Léim ar aghaidh chuig an bpríomhábhar
Gnáthamharc

Dáil Éireann díospóireacht -
Tuesday, 15 Mar 1983

Vol. 341 No. 1

Financial Resolutions, 1983 . - Financial Resolution No. 14: General (Resumed) .

Debate resumed on the following motion:
That it is expedient to amend the law relating to customs and inland revenue (including exise) and to make further provision in connection with finance.
—(Minister for Finance.)

: Is mian liom labhairt san díospóireacht seo ar cháinaisnéis na bliana 1983 agus ba mhaith liom a rá ar an gcéad dul síos gurb é mo thuairim go bhfuil tábhacht eile ag baint leis an cháinaisnéis seo. Tá súil agam go n-éireoidh leis an strategy atá leagtha amach ag an Aire Airgeadais agus go mbainfidh sé amach na haidhmeanna atá leagtha amach go sóiléir in a óraid cúpla seachtain ó shin. Níl aon amhras, mar a dúirt mé, ach go bhfuil tábhacht eile ag baint leis an cháinaisnéis seo. Braitheann staid na tíre sa todhchaí, staid na fostaíochta agus forbairt eacnamaíochta ar na torthaí a bheidh le feiceáil de bharr na cáinaisnéise seo.

Ní cuimhin liom aon cháinaisnéis i rith na fiche bliana atá thart atá níos tábhachtaí don tír seo agus do mhuintir na hÉireann ná an cháinaisnéis seo. Mar a dúirt an tAire agus é á tabhairt isteach cúpla seachtain ó shin, tá deacrachtaí móra an domhain ag brú isteach orainn sa tír bheag seo. Tá deacrachtaí uafásacha, deacrachtaí a bhaineann le cúrsaí eacnamaíochta, cúrsaí sóisialacha, agus go háirithe tá an dí-fhostaíocht ag méadú go h-uafásach in aghaidh an lae. Tá beagnach 200,000 daoine dí-fhostaithe sa tír seo — 14 faoin gcéad, an céatadán is airde sa Chomhphobal.

Is í an phríomh-aidhm atá ag an gcáinfhaisnéis seo ná cúrsaí airgeadais a chur i gceart arís, agus chomh maith leis sin an strategy bunúsach ná cúrsaí eacnamaíochta a chur chun cinn arís ionas go mbeidh forbairt na tíre ar siúl i slí go mbeidh níos mó fostaíochta á cur ar fáil agus go háirthe go gcuirfear stop le méadú líon na ndaoine atá dí-fhostaithe faoi láthair.

I believe the results of this budget and of its financial and economic strategy will determine the welfare of this small nation and our people for many years to come. We are at a critical time in the history of this country. We are faced with appalling, frightening and unprecendented problems — economic, social and financial. We have the frightening spectre of daily mounting unemployment, of factory closures, and of a balance of payments situation which is getting out of hand. Every penny accruing from the PAYE sector is going to service our foreign debt.

There is little or no opportunity here for the many thousands of young people leaving our educational institutions. We have the youngest population in western Europe but because of better educational opportunities over the last two decades we have young people with training skills, expertise and know-how which their counterparts of previous generations did not have.

Much has been said about this being a harsh budget which has hit certain sectors of the community very severely. This budget is the price the people have to pay for the appalling mismanagement, squandermania and lack of enterprise and initiative displayed by those in Government since 1977. The period between 1977 and 1982, by any independent analysis or assessment, will be rated the most disastrous in our history. We had massive foreign borrowing, doubling and trebling each year and at the same time we had nothing to show for this money. Borrowing by an individual, a company or a Government is justified if the money is invested and put to productive use. This massive borrowing since 1977 has left this country in a dire mess.

The Minister for Finance and the Government when formulating this budget gave effect to the truth we spelled out to the electorate last November. The people knew the country was in a dire financial mess and that some semblance of order had to be restored to the national finances. We spelled out clearly and unequivocally that unpopular measures would have to be taken and that a harsh budget would have to be introduced. We said there was no soft option, no magic formula to solve our economic and social problems overnight.

We have a courageous and determined Government who are not afraid to take unpopular measures and who are committed to cleaning up the mess that they inherited from the previous Administration. This Government have inherited a situation of a magnitude and a gravity that no Government in the history of the State has had to face and the budget is the price that the people must pay for the con job perpetrated on them by Fianna Fáil in their election manifesto of 1977. At that time Fianna Fáil tried to give the impression that everything would be free, but we know now only too well how high is the price of the promises made then. Because of that recklessness on the part of Fianna Fáil this country was plunged into massive borrowing for which the taxpayers are now suffering.

This has been a harsh budget right across the board, but the people appreciate the reasons for it. They realise that belts must be tightened if we are to see any light at the end of this very dark tunnel. General reaction to the budget can be summarised by what was said to me a couple of weeks ago by a constituent. This man has four teenage children and he told me that he does not mind a certain amount of belt tightening and of having to pay more tax if it means a future for his children in their own country.

While it is fundamentally necessary to restore some semblance of order to our chaotic financial position, the Government must bear in mind that a budget must have twin objectives. Apart from the question of financial strategy, a budget is the major instrument of a Government's economic strategy. In analysing this budget we must consider it against the background of the mess the Government inherited and then in terms of the economic and social problems facing us. I am satisfied that the basic fiscal management policies as outlined in the budget are correct. One hears many arguments about the various measures that have been taken. It can be said that there are certain areas in which the impact may be too severe, but overall I am satisfied that the Government have started on the right road especially in relation to straightening out our financial situation.

There is much concern that the Government may have concentrated too much on purely a book-balancing exercise. We must remember that to place too much emphasis on accountancy procedures may be to create further unemployment and economic depression. This is the criticism that has been levelled against this budget by many commentators. However, I am satisfied that in formulating the budget the Government had in mind to a great extent the whole employment situation. They realise that the introduction of the necessary national financial discipline will make possible a new dynamic economic recovery which will enable us to have a sound employment-creation strategy. It is very important, not only for the youth of our country but for our whole economic survival, that the galloping rate of unemployment be halted. Our efforts in this direction are affected by factors outside our control — for instance, the world economic recession and the various increases in energy costs. Our farmers, manufacturers and exporters have had to contend with these very difficult circumstances but this major problem of unemployment must be the concern, not only of every Deputy here but of every individual in the country.

