if we do not see the major inflationary threat which is undermining the economy. Nobody appears to care and we hear little about it. The suggestion is that the crisis has passed and the rate of inflation in house prices has reduced to only 17%. However, the truth is that we are in the middle of the storm at present.
I am concerned about this because I am old enough to remember what happened in the past when inflation took control of the economy and we became victims of a vicious spiral which got worse as time went on. It happened at least twice in the past 30 years and on both occasions we made a mess of dealing with it. I am concerned we will go down that same road a third time. Why is inflation at 4% a crisis when at 2% it is not a crisis? The reason is that inflation is not a linear thing. It is not that 4% is twice as bad as 2%. Inflation at 2% is controllable but inflation at 4% is uncontrollable or verging on the brink of being uncontrollable. It is a bit like the 'flu epidemic we have just had – when a small number of people get the 'flu there is no great concern and people can continue to get the 'flu at a low rate and nothing gets worse because by the time new people get it the first lot are over it. At a certain point, enough people get 'flu at the same time for it to start snowballing. Suddenly, there is an epidemic and one is no longer in control. That is the way inflation works because I have seen it before and somewhere around 3% is the trigger point. We are at that point now and may have passed it.
I recall speaking on 1 December, the day the budget was published, and feeling almost like a Jonah because I expressed concern. I said that at least the Americans have Alan Greenspan to look after their money and inflation. If he sees signs of something going wrong he can increase the federal interest rate and slow it down. We are no longer in that position in that we are not able to control our own interest rates due to our membership of the euro. Therefore, we have to use other methods to solve it. The first step is to recognise it as a serious threat. We need to give the matter attention but nobody seems to know that. I suggest the Government does not want to know, if we are to judge from the fact that it presented us with a budget that is inflationary in almost all its aspects.
History will show that the Government was a fire brigade that came to the fire with its tanks filled with oil, not water. I can understand the reason. It seems employers' organisations are in exactly the same position. They are afraid to talk about inflation because the unions will worry and look for more. There is a conspiracy of silence. I suggest the Government and employers' organisations do not want to talk about it. That employers' organisations do not want to talk about it is the irony. The knee-jerk reaction, which has cost us so much in the past, is that when inflation threatens people clamour to raise the cost of labour. If threatened by inflation in the future the unions will look for more.
I can understand the reason employers do not wish to draw attention to it. Once that happens it further fuels the inflationary spiral instead of dampening it down. What possible purpose could be served by hiding the truth about inflation at this point? If nothing is said for the next few months and after an agreement is signed inflation is acknowledged to be a reality, what will happen? The unions will cry foul and say that is not fair, they were not told and will seek to renegotiate the agreement.
It is far better to face up to the problem now and to do so openly and honestly. I have little hope we will do just that. What we have done in the past is to run away from inflation until it has gone out of control and then focused on measures that made it worse rather than better. We have seen this happen in the past, certainly in the past 30 years. It has happened twice when we were unable to control it. As the Minister of State, Deputy Cullen, said 12 or 14 years ago we grabbed a hold of the issue, sought a consensus and managed to achieve it. We will not tackle it by hiding the problem and saying it does not exist. I urge that we do something to help avoid making the same mistake. All the signs are that we are not doing that.
The biggest challenge and threat to us is inflation. Let us be open about it, put our cards on the table and say "that is the challenge". I do not see signs that it is recognised by the Government. If we do not manage to achieve an awareness of it we will look back and say we had the good years but they finished in 2000 and what a shame we did not do something about it when it was in our power to do so. I urge the Government to grab a hold of this opportunity and face up to the difficult tasks. If so, we can look back on this year as the year we managed to take the right steps to maintain our position, rather than to lose it.
The Appropriation Act provides for substantial public spending for various services and comes at a time when the economy has improved substantially. There have been tremendous improvements in the workplace and the number in employment has increased. All sectors have made a contribution to gross national product and to the strength and finances of the economy.
