The time is now opportune to forget political divides as we are reaching a crisis situation with 215,000 of our people at this moment unemployed; and present indications are — and this is accepted by the Minister for Finance and the Government — that these figures can reach 240,000 by the end of this year. The vast majority are in the age group 18 to 25. It is now the duty of politicians, especially in Government, to seek to tackle this serious problem. I hold that an all-party committee embracing the present Government Task Force should be set up immediately to spearhead the creation of worthwhile employment. The unemployed do not want a handout. They want work and job satisfaction. Agriculture, our largest industry, is responsible for 20 per cent of total employment and contributing 13 per cent of GNP merits only three paragraphs in a Budget Statement running to 61 pages. No measures have been taken to alleviate the financial difficulties facing farmers who have borrowed to expand their operations.
Financial Resolutions, 1984. - Financial Resolution No. 11: General (Resumed).
I think the economic wisdom of my colleague, Deputy Foley, merits a better hearing. Could we have more Members in the House?
Notice taken that 20 Members were not present; House counted, and 20 Members being present,
When we compare this with industry we see that a rescue service is provided. No attempt is made in the budget to ensure that the same alternative is available for agriculture in the light of the milk super-levy. We have only to contrast this with the Minister's sketching of the future directions of his tax policy. The levy is the most serious threat to our largest industry and merits serious analysis not a throw-away line. There is no response in the budget to the need for Government involvement in establishing Irish food industry brand names in international markets. The Telesis Report, CTT and major business people have called on the Government to share in the risk associated with breaking into new markets. These markets are so large that even a small contribution from the Government would generate a massive number of new jobs throughout the country.
This type of Government involvement takes place in other countries such as Italy and France. The cost of such a venture is beyond the resources of Irish firms. What is the point in employing consultants such as Telesis if their recommendations are ignored? When we look at documents such as the Fine Gael election manifesto, the Labour Party election manifesto and the Joint Programme for Government and compare what was promised with what has been implemented in the 1983 and 1984 budgets, there are several serious contradictions and turn-abouts in relation to agriculture. Agriculture suffered a mini budget some time ago with the decision to impose disease levies under which farmers will now contribute £5 million. The IFA made repeated calls on the Government to alter this method of assessment of farm incomes for levy purposes from gross net income. While the Minister acknowledged the problem he made no effort to resolve it. Many small holders over the past nine months have been deprived of their small farmers' dole and this has caused great hardship in many areas. I know of farmers in North Kerry who are under severe financial pressure at this moment due to borrowing large sums in order to build up their small family farms to viable holdings. I appeal to the Minister to seriously consider such cases of hardship by providing a supplementary allowance to help them over this crisis.
I am disappointed that the Minister did not consider the serious plight of our tourist industry. Our hotels employ over 26,000 people in 700 hotels and 85 per cent of these jobs are outside Dublin. The Hotels Federation made several submissions to the Minister with regard to a reduction of VAT on hotels, which now stands at 18 per cent and 23 per cent. The VAT rate on hotels in this country is the highest in the EEC. In the UK it is 15 per cent and 3 per cent for long-term stays. In France it is 7 per cent and 9 per cent for de luxe hotels; in Germany it is 13 per cent; in Italy 19 per cent and 14 per cent; in Belgium 6 per cent; in Holland 4 per cent; and in Spain, which is one of our main competitors, sales tax on hotels is as low as 3 per cent. Why should the hotel industry have to pay 15 per cent corporation tax while it is only 10 per cent for the manufacturing industry? It is regrettable that the price of drink has again been increased. Our drink costs are discouraging to visitors coming here.
A rescue service like that provided for industry to assist hotels in financial difficulties is now absolutely essential to protect the jobs that are involved. A scheme of improvement grants for existing hotels and guest houses is also essential. In this way many new jobs can be created. Another cause of concern in the industry is the new fire authority regulations — I referred to this last year — which must be implemented. Special grants should be made available and also special loans at special rates of interest. The Bord Fáilte statistics for 1982 show the Cork and Kerry region as the major one of the eight regions with 1,500,000 visitors and total spending of £131 million. I hope the Minister and Bord Fáilte will take note of the figures that have been published and consider the Cork and Kerry region for a much fairer slice of the money available for marketing.
Local authorities this year will face serious financial problems because of the shortfall in the rates support grant which this year has been reduced from 15 per cent to .8 per cent. In Kerry alone it will mean a shortfall of approximately £1½ million. The only way this shortfall can be made up is by reducing the services, reducing the work force or increasing many service charges and introducing many more charges. This is not on. The concept of local charges is not a solution to supplementing the shortfall from central government to local authorities. Some new form of funding has to be found.
From the figures available the Minister can anticipate an increase of over 20 per cent in income tax of which the PAYE sector are contributing 85 per cent. Forty per cent of people are now in the 35 per cent bracket. The Minister has not accepted that there is a need for drastic change in the whole system of taxation. The PAYE workers are still carrying the big burden which this year will mean £300 million extra over last year's figure.
Health cuts this year are very serious. The budget for the Southern Health Board for this year has been cut by £4.6 million on top of a shortfall from the previous year of £2.2 million, which is a total of £6.8 million in two years. This is a very serious situation and in no way can the Southern Health Board continue to provide the services and facilities within the Cork and Kerry area. The chief executive officer made a statement at a meeting on 3 January pointing out that unless extra capital allocations were made available he would be forced to close many wards in the hospitals in both Cork and Kerry. Furthermore, possibly it could mean a reduction in the work force by anything up to 400. I hope the Minister will not allow that to happen and that he will make provision for extra finance for which the Southern Health Board are calling.
Last year the IDA's allocation was cut by approximately £6 million. This year the Government tell us that the IDA have vacant factory space and as a result they are cutting the allocation to them. In this time of recession that shows a lack of confidence by the Government in the IDA. What is the alternative to the IDA? They have given a good return for investment over the years. They have been recognised as a job-producing agency up to now, but it is obvious that the Government do not accept this. In their report for 1981 the IDA stated that they were in the process of formulating a special plan for the period 1982-92 to highlight the development opportunities and to ensure that the IDA are geared to operate efficiently in the changing economic environment. The IDA have over 600 acres of land available in the Ballylongford area of north Kerry. Planning permission has been granted by Kerry County Council for an oil refinery in the Tarbert area. I appeal to the Minister to make funds available for the setting up of this refinery because of the massive unemployment in the area.
On Monday of this week a Kerry industrial report was released by the Kerry County Manager highlighting the present serious unemployment in the county which now stands at 20.7 per cent, and 25 per cent of that figure are under 25 years of age. On a county by county analysis that shows that Kerry has the second highest percentage rate of unemployment. This is a crisis which calls for immediate action by the Government. We are heading for an explosive situation in Kerry. The Government have taken steps to redress this situation in Cork city and I appeal to them to extend this special effort to include Kerry or, if that is not possible, to appoint a special task force to explore all avenues and harness all resources to reduce this level of unemployment in Kerry, with the age group 18 to 25 years of age especially in mind.
The budget is disappointing. It offers no help or confidence for the future. It gives no incentive to business and no attraction for capital investment into our economy. It offers no job opportunities, to young people particularly who are looking to us politicians and to the Government. This is a budget of no concern which underlines a policy of despair.
