Dáil Éireann díospóireacht -
Thursday, 1 Mar 1979

Vol. 312 No. 4

Financial Resolutions, 1979. - Financial Resolution No. 8: General (resumed).

Debate resumed on the following motion:

That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.

—(Minister for Economic Planning and Development.)

Mr. J. Walsh

Before moving the adjournment of this debate last week I was referring to our exports and the satisfactory position with regard to them in recent years. Córas Tráchtála should put more effort into market research. We export a lot of our produce but in many cases our representatives travel around the world trying to find markets for products we manufacture here rather than establishing what markets are available and tailor-making products for those markets. Córas Tráchtála should put more effort into this and allocate more resources to that section of their operations. We have been singularly successful in attracting industry to the country and the IDA have established a worldwide reputation for their ability in this regard, but there is a shortcoming in their strategy in so far as industry is attracted almost indiscriminately into the country.

We should remember that our tourist industry is our second most important industry and the sooner the IDA prepare an industrial waste disposal policy, the better. Many problems are arising in regard to the disposal of industrial waste, the indiscriminate dumping of toxic waste in various areas close to the cities. We must organise the disposal of such waste as a matter of urgency.

The Minister should immediately ask the Institute for Industrial Research and Standards and the IDA to introduce a programme and national policy for industrial waste disposal. It is not good enough to attract industries here, establish them and then find that residents' associations and other bodies are complaining because their areas are used as industrial dumps. We must have a national policy in this matter; it should have been introduced before now, and at this stage it should be pursued as a matter of grave urgency. On the one hand we have to have industries to create jobs and on the other, keep Ireland beautiful. There is no point in having these two policies running counter to each other.

Following the budget we have had a great deal of comment on our economic targets and projections. The growth rate for the past two years has been an outstanding feature of the economy. It can truly be said that economically the country has come of age. Our growth rate has surpassed the average for the EEC and OECD countries. Since the budget the target growth rate has been the subject of some comment and criticism. The Allied Irish Banks Quarterly Review, Spring Issue 1979, No. 19, one of the first documents published since the budget, gave figures which are more or less in line with the Government's targets. As quoted in that document, there was a projected growth rate of 5 per cent in 1979 compared with the forecast for the EEC Commission in their annual report for 1978-79 of 3½ per cent in the Community as a whole, almost half the figure we projected. This would give Ireland once again the highest growth rate among EEC countries on the basis of the most recent OECD projections for 1979 which are as follows: Belgium 3½ per cent, Denmark 2½ per cent, France 3½ per cent, Germany 4 per cent, Italy 3½ per cent, Netherlands 3 per cent and the United Kingdom 2¼ per cent. Even if we take the most pessimistic forecast, the Irish growth rate far surpasses those other countries. If we had a little less negative comment on the economy and more positive and constructive comment, we would get further. For a small developing country those figures are outstanding.

It is a measure of the success of our membership of the EEC that since 1972, when markets were opened and became available to us, we have responded in a dramatic way and seized those opportunities and made the most of them to the extent that despite some of the constraints that exist at the moment we are showing the rest of Europe how an economy can be run and how well it can be done, even for a small developing island economy.

The other matter which received most public comment since the budget is the 2 per cent levy. Last Thursday I suggested here that the farming community should accept a system of taxation on their incomes and their profits from farming which would allow them to pay a fair share of tax, and no more than a fair share, over their tax free allowance, and be seen to be doing that by the remainder of the taxpayers. I am glad that over the last few days the Government and the leaders of the farming community have worked out a proposed system of taxation which will once and for all bring the farming community into line in the payment of tax, the same as every other business and PAYE people.

As I said at that time it is destructive and not in the national interest to have the urban and PAYE man accusing the farming community of not pulling their weight. The only way the farming community can be seen to be pulling their weight is if they are taxed on the same basis as everybody else. I do not think farmers will have very much to pay and the people who are shouting loudest for them to pay tax will not get the kind of return they expect. It is only since we joined the EEC that the farming community have had any real outlets for their produce. Up to 1972 there was a good deal of hardship in various parts of rural Ireland but thankfully, since then, the farming community have responded and the top third of the farming community are in a position to pay their fair share of tax.

I hope the farming leaders will ensure that a system of taxation which will allow the agricultural industry to develop and expand will be ironed out and that the farmers will get concessions for the development of their businesses because in many cases these businesses are in the developing stage. The tax system should not be a constraint on development and the farming leaders and the Government should bring in a tax system which would allow them to pay a fair share of tax and at the same time develop their enterprises.

I am not impressed with the reaction and propaganda we had from the Opposition over the last few days. A number of Opposition Deputies tried to have the 2 per cent scrapped or dropped. When a reasonable compromise was reached with the leaders of the farming community they still were not satisfied. It is difficult not to come to the conclusion that there is a certain amount of mischief and negative propaganda being made out of this matter. It would be in the interests of the whole community if this matter could be resolved to the satisfaction of all sectors of the community.

The farming community and the agricultural economy are contributing more than their fair share towards job creation and the maintenance of living standards in rural towns. Two out of every three jobs outside Dublin are based in agriculture, services to agriculture and the spin off effects of processing of agriculture produce. This brings me back to the point I made about market research.

More milk is being used in the manufacture of products for which there is no market than was the case 20 years ago. Surely technological advances should have provided the expertise to manufacture products for which there are markets throughout the world. There is no point in converting milk into butter when there is a contracting market, or into milk powder when there is an oversupply. Those promoting the dairy industry must put more effort into market research, find out the products for which there is a market and ensure that manufacturers produce these products.

In my area there is an example of how milk, as one farm product, can be manufactured to great advantage. Milk is converted into almost every conceivable type of product. We fall down very much in the manufacture of cheese by concentrating on the production of cheddar cheese to the almost total exclusion of the continental varieties for which there is a tremendous market. In the milk manufacturing concern in Ballineen the whey, which is a by-product, is converted into a very valuable alcohol by using a suitable strain of yeast. In the old days the whey was allowed to run into rivers and streams, causing pollution and killing fish. Through this new process there is added value and pollution is being prevented.

In the meat industry we export too many live cattle and also too many slaughtered cattle. We should have much more added-value processing and produce individual portions of meat for the convenience of the consumer. More and more housewives are working outside the home and more time is taken up by interests outside the kitchen. The convenience element of most foods is just as important as the quality or the type of food. Any product nowadays which does not have a convenience element does not stand much chance in the marketplace.

I compliment the Minister on this very comprehensive by-product in line with Government strategy during the past two years. I welcome the improvements in social welfare benefits. Social welfare recipients are the weakest sector of the community and it is much more advantageous for these people to have a reasonable allowance to provide them with some comfort in their old age or disability rather than some of that money being expended in food subsidies from which all sectors of the community benefit. Social welfare recipients should be singled out for special treatment if possible and I am glad that the budget contributed towards the improvement of their position. I welcome the commitment of the Government to a growth rate of 6.5 per cent for the economy as a whole. We must endeavour to improve the position for everybody.

Mr. O'Donnell

The budget is the main instrument of Government policy and the annual debate on the budget affords us an opportunity of analysing, reviewing and assessing the performance of the Government. The debate on the 1979 Budget is taking place against a background of unprecedented industrial unrest and growing economic and social chaos. Strikes, protests and demonstrations are now the order of the day, and each new day brings with it threats of new strikes, new disruptions and more chaos. As well as that, inflation, prices, unemployment and emigration are all on the increase again.

We have, at the same time, a Government who were elected a mere 18 months ago with the largest majority in the history of the State. That Government appear to be totally unable or unwilling to come to grips with these very serious economic and social problems. They appear to stand idly by and appear not to be conscious of the reality of grave economic and social problems which confront the nation at present. Despite all the promises in their election manifesto, despite the fact that we have had multi-coloured papers on the economy, despite the assurances given by various Ministers and the confidence expressed by the Taoiseach and his Ministers, the reality of the situation is that there appears now to be no earthly hope of the Government's economic and social targets for 1979 being realised. There is nothing in the Minister's speech to indicate the contrary.

The most important target set relates to the annual growth rate, on which economic and social progress depends more than anything else. It is now quite clear that there is no hope of the 6.5 per cent grow rate being achieved and the forecasts of many independent experts during recent weeks tend to confirm that. All the evidence is that we will be very lucky if we achieve a growth rate of 4 per cent. As well as that, it is now clear that pay rises will have to be at least 14 per cent if real incomes are to be increased.

Indications are that fewer houses will be built in 1979. The Minister of State opposite, who is involved in this area, may refute this or not, but from the evidence available it is quite clear that the Government's housing targets will not be met this year.

There is another aspect of the Government's economic policy which is basic and fundamental to the budget and to the White Papers and which was also a key point in the Government's manifesto. I refer to the creation of employment. The generation of employment and new jobs will depend largely on success in achieving the Government's target in relation to growth rate. The figure of 4 per cent, which now appears to be a realistic forecast, has serious implications for the creation of employment.

I do not think that the targets which were set will be achieved in 1979. Of course the Government will endeavour, as they did last year, to create the maximum number of jobs in the public sector, but this cannot be maintained indefinitely. For every job created in the public sector, there should be two or three further jobs created in the private sector. Last year the Government created a number of jobs in the public sector. This was an easy thing to do. The money was borrowed to do it, but we cannot create real employment in this way. There were efforts to encourage the private sector to play its part in the job-creation programme. But I am afraid the strategy of the Government, as pursued in 1978, did not achieve the proper and optimum balance between the public and private sectors. There is no evidence that there will be any improvement in the situation in 1979.

There is another aspect of national policy that gives rise to grave concern and there is no point in beating about the bush in this matter. A fundamental and vital element in national development is a harmonious climate of industrial relations. In the past 12 months there has been an unprecedented series of strikes and disruptions and almost continuous industrial unrest. Is there any evidence that there will be any improvement in the situation in 1979?

An Ceann Comhairle

This does not pertain to the Financial Resolution.

Mr. O'Donnell

It is quite clear that the Government's targets for growth rate, employment creation, housing development and so on cannot be met in 1979. The Government were elected with an overwhelming majority, the largest in the history of the State, and they were elected on the strength of a manifesto that promised a utopia for the Irish people. It is incredible that we should be confronted with our present situation and with very alarming economic and social problems.

