Dáil Éireann díospóireacht -
Tuesday, 6 Feb 1990

Vol. 395 No. 3

Financial Resolutions, 1990. - Financial Resolution No. 9: General (Resumed).

Debate resumed on the following motion:

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

—(The Taoiseach.)

Mr. McCormack

Returning to more mundane matters, it would be fair to say less than a week after the presentation of the budget that it was a non event. It was the first time I listened to a budget being presented inside this Chamber although I had been in the public gallery when previous budgets were being presented. I can truthfully say that last week there was very little atmosphere in the House. There was no excitement or buzz which is usual on budget day. Perhaps this was due in part to the leaks to the media in the weeks before the budget resulting from competition between the two parties making up the Government. There was keen rivalry between them to see who would leak most and each tried to indicate their influence on the budget. Obviously, pressure was exerted by the smaller party, which has three Ministers in Government, to have some influence on the shape of the budget. However, I do not see much evidence of the influence of the smaller partner in Government, apart from the Minister for Finance's proposal to increase VAT charges on the supply of electricity from 5 per cent to 10 per cent on 1 March. I will deal with this matter more fully later.

In presenting the budget the Minister for Finance spoke for almost two hours. Is it a record for a Minister for Finance to speak for so long without making any reference to the provision of housing, the restoration of our county roads and the promotion of the tourism industry which is of vital importance to the economy of the west? I welcome the indication that that famous longstanding rod licence dispute may be settled this week. However, I will say no more about that matter now.

The Minister in his speech hardly gave a mention to agriculture, with only a passing reference to the refund of VAT. However he did refer to the health services in detail. This is a major topic, yet nothing was provided to improve our health or hospital services. What about the patients in the corridors and those being discharged too soon? What about the elderly who have to wait for years before being called for operations, such as hip replacement and cataract operations? What about the nursing staff who find themselves under severe pressure and the conditions in which they have to work with beds in corridors? There is nothing in the budget for them. Neither has anything been provided to shorten the waiting lists, and to open beds in hospitals, such as Merlin Park in Galway where 230 beds are closed and University Hospital where there are beds in the corridors? No indication was given that more doctors and nurses will be employed. In other words, there was nothing in the budget which would lead to a restoration of public confidence in the Minister for Health.

Last June the Taoiseach said that he did not realise that there were such problems in the health service. Do we now find ourselves in the same position with the present Minister? The Taoiseach and the Minister for Health should realise that there is a crisis in the health service. I have been keeping in close contact with the service in my own area and I have visited University Hospital in Galway on a number of occasions since January where I spoke to doctors, nurses, patients and their relatives. What I found there was very disturbing. I found extra beds in the wards on a regular basis, beds taken up in the day room and beds in the corridors. I am not speaking from hearsay but from what I found on my visit to the hospital. For example, the day ward should be reserved for admissions for minor operations, biopsies etc., but it is being constantly used for medical patients. This is completely against good nursing practice, and I am aware of that because my wife is a nurse. It leads to dangers of cross-infection, and all the extra beds put additional strain on the staff as there is no extra nurse to cater for them.

Those extra beds in the corridors are putting great stress on the nurses in having to face patients and relatives under those circumstances, and they are causing a serious risk to the health of patients in that now if there is an emergency the necessary equipment cannot be got into the wards quickly enough because of the beds in the corridors. Often in such cases seconds are vital. God only knows what would happen if there was a fire on any of the floors. You could forget about University Hospital, Galway, if there was. I have witnessed patients going back to corridors after a general anaesthetic. Again, this is intolerable. There is no emergency equipment in such areas and sometimes not even a plug is available to plug in emergency equipment when it can be got. If that is not putting patients' lives at risk I do not know what is.

The Minister for Health, Deputy O'Hanlon, blames the influenza epidemic at Christmas for all this over-crowding but I am informed reliably that very few of the patients admitted at that time were suffering from influenza when they came into the hospital. However, many of them were suffering from influenza when they left the hospital as a result of being left in beds in corridors in draughts. That is not fiction; that is fact. I witnessed one case where a family had to put coats on the end of a bed of an elderly patient in the corridor to keep away the draught.

Because of the pressure on the beds patients are being discharged too soon with nobody at home to look after them. This is a vicious circle. It is putting pressure on the hospital for beds and patients have to be put out in order to make room for new patients.

I am aware of a case, and I have the permission of the family to use all details of this case where necessary, where on 1 January an elderly man from Connemara was admitted to University Hospital, Galway, for tests and he was considerably worse on 2 January than when he went in. He was unable to walk or talk at this stage yet on 3 January his relatives were telephoned and told their father was fit to be discharged. Two of the family came in and when they saw their father they thought he was not fit to be discharged. One of the girls asked how they could bring home their father when he was not able to walk. The junior doctor in charge told her not to worry, he would be brought to the car in a wheelchair. That happened and he was put into the car and driven 30 or 35 miles home to Connemara. When his wife saw him she was very alarmed and sent for her own doctor who insisted on having the patient readmitted that night to the hospital. He was readmitted on 3 January, the day he was discharged. He remained in a bed in a corridor outside St. Gerald's Ward for one and three-quarter days. He died two weeks later. I am not saying the treatment he got was a factor in his death but it is no way for a 74-year old patient to be treated in any of our hospitals.

I discovered on my visits to University Hospital that about a year ago the domestic staff were replaced by contract cleaners. Previous to this there were three domestic staff on each floor in University Hospital, one in each ward and one working between the wards. Now contract cleaners come in in the morning, prepare the breakfasts, clean the toilets, etc., wait for two hours and then they are gone. This breaks up continuity for the patients. Previously the same domestic staff brought breakfast, dinner and tea to a patient but for a patient staying a week or two in the hospital that pattern is broken. The domestic staff are lost to the nurses because they were always a help to the nurses in rearranging beds where patients were discharged or died. That service is not there now and that is a deterioration.

There is no use in being critical about the hospital services unless we can offer a solution. I think there is a solution to the problem in Galway which I am sure would apply in other areas. We have Merlin Park Hospital and we have another hospital under the auspices of the Western Health Board in the region. The solution to the overcrowding in University Hospital is the reopening of Merlin Park Hospital which has many units closed. Unit 9 with 20 beds, unit 8 with 40 beds, unit 1 with 50 beds and unit 10 with 122 beds are closed. If these 240 beds were brought back into operation it would alleviate the problem of pressure on beds in University Hospital and would lead to improved hospital services. This is a simple solution staring the Western Health Board and the Minister in the face.