From discussions I have had with a wide section of people, people of different political persuasions and so on, I realise how frightened people are because of the unemployment situation. In the past many of our young people left school on the completion of first-level education but we now have coming on to the labour market people who are well educated and in many instances highly skilled but for whom there are no job opportunities. I have noticed a frightening change in the situation in the past decade. In normal circumstances the education, the skills and the expertise that is coming on-stream would be of the utmost value to the development of our country but there are not the opportunities in present circumstances for the utilisation of this knowledge and of these skills.

We must tackle this problem. It is the most vital problem facing us today. Most other countries, too, have unemployment problems. The European Parliament has discussed the situation but very little progress has been made in formulating new policies and strategies. It had been suggested that short-term measures might be adopted to help resolve the problem. At a time of recession there is a great temptation for any Government to concentrate on the short-term in seeking a solution to unemployment. Many suggestions have been put forward to deal with this matter including the introduction of a shorter working week, controls on overtime, early retirement and job-sharing. The introduction of any of those measures will have an impact on employment creation in the short-term.

We must spell out clearly that material living standards and employment prospects depend entirely on the quantity and value of the goods we export or sell on the home market. We must develop our economy and produce the goods which will obtain for us the wealth necessary to create employment. That is our real formula for development. There is no shortcut solution to our unemployment problem. We must carefully assess our resources and their potential, particularly our land, fisheries and tourism. Another short-term solution has been propounded by a colleague of mine, Deputy Kelly, and I regret that I must differ from him in public. Deputy Kelly suggested that emigration might be the answer to our unemployment problem. Emigration has been our greatest scourge prior to and since the foundation of the State. It was easy for people to emigrate to the United States and the UK before because there was no language barrier and jobs were available. For that reason successive Governments did not have to tackle the problem of creating full employment for a growing population. The so-called safety valve of emigration was the easy way out. Although we are in difficult recessionary times it is unrealistic and strategically wrong to suggest that the only future for our young people is the emigrant ship. I reject that. I have fought all my life to prevent emigration and I will continue to do so.

While short-term measures such as job-sharing and a shorter working week may prove helpful, we should plan for the elimination of the problem in the long-term. I accept that some successful experiments were carried out in Aer Rianta in job-sharing and staggered working hours, but we must plan for the future. I hope that the strategy behind the budget is to create new thinking to pave the way for a new national economic development programme and a job creation programme.

I regret to say that the State agencies which in the past made a notable contribution to job creation — I am thinking of the IDA and the Shannon Free Airport Development Company — are not succeeding in their strategy to attract foreign industrialists. The real problem we face in relation to job creation is that the flow of foreign industrial investment has slowed to a trickle. The countries from which those industrialists came, such as the US, West Germany and Holland, are all experiencing economic difficulties. Those countries have to deal with unemployment, redundancies and massive upheavals in traditional industries such as steel and textiles. In the immediate future we cannot look forward to a resumption of a flow of new industries from those countries.

We also have the appalling problem for an agricultural country that our indigenous industries, particularly our food processing industry, which have existed for more than 100 years are folding up. In my constituency we have lost Ranks flour mills and the Erin Foods subsidiary company, Matterson's, is facing closure. Golden Vale Engineering, a company catering for the finest agricultural region in Europe, the Golden Vale, is also in difficulty and 157 jobs were lost there ten days ago. Fastnet Foods in west Cork has gone and the Erin Foods subsidiary in Midleton and the sugar factory in Tuam are in difficulty.

The latest information I have from a reliable source is that there are 300 factories in trouble at present, only marginally surviving. In 1980 a total of 89 factories closed and that figure rose to 94 in 1981. I understand that the figure for 1982 will be between 90 and 100. Where do we go from here? There has been a slow-down in the amount of foreign investment and the IDA are facing enormous competition in their efforts to attract foreign industrialists from the UK, European countries and Third World countries. What are the prospects? How will the budget help to deal with the problem? Will it save the remaining indigenous food processing industries? When the history of the State is written one thing that will be highlighted will be that as a country with the finest agricultural land in Western Europe and blessed with climatic conditions conducive to agricultural production we have permitted our food processing industry to fail. We are importing food products to the tune of £800 million per annum and I understand that we even import such ordinary vegetables as carrots and peas to the tune of £40 million. I have been informed that potatoes produced in Norway are being sold here. We must face those blunt and harsh facts. Since I was elected to this House I have referred to those problems in the course of each budget debate. Our greatest failure is that we have not realised the potential of our greatest resource, our land. The proof of that is that in the Shannon Industrial Estate, of which I am very proud and where many thousands of my constituents earn their living, there is not an industry processing the produce of the rich hinterland.

We must tackle the unemployment problem. During the past 20 years we concentrated on encouraging foreign investment and the IDA did a great job. When I was appointed Minister for the Gaeltacht in 1973 I was told it was impossible to bring industry to the Aran Islands, Connemara, west Mayo or Donegal because nothing was conducive to the development of industry there. However, when we examined the problem we realised the huge resources of the sea coast. We discovered that fish was not being canned anywhere and that all canned fish was imported. Some enterprising people in Burtonport had the idea of establishing a cannery there in 1975. I was responsible for sanctioning the investment for almost £0.75 million of State funds in that enterprise and it has been enormously successful. It resulted in import substitution, of which we now hear so much, and also generated new exports.

This country is cursed with theorists and we find many economists putting forward ideas and engaging in academic discussions on radio and television. Most of them never created a single job and would not know how to do so. We must examine the areas of potential. We must develop a dynamic national policy for agriculture which could create 100,000 new jobs over the next five years in both food processing and agriculture. We must ensure the maximum added value before our products are exported.

The failure to develop our fishing industry is the greatest national scandal since we got our freedom in this part of Ireland. The fishing industry is producing only a fraction of 1 per cent of its potential. One sees in continental ports truck loads of finished products with the maximum added value being taken to markets in Paris and other large centres.

Our tourist industry also has great potential but we need a completely new policy. The amount of money expended annually by Irish tourists going abroad is now equivalent to earnings from tourists coming here. The question of cost competitiveness is crucial.

