The 1979 budget which we are discussing at the moment will certainly go down in the history of the State as an historical budget. It is a further development of the election manifesto which we placed so successfully before the Irish people in June 1977.
This morning the Taoiseach came into the House and made a very good statement in relation to his meeting with the other EEC leaders on Monday of this week. I would like to congratulate the Taoiseach on his negotiations and on his efforts in bringing home £45 million this year. This will give further assistance to the development of this nation. This injection of funds was not taken into consideration at all in the budget but I am sure that in the coming year we will hear more about it in relation to the development of infrastructures and the provision of more jobs.
I would also like to comment on the Taoiseach's defence of the common agricultural policy. It is consistent with our approach facing the electorate in June in relation to the European Parliamentary elections. The Labour Party's line should be seen in the light of the objections by the British Prime.
Minister, Mr. Callaghan, to the continuation of the CAP and to improvements and increases in farm produce. I would like to say to the Leader of the Labour Party that if these are his policies as well facing the electorate in June and if they are, I can assure him that he will get very few votes for his candidates, especially in the rural constituencies because his party are totally opposed to the development of this nation. We have benefited more than any other nation in the EEC in relation to the CAP. Therefore it is vital that this policy should be continued and this Government are consistent in their approach. I know that the Taoiseach actively sought the continuation of the policy and the expansion of the grants and aids to agriculture here at the meeting on Monday. I must say that the efforts of the British Prime Minister to remove the CAP will be frowned on and indeed, as I said, the Leader of the Labour opposition in our Parliament should dissociate himself from the statements made by Mr. Callaghan at this meeting in Paris.
I would like to refer again to the budget which was put before the people here in February. This budget has been the subject of much debate and discussion since its presentation in this House. The debate was mainly in relation to the proposed 2 per cent agricultural levy and ignored the 73 pages of the Tánaiste's financial statement which provides the total package, the second stage of the Government's strategy for economic and social development recently published in the White Paper, Programme for National Development 1980-1981. Indeed this debate is presently raging about farming taxation and the contribution made by the PAYE sector. It started as a result of the budget statement of 7 February.
Many people view with admiration the brave and courageous efforts of the present Government to investigate and initiate methods of raising taxation, of sharing the burden among all working people in our community. The conservative opposition here are unable to grasp the effort this Government are making to initiate this great debate. It is only right and proper that this debate should be commenced because it will allow a situation to develop where eventually we will have a fair and equitable taxation system. This is what every section of the community is seeking.
It is regrettable that this proposed one-day stoppage should have been suggested at all. It will serve no useful purpose and it is regrettable that so many people throughout this State will suffer as a result. I hope it will be prevented even at this stage, that the trade union organisations will ask their members to call it off. The Government, in initiating this debate, are prepared to suffer a degree of unpopularity in order to arrive at a fair solution. I feel the public should realise the work which the Government are doing at this time. Unless a fair system is agreed the nation as a whole will lose out and the weaker sections of our community will suffer most.
Fianna Fáil, at all stages in our history made strong and unpopular decisions for the common good. Let this present situation be viewed in this light. This Government are prepared to grasp the nettle and take decisions in the national interest. That was always the case. It is consistent with the traditions of this party that at all stages in the history of this State when in government we were prepared to bring in legislation and to initiate debates, and in many cases these have resulted in major benefits to the nation as a whole and in some cases in a loss of support by this party. But with Fianna Fáil the nation has always come first and the party has come second. We are a national party, represented throughout the whole country. We have the largest majority in the history of the State but we are not a dictatorial party using hammer tactics to push through legislation in this House. It is a question of consideration, discussion and debate with all sections of the community, with all interests, whether farming interests or trade union interests. The fact that we have a majority in this House does not mean that we will use this majority to force our will against the interests of the nation or the public as a whole. I think if the present opposition parties had the type of support that we have at this time they would certainly be a dictatorial government, as indeed they were during their period of office. Fortunately they have not got the type of support that we have.
Coming up to the last general election it was obvious that the former Government were losing control and were adopting a dictatorial approach to all aspects of policy. This is something Fianna Fáil will not do because it is not in the best interests of the nation as a whole. We will not use the jackboot type of policy of the previous Government. Where adjustments can be made in any aspects of taxation, those adjustments should be made in discussion and consultation with all the interested parties. This is the right approach in a parliamentary democracy.