Lest anyone should think it is not possible to do that, I quote from a press statement from the Minister for Health after he met the CEOs on 8 January 1990. He said that in all such situations local management and health boards and public voluntary hospitals have whatever flexibility is necessary to deal with the problem, and this was normal practice whenever there were unforeseen demands on the service such as those arising from major accidents or epidemics. That was the Minister telling the CEOs they have it in their power to do those things. If the Minister or the Western Health Board cannot see their way to reopening units at Merlin Park, I demand that at least one unit should be open immediately to alleviate the problem.

There is another solution. Why not lease the units in Merlin Park to some of the nurses who are made redundant? I know they are willing to take them. Eight or ten nurses could run those units on a commercial basis. The wards, equipment, kitchen equipment, emergency equipment are all there. It is the best setting in the country. It could be leased to nurses who could provide a service and charge for it. They would be able to run it as a viable proposition and I have no doubt it would be full of the type of patients who are now being shunted out of University Hospital to Merlin Park and back to University, Hospital. Those patients could be catered for long-term there and patients after short stays in hospitals convalescing from operations etc. Could stay for a few weeks in Merlin Park before going home. This would be the solution to the problem where people are sent out of hospital before they are ready to go home. I ask the Minister to consider that. If it is successful there it could be tried in other hospitals such as the closed part of Castlerea Hospital, Roscommon Hospital or any other hospital where there is demand for this service.

People are now living longer, and families are different from what they were ten or 20 years ago. Often both husband and wife are working with nobody to look after old people in their homes. The Minister in his budget speech made great play of what he called the carer's or the prescribed relative's allowance, but he failed to say it is almost impossible to qualify for this allowance. To qualify for the prescribed relative's, now the carer's allowance a person would have to be looking after someone of pensionable age and be living with that person. The person cannot be in receipt of any other income. If the carer has an income from farming or any other source then he or she is disqualified. Even an income from social welfare disqualifies. The Minister for Finance said this allowance would be increased from £28 to £45 and he indicated details would be announced by the Minister for Social Welfare. I listened very carefully to the contribution of the Minister for Social Welfare in the budget debate last Thursday. He said very little by way of explanation except that the increase from £28 to £45 will be for full-time carers, which had already been made clear by the Minister for Finance in his Budget Statement. I quote:

I am increasing from £28 to £45 per week the payment made in respect of certain relatives who care on a full-time basis at home for such persons.

The Minister for Social Welfare did not expound further on the matter except to say that the allowance is for full-time carers, is means-tested and will come into operation from 1 October 1990. The Minister praised the work of dedicated carers to whom the community owed a debt. I could not agree more but let us cut out the lip-service and get down to drawing up a realistic carer's allowance scheme for which it is possible to be eligible. At present a farmer with ten or 15 acres of land with ten or 15 cattle who is caring for his father, mother, grandmother, grandfather, aunt or uncle would not qualify for the carer's allowance on the grounds that he had an income from farming. In a year when he would have made a loss from keeping his ten or 15 cattle, he still would not qualify for the carer's allowance because he would not be considered to be a full-time carer, as he would have had to leave his house to count his cattle or throw them a bale of hay. It is ridiculous that he or she could not be regarded as being eligible for the carer's allowance.

To make a big play of increasing the allowance from £28 to £45, without making it easier to qualify for it defeats the purpose of the scheme. In other words it is a pretence. This is a very important scheme in rural areas, in particular, and in urban areas where families mind their old relatives in their homes thus keeping them out of high cost institutional care. I strongly urge the Minister to make it easier to qualify for the scheme. The present allowance, announced by the Minister for Finance in the Budget Statement is only a cosmetic exercise. We have to advise a realistic carer's allowance which would be a beneficial saving to the State in the long term. For example it costs in the region of £350-£450 per week to keep a patient in institutional care. If people could qualify easily for a carer's allowance of £100 per week there would be no difficulty in keeping a number of those people at home where they have lived all their lives with a member of their family looking after them. This would be a great saving to the State.

The Minister also made provision for an increase of £3 million for orthodontic treatment. I say "good on him" because at present this service is a sick joke. I will outline the situation in County Galway. At present children on the 1982 list are receiving treatment. It has taken one and three quarter years to clear the backlog of the 1982 list and at that rate of progress it will be 15 to 18 years before children on the current waiting list are seen. That defeats the whole purpose of orthodontic treatment. The Government have decided to make a further £3 million available to the health board dental service. I am asking the Minister to appoint a full-time orthodontist to cover the 2,000 children on the waiting list in County Galway. At present an orthodontist from Dublin visits the Shantalla clinic two days a fortnight on a Thursday and a Friday. If a full-time orthodontist was appointed the backlog could be cleared up in two to two and a half years, which is long enough to be on a waiting list.

When referring to child benefit payments, the Minister said, and I quote from his Budget Statement:

... and most importantly, I am increasing monthly child benefit payments across the board by 5 per cent or 75p for each of the first four children.

A child would have to go very easy when putting the jam on the bread if the 75p was to last the full month. Whoever wrote that sentence in the Minister's speech certainly intended to draw attention to the payment of 75p per month; perhaps it was a deliberate mistake but I do not think one should draw attention to such a payment.

The Minister has indicated in the course of his speech that pensioners over 80 years of age will be allowed to retain their free electricity entitlement when people come to live with them. With respect, I suggest that a relative coming to live with an old and infirm person long before they reach 80 years of age and I think we could realistically reduce the age to 70 years and that cases could be treated on their merits. The free electricity allowance should not be discontinued in cases where a relative comes to live with an elderly person. I do not accept that the qualifying age of 80 is appropriate in this regard. When referring to the fuel allowance, the Minister says:

The allowance is also being extended to persons in receipt of smallholders' unemployment assistance who live alone.

Why should not a smallholder with five or six children on unemployment assistance be entitled to a free fuel allowance? In fact the mother of that family would have to have dinners ready at different times for children coming in from school, would have to dry their clothes in this type of weather and would have to provide light and heat when the children were studying. In fact I think that they should be entitled to free fuel. There is no point in having the scheme and then discriminating against the people who would benefit most. This anomaly should be redressed and thus smallholders with a number of children who are in receipt of unemployment assistance would also qualify for the fuel allowance. In fact they might be more in need of the allowance than a person living alone.

