Dáil Éireann díospóireacht -
Thursday, 11 Oct 1984

Vol. 352 No. 9

National Economic and Social Plan: Motion (Resumed).

The following motion was moved by the Tánaiste on Wednesday, 10 October 1984:

That Dáil Éireann approves the policies set out in the National Economic and Social Plan —Building on Reality.

Debate resumed on amendment No. 1:

(1) To delete all words after "Dáil Éireann" and substitute the following:

"deplores the failure of the Government's National Economic Plan to provide a strategy for reducing the overall level of unemployment; condemns the continued refusal of the Government to establish tax equity, and particularly its failure to ensure an adequate return from the business, farming and self employed sectors; expresses serious concern at the additional cutbacks proposed in the public service; regrets the failure of the Government to take into account the principles expressed in the recently published Irish Congress of Trade Unions document,Confronting the Jobs Crisis; and believes that the plan is basically a restatement of unsuccessful social and economic policies pursued by previous governments”.

—(Tomás Mac Giolla).

Tomás Mac Giolla

While speaking on this so-called plan yesterday I was dealing with the area of job creation and the total failure of the Government to face up to the task of providing jobs for the 230,000 people who are unemployed. I was interrupted by Deputy Kelly and I can only say that I was appalled and shocked that such an erudite and learned gentleman as he should display such gross ignorance of the role of the semi-State sector in our economy and that he should regard them simply as another area of the Civil Service. He fails to see any difference between the Civil Service and the semi-State sector. Such a display of ignorance on the part of any Deputy on the Government side probably indicates why there has been such a policy of eroding the power of the semi-State sector.

Having worked for 30 years in a semi-State company I know that the semi-State sector are battling constantly against the Civil Service, battling against interference from Ministers and civil servants and trying to maintain their independence. In the past two or three years this Government have smashed one semi-State company after another by reason of breaking their financial independence. If a man such as Deputy Kelly cannot appreciate the difference between the semi-State companies and the Civil Service, we may well ask whether there is anyone on the Government benches who can appreciate that difference.

Mr. Kelly

Bodies who have to be bailed out each year to the tune of tens of millions of pounds have no independence.

Tomás Mac Giolla

Do the Government not realise that the semi-State companies are the very engine of growth in the economy? They have maintained stability when all around them in the private sector have collapsed.

An indication of what the Government are doing in the area of the semi-State companies can be found in the area of taxation. According to the plan taxation is not to be increased. There is a graph which shows a levelling off but the situation is that the consumer will be paying the taxes. An example of this is the levy of at least £15 million which the Government impose on the ESB. In addition there is a tax on hydrocarbon fuel oil, a tax which I understand does not apply in the case of the Alumina company at Aughinish. The tax on hydrocarbon fuel oil is higher in the case of the ESB then in the case of any other user. I am quoting from Deputy Kelly's friends, the CII and not from any semi-State source.

In addition the price paid by the ESB for natural gas is higher than the price paid by any other user. I put a question to the Minister regarding the price of natural gas to the various users but the Minister replied that it was not his function to answer such a question. However, I understand that the ESB are paying the highest price for natural gas. Bord Gáis make a profit of £68 million which the Exchequer take in. The Exchequer therefore is taking in all this extra money. The £15 million levy on the ESB has only applied for the past three years. No such levy had been applied from 1927 until then. The profit from Bord Gáis comes mainly by way of their sale of gas to the ESB. Consequently the ESB find it necessary to double the price of electricity, so it is the consumer who is paying the tax to the Exchequer. In this way the Government are smashing the financial independence of the ESB.

They are doing the same in respect of Bord Telecom and An Post. They tell us that they will take £50 million from these boards in the next year and up to £250 million in the following three or four years. It is obvious, therefore, that these boards must increase the costs of their services, so again the consumer will be paying the additional money into the Exchequer. That is the new system of taxation being used now, despite the Government having the gall to tell us that no extra taxes will be levied in the coming three years.

It is clear that there has been no serious examination of tax reform but that a decision has been made not to reform taxation. The proposals of the Commission on Taxation are dealt with in two or three paragraphs in the plan and they are dismissed as being not feasible. It is not that I would agree with all the proposals of the commission but we must bear in mind that they were established following the most massive demonstration ever to take place throughout the country. In proportion to our population there was probably a larger turnout of demonstrators than ever appeared on any political issue in any country when 350,000 people came on to the streets in Dublin in a march agains the taxation system. They called for taxation reform but the only result was that the Commission on Taxation were set up. That commission have issued two or three reports and they are still sitting. However, their reports have been dismissed in this document by the Government as simply not feasible and no alternative tax reform method has been proposed. There is no commitment to tax reform apart from saying, and this will be used by Labour and Fine Gael Deputies, that there will be no increase in PAYE taxes. Of course that means that PAYE workers will continue to pay between 85 per cent and 90 per cent of all income tax and they will also have to pay additional amounts as consumers in respect of ESB and telephone bills, transport costs and so on.

The plan admits the exceptionally low level, and indeed the falling level, of capital taxation. This has fallen from 11.4 per cent of all taxes in 1974 to 4 per cent of all taxation in 1984. Capital taxes yield about £15 million at the moment. The Programme for Government of Fine Gael and the Labour Party said capital taxes would be raised to £100 million but this will not happen. The amount will not yield even £30 million. The document put forward by the Government, while stating that such taxes are exceptionally low, has no plans for increasing them except a vague reference to the fact that they will probably increase as time goes on.

The Labour Party have taken credit for the land tax as their input into the plan but I do not see any other recommendation of the Labour Party incorporated in that document. They recommended that a land tax be imposed, a tax that was both revenue-earning and also the type of tax that could alter the production levels on farms, making the inefficient farms more efficient. A land tax has been proposed to a maximum of £800 for all farmers under 80 adjusted acres and it has been suggested to me that that would be equivalent to approximately 110 unadjusted acres. Under this plan a farmer of 110 acres who is not liable to income tax will pay a maximum of £800 land tax. What has happened is that 100,000 farmers have been taken out of the income tax net at the very time that the plan is putting 200,000 unemployed people into the tax net. I accept that not all of those 200,000 unemployed will be liable to tax but neither would all the 100,000 farmers be liable to tax. Rather than ensuring tax equity this plan has reversed the procedure and made the taxation system much more inequitable. The average amount taken from PAYE workers in 1983 was £1,800. Under this plan the maximum land tax will be £800 and for farmers in excess of 80 adjusted acres or 110 unadjusted acres they will move into the income tax net but they can deduct the £800 from income tax.

The total revenue from rates from farmers in 1979 was £36 million. Adjusted for inflation to 1984 levels that would be approximately £70 million. Even on the Government's own statement in this plan, the total they hope to get from farmers in land tax and income tax will be £65 million which is less than was taken from farmers in rates alone in 1979. Where is the tax equity here?

There is a further point which I think it is unlikely the architects of this plan could have seen because surely they would not have allowed it to develop. Under the child benefit scheme now a benefit of £30 per month will be granted but this will be subject to taxation for employed and unemployed workers. Under this plan there is no basis under which farmers with less than 80 adjusted acres can be taxed in respect of child benefit. They are not paying income tax and their child benefit will not be taxed. They will get away scot-free with that also — no income tax, a maximum £800 land tax and no taxation on child benefit but the employed or even the unemployed worker will pay income tax on child benefit. Is that equity? This Government have not considered the effects of the proposals they have made.

It is specifically stated in the plan that there would be further increases in local authority service charges.

The plan says the £65 million income from farmers will be collected by local authorities. Deputy Spring and Deputy Bell, the two Labour Party speakers who have spoken in this debate, have said this will give more power to local authorities and that they will have a larger income. If they read the plan they will see that local authorities will collect the £60 million or the £65 million but that amount will be deducted from the Government's subvention. The Government will reduce the amount of subvention to local authorities by the amount collected from the farmers. Therefore they are acting simply as tax gatherers and have no income for local authorities.

Under this plan we shall end up in 1987 with more people unemployed, lower living standards, higher emigration, heavier direct tax burdens and also higher consumer prices, yet having a huge foreign debt.

Apparently the plan is one whose aim is to cut the budget deficit. There are two methods by which the Government hope to achieve that goal, one being a hope that interest rates will come down and the other through the curtailment of public service pay. The public sector is the constantly maligned, bullied, brow-beaten sector told they are lucky to have a secure job, that they have everything and therefore should accept lower pay. The implication is that all of these public service workers are on very high levels of pay which is not the truth at all. Deputy Kelly does not know much about semi-State companies but presumably he knows that the public sector, civil servants, include a whole range of people working in say, the health and forestry areas, a whole range of low paid workers who would not correctly carry the label put on them by Deputy John Boland, as being people in the £18,000 to £20,000 a year bracket.

An Ceann Comhairle

The Minister for the Public Service.

Tomás Mac Giolla

The Minister for the Public Service, Deputy John Boland. Even if we consider those civil servants in the £18,000 to £20,000 a year bracket it must be remembered that they pay the full last penny of their taxes, perhaps £4,000, £5,000 or £6,000 a year. But the 80 adjusted acreage farmer, a farmer with perhaps 100 or 110 acres who may also earn — as will be seen from statistics——

Mr. E. O'Keeffe

Why does the Deputy not buy a farm?

Tomás Mac Giolla

——£18,000 to £20,000, or many of them, will not pay £5,000 or £6,000, their fair share of tax. They will pay a maximum of £800 in land tax, no more.

Mr. E. O'Keeffe

The Deputy should buy a farm and find out.

Tomás Mac Giolla

That is the difference between the two categories, the public servants who pay their way, from whom the very last penny is deducted, who have given this country excellent service over the years. They are now the people being blamed for all our ills. They are the people who will be hammered, the people or sector through whom our budget deficit will be cured because their wages will be cut. Therefore they are the people to be hammered while allowing everybody else to make whatever they can out of the economy. There is one group only constantly being hammered under this plan——

Mr. E. O'Keeffe

They are the farmers.

Tomás Mac Giolla

They are the working class people. Not alone have they been appealed to to support this plan but have been told it is their duty to do so, one which hammers them into the ground. This is an attempt to revive a dying Irish capitalism which failed and brought on us our present economic problems.

I do not know what element of socialism there is in this national plan for the Labour Party. I cannot understand how they can perceive any percentage whatever of their policy or of socialist policies contained therein. I cannot even see what element of social justice is contained in it for the so-called left of Fine Gael. There has been no consideration given to the trade union movement, to the excellent document produced by the Irish Congress of Trade Unions. This whole plan is the bosses' view of society. Not alone is it a Fine Gael view of society but it is also the Fianna Fáil view of society, the whole thrust of The Way Forward demonstrated precisely the same viewpoint, favoured the same people, hammered the same people. Workers, employed and unemployed, will reject this so-called plan in toto. Public, sector workers particularly will not allow themselves be made the scapegoats for the inefficiency of the private sector and for the bungling of governments.

Our amendment to the Government motion reads:

(1) To delete all words after "Dáil Éireann" and substitute the following:

"deplores the failure of the Government's National Economic Plan to provide a strategy for reducing the overall level of unemployment; condemns the continued refusal of the Government to establish tax equity, and particularly its failure to ensure an adequate return from the business, farming and self employment sectors; expresses serious concern at the additional cutbacks proposed in the public service; regrets the failure of the Government to take into account the principles expressed in the recently published Irish Congress of Trade Unions document, Confronting the Jobs Crisis; and believes that the plan is basically a restatement of unsuccessful social and economic policies pursued by previous governments”.

I hope that those who purport to defend working class people will support our amendment.

Mr. Kelly

We have now begun a new session of the Dáil and entered into the first of what will probably be five or six Budget-debate type knock-ups, boring, predictable ding-dongs between the two sides of this House covering the same old beaten ground which has been traversed ever since I came into this House——

Tomás Mac Giolla

And before that.

Mr. Kelly

——and before that as well, except that the level of ground on which this confrontation has been taking place is getting lower and muddier as the years go by. It is predictable to the point that one might be excused for not bothering to come at all. It is predictable to the point that one could have taken the name of the Tánaiste off his speech, put it on to Deputy Haughey's and vice versa given the two speeches to somebody from the far side of the world, an emigrant gone 60 years who no longer had any idea who ran this country, and he would not know which side was which. That is not intended as a criticism of the Tánaiste's speech or of the national plan. On the whole I must approve of the plan while I shall have some criticisms to voice on it. I shall not bore the House by spending too long appraising it. It is a sign — not that I needed to be convinced — that the Government do mean, if given the chance, to get the economy under control again, to deal, in so far as they are able, with the accumulated problems they inherited. I will not say they were all caused by the far side — we may have contributed to them ourselves — but they exist whoever caused them. I believe the plan is a sign, perhaps not an entirely adequate one, that the Government are serious about dealing with those accumulated problems.

I have no desire to flatter either Tomás Mac Giolla or Proinsias De Rossa but one of the few things that makes this House worth attending is the genuine debate which takes place between what I might describe as the unadjusted socialists over there, embodied in those two Deputies, and the rest of us. I do not mean to offend Tomás Mac Giolla but what he has been saying has been three parts nonsense from the economic viewpoint. The same analysis could be applied to everything he says on similar subjects, though I often have to agree with him on others. At the same time the contributions emanating from the unadjusted socialists over there have got a certain basis of truth.

Let me endeavour to clear the ground for the few moments I want to spend on Tomás Mac Giolla by admitting that. I might amaze Tomás Mac Giolla by admitting to him that the point of view he takes up about the class orientation of society and of government in a country like this is not just a Marxist fiction. There is some truth in it. That is not something we need to apologise for, but we have to try to mitigate its effects, and in humanity and charity try to make sure that it does not run riot. It is a fact of nature that every individual organism strives first to survive and then to extend its power, sphere of influence and domination over its neighbours and sometimes to survive at their expense. The same is true of groups in society. A group develops a sense of its own interest unconsciously, and not with any culpable or malignant desire to oppress others. If Deputy Mac Giolla and his party and others who share their point of view were to confine their philosophy to driving that point home, they would be doing something of a service.

It is true that the people who tend to accumulate, whether by their own efforts, by inheritance or whatever, will unconsciously tend to band together and that the institutions of society and the law will automatically reflect the interest — if you like to put it that way — of that class. There is no point in denying that and saying it is nonsense. I do not deny it; but the point is that, even if that perception is correct — and I believe it is a correct perception — it has absolutely nothing to do with the creation of wealth. Even if it is correct to say that classes tend to merge and consolidate themselves at the expense of others, that has nothing to do with the creation of wealth. Perhaps I should say that if one were to reverse that situation, overturn it and destroy the class structure, no automatic creation of wealth would ensue. As with all human institutions which are imperfect and with which we have to muddle along as best we can, the only way to do justice to the perception of Deputy Mac Giolla and those who think like him — and there are many sincere people among them — is to try to mitigate the effects of a capitalist society as best we can and to prevent it from bearing injuriously or oppressively or scandalously on those who have not been lucky in this generation — although in a country like this, where the barrel is shaken every two or three generations, they may be lucky in the next shake-up. It is up to us to try to mitigate the effects, if we can, and if Deputy Mac Giolla was to confine himself to that there would be very little separating us.