The Government are governing with the support of this House and with proper respect and regard for all sections of the community. The Government must always be prepared to listen to the wishes of the people. In the national interest they must be prepared to change or revise decisions after proper consultations and at the end of the day make decisons that will benefit the nation as a whole.
Since we took office in 1977 our fight against inflation has been successful. There was an inflation rate of 21 per cent in 1975 but this dropped to 7.6 per cent in 1978. We hope to continue on this path and to reduce the inflation rate to somewhere in the region of 5 per cent in 1979. This must be seen as an effort by the Government to tackle the great scourge of the country in the period 1973-77, namely, the scourge of inflation. During that time the earnings of people were useless.
The PAYE people were far worse off in 1973-77. We are giving those people a better deal. When the National Coalition Government were in office there were members of the ITGWU on the Labour Party benches and it is strange that there were no one-day strikes or marches in relation to PAYE. Maybe it is a coincidence, maybe it is not, but the matter must be considered in the light of developments and improvements in the PAYE sector since 1977. There is no doubt that PAYE people are paying a massive share of expenditure. All Members of this House are PAYE people and I personally am prepared to give my contribution to help those who are less well off.
It is obvious that the revenue collected by way of taxation is going to the less well off members of the community. The massive social welfare increases in the budget are welcomed. Before the budget I urged strongly that a massive increase be given to social welfare recipients and I was pleased to see that they were included in the budget. Social welfare recipients should be given priority treatment. They should be given the necessary support and aid to ensure that they have enough food, heating and electricity and that they have decent housing. Adjustments must be made in each budget in line with those made in this budget.
Old age pensioners, widows, deserted wives and other categories have been given an increase of 16 per cent and there have been short-term social welfare increases of 12 per cent. If we can bring down the rate of inflation to 5 per cent these increases will mean even more to social welfare recipients. We have given those people two to three times more than was given in the period 1973-77. The previous Government always boasted that they were the only Government who gave decent increases to social welfare recipients but they had to introduce mini-budgets every autumn in order to make up to the less well off section for the ravages of inflation which eroded the benefits of the increases given. We are giving real increases to the less well off section. These people rely totally on the Government. They have not a strong lobby and they have no union to back them. Their only voice is the elected Members of this House. I shall always support the lesser well off members of our society, particularly social welfare recipients.
I am proud to be a member of a Government who have given the benefits of taxation to the lesser well off people. Fianna Fáil will always continue this policy. It is our policy to support the old, the disabled, the widows and social welfare recipients. We have always been prepared to raise taxation, even unpopular taxation, to support those people who have not a strong voice. Unfortunately they cannot have one-day strikes. I think they will be genuinely satisfied with the increases the Government have announced.
There have been increases of roughly £2.55 and £2.20 per week for contributory and non-contributory old age pensioners. Recently I made an appeal to the Minister for Social Welfare to ensure that patients and residents of welfare homes and psychiatric hospitals, including the Sacred Heart Home in Roscommon, the home in Carrick-on-Shannon, the welfare homes at Mohill and Boyle and the psychiatric hospital in Castlerea should get the increase announced in the budget for old age penisioners. I asked that the health boards should not pocket the increase of £2.20 per week granted to old age pensioners. At the moment these people get a pocket money allowance of £3 per week. An increase of 50p was granted last year and I initiated that increase by approaching the Minister for Social Welfare. He was willing to instruct the health boards to increase the allowance to £3.
That £3 allowance is totally inadequate and I appeal to the Minister to instruct the health boards to give the full increase of £2.20 per week to the old age pensioners in their institutions and homes because the increases in tax on drink and tobacco have affected those people more in relation to their allowance than any other section. Their one pleasure—perhaps a pint or two and a cigarette or a pipe—should be allowed for. The health boards that are adequately financed at present and have been adequately financed should not be allowed to take this increase. The Minister should ensure that when these increases become payable they go direct to those for whom they are meant and not the health boards. I was speaking to the Minister recently and I am confident that he will instruct the health boards to give the recipients these increases, so that they may have proper pocket money which will ensure them some enjoyment for the remainder of their lives. They are entitled to these increases. They have no union or organisation to represent them. Whenever I have spoken on the budget I have always spoken about social welfare recipients. I know that in this case my voice and their voice will be heard here in regard to these improvements.