The budget has been debated at length in recent weeks. I venture to suggest that in future it will be known as the tale of the 2 per cent. The most controversial measure proposed in the budget was the decision to impose a 2 per cent levy on farm products. That decision was the greatest political blunder in the history of the State. The Government have recognised this now and they have been compelled to rectify it as a result of a very strong and entirely predictable public reaction. Within 24 hours of the announcement by the Minister for Finance in his budget speech it was crystal clear to Deputies on all sides and to a wide section of the public outside that this measure, which was ill-conceived, indefensible and totally unjust, would never reach the Statute Book.

It is obvious that the Minister for Finance and the Government completely misread the agricultural scene. They received substantial support from the farming community in the last general election. Quite deliberately they went out to cajole and persuade the farming community to vote for them and it is incredible to understand how the Government, and the Minister for Finance in particular, expected to get away with such a measure.

A question that has been asked frequently in the past fortnight is how could the Government be so blind as to think they could get away with such a measure. It is obvious they underestimated the intelligence of the farming community and of the people who are directly and indirectly involved in the agricultural industry. In recommending this measure to the Government the Minister for Finance was tempted by purely financial considerations, and he fell for the temptation. It was a surefire method of extracting the maximum amount of tax from the farming community. It would have been applied across the board to big farmers and small farmers irrespective of the size of farm or their income. The Minister fell for the temptation to apply this measure, thereby compelling every farmer to pay tax. I believe that some genius in the Department of Finance came up with this idea and it looked effective on paper. I do not know how the Minister for Agriculture, who must take responsibility as a member of the Government, allowed this measure to see the light of day in the Budget speech of the Minister for Finance.

This levy has been written about and discussed at length over the last few weeks. Yesterday the Minister for Finance was reported as having said that if proposals agreed on in principle the other day with the farming organisations, did not work out, the levy would still be imposed. This method of raising revenue is contrary to the concept of social justice and to the concept of equitable and fair taxation. It is indiscriminate as all medium and small farmers would have been required to pay, irrespective of their ability to pay or of the size of their holding. We had an appalling situation of a Government attempting to extract, by foul means, the maximum amount of tax from the farming community.

On economic, social and moral grounds, a produce tax cannot be defended. The Government had obviously not borne in mind the fact that a production tax of its very nature is a disincentive to increased production. Various Government spokesmen have outlined their strategy and programmes for economic development over the last year and a half and Minister after Minister has pointed to the potential of the agricultural industry for increased production, increased exports and increased employment. We then find ourselves in a new situation where the Minister for Finance comes into the Dáil and announces that he will impose a regressive tax. There has been strong adverse reaction from the agricultural community and their representatives with whom I discussed the matter over the last fortnight. All agree that the tax is unjust, inequitable and a disincentive to production.

Another significant aspect of what might be described as an abortive attempt to impose this levy was the incredible complete failure of the Government to anticipate public reaction to it. Apart from the Minister for Agriculture, many Ministers in the Government represent rural or partly rural constituencies and received a substantial rural vote. I cannot understand how this measure reached the stage where it was included in the Budget. Public reaction was entirely predictable. Subsequent events clearly showed a very spontaneous, widespread, adverse reaction. It also provoked adverse reaction from sections of the community who have no direct involvement in agriculture. The decision to introduce the levy was clearly a major political blunder. The Government have now agreed, faced with very strong adverse reaction, not to go ahead with the levy, assuming a satisfactory outcome of the discussion which took place last Tuesday between the Taoiseach, the Minister for Finance, the Minister for Agriculture and other Ministers and the representatives of the farming organisations.

While on the subject of controversial farm taxation I will express my concern and the concern of many people at the manner in which the Taoiseach and the Government treated this House and this Parliament when attempts were made to have the measure debated and put to a vote in the House. Early on, the Taoiseach indicated that this measure would not be implemented in the normal way through the Finance Bill but would be implemented by ministerial order. He then indicated to his own parliamentary party following a discussion there that the Minister for Finance had agreed to modify the measure somewhat. At the Fianna Fáil Ard-Fheis details of the modification were outlined. Following the meeting with the farming organisations on Tuesday a new agreement was reached which, if successful, would mean the withdrawal of this particularly offensive measure. My point is that on a number of occasions, even as late as yesterday, the Taoiseach refused to infrom the House as to what transpired in the discussion with the farming organisations. He is not showing very good example. He is indicating in an arrogant and aggressive way his contempt, if you like, for the normal democratic procedure and particularly his contempt for the Opposition parties in our national Parliament.

The worst feature of what might be described as this whole sorry episode of the 2 per cent levy, and perhaps the most serious, was the manner in which it has driven a wider wedge between the farming and non-farming communities, between the farming organisations and the trade unions. At this time, when every effort should be expended by all sections of the community in fostering a spirit of co-operation, harmony and mutual understanding and goodwill, this type of sectoral conflict we have been witnessing in the past few days is not good and is something that could be avoided.

Out of all the argument and discussion and the whole sorry episode there has emerged in the past few days one very bright omen. I was very pleased indeed to read in last Tuesday's newspapers of suggestions having been made and responded to in a positive way by both the farming organisations and the trade unions that they should come together in a spirit of mutual goodwill to discuss their problems and differences and try to arrive at a consensus which, while recognising each other's problems, would enable these two sectors of our national life to work together and contribute individually and jointly to our economic development and social progress. If the country is to make progress, if targets are to be achieved and if the major national objective of full employment is to be attained in the foreseeable future, it is absolutely essential to have harmony, co-operation and goodwill between all sections, employers and workers, farmers and non-farmers, urban and rural. This co-operation, mutual goodwill and understanding is absolutely vital. The Government must use every effort and opportunity to encourage it. That is not easily achieved in a democratic society. Above anything else, achievement of this harmonious climate which is daily becoming more urgent depends largely on the ability of the Government and the type of leadership it provides. The Government must first provide dynamic leadership and show example; secondly, the Government must take the initiative which entails courage, enterprise and energy to create the structures which will enable the spirit of goodwill and co-operation and harmonious industrial relations to be achieved.

I regret that this Government, now 18 months in office, have given no grounds for hope that we might be able to work towards this particularly desirable national climate. In his Financial Statement the Minister referred to the role of agriculture in the national economy. He outlined a number of ideas, proposals and policy points regarding the future of this most important part of our economy. Anything said by the Minister in his Financial Statement in regard to agriculture faded into insignificance following his announcement of the 2 per cent levy. It cannot be said too often or over-emphasised that agriculture still is, and will be for a long time to come, the most important natural and national resource we have. It offers the greatest potential for increased production, increased exports and increased employment. This is being more and more realised because if we look back over the past 10 years we can see the contribution agriculture has made to the national economy, to exports, job creation and so on.

I was disappointed with the budget and particularly with the Minister's speech. In the part of the speech which dealt with the agricultural industry, there was no indication of new thinking, new ideas or new approaches to the vitally urgent problem of accelerating agricultural production and generating new exports and new jobs. It is regrettable that the Government attempted to impose the penal tax which has come to be known as the 2 per cent. In recent times many experts have commented on the role of the agricultural industry in a developing Irish economy. Reference was made to it in the Minister's budget speech, in White Papers and Green Papers.

I regret to have to say there is no evidence that the Government realise the potential that agriculture offers for increased employment and increased exports. Lip service is paid to the industry from time to time but what is needed now—and the budget makes no provision for it—is a new dynamic, a new approach, a new forward-looking, progressive policy which would ensure that the agricultural industry achieves its full potential as quickly as possible.

Successive Fianna Fáil Governments always appeared to do the wrong thing in relation to agriculture. There has been no proper appreciation of the industry. I have been a Member of this House for 18 years. I remember when the farmers protested legitimately at the gates of Leinster House. Instead of inviting them in, they were carted away to the Bridewell in Black Marias, and they ended up in jail. I remember the farmers marching to Dublin from all over Ireland seeking a meeting with the Minister for Agriculture. He left them sitting in the gutter outside his door for nine weeks and would not meet them. I do not know what philosophy Fianna Fáil are pursuing.

The debate has started on the Committee Stage of the Agriculture (An Chomhairle Oiliúna Talmhaíochta) Bill in which the Minister for Agriculture has made substantial changes in the Bill enacted by his predecessor. That is a retrograde step. In 1957, there was a reversal of the unique, very exciting and very valid concept conceived by the late Canon Hayes, founder of Muintir na Tíre, the parish plan for agriculture. It was put into operation by the then inter-Party Government and, when Fianna Fáil took office in 1957, they scrapped it.

Looking back at the performance and the policies of Fianna Fáil over the past two decades almost, we see their failure to realise—or perhaps they realised it in an artificial or superficial way—the fundamental importance of the agricultural industry and their failure to put into effect a progressive, comprehensive, co-ordinated policy which would enable the industry to develop to its full potential.

I should like to refer now to a document I have received. I am sure other Deputies received it in recent weeks and I hope the Government and the Minister for Agriculture in particular will take note of it. It is a very well-researched document and makes comprehensive and detailed proposals for the development of agriculture. I refer to the document produced recently by the Irish Agricultural Organisation Society "A Framework for Co-operative Development". It outlines and pinpoints what I would describe as a very exciting future for Irish agriculture, provided the Government are prepared to support the IAOS and enable them to implement their very good proposals.

The significance of this document is that it is comprehensive and deals with the whole spectrum of Irish agriculture from the production stage to the finished product going into the export market. I have been greatly impressed and encouraged by the work undertaken by the IAOS. I sincerely hope the Minister for Agriculture will back them and enable them to implement this policy.

I was disappointed at the omission in the speech made by the Minister for Finance of any reference to the role of the co-operative movement particularly in relation to the development of the agricultural industry. The co-operative movement is the greatest thing that ever happened in this context. It had a difficult existence. It has the same validity now as it had at the end of the last century when the great pioneers attempted to apply the concept of co-operation to the dairying industry, and it will have the same validity in the eighties and nineties. Greater emphasis must be placed on the concept of co-operation. Greater encouragement must be given to it by the Government. Greater financial backing must be given to the IAOS, which is the umbrella organisation.