The Minister is allocating an additional £1.3 million for developments by voluntary housing associations. While this is a very welcome provision it draws attention to the current housing situation which the Minister did not refer to in the course of his speech. Members who are also members of local authorities will know that local authority housing is in a state of crisis. There was provision in the Book of Estimates for £6 million plus the sum realised from the sale of houses to tenant purchasers. This compares with an allocation of £120 million which was provided for housing in the mid-eighties. To put matters in perspective I will outline the situation in the local authorities on which I serve. For example there are now 275 families who have been approved for houses on the Galway Corporation housing list. Yet we have built no houses in the corporation area since 1986, with the exception of 20 flats which were completed this year in the inner city area.

I will now compare the allocation for housing in the years since 1983. In 1983 we were allocated £3.5 million for the provision of local authority houses by the Fine Gael/Coalition Government and we were able to build 85 houses; in 1984 we received £4.32 million and we were able to build 122 houses; in 1985 we received £2.6 million and we built 72 houses; in 1986 we received £2.13 million and we built 68 houses; in 1987 our allocation was reduced to a miserable £210,000 by the new Government and no houses were built; in 1988 we received £500,000 to complete schemes, but no new houses were built; in 1989 we received £750,000, which in the main was for the provision of halting sites. What is the Minister saying to the 275 families who are on the current waiting list? Is he telling them they will have to emigrate or else put up with the conditions in which they are living? The situation is no better in County Galway. In 1986 we received an allocation of £4.45 million and 219 houses were built; in 1987 we received £1.734 million and 107 houses were built; in 1988 we received £212,000 and we built 20 houses; in 1989 we received £527,000 and we had 20 new starts, but that sum of £527,000 included moneys for the provision of a halting site in Ballygar. As I have already said the provision for housing in the Book of Estimates this year is £6 million plus the money from the resale of houses, but this compares with an allocation of £200 million in 1985/86.

Those people able or prepared to provide homes for themselves have had another blow struck at them in the provisions of this year's budget. It is true to say that the average mortgage repayment has risen — as a result of a 4 per cent increase in interest rates — by approximately £100 per month. There has been yet another blow for such people, namely the reduced income tax relief on the life assurance content of mortgage endowment policies which increases their monthly repayments by approximately £8 to £10.

I will deal now with the increased VAT on electricity charges, from 5 per cent to 10 per cent from 1 March next. The Minister say this will yield £11 million this year and £18 million in a full year. According to the Minister that cost will be absorbed by the ESB. I contend that will not be possible. Who does the Minister think he is fooling? I am sorry the Minister for Energy is not present to hear what I have to say. What is the point of imposing an additional 5 per cent VAT on electricity charges, contending that the cost will not be passed on to the consumer when the ESB are already in debt to the extent of £180 million to £190 million? I contend that inevitably the £18 million in a full year will be passed on to the consumer; there is no other way out of the predicament. It must be a serious blow to the Minister for Energy to have that passed on to him by his colleague, the Minister for Finance.

There is also the introduction for the first time of a 10 per cent VAT imposition on telephone and related services from 1 July next. Indeed, the Minister in the course of his remarks on that subject did not appear to be so sure that that charge would not be passed on to the consumer. He said:

I am confident that this initiative can be implemented without increased costs to telephone users, both households and VAT-registered businesses ...

He would not appear to be nearly as sure about that charge not being passed on. This will do untold damage to the recent good work done in the provision of telephone services particularly for people in rural areas who had been encouraged to apply for such services.

Under the heading National Environment Action Plan the Minister indicated the provision of an additional £20.1 million to meet the costs of that plan in 1990 announced by his colleague, the Minister for the Environment the previous week. Again, to quote from the Minister for Finance's Budget Statement, he had this to say:

This plan sets out the action the Government are taking to protect and enhance Ireland's natural environment and to improve the quality of life. I am providing an additional £20.1 million to meet the costs of this plan in 1990, of which £13.6 million relates to expenditure and £6.5 million relates to a taxation measure which I will deal with later.

I welcome the provision of this money to meet the costs of this newly announced plan. Indeed, it would be my hope that the Minister for the Environment could utilise some of those funds to sanction the Galway city sewerage scheme accompanied by full secondary treatment works, thus protecting Galway Bay from the serious pollution there at present. I was a member of the deputation from Galway Corporation who met the Minister for the Environment last week on this matter when we impressed on him its importance and the enormous concern of the people of Galway, and indeed tourism interests in the west generally. We impressed on the Minister the need to sanction this new sewerage scheme and secondary treatment works straightaway to allow Galway Corporation to design immediately a scheme for the secondary treatment works. Indeed, such work will become essential by the year 1998 under an EC directive which stipulates that major seaside towns instal secondary treatment works before discharging sewage.

I have drawn attention to only certain aspects of the budget in the time available to me. The longer the interval since the introduction of this budget, the more time people have had to analyse the Minister's remarks and their implications, the more they realise it leaves much to be desired. There is much work remaining to be done on ironing out various aspects of its provisions. I have dealt with some only, such as the carer's allowance, free fuel schemes and so on. I will endeavour to tease out such matters with the relevant Ministers when the necessary legislative measures come before the House. It is all very well for a Minister for Finance to use flowery language in introducing the Budget Statements, contending that this or that will be done, that it is the intention to do this, that or the other, or contending that this or that tax will not impose any additional burden on the taxpayer, but, when one gets down to working out the implications of such measures——

An Leas-Cheann Comhairle

I intervene to advise the Deputy that he has one minute remaining.

Mr. McCormack

I was particularly disappointed when the Minister for Social Welfare came into the House on Thursday last, he did not clarify any of the budgetary provisions, particularly the scheme in which I will take most interest, because of the overall health position, that is the carer's allowance. I appeal to the Minister for Social Welfare to make the provisions of that scheme easily available to an ordinary family member caring for an elderly relative in their home. Indeed, he might well increase the maximum payment from £45 to, say, a realistic figure of £80 to £100 per week which would render it possible for somebody to leave their employment to take care of an elderly relative in their home.

Minister for Labour (Mr. B. Ahern)

This budget builds the foundation for optimism as we enter the new decade. Its central thrust is the positive one of building on the economic and fiscal progress we have made, boosting job creation, in helping the disadvantaged and in improving living standards.

It rests on the success of the Government in bringing the public finances into order. The Government have achieved, three years ahead of schedule, the fiscal targets set out in the Programme for National Recovery. We have now set new targets which would have been inconceivable only four years ago: to reduce the debt-GNP ratio further towards 100 per cent and as part of this to achieve a broad balance on the current budget for the first time in 21 years.