Senator Quinn referred to inflation. I concur with the view that people should be concerned about it. It is of fundamental importance to the national wage agreement with the social partners. It is important that it be referred to in the negotiations and taken seriously. If there is one thing that would undo economic growth for the welfare of young people it is inflation. Unless controlled, it could have a spiralling effect on the national wage agreement, unsettle any good budgetary management plans and make our exports uncompetitive. That would have an adverse effect on the economy.
I welcome this Act in the context of the national development plan. I take this opportunity to wish our Ministers well in their new appointments as guardians of the State. The great challenge is to look at the country in its entirety, deal with the elements of peripherality and treat our citizens in a fair and just manner. Elements of infrastructure, including roads, piers and harbours, and the development of our natural resources need to be dealt with under the national development plan. It is important to address these matters in this good economic climate.
I will be a little parochial for a moment. We have seen major development in the west. One need only go through my colleague's county and that of the Cathaoirleach, County Roscommon, to see the number of public utility water supplies in the towns on the national primary route, right through Roscommon and into Mayo. The people see that something is happening. There are town improvement and enhancement schemes. There is activity, there are contractors at work and there is a strong sense of a future for the people in peripheral and disadvantaged areas. We are experiencing good times. It is most interesting how quickly that change has come and how affluent and confident young people have become through the education system in dealing with this development, in participating in and continuing to improve the economy, and in building up the strengths of all the economic assets through their participation in work.
There are other aspects with which the Government should deal in the context of the national development plan. The Government should assist the regional airports. The tax incentives which were introduced in that regard should be extended. We should make them the important hub of the industrial sector. Enterprise Ireland and IDA Ireland should look seriously at developing these airports as centres and they should participate with them and give them the necessary supports and encouragement to play their part in the creation of employment and the development of industry.
Since 1993, the number of people working in Ireland has increased by 25%. That is a huge increase and when one sees the return to the Exchequer it is obvious what this is doing for the economy and the strength it has given Ireland's finances. When there are high levels of employment there is a tremendous tax yield and investment in the State. This gives the State the opportunity to develop, plan ahead and work for the benefit of the people.
Within the context of our responsibilities, one of the areas which needs particular attention in a changing environment is agriculture. The Government has a responsibility, while having negotiated Agenda 2000, to sustain farming having regard to its importance to small farmers in particular. The Government has done that in the Finance Acts and in the Appropriation Act, 1999, it has provided the necessary funding to support and sustain farmers on the land within a changing economy and agricultural situation because of changes at European level and within world trade negotiations. While there is a change in the work practices of part-time farmers, there is a large group of people who need to see a future within the context of farming and living on the land. We need to keep people participating on the land in that context to sustain the schools, churches, etc., in the small towns and villages while there is an increase in the number of jobs and opportunities. It is important that we sustain farming.
Recently Mayo County Council saw proposals for an allocation in the region of £19 million to £20 million for piers and harbours along the western seaboard by the Department of Arts, Heritage, Gaeltacht and the Islands and, while the proposals have not been agreed yet, I welcome them. These are things which we should plan for the future when the economy will not be as strong and will not be growing at today's rates. Now that we have the money, we should provide these added facilities so that the people may use the natural resources to help sustain farming and communities in the future. They will play their part in agri-tourism and diverse agri-practices. We should develop the natural resource of seaweed. We should develop those fundamental industries to sustain communities and provide income for families in the long term. Now is the time to make those investments. The Govern ment is approaching this in that way and that is only right and proper.
The Minister for the Marine and Natural Resources should, if it is economically feasible from an engineering perspective, decide that the gas will be brought ashore in County Mayo. In the interests of proper development, the supply should emanate from Mayo and service the rest of the country. Rather than have the county bypassed in the future, it is only right and proper that the people of Mayo, with the rest of the population, should benefit from this great resource.
When one considers that the Appropriation Act, 1999, involves nearly £15 billion, one must ask how Ireland has arrived at this stage of development. Much encouragement comes from the practice of investment within the State and tax incentives in certain areas have increased the level of substantial investment outside the major centres of growth. Those schemes can be beneficial to individuals but at the same time they need careful management because they bring about much development which would not take place were they not in place. Such schemes should be focused and they should be examined carefully. They are important in the distribution of economic development.