Another question is agitating people's minds at present which is fundamental to the Government's economic policy. As far as I can recall, there was no reference to it in the Minister's budget speech. People are asking what is happening in the Department of the Minister for Economic Planning and Development. The annual debate on the budget is the appropriate time to raise this matter. We were presented with what was supposed to be an original idea, one offering the great possibilities—the decision to set up the Department of Economic Planning and Development. People are beginning to wonder and question what this Department have done in relation to economic planning and development since their establishment 18 months ago. We have had White Papers and Green Papers. There is growing disappointment at the apparent total failure of the Minister for Economic Planning and Development and of his Department to come up with concrete plans and structures which would enable economic planning and social progress to take place.

I am concerned particularly with the failure of that Department to come up with any one new idea in relation to a vital element of our national development, that is, regional development. At the outset of the debate in this House when that Department were being set up, it was indicated to the House that regional planning and development would constitute a very important part of the responsibility of that Department. After all, the budget is the major implement of economic policy. But there is nothing in the Minister's budget speech to indicate that the Minister for Economic Planning and Development and his Department have come up with any new idea, strategy or structure which would accelerate and facilitate more co-ordinated economic development.

There are in the country eight regional development organisations. I think my colleague, Deputy John Ryan, has been very closely involved in the RDO in the mid-west region. But these organisations have no power worth talking about—no teeth, so to speak—and very little finance to enable them to undertake their task, which is to co-ordinate economic development at regional level. Perhaps the Minister for Finance when replying to this debate, or the Minister of State now present, would give the House and the country some indication of what new planning strategies have been evolved by the Government, through the Department of Economic Planning and Development, first of all, for overall national economic planning and, secondly, in relation to regional planning and development. The question of economic planning and development at national and regional levels are vital elements in any national plan.

I expressed my support and pleaded earlier for the concept of co-operation between different sections of the community and different sectors of the economy. If progress is to be made, if employment targets are to be achieved—in particular the objective of full employment must be achieved—it cannot be done by the methodology indicated in the present budget or indeed in the different papers, White and Green, presented to us.

I believe a new approach to national and regional development is vital and is a matter of extreme urgency. But, most important of all, there should be co-ordinated development. Any national plan must be implemented at local and regional levels in a co-ordinated way. In view of the fact that the Government have rejected the concept of a western development board and have done something completely ridiculous in relation to the Shannon Free Airport Development Company, by reducing its functions and powers, the possibility of expanding the role, functions, powers and scope of the regional development organisations should be examined.

We have experienced a situation recently, which was sparked off and intensified by reason of the controversy surrounding the 2 per cent farm levy, when the conflict between sectoral interests, as it might be described, became absolutely detrimental to national development. There is an onus on the Government to encourage understanding, goodwill and so on between different sections. There is need also for the Government to lay down the necessary structures to facilitate this goal at regional level in particular. There is dire need for the formulation and implementation of new structures to facilitate co-ordinated regional development with inputs from the different sectors of industry, agriculture, tourism, fisheries and so on. I am publicly asking the Minister for Finance in particular, and the Minister for Economic Planning and Development—if he has not yet spoken on the budget debate—to inform the House and the country, both of whom are entitled to know, what is happening or what plans the Government have for regional development.

I made brief reference to the tourist industry earlier. There is nothing in this budget which could be identified as contributing in any way to the further development of our tourist industry. Indeed, the tourist industry seems to be fading more and more into the background in relation to overall Government planning and development strategies. This is an industry which has been making successful strides in recent times, but one also which has suffered immensely from the impact of the problems in the North of Ireland and more recently the world economic recession. Nevertheless, it has shown great resilience and seems poised now for further development, provided it is backed by the appropriate policies, assistance and encouragement from the Government. I doubt very much if this industry is receiving the Government attention it warrants. I believe it still has fantastic potential as an industry and has tremendous scope for further development, but new strategies and new approaches will have to be applied.

I particularly want to draw the attention of the Minister for Finance to what is perhaps the major problem confronting the tourist industry at present. That is the cost of access transport. I want to urge on the Government the desirability of looking seriously at the whole question of transport vis-à-vis the development of the tourist industry. Every time there is an increase in air fares it has an adverse affect on tourism. A comprehensive study should be made into the relationship between transport and tourism development and the relationship between air fares and the cost of access transport to this country and tourism development. I believe the tourist industry has exciting possibilities for attracting new tourist traffic and developing new markets in Europe. It is important that greater attention be paid to the problem of overcoming the difficulties of air transport, the cost of air transport and the whole question of access transport. Have the Government any plans in this respect and will additional finance be made available to Bord Fáilte and to the regional tourism organisations to enable them to exploit the potential that is undoubtedly there, particularly in Europe, for attracting new traffic to this country?

The final point I wish to refer to is a question which arises indirectly from the last point I was making about the tourist industry. It is in relation to the whole question of transport, which is a vital and important element in national development. I wish again to ask for the formulation of a national transportation policy. According to the latest statement from CIE, Dublin suburban rail services are coming to a standstill; they cannot carry on any longer. There is a very serious problem here in that the rolling stock on the Dublin suburban services is now very old; it is becoming antiquated and worn out. There is also a shortage of rolling stock on the provincial services. I thought the Minister for Finance might have indicated in his budget speech whether money is being provided to enable CIE to proceed with the modernisation and streamlining of the Dublin suburban rail services and the provision of new rolling stock for the provincial routes. CIE's proposal, which is a very good one, has been with the Government for a year-and-a-half now and the matter has been raised in the House on a number of occasions over the past year. But there is still no indication that the Government are going to provide the money to enable CIE to get on with their job. I have looked through the budget speech and the Estimates and I cannot find any indication whatsoever of any decision by the Government to provide CIE with the moneys necessary.

Another aspect of transport is the toll road. The different Ministers responsible for different aspects or policies should make new attempts to co-ordinate the different elements and to try to formulate and implement a comprehensive coherent national transportation policy. I would draw the attention of the Minister for Finance to the need to look at this area very carefully.

Lastly, I wish to add my voice to the many voices which have been raised over the past five or six weeks in condemning the decision of the Government to abolish food subsidies. The 2 per cent farm levy is also a totally unjust and inequitable tax and will affect the small farmer as well as the large farmer—in fact, it will have an even greater impact on the small farmer. The abolition of the food subsidies was a despicable act. I represent a constituency which is largely urban—the city of Limerick. Over the years one gets a tremendous insight into human and domestic problems, the problems of the underprivileged and the poor and of the weaker sections of our community. I was horrified and appalled when I heard the news that the food subsidies were being abolished and that the cost of essential foodstuffs was being automatically increased as a result. Any Government who would do that while at the same time abolishing wealth tax have no social conscience. The people are beginning to realise that this Government have no social conscience, no social philosophy and they certainly appear to have no interest whatsoever in the fundamental concept of total justice.

Minister of State at the Department of the Environment (Mr. J. O'Leary)

First of all. I should like to refute the allegations made by Deputy O'Donnell. He stated that we now have strikes daily and clearly gave the impression that the situation in relation to industrial disputes is far worse now than it ever was before. This is not so. Statistics and figures can prove this. There were far fewer man-days lost in 1978 than in 1976. Those figures speak for themselves.

I should like categorically to refute the allegation Deputy O'Donnell made that fewer houses will be built in 1979 than were built in 1978. This allegation is completely without foundation. I am convinced that the number of houses completed in 1979 will be at least as high as in 1978. More and more mortgage finance is available for private housing from building societies and other lending agencies. A record number of applications are being received for SDA loans by local authorities and applications for the £1,000 new house grant are pouring into my Department at an increasing rate. All this indicates that the number of houses completed in 1979 will be at least as high, if not higher, than in 1978.

There is now an air of confidence in the house building industry and in the construction industry as a whole. I am saying this to refute the allegation made by Deputy O'Donnell in relation to housing. The one and only reason which might prevent the construction industry from moving on to greater levels is the scarcity of skilled labour. During the term of office of the National Coalition there was a lack of confidence in the building industry, particularly during the latter part of that period. At that time young people were not prepared to become apprenticed to the various skills and trades within this great industry and it has been only within the past year-and-a-half that interest has been shown again in this area.

I intend concentrating on matters relating to my Department as they are affected by the budget and to refer to such matters as job creation, environmental improvement, local improvement schemes, group water supply schemes, planning and development, private housing, housing grants, mortgage finance, house price control and the national house building guarantee scheme. The services of the Department of the Environment figure prominently in the strategy of the Government as outlined in the budget. The extent to which central government resources are devoted to local services can be demonstrated best by a few figures. The local authorities who operate under the umbrella of the Department will spend this year an amount in the region of £610 million. Of this amount the local authorities will raise on their own accord more than £170 million. The massive injection of funds by the Government to the local authority sector, as disclosed by the figures I have given, produces a twofold effect. First, it enables local authorities to provide the services the community need and which are so essential for the economic and social development that the Government are striving for. In addition, ratepayers are being cushioned against the burden of meeting the cost of the services from which they benefit. Briefly, that sets the scene in terms of the implications of the budget for the local government sector.

In a debate like this one could not hope to deal comprehensively with every aspect of Government policy at it affects the services provided by the Department and by local authorities. Therefore, I shall concentrate on the aspects I have outlined. Unemployment has been pinpointed by the Government as a real threat to the future of our country. The need for the creation of employment is a main theme of the White Paper. This primary objective of Government policy is reaffirmed forcibly in the budget. The Government's efforts so far have been singularly successful. For instance, by the end of 1978 the target of nearly 23,000 jobs under the job creation programme almost £600 million has been provided for spending on building and may be very proud. The overall employment target for 1979 is to effect a decrease of 25,000 in the numbers out of work. The main expansion of employment will come from the industrial sector. The building and construction industry, overall responsibility for which rests with the Department of the Environment, will be making a significant contribution. In the public capital programme almost £600 million has been provided for spending on building and construction. This is an increase of 27 per cent on the 1978 spending. Consequently, the increase in the average level of employment in the industry in 1979 should be significant.