The progress of these three years compares more than favourably with the six previous years when the debt-GNP ratio jumped from 94 per cent to 130 per cent, the national debt doubled and we staggered under record budget deficits and interest rates. This dramatic recovery has been carried out without relying on the tried and failed policy of increasing taxation. Indeed, we have actually reduced taxation rates significantly. Income tax has dropped from 35 per cent in the standard rate, and from 58 per cent to 53 per cent in the top rate. Corporation tax has been amended twice. New tax collection methods have reaped sizeable rewards.

We have paid particular attention to the plight of the poor, especially those with dependent children. We have improved the family income supplement scheme. We have increased the general tax exemption limits for the low paid. For instance, a married couple with two children can now earn £7,100 without any tax liability, an increase of nearly 30 per cent on the 1988 figure of £5,500. Marginal tax relief has also been improved.

Those with incomes less than £60 a week will not have to pay employee's PRSI either. Their social insurance entitlement will not be effected and their employer will continue to pay employer contributions in respect of them. Between the two measures, well over 100,000 people will find they have greatly improved levels of take-home pay.

For those who are unfortunately still dependent on social welfare, the Government have increased rates of assistance by amounts greatly in excess of likely inflation rates for the third year in a row. For instance, the standard level of assistance has gone up by 5 per cent, well above the level of expected inflation, and the level for the long-term unemployed has jumped by 11 per cent, bringing their rates some 35 per cent higher than in 1988 and much closer to the recommended levels of the Commission on Social Welfare. The free schemes and the fuel allowances have been further improved.

For families with dependent children, we have increased child benefit and child dependant allowance. We have introduced a new clothing allowance to help out with the financial burden of preparing for winter.

The main thrust of the budget has been to intensify the already favourable movement in the economy and encourage job creation. The Government have decided to take two further measures specifically to boost employment.

First, the Government have decided to introduce, on a pilot basis, a new training for employment scheme to be operated by FÁS in conjunction with employers. The idea is to encourage employers who foresee an expansion of employment in the future to take on trainees earlier than they would otherwise have done. An allocation of £1 million is being made available to FÁS in 1990 as the Government's contribution towards the cost of the scheme. The details of the scheme have yet to be finalised but it will offer actual work experience plus a significant amount of general skill training. I hope to be in a position to give more information within a matter of weeks.

I am also pleased to announce that the social employment scheme will be available to more participants than ever in 1990. FÁS will provide places on social employment scheme projects for more than 15,000 people. This represents an increase of over 50 per cent on the 1989 level. This once again underlines this Government's commitment to help the long-term unemployed. An expansion of this order will require the whole-hearted co-operation of the trade unions, local authorities, voluntary bodies and many other interests. It will be facilitated by the child dependant allowance which was introduced with effect from 1 January, of up to £10 per week per child for participants in the scheme. This allowance should attract far more participants with children to the scheme. The new training for employment scheme and the expansion of the social employment scheme complement the measures for job creation and assistance to the disadvantaged I announced last September on behalf of the Government. You will remember that these included a new PRSI exemption scheme which incidentally expires at the end of this month, together with a variety of measures to promote job creation and to target assistance more clearly on the disadvantaged, especially in inner urban areas.

Turning to the overall employment scene, 1989 has proved to be a year of great significance for jobs. For instance, in Dublin alone, last year saw an actual increase in total manufacturing jobs, after almost ten years of decline. Independent observers of the economy, such as the Central Bank, estimate that total employment increased by up to 13,000 in 1989. A survey carried out jointly by the Federation of Irish Employers and the Confederation of Irish Industry confirmed that most sectors expect employment to increase in the year to April, 1990 by an overall of 4.2 per cent. Employment among the firms surveyed had increased by 6,600 between April and December 1989.

Indeed, private sector employment is now estimated to have grown by 35,000 to 40,000 jobs over the last two years, offset to some extent by declining public sector and agricultural employment and a lower rate of activity on FÁS programmes. This impressive performance demonstrates how effective the economic policies pursued by this Government and their predecessor have been.

I am also very heartened to see the dramatic decline in the number of job losses. My Department's records show that there has been a 42 per cent drop in the number of notified redundancies in 1989 over 1988; last year's level of 13,400 was about half that of the peak in 1984 Public sector job losses, which are not notifiable to my Department, are also likely to decline significantly.

In 1990, the Government expect an increase in non-agricultural employment of about 16,000. This is in line with the ESRI's Quarterly Economic Commentary for December 1989, published last Tuesday, before the budget. The overall thrust of this budget and the specific measures it contains will contribute to increased employment and reduced unemployment, as well as higher investment activity and living standards.

This recovery in the economy and in jobs should help to slow down the rate of emigration. Again the recent ESRI forecast supports this assumption, predicting a significant reduction in emigration to about 25,000 in 1990. I expect involuntary emigration in particular to decline. Encouraging signs exist in relation to young people without educational qualifications who have always been at risk of emigration. My Department's school leavers survey shows that fewer people are now leaving school early, without qualifications.

The training and employment scheme and the 50 per cent expansion in the SES are new incentives. Of equal importance are the other FÁS programmes to improve the skills of our workforce. The budget for FÁS will be £185 million, including European Social Fund assistance. This will enable FÁS to provide again about 14,500 activity years, in the variety of programmes essential to improve our national skill levels and to help the disadvantaged to find satisfactory jobs.

I have always been anxious to ensure that the allowances payable to FÁS trainees should be maintained at an adequate level to attract people in training, particularly older unemployed persons with dependants. In September last year, as part of the package of employment creation measures, I announced that a £10 weekly bonus would be payable to all trainees with dependants. This bonus has been paid since 30 October 1989. It is my intention to increase the training allowances payable to FÁS trainees in line with the social welfare increases which have already been announced. There are two other developments by FÁS which I should mention: apprenticeship and continuing training by firms.

At my request, FÁS conducted a review of the Irish apprenticeship system during 1989. The results of this review were published in a discussion document which was launched last December. The purpose of this document is to encourage debate on the whole apprenticeship system and FÁS are anxious to receive submissions from interested parties before the end of March. One of the main changes proposed is the introduction of a standards reached system of apprenticeship, rather than one of `time served'. I would stress that the proposals in the discussion document do not represent decisions taken by FÁS, who will take all views submitted to them into account when making final recommendations to me for a future apprenticeship system.