We need a dynamic new policy to encourage the development of indigenous industry, with agriculture offering the greatest number of possibilities. We have enormous resources in agriculture, as well as great expertise and first-class advisory service. We have farmers who will respond if given the opportunity of working in the framework of a long-term development policy. Unfortunately, when they responded in the past there was usually some change in policy. We must now restore the confidence of farmers.

We should make the maximum investment in research and development of food technology. There are many internationally recognised scientists in our food technology sector. We must also utilise the potential of the co-operative movement which has been so successful in the dairy sector. I see no hope of generating the necessary degree of new employment except through the development of our resources. Our cost competitiveness has been eroded to a frightening degree. This is shown very clearly in the most recent OECD and EEC publications, as well as documents produced by the NBST and the CII.

There is scope for the expansion of exports. It has become fashionable to say that because of the international recession the possibility of generating exports is very limited. I reject that. In 1982 Ireland's share of foreign trade was 0.492 per cent of world trade. To increase that by a fraction of a percentage point would make an enormous difference and it should not be beyond the bounds of possibility.

I am very concerned with the effects on the hotel and tourist industry of the increase in VAT. Some way will have to be found to ensure that the tourist industry is enabled to ride out present difficulties.

As well as cost competitiveness, which is related to unit costs and wage costs, there is scope for improvement in the design, packaging and marketing of products. There is also scope for the development of identifiably Irish products which will be associated with this country in the same way as watchmaking is associated with Switzerland. There is need for brand image development particularly in the food processing area.

There must be much closer contact between our academic institutions, particularly our third level institutions, universities and colleges of technology. There must be much closer inter-relationship between scientists, technologists, engineers, pharmacists and so forth in those universities and manufacturing industry and with research and development. It is worth recalling that very often when some person invents something new he is laughed at. I recall Professor Timoney, who came to me in 1974 and said he had designed a new armoured carrier, was laughed at. However, he decided to locate a factory in the Meath Gaeltacht and he was assisted. I understand this has been a highly successful industry and some of those vehicles have been exported to European countries. There is need for research and development and the encouragement of entrepreneurship. In the National Institute for Higher Education there is a great example of what can be done by a much better inter-relationship between the academic institutions, the practical manufacturing, research and development. The close relationship between the National Institute for Higher Education at Limerick and the Shannon Free Airport Development Company has led to the creation of a considerable number of small industries in that region. Because of the availability of the faculties and the expertise of the NIHE, particularly in the field of electronics, the mid-west region has been able to attract major international firms to locate there.

All the resources available to us must be directed towards tackling the enormous problem of unemployment and job creation. This must be the basic objective of national policy. We must face up to the challenge of creating employment for the youngest labour force and the youngest population in western Europe. Let us not talk about the safety valves, the soft options and other things like that. We must tackle this problem. If the resources and the expertise of the IDA, the Shannon Development Company, the Agricultural Institute, ACOT and the universities can be channelled into a coherent development policy directed to agriculture, food processing, fishery development, fish processing with the ultimate aim of having the maximum value put to the basic raw materials in the country, we can develop exports.

There is enormous goodwill for this country, particularly in Europe. That is the one thing all my colleagues, irrespective of party, have found. There is potential for penetrating the markets particularly for good quality food products, fish products, and there is enormous potential for developing tourism in Europe. I believe Europe offers the best possibility for tourist development. I believe the Telesis Report, an examination and analysis of the Industrial Development Authority, clearly highlighted the areas I have been referring to, such as food processing, agriculture and fishing. There is need for a reorientation of the whole economic strategy into those areas to develop our natural resources. I am convinced the IDA can do it.

If we continue with the present strategy I believe we will not have any results. I hope the financial strategy which has formed the basis of the budget will succeed in laying the foundation for a new radical, enlightened, innovative and enterprising national economic development policy directed to the real resources of the country where the potential for job creation is greatest. If the budget can achieve the twin objectives of securing financial rectitude and job creation it will have succeeded. The acid test of success or failure of any budget is its success or failure in generating new economic activity and job creation.

: The budget debate will soon draw to a conclusion. Thousands of words have been spoken in this Chamber over the past few weeks for or against the budget. I am not one to criticise if I think what is being done is fair and right. I do not criticise just for the sake of criticising. I try to see the other person's point of view, I try to put myself in that person's situation and if I think that person is making a fair, right and good decision I am the first to agree with that person.

When I look at the end result of this budget I can only see it causing more unemployment, higher prices, and destroying the construction industry. Two of the main things the Minister in his budget speech suggested he was trying to do were to minimise the effects of recession and of the necessary adjustment policies on the low-paid and on those on low incomes generally and to achieve the necessary moderation in pay policy so that we can reverse the decline in competitiveness which so endangers our employment levels. I cannot understand how he can possibly think the budget will achieve those two objectives.

This is the most savage and stupid budget I have ever witnessed. It is only in the next few weeks that the people whom it will affect will begin to realise how badly it will affect them. It will create a vicious circle we will not be able to get out of. It will create more unemployment, increased prices and will cause people who are unemployed at the moment to have less money. Everyone will have less income and therefore will be buying fewer goods. That in turn means job losses. Sales of all commodities will drop. Where do we go from there?

There are many problems, the biggest of which is the plight of the unemployed, but not one word was uttered in the Minister's budget statement about the unemployed. In my opinion unemployment is soul destroying and demoralising, whether the person is aged 16 or 60. There are young people leaving school, well-educated or at the inter-certificate level, without a hope of employment. Young people are leaving at 18 years of age with good leaving certificate results and then at 21, having done a course in AnCO, will find that their prospects are getting worse, not better.

Yet the Government do not seem to be making the slightest effort to try to make the situation better. As Deputy O'Donnell said, factories are being closed daily. Young married men with mortgages, threatened with redundancy, are terrified. Older men of between 45 and 50 years of age are becoming redundant without hope of ever being re-employed, no matter how hard they try. It is correct to say that at 40 years or 45 they are too old to be re-employed.

Our young population is growing at a rate four times greater than in Europe and our labour force is growing at twice the European average. Therefore it should be the first priority of the Government to create jobs and not to be moaning, blaming everyone else, blaming every Government but themselves instead of getting on with the job they were elected to do, to stop the decline, to create jobs.