The Department will be concerned very much with part of the £20 million job creation packet announced in the budget. The Department are being allocated £5.2 million for spending equally on road works and environmental improvement schemes. These extra allocations are particularly welcome both from the point of view of the jobs that will result and of the benefits that will accrue from the projects which local authorities will be able to carry out. It is expected that the funds for the special programme on road works will provide the equivalent of about 275 jobs of one year's duration. This in itself is significant. An extra £2.6 million for environmental improvement schemes increases the total allocation for these schemes in 1979 to £4.28 million and will enable local authorities to undertake further desirable improvement works this year.

There is a need for special attention from the environmental point of view in the Dublin inner city area. The Government have earmarked £.5 million of the new allocation for work in this area. The environmental improvement schemes programme fits in well with the role of the Department in the promotion of activities and projects of environmental benefit.

Last year a sum of £4 million was provided in the budget for a scheme of environmental improvements. This scheme was designed to provide short-term employment equivalent to 1,000 jobs of a year's duration, of which 75 per cent were earmarked for young persons. The collection and execution of works remained the responsibility of local authorities. The general guideline was that these works should be of environmental, recreational or amenity value to the community. The type of projects selected include the provision of playgrounds and parks, the provision of car parks and other amenities at scenic areas, the cleaning up of derelict sites and the carrying out of operations to improve environmental standards generally.

Because of industrial action on the part of certain local authority staff members the authorities were not able to spend the full amount allocated in 1978. However, by 31 December 1978 they had expended £3.1 million. At peak 2,000 persons were employed on works under this programme. Included among these were more than 1,600 young people. In all during 1978 there were provided the equivalent of 750 jobs of one year's duration under this programme. Accordingly, it is fair to say that the programme has had a substantial impact in terms of the employment of young persons as well as the carrying out of much useful work to the benefit of the community. Happily, the Government have been able to continue the programme in 1979. It is my hope that local authorities will be able to avail of the allocation to the fullest extent possible. In this way useful employment will be given and this will also make a further contribution to the raising of environmental standards.

I am very pleased that the Government have been able to make provision this year for a local improvements scheme to the extent of £2.75 million. This is £1 million more than the 1978 allocation and compares with only £1 million provided in the 1977 budget. County councils will be able to expand work to a very significant extent under this scheme. It is designed to aid agricultural production by assisting land owners to carry out improvements on accommodation roads, bog roads and minor drains. Substantial social benefits are also derived from the works undertaken. Road access to houses and farms is improved. One would not want to underestimate what this means in terms of acceptable living conditions for rural dwellers. Works under the scheme have a high labour content. They provide a valuable supplement to the income of land owners and land holders in underdeveloped areas. The vast bulk of expenditure on the scheme takes place in the western counties. This is now one of the most popular schemes being operated by county councils.

As regards group water supply schemes, the availability of piped water supply is a further major factor in ensuring acceptable living conditions in rural areas. It is a service urban householders may take for granted, yet many rural homes lack this basic amenity. The census of population in 1971 showed that about 154,000 houses, nearly all in rural areas, had no piped water supply. The position has substantially improved since then. Piped water has been installed in many existing dwellings with the aid of grants. Older houses which lacked piped water supplies have gone out of use. Virtually all new houses built in the intervening years have a water supply. It is estimated that at the end of 1977 the number of houses without piped water supply has been reduced to about 63,000 or just over 40 per cent of the 1971 total.

There has been a tremendous upsurge in the number of private group water schemes undertaken by local communities with the help of the generous grant assistance available. A total of 68,500 rural homes have to date secured piped water supplies from group schemes. In 1978 alone piped water was provided in nearly 10,800 houses by way of group schemes. This was an all time record. Group schemes gave access to piped water supplies to about 8,500 farms in 1978.

We must realise that group schemes are now big business. An estimated £6 million was invested in these schemes last year. The future prospects for group schemes are bright. At the end of last year schemes were in progress which will provide piped water in an additional 9,000 houses approximately. A further 206 schemes, which will eventually serve more than 7,000 houses, have been designed.

Irish farmers must modernise their holdings if they are to meet the challenges and avail of the opportunities offered by our membership of the European Community. A piped water supply is an essential part of farm modernisation plans. So far, an estimated 48,000 farms have been given access to piped water from group schemes. The farmer quickly recovers the cost of joining a group scheme from improvements in the yield and quality of milk, higher stocking rates on the land, the potential created for the construction of modern farm buildings and the use of modern farming methods and equipment, including milk cooling equipment.

The success of the group scheme movement is first and foremost due to the organisers, trustees and committees, all of whom work for their local communities on a voluntary basis. My Department and the county councils have been glad to give financial assistance and expert advice to groups undertaking these vital co-operative projects. Total co-operation in carrying out group schemes can lead to the launching of other community projects on a co-operative basis.

I have the highest admiration for all those associated with the organisation of group schemes in their areas. The community at large owes them a great debt. The EEC have recognised the importance of piped water supplies for agricultural development. To date the EEC Commission have allocated grants totalling nearly £1.2 million to 99 group schemes from the European Agricultural Guidance and Guarantee Fund, FEOGA. In addition FEOGA grants totalling £4.5 million have been allocated to 75 public water schemes undertaken by county councils, usually to facilitate group scheme development.

Our physical planning structure is an essential ingredient of the Government's economic development programme. Material progress, unless properly controlled, carries certain risks for the environment. We have to be on our guard to ensure that no form of development can be allowed to exploit our physical resources. We had to get good quality in planning and design. On the other hand, trivial and unreasonable environmental opposition cannot be allowed to frustrate or impede the Government's policies to secure development and more jobs. We must strive therefore to achieve balance and consistency between the laudable targets of taking maximum advantage of developing opportunities and the need to ensure the preservation of high environmental conditions.

There is no fundamental conflict or incompatibility between those two aims. Services such as housing, roads and sanitary services, which are so essential to our present and future employment requirements, make great demands on resources. It is therefore essential that priorities for investment in these sources are soundly based. This is where the local development plans have their role to play. Each planning authority is obliged to make and keep its plan up to date. It provides the framework within which development can be promoted. All planning authorities have made development plans and the majority of these plans are currently under review for a second time. This review is essentially an examination and an updating of the plan in the light of the planning authority's experience in implementing it over the previous five years.

I am very conscious of the need to ensure that the planning system is used to promote desirable developments rather than merely as a method of negative control. Planning authorities were requested in September last to facilitate developments which would expand employment opportunities by speedy process of planning applications in relation to such projects. Top priority should be given to applications for planning permission where job opportunities are concerned.

It is perhaps true that undue emphasis has been put on the negative aspects of planning legislation. Enforcement of planning controls has tended to get more prominence than the wide-ranging positive powers of planning authorities to promote economic activity. The local authority has a lot to contribute to the Government's national development programme. I have said before, and would like to repeat again, that I should like to see each planning authority look on themselves as a development corporation and their developments plans should take cognisance of this very important role.

With regard to private housing, the provisions made in the public capital programme for the financing of housing reflect the continued priority the Government are giving to housing. It is a basic plank of the Government's housing policy that as many families as possible are helped and encouraged to provide their own houses. The provision for private housing grants in 1979 is twice what was paid in 1978. During the past week we have had two debates on housing, one in the Seanad and one in this House.

With regard to new house grants, this year we are providing £13 million for new house grants and practically all of this will go to recipients of the £1,000 grant for first-time owner-occupiers. A small proportion will be needed to pay off outstanding grants under the old grant schemes that are payable where a house was completed before 1 January 1979. We expect that more than 12,500 people providing houses for themselves will benefit by the £1,000 grant this year. Last year some 12,000 applications were approved and 7,140 were paid. The shortfall in payments was not due to any delay on the part of the Department in arranging inspections and in paying grants. Rather it appears that the houses were not being completed at the rate suggested by the level of approvals and applications from July 1977 onwards. It seems likely that the large number of grant approvals carried over from 1978 will come forward for payment this year.

Last year we introduced an improved package of financial assistance to philanthropic bodies engaged in providing houses for the elderly. I am conscious of the invaluable work of such bodies. I hope the availability of the new package of loans, grants and subsidies will encourage and assist public bodies in looking after those people, who tend frequently to be forgotten. The voluntary bodies will have considerable freedom to manage their new projects.

With regard to house improvement grants, these grants, including the provision of individual water supply and sewerage facilities, are expected to absorb about £17 million. The intake of applications during 1978 was double that of the previous year under the old restrictive and totally inadequate schemes. Last year more than 30,000 grants totalling £12,500,000 were approved and payments came to £6.15 million. The substantial level of grant assistance available for conservation and improvement works continues to stimulate a very high level of interest from house-holders. This is an encouraging trend from the viewpoint of overall housing policy. It ensures that the present housing stock, an immense national asset, is maintained and improved and that the standards of habitability, amenity and comfort of our houses are improved. If the present level of activity in this area continues for another year, we will have more than made up the ground lost due to the niggardly and short-sighted policy pursued by the previous Government in regard to such grants.

We must also bear in mind that substantial increases have been made available with regard to water and sewerage facilities for private housing. The grant has been increased from £125 to £350. This, combined with the water and sewerage grant, comes to approximately £950, which is almost equivalent to the £1,000 new house grant. These grants have a useful purpose in that they help to maintain the existing housing stock. Were it not for the grants at least 5,000 houses would fall into disrepair each year.

With regard to mortgage finance, if people are to purchase their own homes the availability of such finance is essential and this is a major preoccupation of the Government. Preliminary statistics indicate that a record amount of mortgage finance was available during 1978. In the first nine months a total of £160 million was advanced by the major lending agencies as against £123 million in the corresponding period in 1977. It is estimated that the total for 1978 was in the region of £220 million, or nearly 30 per cent more than in 1977. Prospects for 1979 appear even brighter. Building societies continue to provide the bulk of mortgage finance for private housing. The net inflow to the societies is running at an exceptionally high level at present. It is hoped that sufficient mortgage funds will be available from the societies in 1979.