The Government are very conscious of the need to ensure that Irish industry is properly equipped to meet the challenge which will be presented through the opening up of the EC internal market in 1992. Up to now, considerable efforts have been devoted to the creation of new jobs but it is, of course, as important to protect existing jobs. Continuing training for those at work is essential if workers are to be able to keep up with changes in skill requirements and other technological developments. Employers and employees alike must become more aware of the importance of training.

For my part, the Government have, at my request, allocated £4 million approximately to FÁS in 1990 for an industrial restructuring training programme to be directed at those in employment. As President of the Council of Social Affairs Ministers, I am hopeful that a Community Action Programme on continuing vocational training will be adopted at the Council meeting in May. The aim of the programme is to support and complement the policies and activities of the member states in the area of continuing vocational training and to involve all those concerned such as employers, employees and public authorities.

The importance of tourism to this country is obvious to everyone, particularly for its potential in creating new jobs. The Government in the Programme for National Recovery set a target of 25,000 additional jobs for the tourism sector. CERT have an important role to play in ensuring that we have the skills necessary to take advantage of the development of the tourist sector and the job opportunities becoming available.

With the expansion of the hotel, catering and tourism sectors, CERT trainees are virtually guaranteed employment in the industry. CERT non-capital resources in 1990 will be £7.5 million, compared with £6.186 million in 1989. They will provide training for a record 9,000 trainees. CERT will also get £1.73 million for capital in 1990 for the development of their new headquarters in Amiens Street in Dublin. This will make their operations more efficient, facilitate future expansion and will, at the same time, give a significant boost to Dublin's inner city area. I should add that training allowances based on social welfare entitlements will also be increased.

In the future development of the economy, the international dimension will play a vital role. We now have a unique opportunity, through the Community Support Framework, to develop our economy, our infrastructure and our human resources. With Community help, we will overcome the disadvantages of our geographical separation from the Continent and catch up with our fellow member states. The objectives set out in our National Development Plan have been endorsed by the European Commission, and the levels of assistance to be provided through the Structural Funds have now been allocated.

In the area of the Social Fund, which is the responsibility of my Department as national authority, the Commission has pledged assistance totalling £1,068 million to Ireland for the period 1989 to 1993. This is a significant increase in the annual level of ESF assistance to Ireland, which last year was approved for over £183 million. The general intervention rate of assistance for individual projects has also been increased, from 55 per cent to 65 per cent. The injection of this additional money will enable us to expand and improve our training and job creation programmes to new levels.

Under the Community Support Framework, the emphasis will be on plans and programmes, and on joint actions between the Structural Funds to achieve maximum impact and the most cost effective use of resources.

Operational programmes have been drawn up for different developmental sectors in consultation with the Commission. Four of these programmes have already been formally approved by the Commission and I expect that the remaining four programmes will be approved in the near future. Several cover joint actions, involving a number of funds. The major programme is for industry and services of which some £378 million will be included for Social Fund support for human resource development.

We are also discussing with the Commission a number of innovatory projects, to test out new approaches to training, and also technical assistance to make our systems more efficient.

All of the operational programmes will be monitored by special monitoring committees. These will ensure that the programmes are proceeding according to plan and that they are achieving the objectives and standards set for them.

I welcome, particularly, the partnership arrangement in these committees between the EC Commission and the various Irish interests involved, including the Government and the social partners. This partnership reflects the reality of the substantial amounts of Exchequer funding involved and the need to integrate the resources of the private sector. The wide range of interests represented on the committees will bring a wealth of experience to the task of monitoring.

An evaluation of the effectiveness of the programmes will also be carried out so that we can refine and refocus them if necessary, as we learn from experience.

I mentioned earlier the increasing significance for Ireland of the international dimension. These first six months of 1990 are particularly significant as we hold the Presidency of the European Council. As President in Office of the Social Affairs Council, I want to lay particular emphasis on the need to intensify measures to promote job creation and to tackle the problem of long-term unemployment. The statistics alone are justification for giving a Community political focus to the long-term unemployed.

About seven and a half million people in the EC have been without work for at least a year and over 15 million people live in households in which at least one person is long-term unemployed. The human misery which lies behind the statistics and the huge economic costs entailed demand that we grapple effectively with this problem. As the Community's economy returns to growth, we must ensure that the long-term unemployed are able to benefit from this recovery.

While action to facilitate more jobs concerns the whole range of Community policies, not just the social affairs area, I intend to bring long-term unemployment to the top of the social affairs agenda.

At the Informal Social Affairs Council next month here in Dublin, I will be chairing discussions on a Presidency paper drawn up by Ireland on the subject. A draft resolution will then be prepared, to be considered for adoption at the Social Affairs Council in May. This resolution will deal with such matters as the role of the Community, member states, employers and trade unions; new initiatives and their financing; and action at local level. While I do not want to go into too much detail about my other priorities in the social affairs area during the Presidency, I will be stressing the importance of progress under the Community Charter for the Fundamental Social Rights of Workers. The charter is an essential counterbalance to ensure that the single market is not solely weighted towards the economic aspects.

I am anxious to ensure that real progress is made in drawing up and implementing the necessary Community instruments. I will be consulting the next two Presidents in Office of the Council — my colleagues in Italy and Luxembourg — to agree a timetable for action.

Proposals for a European training foundation, which will promote EC training assistance to Poland and Hungary, and possibly other Eastern European states, will be another major item to be finalised during the Irish Presidency.

Apart from its Presidency role, Ireland as a country has a major contribution to make in the successful implementation of any proposals to assist these countries. In the area of vocational training, my Department are producing a report outlining specific proposals on how the Irish Government could contribute to human resource development in Poland and Hungary. These proposals will now be the subject of more detailed discussions with representatives of the European Commission and the two countries concerned.

Turning back to the Irish scene, I would like to welcome again the contribution of the social partners through the Programme for National Recovery to the economic turnaround over the last two years or so. Business expansion has been made easier by the stable industrial relations climate and by the degree of pay restraint.

My Department estimate that there were only 41 strikes last year, fewer than in any other year since the State was founded. The number of work days lost was 41,400. With the exception of 1944, this was also the lowest since 1922. Only two of the 41 strikes were concerned with basic pay increases, further clear evidence of wage stability under the Programme for National Recovery.

This restraint by workers has had real results. The statistics I gave earlier show that the jobs that were needed are being created and that people are very much less likely to be made redundant. The income tax reliefs provided in this budget and the previous two budgets have helped to ensure that living standards have been protected. Indeed, this budget will combine with the carry-over effect of last year's budget to raise real disposable incomes by about 3.5 per cent in 1990, even taking likely inflation into account.