I am amazed they have not paid the slightest heed to the construction industry, the greatest single labour creating industry. The Government have brought about a situation in the budget which forced the Construction Industry Federation to state that the effect would be to induce the loss of 12,000 jobs in that industry alone, and of course that will have a spin-off which will mean a decline in purchasing power, and the Government cannot see any way out of it. They have given £31 million extra towards greater employment but they are not doing the obvious thing which is in some way to halt unemployment.

This budget will prove counter-productive. It will impose increased burdens on the declining labour force. Soon we will have more unemployed than employed and this will create a situation in which the whole fabric of our society will begin to break under the strain.

I ask the Government to take the human factor into account. Do they appreciate what they are doing to family life, to widows, old-age pensioners and other groups who find it difficult to keep their heads above water? This budget will bring them to the brink because they will not be able to cope. I have had young couples coming to me who have reached the stage when they are behind with their mortgage repayments. This will get worse still next week when husbands, if fortunate enough to work, will come home with £20 or £30 less, although they will have to pay higher electricity, oil and general fuel bills. Will the Government not take these basic human factors into consideration?

The woman in the home, already struggling to feed her children, will be unable to cope. She got no increase in children's allowances, which is a disgrace. What happened to the promises about giving her free dental and optical treatment? This Government are obsessed with trying to balance the books. They are spending all their time adding up their sums and do not think beyond that. They are giving our people an overdose of hard times which could prove fatal because the people will not be able to bear that burden imposed in the budget.

The building industry, as I have said, is going through a hard time and I should like to know if the Minister for Finance is contemplating eliminating the incentive given in the 1981 budget which gave relief to people offering moderate-cost accommodation — I am not thinking of those buying apartments and re-letting them as investments. I am worried about the jobs that could be lost if that incentive is done away with. It could reach 7,000.

Finance for construction has been cut by 15 per cent and therefore house prices will go up by about £700 because VAT is going up. Money for the Housing Finance Agency has been reduced by £10 million. This will cause the loss of more jobs in the construction industry and it will make it very difficult for the average couple even to contemplate buying their own home. At the moment they find it difficult enough with practically no increase in wages and prices rising, how on earth can they even think of buying a house in the coming year or two? It may be that the houses will not be built because the construction industry think people will not be able to buy them. Because of Government action fewer houses will be built in the coming years.

I am very fond of Deputy John Kelly. He is one of my favourite people on the Fine Gael benches. He is a very good politician. He speaks his mind and he is very sincere. What he suggested about emigration for our young people was a dreadful thing to say. We suffered from emigration in the thirties, forties and fifties. We do not want our young people to have to leave. During the fifties I saw mothers crying because their sons had to emigrate to look for work. I do not want to see that situation ever again. I want us to be able to create employment for our young people to keep the family together in our own country where they should be. At the moment the idea of our young people emigrating is being aided and abetted by the Government as a solution to the unemployment problem. I do not want to see that happening and I am quite concerned about it.

In the budget £5 million was allocated to the family income supplement scheme. The previous Coalition Government had a Minister for Poverty. Under a Coalition Government poverty always increases, although they talk forever about how concerned they are about poverty and about people on low incomes. I wonder how this £5 million will be distributed.

Will the family have to go to a social assistance officer and almost beg for an allowance out of that £5 million? It was stated that it will cater for 20,000 families. I am not particularly good at mathematics but I calculate that works out at approximately £5 per week per family. With wages as they are at the moment and with increasing prices, £5 will not go very far in a family with a couple of children. I wonder what families will get this money. They will probably have to be below the breadline to inveigle it out of whatever social assistance officer will be employed to dole it out.

The Social Welfare Bill was debated last week and the week before. For the first time for as long as I can remember there is now a decrease in social welfare. With inflation rising the implications of the budget will be far harsher than anyone has imagined. The increase of 10 per cent in short-term benefit and 12 per cent in long-term benefit will not compensate for rising prices, and so on. The incomes of old age pensioners, widows and the unemployed will be cut. The money they will receive will be of less value to them this year than the same amount would have been last year. They will all be worse off.

There is no move in this budget to eliminate the sex discrimination in the social welfare code. I suppose the Government are waiting until this becomes compulsory at the end of 1984 under the EEC regulations. Because things are so bad for the housewife the single unemployed woman and the widow the Government should have tried to update the social welfare code to alleviate the hardship encountered by those people.

I suppose there is no possibility that they would give the married woman at home some sort of social assistance. I do not suppose that will happen for a long time. This is one of the discriminations against women which should be removed now instead of waiting until the end of 1984.

The children's allowances for apprentices from 16 to 18 years of age has been stopped. I read in the newspapers — and I hope it is true — that the £7 to £10 fee for making an application for a job in the civil service is not to be imposed. Two or three young people in a family might be applying for jobs. Imagine the cost of two or three children in one family applying for one or two jobs. It is totally wrong. I hope there is to be a change because that is an absolute disgrace. I never heard anything worse in all my life than that young people who are finding it so difficult to get jobs should be asked to pay an application fee.

This is a deflationary budget. It will cause more unemployment. I am told that next winter the unemployment figure could be well over 200,000. Youth unemployment will increase rapidly. I could relate a catalogue of catastrophies which this budget will cause. The social and economic consequences are frightening particularly for the family. Everybody will be worse off and nobody will be able to do anything to help.

I go to the supermarket once a week to do my shopping. Recently I made it my business to look very carefully at what is on the shelves. I brought my notebook with me and I wrote down details of the various items, including where they were manufactured. It has horrified me to see the amount of imported goods on the shelves of supermarkets. What is wrong with us? Can we not grow vegetables, make hamburgers, or make pies? A person should not have to hunt through the shelves looking for an Irish product. We import carrots and tomatoes from the Canary Islands, celery from Israel, potatoes from Cyprus and other products from Italy. We spend millions of pounds in keeping other people working in their own countries.

There is now an influx of packets of frozen foods, commodities which people did not buy ten years ago. We did not know about such commodities. These foods are expensive, but it seems that people forget this until they come to the checkout when they have to pay an enormous amount. The majority of packeted foodstuffs are imported. We are spending a fortune on imported foods and vegetables and it is about time we stopped this. We should make an effort to build up our food and vegetable industry. The housewife has to purchase vegetables practically every day. Deputy O'Donnell said we are importing vegetables worth approximately £40 million. Imagine what that would do for our farmers. Why do they not try to get a portion of that money?