The national wage agreements certainly underpinned economic development. They instilled confidence within the workforce and guaranteed the future by taking inflation and other aspects into consideration. It is important that the new national pay deal, which is under consideration at present, is concluded because it is fundamental to any managed economic development for the future. This country needs another agreement. It is important that the parties concerned are encouraged to come up with a reasonable and sensible deal in their long-term interests.
The cost of wages in the construction industry, according to people involved in the industry to whom I have spoken, has grown substantially outside the national wage agreement. While interest rates are low and people can afford to take on substantial investments, such as houses, if the economy is not handled properly and the greed element creeps in, we could bankrupt the young people who are taking out those loans if substantial interest rate increases were introduced in the future. It is important that there is an element of common sense in this and that management issues within the national wage agreement and the agreement itself are honoured. If that is so, the agreement will play an important part in underpinning the future of the economy.
In the context of the £40 billion national development plan, there is a need for good infrastructure to bring people to all parts of the country. A good standard national roads network is important to the local economies and it is fundamental to many aspects of tourism and diverse investment in the future. The State should invest in the national primary and secondary routes for the future. That is the responsibility of the National Roads Authority and the Department of the Environment and Local Government. One looks forward to each county council putting forward properly designed investment plans. It behoves each council to prepare such plans and to obtain as much money as possible from the national development plan to build up a proper road network.
I commend the Minister and others on introducing the Appropriation Act and in getting the maximum return from it for the nation. I am delighted to see the success of State investments.
This is an opportune time to contribute to the debate on the Appropriation Act because things have never been so good in this country. A few years ago no one would have believed it could happen and many people still ask how we did it. If we are to consider this question seriously, we must go back a long way to the introduction of free secondary education. In that way we began to educate our workforce and thus laid the foundations for our current prosperity. Much of the current economic boom is generated in the technological field, including the communications and computerisation sectors which are the major economic players. The booming economy looks set to continue for many a long day. I pay tribute to those in the teaching profession who have brought education to its current high standard.
Social partnership has also done much good for the country's economy. I always like to give credit to our former Taoiseach, Mr. Charles J. Haughey – a man not always spoken highly of – who introduced the first social partnership system, got it off the ground and made it work. The social partnership system stabilised the labour market and eliminated wildcat strikes and other such unrest. Workers now know what they will receive from national wage agreements. Now that the social partners are sitting around the table again, let us hope they will bring the negotiations on a successor to Partnership 2000 to a successful conclusion. The country's economic performance cannot continue without a happy, solid and committed workforce. The economy is working because a dedicated workforce is doing its job well.
The economy would not work either without good government. When things go wrong there are protests outside the gates of Leinster House and the Government is blamed along with Deputies and Senators. However, when everything is going well one does not hear any praise for the Government. The attitude is that it would happen anyway but if that were so, why do things sometimes go wrong? Any business is only as good as its management. We now have a good management in the Fianna Fáil-PD alliance which is doing a wonderful job. The money is available and the Government is using it wisely. Many people say that we should spend the millions we have in the bank but that is a foolish philosophy. I pay tribute to the Minister for Finance, Deputy McCreevy, for his good housekeeping because we must have something in the kitty for a rainy day. There is an old saying, which goes as follows:
If you burn the candle at both ends,
It gives a lovely light,
But, oh my foes and oh my friends,
It will not last the night.
We could easily find ourselves with nothing for the rainy day because any business, or society for that matter, can have occasional hiccups. In fairness to the Minister for Finance, he is making sure that does not happen.
The Government is spending money very wisely. Never before has such money been spent in local authority areas on road construction. It is rather sad, however, that so many road projects are held up, in many cases by professional objectors. The Kildare bypass project is a nightmare because it has been held up by protesters who want to protect an unusual snail which lives near its path. We are told that the extra traffic would discommode this remarkable mollusc. Things have reached such daft proportions that a multi-million pound project to construct this much needed new bypass is being held up for a species of snail, and the delay is costing additional expense.