I am glad of an opportunity to speak on the budget and the general economic situation. We in this House came into this budgetary season when we had conditioned the public generally to expect that the economic measures to be taken in the budget would be hurtful to most sections in our society. We made a case about our economy and the people were pleasantly surprised to find that the Minister had put together a package of policies that were not extremely severe in their effect on the ordinary citizen, and at the same time he has satisfied the public with a budget that can contribute in the year ahead to working towards a solution to our economic problems. A number of factors have created this mood of optimism throughout the country. Last year, the very strong performance of our industrial sector and the improvement in exports in the region of 25 per cent in price and 9 to 10 per cent in volume of manufactured goods, have made a very significant contribution. It has convinced us that the policy of industrial development pursued by successive Governments over the years using principally the IDA grants and tax incentives has been relatively successful and that, in spite of many adverse economic factors, this new manufacturing industrial sector that was introduced in recent years to the Irish economy and attracted here by the IDA has been successful up to the moment. We should not place too much confidence in this trend continuing. It must be possible for the IDA to sit down and study carefully the number of factories that have been established, the number that have achieved full capacity and the number in the pipeline to find out whether this increase in manufacturing output is likely to continue or whether it is obvious already that it must cease at some date. I get the impression that this trend will not continue indefinitely.
Notice taken that 20 Members were not present; House counted, and 20 Members being present,
Are the Opposition Whips aware that on each occasion they indulge in this cynical exercise they are not alone bringing the whole House into disrepute but are also interrupting very important committee meetings that are in progress around the House? I hope that the next time they indulge in this exercise they will bear that in mind.
Before the interruption I was making the point that we had several items of good news on the performance of our economy in the run up to the period when the Minister was preparing his budget. The improvement in the export of manufactured industrial goods should not lull us into a false sense of complacency because I have got the feeling that this industrial development has already slowed down. In the years to come we will have to look to our own resources, to native indigenous industries and services, to provide employment rather than rely too heavily on continued growth in the establishment of foreign firms.
Another item of good news was in regard to our balance of payments. Our public finances are in better order and at least we have lived within our projected targets. There is considerable evidence that the Government have introduced the type of discipline into the management of our economic affairs that will give us confidence that we can live within the limits of the budgets we prepare and work within the plans and policies we adopt. Another matter which gave us encouragement was the fact that interest rates have dropped, and we hope there will be a further drop in those rates soon. That will encourage investment. Up to now investment has not been a profitable proposition because of high interest rates. Agricultural incomes improved last year, another reason for optimism. International economic observers recently placed our economy as the seventh most rapidly improving one in the world. That is a change from the type of news Ireland has been making in recent years with observers focusing more on the size of our national debt and the fact that our economy was not growing. The news about our economy has been better in the final six months of last year.
We must recognise that the Minister in preparing his budget found himself in an economic cul-de-sac that the economy has been moving down in recent years. The ground in front of us was getting shorter each year as wrong policies were pursued. Our options became fewer and one could not but sympathise with the Minister for Finance who in a period of recession had to prepare a budget without the option of carrying out a programme of reflation or being able to do much to solve our unemployment problem by loosening up the financial position and producing policies to create jobs. Money is required to implement those policies but it cannot be raised in the form of taxation because we recognise that we have come to an end as far as increasing taxation and providing budgetary finances are concerned. We all recognise the difficulties involved in raising money. We know we cannot reduce the profitability of companies at the moment. That would be the third step the Government take when they are on the way down, and we already passed that stage more than two years ago. We recognise that money invested is not giving a return and that industry in Ireland or other European countries is not profitable by comparison with Japan or the United States. Therefore we do not have the possibility of raising money from the industrial sector because they do not have any money. That is why the Minister finds himself severely restricted. At the moment there is a tendency for us to pin our hopes on what we see as an improving economic situation in the world generally.
Those who are optimistic and look around the world to see where improvements in our situation will come from are looking towards Europe and America and watching for the upturn in the world economy. Experts have been forecasting this upturn and saying how it will affect us. They are looking to the United States to drag Europe after them. In the last six or eight months people have been saying that 1984 will be the year to export to the United States because the dollar will be strong, that this is an election year and prospects for exporting to America can only improve. One can only hope that the dollar will hold firm but it must be recognised that the United States has an immense budget deficit in the region of $200,000 million, and a balance of payments deficit of around $100 billion and the prospects for the long-term maintenance of economic growth in the United States are not as bright as they were some time ago. It would be a mistake for the people of Europe, and particularly the people of Ireland, to believe that an extended period of growth in the American economy will solve all our problems.
Recent studies have shown that America did not have the same unemployment problems we had for two reasons. Their labour market is more flexible and since the oil crisis some years ago wages in real terms in the United States and Japan have tended to reduce rather than improve while in Europe wages and salaries retained their value. American companies have been making profits of the order of 8 or 9 per cent above the European average. This kept the American economy moving but it has been recognised that when compared with Europe, modernisation of industry and labour productivity in the United States has not improved in the last five or six years. In my view, the immense optimism which has been generated in certain circles here that this improvement in the American economy will bring Europe with it might not be well founded. It might be a mistake if we were to say that because other economies are improving ours will follow. Our economy will improve only if we take advantage of our opportunities to export to this market, if companies invest and if our industries are run profitably. We are assuming that when there is this upturn in Europe and America, they will not fill the demand from the over-capacity which is obviously there. I do not think there will be any automatic improvement simply because there is economic growth in the United States and elsewhere.
We have to look at our problems and try to solve them. If the international climate is not right an open economy like ours will find it extremely difficult to generate the kind of economic growth that will solve our unemployment problems. The present Government and the previous Government have taken credit for the fact that inflation dropped during their periods in office. This is a hopeful sign, but I doubt if either Government can honestly claim that the rate of inflation was reduced because of actions they took. There must be something in the theory that inflation must burn itself out in an open economy if it continues at a pace ahead of that of its trading partners. We should recognise that it is not the rate of inflation that is important; what matters is the difference between the rate of inflation in one economy and that of its main trading partners.
If we measure our performance against that of America and the trade bloc with whom we do business, we have to recognise that our performance has not been good. Last year our inflation rate was almost twice that of our main trading partners, the Federal Republic of Germany, Britain and the United States. Even though our inflation rate has dropped a certain number of points, we are still lagging behind our main trading partners. This means our economy is suffering from disadvantages which have increased over the years. It must be recognised that if our inflation rate is twice that of our trading partners it will be very difficult for us to sell to those markets. It has been estimated that over the last five years we have lost 11 per cent because of labour costs compared with our trading partners. Recently the Leader of the Opposition said that take home wages in real terms have not improved for Irish workers. That is one point of view, but it is probably true. The cost for Irish industry of employing somebody is another question but it has to be recognised that that cost has increased here by 11 per cent more than in the countries with whom we trade. This has led to the difficulties we have been experiencing.
In the course of this budget debate the problems have been discussed by Members who were quite sincere in what they said. Most people recognise that it is not easy to solve the unemployment problem. Very few people put forward solutions to the problems that have created this severe unemployment except such solutions which would be obviously popular with their constituents. No solution has yet been dreamt up which is at the same time popular with the public and effective in resolving our economic problems, in so far as the public are able to perceive what are the correct policies to be pursued. Unfortunately there has been so much jargon, so much talk, so many easy solutions put forward that the public are rather confused at present about who has and who has not the solutions.