I am confident that the Industrial Relations Bill which I introduced in December last year to the Oireachtas will help to improve the stability of industrial relations further. It will provide a better framework for collective bargaining and dispute resolution, and help create conditions favourable to employment-generating investment. As I hope to take the Second Stage of this Bill in the House shortly, I will not go into the details now.

However, Deputies will have noticed that an additional £1.273 million has been provided in my Department's Vote to cover costs arising from the amalgamation of the Irish Transport and General Workers' Union and the Federated Workers' Union of Ireland. This historic merger, into the Services, Industrial, Professional and Technical Union, is a major step towards the rationalisation of the trade union movement, again an important factor in attracting investment.

Since taking office almost three years ago, I have been determined to ensure that the significant body of protective legislation administered by my Department is relevant and necessary to contemporary jobs. In this I am giving priority to the preparation of legislation to protect part-time workers. At the moment Ireland is one of the few EC countries which makes a distinction in protective legislation between part-time and full-time workers. Part-time workers have been increasing rapidly and now make up about 8 per cent of the work force.

Part-time work has many attractions, both for workers who have other commitments or interests and for employers who find that it gives them added flexibility. However the exclusion of 20,000 part-time workers from most of the protective legislation administered by my Department is inequitable and outdated. A further 20,000 are excluded from any statutory entitlement to holidays.

It would be most undesirable to allow a dual labour market to grow up, with a core of privileged full-time workers and a surrounding disadvantaged group of marginalised, easily exploited part-time workers. I therefore intend this year to introduce a Bill to the Oireachtas which will give adequate statutory protection to most of those who are at present below the minimum thresholds.

Work is also proceeding in my Department on amending legislation on unfair dismissals, employment equality, and the payment of wages. I hope to be able to bring forward a Bill in each area this year. Legislation on working time is also being reviewed.

Three months ago, I established the National Authority for Occupational Safety and Health, known as the Health and Safety Authority. The board of the Authority is tri-partite, balanced so that employers' and workers' representatives will have a major input into the development and implementation of overall national policy on safety and health at work. Perhaps the most significant features of the legislation, and of the role of the Authority, are its scope and its emphasis on prevention. For the first time in Ireland, everybody at work is given statutory safety and health protection. Employers, in consultation with workers, must identify all hazards in the workplace, and take the necessary preventive measures to control and if possible eliminate risk.

Broadly speaking, the Authority will promote, advise and research on occupational safety and health. Powers of enforcement are sufficient to provide a real deterrent to the carelessness or lack of proper concern that have often resulted in serious or even fatal accidents in the past.

Two weeks ago I was delighted to launch the Authority's programme of work for the next three years. The speed of development of this programme augurs well for the enthusiasm and commitment brought to the task by the board and staff of the new body. I particularly welcomed the progress the Authority have already made in planning their activities for the sectors now covered by the legislation for the first time. I know that full implementation will have to be done on a phased basis, but a good start has been made.

The real test will be the success of the Authority's programme in reducing the number of accidents and ill health at work. I am confident that significant progress will be made towards creating a safe and healthy environment for everyone at work.

Finally, as we start the new decade, the forecasts are optimistic. Our economy has been transformed by a steady reliable policy of caution and control, firmly grounded in the consensus between Government and the social partners embodied in the Programme for National Recovery. The current Programme for National Recovery runs generally to the end of 1990. It has played a major part in the turnaround of the Irish economy in recent years and has been a central plank of Government policy. Increasingly, it has led to greater job creation. It has served the real interests of the country and of the trade union movement.

Taken with income tax concessions, it has resulted in a moderate and realistic level of wage inflation and has at the same time yielded significant real increases for workers. Surely a sensible approach compared with the tired old discredited system we suffered for so long with double figure wage inflation, even higher price increases and lower real incomes. It has also given the trade unions and employers a significant role in influencing Government economic and social policy. The predictable claims of some for a return to a free-for-all does not make sense today. It would be against the interests of the unemployed and the long-term interests of individual workers and the economy.

The Government have reached or surpassed all their targets. Industry has returned to growth and profit. Steady progress has been made towards spreading the burden of taxation more equitably. People at work have benefited from rises in real take home pay. And those without jobs will get extra money to help them live fuller lives and extra help to find a job in an increasingly buoyant economy.

The formula has worked. With the support of all of us, it can continue to work and to lay secure foundations for a prosperous decade ahead.

Mrs. Taylor-Quinn

Listening to the Minister I wondered if he and I were living in the same country because, the general reaction of people I met in my constituency from different strata of society was that the budget did little or nothing for anyone. At best some people thought their income would remain the same as last year and that the increases in social welfare barely matched inflation. Tax relief was offset by the increase in interest and mortgage rates. Indeed, most people felt they will be worse off as a result of the budget.

We are trying to convince ourselves in this House through our mechanisms and use of words that things are happening, which is not really the case. We are becoming great architects of very nicely formulated sentences, paragraphs and general verbosity. However, people will not benefit from the codology in this Chamber. The Minister said that there was an upward trend in employment and that the emigration figures are down. However, 230,000 people are on the dole and last year about 50,000 emigrated. The Minister for Labour said just now that he expected 25,000 people to emigrate in 1990. Unfortunately, few people are left to emigrate and it is those who are sitting their leaving certificates in June who will leave.

The Government have not been sincere in their efforts to tackle the jobs problem. They talk about job creation but we do not witness it in our respective constituencies. Hundreds of people are emigrating every day all over the country and in rural constituencies, such as mine in Clare, it is frightening to see how many parishes have been denuded of young people. It is very depressing to see dozens of young people leaving rural parishes all over the country. This also applies to urban areas and the working class areas of Dublin and other cities. Verbal diarrhoea in this Chamber will not rectify the situation. The Government must be condemned for the manner in which they presented a whole series of bluffs to this House. Nobody is any better off as a result of the budget. One would not mind that if there was a substantial increase in employment because those who are in a position to pay tax would be willing to continue doing so if they felt that less well off people would be provided with jobs.

The Minister for Labour spoke about creating 25,000 jobs in the tourism centre with the help of CERT and Bord Fáilte. I question the Government's sincerity in this regard as the rod licence dispute is now entering its third year and they have done nothing to resolve it. The dispute has cost millions to the economy and jobs have been lost. This has happened in parts of the country which rely on the tourism industry. The Taoiseach must be condemned in relation to this area because, last year, he was the major stumbling block to solving the dispute. Many people in the west have already lost their livelihood as a result of this dispute, yet the Minister has the audacity to say in the House that they are targeting 25,000 extra jobs in tourism. It is the height of hypocrisy.