The importance the Government attach to the local authority house purchase loans scheme is evidenced by the further increase from £7,000 to £9,000 in the maximum loan which came into effect on 1 September 1978. Since the Government took office in July 1977, the loan limit has been doubled and the income limit has been increased by nearly 50 per cent. These increases have led to a substantial increase in demand for loans. To meet this increased demand a total of £43.5 million has been provided for house purchase loans in this year's public capital programme. Both loan and income limits are being kept under constant review in accordance with the Government's commitment to assist people who are unable to obtain loans from other lending agencies.

In his budget speech the Minister for Finance announced a further measure designed to improve the supply of mortgage finance. Trustee saving banks are to be empowered to grant house loans. These banks operate on the basis of an overall limit on lending by them of 15 per cent of the balances due to depositors. This limit will still apply but since their aggregate lending has generally been well within the limit there is worth-while scope for the giving of house loans. This is a very welcome development. The commercial banks continue to make a valuable contribution in the field of mortgage finance. While the contribution from assurance companies is disappointing, I am confident that the total amount of funds available from all sources will be sufficient in 1979 to meet the needs of the various sectors of the community.

It is estimated that in 1978 the certificate of reasonable value system achieved price reductions affecting 1,334 houses and the amount involved was almost £1.2 million. This amount is by far the highest figure of saving in any year since the system was introduced in 1973. The operation of the system brought even greater benefits to purchasers of grant-type houses than the figure I mentioned might suggest. It is a legitimate claim that the system has the greatest effect before the builder submits his price for examination. The price it is intended to charge must be justifiable before it is submitted for scrutiny by my Department. I am aware that concern has been expressed both inside and outside this House about abuses of the CRV system and I have already told the House that I am aware of certain unsatisfactory aspects. I should like to reiterate that the forthcoming housing Bill will contain comprehensive provisions to clarify and strengthen the legal position relating to CRVs and to prevent abuses of the system. That Bill is in the course of preparation and is expected to be circulated shortly.

The national house building guarantee scheme offers purchasers of new houses a six-year guarantee against any major structural defects. The scheme was launched in January 1978 and has now completed its first full year of operation. My Department were closely involved in the development of the scheme. The housing grant inspectorate of the Department provide the essential inspection service for all new houses covered by the scheme. While the Department have no part in any decisions made by the guarantee company and have no responsibility for the guarantees given, they are represented at all meetings of the board of the company by two officers with observer status. I regard this scheme as a significant step forward in the area of protection for house purchasers.

Some time ago I asked the various lending agencies to support the scheme. I was glad to note recently that the major building societies have decided to back the scheme and from January 1980 onwards they will advance loans only for new houses which have the guarantee. The level of activity in the first year is, perhaps, somewhat disappointing. The number of builders who have been registered is 352. Cover was extended to a total of 3,781 houses, not all of which have yet been completed. However, it is always difficult to get a voluntary scheme like this off the ground with any degree of speed. The vetting of the financial and technical competence of builders can be a slow process. I am confident that the support of the building societies will provide the necessary stimulus and that this year will see a considerable expansion of the scheme.

Local government affairs in the widest sense have figured prominently in the deliberations of the House since this Government took office. During last March and April we had a very wide-ranging debate on the Environment Estimate. All this shows that the services provided under the auspices of the Department of the Environment are crucial to the well-being of individuals and of the national economy as a whole. It is manifest that in making their budgetary decisions the Government have not been found wanting in giving various local services an equitable share of national resources.

I should like to deal with some points raised by previous speakers. Many contributors to this debate have queried our plans and targets. I would ask the House to contrast the plans and targets of this Government, as set out in the Green Paper and the White Paper, with the non-existence of any plan or target when the Coalition Government were in office. We know where we are going and we have aims and goals which we are determined to achieve. We have leadership and unity of purpose in this regard—two vital assets in any party or Government. Let us contrast this situation with that which existed when the Coalition were in office. They had no plans or targets and had nothing concrete to present to the EEC in support of applications for additional funds and assistance. They were just doing what they were told to do by the EEC in the absence of plans and targets. This Government's targets for the economy in 1978 were demanding. Many people thought we aimed too high, but the record is there. The growth rate was about 7 per cent, a rate which for the second year running was the highest in the EEC. That figure was almost double the average achieved in the OECD and almost triple the average in the EEC. This was a remarkable performance by any standard and one of which the community as a whole can be proud.

We must also bear in mind that we had the biggest annual increase in employment in decades. In this our experience was quite unusual by international standards. Figures published by the EEC Commission show that unemployment in the Community as a whole rose last year. In contrast, it fell here and by a much bigger amount than in those other member states where it was also reduced. The dynamism of the various sectors of the economy was illustrated by the fact that, as the latest figures show, industrial exports were higher by 17 per cent in value last year and agricultural exports by 18 per cent.

Since the increase in average earnings per worker in 1978 worked out at over 16 per cent and since the average increase in consumer prices was 7.6 per cent, it must be realised that real earnings per head rose by about 8 per cent. These are among the largest rises in the standard of living of the average worker ever recorded here. We must also bear in mind that, while this rapid growth in nominal and real earnings may have given satisfaction to those who enjoyed it, the inflation rate for 1978 could but for the high growth in incomes have been about 1 per cent lower and we could have achieved even more than the 17,000 net jobs achieved.

The recent White Paper describes the policies directed towards attaining the Government's employment targets. The main growth in employment this year is expected to come from the continued expansion of industry and the inflow of new projects through the efforts of the industrial promotion agencies. The capital resources at the disposal of these agencies this year amount to more than £131 million, which is 38 per cent more than that spent in 1978. The Government have reorientated their spending programmes so as to increase their contribution to job creation. The 1979 public capital programme and non-capital Estimates provide for substantial job creation in the public sector and in the building and construction sector. The Government's foremost social priorty will continue to be the creation of employment. Job creation benefits not only the individuals concerned but their family circle as well.

For social welfare recipients an integral part of the Government's programme has been to maintain living standards at least in line with the cost of living. Excessive income increases do not make this task any easier. They put up the cost of living and, by making industry less competitive, hamper the reduction of the numbers of claimants for unemployment benefits. I am sure the public at large wish social welfare recipients to continue to share in our growing economic prosperity by a further real improvement in the allowances payable to them. I was glad that the Minister was in a position to improve substantially the position of social welfare recipients. As we are aware, there is a general increase of 12 per cent in the weekly rates of short-term social welfare payments. These payments include unemployment benefit and assistance, disability benefit and maternity allowances.

In the social welfare context the Government see old age pensioners and other long-term recipients, including widows, as deserving of special consideration. It must be realised that their capacity for work and their living requirements are very much affected by advancing years. As a recognition of this I am glad that the Government decided to increase their allowances by 16 per cent. This will mean a total increase of £4.50 a week in the maximum old age contributory pension for a married couple of pension age who are under 80. It is worth noting that the additional Exchequer cost of the proposals relating to the increases in social welfare, all of which will become effective from the beginning of April, is more than £40 million in a full year and over £30 million in 1979. I am sure all taxpayers do not begrudge this transfer of funds to the less well off sections.

I was glad that the Government were in a position to make further improvements in the position of veterans of the War of Independence. There are 18,500 veterans still alive. It was decided that the means test ceiling should be raised by £100 and this will give an automatic increase of that amount. Over and above that they will receive increases as a result of the annual revision of public service pensions. It is worth noting the extension of the telephone rental subsidy scheme for veterans and it is also worth noting the doubling of the funeral grants payable in respect of holders of duly awarded service medals. As most of us are probably aware, prior to this the funeral grants were payable only in cases where deceased veterans were in receipt of special allowances.

I welcome the Government's positive policy on decentralisation. This is something about which we have heard much but about which nothing was done by the National Coalition Government. The previous Fianna Fáil administration successfully decentralised sections of a number of Departments in co-operation with the Departments and the unions concerned. The policy of decentralisation will have many advantages both for Dublin city and for the provincial towns to which the various decentralised sections of Departments will go. We must remember that having all the State's Departments in Dublin, their sections and subsections based in Dublin, and a continuous rapid growth in the population of the city give rise to many problems. It leaves problems in relation to traffic, transportation, housing and many environmental problems. The policy of decentralisation to which the Government are committed will go a certain distance toward alleviating these problems. At least it is a policy that will ensure that these problems are not aggravated.

On the other hand, the provincial towns fortunate enough to have the privilege of providing accommodation and houses for the decentralised sections of Departments will benefit considerably. These benefits will work in two ways: the people who will go to take up permanent residence and employment in provincial towns will be happy to do so in the knowledge that the amenities there will be valuable from many points of view. The quality of life from many points of view may well be better in these towns than where these people live at present. I am sure they will find educational facilities available. Decentralisation will be a major boost for these towns because it will create additional employment in the building and construction industry sector in the building of office blocks and office accommodation and the provision of nice new homes for the persons concerned. I am confident that this policy is and will be very popular.

I am satisfied that the budget is a good, sound, solid, logical budget based on well-thought-out plans and strategies. A considerable amount of work, thought and time went into it and I believe it will go down as one of the best ever budgets. Its main purpose is to provide a climate for job creation, for getting more people off the unemployment register and providing more jobs for young people for the benefit of the community as a whole.

Mr. J. Ryan

Early in January, as spokesman for my party on industrial relations, I publicly reviewed the Government's record particularly in the field of industrial peace in 1978, a year in which wealth tax was abolished and food subsidies partially abolished. In my summing up of the situation and of the Government's activities in that year I described the present administration as the most anti-social Government elected since the foundation of the State. This can be described as a very substantial charge but in my opinion it is well deserved, and convincingly so in regard to budget day when at the conclusion of the Minister's contribution and his outline of the terms of the budget one could repeat the old saying that, again, the rich were getting richer and the poor poorer.

The budget prompted an editorial comment in one of our local papers, The Tipperary Star, of 17 February headed “By George!” as follows:

. . . . but be that as it may we feel it our bounden duty to say that we detected something of a smirk on the Colley countenance as he delivered his budget speech to the nation—and we were not alone, it transpired. Maybe the Minister just cannot help it, because it was not our first time to observe it. He gave us the distinct feeling that he felt he was talking to a lot of gullible gombeens.