Tomás Mac Giolla

There is more than luck involved in what happens.

Mr. Kelly

That may be true, I will not quarrel with the Deputy about it. The consequence of his kind of perception is the growth of an enormous overshadowing tree of unreason. The little plant out of which his political philosophy grows is valid enough, but what grows out of it, because of the way it is trained and because of the unwillingness and the human pride of those who espouse his point of view to admit that they may have been wrong and that the others are not all criminals and conspirators out to do down and exploit the working people, is unreasonable.

The fruits of unreason from this tree fell freely in Deputy Mac Giolla's speech. He said, not once but two or three times, that "the private sector had created unemployment." This morning he said that when the private sector was crumbling and collapsing, the only thing that held up was the public sector. I am damn sure that it held up, because no one was ever fired from it. Naturally it held up, when they can be bailed out by the State no matter what their losses were. What semi-State body — Bord na this or Comhairle na that — were ever shut down by a Government because they were not able to run their affairs properly, because it was costing the taxpayers too much, including those that Deputy Mac Giolla is weeping for and that I think he is right to weep for, those who are paying tax at a far lower level of income than anywhere else in Europe? They are carrying on their backs a State structure which is notoriously top heavy and insufficiently controlled in the way that commercial considerations oblige the private sector to control what they are doing.

Tomás Mac Giolla

The State then has to pay the social welfare benefits to the unemployed.

Mr. Kelly

The Deputy is now shifting to another ground. The private sector has been clearly blamed by Deputy Mac Giolla for causing unemployment. I suppose I have a few friends in the CII, but I am by no means to be identified with them, they fight their own corner the same as Deputy Mac Giolla fights his, with the same partisanship as the trade unions adopt. I have no illusions about any sector — they all respond to the same natural law of trying to maximise their own corner. However, the CII and people near them will tell you that one of the reasons why the private sector is struggling is because it has to carry on its back a crushing load of taxation designed in part to carry the public sector, about which Deputy Mac Giolla was shedding tears, and increasingly to pay interest charges on the enormous public debts which Governments here have contracted over the years.

I can claim very few firsts in the field of economic debate, as I am not an economist, but I think I was the first person during 1977, 1978 and 1979 to point to the number of pence in the pound of the national revenue which was being absorbed by interest payments and which is now a common part of the political alphabet. When I first started to point this out, 28 pence in the pound was being run away with in interest payments; it is now 38 pence. Is there to be no limit to it? If Deputy Mac Giolla had his way and if the old granny we listened to yesterday, the Leader of the Opposition, weeping tears about the hardheartedness and the unfeeling Government——

Mr. Cowen

The Deputy is always attacking the Leader of the Opposition.

Mr. H. Byrne

Deputy Kelly will get the headlines.

An Ceann Comhairle

Using terms like that tends to lower the standard of debate.

Mr. Kelly

I am sorry, I will try to bring it up again. Apparently, the only way, from what we heard yesterday or today, by which we can clear ourselves of the charge of being unfeeling, and rebut the accusation of heartlessness, is by spending more money. Where is the money to come from? To do him justice, Deputy Haughey never said that it could be got by taking the wealthier parts of the community, turning them upside down and shaking them until all the coins fell out of their pockets. At least he never went that distance, although no doubt he would if it suited him in order to put a Government together.

Deputy Mac Giolla and the unadjusted socialists have frequently made the point that the way to collect revenue here is to tax the wealthy. One of the problems from which this country suffers is isolation, and we know nothing about the standards of outside. From my own modest acquaintance with the outside world, I want to tell Deputy Mac Giolla that there is almost no wealth in this country which would be regarded with anything but a pitying, condescending smile by the people who are rich according to local standards in France, Holland, Germany, Italy or even in Britain. There is almost no wealth of that sort here. I do not deny there are people who are doing very well. They have been lucky, and could contribute more than they do at present. Alone among the Members of the two big parties I am still advocating a proper wealth tax. It is about the only point on which I have some common ground with Deputy Mac Giolla and Deputy De Rossa. However, there is not the volume of wealth here which would make a serious difference even if you were to confiscate 100 per cent of it, let alone tax it.

I remember the former Deputy Lynch when he was Taoiseach saying about ten years ago that someone on whom he was able to rely had calculated that if we were to confiscate, never mind tax, the wealth of everybody in the country earning over £5,000 a year — that was in the early seventies — I have forgotten the sum he came up with but it was laughably small, it would not pay the CIE deficit for more than a couple of years, let alone all the other deficits that had to be met, the interest payments and the public service bill. There is no reality in that kind of talk. If Deputy Mac Giolla is weeping for one class he has to do something tough to another. The same is true of Deputy Haughey.

To blame the private sector for unemployment is a bizarre charge. It was Deputy Mac Giolla who went to the far side of the world in a different argument last night in order to rebut — and I think he was right to do so — the argument that advancing technology necessarily has to threaten jobs. He asked how it was that in Japan where they have the most advanced technology in the world there is the least unemployment. I conceded that that is a valid point; but I want to know how it is that in Japan the role played by public ownership is absolutely minimal. Maybe the State owns the railways, but that is about the size of it. There never was a country in which private enterprise was more enshrined, put on an altar and worshipped than in Japan. That is the country which has brought to the highest power the very system Deputy Mac Giolla is blaming for unemployment here. If private enterprise has run riot in Japan even more so than here and even if Japan does not have a NET or CIE to worry about, surely they should have created even more unemployment on that theory; but they have not done so, oddly enough.

We heard a lot of sneers from Deputy Mac Giolla at the expense of the Labour Party on these benches. He said they had not succeeded in achieving very much and that this plan, far from being a fulfilment of the Labour Party's objects, made "a mockery of the principles of socialist planning". A Deputy who is holding up socialist planning ought to let us look at a shining model of a socialist plan which is working smoothly in some other country, I do not care how far away, and spreading peace and prosperity, welfare and smiles all round. Where is there such a country? Let us know about it. There may be such a country, but none of the countries we hear about seems to be in that position.

Would Deputy Mac Giolla like a planned socialist economy on the Polish style, The Poles who have had to ask to reschedule their debts, who cannot meet their liabilities, to whom no one will lend a shilling except for fear of the Russians? The only reason they get credit is for fear of the political consequences of refusing. Does he want that kind of economy, where the people are nearer starving than any other European people? In Poland the people have to queue for a week to get half a pound of mince. Does he want socialist planning on the Russian or Romanian style, where you can walk along the streets and someone can come up and offer to buy the trousers off you? Does he want socialist planning on the lines we are seeing in Hungary and China, where quietly they are reintroducing the capitalist ethos, where suddenly profit is being brought in from the cold, dusted down and made respectable? People are allowed to feel that they can earn a few pounds of their own, and the ordinary human instinct to consolidate one's own corner is no longer blackened but is being accepted as the principal and perhaps the only useful and reliable engine of economic growth.

It is a well known fact that in countries where agriculture has been largely collectivised — and I must admit Deputy Mac Giolla did not go the distance of suggesting that that should happen here — more is produced from the small home plots of one hectare or one-and-a-half hectares left to the individual wretched collectivised farmers than from the wide acres that have been collectively farmed. If people in a country like Poland ever have a chance of seeing a chicken in a pot, it will have been bought from a peasant who raised it on his own garden and not in a collective holding.

Our people take fresh vegetables and fruit for granted although they still have Deputies like Deputy Mac Giolla and Deputy Haughey weeping for them. It would be very easy to talk to these people if they got a dose of socialist planning. In case I have done an injustice to some country I left out of my list, Deputy De Rossa will have an opportunity to remedy the situation. When replying to that point, which is not original because it has been mentioned many times before, I would like him to indicate how people who are able to make choices in regard to their own lives have to be kept inside their own countries by barbed wire and machine-gun posts, and how it is that one only knows one is approaching a planned socialist economy when one is held up for three or four hours at the border and has to pass an array of barbed wire, machine-gun nests and guards of a kind seen nowhere else. They are not just to keep tourists out, they are to keep their own people in.

I took my car to Hungary one year and the boot was searched on the way out, not to see if I had a couple of bottles of spirits, because they were glad to sell them, but to see if I had one of their unfortunate people in my boot. That is socialist planning. I know that it will seem a cheap point, because it has been made so often before, but I am still waiting to hear a reply, cheap or dear, because if there is such magic in a planned socialist economy, we would like to know why, when there has been socialism in the world for so long, there are no examples near to hand where public ownership having replaced the private sector has created genuine full employment and prosperity.

I must make Deputy Mac Giolla this present, if it is any use to him. We can have "full employment" in a sense, if we put two or three people attending a single lift, as is the case in some Eastern European countries, where the hotel foyer is swarming with functionaries, none of them doing very much, but all on the payroll. That can be done provided you are allowed to fix what they are paid, and they have no say in what they are paid, and also provided you can control the price and supply of the commodities on which they depend for existence. If we could do that we would have full employment too. If an Irish Government could say that this was the national wage, that the wage for certain jobs was such-and-such, and that they would answer any objections with batons and machine-guns, we too would have full employment. If we could control the supply and price of commodities there would be no difficulties. If people could be confined to one or one-and-a-half-roomed apartments so that they could never have more than one or two children — and you would have to be a very high functionary to be able to afford a flat big enough for two children — and if we had a parliament and a press which lay down under that, naturally we could have full employment. But we do not have these convenient aids to socialist planning here, and I hope we never will have them.

Tomás Mac Giolla

Starve people to death.

Mr. Kelly

I do not want to make little of poverty and I agree that, as a certified member of the middle class, as dozens of Deputies are, it is easy for us to overlook its existence, but there are damn few people in this country who are so poor that they would wish to swap their position with somebody in a meat queue in Warsaw.

I would like to welcome the Government's plan and I will run very quickly through some of the points in it of which I must approve and commend. The Government's devotion to reducing the burden of the public sector, whether by pay restraint or by controlling numbers, is admirable. I have been advocating that on both sides of this House since I came here. The references in the plan to concentrating State support on sectors like marketing is admirable and correct, and the idea of spending money on the communications infrastructure, on roads, is also correct.

It might be well to point out for the benefit of unadjusted socialists who believe in State employment that even though the road expenditure envisaged is enhanced by comparison with previous years, at its peak in 1987 the expenditure of £155 million will be only roughly half of the cost which in that year will be incurred by the employment of a body of civil servants over and above those we had in 1973. In the decade 1973-1983 almost 20,000 people joined the nonindustrial civil service, this in an era of computers and technological aids of all kinds which have wiped out employment growth in parts of the service sector such as banking and insurance. It has no impact on the public sector. They seem to need machines and people also. The recruitment was going on even under Liam Cosgrave's Government, but it took a huge bound under the stewardship of the then Minister for Economic Planning and Development, Martin O'Donoghue. We have all these extra people on board and it is expected that by the end of the planning period 5,000 of them will have been shed. Even so, the remaining extra ones will be absorbing in pay and accommodation twice what we envisage spending on roads. I hope that will put the matter into perspective.

I am glad to see the extension to restaurants of ordinary licences. This will make restaurants comparable from the point of view of the tourist or anybody else with what can be found in countries which compete with us in the area of tourism. This is something I tried to do during my eight months as Minister for Trade. There are many other positive points in the plan with which I will not bore the House because we will be hearing about them from speakers on this side in time to come. There are, however, a number of specialised criticisms I wish to make. I do not mean these criticisms to overbear or outweigh my general approval of the plan, and hope they will not appear to do so.

There are references in the plan to public ownership, possibly inspired by the Labout Party's participation in its production, though I have no doubt that people in our party would be in favour of public ownership, as I am, where a function needs to be done which private interests are not capable of doing. This was certainly the case in the twenties and thereafter. It is a pity that references to public ownership are undifferentiated. There are several kinds of public ownership. The kind of public ownership which is destructive and tends to waste money, to be uncontrollable and incapable of supervision is State public ownership or, in other words, national public ownership. I would be deeply interested in and very keen to support public ownership at a more modest level, a community ownership. I would be very interested in a system which would inject the co-operative idea into a local structure not confined to street lighting and street cleaning but concerned with the development of local matters of economic advantage. I would be in favour of communally-owned development of sources of production on a scale small enough to respond to the control of the people whose money and effort would be involved and who would be deriving benefit from it. It is at the local level that public ownership is desirable and it is a feature which is missing. I regret that the plan makes no reference to that possibility.

The reference to the National Development Corporation made me give a wry smile. I have been hearing about this spook ever since it first surfaced in the form of an accommodation address in Kildare Street without even a telephone, a permanent secretariat or anything else during the time when Deputy O'Malley was Minister and Mr. Lynch was Taoiseach. Apparently it is now to have a somewhat more solid substance, but I am still not clear what it is intended to do. I could not help laughing at finding in the plan that the National Enterprise Agency "would seek to identify opportunities" for the National Development Corporation to pursue. Surely the people who want a National Development Corporation should see those opportunities before setting it up? I can see it so well that I could nearly write the script. There will be an office with wall-to-wall carpeting and a stainless plate on the door with a cute little logogram designed by some graphic designer with a tweed tie. All these indicia of semi-Stateship will be there; but we still want to know what this National Development Corporation will do.

Twice or three times there is reference in the plan to its operating in the area of natural resources. I do not need to be persuaded that our natural resources are underdeveloped. I go along with virtually everything of a factual kind that Deputy Mac Giolla said about the under-utilisation of farmland, forestry potential and fishery potential; but which are the opportunities involving exploitation of natural resources which require yet another State spook to run them? Are they in the field of forestry? Why not then try to reconstruct the Department of Forestry as the Department of the Gaeltacht and Gaeltarra Éireann were reconstructed? There is a certain expertise though not of a commercial kind, and technical knowledge of forestry and some responsibility for developing it already in the State apparatus. Is it something to do with fisheries? Have we not Bord Iascaigh Mhara? Is it something to do with bogs? Have we not Bord na Móna? What is it to do? Is it to be a disembodied spook? Is it to remain such, in spite of the fact that it may have a staff of a couple of dozen pretending to be shuffling around bits of paper and sums of money — equity, as it is called — from one firm to another or one body to another merely to flatter some socialist ideology? I do not mind State involvement where it is essential if wealth is to be produced, but I very much mind a body being set up whose functions are very unclear. I have frequently defied Fianna Fáil and my own colleagues to tell me what this National Development Corporation will do on the ground, and I am still waiting for an answer.