Many social welfare improvements in the budget have been in a sense ignored. These should be noted by the public generally. I mention specifically improvements as regards means tests for old age and widows' pensions. These have been long out of date and I am delighted that the Minister for Finance has ensured in this budget that special consideration will be given when calculating the means of applicants for old age and widows' pensions. In the summary of the budget the section concerned allows for an increase from £25 in the case of claimants for old age non-contributory pensions and from £100 in the case of widows non-contributory pensions to £200 in the amount of capital that will not be assessed as means for such claims. The previous allowances were long out of date and deprived many applicants of the maximum pension. This anomaly is being removed, but again this has been ignored by the media generally in their concentration on one aspect only of the 1979 Budget.
There are many other improvements in regard to the assessment of means in the budget and also improvements in regard to the extension of free or subsidised telephone facilities to allow for a case where there are two people in the house and the second person is handicapped in some way. This was badly needed. Also, in the case of the blind and the mentally handicapped there is an extension of free travel facilities. Free travel is already available to blind persons over 21 and to mentally handicapped persons, but it is proposed to extend free travel to blind persons between 18 and 21 to enable them to travel free to special work or training. It is also proposed to exempt all mentally handicapped persons who are entitled to free travel from the restrictions applying to free travel at peak hours. These concessions should be widely welcomed by those they benefit. At present the free telephone facility applies only to pensioners living alone and it is proposed to extend this to include pensioners where the only other person residing in the house is permanently incapacitated. I welcome all these improvements which have not been given sufficient publicity in the media.
A further item is the improvement of the exgratia public service widows' pension. This scheme, which comes into operation this month, will give greater help to widows and orphans of members of the public service who have died. This is also welcome. There are also improvements for veterans of the War of Independence with effect from 1 July 1979. The means test ceiling for special allowances will be increased by £100. That will give an increase of that amount to all eligible holders over and above the increase they will receive as a result of their annual revision of public service pensions. War of Independence veterans will also have the telephone rental subsidy scheme for veterans living alone extended to apply to a veteran living with his wife or with an invalid or an old aged, blind or widowed pensioner, or with a person residing with him for the purpose of providing constant care and attention.
Recognition of the position of War of Independence veterans is always welcome because without their sacrifices this Parliament would not exist. It is only right that the Government should always recognise, as they have done since returning to office, the special position of these veterans and give them all necessary aid and assistance.
The new system of social insurance comes into force on 6 April. It will result in a real saving to widows and deserted wives of approximately £2 per week. People in receipt of low incomes will also make a saving due to the fact that social insurance contributions are related to earnings. This is a budgetary provision of 1978 which is coming into force this year. It will mean an improvement for the lower income group and it will simplify the whole system of collection of social welfare contributions. The stamp is being abolished and there is a direct percentage payment to the Exchequer which has been reduced for the lower income group.
Another aspect of the budget is the general improvement in regard to the financing of the building sector. In a speech here on 1 March the Minister of State at the Department of the Environment gave details of expenditure in his Department in regard to house building, house development, reconstruction grants and all aspects of his Department. Local authorities will benefit to a great extent by the budgetary provisions. This year the local authorities will spend £610 million of which they will raise £170 million. The role of the local authorities is vital and they are being enabled to fulfil this role by the funding they are receiving from the central authority. Because local authorities have responsibility for such essential services as roads, water, sewerage and so on we must ensure that they continue to have the necessary support, especially now that domestic rates have been removed. I am happy with the amount voted this year for the counties I represent. During the time of the previous administration we were not given any worthwhile finance for infrastructural work, but Fianna Fáil have changed that situation. In Roscommon a sum of about £3 million has been received in respect of water and sewerage schemes. This money has resulted in greater employment in the area as well as in an improvement in these services. In addition, the improved infrastructural facilities will result in more factories and more houses being built.