There are many other instances of such problems around the country. In my town of Sligo, the building of a through road has been held up for the past ten years by various groups of objectors. It is time to devise a system whereby we could overcome such problems without holding up road building projects for years. The construction eventually goes ahead, but not before millions have been spent on legal cases. It is a bonanza for the lawyers because such planning objections must go through the courts and, as we have seen in the Glen of the Downs case, some objectors will not accept the court's decision. Another way must be found around the problem because such planning objections could destroy our economy. The money available should be spent on better roads instead of being wasted by objectors.
Child care is another issue which was discussed in the House yesterday when there were calls for more crèches and child care places generally. We should study this matter more closely because I do not think that extra crèches are the answer. In some countries that have widespread crèche facilities, children are not cared for by their parents at home. There should be freedom of choice and if a woman wants to stay at home to rear her children provision should be made to enable her to do so. She should not have to work owing to necessity. I have said that before and I will con tinue to do so. We should debate the matter thoroughly to see if we can come up with a better system.
Health boards have never before received such a level of investment. When I joined the North Western Health Board some 23 years ago, the entire health board budget would not buy food for hospital patients today. I am worried about where all the money is going. A very good audit is required because, while everyone is calling for more resources, that means more expenditure. The former Minister for Health, Deputy Howlin, was an active Minister, fair play to him. He tried to do something about hospital waiting lists by investing in the health services but the lists expanded. Where did the money go? The Government has made several financial injections to try to eliminate waiting lists, but I wonder if a proper audit is being carried out on how such money is being spent.
It always amazes me that while medical card holders cannot get a hospital bed, if one decides to pay one can have an operation overnight in the same hospital, with the same doctors and nurses. There is something radically wrong with that. Many people are covered by the VHI and BUPA-Ireland health insurance schemes, as well as local authority and Civil Service insurance schemes. If one takes out those who are paying for such schemes and younger people who are not using such services, only a small number are availing of the State's investment in public health. What is the cost of each public hospital patient? It must be colossal because colossal amounts of money are allocated to public patients.
Every town and village in rural Ireland, despite what people say, is booming at present. When I used to travel through County Leitrim, villages such as Dromod and Drumsna were dead. They are now built up. I cannot understand how there is a housing shortage because never before have so many houses and apartments been built. Entire farms have been built on around Bundoran. There is a huge amount of development in every town and village. Houses are being built on the lawns of other houses in Dublin. I sometimes wonder if the number of houses is being accurately reckoned because I am amazed there is a shortage.
With regard to agri-business, more money should be spent on horticulture and organic farming, for which I know provision was made in the Estimates. What is referred to as organic farming now was the traditional, ordinary way to farm when I was a boy. We need to produce more fresh food.
I read an alarming newspaper report recently that the clingfilm we use to wrap everything promotes the growth of bacteria and that there are more bacteria in wrapped than unwrapped food. Where are the experts now who told us that everything had to be hygienically wrapped? It transpires that is not the case. We are also told that the latex gloves used by medical practitioners contain a cancer causing substance. I sometimes worry about what experts tell us. We hear today that the 'flu injection should not have been given to anyone with chest complaints, such as bronchitis, because it can cause them serious difficulties. Will there be compensation claims from people with bronchial complaints who suffered problems as a result of the injection? We need tests to ensure that what we are doing is 100% correct rather than being told what to do by big pharmaceutical, rubber and plastics companies which are making a great deal of money out of this.
We hear a great deal about the environment and wildlife. The reason for the decline in our wildlife is starvation. In the days when every farmer tilled and ploughed, pheasants and other birds had plenty of food. There is no food in grass for birds. We could increase wildlife, bring back rural Ireland and make it more profitable for small farmers to till their land if we could devise a system for producing home grown foods and create a market for them. What happened with the market for potatoes in Donegal a few years ago is an example of the problem that can arise with home grown foods. When there was a big crop of potatoes in Donegal there was no market for them, but when there were no potatoes the price went sky high and we had to import them.
More money should be spent on organic farming and the promotion of wildlife. There is great potential in the organic farming business but a market must be organised for such crops because they do not have a long shelf life. I doubt that vegetables and fruits with a long shelf life are healthy because they are injected with various substances to keep them looking good. However, do they taste good and they are wholesome? That is a big question.
Debate adjourned.