The third point is in regard to toll roads. It is a pity that the Naas by-pass is not already subject to a toll. I do not know the situation exactly but everybody who uses that road is delighted with the difference it makes to a journey to the South of Ireland. Even when going somewhere like Galway it may actually be worthwhile to go as far as Newbridge or Monasterevin before striking west because of the ease with which one can now travel that distance. Most of the travelling public would not have minded paying a modest toll for the use of the by-pass which has cost so much public money. An opportunity was missed in not putting up a toll gate and charging people, so as to get the public used to the idea and to disabuse them of the idea that such facilities can be had for nothing. I am all in favour of the idea of getting private capital into this sort of development, and recouping expenditure by means of a toll.

I notice that the plan states that the toll roads will revert in due course to public ownership. That may also be a sop to socialist ideology. I do not mind the idea in the long run, perhaps, of a franchise expiring, but I should like to hope that the Government will not be so foolish as to proscribe conditions for the building of toll roads which will frighten away capital investment. Who will put many millions of pounds a mile into a motorway or by-pass if he knows that his franchise to collect the toll will expire in seven to ten years — or perhaps even less if Deputy Mac Giolla were to get in? No one will do that. While I do not wish to create an Irish road which will be for a thousand years in the control of a single family, or anything like that, the ideology content in this proposal may very well prejudice the success of the whole idea. It should be made absolutely clear that any such franchise will run for some very substantial period of time, sufficient to attract private capital. If we do not attract the private capital, the taxpayer will be paying for these by-passes and that will mean that they will be subject to the jolly old "budgetary constraints" about which we hear every year or half year in connection with all kinds of projects, whether needed or not.

In regard to the licensing proposals, although I approve very strongly of the idea of extending full licences to restaurants, I disapprove equally strongly of the idea of longer opening hours in summer. There is absolutely no need and no demand for them. They have them in the country anyway, as far as I have been able to observe because they disobey and very largely disregard the statutory licensing in many parts of the country, particularly holiday areas. I ought not to appear to condone it, but among breaches of the law I would give this a fairly low priority. I had better not name any place or I might get angry letters from them but in resorts X, Y, Z they are a little lax in closing up on a bright summer evening at the right time. It is a breach of the law and I cannot call it anything else; but I would give it a low priority in trying to put down crime.

The idea of having universal longer opening hours in summer is not really related to any genuine tourist need. As The Irish Times or some other paper said in an editorial yesterday, it is not the case that on the Continent places which sell drink stay open all night. In most parts of the Continent, in my experience, unless one goes to a place which is specifically a night bar or a nightspot — with which I must admit I have only limited acquaintance — which will charge two, three or four times the going rate for a beer or a glass or bottle of wine, what I might call the ordinary common-or-garden neighbourhood eating-and-drinking joints all shut by about 11 o'clock, roughly the same time as here.

Speaking as a Deputy for the much despised Dublin South region, which is largely inhabited by country people and their children, I might add, I have all of Dublin 14, and Dublin 16, a small piece of Dublin 4 and a little of the county in my constituency. Let us just stick to Dublin 14. There are a very large number of surburban pubs in that district. They are on a road and have houses all around and opposite them. People who live in those houses at the moment have to endure noise up to, including and beyond closing time, at 11.30 p.m. in the summer. This means that they cannot really settle down to a night's sleep until midnight. If those public houses now feel obliged, for reasons of competition or anything else, to stay open until 1 o'clock or other extended hour, that will cause many human problems and disamenities for the people I represent. The Deputy opposite from Longford is nodding and I am sure he has similar problems in his own town. Since he is expected to be a wonder-worker and my constituents have not the same expectations of me, he will be under real pressure.

Mr. Wilson

Hold my torch.

Mr. Reynolds

That is the first compliment the Deputy gave to this side today.

Mr. Kelly

My people will take a reasonable answer like "I do not like this, but I can do nothing about it", but they will expect Deputy Reynolds to get the whole thing stopped.

The scheme to break CIE into three components, I suppose, is a start, as any kind of splintering in a monolith is a start, but I would have wished a little more than that, for our national transport company. There is no substitute for a bit of competition. While I am emphatically not advocating the wholesale privatisation of CIE, some element of competition should be brought in, perhaps by offering, even if only as an experiment, a package of routes to the private sector for tender. I know that some routes are essentially a social service and never would pay because the traffic is not there, and so on. Other routes are demonstrably profitable. I would make a package of a profitable and unprofitable route and try selling it to the private sector and see how they could do — whether they could manage with less of a subsidy or perhaps none at all. It would enforce, in that way, in what was left inside CIE the ordinary natural human spirit of emulation. The idea of breaking CIE up is managerially a good idea, but I should have liked the idea to go further and bring, in some shape or form, competition to bear on it.

I notice also in the plan several references to energy, but one amazing thing to which a historian of the time really ought to pay attention is that a theme which was all the rage as recently as 1980 or 1981 has disappeared from view altogether, namely energy conservation and the development of new energy sources. There is nothing, so far as I can see, in the plan about these at all. Energy conservation has taken something of a back seat for the accidental reason that oil prices have been stable recently. That does not say that they will not start going up again at some point.

Mr. Wilson

In the past week.

Mr. Kelly

It is also true that the oil producing countries have taken fright because conservation measures in the western world have been fairly successful and western consumption of oil has been very well contained. Who is to say that we shall not need energy conservation in the future? Certainly, as we all know, it was the received wisdom four or five years ago that the conservation of energy and the provision of energy from alternative native domestic sources have a very high potential employment content. In addition, no matter how well we succeed with alternative sources we have brought our hydro potential pretty well to its limit, so far as big schemes are concerned, at any rate, which need a certain head of water, a certain fall. All the large rivers which could have been exploited have been. The room for small scale hydro development is very limited or rather the contribution which it can make to the national grid is pretty limited. I do not know to what extent the production of electricity from peat burning stations can be increased, but that is obviously a finite resource and will be gone in a measurable and small number of decades.

Mr. Wilson

Two.

Mr. Kelly

The plan missed a trick in not drawing attention to this continuing need which hangs over us, and the failure to press ahead with which has consequences for us in our balance of payments. I do not need to tell the House that the cost to the economy of very large oil imports is extremely high.

There is also a reference to local government reform and I am sorry to note that it is virtually confined to representational and fiscal matters. In other words, the local government reform envisaged is one which will ensure more rational representation and give local authorities a certain control once again of their own finances. That is not enough. Local government reform should dig much deeper than that and, as I said earlier, should go back to the point where we ask ourselves if it would be possible, in the framework of local government reform, to envisage a tier of local government which would have a specifically economic and developmental character. I an not going to go into details in suggesting the size of the unit, but perhaps a smallish country town with its hinterland, with a population of 10,000 or 12,000 which would have a specifically economic function. This would be, if you like, an automatic local co-operative with 100 per cent membership of the local population, which would have a legal structure which enabled it to acquire property and develop property, to employ people in horticultural or forestry enterprises, and in a whole range of things like fish farming and tourism development. One could make a long list if one were speaking in a different kind of debate.

We should not miss this opportunity of local government reform to introduce into our local government structure a tier somewhat along the lines I suggested which would have a specifically economic function and which would provide the possibility, which I hope would gladden Deputy Mac Giolla and his friends, of public ownership at that level to which no one, and certainly not I, could see any possible objection.

I gave great offence to a valued friend and colleague of mine in my own party and a member of Dublin County Council not long ago by saying something rude and — probably something of which I am often guilty — insufficiently considered about local government. I am sorry to say it is the public perception of local government here that it is a kind of fifth wheel on the coach and that nothing much here would be very different if it did not exist at all.

Many local authorities, rightly or wrongly, justly or unjustly, get into the news because of section 4 motions, which are said to disrupt the proper planning of a vicinity, or because they want to shrug off some invidious task they were elected to do in the way we have seen. The whole itinerant problem has been taken away from them. Naturally it is very invidious and productive of unpopularity to be seen to be associated with something like siting an itinerant settlement, but that is what people are elected to do. That does not suit local authority representatives and they have now successfully managed to shed that responsibility.

They get into the news over what are called junkets. I have only got the authority of a newspaper for this and I do not know whether it is true or false — if it is false I beg the pardon of the ladies and gentlemen concerned — but I read in The Irish Times yesterday that seven out of the nine urban councillors of Arklow are off to a housing conference in Brighton. That requires no comment from me. I will just fill out that picture by giving a domestic detail of my own. My brother served one term on the Dublin City Council. I suppose I have to assume innocence on his part. He went once to a housing conference in Helsinki in the seventies. When he got back he told me that the Irish representation at Helsinki outnumbered that of all the other nations put together.

That is the image. I have no doubt that by dragging this up in the Dáil I will receive angry letters from people. My post need not worry you, Sir, but I have no doubt that by mentioning this I will be called unfair again. All I am saying is that this is the public perception of the elected side of local authorities: that they are cowardly, that they try to flatter local interests, that they give in to pressure groups, that they try to shed invidious and odium attracting functions, and that they are out to rake in expenses, and sprees, and trips, and so on. I am sure that is unjust, but that is the public perception of them. Local government reform which stops short at redrawing a few boundaries and handing over the administration of local finance for the council will not go far enough to satisfy the public.

Under the heading "Reform in Second-Level Education" I notice a reference to what are called the aspirations of the children. I certainly agree that education has to have regard to the aspirations of children, students and pupils of all kinds, and has to have regard to trying to give them a chance to attain the best possible individual human development. But in a country like this, which is trying to battle upwards, it has to have some regard too to the needs of the economy and the needs of the wealth producing material sides of the economy. I do not think we need to apologise for that.

On the contrary, the complaint heard is that people are being turned out of schools quite unfit for the world they are entering. Yesterday I heard Deputy Haughey saying — and I would not quarrel with his complaint if it relates to people who are quite untrained and are at the mercy of the world they are entering — that he had seen a report that 70 young Irish people a day had been arriving throughout the summer in London as emigrants. If they were people thrown on the waves of the world and landing up at Euston or Heathrow without a job, and without any notion of how to go about getting a job, and unfitted to look for the few which are on offer, that is a pity. It is worse than a pity; it is a disgrace.

We should bring into the criteria on which second-level education is to be restructured not merely the aspirations of the pupils, which very often, perhaps because they are not old enough to know any better, will not actually stretch beyond a secure public service job, but which should stretch also to trying to match what comes out at the far end of the educational system with what the economy will need, so that they can find useful and productive employment.

These are the individual points I wanted to make on the plan. In the latter part of my contribution I want to make a few general remarks on some things which it appears to have missed on the larger scale. I make this acknowledgement gladly: it is a plan which does confront reality on the narrower plane. It confronts the reality of unemployment, of very heavy taxation and budget deficits. It confronts all these realities head on, and there is no waffle or flummery in it so far as those things are concerned. But there are deeper realities, and a plan such as this, into which a great deal of labour has gone, might have excavated the ground a bit more in order to confront those realities.

Tinkering around with — I do not mean to use a disparaging word like that — or adjusting the kind of implements which lie close to a Government's hands, — implements like taxation, public service pay, investment in capital projects and so forth — and trying to gear those implements to a particular result may produce a certain result, but it is comparable to sowing very expensive seed on ground which has not been properly ploughed and harrowed. The ground of the Irish economy should have been turned over to the depth of a full spade and a bit further so as to reach into Irish society as well.

There are realities which underlie some of our problems which a plan like this cannot deal with because of its nature. I agree one's perception of some of these things is subjective. One of these realities is that we have a population excessively oriented towards help from the State. It is not all that different from other western European peoples, but to some extent it is different. From my knowledge of Europe and the time I spend there — I spend as much time there as I can — my impression is that other European peoples are not as orientated to expecting the State to help out on every occasion. That is a frame of mind which has been becoming more marked here, and which has been encouraged by politicians, naturally for the sake of votes. That is a very important factor underlying the more superficial defects in the economy.

We suffer from a terrible degree of isolation. We forget we are an island behind an island, that we are doubly cut off from the standards of the outside world, that the only ones visible to us are those of the British, which are not all that high anyway. We take from the British things which it suits us to take, like the industrial attitude of the British trade unions, merely because we can point to them, see them on our television screens, and something like that tends to become the norm here, and not the industrial relations pattern of continental Europe.

We are unlucky in our isolation. We have no clue about foreign standards of work, of quality, of punctuality, of design. We do not begin to know what people are talking about under those heads.

It was depressing and sad to find a deputation of Irish farmers coming back with long faces from the food fair held in Berlin at the beginning of the year, saying that we had not even arrived at the fair. They had no clue about what European consumers wanted and would buy. All they knew was what they had been producing all their lives and what they intended to go on producing. Any idea of tailoring what they did towards what people wanted to buy outside was absent from their frame of mind. They cannot be blamed for that. It is a consequence of the geographical isolation of this country and that is why, to get back to what Deputy Haughey suggested yesterday, it is criminal — that may be a strong word to use — it is very strong-headed to indulge the fetish here about emigration. Deputy Haughey used a term dredged up from the dusty old rhetoric of the 19th century, "the spectre of the emigrant ship." That is very wrong fetish to flatter in people's minds.

This country seems to be closed to any sort of unusual idea, and I am sorry to say that people here tend to be unfair to unfamiliar ideas, to distort them and throw them back in some unfair form at the person who has uttered them. I know perfectly well that what I say now — I said it last year and the same thing happened — will amount to: "Kelly's recipe is emigration". I am not delivering any recipe for anything. I do not know the cure for our problems here, but I feel that I know some of the things which caused them, and one of them is excessive isolation. If Deputy Haughey was correct yesterday, it is sad if 70 young Irish boys and girls, untrained, unequipped, jobless are being disgorged from the Irish Mail at Euston every morning. That is terribly sad and we all must feel shame and sorrow for it. However, it is quite different if we can think of people leaving this country to go away and learn something about the outside world, get to grips with it, understand it and what it wants and expects, learn its languages. There is nothing wrong with that.

An industrialist, Mr. Ken Rohan, in one of the newspapers yesterday raised this very point. He said: "Many of us went away for a few years. I did myself. What harm did it do us? We learned from it". I spent seven or eight years of my life altogether out of this country. I earned my living for four years in England, admittedly in a job of some prestige and dignity. I do not intend to be careless of people who are not so lucky, but I did not feel that I was a victim of the spectre of the emigrant ship. I had been earning my living here previously and I could have come home at any moment and do it again. I did it again in the end. I believe that I learned something from that. I learned something from living for about three years in Germany as a student. Anyone who has had such a chance — paid for in my case by the Irish people because I could not have gone except for a scholarship publicly funded — had been very lucky.

I want to try to break down this fetish about going away and get rid of the old-granny saying: "Wisha, take care would ye cross the road". We want to get away from that and let people cross the road. If they find suddenly, as many of them do, that there is a better life in Canada or Australia, who is to stop them? My father spent eight or nine years as a young man in South America. He came back here when he was about 30 and worked here for the rest of his life. I never heard him represent his experience as having been victimised by the Government of the day, though I think the British were still here when he left. I always understood that his experience was enriching for him. His three brothers did the same and one of them, still there, has been in the Argentine for the last 60 years.