It went on to say:

. . . . However, it takes no great genius to see that the Minister was less than generous to the really needy and however he might try to convince us with figures, sixteen per cent of a pittance still amounts to sweet damn all,

It concluded with a very significant sentence—significant by hindsight:

Meanwhile, Mr. Colley must know by now that he has little about which to be smug; indeed there is ample evidence to show that he may shortly find the smile is on the other side of his face—as the saying goes.

What a prophetic statement. Watching television last Saturday one could say the smile was on the other side of his face—indeed the smile was not there at all. Instead we saw a haggard and distraught Tánaiste announcing at his party's Ard-Fheis the watering down of the 2 per cent levy. One could see that he was a beaten man, and that he had backed a loser once again. I am sure Deputy Meaney had a very enjoyable weekend in Ballsbridge, and he deserved it richly. If he broke into "Happy Man", the Cork entry for the Eurovision Song Contest, one could forgive him. He was happy. He did something a backbencher could be proud of doing. He changed the thinking of his party on one aspect of the budget.

For months we have been having statements from the Tánaiste, and many senior Ministers, urging industrial peace and wage restraint for a very good purpose, a purpose I and my party support wholeheartedly, for the sake of national prosperity and increased employment. The reaction from the Irish Congress of Trade Unions was very responsible and supported wholeheartedly the Government's call for restraint. Following those pleas for restraint, the ICTU submitted a package prior to the budget for consideration by the Cabinet which included a recommendation of a £100 million tax concession for the long-suffering, overloaded PAYE sector. What did our concerned administration offer them? A miserable £26 million in relief out of a figure of approximately £600 million collected from them last year.

In the days after the budget, the reaction from these people in my constituency was severe. Many of them described the tax reliefs as purely and simply a con job. I am at a loss to understand how the Government can expect responsibility from workers seething with discontent and bordering on militancy. Their patience is practically exhausted. One can appreciate their discontent when one considers that, out of a total of something like £680 million taxation collected last year, PAYE workers contributed 87½ per cent.

How can the Government expect the unions to control the rank and file in this explosive atmosphere? After the abolition of food subsidies, promises were made of compensatory allowances in the budget to offset the ever-rising increases in food costs. Instead of keeping that promise, the Government offered them the insult of a miserable pittance of a net decrease of 3 per cent in their PAYE contribution to the national coffers.

I say this in all sincerity as an Opposition backbencher. In the months ahead, if there is an increase in industrial unrest, the Government should not wash their hands of their contribution to the frustration and dissatisfaction in our workforce. They are guilty of contempt for and indifference to the ever-increasing burden on the PAYE sector. Following the events of the past few days as we await the announcement of a supplementary budget outside this House—an extraordinary development, very much removed from the normal procedure—I appeal to the Executive to heed the new call from the ICTU for a drastic improvement in the tax offer. If not, the Government should be prepared for excessive wage demands and increasing unrest. The blame must be laid where it should be laid, at the door of the Government.

Their lack of concern has prompted the other social partner, the FUE, to make a statement. In the Irish Independent of Friday, 23 February there is a headline: “FUE puts three-year plan to raise take-home wages”. A paragraph in the article by the Industrial Correspondent reads:

The Federation was convinced that a good deal of the pressures for large increases arose because of the amount which was deducted under the PAYE system and from a feeling among employees that they were required to contribute an unduly high proportion of State expenditure.

That note of alarm and concern from the FUE should be appreciated by the Government. A new deal is needed urgently for the PAYE sector, not in five years' time, not next year, not by setting up a commission, not by issuing a White Paper, not by setting up a working party, but by direct, prompt and strong action by the Government this year for the sake of harmony and the national well-being, and for the good of the country.

Other factors in our society have also contributed to this unrest among our workforce. Some aspects of the Department of Health are of prime concern and importance to working people. A very high priority is the medical card to the lower paid worker, especially a man with a family on a low income. I am a member of the health board in my region and I am satisfied from my own knowledge, and from people calling to see me, that there has been a substantial cutback in the number of medical card renewals this year. People who have already suffered because of the partial abolition of the food subsidies are now suffering further because of the withdrawal of medical services to which they are rightfully entitled.

Why? Because the income limits are unrealistically low. How could anyone, any Minister, or any CEO of a health board state categorically that a husband and wife with an income of £40.55, 5p over the limit, are financially capable of meeting the cost of hospitalisation or doctor's care at home? How can our caring Minister stand idly by and do nothing to relieve the terrible anxiety of the worker and his wife in a time of sickness or hospitalisation? Why does the Minister not instruct the CEOs of the health boards to increase considerably the medical card income limits for these unfortunate people who were the greatest sufferers because of the abolition of the food subsidies? Ashless Wednesday pales into significance compared with the mental stress and strain of a husband or father confronted with substantial hospital or doctor's bills.

On the Adjournment last evening when a Deputy of my party recommended that in view of the abolition of food subsidies the eligibility limit for medical cards should be raised, he was told by the Minister categorically that he had had discussions yesterday with the chief executive officers and that those CEOs had decided there was no need to increase the income limits. Surely this constitutes an abrogation of responsibility? Indeed, I might say that the CEOs are as far removed from the realities of life as is the Minister if they consider that a working-class family with four or five children do not need their income limit raised in that respect. If one were to assess the increase occasioned by the abolition of the food subsidy on milk alone it would be found that a weekly milk bill had been raised by up to £2 for that type of family. That is not taking into account butter, bread, and other essential foods. Surely the Minister should not leave such a decision to the CEOs? They have sufficient power already but in a matter of such social content as the income eligibility limit for medical cards, the onus is on the Minister to ensure that persons in that category reap the benefit of the health services to which they are entitled.

On the Health Contributions Bill, 1978, on 13 February 1979, at column 1008 of the Official Report the Minister said:

The higher paid workers—and I think I am entitled to call anybody earning more than £5,000 a year a higher paid worker—will not be left unaided as regards these consultant services.

Incidentally, the Minister raised that figure in the same debate to £5,500. In the current year with health costs and the normal cost of living rising rapidly, I do not accept that a man earning a gross figure of £5,500, irrespective of the number of his dependants, is a highly paid worker. I absolutely refute the statement that he is a higher paid worker. I realise he is more highly paid than a man on a gross figure of £3,000 but his income is much too low to exclude him from this much vaunted and trumpeted health scheme the Minister for Health is about to introduce. Perhaps an explanation is to be found in the fact that, being well-heeled, the Minister is very far removed from the hard facts and realities of life. Today a gross income in the region of £5,000 to a man with four children, paying mortgage repayments, cannot in any way qualify him as a higher paid worker. In my opinion, a man in that category is barely existing with the current cost of living. The attitude of the Congress of Trade Unions to this new health scheme supports my stand. They maintain that too many people are being excluded to make for success. As a contribution towards industrial peace—for which we all wish—I appeal to the Minister to listen to the reasoned arguments of Congress. I can assure him that the Congress of Trade Unions is just as concerned as are the Government about the maintenance of industrial peace. I appeal to the Minister to increase the income elegibility limits for medical cards to at least a figure of £8,000 so as to bring persons who require the benefits of the health services within the new scheme. I appeal to the Taoiseach and to the Minister concerned to have a reappraisal of the situation and to adopt a realistic figure in keeping with present-day costs.

Another factor which caused me grave concern was the substantial cutback of £5 million in the budget for social welfare. From my experience as a Deputy and as a councillor, from people coming to me with social welfare problems, I know there is a definite witch-hunt on—a definite effort being made not alone to save the £5 million cut-back in the budget but to reduce considerably social welfare expenditure in the year ahead. That I consider to be a very anti-social step on the part of the Government and one being taken at the expense of the worst-off in our society, those people who have been hit already by the abolition of food subsidies. This attitude of the Government towards social welfare confirms my statement and rightly brands the Government as being anti-social. It is something which will be of grave concern also to people involved in community care, in voluntary social welfare services because that £5 million was genuinely needed to aid the most underprivileged in our society. It is a crying sin that such saving should have been effected in that area.

I should like to refer to the question of industrial relations in the Department of Health. I refer to one of the most united demonstrations and marches I have witnessed to this House made by the nurses last November. This very responsible body of dedicated workers came into this House. They listened to the speeches of the Minister and of the appropriate Opposition Deputies. That evening, in a very touching speech, the Minister praised their work and afterwards promised them a Christmas bonus. Unfortunately, he did not say which Christmas because these people, who are still awaiting the report of a commission, have not received one shilling of this gift which was promised before last Christmas. In the light of the failure of the Minister to deliver that package, how can this very responsible body of workers look forward to a genuine and concerned report being submitted to the Minister in the very near future? This treatment shows scant regard for the contribution made by nurses down through the years to the sick people of our society and their continuing concern and work in hospitals and institutions throughout the country. At the same time as this con job is being perpetrated on the nurses, negotiations are going on for a very considerable salary agreement for another body in the health structure—the consultants. Having witnessed their muscle some years ago when another health scheme was put before them I am satisfied that they will not be treated by the Minister in the same manner as the nurses were. We had experience of their capabilities and of their concern for the sick some years ago when another Minister introduced a service.

When one tries to analyse the reasons for this terrible unrest in the country among working class people one cannot but come to the conclusion that a major contributory factor to the labour unrest, and the large-scale wage demands being made, mainly in the public sector, is that despite assurances given last weekend the cost of living is escalating week by week. Ask any shopkeeper. Ask any housewife. We have mini-budgets now every week and very little response from the Minister responsible. I refer in particular to the Minister for Industry, Commerce and Energy. His silence is stunning. What a tremendous transformation that is from the years when he was on the Opposition benches here screaming at every penny increase. Let him not shift the responsibility to his Minister of State. That will not be acceptable. He is the senior Minister and the buck stops on his desk.

Another question I am prompted to ask is what has happened to his food basket promises of 1977? I can well remember the basket and the list. What has happened? Ask the housewives. In the intervening 18 months food prices have risen by a staggering 34 per cent.