The Minister also announced an additional £2 million to Bord Fáilte for extra promotional work. I welcome the announcement and I hope Bord Fáilte manage to attract more visitors this year but the Minister did not give any extra money for tourism promotion to SFADCo. After all this Government gave responsibility to SFADCo for tourism promotion in the mid-west region. The Minister also hit two areas — telecommunications and electricity — very badly. He announced an increase in VAT from 5 per cent to 10 per cent on electricity and 10 per cent VAT on telecommunications. If the Government are serious they should have a confident line of action if they intend to create jobs in certain areas. As far as the Department of the Marine are concerned there is a haphazard, higgledy-piggledy approach in relation to compensation for storm damage. In the budget speech, the Minister anounced that he was giving a sum of £100,000 to BIM for damaged boats. I welcome that announcement as it is an acknowledgement of the fact that damage was done to boats at Kilmore Quay. What about compensation for storm damage on the south and south-west coast and up as far as Sligo? There has been no announcement in this regard and I hope he will do something about this in the weeks ahead. The Minister announced a grant of £950,000 to the Department of the Marine for emergency coastal protection work. That sum is welcome but the Government need to consider long term and sustainable solutions because we are an island nation and storms are an inevitable feature of our lives. Constant damage is caused every year by storms and, therefore, we need to have a properly thought out approach in relation to tackling the problem. Haphazard allocations here and there will not solve the problem in the immediate future.

I was disappointed that the Minister for Finance did not make any announcement in relation to the air and sea search and rescue service. There was no provision for any additional moneys to provide proper facilities around the west coast. Even today, we had an example of us not having facilities or co-ordinating services available to put in place a proper air and sea search and rescue service. The Government should be tackling this in a constructive way but instead of doing that they paid £1.4 million to lease a jet for six months to ferry Ministers back and forth across Europe when there is a perfectly good scheduled service from our airports to all the major cities in Europe. What are the priorities of the Government? Is it saving lives off the west coast or getting Ministers to the various capitals of Europe? As an island nation transport is an integral part of our economy. If we are to compete on a satisfactory basis as a member of the European Community — particularly after 1992 — we need to be able to export our goods as quickly as possible. We also need to be competitive in relation to the rest of Europe.

As an island nation we are at a disadvantage not having any land access to other member states. The Government do not recognise that and the Minister did not take any action to make allowances for it. He did not announce any schemes to improve the facilities at our ports for loading and unloading and that is an indication of the Government's backward approach.

On the question of transport, our hauliers find it more expensive than their Northern counterparts to purchase their lorries, haulage equipment and fuel because of the extent of our excise duty. Their Northern counterparts can get to the ports faster and at less cost than hauliers in the South. The Government have not done anything to make life easier for our hauliers. They have not given them any help to make them more competitive, to enable them to survive or help them create more jobs in the haulage business. As we approach 1992 the Government are being negative in their dealings with the haulage industry.

There is no doubt that we need to improve the shipping services from this country. We must have a speedy, efficient and economic service to all ports in Europe but the Government have not done anything in the budget towards that. They had an ideal opportunity to invest in shipping but failed to do so. We cannot hope to succeed after 1992 if we do not have fast and cheap access to the European markets. Unless the Government cop on very fast we will lose more jobs and more of our young people will be emigrating. The Government's action is only higgledy-piggledy. It appears from the Minister's speech that he is trying to satisfy many pressure groups and his backbenchers in his minimal gestures. He did not take any positive action and that is unfortunate for the country.

In my view the budget amounts to a series of tricks with the existing system. There is no doubt that there is a lot of inefficiency, duplication and bureaucracy and that was recognised by the Minister who indicated that he intended correcting that. I suggest to him that there are some fundamental flaws in our administration and that he should correct them as soon as possible. Our Civil Service is efficient and most civil servants are aware of where the flaws exist. However, it is a matter for the Minister to give leadership and encourage civil servants to highlight the inefficiencies and to take action to eliminate them. It is not enough to ask them to do that work; they should be rewarded for their efforts to rectify the flaws. The Minister should recognise that we must tackle the mountains of bureaucracy. It is up to him to get rid of the red tape. That would benefit the population, particularly those who depend on the State. I am referring to those in receipt of social welfare benefits and those who pay taxes. The Minister should move to minimise the amount of red tape.

For instance, there is a massive backlog of applications for licences to get involved in aquaculture with the Department of the Marine. In fact, fish farms have commenced without the necessary licences from the Department. It appears that the Department do not have sufficient resources to carry out the necessary preparatory work when applications are received. That procedure could be simplified. There is no need to employ more people and the Minister for the Marine should consider simplifying the licensing process.

Our spokesman on Justice, Deputy Jim O'Keeffe, called on the Government to sort out the problems that exist in the Land Registry but they have not made a move on that proposal. There are 26 county registrars in the country and many of them in the fifties, before the Land Registry Office was set up, were registrars of title but they do not do that work any more. The Government should consider passing on a lot of the work done by the Land Registry to county registrars. There is room for improvement and rationalisation in all Departments and the Government should embark on such programmes. Progress is being hindered because of bureaucracy. Many people considering creating more jobs give up half way because of the extent of the red tape they must overcome. Those with entrepreneurial skills move elsewhere and as a result we lose jobs.

There was no evidence in the Minister's speech of the prospects of more jobs being created. The business community have expressed serious concern at the Government's decision to reduce capital allowances. There is no doubt that that will curtail investment. That was a negative move by the Minister. The figures released by the IDA and SFADCo should be questioned. I suggest that an independent body be employed to audit those figures annually. It is ridiculous asking any institution to audit their own accounts or report on their work. An outside body should be employed to question the veracity of the figures published.

I have grave reservations about the figures for jobs created in my constituency. I do not see any evidence of the jobs announced by those bodies.

I should like to refer to health which will come up for discussion later this evening and tomorrow. There is a national crisis in the health services and the mismanagement by the Government of those services is nothing short of despicable. The health services are a national scandal. The Minister failed to recognise the problems in those services, another indication of the Government's lack of concern for the health of our people. Those most affected by the health cuts are the poor, the old and the sick. In the casualty department of Clare County Hospital in Ennis at present there are three chronically ill people lying on stretchers and they do not know if they will get a bed in the hospital. I am aware of people who were sent home at 10 p.m. and 11 p.m. on winter nights when emergency cases were admitted. That is unacceptable in a supposedly caring and Christian society. We are bordering on the uncivilised in the way we treat the old and the sick. The Minister for Health, and the Government, must respond to the complaints. I wonder if they take us seriously when we complain about these problems. Do they realise that people are suffering? If they did realise it, I feel they would respond. Unfortunately we have had no response from the Government on the health crisis.