This fetish is damaging and damning and must cripple any effort to readjust our educational system. We ought to encourage young people to go away, not to make it easy for 166 TDs who then do not need to worry about the unemployment problem, but to give the generation who come after us a better change to deal with the outside world, to sell there the stuff on which we depend for our prosperity. I cannot see anything tragic if somebody goes and finds that he prefers to stay away. Admittedly it is sad for the parents. My second son is a student in America at the moment, and I have to run the risk that he may decide he wants to stay there. That would sadden me very much, but it is his life, and I would be ashamed to go around whingeing about how the country here had left no opening for him. He should be encouraged to go, and everybody who can possibly get the chance to go even on only a temporary work permit, ought to do so and be encouraged to do it and should not be fed up to the ears with old guff from politicians about: "Wisha, is trua, you will be on the emigrant ship before you are finished". This country is full of people who have been away for a few years, most of them unfortunately no further than Britain. It is important to try to overcome our isolation by a deliberate programme of study trips, work exchanges, using the facilities which the EC has given us because of the free movement of labour which it implies and which was one of its objectives when it was set up. It is important to exploit that, and not to whine behind the door hoping that the EC will buy our butter and bullocks and at the same time not using the other facilities offered.

That is virtually the last thing I wanted to say. These are elements of the infrastructure or subsoil of the economy which, with our isolation, our defective, out of date, idiotically geared educational system and the frames of mind which go with it and the excessive dependence on the State, are holding us back and need to be reversed if the kind of measure which this plan — or any other plan — contains is to have any effect.

The last thing I want to say before I sit down is on a general matter which came into my mind when reading in one of last Sunday's papers Deputy O'Malley's verdict on this plan. For Deputy O'Malley it was a relatively unpartisan, calm and sober judgment — of course he has no great inducement to partisanship at the moment. He said some interesting things and ended up by identifying his own priority for a successful national plan as being the creation of an atmosphere for investment. He said that unless this plan created the atmosphere in which people are going to put large sums of money into the economy it cannot work and we cannot get full employment. I would not quarrel with that perception, but the thing which is dissuading and deterring people — if they are being deterred — from putting money into the economy, investing their savings, taking a chance, has nothing to do with the day-to-day measures of the Government or the failure of the Government to offer them incentives. It has a great deal to do with their long-term unease about the kind of political society this country is growing into. They see one Government succeeding another, having promised more and more things which they cannot perform or pay for.

For example, they see that this Government are low in the public opinion polls, which is what we might expect in times like this in the middle of a Government term and it does not shake or worry me in the least. They say: "If this crowd go out with all their faults, what are we going go get? We are going to get Haughey, Doherty and all the others back again". That is what people say and that is exactly what is in their minds. I am sorry if to say it like that wounds anybody. "We are going to get that other gang back" is what people say to one another in pubs or wherever they meet. What are they to look out for? If the Government change, unless the leadership of the party on the other side, changes in the meanwhile to something very different from what it is and if they show the form they showed in the last few elections, they will be making promises to the people of the kind which were necessarily implied by Deputy Haughey's talk about the hard heart and the hard feelings yesterday. If he really means that, the only way he can show that his heart is in the right place is by spending money which he has not got, which we have not got and which we can only borrow by increasing the burden of debt yet further. That would put more people out of work, but it is the only way it can be done. That is what has people depressed. They look at a Government staggering under the opinion polls, down a number of points compared with our opponents, and they say, "And are we in now for another term of the other crowd? my God, should we leave now while the going is good?" Those thoughts run through the minds of many people.

Any Deputy on the far side who has any type of view of the world scene must know that there is some truth in what I have been saying. That is what deters investment. The people do not see here a Government of a political complexion, united and permanent enough — I do not mean permanent in that sense because no Government should be permanent, but with a reasonable prospect of a reasonable term in office — to carry through a reasonable programme of economic recovery and discipline. The people do not see that. They see a Government who are doing their best; the Government have done their best; I have made several critiques of the plan but the Government have done their best, and the plan is a step in the right direction. The people see that the small amount of discipline which that plan implies had already encountered bitter political opposition which, of course, will be exploited by Deputy Reynolds and his friends. They see the spectre, not of the emigrant ship in that sense but a different type of spectre, looming up, the spectre of Deputy Haughey and Deputy Reynolds, possibly doing a deal with some of the unadjusted socialists, and say to themselves, "What is in store for this country? Will I hedge my bets? Will I invest somewhere else or will I go away myself anyway?" Some people have adopted the latter stand.

Mr. Reynolds

The Deputy must forget that his party did a deal with Joe Rea. Did the Deputy agree with that? I am sure he did not.

Mr. Kelly

Deputy Reynolds may make that speech later. The suggestion I have made is what the people have to look forward to. It is made not merely for sentimental airy reasons of, "Let us get back to the old Sinn Féin", although it is partly for that, but it is also so that we can have a change to a strong Government — I do not mean a dictatorial one or a permanent one — who do not have to look over their shoulders at ideologies——

Mr. Reynolds

Why is it that we do not have that at present?

Mr. Kelly

——at socialists, adjusted or unadjusted, in carrying through a programme. For myself — I know the size of the minority I represent in my party — unless I could see some form of Government like that emerging the only alternative would be for the party I belong to, to go out to try with all their might and main to take up the load which Fianna Fáil have not being willing to take up, the load of governing the country responsibly for a long period. That can be done only by gaining the type of majority which at present seems distant from us. It will mean another decade of fighting, wasting our time, and the political Punch and Judy show here which is a large component in the lack of confidence and sense of unwillingness to invest which Deputy O'Malley rightly identified as one of the things holding our economy back. I have spoken for much longer than my usual time and I apologise if I have held any Member up or bored any Members.

Mr. Reynolds

Deputy Kelly may have spoken for a long time and although he is usually interesting and entertaining it was only in the latter part of his contribution that I realised we were listening to Deputy Kelly. It appears that he has been listening to people with different views from those who have spoken to me in recent times when he said, "If the Government cannot do the job what do we have but the other fellows?" Even the dogs barking in the street are anxious to know when the electorate are going to get rid of this lot. Has Deputy Kelly been away for a long time, because he is far removed from reality? Deputy Kelly asked when the country would get a strong Government but I must point out to him that the Government have 86 Members supporting them. Why does he blame us if they cannot govern the country? He must recall the pledges his party made. I am surprised at Deputy Kelly who is not usually hyprocritical in his statements omitting to mention the commitments made in recent election campaigns. Those commitments are voluminous. I would love to be able to read them all to the House and if I have time I will quote some of them later.

At all times it is part and parcel the philosophy of Fine Gael to try to blame the other follow for what is happening in the country. When are they going to wake up? The people have seen the light. They bought the promises for a while and then asked for delivery. Delivery has not been forthcoming and they will welcome an opportunity to give a verdict.

The Deputy mentioned the emigrant ship, "Sinn Féinism" and so on, but the sooner we get back to a philosophy of "Sinn Féinism" here the sooner we will pick ourselves off the ground. The spirit and philosophy of self reliance can contribute in a big way to solving many of our problems. I was interested to hear the Deputy, when referring to the plan, use the phrase, "highly industrialised nation." I am very familiar with that and I must also point out that I am aware of the small farm enterprises. Ireland is ideally suited for such advancements but no Government have taken that problem by the scruff of the neck and tried to put a proper plan together. Fine Gael, in their policy document in 1981 and their Programme for Government in 1982, outlined what they intended to do about the food industry. For almost 18 months I have been pressing Ministers to do something about this because, like Deputy Kelly, I see many opportunities in that area, but what did we get?

We got a task force of junior Ministers. That task force has existed for more than 18 months. It appears that the Government's answer to every problem is to appoint a task force to deal with it, or pass it to a committee of consultants. The final insult in the plan in regard to the development of the food industry is to go from a task force of junior Ministers to employ an international consultant. After two years in Government with an opportunity staring them in the face they have adopted that attitude although our food import bill has reached a staggering £845 million. The Government have a strong majority to deal with that problem but they can present us only with an insult in regard to the development of our best natural resource based industry, that they intend employing an international consultant. The Government do not need the services of such a consultant. All that is needed is the will to tackle the problem. They need the will to take the power that is spread over so many Departments in regard to the development of the food industry, and the semi-State agencies, and appoint one Minister and one organisation to deal with it.

In 1982, in my short term in Government, I had adopted that attitude. We have too many organisations—100 semi-State bodies are enough for us and we could do without some of them. The one organisation I consider to have the potential to do that job, an organisation that had proved highly successful in carrying out its task, is SFADCo. That is an excellent organisation that possesses the right calibre of people, an organisation that has tested various new industrial concepts in the mid-west. It has reached saturation point after contributing in a big way to the development of Shannon Airport. I made a decision to decentralise the decision making process of the IDA to the regions. It was my suggestion that SFADCo should have its statutory area extended to bring in the big co-ops in that part of the country. That would have been a good start down the right road.

Anybody with an eye for opportunity will see, following a walk through any of our supermarkets, what the market needs. They will see the potential for small industries. I have heard Government Ministers saying that this cannot succeed in Ireland because food development today is an economy of scale operation. I have some knowledge of the market place and I know that it is no such thing. I accept that that is the case in some areas of the food industry but there are gaps in the market for quality foods produced on a small scale. A good product will command a good price if it is delivered on time. A simple philosophy that I always apply is: "Look after the customers, look after the workers and the profit will look after itself." We need to get more people thinking along those lines.

When referring to the plan Deputy O'Malley said, among other things, as we have said many times here—last week I said it at a conference on employment up to the year 2000—that until we get back to the proper climate here and attract international and domestic investment we are on the road to nowhere. Private investment here fell to the lowest level in 15 years last year. No matter who was in Government, that is a fact. It is not being put forward here as a cheap political point.

We have to look to see why that is happening. It is very easy to point the finger and say that the international recession is causing it. The largest proportion of our foreign investment always has come from the US. People over there would think us stupid if we said that the recession has not lifted in the US. Even in 1982 there were signs that the recession was tailing off. What have we got out of it? We have got nothing, and has anybody sat down to ask himself why? The reasons given by the Government for lack of international investment here are spurious, and I will give a simple example.

During the debate on the last budget we put up a very strong argument to the Government, but particularly to the Taoiseach and the Minister for Finance. We asked them, for heavens sake, not to introduce a retrospective element of accelerated corporation profits tax in that budget, because though it might be seen to be bringing some equity into the taxation system it would cause problems in the international investment market. I do not say that to make a cheap political point. In my short time with the IDA, looking everywhere in the United States for investment, the final question I was always asked was whether if the Government were changed in Ireland there would be retrospective legislation on taxation. I was always able to reply—so was the Minister who went before me—that irrespective of what Government was in Ireland that barrier had never been broken in regard to the introduction of retrospective legislation on taxation. Today an Irish Minister cannot go to the US and say the same thing.

The negotiations in regard to the Hyster project in Blanchardstown demonstrated the type of policies existing in 1982 before we had any industrial plan from Deputy John Bruton. There was a reorientation of grants, selection of industries to make them people-orientated rather than building orientated. The policy then was one of low exposure up front. That company had a particular dominance in regard to mechanical handling and robotics. The policy was that those people would take the right employees and train them in market research, market development, research development—the total business concept.

That is what Telesis said we should be doing. That was being implemented in 1982. Therefore, I smile when I see the contents of the industrial policy section, when I read references to innovation and imagination for example, national linkage programmes. What is that? It is a new name for import substitution which should be pursued vigorously because it could yield many more jobs than we realise. Does the House realise that by reducing our import bill by 10 per cent we can create 16,000 new jobs? Does the House realise that 70 per cent of the clothing used in this country is being imported—£300 million worth or more?

These are opportunities that should be taken up. This plan proposes to introduce grants in certain areas, and I welcome them. I refer specifically to the transfer of technology. Taking technological licensing from abroad would help weaker Irish companies to make their place in the markets and this would rejuvenate them. The point at which I began is that it is the duty and responsibility of the Government to create the right climate here for investment. Until that is done, the Government can produce all the documents they like but at the end of the day they will deliver nothing because the sooner we realise that real jobs are brought about by personal initiative and corporate enterprise the better and that there is no other way to develop jobs in a private enterprise economy.

Deputy Kelly tried to tell us about socialist countries where this is working properly. I have the same detestation as he for that type of system, though perhaps I am not as right wing as he, but I would remind him and the Government that we are more socialist in many ways than many of those countries Deputy Kelly referred to. We have arrived at the point when almost 66 per cent of our GNP is being spent by the Government. That is a much higher percentage than some of the countries in Europe that have become known as socialist. Until we get our economy balanced and until we make up our minds about exactly what kind of economy we want to run here, we will not get anywhere. My view always has been that it should be a mixed economy. It has gone the other way and while the State continues to take more and more there will be less and less there for job creation, less for the people who have initiative, less incentive for those who want to work and much less incentive for investment. At the end of the day, whether the investor is foreign or domestic, if he cannot get a return on his investment he will not be around for long. They know there is no return at the moment and that is why they are not around.

Do not tell me that this country is short of money. It is not. All we have to do is wait for some leak of information from the drilling operations off Waterford we see the money, whether it is £1,000 million or £1,500 million. There is money here and there always has been, all of it available for investment. Unfortunately we have changed the investment ground rules under which investors can take the risk and if things work out they get a return. I am talking about risk capital which I would welcome and in respect of which I would welcome any new initiative from the Government. I have been pointing out the unreality of this plan. There are sections in it that I welcome. I see the Minister for the Environment here. One of the things I welcome in the plan is the proposed investment in roads. However, it is minuscule, very small.

Mr. Kavanagh

No.

Mr. Reynolds

The figures are here and cannot be disputed. The Minister knows that the country is crying out for a proper road infrastructure. It is one of the prerequisites for a competitive economy and we have heard sermons continuously from that side of the House about it. It is no use continuing to point the finger at private enterprise and tell those involved in it that they have to be competitive. What is making them uncompetitive is the cost imposed on them by the State. I refer particularly to the cost of employment which is a major disincentive to people to employ workers. The Minister for the Environment may not admit that but he knows it as well as I. He also knows that there are sectors in industrial relations that should be looked at and updated because the law there is a joke. I refer particularly to the Unfair Dismissals Act. Good trade unionists know that that is not working. I am not advocating a strong line by employers but I ask the Government to look at it and bring it into 1984.

The same goes for the Redundancy Payments Act. That is a sick joke. We have legislation which states that we pay an employee half a week's pay for every year's service. But what happens? It has just gone on and on. When the Minister was Minister for Labour I remember the Government approving six weeks pay for every year's service for ESB workers. Let us legislate for what the figure should be so that at the end of the day if businesses fail everyone will know where they stand. We cannot continue on the way we have been going. We have legislation but the Government are the biggest culprits when it comes to abiding by it. If needs be we should change the legislation and get away from the hop, skip and jump approach which acts as a deterent to investment here.