One might ask where has the Minister's previous facade of concern for the harassed housewife gone. His concern is now only a memory. Indeed in his statement on television last week when he was indicating impending increases in oil prices he said that the Ayatolla of Teheran was the culprit. Of course, back in 1974 he never heard about Sheik Yamani. The transformation that has taken place is amazing. It was all our fault in 1974. Now it is the fault of the New Government in Teheran; the Ayatolla is responsible. Might I ask, as the song says, where have all the consumer associations which were so loud in 1974 to 1977 gone? Again the silence is profound. I am inclined to draw my own conclusions about the origins and the priorities of these consumer associations. I would also refer to an RTE programme that operated so conscientiously in those days when we had a weekly tirade, viciously anti-Government, seemingly jocose but nevertheless a well-planned conditioning programme to ensure maximum anti-Government sentiment. It is seldom I look at it of late so benign has it become. The producer of this programme has since been appointed a film censor. Again I am not innocent. I will not draw any conclusions here; I will leave it to the imagination of the people to decide exactly where we stand on these things. I say that in all sincerity. Where has this Minister for Industry, Commerce and Energy gone? What is he doing? When he was in Opposition he so stoutly condemned every penny increase; he was screaming from the rafters here in Leinster House.

Another area of social discontent is the question of housing. Despite the Minister of State, Deputy J. O'Leary's, very rosy picture of housing programmes in 1979, I will also put on record lest people forget that in the years we were in Government 100,000 houses were built. This is something that has very peculiarly been forgotten. As a county councillor and as a person very much involved in the housing needs of my area I see the housing directive of August 1978 from the Custom House to county managers as indicating very clearly that very high emphasis is being put on income restraints and income limits. High priority is now being given to the ominous document on income tax, P60, rather than to the housing needs. The manner in which the terms of this document are being carried out is another abdication by the Government of responsibility for the provision of local authority housing. This is a stark reality.

I mentioned previously that the income limit of £5,500 is inadequate. While shrewdly enough the Minister does not lay down rigid financial guidelines in this respect there is an effective restriction embodying a gross income of approximately £4,000. In other words, in collusion with the county managers, the Minister for the Environment has now created a situation where a worker with a gross income of £4,000 is no longer the responsibility of the local authority.

I say this because it is emphasised in the directive of June last that a man on that level of income should be able to provide a house for himself. This is a farcical situation since the applicant would not qualify for a local authority loan. But, even if the income limit were £4,000, the situation would be almost impossible when one realises that the cost of building an average house today is about £15,000 plus about £3,000 for a site—and these are conservative figures. Even allowing for the £1,000 grant —and that grant has lost some of its value in the past year—how can a man who is urgently in need of accommodation be expected to offset the difference between the loan and the cost of the house? I appeal for more flexibility in this area on the part of the Minister and his agents, the county managers, because without this flexibility many workers and their families will be condemned to living in bad housing conditions. The directive was anti-social. It was a shrewd move on the part of the Government, because they are making whipping boys of the county managers by advocating restrictive measures and leaving to county managers the implementation of this anti-worker policy. It would appear that the county managers are dovetailing the new directive with the housing loan limits. If the Government are concerned that there be industrial peace, they must be seen to help the workers in regard to the provision of modern living conditions.

The Minister of State talked about the number of houses that will be built this year. I take it he was referring to the private sector, because the directive to which I have referred will have a very restrictive effect on local authority housing. There is little point in appealing to people to provide houses for themselves while costs are increasing at such a pace. It is admitted by those who should know—and this includes some people in the building industry—that house building costs have increased in the past 18 months by 35 per cent. In rural Ireland an average site can cost as much as £5,000. I appeal to the Government to think again about their housing directive, because if they continue on their present course they will find that in a couple of years, despite what the Minister of State has said, local authority housing programmes will be minimal and, consequently, increasing numbers of families will face a future in bad housing conditions.

Our record in terms of industrial unrest is very poor. This is a matter of concern for the ICTU. Last weekend the Taoiseach referred to excessive wage demands and appealed for restraint in this area, but how can he expect a satisfactory response to his appeal after the Government's cowardly surrender during the week to a very strong lobby? Can such an act be seen to indicate strong Government? This erosion of the democratic power of a so-called responsible administration must have tremendous repercussions in the PAYE sector. In such circumstances can anyone blame the Post Office workers for extending their strike into next week? The surrender to the farmers can only have the effect of escalating unrest among the workers and will substantially increase these excessive wage demands. The blame lies with the Government. I must emphasise that, because I believe that if things go wrong in later months the trade union movement may be blamed and made the scapegoats of the situation.

I should like to know why the Government climbed down. I wonder if they were thinking of a certain date in June. It appears to me that this was the guiding influence because they want to win those elections at all costs. In the light of the Government's action I should like to know how we can be asked to respect the provisions of any future Finance Bill particularly when one has regard to the fact that it was in a matter of weeks of the budget being introduced that the Government yielded to sectional pressure and climbed down on one of their proposals. Strong Government means making realistic, fair and equitable recommendations and decisions for implementation in a budget and then carrying out those measures in spite of all pressure. One can respect such a Government but how can our people, in the light of the events of the past week, consider that they have a logical and courageous administration?

The decision of the Government in this regard may have serious repercussions on labour relations in the months ahead. I do not want to be pessimistic, but I must express a fear for the future. A terrible blunder was made by the Government in introducing the levy in the first place and, having adopted it, withdrawing it. It seems to me that we have a Government outside of Leinster House rather than within it. That trend must be stopped. If the Government and the House are to retain the respect of the people government must be seen to emanate from Leinster House and not from Portlaoise, Ballybrittas or Liberty Hall.

The members who constitute the Irish Congress of Trade Unions are reasonable people concerned for the employment and job creation programmes outlined by the Government. Congress has submitted further recommendations to the Government to ensure that every possible means are taken to create the maximum number of jobs in the years ahead. The Government and semi-State bodies face a tremendous challenge, because in spite of the fact that there were 30,000 job approvals last year we still have something in the region of 103,000 people on the unemployment register. Unfortunately, we had 13,000 job losses last year in spite of all of the efforts of the agencies concerned with the job creation programmes.

It is unfortunate that serious inroads are being made into our traditional industries, particularly those based on natural resources. Many of those industries are experiencing serious difficulties. I am aware that the meat factory in Roscrea is experiencing great difficulties and that three weeks ago 200 men were laid off. From the information I have received I believe that unless the Minister for Agriculture and the Minister for Industry, Commerce and Energy and Commissioner Gundelach, that infamous person in Brussels——

An Leas-Cheann Comhairle

The Deputy should not use that phrase when talking about any Member or any person outside the House.

Mr. J. Ryan

I withdraw it and let the people draw their own conclusions. Unless steps are taken by the gentlemen I have mentioned the meat processing industry here, which is now tottering, will fall to the ground with the loss of thousands of jobs. If the meat processing industry goes to the wall the thousands of people who have been employed in it for upwards of 30 years will be unemployable. Every effort must be made to ensure that the industry is revived and put back on a winning trail. Otherwise, a town in my constituency will suffer serious repercussions which will affect the workers and the commercial life of the area.

In the planning and development of our economy as we enter the eighties it is essential that we have a united front to achieve the goals of full employment and improved living conditions for our people. We are a small country and we can ill-afford divisions, rancour or distrust between any sections of our people. Let the terrible blundering and mishandling by the Government in the past few weeks be a lesson to all that our people must be treated equally.

Mr. Cowen

It is not surprising that a budget should stir up controversy and this year's budget is no exception. We have all heard the many serious allegations made following the introduction of the budget. Unfortunately, the most misleading statement of all came from the Leader of the Fine Gael Party. The fact that he is leader of the main Opposition party and a man with a reputation in economics means that his words are very important for his party and, to a lesser extent, to the ordinary man in the street. Deputy FitzGerald accused the Government of using fraudulent figures which were grossly distorted and falsified. We all know that figures and statistics can be used to back up any argument and that the same set of figures and statistics can be used to strengthen an argument from the opposite point of view. Playing around with figures and statistics is becoming an annual event here. I am not saying that all Members indulge in this annually, but this year Deputy FitzGerald is playing a different sort of game when he accused the Government of presenting for debate a falsified set of figures and implied that there was an intention by the Government to deceive the House and the people.

Last year Deputy FitzGerald and other Opposition Deputies poured scorn on the Government for their plans, predictions and figures, but they have been proved wrong. The figures we put before this House in last year's budget in regard to the state of the economy and where we were going have been fully implemented through Fianna Fáil's policies. Those figures were mainly on target and they were severely honest and correct. The scoffing and blustering about last year's budget by the Opposition has singularly failed them and has not fooled even themselves. Is this the reason why they cry out that this year's figures are not true? We should debate the figures fairly and ignore the cry of "foul" before the debate has even started. "Foul" has been cried by the Opposition before this debate even got off the ground and the same cry was heard during the debate on last year's and other budgets.

In the past Fianna Fáil have proved to be the party of reality. They proved that in 1979. I am convinced that in the coming year it will be proved yet again. We must all admit that last year's budget raised the morale of the country. People see the real benefits from last year's budget all around them. The results of Fianna Fáil's policies are positive and expansive.

In the present circumstances this year's budget continues the tradition of being expansive and realistic. We have emphasised that our primary economic aim is to create new jobs and this budget is highly geared towards meeting this objective. It is aimed at contributing towards a worthy and realistic target of cutting the number of unemployed by 25,000 this year. Nobody who has the interests of the people at heart can quibble with this primary aim. Everyone must agree with it—young people, unemployed, employed, those working on farms, people in towns and cities and even retired people. Opposition Deputies must also agree with this aim.

Last year the Opposition said we would not lower the unemployment figure but we did. This year they shout we will not succeed, but I can guarantee that we will and the majority of the people know that too because they have seen and felt the results of our efforts in job creation since June 1977.

This budget provides for a total additional expenditure of £20 million on job creation. What I like most about the details, backed by detailed honestly planned figures of how job creation can be achieved, are the funds to be expended and the emphasis on jobs for the young. The extra £5.2 million for job creation in the environment, the work experience programme costing £3 million, the increase in the number of AnCO training places to 6,370 and on top of all that, the additional expenditure of £3.2 million will add another 1,000 to the increased number of young people coming into employment this year.