The grants in respect of group water schemes are very welcome. These apply to areas in which the local authorities are unable through their own efforts to provide regional water schemes. But there is one point I should like to make in this regard, and that is that the Minister might investigate the question of introducing legislation to control the organisation of these group schemes. In the present situation exorbitant sums are charged sometimes to new applicants. In many cases where the local authority provide the water and the group involved in the scheme provide the pipes and so on, those involved initially in the scheme charge newcomers a very high price for the service. Apparently the Department have no control in this regard and that is why I suggest that legislation be introduced setting out a maximum charge for new connections. Some regulations are needed to control the development of these schemes. They are very worthwhile schemes and much credit is due to the people who are involved in them, but there is some room for improvement on the lines I have suggested.
Regarding the question of house building, a very welcome aspect in this sector has been that since being returned to office Fianna Fáil have increased the local authority loan from a level of £4,500 to a maximum of £9,000. We have increased also the income level in respect of eligibility for these loans. During his contribution on the budget the former Minister, Deputy Tully, reminded us of the good work he did during his term in office, but I would remind him that during the years of Coalition rule the house-building industry reached the worst stage ever in the history of the State. Some of the reason for this situation was the difficulty in obtaining loans and also the removal to a large extent on 1 January 1976 of the grants. The £1,000 grant for new house purchasers has been a tremendous help. Last year about 12,000 applications for this grant were approved and the number paid was 7,140. The shortfall was not due to any delay on the part of the Department, but it appears that the houses were not completed at the rate expected. Such delays are normal in building, but the money is available for those who qualify for the grants.
On the question of local authority loans I would appeal to the Minister for Finance to bring to bear whatever pressure is possible on the banking institutions in relation to bridging finance. I appeal to these institutions to set the minimum interest rate in respect of bridging loans for people who have obtained sanction for the £9,000 local authority loan but who are experiencing delays in receiving the loan, because of delays in relation to title of property, for instance. The banks are exploiting these sorts of situations. Some of the massive profits they are making might well be given to subsidise the bridging finance required by people either building or buying a house for the first time. Even to confine this facility to people who qualify for the £1,000 grant would be a great help. Perhaps the banking institutions could fix the interest on bridging loans at a maximum of 1 per cent more than their deposit rates. It is grossly unfair and unjust to charge interest rates of 15 or 16 per cent on bridging finance in respect of a house, especially as this is finance that is guaranteed by the local authorities and which is paid directly to the banks. If necessary, perhaps the Minister would introduce legislation to ensure that at least some of the funds of these private banking institutions are made available to people who are first time buyers of houses.
Because of delays in regard to titles, delays in the Land Registry, delays on the part of solicitors and so on, people often have to pay interest on bridging loans for as long as two or three years. This situation is totally unacceptable. Perhaps one way of coping with the difficulty would be for the Department to set up building societies within the local authorities on the lines of a national building society which would attract finance from the public generally, pay the current rate of interest and then give special loans at a minimum rate to loan applicants. The present building society charges are exorbitant. The difference between the investment rate and the loan rate is excessive and their profits are also excessive. This situation should be investigated.
One way to deal with that problem would be for the State to set up in direct opposition to private enterprise. That could be organised efficiently and effectively through the local authorities. This would give them a new role to raise money directly from the public, as is the case in Britain and elsewhere. The local authorities have the necessary personnel to administer such a project. They would administer it at a minimum charge and the money would be available to people who are not eligible to apply for the present £9,000 local authority loan. Although the building societies are serving a need the State should and could get directly involved in the direct financing of housing. I do not advocate any nationalisation or takeover of building societies; I am advocating a national building society operated through local authorities.
Some years ago I researched this aspect of financing for local authorities. In my view the present system of local authority loans is very satisfactory. The difference between the rates paid by the local authorities for the money they get and the rate they charge is roughly about half of 1 per cent. This is the maximum which should be charged by any institution. Building societies are making massive profits and should be brought to heel, their profits should be reduced and they should give loans at better rates. If they do not do this the State should play a direct role in raising finance through local authorities. The public in each county would have tremendous confidence in placing their money with the local authorities because they would know that the money they invested directly in their own areas would be used to finance housing there. In other words, they would benefit their own area if they invested in their local authorities with the guarantee that the money would be spent locally. There is a great deal of money which could be invested in this way.
The money which will come back to the Exchequer as a result of our membership of the EMS could be channelled into this very productive development. Priority must be given to assist young married couples who are finding it increasingly difficult to provide the most important necessity of life—the provision of a home. It is Fianna Fáil policy to encourage young people to provide their own homes. Since 1977 the amount of the house loan has been increased by 100 per cent. This area still requires special attention and a fresh look should be taken at it.