I take issue with some of the remarks made by Deputy Kelly in relation to the old granny approach of the emigrant ship. Perhaps Deputy Kelly was lucky and more fortunate than other people. There are two types of emigration. Up to 12 months ago there was only one kind and that was where people went by choice, for example, to gain experience or broaden their horizons. That is to be commended. There is nothing wrong with that. The Irish always had an inclination to see what the world was like. These people come back home and do an excellent job and make a significant contribution to the economy. Some of our best managers are those who took the opportunity to go abroad. However, the vast majority of those who emigrate now go out of necessity. This is the group we should be all concerned about and not brush over the position with a paint brush and say it does not exist.

In the seventies we had a low rate of emigration but that trend has now been totally reversed. The statistics are so far out of date that we do not know the extent of the problem. We do not know if 10,000 people, 11,000 people or 17,000 people emigrate each year. Imagine the impact of that on the planning process. How can one plan when the statistics are almost two years out of date? If people in private business managed their affairs in that way they would not be in business. This Government continually lecture people about how to run their business and this is the way they act. It is not today or yesterday that I have said this. I have been saying for a long time that unless the statistics are right one cannot plan the economy. The more one reads the document the more one realises what is being concealed. More is concealed than is revealed.

If the Government are prepared to accept that long-term structural unemployment will stand at 220,000 and if the best they can do is say that unemployment will be about the same if not higher at the end of the three-year plan, then they are reneging on their promises. The Government have nailed their colours to the mast. If they want to stand over it that is fine because the sooner they give the people the opportunity to cast a verdict the better. I know what that verdict will be.

Mr. Connaughton

The Deputy has a short memory.

Mr. Reynolds

The Minister of State has a shorter one because he went to a meeting in Ballinamuck and told the small farmers he would fix them all up and look after their special payments for TB eradication but the Minister introduced emergency measures in south Kilkenny and Waterford.

Mr. Connaughton

The Deputy was in Government and unemployment spiralled.

Mr. Reynolds

The Minister of State is a decent man. The people in Longford thought so but they do not think so now when they see what the Minister did for south Kilkenny while the Minister of State did nothing for the poor small farmers in north Longford.

Mr. Connaughton

The Deputy did his best for three or four years and unemployment got out of hand. Do not cry wolf now.

Mr. Reynolds

If the Minister of State wants to tempt me I will take out a document and read out every commitment and promise made in both election campaigns. The Minister of State will become so red in the face that he will probably get a heart attack and end up in the Mater.

Mr. Connaughton

No fear of that.

Mr. Reynolds

If I was not annoying the Minister of State he would not interrupt me. Deputy Kavanagh did not bother to interrupt me. He was quite happy with the input made by Labour although I do not know how his colleague, Deputy McLoughlin, will square this in Meath. On the day the removal of food subsidies was announced in the newspaper he had an interview with the Evening Herald. At the end of the interview he said that Labour had made its impact in Government. He said it would have been a lot worse if Labour were not there. He said that they would fight the food subsidies to the death. That morning the daily newspapers carried the Government decision to remove half the food subsidies. Deputy McLoughlin is normally present and vocal in the House. I should like to hear how he squares that with fighting the food subsidies to the death. Perhaps Deputy Kavanagh is happy with the way it is going.

I condemn in the strongest possible manner the Taoiseach's and Fine Gael Ministers' treatment of Members of the House. Everyone will recall that at the end of the Adjournment Debate in June the Taoiseach was full of optimism saying that there was light at the end of the tunnel and better days ahead. The worst was over. A few days later he went out to a newly convened parliament in Malahide and told members of Fine Gael that doomsday was approaching. We were in hock to international financiers and if we did not do this, that or the other they would take over the whole show and run it for us. What kind of deceit is that? What is the real position? Do the Government know what it is? I wonder.

The Chair will recall that on numerous occasions on the Order of Business he ruled me out of order more often than not when I asked about the publication of the industrial policy. I was promised it but it never arrived. yet it could be published within one week of the adjournment of the Dáil. We were here on 5 July and it was published on 12 July. That is a Government concerned about upholding the institutions of State. They are contributing to the attitude people have about this House. We could not get it here but a week later it was published.

When the industrial policy was published the Minister for Industry, Trade, Commerce and Tourism called each newspaper in separately for an interview. That is unusual but it is a very good idea if you have a message to deliver and do not want to face the full questioning of all press reporters. Each newspaper was called in separately and given the lines. It was some insult to this House.

We had the debacle of the food subsidies where, as far as I could gather from the Taoiseach although he was not forthcoming about it, the decision was taken on the day on which it was announced. I have experience of Government but have never known a decision to be made like that — brought to Government in the morning and made on the same day. That is only done in an emergency. The normal approach to Government business especially on a major issue is that a Government memorandum is circulated to each Department with a request that the Departments express their views on what is contained in the memorandum. When all these views have been obtained the Department who circulated the memorandum bring the matter to the Government. I find it hard to accept that in this instance there was any discussion beforehand.

I do not believe that when the Labour Party held their meeting in County Kildare they were aware that food subsidies were being abolished. That will be my view until such time as someone may tell me otherwise. The Government waited until the Dáil was in recess before giving the bad information. Not one of them had the courage to stand up here and tell the people what they intended doing and why they considered it necessary to abolish food subsidies. A hit and run approach is the order of the day so far as the Taoiseach and the various Ministers are concerned. These are people who have said time and again in the political market place that Fine Gael can be relied on to be honest and open and to put the interests of the nation first. It is clear from what has been happening in the past few months that when political problems arise the Fine Gael Party put Fine Gael first and the interests of the country second. A clear indication of that was the signing by 25 Fine Gael TDs of a document for Mr. Rea whereby he would decide what should or should not be in an economic plan.

It is clear from reading the plan that the people on behalf of whom Mr. Rea speaks are being well looked after because most of them are in the category who will have from 80 adjusted acres upwards. Not only will these people not have to pay the same level of tax as they have been paying but they will pay less because when computed the land tax will be regarded as a tax credit. Is it any wonder, then, that Mr. Rea left Buswell's Hotel delighted?

The figure in the plan is disputed by such an eminent economist as Dr. Brendan Walsh. If the Government are to take in the revenue that is projected in respect of the land tax the smaller farmers are the ones who will be paying. However, it may well transpire that nobody will be paying the tax since it is not to be effective until 1986-87. I trust that some of the Government speakers will take the opportunity during this debate of clarifying many of the issues that have been raised.

After months of sweat, blood and tears, of Cabinet meetings lasting up to 16 hours a day, this plan is what is presented to us. One must ask how so many hours could have been spent in the production of such a document. Any Government worth their salt would have produced a similar document in one week at most. Is this plan just a further demonstration of the paralysis of thought and action that has gripped the Government? After all their deliberations they have produced a plan which in effect is not to have any meaning until 1986-87.

I heard some of the national handlers refer to the plan as super glue. That seemed to imply that, like super glue, the plan will have the effect of sticking everything together for all time.

Mr. Connaughton

I hope it will stick for longer than The Way Forward stuck.

Mr. Reynolds

If the Minister reads the plan he will find that it contains a lot of material that was used in The Way Forward so I should not be surprised if some of the civil servants who were involved in drawing up parts of that document were involved also in drawing up parts of this plan.

Another description of the plan which I heard used by a Government backbencher was that it could be compared with Evostik. The advertisement for that commodity is on the lines that Evostik sticks almost anything to anything. If one has regard to the behaviour of the parties in Government, to their running to the media in times of crisis to save their skins, the Evostik description may not be a bad one. However, I would describe the plan as political Polyfilla to the extent that it will close up the cracks on a temporary basis. We all know that there nearly was a crisis a few weeks ago which concerned the mortgage interest relief but in that case too, Fine Gael, being the good, sound, conservative politicians they are, looked into their political backyard and said that whatever about the land tax there was no chance of their losing their large middle-class vote in Dublin. The Minister of State will appreciate how long Polyfilla lasts.

Mr. Connaughton

It lasts a lifetime.

Mr. Reynolds

The Government will not be able to rely on the plan to keep the cracks closed. The launching of the plan was carried out on a grand scale. It did not take place in the Department of Finance but in the lavish surroundings of lveagh House. Those of us who watched the event on television saw the chief of protocol, whatever he had to do with the plan, leading in the Taoiseach and the Ministers. The press were there but as soon as the plan had been announced the Taoiseach left the rostrum and went to another room where he talked only to political correspondents. No other correspondent was given such an opportunity.

The Minister for the Environment, being the good sound trade unionist he is, will appreciate that the oldest trick in the game is that by wearing people down sufficiently their sharpness goes.

Mr. Kavanagh

Obviously the Deputy was impressed.

Mr. Reynolds

I was impressed at the lavishness of the occasion. Were you there a Cheann Comhairle?

An Ceann Comhairle

I am here and that is what matters.

Mr. Reynolds

The surroundings would not have impressed the 211,000 people who are unemployed but the Government's aim was to ensure that they got the marketing brand image right at first but they must remember that the best marketing team in the world, while they can sell the product for the first time, may well find that the second time round the product remains on the shelves. The Government may succeed on the first count but not on the second.

Perhaps whoever is speaking next for the Government will tell us whether the same sort of presentation took place in our embassies throughout the world and, if so, at whose behest? Was there pressure, direct or indirect, for such presentation? I am looking for a clear and unequivocal answer to that question. If there was such pressure why was it applied, but if there was not what was the purpose of the whole exercise? Was it to elicit the views of international economic commentators? If that was the intention I need only refer the Government to the first economic publication that has come to hand containing feedback. I quote from the current addition of the influential magazine, World Business. They say that the plan is so speculative that it might have been drafted by a turf accountant. We all realise the nice and subtle connotations of that.

The quotation continued:

At least its authors will find it cheaper to drown their sorrows if their assumptions prove false.

That is what the economic commentators in World Business said. The Government cannot fool people. They know how unreal is the plan. Let us consider the basic, and indeed heroic, assumptions on which the plan depends. It depends on the púnt not going down in value against the US dollar, on a sliding back of US interest rates, even though last week in Washington and elsewhere they were talking about an increase in interest rates, it depends on world markets growing by 5 per cent per annum and it also depends on a quiet acceptance by the public sector of a total pay freeze this year, a 1 per cent pay increase next year and then 1987 — the official date of the next general election — will see the public service fixed up to the tune of 7 per cent or 8 per cent.

There are clear and discernible facts in that document that are obvious to anyone who reads it. Clearly it is more a political document born of political necessity than an attempt to solve our economic problems. There will be a pay freeze this year, an increase of 1 per cent next year and a large increase in 1987. The land tax will come into operation in 1987. Everything that matters will happen in 1987.

This plan is diced and spiced with a few goodies in front and I must compliment the Government on a beautiful summary document which contained only the few goodies. However, World Business searched for the real evidence and that is what every good economic commentator will do. They will have to consider if all the basic assumptions on which this plan is based have a possibility of succeeding. If only some, or if none, of those assumptions comes true, what will the Government do? What will happen to our economy? Will the Government throw up their hands in horror and try in some mysterious way again to blame Fianna Fáil, because this is what they have been trying to do in the past few years?

This document is highly speculative. It is not built on reality but is built on quicksand and on fantasy. If some of these assumptions came right in normal circumstances the Government would be doing very well but to base the success of the plan on all of them coming right is bordering on gambling. Hence we read the remark in World Business when they said the plan could have been written by a turf accountant. Their remark that the authors could drown their sorrows cheaply probably referred to the reduction of £1.50 in respect of the price of a bottle of whiskey. I am not a drinker but I say good luck to those who avail of this reduction. What has been done in this connection is an example of the kind of selective tax reductions we have been talking about that makes more sense than what the Government have done up to now.

We have pointed out time and again what happens when there is a distortion in price levels between here and the North of Ireland. The Ceann Comhairle will be familiar with the situation. The only hope is to have those levels as close together as possible. We warned the Government about the distortion of trade that would occur but the Minister for Finance just brushed our remarks aside. His reply always was "Nonsense. You are living in cloud-cuckoo land. That will not happen". Would he say the same today? Would he deny the report of the Allied Irish Investment Bank who did an in-depth study into this matter and put in a figure of £230 million? When one considers that the goods in question are at the high VAT rate of 23 per cent or 35 per cent we are talking of £50 million or £60 million not going to the Exchequer. This kind of silly situation has been brought about by people who do not know about the real world and who do not know or understand what makes an economy tick. The Government's policies are going into reverse and they know it. They know exactly what has happened in respect of the distortion of trade and the first admission of this is the reduction of £1.50 in the price of a bottle of whiskey.

What will happen to the electrical industry where 75 per cent of their business is going to the North of Ireland? What about all the jobs that have been lost in that industry because of the ridiculous VAT rates? The Government have killed the goose that laid the golden egg. They have long passed the point of diminishing returns. If the Minister for Finance were present I should like to put certain questions to him. I would ask him to consider carrying out an econometric study of certain sectors of industry that have growth potential and to work it out down the line. Then he could see the sense in reducing VAT rates in order to give industry a chance to grow. At the end of the day the Exchequer would gain a lot more, jobs would be created and we would have a better economy. The Government have penalised every industry. They have destroyed the incentive to work and to invest and everything is coming to a halt.

The policies of this Government are driving people out of legitimate business and into the black economy. This is happening to people who would never have dreamt of taking such a course but who are forced to do this if they are to survive and to look after their families. If the Government continue with the levels of taxation they talk about and go in the direction they are going now, the end result will probably be worse in terms of human suffering and real problems for many families. What is happening is that the white economy is being squeezed to death while the black economy flourishes. Any person who closes his eyes to what is happening is not living in the real world. Sometimes I get the clear impression, as do many members of the public, that the Minister for Finance does not know what the real world is all about and what is needed to make the economy tick. Running a business or an economy is not very different in one sense. When costs get out of line and when you begin to lose markets there are two things that can happen: you close down — and that is happening — or you adopt a positive approach. You cut your costs, increase productivity and sell your products in the market place. Businesses thrive in a recession if they are good enough, but they will close if they are bad. A Government will show their mettle and show what they are worth in tough times but we must recall a statement from Young Fine Gael who said that the Taoiseach "hasn't a clue". It is no wonder our country is in such a depth of depression and despair. I hope it has not gone too far. Having wasted the past two years, having been paralysed in thought and action for that period, I hope the Government will pick up the pieces, adopt positive thinking which will lead to investment, the restoration of confidence and a taxation system moving in the direction of being fair and equitable. I am not contending that the taxation system can be transformed overnight. Neither am I contending that one can recreate a climate for investment overnight but there can be pointers given in the right direction so that people at home and abroad know the Government are serious about what they are doing, that enterprise and effort will be rewarded, that the risk-taker will be rewarded, so that profit and the creation of wealth will no longer be dirty phrases in this society. On the other hand, if they continue to be, if that is the kind of society in which we want to live, then let us know about it but I do not believe that is the type of society desired by the electorate. It should be put to the acid test of democracy when the electorate will tell us what they want and, at the end of the day, it is on that decision we must act.