The tax on property will cause grave hardship across the board, from the person living in the small house to the person living in the large house. An average size house will cost approximately £45,000 or even £50,000. At the moment the local authority in Dublin are building houses in the centre of the city that will cost nearly £50,000 each. The corporation do not build luxury houses. They build average ordinary houses for average people. The £65,000 house is a little above the average but not too much. In many cases the owner of such a property may have worked very hard to buy the house; he may have sold a smaller house and eventually got to the stage where he could afford a more expensive one. If the owners are two professional people earning £10,000 each or a little more, they will be caught by the property tax. That will cause much hardship to ordinary people with a little over the average wage and I do not see why they should be penalised.

The local authorities have been told they must find £65 million, but we have not been told where the money is to come from. Nobody seems to know how it will be collected. Will people be charged for getting their dustbins emptied? One householder may have only one small plastic bag of refuse while his neighbour may have ten bags of refuse. Are we going to regulate the price according to the amount of refuse? Are we going to charge water rates? There will be much discontent among average people if there is any indication that domestic rates will be brought in by the back door. People put up with paying domestic rates for long enough. It was a most unjust rate because it did not take into account a person's ability to pay. If this is another form of rates there will be much hassle and many will refuse to pay.

Will people be charged for street lighting or for sweeping the streets? It will be very difficult to impose that type of tax and people will not agree to it.

One of the most worrying aspects is the cutbacks in education. In my constituency people have come to me with pages of names and addresses of those complaining about such cutbacks. I am not talking about parents whose children have free transport, as is the case in some parts of the country: I am talking about Dublin people who are worried about educational facilities for their children. It is only since free education was introduced by the late Donagh O'Malley that people were able to give their children the opportunity to go to secondary school. There have been many improvements in the educational system — for instance, with regard to the pupil-teacher ratio, career guidance and remedial teaching. All of these improvements were welcomed by the average person because it was an indication that the Government were trying to do something in that area. Parents are very interested in education. I always find at a public meeting that the hall is packed if the matter under discussion has anything to do with education. The cutbacks initiated by the Minister for Education will damage our educational system and set us back ten years.

The budget does not do anything for the tourist or motor industries. What are we trying to do to our industries? Are we trying to abolish all jobs and start from scratch with everybody unemployed? Sales of new cars are down by 32 per cent and the retail sales of petrol have also dropped since the recent price increases. A large number of people were employed in this industry but now it is expected that thousands of them will lose their jobs in the coming year and a half.

The tourist industry was our most important industry after agriculture. VAT has been increased to 23 per cent. If any Government, including my own, had any sense they would reduce VAT in this area to 10 per cent. This would give an opportunity for competitive prices and people would come to the country. I thought that was what it was all about — encouraging people to come here.

Petrol costs £2.80 but the amount of revenue collected has decreased. What is the point of increasing the price of petrol when last year the revenue dropped to £160 million? It was £180 million the year before and I am sure this year it will be down to £130 million. What is the point of all this?

How much thought was given to the budget? Did those with an input into it sit down with two columns of figures and say: "This is the way we want it, let us do whatever has to be done regardless of how it affects the country"? Sets of figures are all very fine but people must be able to look after families, pay a mortgage, buy groceries, educate and clothe their children.

As regards the "Buy Irish" campaign, I had a look at some goods in the shops to see how easy or difficult it is to buy Irish. I found it extremely difficult because much of the clothing on sale does not have any label stating where it was made. Perhaps it is snobbish but there are some Irish manufacturers guilty of putting a name inside a coat or dress which sounds very nice. But is does not state where the garment was made. I made an inquiry about a garment and found that it was Irish made but this was not stated on it. Are manufacturers afraid to put "Made in Ireland" on garments because people might not regard them as being as good as those made in France or Italy? I have often gone into a shop and asked for a blouse or a dress. The assistant would tell me delightedly that such and such a blouse was made in Italy or France as if that was great. Irish manufacturers should be encouraged to label their clothes "Made in Ireland". It would then be easy to distinguish clothes which are not made here.

I have often asked women, who are the people who buy clothes, shoes, household goods and so on, to buy Irish made as far as possible. They are beginning to realise that when they buy Irish it helps to keep their husband at work or get their child a job. If we only bought what we manufactured or ate the food we produced we would have no problems. However, we spend a lot of money on imported food and clothes from such places as Hong Kong, Taiwan and so on. Our industries are dying and people cannot get work. Much of it is our own fault. We are not making much of an effort to help our country at present. Everyone should make a real effort to buy as many Irish goods as possible.

I am disappointed with the budget. It does not do anything to help the unemployed. There is very little real hope for anyone. I hope it is not an overdose of hardship to make things worse instead of better.

: I did not intend to speak on such a complex subject as the budget in my first year but I am driven to speak by parochial needs and considerations. Like most rational people I accept the need for this hard budget, the harshest which has been brought in in this State. It must be seen against the worsening economic situation which we face. We in the Coalition must take a bow for having a Government who have the guts to face the unpleasant and enormous problems which confront us as a direct result of the notorious 1977 manifesto and its atrocious policies. As a liberal, I pay homage to Fianna Fáil. They have made a very big contribution to the history of the State but I believe that the 1977 manifesto will rank as the most notorious document ever produced and will be spoken of for many years to come.

There is a national emergency at present and that is why I endorse the necessity for this harsh budget. As a newcomer to politics it is very hard to listen to various Deputies from the other side of the House adopting a dog-in-the-manger attitude to the very rational steps that the Government are taking in order to secure the future for the next generation. They troop in, they nit-pick and find fault with various policies which the Government are trying to implement. Where were their solutions last year when they were so out of touch with reality and the economic state of the country that they actually thought there was a period of boom and bloom? They were totally out of step with the nation. Where were their magic remedies during the crisis years from 1977 to 1981? Despite the fact that they had a majority of 20 seats in this House, they produced sterile policies, the situation gradually worsened and finally was totally out of control as a result of the policies of "Doctor Disaster", alias the then Deputy Martin O'Donoghue. His policy sowed the seed, we are now reaping the whirlwind and will continue to do so for many years.

Undoubtedly this budget is hard and next year's budget will also be hard. It is necessary to have hard budgets so that the country will survive. We are in the midst of the greatest crisis that has ever confronted us. We must acknowledge that and face up to it.