In this House we have an obligation not only to put forward solutions but to make some effort to rid the public generally of the sort of confusion surrounding the whole debate about how our economy performs and what affects its performance one way or another. If we could but create public awareness of what is important and what is not in regard to the generation of jobs and all concerned with it, we would have gone a long way towards resolving the nation's problems. Here I do not propose to debate the educational system but I should like to see greater effort within our educational system at least to explain the basic elements of economic policy to young people so that they would be able to differentiate between those offering real solutions and those people merely proposing popular policies regardless of their long-term effect.
I was talking about the competitiveness of labour-intensive Irish industries, those that have been penalised by our taxation policies. All sorts of social schemes have been introduced in recent years, schemes like the pay-related benefits, redundancy moneys and so on; indeed, there are so many schemes in operation it is difficult to remember all of them. But, on the other side, have been the increasing charges demanded from employers, whether they be in the industrial or services areas, large or small. The cost of employing people has risen enormously. Some people break down these charges into personal income tax payable on the salaries earned and the social charges. In addition to the wages the worker takes home with him all of these must be seen as a charge on the job. Such charges can be broken down into the employer's and employee's portion, but that is all irrelevant. It is popular belief that it is the employee's share of wages that is deducted and passed on to the State. I would accept it if the State said: "We will allow an employee to take the decision about whether he or she takes home that money with them or whether they give it to the State, whether they provide for themselves in their independent way for the future security of themselves and their families". But the State says: "No, we know better. We will take that money from you and we will invest it for the security of yourself and your family in the long-term future and you may or may not get benefit therefrom". By no stretch of the imagination can this be described as employees' money. It is a tax on employment. The State, in its wisdom, has decided to give certain social benefits and they have decided that these will be paid whether people want it or not. There is no freedom about it. If this is the employee's money, then the employee must be free to take it home and invest it himself or herself for their security and future.
This has led to a situation in which the native market for clothing has been penetrated to the extent of 70 per cent today, as against 40 per cent in 1947. In the same period Irish markets for textiles have been penetrated to the extent of 70 per cent today as against 50 per cent in 1947, while our food industry has been penetrated to the extent of 30 per cent today as against 18 per cent at that time. It should be remembered that in the last five years Irish labour costs have risen 11 per cent higher than those of our trading partners. It is fair to point out that no industries have suffered more as a result of these increased labour costs. I want to underline that this has not necessarily resulted in an improved position for the workers since labour costs involve money that the worker is not allowed to take home. This burden has weighed extremely heavily on the sectors that are labour-intensive, above all on leather goods where labour costs are extremely high, as they are in the clothing, footwear, food processing, biscuit-making and confectionery industries, all of which have suffered severely.
The industries that have done well and which have contributed to our improved balance of payments, the high technology industries, have suffered relatively little because their labour costs constitute a small proportion only of their production costs. For example, our share of the British market in traditional manufactured goods fell by 26 per cent in the last five years, a further indication of the deterioration of the competitiveness of our industries because of the economic policies we have pursued because of inflation and those higher labour costs.
If we are unable to come to terms with this problem we shall not resolve the unemployment situation about which every Member has wept when speaking in this debate in recent weeks. It is not alone a question of some sectors of Irish industry demanding higher wages, more than their share; it is also the effect of Government taxation policies and others which have continued to demand the payment of VAT at entry points. There are also our high interest rates. Therefore it will be seen that there are a number of elements inherent in the problem and unless we take positive action it will continue.
The other element making it extremely difficult for us is the consistently higher interest rates we have had than those of the economies with which we compete. It has been said generally that there is nothing we can do about these interest rates, that they are regulated by market influences, that they constitute a very difficult problem. The USA can be seen as the origin of much of the pressure put on interest rates in Europe in recent years. If the combination of pressure put on the United States Government by the member states of the European Communities cannot encourage them to divert from the policies creating these problems, then there is no prospect of an Irish Government being able to exert such pressure.
I find it difficult to understand how people can justify those high interest rates on the grounds that our inflation has been running at a rate faster than that of most other developed countries while at the same time rejecting the argument put forward that, if we are to achieve improved competitiveness or get back to the situation that had obtained, there ought to be a corresponding rate of devaluation. It is the only way by which this difference in the rate of inflation can be worked out of our system. Not only must we be concerned about the rate of inflation last year, which was twice that of our trading competitors, but we must also remember the 10 per cent already built in during the previous year and the 9 per cent in the year before. This has accumulated in our system and has created a problem in that it is making it impossible for our industries to compete.
We have not had an exchange rate policy. We have put our heads in the sand and have assumed that it is the business of Government to protect our currency regardless of the performance of the economy. If our currency was traded on the international markets it would not have the value that is put on it at the moment. We cannot look to the money markets to find out the value of our currency. We have the ability to trade in the world which indicates something but our unemployment situation shows we need to think out some solutions and many considerations will have to go into the mix of policies that will succeed in the end. The Opposition and the Government should give serious thought to our policy in this area.
New Zealand has adopted a policy of devaluing its currency by the rate of difference in its currency and that of its trading partners. A few years ago the World Bank issued a report which indicated that in the lesser developed countries those who pursued policies of readjusting their currencies made more economic progress than countries that maintained their currencies at a higher level. If we do not think it would improve our prospects for better terms of trade, why do European countries complain that the Japanese have consistently maintained their currency at too low a value? Of course it would not have the same effect on a small open economy like ours. The counter-argument to that is that a strong dollar has not prevented the United States from making economic progress but we can say the same thing about that country as about Japan. The United States economy is not so open to the pressures that could affect us because of an over-valued currency.
Last year we had a small devaluation. When we examine the reason for our improved performance in industrial exports last year we will see that this was one element that helped to make our goods more competitive. The returns from the agricultural industry last year showed that the devaluation had a considerable impact on improving the climate in that industry. The answer always given is that it will create further inflation. However, if the Government and those of us here who have responsibility for directing and controlling our economy impose the kinds of disciplines that are required that should have considerable effect.
When we joined the EMS we joined a system which contained some stable and some not so stable currencies. However, we expected, and this was reasonable, to hold the parity of our currency if we exercised the same disciplines in our economy as did other countries. If we are to be part of a monetary system that includes countries such as Holland, Belgium, Germany and Italy — the latter is a different type of economy in that it is not so open — and if we are to maintain parity, we must have the same kind of discipline and the same kinds of wage increases.
I remember saying in our party room in 1975 when national wage agreements were becoming popular that if we pursued a policy that a person was entitled to an automatic wage increase because of inflation regardless of the performance of the sector or industry in which that person was working we would get into trouble eventually. We should get back to having some kind of discipline in the system. Directors and workers of an industry should be compensated according to the economic performance of that industry. If this is not done businesses will not be able to survive. I had the experience of talking to the directors of a clothing company who established an industry without State assistance, who did not take exorbitant profits but who paid the staff a fair wage in relation to the return given by the industry. The decision of the Government was that if such industries could not pay a living wage they should close and the Government were forced to maintain the workers at home.
We should adopt a more sensible and flexible approach to the labour market. Industries should pay what they are able to pay and that should be negotiated between the workers and management. I would argue for more openness. Directors should have an obligation to give information to workers so that they know what can be got. When workers and employers work out agreements, if the employer goes too far the industry will close down but if the worker goes too far he loses his job. Only on that sensible, balanced basis can people decide whether their jobs are worth working for and worth fighting for. The notion that people can be compensated for the rate of inflation is a very foolish one.