With regard to the appeal for a consensus on the proposals in this national plan I must say I am not a believer in a consensus at any time. I believe in competition, in free market competition. I believe in it at manager/worker level. Competition keeps both on edge reaping better results at the end of the day. I believe democracy thrives on competition and the sooner there is more competition in many areas here the better it will be for our economy. Those are my suggestions with regard to how the Government can correct the climate for investment obtaining and where they have gone wrong.

The three main objectives of this plan are to reverse the continuing upward spiral of unemployment, to halt the burden of taxation and to put the State's finances in order. Deputy Haughey and others yesterday afternoon covered the challenge of unemployment, exactly what the figures mean when they are teased out, the very dubious basis on which they have been calculated, indeed what might well be described as a phoney basis because, unless somebody corrects the records, that is what it will prove to be. The first premise on which it is very dubious is that of the labour force projections, the annual increase in the labour force which the plan contends will amount to 15,000 people. The White Paper on industry published on 12 July last predicted a figure of 17,000 whereas the NESC and ESRI reports predicted 20,000. The Government have a responsibility and duty to tell us who is right. Daily I become more sceptical of those sorts of figures being trotted out. Indeed when one sees what happened with regard to the milk super-levy one cannot be blamed for being sceptical. Who is right? It is incredible to think that the arms of government can come up with figures like 15,000, 17,000, 20,000 in relation to an increase in the labour force whereas if one does one's homework properly one will come up with the proper result at the end of those three years. If the figure is to be 20,000, then that means the Government have 5,000 more people annually to look after; if the figure is to be 17,000, then there are 2,000 more people to be looked after and, if the figure is to be 15,000, then one might well ask: how did the White Paper get it wrong, or why did the other two agencies get the figures wrong? I certainly do not believe in the projected figure of 15,000 because it would appear that a miraculous change has taken place in recent weeks.

We come then to the manufacturing jobs to be created. I should like to think that the projected jobs in that area would be exceeded but while this climate prevails with all its accompanying problems, I do not think it will be. However, if it is, I shall be the first to welcome it. The IDA are the experts in the field of industrial development. In their strategic plan they contended that 1,000 jobs in manufacturing would be created annually. Is it any wonder that that strategic plan was never published despite questions having being asked in this House? The Minister for Industry refused to publish it and it is now quite obvious why it was not. I asked the then Minister, Deputy John Bruton in this House last May if the IDA's projections of jobs to be created this year would be sufficient to offset projected job losses. In general terms his reply was that they would fall significantly short of what would be required to replace those job losses.

In the area of job creation there is another serious question mark and we should avail of this debate to clarify this matter. Social employment is a desirable objective because at least it alleviates the general degree of idleness obtaining. But at the end of 1987 it should be remembered that they will be part-time jobs only. It is a desirable objective, supplemented by the various training schemes which are expected to create approximately 2,500 additional jobs. It is time there was carried out a full reappraisal of these training schemes, costing something in the region of £140 million a year. I am not too sure that the taxpayer is getting value for money in this respect or that the people on whom the money is being spent are getting value either. Some basic mistakes have been made in the approach to training, of which I have had practical experience in recent weeks and it might be no harm to give the Minister for Labour present some insight into what I mean. On the question of training people to be computer operators it is generally accepted in the market place today that the first basic requirement is that a prospective candidate be a good typist, that that is the real priority. That is absolute nonsense because, in practice, the opposite has proven to be the case. There is absolutely no point in a computer operator being a fantastic typist if he or she does not understand the information they are feeding into the machine. Rather the first priority should be that a candidate understands book-keeping or accountancy whose basic principles are much more important than knowledge of the typewriter keyboard. There must be a practical investigation of what is taking place in the course of these training schemes. I want to see people trained to their maximum potential, acquiring the maximum skills. In my view some training courses have dubious results. I am not endeavouring to throw cold water on them but I want to see value for the taxpayers' money while at the same time imparting the best possible skills to our young people. Perhaps better value for money could be got by in-house industrial training.

There are many question marks hanging over the projections in the job creation area. The common theme running through my remarks is that, unless the correct climate is created, unless the climate for investment is right, the projects needed to produce those jobs will not be successful. I want clarification of this fanciful figure of 30,000 jobs in the private sector services clarified. From where will they emanate? In what sectors will they be created? The many unemployed people are looking to this plan for any hope of a job in the future and they want to know where such opportunities will arise. The Government are obliged to state where those jobs will be created. The traditional areas of banking, insurance, the public sector have all been exploited to the full. Are these jobs to be created in the Kentucky Fried Chicken business? Consumer demand is so depressed I do not foresee them arising there. Will they be created in the fast foods area, the junk food area, high fliers in other economies and which could be here if ours was in order? On the one hand, the Government cannot contend that they will increase the number of manufacturing jobs in the private sector while at the same time there is depressed demand because their economic policy for the years 1985 to 1987 — even on the admission of the Taoiseach himself —— will be deflationary, which in turn will create more unemployment within domestic industries.

At present the industrial base of this country is split almost in half. There is the huge growth in manufacturing exports which is to be welcomed but, when one analyses from where it emanates, it will be seen that it emerges from the high technology and chemical areas, in addition to agriculture. The domestic industrial base is becoming constantly smaller. The Government's taxation policies have resulted in less consumer demand within the economy with more and more industries closing. In 1983 there were 700 liquidations and already this year there have been nearly 700 more. If we do not do something quickly there will be no industrial base on which to build a recovery. I totally reject the projections in relation to unemployment, the major challenge facing Government and economic planners up to the end of this decade. If the Government side give precise information and answer my questions I will be glad to admit to being unfair to them in saying this plan will fail.

The burden of taxation will remain, in spite of the indexation of tax-free allowances. The Government should not try to fool the PAYE sector into believing that they will be paying less tax in 1985 and 1986. Even with full indexation, to which the Government do not seem to be totally committed, the tax take will be more, not counting additional taxes or charges for school buses, VHI and the removal of the other half of the food subsidies. Indexation is too little too late. We remember the magnificent tax reforms which were to be introduced in 1981 and 1982 and Deputy Haughey dealt adequately with that subject yesterday.

In regard to borrowing and getting the State finances into line, the projection is that the current budget deficit will be 5 per cent of GNP in 1987. The greatest let down for people generally was when the Taoiseach, Deputy Garret FitzGerald, did a U-turn on the current budget deficit. The holy bible of economic philosophy which he hawked around every village and town in 1981 and 1982 was that nothing could be done in the economy until the current budget deficit was put right. Two years later, having inflicted depression and misery on most people, he decided to do a U-turn and forget about the current budget deficit. Perhaps the Labour Party pursuaded him to agree. He destroyed his credibility and the confidence placed in him. People believed him when he said that he would always tell the truth and stick to his guns. He did his U-turn for political expediency and survival. Who can tell what 5 per cent of GNP will be in 1987? They are dealing with a fictitious figure because it is always in retrospect that it can be computed. Once they move from a phasing out of the current budget deficit to a figure of 5 per cent then everything else becomes a moveable feast. They have wasted two years in Government. They have analysed the problems and know they should not be borrowing money for day-to-day expenses but should be borrowing for capital investment in infrastructure, yet they clearly state that this is the policy they intend to pursue.

I should like to see greater investment in roads because this problem must be tackled sooner or later. I know there is pressure on Government finances but there is a lot of money in the private sector which could be utilised in various ways. I am glad that the Government have made a start and I welcome the Taoiseach as a convert, even if it is on the road to Damascus, in relation to investment in roads. Anybody who looks at the Naas by-pass can see the real return to the national economy and investment of that sort will be repaid handsomely. The Government have thrown out the window everything they believed in and they do not have any credibility. On this the plan will fall. People do not believe what they are being told. They know what happened in regard to food subsidies and they now see this U-turn on the current budget deficit. You say the plan is based on reality but I say it is based on quicksand. The political considerations are such that you may not be concerned about whether it succeeds in the long term if it succeeds in the short-term objective of keeping them in power at whatever economic price in terms of human misery, higher unemployment, higher taxation. These things do not seem to worry you as long as you can stay in power and try to reverse your current electoral prospects.

An Ceann Comhairle

I would remind Deputy Reynolds that every time he says "you" he is referring to the Chair.

Mr. Reynolds

I would not like to include the Chair. Please accept my apologies.

An Ceann Comhairle

I certainly would not wish to take the credit or the blame for the matters the Deputy is speaking about. He should use the third person.

Mr. Reynolds

The basis of this plan is highly speculative. It is a gambler's paradise. If we knew that we could forecast interest rates and everything else we would not need to be in politics since we could make money much more handily. It is highly risky to base such a finely balanced plan on such speculative assumptions.

I would seek clarification in relation to employment. The taxation area is quite clear. I welcome the investment in roads. It is incredible that a Government who brushed aside any possibility of a reduction in VAT on newspapers finally succumbed before somebody else might get the opportunity. That is an old political move, to steal the Opposition's clothes, and I am the first to recognise that reality.

I know how much this Government like a good press; we all do because it is the life of the business. This country is faced with the problem of high unemployment and a Government who accept that unemployment will always be with us, whether it is at 200,000, 210,000 or 220,000 are reneging on their responsibility to the people, especially our young people. We have reached the ridiculous situation where we are borrowing to pay people to be idle. What crazy economic theory says that works better than borrowing to provide jobs and encouraging people to make returns to the Exchequer? Part of our borrowing is used to pay our social welfare services, but as long as this Government are into straitjacket economic thinking, things will stay the same.

There is an air of despair and depression throughout the country which has not been seen since the fifties because people who would like to invest are discouraged from doing so. In this document the Government parties say they will protect the less well off sections of the communities but taking away food subsidies can mean an increase in the grocery bill for these people of between £4 and £6 each week. The Government may say that the 7 per cent social welfare increase will compensate them for that, but that is not so. The Government are going to take away the other half of the food subsidies when the child benefit scheme has been introduced.

The hallmark of this Government has been despair and depression. They have needlessly inflicted misery on many families. I have been listening to the Taoiseach for the past three years and get the impression that to the Taoiseach, Deputy FitzGerald, misery is very important. He has been trying to make people afraid for the future. In 1981 he said the international bankers would come here to run the economy and at that stage our national debt stood at £3 billion. If that was true then, how much truer is it today when our national debt stands at £8 billion? Yet I hear no talk about the international bankers knocking at our door to take over the economy. If that was true in 1981, it should be true today because our economic circumstances are more serious than they were then. As long as we are going to allow high unemployment to affect political stability, we will be allowed to run our own affairs. That is why I say it is very risky to plan for more than 200,000 unemployed in the long term.

Fine Gael and Labour backbenchers were asked to accept sacrifices for two years and to ask their people to do likewise. These two years have passed and the Government say we are worse off than we were, that the cure is worse than the disease. The Government are planning their faith in this document. There is misery and hardship in Ireland today and it seems to be hallmark of this Taoiseach that he loves talking about misery. When he was in Government he created misery and when in Opposition he invented it.

Minister for the Environment (Mr. Kavanagh)

The contribution we have just heard leaves me a little puzzled because at one stage the Deputy almost praised aspects of the plan but basically he condemned it roundly. I would never compare it with previous plans produced by Fianna Fáil when in Government. Fianna Fáil produced a plan in 1977 which made wonderful offers to the public. They tried to buy power by doing away with rates, car tax and giving increases in taxation ——

Mr. Reynolds

I am wasting my time listening to this long playing record.

Mr. Kavanagh

That is the plan to which Deputy Reynolds should refer occasionally and look at how successful it was. Is he suggesting that we go back to that type of economics? He should look at the gentleman who in my view is wrongly given credit for that plan and see where he is. He is not on the Fianna Fáil backbenches any longer. He has to accept responsibility for the expectations which were raised in that plan. Fianna Fáil's more recent plan was a little more modest but it was not based on a foundation which could be looked at comprehensively. I thought that at last Fianna Fáil were beginning to realise just how difficult the position this country finds itself in as a result of the 1977 plan.

It was suggested that the redundancy rate of six weeks for each year's service was made by me to the ESB. That had nothing to do with me or with the Department of Labour. The ESB have their own conciliation and arbitration scheme which operates independently and they have the services of the Labour Court when they want them. As Minister for Labour I have never issued a directive suggesting that any level of redundancy payments should be given to any group of workers. These decisions were arrived at after negotiations and consultations either at Labour Court level or within the conciliation and arbitration service.

I am glad to hear that the Deputy agrees with private enterprise, the market forces and open competition. We in Government have always believed that large public sector investment is necessary if the country is to survive and expand. Over the past few years the IDA have helped many firms in the private sector and Fóir Teoranta have helped companies which were in trouble. AnCO have provided training schemes and the private sector have availed themselves of the initiatives which exist to help them expand their business. CTT have helped private companies to sell their products abroad. This is an example of the State and private enterprise working together to sell our goods at home and abroad. If private enterprise is to solve the problems of this country, we should not look back and concentrate on what has been done years ago under Fianna Fáil or Coalition Governments.

This does not take note of what has been happening over the years with regard to the private sector. Without considerable State involvement by all Governments, the private sector could not have carried on. I cannot accept that open market forces, private enterprise and open competition would not have had a disastrous effect on our economy. The private sector have not created the jobs which were expected would be created and that is why we have had this panoply of assistance and guidance at various levels, whether financial or market, at home and abroad to give every impetus to private and public investment in their enterprises.

There has been no more comprehensive or constructive contribution, during my 15 years in Dáil Éireann, to the government of this country than the present national plan. It vindicates the co-operative effort of the present Government and charts a sound course for progress over the next three years.

The plan is coherent, systematic and quantified and offers well founded hope for the country in the coming period. Within its strictly realistic framework, new thinking has been brought to bear on a host of constraints which otherwise threatened the stagnation of our economy. There are major initiatives on employment and on the institutional reform of the economy. Within my own area the decisive hand of the planning process is evident in the new measures proposed to enhance access by local authority tenants to private housing, in the bold redirection of capital resources into major road improvement and in the measures outlined for the reform of local government.

The plan is both a culmination and a beginning. It represents the culmination of two years' unremitting efforts to bring under control the tottering economy that we inherited at the end of 1982. The chronic imbalance then existing in the public finances made it much more difficult for us to pull out of the recession in tandem with the stronger industrial economies. However, the rapid growth in industrial output and exports in 1984, the projected increase of close to 3 per cent in GDP and the tapering off of the decline in employment all testify to the success of the Government's efforts to restore stability and confidence to the economy. Furthermore, both the rate of inflation and the balance of payments deficit have been dramatically improved and this year's budget is on target. Now that stability and confidence have been restored we can plan ahead for the next three years.