This Government are prepared to bring in any legislation required in this area. I have complete confidence in their ability to take the necessary steps to ensure that anomalies will be dealt with as quickly as possible. Reconstruction grants are very welcome. The amount of finance being made available to assist the disabled to extend their homes and provide the necessary sanitary facilities has been increased. At present a disabled person can receive a maximum grant of £2,400—an increase on the maximum granted during the previous administration of £800. They can also receive, for additional reconstruction work, a grant from the Department of the Environment.
I am delighted to see that the Minister of State at that Department is present. Earlier I complimented him on his excellent speech on 1 March. I would like to compliment the Minister for the Environment and the Minister of State for their excellent work in that Department. At column 18, volume 312 of the Official Report of 22 February 1979 Deputy Tully, Minister for Local Government in the previous administration, was proudly boasting about his efforts in that Department. He said:
When I was sitting on the Government front bench representing a Department I took my own responsibility. While I had to report to the Government and get a Government decision on various matters, if I thought it right I made my case. If I got the right to do something I did so without going around and asking people if it was right or wrong.
From my experience of his Department he made many wrong decisions but I am delighted he is prepared to take responsibility for his mismanagement of that Department. No Department was such a disaster as that Department under Deputy Tully. He has taken responsibility for removing the grants on 1 January 1976, thereby depriving many people of the grants to which they felt they were entitled and for which they are still fighting. I am sure he was not very proud of that decision. It took this Government to bring back credibility to the Department and to ensure that there was sufficient finance available for new houses, reconstruction grants and the disabled persons' grants which are being administered by the local authorities and financed by the Government. Under the instruction of the Government local authorities are being liberal in granting disabled persons' grants. Under the previous administration one had to be almost dying to get those grants but under this Government it is relatively easy to get them and they are being granted to the people who are entitled to them.
The Minister should consider the possibility of allowing the local authorities to carry out this work directly where disabled persons are unable to arrange for the work to be done. As public representatives we can help in obtaining the grants, but we are not able to organise builders to carry out the work. That would require not only negotiation but supervision of the work. Possibly the youth employment scheme could be extended to enable local authorities to undertake this task and the grants could then be paid directly to them. I suggest that the Minister should have discussions with the managers of local authorities to see if that policy could be implemented. At present many people who are eligible for these grants are unable to benefit because they cannot organise the work. Perhaps some scheme could be devised, even on a pilot basis. Local authorities would be enabled to give more employment to skilled personnel on a permanent basis.
The role of the Department of the Environment is vital in the development of rural areas. Finance is necessary for sewerage and water works, drainage works, local improvement schemes and group water schemes. The Department are getting the necessary recognition in regard to finance and some of the money which the Taoiseach has succeeded in obtaining from the EMS could be used to improve road structures. The road from Dublin to the west is not in a satisfactory condition and it must be brought up to a proper standard. A huge volume of traffic has been generated as a result of improvements in the economy since 1977, as can be seen by the large numbers of juggernauts on the roads. Improved road structures are necessary to ensure that the products of rural Ireland are brought to the ports for export as quickly and safely as possible. Whatever finance is necessary should be directed towards this.
Deputy Barry Desmond spoke about the development of CIE services. He did not comment on services to western areas, but I would appeal to the Department of Tourism and Transport to investigate the urgent need for the improvement of the rolling stock serving the west. There is need for the development and improvement of public transport. It seems that in the years ahead there will be certain restrictions on the use of oil and energy in general and we will be relying more and more on public transport services.
Deputy Desmond neglected to mention the sale by CIE of some of their hotels. The Coalition Government, which included so-called socialists, allowed a semi-State body to sell these hotels. If they were really socialists they would have been advocating the development of all semi-State bodies and all aspects of their business and would not have allowed CIE to sell these fine hotels to private enterprise. I have always said that I am a member of the only socialist party in this country because they are the only party who are concerned with the weaker sections of the community—they are concerned with all sections.
I welcome all the improvements announced in the budget. I regret that much attention has been paid to one aspect of the budget and many of the improvements have been ignored. They will be recognised as the year proceeds.