People have spoken about our serious unemployment problem. Many phrases and clichés have become very popular in recent years. When I became a member of the European Parliament five years ago the idea of work-sharing was taking off there and in the intervening period it has become very popular in Ireland. People say we cannot solve the unemployment problem because of the growth in technology. I was not in the House last week when the Minister for Industry, Trade, Commerce and Tourism, Deputy Bruton, spoke on the subject but I read his speech. His speech was not making a political point but was searching for sensible solutions to the economic problems. I recommend those Members who did not hear the speech to read it because it was a thoughtful, responsible and well-researched contribution on the subject of unemployment and how we might solve it. Work-sharing has been adopted by those who always have looked for simple solutions. This was trotted out on all occasions as if the way to solve our unemployment problem was to push up the cost of industrial goods by involving more people in the production of a particular number of units at one time.
People will argue that we can have work sharing without a reduction in wages. That does not justify an answer. Nevertheless, it is a popular myth. Earlier retirement is a close relation. Somebody has said that the idea of work sharing as a solution is based on the fallacy that a lump of labour exists, that there is so much work to be done and that if you involve a greater number of people in doing that work the unemployment problem will be solved — that rather than expand demand for goods and services and create more work in that way, there is only so much work to be done and when it has been done there is no more.
It might be beneficial to remind people these days that in the eighteenth century there was a movement whose avowed intention was to prevent technological development: they believed at that time that such development would deprive people of the opportunity to work, and gangs of people roamed the fields of Britain and France breaking up machines, new ideas for threshing corn and churning milk, because they said they would prevent the development of a labour market. In the first half of this century, technological development was much more rapid and exciting even than it is today, yet the population of western Europe was increasing rapidly then. That led to full employment rather than the opposite. Therefore, the case does not stand up that the numbers employed will be fewer with the development of new technology.
It has been argued that early retirement can solve our problem. I hope that through the years we can make it possible for people who wish to do so to retire earlier by, of course, the introduction of new technology. That means that if there are goods and services required and that we do not wish to expand production — by the introduction of new technology we can expand production to a certain degree anyway — we can allow some people out of the labour market and, from the wealth generated in industry and services, we can afford to pay those people, or they can afford to live from their savings. That would be a very welcome thing but I would not force young people with talents and energy into retirement with the idea that in that way we can resolve the problems of the unemployed.
We cannot underline sufficiently that we have not run out of work to be done. It is obvious that the work is there and that what we must do is to reorganise ourselves to be more competitive vis-à-vis the economies around us. If we cannot propose solutions to the problems of 300 million people in the European economy, at least we can propose solutions to the economic problems of 3½ million people in this part of Ireland. That can be done by making ourselves more competitive instead of the other things that have been recommended.
However, we will not do it by pushing up the cost of our goods and services through a programme of work sharing. We must appreciate that already there is a certain amount of income sharing. We are paying people who are not working. The popular concept is that we should create public works with the money which we give through social assistance and benefits. I do not think that is a solution, but we could reduce taxes progressively on employment and allow some of the money back into the private sector where that is wise — where the public sector is efficient I am not against encouraging more employment there — but it is not a solution to our unemployment problem to put the people who are unemployed into public works. If that were a solution our problem would be a simple one.
One thing we must not do is to lead the industrial countries with whom we compete in the race towards a reduction in working time, thereby putting up the cost of the goods we manufacture and sell abroad. We must be the last of the developing countries to embark on this because we are not quite as efficient or productive. Therefore, that is not a solution open to us in the short term.
Another popular solution is to buy Irish. I have always favoured supporting Irish industry as far as we can. When we are buying goods and services we should patronise Irish industry. We should first consider the jobs of our fellow countrymen and our neighbours' children by buying Irish products, but if anybody thinks that a "Buy Irish" campaign can be a solution to our problem it is a great mistake. It is one more soft option being proposed. If we decide to buy Irish goods regardless of the cost, we naturally encourage Irish industry to be less efficient, and automatically we reduce our standard of living.
We had the popular myth that Ireland lost 40,000 or 50,000 jobs directly as a result of joining the EEC, involving the opening up of free trade with those industrial countries. I do not accept that. Our entry to a free trade agreement was not arranged by a Fine Gael or a Coalition Government but by a Government under Seán Lemass many years ago. That was a wise approach. The late Mr. Lemass recognised that if we were to come out of the doldrums of the forties and fifties we had to go out into the world and learn to compete if we were to have a decent standard of living. If we propose protectionism as a solution to our problems, as sure as night follows day we will suffer as a consequence. Particularly, a small economy like ours cannot rely on such a proposed solution. I would appeal to everybody as far as possible to buy Irish goods, but I would not ask anybody to buy from Irish manufacturers goods which those manufacturers cannot sell anywhere else. It would be embarking on a course that could only lead us backwards into lower standards of living if we encouraged domestic manufacturers to produce and seek to sell goods and services that are not competitive and not up to standard.
The IDA have done a good job to encourage industry into Ireland. Because of the increasing cost of labour here we had a race by manufacturers to automate and to re-equip their industries so that they could reduce labour and labour costs. The IDA have been giving generous grants to industrialists and in some cases this has had the effect of encouraging industrialists to reduce employment, although in other cases the grants were used to increase competitiveness. The IDA and the Government generally in their policies must be extremely careful not to give grants to industries which can have the direct effect of reducing employment, except where this is absolutely necessary.
The Deputy has four minutes.
I wish to refer briefly to the speech made earlier in this debate by the Minister responsible for Forestry, Deputy O'Toole. Because I come from an area in which this subject can generate much discussion, I welcomed his promise of an announcement of a scheme which would encourage greater involvement of landowners in the development of our forestry resources. In the EEC, in industry and in agriculture, a self-sufficiency has developed in many areas — in milk, in cereals, in beef with the exception, for the moment, of sheep. We begin to ask what we can produce. It is time we sought alternative land uses, and afforestation is one of them. I have always regretted that the ordinary landowners did not see afforestation as another crop which could be produced, albeit over a long period of time but which within their lifetime would be of some benefit to them. I regret that the introduction of the new scheme for private afforestation by the Community was not brought sufficiently to the attention of the public so people did not take up the scheme. The grant is fairly generous and if the ordinary farmer had been encouraged to avail of this grant the scheme would have been more successful.
The situation is particularly difficult in the part of the country which I represent, where private individuals and companies are buying up land for afforestation. This, in itself, may not be a bad thing — in fact, I am convinced that it is not. However, when it is in direct conflict with the aims and aspirations of small farmers who already live in the area with regard to extension of their holdings, we have an obligation to try to resolve that potential conflict of interests. One way in which we can do this is by developing policies which will involve farmers and landowners with the Department of Lands in the development of our forestry resources, which in the end can give the prospect of employment to young schoolgoers of today and at the same time not necessitate a change of ownership of the lands concerned.
I should like to see an acceleration of the research programme which is being carried out by the Agriculture Institute on the development of short rotation forest crops — another land use with immense prospects for reducing our reliance on imported energy. There were a number of comments which I had hoped to make, but as my time is now exhausted, I shall conclude.
I was very interested to hear the last Member speak about forestry and the proposed incentive of the Minister for Forestry and Fisheries to assist those who might utilise their lands for increased afforestation. This is a great lack in rural areas in the sense that much of our land lies fallow, is under-utilised or not utilised at all. That part of our land which has been planted with trees has given us a reputation for having the proper type of climate to grow trees and to grow particular species rapidly. Because of that I would encourage the Minister to continue apace with his proposed programme. However, in doing that he should consider the possibility of moving the Department of Forestry out of the hands of the bureaucracy and into the control of a semi-State body like Bord na Móna who have done a magnificent job with the bogs in the midlands. Whatever else may be said about afforestation and the clothing of our countryside and hillsides with trees, our history in this respect has been little short of failure and we have not performed very well.