As I have said, the publication of this plan also represents a beginning — a beginning, one would hope, to an era of renewed economic progress at home, which happily coincides with an improving outlook for the world economy. It is also the beginning of the road to reducing unemployment and reducing Exchequer borrowing to sustainable levels. In this way future generations will not be burdened with a legacy of debt, and we will be able to use our resources to create jobs for our young people rather than to pay interest to foreign bankers.

The macro-economic strategy underlying the plan has been carefully chosen for our present circumstances. While it charts a steady course towards reducing the current budget deficit and Exchequer borrowing, it avoids the unacceptable effects which a rapid elimination of the budget deficit would now have on employment and on the less well off sections of the community.

As the title implies, the basic asumptions of the plan are sober and realistic — indeed some might even say that they are conservative. They are not fanciful or conjured out of thin air, as in the case of another well known plan. Policy in respect of all significant programmes has been examined and discussed, and expenditure over the next three years will be based on specific Government decisions already taken. In some areas, such as housing, existing policies have, during the preparation of the plan, been subject to rigorous review to ensure that policy measures are effectively designed to meet objectives.

There are no facile claims to solve the unemployment problem overnight. Rather, the magnitude of this problem is illustrated by the fact that, even if the 44,000 jobs foreshadowed in the plan are realised, unemployment, because of the rapidly expanding labour force, will remain more or less at its present level in 1987. It would have been easy, of course, for political reasons, to have manipulated these forecasts so as to offer a more optimistic or palatable projection for the years ahead. This plan strictly adheres to objective forecasting methods in keeping with the realism which is its general hallmark. It leaves no doubt that the overriding concern of the Government is the social derivation and economic waste that is unemployment. The unemployment problem has been to the fore in the consideration of all policy issues. The new social employment scheme for the long term unemployed is, I think, a particularly welcome one in that it will offer large numbers of those without work for over a year an opportunity to break out of the rut. I expect that local authorities will be major participants in this scheme since they have a wide range of necessary works that could be carried out under the scheme as outlined in the plan.

For Ministers and Departments, the plan provides a very welcome framework within which they can plan their programmes for the next three years. The stability, continuity and funding which the plan guarantees will provide an environment in which they can plan ahead with a degree of confidence which was hitherto lacking. It will enable public authorities to set more meaningful objectives and targets thereby assisting them to make expenditure programmes more effective and achieve better value for money.

The plan also shows that the Government, while fully appreciating the need to improve economic performance and maintain order in the national finances, are equally determined to press ahead with badly needed development of policies in other areas such as social welfare, health, education, housing and local government reform — the latter two fall within my own province as Minister for the Environment. I will now speak about the implications of the plan for these and other areas within my remit as Minister for the Environment.

The Government's continued and unambiguous support for the housing programme is a striking feature of the plan. It reflects a clear recognition that proper housing for the nation's growing population must be to the forefront of Government strategy for social development in the years ahead. The plan commits the Government to maintaining a substantial programme of local authority housing for those of limited means and contains a number of policy initiatives that I feel sure will be welcomed on both sides of the House.

I am naturally gratified that, given present economic constraints, the Government have recognised the fundamental importance of maintaining an effective and vigorous housing policy and that we have set our face against the kind of retrenchment in expenditure that had been advocated publicly to us. Those who intimated, sometimes publicly, the imminent abolition of private housing aids, such as the £1,000 grant and the £3,000 mortgage subsidy, underestimated the social commitment of this Government. We were not prepared to countenance a situation which could only have had the most serious consequences for potential first-time house purchasers, as well as for the housing programme as a whole and for employment and output in the building sector. Indeed, not only did we decide to retain the existing housing aids intact, but we have also introduced, among a range of new measures, a new £5,000 grant which I expect to play an important part in coming years in the implementation of our overall housing policies.

Apart from the social implications, the Government recognised that a reduction in support for private housing would inevitably lead to an increased demand for local authority housing so that in the last analysis the result would almost certainly be an increase rather than a reduction in the burden of public expenditure.

Another major consideration for the Government was the increasing dependence of the private housing sector of the building industry on the first-time house purchaser. For a variety of reasons, the new house market has become increasingly dependent in recent years on the first-time purchaser to the extent that first-time buyers now represent about 60 per cent of all purchasers of new houses compared with not much more than 40 per cent a few years ago. We had evidence also from a Foras Forbartha survey that the £1,000 new house grant and £3,000 mortgage subsidy appear now to be the most important factors influencing purchasers in favour of the purchase of new houses rather than existing ones. To terminate the grant and mortgage subsidy schemes in these circumstances would certainly have dealt a body blow to the private house-building industry, which is something this Government were not prepared to contemplate.

Not only have the Government retained the entire range of incentives for private housing, but they have also broken new ground in giving a commitment in the plan to the continuation of these schemes for at least the next three years. This will, I believe, enable house purchasers and house builders to plan with reasonable confidence over the next three years.

I have already mentioned the new £5,000 grant for tenants of least three years' standing and tenant purchasers who give up their dwellings in order to buy new or secondhand private houses. In economic terms this grant is justified by the high level of capital expenditure and current subsidy that is involved in the provision of every new local authority house. The Government visualise that the grant will, over time, enable greater inroads to be made into local authority housing lists and at the same time contribute towards the achievement of a better social mix within individual housing areas. I am confident that the grant will help also towards the achievement of better use of our existing housing stock, since tenants whose families have grown up will be encouraged to buy houses that are more suited to their needs. In addition, the grant should increase the capacity of local authorities to meet the needs of the more disadvantaged sections of our community, the homeless, travellers, the elderly, the disabled, single parent families and others whose only hope of reasonable housing is likely to be the local authority programme. I intend to announce shortly the full details of the new grant which will be additional to all other aids for which a tenant or tenant purchaser might qualify. I feel sure that the new grant will encourage the demand for private housing and thereby assist output and employment in the building industry.

It goes without saying that tenants of local authority houses will continue to have the option of purchasing their present homes under the terms of the existing tenant-purchase arrangements, which allow substantial discounts based on length of tenancy.

Apart from the initiatives in the housing area, the plan contains a considerable amount of good news for the building industry and I think that this fact has been recognised by commentators and representative bodies. Expenditure affecting the building industry will increase by more than 12 per cent over the period of the plan and in the key area of roads investment will increase by over 52 per cent. The 1984 public capital programme expenditure affecting the building industry will be maintained in real terms in 1985 despite the overall fall in the level of the total public capital programme in that year and the fact that some investment programmes with significant building and construction elements are reaching completion.

It is projected in the plan that the volume of output of the industry will increase by almost 7 per cent between 1984 and 1987. It is expected that growth in output will come from a recovery in private investment beginning in 1985 and strengthening in the following two years.

Already there are indications that the worst of the recession in the building industry has passed and that conditions will soon be favourable for a return to growth. For the future it is important for the good of the industry that its development should be related more to the overall performance of the economy as a whole so that it does not become dependent to an unwarranted degree on the level of public sector investment. An important factor at the present time is that the overall stability engendered by the national plan should create a more favourable climate for investment and, in turn, be beneficial to both output and employment in building.

The Government's objective for the local authority housing programme is to provide accommodation for 9,000 households annually. This will be achieved by building 6,000 new houses per annum and by seeking to ensure that about 3,000 houses from the existing local authority housing stock are available for reletting. The flow of vacancies from the existing stock will, of course, be helped by the new £5,000 grant.

The net effect is that about 27,000 households who are in need of housing will be housed by local authorities during the period of the plan. This is a remarkable commitment in the current difficult situation facing the public finances and is the clearest indication of my own and the Government's support for the programme. I should mention in this context that completions of local authority houses in the current year will be significantly higher than in 1983, which in turn was some 400 houses above the level of completions recorded in 1982. In part, this achievement has been made possible by measures which the Government took to obtain better value from the money invested in the local authority programme. I am glad to say that these cost control measures are now paying off in a way that does not involve recourse to the kind of low-cost approach that proved so disastrous in previous years.

Another important initiative in the plan is the decision to allow local authorities to buy houses in the private market where a need is seen to exist and it is established that good value is obtainable. This measure also will be conducive towards the promotion of greater social integration and help to break down the barriers that often exist between local authority and private housing areas. I will be looking to local authorities to operate the new arrangements in a well-planned and sensitive way and I have no doubt that the results will be worth while. I should emphasise that this venture into the purchase of houses, as distinct from having them built by competitive tender, does not represent an overall policy departure from the established procedures which will still continue to be the means through which the bulk of the programme will be provided.

It is important to note that both the £5,000 grant and the purchase of private housing by local authorities apply to both new and secondhand housing. The decision to include secondhand housing will have important effects on both the better use and the maintenance and conservation of the existing housing stock.

Much greater attention is now being focused by my Department on the relative needs of the applicants being housed by the different local authorities. It is my intention that for the future we should put more emphasis on the need to allocate capital moneys to local authority housing on a basis that will take greater account of the comparative needs existing in individual areas and that will ensure that in all areas special categories of persons who are in need of housing — such as the homeless, the aged, travellers and the disabled — will receive equitable and equal treatment.

While great progress has been made in the local authority house building programme, both in terms of the number of houses built and value for money being obtained, the direct subsidisation costs of the programme and the costs of the management and maintenance of local authority housing are still matters of major concern. The average Exchequer subsidy for each new house is running at about £85 a week. Rents of local authority houses fall far short of the costs of management and maintenance and make no contribution to the servicing of capital costs. Clearly, we have no option but to attempt to alleviate this problem if the prospects of those who will be seeking housing in coming years are to be safeguarded. There is an inseparable link between the level of current subsidies and the size of the housing programme that we can afford.

The Government are committed to a two-pronged strategy which will involve raising rents progressively to a level more in line with actual expenditure — but within the context of the differential scheme which ensures that no tenant is asked to pay a rent that is unreasonable in relation to his income — and securing more effective maintenance and management arrangements. Proposals for a revision of the rents scheme for local authority dwellings for 1985 will shortly be put to representatives of the tenants.

One of the reasons for the high cost of maintenance and management is that local authorities tend to assume responsibility for minor repairs and maintenance of a routine nature, which could be undertaken more conveniently and more cheaply by the tenants themselves. I am satisfied that the majority of tenants will accept that it is reasonable that they should, in fact, undertake these kinds of repairs and I know that many of them already do so in the ordinary course of events.

The Department will shortly be discussing with local authorities the implementation of the proposed new arrangements, which, I would emphasise, will include provision to ensure that where compassionate circumstances exist, local authorities will continue to carry out the works involved.

A new scheme will shortly be introduced to finance the cost of urgent major works of a structural nature to housing provided under the "low cost" arrangements of the sixties and early seventies and to certain other deficient local authority dwellings. Under the scheme, local authorities will be authorised to devote part of their capital allocation for local authority housing to such works where it can be shown that the carrying out of the works envisaged would be cost effective. Subsidy at a rate of 80 per cent of loan charges will be paid by my Department in respect of funds expended on this scheme. I know that the introduction of this scheme will be welcomed generally and I should say that I have been acutely aware from my knowledge of certain schemes that were provided within my own constituency just how real the need is for the kind of remedial programme that is envisaged.

I would emphasise, however, that the programme of works will have to be phased over a number of years and that it will almost certainly be necessary to draw up a priority list of schemes which will qualify for assistance. This and other aspects of the new arrangements will soon be the subject of discussions with local authorities. It will be my aim to ensure that where structural works are carried out as envisaged, they will be supplemented by wider efforts to raise the general standard of the estates concerned, largely through the direct involvement and participation of the tenants themselves.

There are other kinds of problems associated with a small number of local authority housing estates, namely, social problems arising from a range of factors including drug abuse, vandalism and other community problems. We are all familiar with some such schemes. What is needed is a concerted attempt, involving all the relevant statutory and voluntary agencies and more importantly the tenants themselves, to improve the living conditions in these areas. I will be encouraging the local authorities concerned to embark on the necessary measures to bring about much needed improvements. I would not, of course, underestimate the extent of the problems involved but a real effort must be made now before it gets too late for any action to be effective.

In the area of private housing, both the Housing Finance Agency and local authority loan schemes continue to play vital roles. I am pleased to announce that the Government have been able to increase the capital allocation for 1984 for the Housing Finance Agency by £7 million bringing the total available for expenditure by the agency to £70 million this year. On the local authority loan scheme, a total of £83 million is available for expenditure on house purchase and improvements loans in 1984. Of course, the building societies are the largest providers of mortgage finance and the indications are that they will provide in the region of £400 million this year. I am satisfied that an adequate supply of mortgage finance will continue to be available to meet demands.

Before leaving this particular topic, I should refer to the Government's concern about costs and delays associated with housing transactions. An aspect of particular concern is that of bridging finance which can be a major burden especially if required for a protracted period. I have already proposed to the Incorporated Law Society and the Irish Building Societies Association the formation of a committee, in conjunction with my Department, which would advise in detail on the practical implementation of measures to speed up and reduce the cost of house purchase. I hope to see this committee established soon. I am anxious that its emphasis should be on practical implementation of the required measures and that it should proceed as expeditiously as possible with its work.

The conservation and optimum use of the housing stock will continue to be an important aspect of housing policy and the existing scheme of house improvement grants has, accordingly, been maintained. The Government also intend to take an important initiative towards widening the scope of the tax incentives that are available to encourage the provision of private rented accommodation. The special tax incentives originally introduced in the Finance Act, 1981, have been successful in encouraging the provision of new modern private rented accommodation. It is now proposed in the plan to extend the reliefs to the rehabilitation of houses which are or were previously let in multiple occupation. Up to now this relief has been available only to new buildings or to conversions of nonresidential or single unit residential properties. The new relief should encourage much needed private investment in housing in inner city areas where virtually all housing in recent times has had to be provided by local authorities.

In the context of private rented housing I should mention the Rent Tribunal which was established by the Government in August 1983. I am glad to report that the tribunal has provided a more acceptable forum for determining the rents and other terms of tenancy of dwellings formerly controlled under the Rent Restrictions Acts.

The national plan represents an important step forward in the development of housing policy in Ireland. It contains some important and innovative measures which, I feel sure, will be welcomed generally. It recognises the vital role that the building industry, and particularly the housing sector, plays in the economy. It provides a degree of assurance and certainty for the private house builder and purchaser together with encouragement and financial support. It allows us to tackle some intractable problems related to the local authority housing stock, of which elected representatives are only too aware. It promotes the more effective use and conservation of our overall housing stock and, finally, it ensures the maintenance of a high level of housing provisions for those unable to house themselves, including the homeless, the elderly and other disadvantaged groups.