Various Fianna Fáil speakers have criticised the Government for attempting to balance the books. The majority of us do not understand high finance but a fundamental principle for even a corner shop is the necessity to balance the books. I fail to understand the derision which Fianna Fáil speakers are casting on our efforts to do so. The necessity for this budget can be clearly seen from the fact that in 1977 the national debt stood at £4,000 million. Today the national debt stands at £12,000 million, an awful indictment of the ineffectiveness of Fianna Fáil policies. It took us 32 years to reach a national debt in 1977 of £4,000 million. In five years we have trebled that debt. So much for Fianna Fáil and their policies.

In 1977 the unemployment figure was 100,000. In early 1983 the unemployment register stands at 188,000. In the last year that Fianna Fáil were in Government 701 factories collapsed. Business is haemor-haging to death. How long can this go on? Eventually the bleeding will stop and this nation may also stop unless corrective and remedial measures taken by the Government are allowed a period of time to bear fruit. Fianna Fáil should stay quiet for one or two years in order to give the Government's policies a chance to benefit the country. Surely the object of the exercise should be to allow the country to benefit from governmental policies? Fianna Fáil had no policies and they are now adopting a negative attitude which must be deplored.

I would like to shed a tear for my native town, Dundalk, and the Border region generally. I ask you, a Cheann Comhairle, as a Cavan man to shed a tear with me. Dundalk is not a village, it is the largest town in Ireland but it has suffered greviously as a result of the continued problems and troubles in the North. There has been no major investment in Dundalk since 1969 and 14 years is a long time for a town to be starved of investment. We have also suffered from the irresponsible labelling of Dundalk as "El Paso" by a British journalist in order to achieve a cheap by-line and to have a laugh at our expense. That tag, which we refute, has prevented investment in Dundalk. The town's situation has been exacerbated by the measures taken by the Government. While I know and accept that the Government cannot parochialise the budget, nevertheless I would be failing in my duty to the people of County Louth, who elected me to represent them, if I did not present the case for my native county and I do so unreservedly.

The recent measures taken by the Government have resulted in Dundalk becoming a ghost town and have created an El Dorado out of Newry. It is cold comfort to people in my town of 27,000 inhabitants to tell them to grin and bear these increases and offer them up for mother Ireland. A bank manager whose client has a commitment on a monthly basis will not accept that, and the position in Dundalk and many Border towns is now one of devastation and deprivation. We are an economic wasteland, economically deprived, with very little hope for the future.

Last night in Dundalk I attended a meeting of self-employed small traders and businessmen. The hall was filled to overflowing and very angry words were directed at me as the representative of the Government. I understand these people's frustration, anger and fear for the future. These are self-employed who get very little help of any description from Government, and they are faced with the most frightening aspect of their business life. Every weekend they watch busloads of people going through their town to the El Dorado of Newry. They watch those buses hopefully for a sign that they may stop, but the only reason they stop is for some of the occupants to go to the toilet. They are going right through Dundalk and they are leaving untold money in Newry and other Border towns. By the end of this year we may have exported millions of pounds to the British Exchequer and those millions will be lost to the Irish economy. My query is, what type of high finance can allow millions of pounds to escape, to be drained from the Irish Exchequer and handed over to the British Exchequer? The scene on the road to Newry every weekend is indescribable. It is like a pilgrimage on the road to Mecca with hundreds of cars converging on Newry from every hamlet in this country. Cars from every county can be seen on the road to Newry, some even from County Clare. On Saturday week last I heard that a mini-bus containing nine people left Dingle in County Kerry and those people spent £1,500 in Newry. On Saturday morning last a television dealer sold 44 colour TV sets and by the end of that week his aggregate sales totalled 148 colour TV sets. The trend to Newry and Northern areas has become a stampede and, like a rolling stone, it will gather momentum and by the end of the year we will have lost millions of pounds. The attractions of business in the North are not lost on the Northern authorities. Belfast City Council are advertising in an effort to entice and seduce Southern people to go and spend money in their area.

Another aspect of all this is that the Government have given the green light to smuggling on a massive scale. Such are the very lucrative rewards at present that very undesirable people could be drawn into massive, large-scale smuggling and we could have the spectacle of guns appearing on the Border with resultant danger to the unfortunate customs men who are trying to stem the flow of smuggled goods into this country. The Government should assist legitimate business people in the Border counties by employing more customs officials in an effort to stem the vast amount of smuggling that is going on there. Basically the difference in the price of petrol is bringing people to the North. People are driving from nearly as far away as Dublin, filling their tanks with petrol and carrying more petrol back in storage cans in their boots. We now enjoy here the highest petrol prices in Europe, and that is not much incentive to any few tourists who might be around.

What can be done? I do not know. I accept the board thrust of the budget and the necessity for it. This budget had to come to prevent haemorrhaging to an economic death but I ask the Government to look seriously at measures to alleviate the hardship that is evident in not alone Dundalk but in all Border areas. I ask them, as a means of alleviating the economic hardships, to consider increasing spending capital in the Border region by providing more money to build roads, houses and schools. This could help the building industry which is in sad disarray. I ask the Government also to ensure that the gas pipeline will be brought to Dundalk on its way to Belfast. I have heard suggestions that it will be by-passing Dundalk. I fail to see how such a measure could be even contemplated, and I ask again that the pipeline become a reality in Dundalk. I also ask the Government to consider transferring a Department to Dundalk. The decentralisation of various Departments should be done in any case and Dundalk has a very valid case for a Department to be located there or in the county.

Finally, I suggest to the Government that at the height of the troubles in the North of Ireland when business was virtually at a standstill in Belfast, the Government in the North created an enterprise zone that was a means of enabling normal business to continue trading. They provided various subsidies for the very hard-pressed traders in those areas and they removed rates. I ask the Government to consider something along these lines as a means of alleviating the worsening business situation in Dundalk and in all Border towns and to maintain the present level of subsidies for labour-intensive industries such as the shoe and textile industries. These subsidies are vital to a town whose largest employers are those in the shoe industry, employing 1,100 people. This industry has recently seen hard times and the existing small subsidy is vital for its continuance. There is no possibility, sad to say, of creating employment in the worsening economic situation, so the fight must be to maintain the present levels of employment. These subsidies are vital in every region, but I speak for the Border region in asking that they be continued. I make no apologies for being so parochial. The scene in my area is one of devastation and many TDs are not fully aware of the seriousness of the situation. The position in Dundalk is catastrophic and remedial measures are urgently needed.