I say this from my own personal knowledge and experience. There is absolutely no reason why, given a properly trained corps of hard-headed managers, our afforestation programme could not succeed. I am not in any way underrating or criticising our bureaucracy. It has never been found wanting in the service of the country, but bureaucrats by their nature move slowly and anything within bureaucracy moves slowly. I believe that to be the reason for the lack of success of our afforestation. I do not say it is a total failure because there is the evidence of trees planted with the compliments of the tax-payer's money over the years, but it certainly has not been successful to the fullest extent. I urge the Minister to grasp the nettle. This is a cliché, but it explains what I mean and I shall use it. He should do the decent and honourable thing from the nation's point of view and shift the Department to a semi-State body. I wish him every success.
My main reason for speaking here today — and I shall not be detaining the House for long and shall preserve them from the pain of my oratory — is that I wish to speak about unemployment. I am speaking generally on behalf of Dáil Deputies living in urban areas and conurbations, in particular, young people, school leavers of yesteryear, school leavers of 1984 and of successive and subsequent years. It will be an ingredient for revolution if we do not employ our young and we shall have very serious problems on our hands. With all the will in the world I do not think bureaucracy has the capacity to deal with the problem of unemployment. The Government should have a new look at the situation. Schemes are bogged down in the system. Now I am not being critical of civil servants. They do their job well. We provide them with a system and they work within that system with a political will. That is as it should be. What I suggest is that the Government should have a look at the system to see if there is a possibility of introducing a new system, a system more in keeping with the times.
I do not think the Dáil is doing its duty to youth today. I do not think we discharge our leadership properly. We have not shown any direction. We have not given any will. We have not provided any opportunity. The possibility is that young people will show their disapprobation. The present situation has in it all the ingredients for revolution. I certainly do not want that to happen and we must do everything we can to avoid such a situation. But the seeds are there. Public and private property is constantly being vandalised. I talk now about a minority, but it is a growing minority. Fortunately the majority of young people are good people. But the minority is growing. Blackrock is in my constituency. There is no public telephone in Blackrock because of vandalism.
Young people in urban areas with ideas must be encouraged to get together in small co-operatives of five or ten to develop their ideas. They must be given the requisite financial assistance. If every Deputy set himself or herself the task of increasing employment by finding employment for five young people between now and this time next year, this time next year we might be able to paint a very different picture. We might be able to stand up and, with our hands on our hearts, say that between the budget of 1984 and the budget of 1985 each of us has been directly responsible for putting five young people into employment. None of us could have said that over the last number of years. We have the IDA who tell us the number of jobs that will be provided and the number of factories that will be opened. That is not enough.
As a matter of urgency in my constituency I am calling together all interested parties concerned about youth unemployment. I am holding a seminar and, as a result of that, I hope to pursue a programme which will ensure that, as a minimum between now and 1985, a number of people will have found employment in that area. That will be my contribution towards solving the problem of unemployment. I am not now talking about the leader of Fianna Fáil, or the leader of Fine Gael, or the leader of the Labour Party, or the two-man party that sits up there. The Workers' Party. I am talking about each individual Deputy who has an obligation to devote himself fully and wholeheartedly to solving the unemployment problem, and the most important section of that problem is youth unemployment.
We have been presented, unfortunately, with an unimaginative bureaucratic budget which does nothing to give hope to anybody. It is a budget produced by civil servants. It bears the hallmark of civil servants. We had reason to be grateful to civil servants in the past and we will, I am sure, be grateful to them in the future; but this budget was created by civil servants, not by the Minister for Finance. There is no doubt about that. Perhaps it should have been the civil servants who came in here and delivered the budget. They are good civil servants and those in the Department of Finance are the high priests of the Department. That is wrong. This budget is an unfortunate budget. It holds out no hope to our young people. The idea behind the seminar I shall hold is to give young people an idea of what we can do for them. I hope others will follow on the same line. No one should be afraid to do unpopular things, just as no one should be afraid to say unpopular things.
Youth unemployment is perhaps our greatest social ill and unless we tackle it we may face dire consequences. I can see young people moving in a direction in which no one wants to see them move. I do not want to see them supporting the half-baked Workers' Party. That is not the direction in which I would like to see them move. The Labour Party no longer gives them any leadership. It is in decline. So far I have been quite unable to understand The Workers' Party though I think I am beginning to understand its origins. The Labour Party served the nation well down through the years and it would be very sad if those who should support Labour were enticed away towards The Workers' Party. I would rather see people in The Workers' Party than in the Provisional IRA, the INLA or some of those other terrorist organisations. I have no time for the Provisional IRA, let me say from the backbenches of the Fianna Fáil Party, but I can see young people being attracted to them. That is bad for democracy and for the country. Successive Governments can take the blame for that.
Deputy McCartin tried to play down the "Buy Irish" Campaign. I have no apology to offer for the "Buy Irish" Campaign. We should pursue a ruthless campaign in buying Irish. The tragedy is that it has not succeeded because the Irish people have not supported it. If they had supported that campaign it certainly would have succeeded. There are certain stores in this city and county who quite genuinely set aside specific areas of their premises for Irish products and who do their best to push them. That is the way the "Buy Irish" Campaign will succeed. I am not talking about shabby Irish products but guaranteed quality Irish products. We have succeeded in anything we have done with a will. We are not a bad nation generally.
We have the brightest and the best at our disposal in the Civil Service, in Government, in Opposition, in our universities and in our technical colleges. This is the sort of brain power we should utilise. Is it really beyond us, rather than having allowed the "Buy Irish" Campaign to abysmally fail, to make it succeed? Large quantities of money have been spent on this campaign and it is not for want of genuine effort on the part of the people engaged in the campaign that it has failed. The reason it has failed is that the Irish people have not supported it. We seem to have some sort of a hang up in relation to Irish made products. People throughout the country seem to regard Irish goods as second-class goods and feel they do not compare with what our former British masters have to give us.
If our retail outlets, supermarkets, hyper markets, mini markets, or whatever one likes to call them, sell Irish goods the "Buy Irish" Campaign will succeed. That is the best place to sell Irish products, assuming the manufacturer produces the goods on time to those outlets. Some of our retailers have not seen fit not only to actively encourage the selling of Irish products but to actively educate their staff and the people behind the counters to push Irish products. We should continue ruthlessly with the "Buy Irish" Campaign regardless of any EEC regulations. The French are masters at economic nationalism and the British are past masters at it. We bow the knee at the altar of some anonymous regulations dictated to us from Brussels instead of getting on with the job of surviving on our own. Nobody else will look after us. This comes back to the whole question of leadership.