No Opposition worthy of its salt and with the welfare of the country at heart can condemn this budget which has the primary aim of creating 25,000 extra jobs this year. We have so-called experts across the House who say our job-creation target is unrealistic and cannot be achieved, but they said the same last year about our aims and targets and also before and after the last general election. Yet Fianna Fáil in Government have proved all the Coalition's pessimistic predictions wrong. People see the country is moving ahead rapidly and that Fianna Fáil's good, careful and realistic budget plans are succeeding in the main, irrespective of the what the Opposition say. I am confident the people are aware of the targets and of the economic conditions Fianna Fáil have achieved in the short space of 20 months.

In this budget the Minister for Finance looks after the Government's housekeeping in a very diligent manner. He has said that we must reduce our borrowing requirements and provide for extra pay and jobs in the public sector. He has met these objectives adequately in the budget. Up to now the Government's strategy was to get the economy going at maximum capacity and as quickly as possible. This required maximum investment. The growth rate of the economy has speeded up and is maintaining, and will maintain, its forward momentum.

This budget sees to it that there is still a steady rate of financial input into the economy to ensure a further steady and increasing growth rate. Besides meeting a current budget costing £2,675 million, the Minister sees to it, through borrowing at 10½ per cent of national output, that the economy is driving forward continuously, that the country maintains its standard of living and that the Government's plan for the creation of 25,000 new jobs is fully realised. The aim of Fianna Fáil to achieve full employment by 1981 is very ambitious but I am convinced that the target will be reached. Fianna Fáil have made great strides during the past 18 months. In County Offaly, 1,300 industrial jobs have been created in that time. I have not the figures showing how industrial development fared under the National Coalition, but I know there was no increase whatsoever in industrial development in County Offaly during their period of office.

It is customary that a budget brings howls of horror from some sections and we have heard some of these howls already. The loudest and least sincere howls have come from the Opposition parties. No budget can earn the applause of all. Such a budget could be fairly described as a "hand-out" budget. A Government cannot give if they do not have the wherewithal. By careful planning and good housekeeping this Government have much to give. They seek to ensure that those most in need get most and all get enough to maintain standards. They also seek to ensure a greater degree of equity and this is highlighted in many aspects of the budget. Some of the loudest howls of horror have come from those in secure employment and this should not be so. We are giving large social welfare increases and the tax concessions are channelled specifically towards the lower paid. This is the justice drive of the budget. Every sector of the community and every partner in the economy should see justice being done and recognise it. The budget is very realistic and I would hope to hear fewer cries of dissent from any section of the community.

A feature of the budget which deserves special mention is that children's allowances are increased on a selective basis. When there is built into the administration of children's allowances the method of clawback, aid is provided for less well-off families without the embarrassment of a means test. This is an aspect of the budget with which I am in total agreement.

I mentioned earlier that there had been serious allegations and bizarre statements about the budget from the Opposition. I dealt briefly with the serious allegation made by the Leader of the Fine Gael Party. The same Deputy was quoted in the press a couple of weeks ago as saying that this was a "contraceptive" budget. It seems he discovered that there was a 15 per cent fall off in marriages in the Republic between 1973 and 1978. The income tax changes in the budget fully recognise the greater responsibility of the married. For instance, the single person's personal allowance of £865 has been raised to £1,115, while the married person's allowance has been raised from £1,730 to £2,230. The tax liability of a single person earning £3,500 is reduced by 3 per cent to £724.75, while a married couple without children earning the same amount have their tax liability reduced by 24 per cent to £334.50. A married couple with two children earning £3,500 have their tax liability reduced by 29.9 per cent to £89. How can anyone say that there has been discrimination against marriage in this budget? The opposite is true. Deputy FitzGerald has been reprimanded by a leading sociologist concerning that statement. Such brash assumptions and statements are made because the Deputy is helpless in his search to find fault with the overall strategy of the Government. He makes those ridiculous statements because he has no real opposition to what Fianna Fáil are doing.

I referred earlier to the intention of the Government to reduce unemployment by 25,000 this year. Their concentration on job training and job creation must have the approval of all right thinking and justice loving people. I also mentioned the need for equity in the distribution of the burden of providing the wherewithal for spending on the economy. The national housekeeping bill has to be met by fair contributions from all sections of the community. I am delighted that the farming organisations and the Minister have agreed to investigate thoroughly ways and means of formulating income tax proposals for the farming community.

I have been speaking to many farmers, particularly during the last few months, and most of them who were in the tax net even prior to this budget are willing to pay their fair share. This is a time for stating one's case in a very rational manner and not in a self-interested way. The farming community fully realise this. They are making their case for the well-being of the country as a whole. Those farmers whose incomes allow them to pay tax will do so but Fianna Fáil will ensure that the taxing of farmers will not swing too far and so diminish the wealth-producing capacity of this export-intensive sector. It would be industrial and financial suicide to do this and I am sure that under a Fianna Fáil Government it will not happen.

There are those in other sectors who unreasonably say that the taxation of farmers is not sufficient. It must not be forgotten that not long ago farmers struggled through long, lean years. They work a seven-day week for 52 weeks of the year. Even with the thresholds reduced in the budget to £50 valuation, we are still talking in terms of 22 per cent to 25 per cent of the total farming community. The percentage figure of farmers under £50 valuation is in the region of 75 per cent of the total farming community. The percentage of farmers who would be in a position to pay tax is in the region of 20 per cent to 25 per cent. The most fair way to extract money from that section of the farming community is by way of income tax. The farming organisations are aware of this and they are anxious to contribute their fair share to the economy by way of income tax.

The purpose of the budget in imposing taxes and in relieving the tax burden on some is to help the weaker sections, to maintain our standard of living and to offer incentives to increase productivity. The PAYE sector has always borne an exceptionally heavy share of taxation and the people concerned must welcome the income tax concessions in the budget. The income tax-free allowance for a single person has almost doubled in the past 18 months, as has the tax-free allowance for a married couple. I am sure the PAYE people are aware of the improvements granted to them in the two budgets since Fianna Fáil came to office in 1977.

The function of the Government is to mediate between all the interested groups in the economy and this job was ably outlined by the Minister for Finance. Every group must be prepared generally to accommodate themselves for the sake of the national interest as outlined by the Government. No group or individual should seek only the benefits of tax reduction and none of the sacrifices attendant on taxation. If each sector looked at it from this point of view we would not hear so many cries of anger with regard to taxation in general that normally come after a budget. There should not be a rift or competition between farming and other industries. For the country to succeed there is no room for envy or jealousy on the part of any group. All sectors of the community need each other. In particular the PAYE sector needs the growth of the farming industry but, equally, the PAYE sector is important for the agricultural community because they purchase farm produce.

The farming organisations now have agreed to pay their fair share of taxation and in view of the fact that single and married people have been given increased income tax allowances the rift that seems to have developed between the farming and non-farming community should not continue. In a small country like this we should not talk about a rift between any sections. There must be co-operation from all sides if we are to achieve the aims of this Government. The majority of the people supported the aims of the Government. A little more co-operation should be forthcoming from the other side of the House. We should all do our best to ensure that jobs are created for 25,000 people before another budget is presented to us. Every section will have to make some sacrifice in order to obtain full employment and a better standard of living for all.

We come to the all-important matter of income restraint, which is necessary if we are to increase employment. The budget does not ask anybody to accept less. The real rise in income asked for this year is 4 per cent. This means a real increase in living standards generally. What is the use of any individual getting an increase of 20 per cent or 30 per cent if there is no real increase?

The Government are asking that people co-operate with them. Will people accept that 4 per cent is a real increase and is enough for one year? Is the Government's appeal for wage restraint not enough to get the support of the masses so that living standards can be maintained and developed? The outlandish increases being demanded by sections of the community are disgraceful. These people should pull themselves together and decide to work in the interests of the country and of the future generations. To provide the required number of jobs in one year requires a little sacrifice from the sections who can bear it and that is all the Government have requested in this budget. By comparison with the economies of other countries our economy is in a satisfactory condition. Our economy is healthy particularly when compared with the economy of the UK where too many people are unrealistically looking for too much too quickly.

To sustain our present economic growth we need more productivity and realistic increases. This is what the Government are requesting and if their request is acceded to 1979 will be remembered in Irish economics as the creative year, as the year when the youth and the jobless were drawn into the employment force in growing numbers. We have a greater opportunity this year than many other nations to cope, because of our proportionately young population, which is the largest in Europe. Because of our large young population an extraordinary effort is needed to provide jobs for them here. That is the ambition and the ideal of Fianna Fáil and with a little effort this target can be achieved. If we grasp this chance and make a united and concentrated effort, while evenly distributing the necessary sacrifice we will enter into the eighties with a healthy economy geared for further progress. If our targets are achieved the next generation will be grateful and will thank us. We must all exercise some discipline. The budget indicates by its logic that better times are ahead if we exercise discipline. We are asked not to take less, but not to be dissatisfied because we cannot take an inordinate amount. That is a realistic appeal which I am confident the people will support.

On our entry into the EMS this type of discipline will be needed if we are to obtain the maximum benefit. Incomes restraint will make our economic prospects more secure and more lasting.

Many of us who have visited other European countries are aware of the hard work and the positive aims of those people in regard to industry. If we pull up our socks and exercise a little more discipline we too can improve our position greatly. I feel confident that the workers in general will make the extra effort to follow the guidelines set down by the Government for achieving our aims. The Government have asked for only a bearable sacrifice by employers and employees and have given an assurance of a steady real increase in living standards and above all they have given incentives for greater productivity and more jobs.

The budget has divided the national cake, let each section take their share and get down to the important task of increasing output to generate wealth, thus securing a better economic future.

The industrial situation in my county of Offaly improved within the past 20 months through this year's budget and last year's budget. For instance, our county hospital is to get an extension of a 40-bed unit. That has become possible because of economic growth. The extension will cost in the region of £.5 million. About £.5 million has already been spent on that hospital since Fianna Fáil returned to office so the total to be spent will be £1 million.

In relation to social welfare this budget illustrates the policy of successive Fianna Fáil Governments in ensuring that the needy sections are well looked after. The increases in social welfare allowances are in the region of 12 to 14 per cent. This is a significant rise. The increase granted in the last two budgets to social welfare recipients were higher than those granted by the National Coalition in four-and-a-half years.

Debate adjourned.