I accept the necessity of this budget. The Fine Gael and Labour alliance are to be congratulated on facing the present problems and producing a budget which was to the benefit not of their respective parties but the country as a whole.

: This budget is concerned mainly with book-keeping and not with managing the affairs of the country for the benefit of the people. The budget has no attraction for employees, workers, business people, pupils and students. There is no incentive for business expansion or job creation, particularly jobs for young people, the reverse being the case. There are cutbacks in the educational system and in agriculture, there is no incentive for tourism and there are proposals for charges in respect of environmental and local government services.

No additional money has been provided for afforestation for the purchase of additional land for planting. The Government decentralisation proposal has been postponed. No effort has been made to provide for regional policies within the context of the EEC regional fund and no great incentive for industrial employment. There are also cutbacks in social welfare benefits. The take-home pay of employees and workers will not be satisfactory when PRSI and PAYE are deducted and when the fact that the PAYE thresholds have not been increased is taken into account. There is a serious deterioration in the health services, with no provision to improve or expand them, at a time when so many young unemployed people are unable to provide the necessary funds for their health needs.

I want to go on public record as openly opposing the cuts in education. I am completely opposed to the restrictions on school transport and the reduction in the number of teachers for post-primary schools. As a result of the school transport cutbacks and the implementation of charges fewer will avail of post-primary education. The school transport service is an integral part of free post-primary education, without which service, outside the cities, the educational scheme would not be a success as pupils living in remote rural areas could not reach their schools.

As a result of proposed teacher-pupil ratio cuts and other measures it is estimated that 36 secondary teachers in Kerry are likely to become redundant within the next two years. This is a very serious consequence of the Government's decision in one county alone. Our educational system is being set aside in order to pander to the architects of fiscal rectitude. The worsening of the teacher-pupil ratio will inhibit totally any progress in the educational field and the pupils will suffer—junior, senior and post-primary.

It appears there are plans for a serious cutback in the school building programme for 1983 and 1984. There is no movement towards the provision of much-needed accommodation in primary and post primary schools where there is serious overcrowding. In many cases additional teachers have not been employed because the necessary accommodation is not being, and will not be provided.

I am convinced that this budget is a disaster for tourism. We in Kerry are in a good position to judge this. The increase in VAT from 18 per cent to 23 per cent which hotels have to pay — and have to charge their customers, the tourists — will play havoc with the industry. This is a clearly established fact. There are no concrete proposals in this budget to expand the tourist industry and to provide incentives to grant-aid marketing facilities. Any investment in this area would be money well spent because there is a very high level of employment in the tourist trade; it is far higher than the ordinary person would imagine.

The Government should provide a scheme of petrol vouchers for tourists and grants for intensive advertising in Britain, Europe and North America. It is obvious that the tourist counties like Kerry and tourist towns like Killarney will be very badly hit by this substantial increase in VAT. In my view every Government should provide more tax reliefs for those engaged in the tourist industry, although it could be argued that that will not be necessary for some time to come because no tax will be payable as hoteliers will make a loss rather than a profit.

The increase in VAT from 18 per cent to 23 per cent will have a serious effect on the soft drinks industry. It should not be necessary to increase VAT on soft drinks and mixers because this industry gives very good employment which could be affected if there is a drop in sales.

I want to mention the effects this budget will have on the national park in Killarney. This park should be developed to its full potential as soon as possible. There are thousands of undeveloped acres in this park and any moneys spent on it would be a sound investment. Killarney requires special attention from the tourism promotion point of view because Killarney and Irish tourism are synonymous throughout the world.

I am very concerned about the future for agriculture and horticulture. It is a pity that the cutbacks in agricultural grants should come at a time when agriculture could provide much-needed employment. I am very disappointed that the Government found it necessary to abandon the payment of grants for farm buildings under the Farm Modernisation Scheme. This grant scheme, which is EEC aided, was dropped without notice. I know a number of farmers who borrowed substantial sums from their local banks for cow byres and farm buildings. They now find they cannot get a certificate of approval to cover the work which is being done with the result that in a number of cases work has come to a standstill.

I thought money would be provided in the budget to help farmers avail of a very good EEC scheme in respect of disadvantaged areas, that is, the payment of headage grants. There is grave concern in certain parts of the south-west, and particularly parts of Kerry, that they were not included in the severely handicapped areas for grant purposes within the disadvantaged areas scheme. This is particularly so since it has come to light that these areas could have been included when the proposals were submitted for approval to Brussels in 1975. The Government should put forward proposals to include the 12 western counties in the disadvantaged area scheme so that headage grants could be paid for sheep and cattle.

I agree with a previous speaker's remarks about the great employment potential in the agricultural and horticultural areas. When one takes into account the enormous sums being paid on imported agricultural and horticultural products one realises that the sensible approach would be to set up a series of food processing industries throughout the country. There is great potential for this in Munster particularly, which is a great dairying area. There is great potential also for horticulture in certain parts of the south west and there is good reason for believing that there is much scope for the provision of jobs in this field. However, such schemes would have to be carried out either by way of private enterprise with IDA assistance or by way of co-operative societies assisted by the IDA. I would not be too happy about leaving the matter in the hands of some semi-State organisation.

The Government should commission an in-depth study of this whole area bearing in mind the huge cost of the items that are imported. With the proper initiative a viable industry could be set up in many counties giving much-needed employment in the agricultural sector. The cooperatives may be the best means of operating such industries. I am confident that there is a great future also for the horticultural industry but there is need for more serious study in this area. We should explore, too, the advantages economically of using turf to heat glass-houses apart from the possibility of providing more employment in this way in the area of turf harvesting.

Side by side with agriculture and horticulture there is great potential for the provision of employment in the fishing industry. A great opportunity is being lost by the failure to set up small industries particularly at the points of landing. If we had fish processing industries in these places the landings would be greater because there would be the incentive for fishermen to land greater catches. We must consider the fishing industry from the employment point of view apart altogether from the point of view of exports. It is not desirable that fish be exported to the Continent without first being processed here. As a result of discussions I have had with people in the fishing business I am convinced that the Government must consider seriously the potential for employment in fish processing. I realise that to become involved in fish processing in this way would necessitate expenditure in respect of the improvement and the development of harbours and piers along the coastline but this would be money well spent in terms of return.