I must pay tribute to two Members on the Government benches, Deputy Molony and Deputy Maurice Manning. I know it may be unusual for somebody on this side of the House to praise somebody on the other side and vice versa but their role in exposing the petrol price increase racket has been commented on favourably by the general public. If the campaign could be conducted on an all-party basis it would be seen as an all-party community effort. Every time petrol prices are increased we are treated to the explanation that those increases are because of the increasing strength of the dollar against the punt. When we hear that the dollar has decreased in strength against the punt does the price of the gallon of petrol reduce? That only happened once or twice. When the Minister sees the strength of the dollar lessening against the punt he should take action and reduce the price of petrol. Could we get it into the minds of everybody in this House that the car is no longer a luxury? The unfortunate motorist is being humiliated, embarrassed and oppressed at every hands turn. He is treated to petrol price increases almost on a weekly basis, on the spurious grounds that the dollar is strengthening against the punt. When the punt strengthens against the dollar the unfortunate motorist has to continue carrying petrol price increases.
The price of a car today is an outrage in relation to the money the Exchequer takes off, which amounts to 50 per cent in most cases and in others it is in excess of 50 per cent of the cost of a new car. In this year's budget we have also had an increase in motor taxation amounting to an increase of £10 for an eight HP car and even a larger amount for higher HP cars. The motor industry is being treated with utter contempt. I do not have any business associations with the motor industry but I have personal associations with that industry. I have good friends in that industry and they have now decided that as far as car sales are concerned it has reached the stage of the law of diminishing returns as the Minister will no longer be able to make a profit out of the sale of cars. He should come to the aid of that industry.
The car was a luxury at one stage and it could have been seen as socially just that money would be taken off the motorist every year. That is no longer a reality. When you go to a middleclass area you will see two cars outside the doors of most houses and when you go to a local authority area you will see quite a number of cars in that area. I would like to see a car outside every person's home.
Would the Minister consider giving the car industry a break? He should certainly have a look at the harm done, particularly during the past year to that industry. The Minister reduced VAT on car repairs and car parts. That is right. It is not in this budget but it was provided in previous budgets. It should not have been imposed on car parts or car repairs, and it should be abandoned altogether in regard to them. If in addition to the expense of car repairs people are asked to pay VAT on those repairs it is understandable that they will not go as regularly as they should to have their cars repaired. That comes back to my point about road safety which I dealt with last evening. People bring cars in poor condition onto the roads when tax is imposed on car repairs. I ask the Minister to look at this and to abandon what is left of that in relation to car repairs and car parts.
The Minister should look at this on the basis that people have been asked to pay increased motor tax and perhaps make the payment of that tax more convenient. We were told here last night that outside River House beside the Four Courts one is treated to the sight of large queues of people waiting to tax their cars. People might come along and, seeing those queues, might go away without taxing their cars because of the difficulty of getting to the tax counter. Of course I do not support such practice. However, I can suggest a simple solution to that, but it is a matter of will, of leadership from the Minister concerned. He should instruct the officials in his Department to instruct Dublin Corporation to issue car tax discs through the post offices. This simple procedure should be done easily if the will to do it were there. I am saying this not in criticism of the good people who operate the car tax office at River House and I hope that my remarks will be seen in ease and aid of their situation. They are an extremely overworked, courteous group of people. I was in with them recently and I saw the problems. If the Minister is not prepared to operate car taxation through post offices at least he should set up a few small tax offices around the city and county of Dublin to make it convenient for people to tax their cars and so eliminate the necessity for them to haul from Little Bray or Shankill or to come in from Skerries over to River House to tax their cars. The Minister might consider my proposal in that respect.
The people I represent have asked me to raise on the budget debate the question of the house property tax. I can understand that the Minister must raise revenue and as long as we have the present tax system we will be always critical of it and we must be forced by law to pay our taxes. We pay our taxes, not with a good grace. However, of all the taxes that the Minister or any Government has ever introduced in this House the house property tax is the most despicable. The home is fundamental to day-to-day living, to an individual's right to enjoy the privacy of a family within it, and now people are being asked to pay tax on the property. Some houses bought for, say, £4,000 or £5,000 about 20 years ago are now valued well in excess of £65,000 to £70,000. The rate of inflation and the depreciation of the £ has taken care of that and people who went into these houses many years ago are now being asked to pay property tax on them. It is grotesque.
I do not wish to comment on the proposed case before the Supreme Court because it is on appeal from the High Court and it would be improper for me to make any point in that regard and I will leave that topic now. However, the case brought by Mr. Patrick Madigan and a number of other people to the High Court did not succeed in that court, it is under appeal to the Supreme Court and so the matter is sub judice. In relation to the house property tax generally I hope that when the next Fianna Fáil Government are elected they will abandon that tax immediately as they abandoned rates on houses when they were elected a few years ago. That tax is dreadful. It is demoralising and unjust and an attack on private property which I find offensive as do the people who made representations to me.
Effectively the people being attacked by the house property tax are paying quite large and substantial sums of money in tax anyway and now they face the added burden of the Government acting as a landlord. The tradition of British landlordism has found its way through to the Coalition Government in 1983 onwards to 1984. I am surprised that anyone with the historical background of the Taoiseach would be party to this form of landlordism. The next logical step would be that if you do not pay your house property tax the Government bailiff will come along with his battering ram and knock your house to the ground. I know that that scenario will never occur, but the whole thing smacks of that part of our history which we would prefer to forget. This tax has been seen to fail. I understand that the Minister anticipated that he would get in excess of £10 million in one year from it and that he has accumulated only £1 million or so. I am open to correction on that, but if that is so it would be interesting to know the cost of the collection of the £1 million.
The form that householders get in relation to the house property tax is the greatest piece of gobbledegook ever produced in any civil servant's mind in our history. It is a landmine. It is very long and very difficult to understand. In addition, many people have to go to the expense of having it interpreted for them. So much for making it easier for people to pay their taxes.
We are all agreed that unemployment is increasing and, as the working week gets shorter, we hear people issuing glamorous statements about the necessity for educating for leisure time. That is very nice, but I would have thought we should be educating our people to be employed. However, I understand the thinking behind this suggestion, that as we progress technologically in terms of the computer and microchip people will have more free time. It is important that we support what could be called the leisure industry, which is growing daily. The Government should not tax it at infancy or strangle it. It should be permitted to grow apace. As unemployment increases and the working week gets shorter it is more important that our young people and older citizens learn how to utilise their leisure time. The Arts play a central role in the area of leisure. Fianna Fáil have a very good record in regard to the Arts. They have been very supportive of the Arts in encouraging the best creative artists to live here tax free through the exemptions we have. Long may those exemptions continue. It is important that we should consider following this philosophy through to its logical conclusion by extending the concession to our interpretive artists such as those in the field of music and theatre. It is a great pleasure to watch or listen to our top performers live in such centres as the National Concert Hall.
We should be deeply grateful to those artistes who have chosen to live here. By their presence they have helped to improve the quality of our theatre. The National Concert Hall is a very democratic place and is not set aside for a particular section of the community who would represent themselves to be upper middle class. It is quite the contrary and is open to all, as it should be. Admission fees should be maintained at a level that will not prevent people going there.
There is great pressure on top performers who continue to live here because if they go abroad they will receive astronomical fees for their talents. We should be encouraging them to remain here by extending the tax exemption to them. I am referring to such artistes as Bernadette Greevy and John O'Conor. We should be very proud of Mr. O'Conor and it is wonderful to think that he has stayed here. We have also Charles Lynch, the great Siobhán McKenna and others of great quality. Some of our artistes have gone abroad but they would be encouraged to return to live here if the tax exemption was extended to them. One can visualise cities like Cork, Galway and Dublin becoming major centres of culture in Europe. Now that we have a magnificent concert hall in Dublin the possibilities are endless. The number of people who would rank as top interpretive artistes is small with the result that the cost of extending the tax concession to them would be infinitesimal but the benefit to the country would be substantial.