The national plan contains a number of important measures for the roads programme. In recognition of the importance of an adequate road system to the economy, the capital allocation for road improvements will be £125 million in 1985 compared with £101.65 million in 1984 — an increase of 23 per cent. There will also be substantial increases in the remaining years of the plan bringing the level of State investment to £140 million in 1986 and to £155 in 1987. These allocations will not only meet but exceed by some 10 per cent the financial targets envisaged in the road development plan for the period 1985-87. This level of improvement expenditure, coupled with an intention to increase State maintenance expenditure in real terms, will not only maintain but provide additional employment in the building industry. By 1987 this increased expenditure will, it is estimated, have generated an additional 1,100 direct jobs over and above the 1984 level. Spin off employment is expected to result in an extra 400 jobs.

There is wide acceptance now that the Irish road network was seriously underfinanced in recent decades. An accelerated programme of improvement of national and other major routes can be demonstrated to offer a worthwhile economic return as well as yielding welcome road safety and environmental benefits. Industrialists and economic commentators agree on this point.

The plan makes it clear that cost-benefit analysis will be used in the case of major projects as an aid to investment decisions and this again clearly demonstrates the Government's concern to obtain value for money from capital investment.

The plan sets out the main aims of the roads programme as the provision of an adequate inter-urban system and the elimination of traffic bottlenecks in our town and cities. In engineering terms this means the provision of by-passes, ring roads, relief roads and bridges and the construction of major road realignments throughout the country. As the plan makes clear, the main focus of investment will be the national routes which carry 35 per cent of total traffic thought representing only 6 per cent of total road mileage. Because of the timescale involved in implementing major road projects, some of the capital expenditure on roads during the period of the plan will relate to the completion of large-scale works which are at present in the course of construction. Examples of these are the by-passes of Wexford, Leighlinbridge, Midleton and Santry, the Navan relief road and the new Waterford bridge.

I intend to announce shortly details of the main new projects to be undertaken during the period of the plan. These will include by-passes at Newbridge, Arklow, Dunleer, Chapelizod, Lucan, Newtownmountkennedy and Shankill as well as works at Dunkettle-Carrigtwohill and sections of the Dublin Ring Road. Although its construction lies beyond the period of the plan, a major study, under EEC auspices, of the important road link between Dundalk and Newry has now been completed and should soon be published following consultations between my Northern counterpart and myself.

The Government are also prepared to encourage private sector investment in roads. Proposals are already being examined for road improvement works to be financed by private enterprise, possibly involving tolls, and details will be announced fairly soon. My Department will also provide private interests with details of projects potentially suitable for tolling to enable them develop realistic proposals.

Sanitary services is another major capital programme and over the next three years I am happy to say that we are providing the capital necessary to ensure continued progress. Over the last two years £195 million has been provided for the construction of water and sewerage schemes — an increase of £30 million on the total provision provided in the previous two years. This substantial injection of capital has meant that considerable progress has been made in bringing schemes to construction stage over the last two years. To illustrate this it might be of help if I gave a few figures relating to the programme.

The Tánaiste, my predecessor as Minister for the Environment, gave approval in 1983 to contract documents for 105 schemes with an estimated total value of £98 million. In May 1983 alone he approved contracts documents for 59 schemes with an estimated total value of over £75 million which was the biggest ever single release of public water and sewerage schemes. I released last April a further 47 schemes with a total value of £37 million in addition to allocating £7 million to local authorities for their own small schemes programmes. The effect of these releases was that within the short space of 12 months the way had been cleared for public water and sewerage schemes with an estimated total value of £126 million to move on to tender and construction stages, thus reducing the backlog of fully planned schemes. The total value of schemes in the programme at tender and construction stages now stands at a record figure of £450 million. The capital provision made last year and this year has enabled this high level of activity in the programme to be sustained and the three-year capital provision of £277 million in the plan will continue to provide the investment needed to adequately meet the requirements of the programme in the years ahead.

In addition to ensuring that adequate schemes are provided to meet the demands of the housing, industrial and agricultural sectors of the economy, I am anxious to ensure that sewage disposal arrangements for public sewerage schemes will continue to be determined by criteria which will allow satisfactory environmental quality objectives to be achieved in the receiving waters. To this end the national priorities outlined by the Water Pollution Advisory Council in their 1983 review have been integrated with the sanitary services programme and I am glad to say that work on the provision of treatment works has already been completed or is in progress in several of the areas listed in the review.

On the subject of group water schemes, Deputies will be aware that difficulty in the administration of these schemes in the recent past has given rise to delays in the processing of proposals. However, I have taken certain steps, including the introduction of new procedures, which should eliminate any holdups that have occurred and should speed up matters generally.

In considering capital expenditure programmes of the next three years the Government were very conscious of the human, social and economic cost of fires. It was for these reasons that we considered that a substantial increase in the capital provision of the fire service was warranted. Over the period of the plan the total provision made for this service is £33.5 million. For comparison purposes this year's allocation is £7.5 million. This increased investment will make possible a continuation and expansion of the current programme of improvements in the fire service. It is envisaged that the allocations for the three years 1985-1987 will enable over 50 fire station projects to be undertaken throughout the country. In addition they will enable an expanded range of fire-fighting, communications, rescue and other emergency equipment to be purchased. In all this, of course, local authorities will continue to be assisted by the payment of a subsidy of 50 per cent on loan charges incurred on capital investment in the fire service.

Increased expenditure on the fire service can be readily justified on economic grounds alone. Fires in 1982 destroyed over £80 million worth of property. There is often a link between fires and job losses — statistics show that one in every three firms where a fire occurs never reopens for business. In the case of those firms which reopen it may take years to regain pre-fire trading levels.

The increased investment in the fire service which will be undertaken in the period 1985-1987 will be accompanied by a major improvement in fire service training by the Fire Services Council and by the programme of education and publicity on fire safety conducted by the Fire Prevention Council. I would like to compliment the Fire Prevention Council, who enjoy 50 per cent funding from insurers, on the excellent programme recently organised for Fire Safety Week, 1984.

The plan includes important provisions for local government reform. As the House will be aware, work has been proceeding on an examination of local government structures with a view to their adaptation to meet current and future needs. The economic and social changes over recent years have wide implications for the local government sector. The increasingly urban orientation of the growing population has put strains on some existing structures. This is particularly so in the case of Dublin where we have seen an extraordinary growth of 83 per cent in population between 1971 and 1981. At the same time there has been a relative decline in the inner city area in terms of population and of economic and social life. Both these trends have direct implications for local government structure. The existing system has succeeded in overcoming the inherent limitations to a considerable degree, largely through co-operative effort and the operation of the joint management system. I am convinced however that a reform of local structures, which has been raised on various occasions over the years, can no longer be deferred.

Various options have been examined and the plan sets out some of the possibilities being considered. At this stage, final decisions have not been made but it seems likely that it will be necessary to make an increase in the number of separate local authorities in Dublin based on a more rational system of boundaries, and on more appropriate area and population groupings. This will have to be achieved with full regard to cost implications and the need to maintain an efficient administration. At the same time there is increased need to ensure proper coordination in regard to the major developments and services—in physical planning, and road and other infrastructure projects, for example—which need to be settled on a metropolitan basis. Very large investments are involved and it is more important than ever to ensure that they are used to the best advantage. A metropolitan council is therefore envisaged essentially to see to this co-ordinating need, as well as to provide means by which joint action may more easily be undertaken wherever this seems necessary or beneficial.

A further innovation being considered is designed to provide representation and a means of communication within the local government system for local communities. This will have immediate relevance and benefit for the new and expanding settlements to the west of the city but provision will be made to enable elected community councils to be established for other areas as well.

Reform needs, of course, are not confined to Dublin. Provision will be made for extension of the representative local government system outside the main centres as well. Special consideration is being given to the position of the small towns which have no separate local government representation at present, as well as to the need to provide better links with local government for voluntary organisations which are doing valuable work at community level.

Another problem which will be dealt with is that of the adjustment of many urban boundaries in line with population growth and movement and the need to bring about a position in which the towns people have a say in the election of the town council. The question of increasing the discretion and responsibilities of local authorities, including greater devolvement and lessening of central controls, wherever possible, and of enhancing the role of the elected members will also be covered in the Government's reform package.

A great deal of preparatory work has been done. Consultations have taken place with the local authority associations, and I would like to avail of this opportunity to thank them for the work which they have undertaken and the submissions they have made. Account has also been taken of other submissions and of the outcome of previous examinations of the question of reform. It is evident from all of this that the reform programme will be a major undertaking. The Government intend, however, that material progress will be made quickly. I expect that the Government will be in a position to settle on final proposals and on an implementation programme in the near future with a view to covering as much ground as possible in advance of the local elections which will be held next year.

Greater responsibility and greater autonomy in local government depends a lot, of course on the financing of the system. In recent years local authorities have become too dependent on the Exchequer for the financing of their everyday costs—close on two-thirds of all their spending on current account is now financed through State grants and subsidies.

The plan to reform local financing so as to bring about a greater degree of local financial government system has taken a major step in this direction by providing that the proceeds of the new farm tax will go to local authorities with the level of State subvention being reduced in line with the revenue from the new source. The farm tax will also contribute to greater equity in overall taxation.

We are continuing with an examination of the possibility of further changes and improvements in the financing area. A special study of the subject has been undertaken by the NESC and the Government will take account of the outcome of that in their further consideration of the matter.

It would be unrealistic, however, to hold out a prospect of substantial additional resources being made available for local authority programmes generally in the short term. Indeed the plan envisages a limitation on the rate support grant for local authorities. This grant in itself accounts for about 27 per cent of local authority spending on current account. The limitation is an inescapable one in keeping with the economic strategy of the plan and with the constraints being applied to other sectors of the public sector. It has to be seen in the context of the increased powers of local authorities to raise income from local sources as well as of the decision that the proceeds of the farm tax will go to them. I am conscious of the difficulties which local authorities are experiencing in living within very tight budgeting limits but I am sure they appreciate that in present fiscal circumstances they must be subject to strictures corresponding to those which have to be applied at national level.

I am confident of the ability of the local authorities to deal with the difficulties arising from these constraints with minimum disruption of services and employment. Each local authority will have to decide for themselves how best they can adapt to the financing strategy of the plan. Fundamental to their approach will, I expect, be a renewed search for greater efficiency in the delivery of services combined with moderate adjustments, according to the circumstances of each area, in the levels of local rates on commercial and industrial premises, and in charges for local services. The very large increases in provision for road grants in 1985, and in the following years, will help to offset the generally tight financial prospects so as to minimise adverse impacts on services or employment.

The plan lays down the parameters within which all Government spending programmes will have to operate and it also lays down the groundwork for the development of policy in many other areas. On many issues it clearly indicates the direction in which Government policy will be developed for the remainder of our term of office.

Regardless of what effort the Government put into planning, their success will depend, in the final analysis, on the degree to which all sections of the community are prepared to work together towards a common goal. Sectional interests must be subordinated to the welfare of all our people because, in the end, it is only as a nation that we can all prosper and provide jobs for our young people. In this plan the Government have answered the call for leadership and direction. I have no hesitation in commending it to the House.

Mr. Briscoe

I should like to give a welcome to the plan. If I had any criticism of it, it is that it is far too modest rather than excessive in its ambition. The targets set out in it should be achieved. In fact, I would go so far as to say that they can be exceeded because of the uplift in the world economy. As the plan states much of what is contained in it depends on outside factors, irrespective of the party, or parties, in Government. If a recession deepens we are all affected, particularly in a country like ours that does not, as yet, have any natural resources. We depend entirely on importing materials for export as finished products. My criticism of the plan is that it is a little short-sighted.

Voltaire said that out of all evil comes some good, and out of the evil of the recent recession good has emerged in the sense that there has been a tremendous cultural revival here. More people are taking third-level education courses and going in for cultural activities because they have time on their hands. We should recognise this by removing VAT from any articles considered to be essential in cultural activities. Twenty-five per cent VAT on musical instruments or on replacement parts may seem trivial but it is very important for people who try very hard to use their spare time profitably. People who did not know it, discovered they had great natural painting talents and are making a good living out of it.

There is growing evidence that small businesses are growing up, little family units. I was in Churchtown recently at an arts and crafts exhibition and saw people producing beautiful works of art, wood carvings, paintings, leather goods. They are surviving in small business units. Some people I have met had been engaged in furniture making in firms which went out of business. They have now opened up their own little businesses and are employing accountants. This is a tremendous growth area but there is the disincentive of tax and VAT if people try to improve themselves.

I know a young girl who applied to join a course in Crumlin VEC. She paid £60 to enrol in a course in commercial subjects but she was told she was not entitled to the dole. This is one of the anomalies. The Government should be more elastic in their treatment and the Department of Social Welfare, particularly, should be able to look leniently at such cases so that if persons wanted to take up third-level or commercial courses they would not be penalised for doing so.

The thing that is holding the country up most is our tax system, which is very unfair and acts as a grievous disincentive to people who would like to work overtime. They ask why they should put in extra hours when most of the money would go to the Government. The Commission on Taxation have completed their work and have produced many good recommendations which should be and could be implemented.

One particularly unfair example here is the high proportion of our people who pay tax of 45 per cent in the £. In Britain the percentage is 3 and in Austria 11. Here the percentage is 40. That means that incentives to work are constantly being taken away from our people. This leads to dishonesty because people feel tax officers are out to screw them for the last penny, whether they owe it or not, and therefore they regard themselves as being in competition with the tax people.

One of the greatest disincentives to industrial growth and one of the greatest reasons for the closing down of small industries is VAT at the point of entry. When it was introduced first some people thought it might be a useful thing if operated on a limited basis. People were bringing in goods by container and selling them at small market places throughout the country. They had no overheads, they did not have shops and were selling to small shopkeepers and others. Unfortunately, VAT on entry militated against people who had to import replacement parts for machinery. The machinery would be held up for up to 90 days before the recipients could pay for the replacement parts because of the need to pay VAT at the point of entry. The Government should look at this, particularly in regard to certain types of machinery, especially for re-export. Many people in business were able to employ travellers who would go out to sell but to my knowledge it took one person three months to get a replacement part and in the meantime he had to sell the machinery.

As I have said, we must give our people tax incentives. Another thing, profit is regarded as a dirty word. I emphasise that people will not come into the country to set up businesses if they know their profits will be taxed heavily and if they do not see the possibility that after setting up they will be able to retain profits on goods for re-export. These types of disincentives are being bandied about. Envy is one of the curses of the nation. Anyone seen to be doing well is open to terrible criticism, and trade unions have a lot to answer for in the situation that exists, in which profit is a dirty word. People will not put their money into businesses if they think that every penny of their profits will be taken away. Trade unions and trade union directors seem to think that every penny of earned profits should be put back into the business.

Debate adjourned.