On the question of the taxation of farming profits I doubt very much that small farmers will complete their income tax forms as envisaged in the budget. Up to recently farmers whose valuations were less than £40 were exempt from the payment of tax but it appears that since the Wexford farmers won their case in the High Court the notional system as we knew it and as it related to farm incomes, is gone. But for small farmers anyway the Government should concentrate on having some notional system instead of asking these people to fill up tax forms which in many cases they are not capable of doing and also because there is no necessity for them to do so as a result of their holdings being so small.

The Government should consider seriously the production unit accounting system as explained by the ICMSA. This appears to be a soundly based system. I was very impressed by the explanation of it as given by the chairman and the secretary of the ICMSA at a recent farmers' meeting in Tralee. Another system which might be used as a notional system is the one used by the Land Commission and known as the adjusted-acreage system. This system works fairly well for Land Commission purposes.

I speak for the small farmers of the south and the south-west and particularly of Kerry when I say that the Government should proceed with the appeal to the Supreme Court against the decision of the High Court that the PLV system be abandoned. That was a system which gave a fair indication of the value of a farm and of its potential income. I know this from my close association with the land and from meeting with smallholders in Kerry, particularly those in the dairying industry.

The motor industry, too, is hit very hard by this budget. There is a drop in sales as a result of the increases in VAT and in petrol prices. This industry is being priced out of all proportion. I am afraid that the impact of VAT on services and charges for repairs will create a situation whereby car and vehicle owners will not bring their vehicles for regular servicing. That could lead to many more defective vehicles using our roads and may well result in an increase in serious traffic accidents. The Government should have second thoughts about the VAT imposition on the motor industry.

I should like to deal now with the environment and local government services. Local authorities will have great difficulty in collecting the charges which the Minister proposes to introduce for services to local communities. It is understood that charges will be imposed for the collection of refuse and the provision of water to houses. Householders in urban districts will be asked for the first time to pay a water charge at a time when the value of money is diminishing. For that reason local authorities will have difficulty in collecting the money. If the Minister decides to introduce those charges — I am opposed to them and will express my opposition at the appropriate time — I hope they will not be severe.

Refuse is collected from households in the cities, towns and villages for amenity reasons. Those who cannot afford to pay the charge for refuse collection will have to find an alternative way to dispose of it and that could create a health hazard. More grants should be channelled from EEC funds to local authorities who are in a position to make great use of such money and create a great deal of employment. A proportion of the EEC Social Fund should be given to local authorities to be spent on employing young people to improve local amenities and services.

I was disappointed to hear that it is not the intention of the Government to proceed with the programme of decentralisation proposed by the outgoing Fianna Fáil administration. Fianna Fáil were deeply committed to a programme of decentralisation of Government offices to provincial towns. We are all aware of the necessity for such a move if we are to have proper planning and development. Dublin, and its environment, is top heavy with Government offices and people. Thousands of young people from the country who are working in Dublin would welcome an opportunity to return to work in their native counties if suitable employment was available. The Government should give the lead in regard to decentralisation. Dublin is overcrowded and as a result has many traffic and housing problems. The answer to the serious problems of the city is to decentralise.

The last Fianna Fáil administration had a proposal for the decentralisation of a section of the Department of Justice to Killarney. Land was purchased in 1981 and tenders were invited for the erection of offices. I should like to know if it is the intention of the Government to proceed with that proposal. The Government should enter into negotiations with local builders with a view to erecting an office complex in Killarney. Such a move would create much needed employment. Towns like Kenmare and Killorglin would also benefit from that programme of decentralisation.

The Government should introduce a regional policy. The whole country is a region for the purpose of funding from the EEC Social Fund. Despite the fact that our population represents only 1.3 per cent of the population of the EEC we still get a good share of money from this fund, but it is spent throughout the country as a whole regardless of the special problems in different areas. I should like to see the development of regional policies. Certain areas should be identified as having social and economic problems and as requiring infrastructural work.

There are two such areas in County Kerry. One is the Iveragh Peninsula and the other is the area aound Sneem. In the former area the local development organisation are making a case for a special grant from the EEC fund. The Government might examine the possibility of a pilot scheme and designate the area so that substantial grants could be obtained. These two areas are experiencing a decline in population while in the rest of the country the population is increasing. These are the kinds of places which should receive special recongnition in any regional development policy.

There is no doubt that the high level of unemployment, particularly the unacceptable level of youth unemployment, is our greatest problem. I am surpised that the Government did not provide more money in the budget for the IDA and I was amazed that their allocation was reduced by £6 million. This represents bad management by the Government. More money should be given to the IDA to assist potential industrialists to provide machinery and equipment for advance factories and for incentive schemes to attract industrialists to these factories.

The areas which have an unacceptable level of youth unemployment should receive special attention. I am very concerned about this problem and I am afraid that unless something is done to provide employment for young people there could be a revolution within a few years.

The Government should compile a list of imports and examine the possibilities of producing some of these goods at home. An incentive programme should be implemented to substitute imports with home-produced goods. Such a programme is vital.

I am amazed at the changes taking place in social welfare payments, particularly the changes affecting sickness benefit and unemployment benefit. I am also surprised at the decision of the Government that all smallholders in receipt of unemployment assistance should be means tested. I will not elaborate on this matter because I intend to raise it on the Committee Stage of the Social Welfare Bill.

I am concerned about the very high level of PRSI and PAYE payments by workers and employees. The decision of the Government to impose a further 1 per cent levy on incomes makes the position more serious and there is no improvement in the PAYE tax bands. Time will prove that employees and workers are doing very badly in this budget. The small business man is also suffering. He is expected to be a tax collector and must keep records and accounts, as well as a detailed account of VAT collected and paid to the Revenue Commissioners. Many small traders are being squeezed out by supermarkets. The Government must do something to assist these people. In many towns and villages, particularly in the west and south-west, people who have been involved in small business enterprises all their lives are now seeking outside employment. This is not satisfactory.

Debate adjourned.
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