Remaining with the topic of music I notice that the Taoiseach appointed two people under that heading to the Arts Council, one from the North of Ireland and the second a person who lectures at Trinity College but is from outside the country. I accept that the individuals concerned are worthy of such appointments but I wonder why we could not have found Irish people of similar quality. I avoided mentioning the latter's nationality because I do not wish to be seen to be chauvinistic or silly in that regard, but the Taoiseach when making such appointments should look to our own people. I am not criticising the reputation or the integrity of those appointed but I am concerned about the principle of appointing Irish people before non-nationals to such an important group as the Arts Council.
I should like to make a plea for the aged in our society, particularly those who live alone. Will the Minister for Finance encourage the Minister for the Environment to examine our existing housing stock in terms of providing indoor toilets? I can bring the Minister to a number of housing estates in my constituency that do not have that facility. That is crazy. Many of the people living in those estates have to go to a hut at the bottom of their garden to perform their ablutions in appalling conditions. That is not reasonable in 1984. We boast a lot about the number of houses we build annually but we should examine our existing housing stock with a view to bringing them up to 1984 standards. I am aware that in the Dún Laoghaire area many people live in houses that do not have indoor sanitation facilities. Such facilities are so basic that there should not be any question of not having the money to provide them. The Minister for Finance should give the money to the local authority for them. I have been pressing Dún Laoghaire Borough Corporation for 20 years to deal with this problem. I do not know if I will be representing the people of that area in 20 years' time — that is a matter for the people of the constituency — but I will continue to press for indoor sanitation facilities for all people. Can any Member imagine the hardship it is for an old person not to have such facilities indoor and having to run to a hut at the bottom of a garden during a harsh winter? People should not be asked to endure that in 1984.
My final cri de coeur relates to the depressed tourist industry. The industry was encouraged by the decision to increase the funds for promotion work by £300,000 and reduce VAT on car hire by 5 per cent. However, disappointment has been expressed that the budget did not do anything worthwhile in reducing VAT for hotels, which is the highest in the EEC. They do not have export relief which is available to other industries. There is 50 per cent corporation profits tax and 10 per cent for manufacturing industry.
Now we come to another problem — drink. The price of drink in Ireland is ludicrous when compared with what is paid in Britain. This country benefited from British tourists until the mad campaign in the North took off in 1969. Now the British tourists will not come here in the numbers we would like. I would be delighted to welcome British tourists. They are a generous people and very good spenders. The average British citizen is a decent person. We should do everything in our power to urge Bord Fáilte to continue with their programme to attract British tourists. But hotels must charge high prices to survive. We should reduce the taxes hotels have to pay in the interests of tourism. If we have the highest VAT rate in the Common Market, how can we expect to attract European tourists when they can get far cheaper holidays at home?
My colleague from the Government benches points out the heading in the Evening Press“Reagan Visit Bonanza for Irish Hotels”. I welcome President Reagan and hope his stay here is fruitful. I also hope it will be financially fruitful for the people of Ballyporeen. They deserve the greatest commendation for the way they are pushing their community to cash in on the President's visit. It is only right that they should get the support of all areas in the country. As I said, President Reagan is welcome and I hope his visit does a lot for Irish tourism by encouraging Americans to spend their holidays here.
As part of the "Buy Irish" campaign, I urge people to spend their holidays in Ireland. We have some of the best guest-houses in the world, their charges are reasonable and they provide very good food. This is a side of the tourist industry which does not get enough recognition. People with families who cannot afford to stay in the larger hotels have seen the advantages of staying in these guest-houses. I am not suggesting that people should not go abroad, but as a patriotic duty we should encourage our population to take holidays at home. Perhaps those who go abroad might take one holiday in three at home. This would be of benefit to the nation.
I apologise to the House for speaking so long but I did not think it would take so long to express my views. I want to tell the House how disappointing, unimaginative and conservative this budget is. As I see it, it does not bring the country any further along the road to national recovery.
I propose to concentrate on the areas of my specific responsibility but before that I will respond to points raised by Deputy McCartin and Deputy D. Andrews. A number of references were made by Deputy Andrews to the "Buy Irish" Campaign. He adverted to the fact that there were legal problems and then proceeded to dismiss them. It would be nice if they could be dismissed as easily as that but I am not sure that that is the case. This is an area where much is being done at voluntary level. I refer in particular to a group of young people — in the main second level students — the Young Ireland group based originally in Oatlands College not so far from Deputy Andrew's constitutency, which has now spread nationwide. If we were never faced with a situation where there were legal constraints on what was available to the Government, the approach taken by that group of young people would offer grounds for optimism.
In the past we had umpteen "Buy Irish" campaigns but they have never been conspicuous successes. This group offer some ground for hope because it is up to the young people to appeal to their peers and their parents and say "Behave in a particular fashion, purchase in a particular way and there is something in it for me". If we bring this to that level there is greater reason to hope that something will be achieved, rather than a much more general exhortation to one and all to buy Irish.
My experience over the past year from talking to young people indicates that they have been meeting with some success. When addressing a meeting in the south Dublin area one parent told me she had changed her purchasing habits as a direct result of the pressure brought by her teenage children. They persuaded her to sign a contract committing her not to spend more than a specified amount of money on foreign imports in any given week. It is a sign of the changing times when people are in a position to exert that sort of pressure. I do not know what would happen if the Ceann Comhairle or other Members of this House had sought to do anything of that nature. Given that the options available to Government are, for legal reasons, limited organisations like Young Ireland are entitled to have the moral support of Members of this House and I urge Deputies to consider how they can assist the spread of that organisation in their constituencies.
Deputy Andrews and Deputy McCartin addressed themselves to the relationship of work and leisure, work and jobs. This is a very appropriate issue to feature in this budget debate. There has been a marked tendency to decry full employment as a realistic goal for Irish society. However, there is every reason to be optimistic enough and determined enough to create a future where there will be work for all. I reject, and I ask the House to join with me in rejecting, defeatist and negative thinking. Perhaps I can explain what I have in mind. It has become commonplace now to say that we are in the midst of a transition, a transition to a new economic Europe. There are a number of different scenarios put forward by experts of one sort or another about the future of employment in a highly technological era. There is what might be described as the unemployment scenario in which most people will be unemployed as a result of technological developments. As an alternative there is what might be described as the leisure scenario. There most people will pursue leisure and they will do so along-side a relatively small number of highly skilled workers in the mainstream economy. Then there is an employment scenario which presupposes that we share around, on as equitable a basis as can be devised, whatever work is available so that as many as possible have access to and the opportunity to participate in meaningful and rewarding work.
I want to advance another possible scenario, what might be called a work scenario in which all of our people will be given the opportunity to engage in meaningful and rewarding work in the future. What does such a scenario involve? First of all, it involves a revaluation of all the "work" which is currently performed in the economy as a whole, that is work paid and unpaid, work perhaps in the social services area, work in the local community. Every one of us in this House knows that there are great opportunities for work in almost every area of Irish society; there is no shortage of work, we are tired telling ourselves that. The problem is — and this is the nub of it — that we find we cannot afford to pay people to do the work which is crying out to be done. That work may be in the area of infrastructural development, perhaps in the area of education, in the social services, health and community care.
If we take that as a starting point then it seems to me that the first requisite — if the work scenario is to become a reality — is that we must maximise the wealth creation from the primary producing sectors of industry and agriculture. The key task there is to produce sufficient products that can be competitively marketed worldwide. We must hope, look to and demand of the market economy that it produces more and more jobs. But we must also accept that perhaps it will not achieve anything like enough in order to attain full employment, at least full employment as it has been traditionally understood. Its key role is to produce sufficient wealth to support the full development of work opportunities in a parallel economy, in a social economy, in an area in which we know we can provide work for all that is worthwhile, creative, rewarding and meaningful. If that is so then the work scenario is linked to some new deal on the distribution of rewards which will offer everyone the status and satisfaction currently enjoyed only by paid workers in the mainstream market economy or indeed people in the public sector.
It is often forgotton, though, by commentators who realise that sufficient jobs — as traditionally understood — are not going to be created by economic development alone that we must still — and this is absolutely essential — concentrate on that wealth-producing economic development if we are to have any basis at all for a "work for all" policy in the social economy area. That demands of us that we start thinking. It demands that we start questioning ourselves. It demands, for example, that we address ourselves to questions such as: what sort of work are we prepared to pay for? How is that work to be distributed? How will that distribution of work relate to the generation and distribution of wealth?
It seems to me that there are examples that, however tentative, show the direction in which we are beginning to move. One example is the youth employment levy. In effect that was an earmarked tax paid by those in jobs which transferred 1 per cent of their income in order to create fresh opportunities for the young unemployed. We are all aware from the debates we have had in this House over the last few months and from the operations of the agencies in the youth employment area that very frequently those opportunities arise in the social economy. More recently and perhaps more specifically, the enterprise allowance scheme has shown the tremendous interest there is amongst the recipients of unemployment benefit or assistance in creating work opportunities for themselves at local level.
There is room to examine, in a sensitive manner, the whole question of State benefit paid to the unemployed in order to ascertain how meaningful work can be created rather than demand of the recipients that they be unemployed, stamped and registered as such. Obviously that would demand that the examination be sensitive. It would demand consultation with the social partners. It could very easily get off the rails and we could find ourselves in a situation of something bordering on famine relief. But I do not think that need happen. It is an area we are beginning to open up, that deserves to be pursued very seriously in coming months and years.
We have an absolute obligation to break the connection between the idea that seems to be prevalent that if one is not holding down a job related to production for the market, one is not entitled to an income, that one is entitled to welfare only. I have doubts as to the extent to which orthodox thinking will significantly influence or have an impact on the unemployment statistics. We need a coherent, broader policy for growth, employment and, then, organisation of work and rewards in society generally. The industrial and social challenge in reality are not as separate as they are all so often presented but rather constitute two sides of the same coin. Technological development alone does not generate economic growth, long-term competitive capability, or social wellbeing. As well as a vigorous industrial and agricultural policy, and a vigorous policy of technological development simultaneously we need social innovation, reform of institutions, perhaps changes in our inherited system of values. I venture to suggest that the area of land reform is one where traditional cultural values have perhaps inhibited full utilisation of our natural resources. Traditional economic thinking will not provide all the answers. In addition to alternative economics we need also an alternative social policy. I welcome the beginning of a public debate in that area.
I want to turn now to the main thrust of my remarks, which is the area of my specific responsibility. I welcome the fact that the Opposition recognise me as being such a reasoned and responsible debater that they know I will not give rise to any controversy and do not find it necessary to come in to pull me up on any errors of fact or otherwise in which I might engage.
Perhaps they just could not face the Minister's devastating arguments.
I am far too modest to put such an interpretation on it but it may be so.
Very shortly after being appointed I made a speech in which I set out my ambitions, hopes and targets for the period in which I would hold office. I suspect that was a fairly unusual thing to do. Probably it is more orthodox to make such a speech during the course of an election campaign and then do whatever one can to retrieve as many copies of the script that remain in the public's grip in the hope that it will be forgotten as quickly as possible. Whether or not it was naive, I made such a speech and I set out the areas in which I hoped to make progress.
I suggested then that it would emerge quickly that this Government had a distinctive policy approach directed towards building a comprehensive youth service. In that speech I set out a number of specific targets on which I hoped to move fairly rapidly and it seems to me this is a reasonable time to come back to the House and report progress.
I indicated then what I saw as the major areas in which movement was required. One was the drawing up of a national youth policy. Another was with regard to developing the role of youth as a social partner. Another was with regard to rapid progress in developing youth work services. I referred to the role I envisaged for the Youth Employment Agency and I indicated my determination to secure a solution to the development officer controversy that had been simmering for some years.
Let us start with the question of resources because that is central to any discussion in this or any other sphere of Government activity. We entered Government with the commitment of support for the voluntary youth services as a priority. When we entered Government the Estimates for public expenditure had been published by the outgoing administration. We found that the increase provided for the voluntary youth sector was a miserly 1 per cent and that was wholly unsatisfactory and quite inconsistent with our stated policy commitment to regard this area as a priority.
In last year's budget it was possible to allocate additional resources to the youth service area and that allowed a substantial expansion in the level of State support. For example, it meant that a number of new youth organisations for the first time were brought into the net as recipients of State grant-in-aid. It meant also it was possible to take a number of initiatives in support of organisations and groups at local community level who were dealing directly with disadvantaged young people. All told, the extra cash made available under various headings amounted to 36 per cent and that allowed for the most dramatic expansion yet in the youth service. This year the provision in the Estimate under the relevant subhead is £2.122 million and that represents a substantial increase on last year's outturn. In addition, the Minister for Finance in his Budget Statement was able to allocate a further £100,000 to youth affairs targetted specifically towards furthering the initiatives taken last year in support of those dealing with disadvantaged young people, particularly in urban areas.
It will be of interest to the House to give some indication of how that money is likely to be spent, but before dealing with that I wish to remind the House of another provision in the budget that is of particular importance to the voluntary youth sector and youth organisations, namely, the change introduced in the administration of the travel tax. This tax which was payable by everyone travelling outside the State had proved to be a serious burden on youth organisations, particularly groups such as boy scouts and youth clubs who as part of their normal routine undertake a fair amount of travelling. A number of them raised the matter with me during the year and, in turn, I raised the matter with the Minister for Finance. I am delighted to say that the budget has taken account of their concern and young people under 18 years who are going abroad either on a school trip organised by a primary or a post-primary school or on a trip organised by a voluntary, non-profit making organisation established for the purpose of promoting the educational advancement or welfare of young persons will be exempt from that tax. That will give a considerable boost to youth organisations and it has been welcomed warmly by them.
Let us see how the £2.12 million will be spent during the next year and in doing so indicate the extent to which it represents the fulfilment of the programme outlined by me on taking office. The Government entered office with the commitment to introduce without delay a comprehensive youth policy that would seek to meet the needs of all young people. We had a number of more specific commitments: one was that we would establish a committee to assist us in that task, that that committee would have a high youth representation and that it would have adequate resources and research facilities. It was also suggested it would be useful if a discussion document could be published in advance of the committee setting down to work to assist it in its task and to provide a focus for submissions. In September last year the committee was established under the chairmanship of Mr. Justice Declan Costello. It contained representatives of all of the Government Departments that relate to and serve young people and it also had representatives of the National Youth Council and other youth organisations. Incidentally, included in its membership is a member of Ógra Fhianna Fáil because we were determined it would not be seen as a partisan group but that it would enjoy the respect of all sides of this House and the nation generally.