Education is a very important area. The poorer, more isolated communities are again being deprived as a result of Government action. There has been no improvement in the pupil-teacher ratio, although it was promised. It is impossible for teachers to give the necessary attention to weaker pupils in large classes. The position is totally unsatisfactory. Again, it is the poorer, more deprived children and those with less ability who are being affected. There have been promises about the appointment of remedial teachers and there is an outcry from every parish to have such teachers appointed. A recent survey produced frightening statistics in regard to the number of children leaving primary school who are not literate in the three Rs — the figure was in the region of 35 per cent. Yet, no additional remedial teachers have been appointed and children are becoming further deprived. Education is a vehicle of access to information and the developing of one's abilities and prospects for securing a job. Unless basic education is provided for young people they will not have any prospect of improving their position if they come from poor and underprivileged backgrounds.

When one visits different schools throughout the country, one is struck by the imbalance in the type of facilities provided. These vary from the most luxurious, well-equipped classes to the most basic ill-equipped schools in other areas. The Department must try to bring about some equality in building facilities and equipment. We have seen no reaction by the Minister. Instead there has been a series of pious platitudes on economic theory. Economic theory does not correspond with the reality on the ground, a fact which the Government must quickly realise.

I have referred already to the Minister's statement that he hopes to create 25,000 jobs and how he has set about doing so. It is totally unacceptable.

I come from County Clare, a west of Ireland constituency with many small farmers. I am sure the Minister of State at the Department of Agriculture, who comes from west Cork, would recognise many of the problems which arise in such a constituency. The Minister for Finance, during the course of his budget speech gave no acknowledgment to agriculture. It is a major industry but is increasingly declining. The constant drop in the number of farm families is alarming. There is also a fall in the price of cattle and an expected fall in the price of milk, which means that more small farmers will be forced off the land and become dependent on social welfare or emigration.

A recent survey in County Wexford showed that the number of farmers earning less than £7,000 gross was about 2,800. That is an amazing figure for County Wexford which shocked many people. If that is the case in Wexford, can we imagine the figure in County Clare or west Cork? There is a serious poverty problem. What have the Government done? They have hijacked the system of farm support schemes. A feature of agriculture in my constituency is farmers looking for headage grants at the beginning of February which should have been paid to them at the end of November. They actually had inspectors inspecting their herds in November instead of being paid. If they had any cattle to sell they were forced to do so at the end of September or the beginning of October because they could not afford to carry them any later. A very substantial number of farmers have not received any headage payments. Some of them had forward headage payments made, which is totally unacceptable. When we were in Government there was pandemonium if all the headage payments were not sent out by the end of November and very few were outstanding.

Any farm development grants have been stalled or are coming at such a slow pace that one would wonder if the Minister was manufacturing the money himself. The Minister is claiming greater economic buoyancy and says the books are balancing well. The reality is that the books are balancing well because the Government have held back so much money which should have been paid months ago. That is true for the Department of Agriculture, the Department of the Environment, the Department of Energy and any Department with which I have been dealing. There has been a deliberate stalling of grant payments in order to keep the books balanced. Let nobody be fooled about that.

With that type of line being adopted, where are the jobs in agriculture? What is the future of the small farmer with this Government at the helm? It is a very pessimistic outlook. Having heard yesterday what was going on in Europe, our farmers need to be extremely cautious and careful because the Government are directing them down the wrong road. That story will remain to be told.

I now refer to my own constituency and the shenanigans which the Government have conducted in relation to the status of Shannon. We have had the spectacle of the Cathaoirleach of the Seanad, the Minister of State at the Department of Industry and Commerce and senior Fianna Fáil politicians making various pronouncements about the status of Shannon versus the status of Knock and seeking the removal of Shannon's special status as the sole trans-Atlantic airport. It is imperative that Shannon should remain the sole trans-Atlantic airport. Sixty per cent of passengers coming from the United States disembark at Shannon and move around the mid-west region. This is very important to the economy of that region.

It is absolutely integral to economic development in the mid-west region that the status of Shannon should remain. Any change could cause a massive upset in the economic structure. It is important that the Government should recognise that setting up senior politicians within their own party to take a particular line will not weaken the campaign in relation to Shannon. Using 1992 as an argument for removing this status is unacceptable because it has nothing to do with the EC. It is a bilateral agreement with the United States of America, not an EC matter. The argument being put forward is hogwash as far as we in the mid-west region are concerned. Shannon has been the trans-Atlantic stopover for many years. It has developed industry and an economy around that fact and it is vital that it should remain as it stands. I am appealing to the Minister of State to ensure that there is no change whatever in relation to the stopover at Shannon.

Minister of State at the Department of Agriculture and Food (Mr. Walsh)

I am particularly pleased to intervene at this early stage in the debate to support a budget which I believe is well balanced and right for our present economic circumstances. I also believe that there is a number of measures which are of real benefit to the farming community. In introducing these measures, the Minister for Finance has responded in a positive way to some of the major priorities which have been advanced by the main farming organisations and other interested parties who have made pre-budget submissions.

However, before dealing with matters of specific concern to farming and the food sector, I would like to start with some general comments on the overall economic and financial thrust of the budget. As the Minister for Finance said in his statement, this budget consolidates and builds on the major progress which has been made in the public finances and in the overall economy since 1987. In the past three years we have seen economic growth return to the economy. In 1989, we achieved 3¼ per cent growth in GNP, and the projected growth rate for this year is almost 4 per cent. Increased domestic demand and continuing buoyancy in exports are the major factors responsible for improved economic growth.

The increased domestic demand is a combination of additional consumer spending, assisted by tax concessions and relatively low inflation in recent years, and the considerable increase in investment which has occurred. The agricultural sector is making its distinctive contribution to this investment. There has been a significant increase, for example, in cattle, sheep and pig numbers which will result in additional output in coming years. There has also been major investment by farmers in pollution control measures during 1989. This investment has undoubtedly been assisted by the increased grants which were made available during the year. I would estimate that a total of about £100 million was invested in pollution control measures and other on-farm investments during 1989 and that a further £100 million will be invested during the coming year.

I very much welcome the fact that the budget continues down the road of improving the position of our public finances. The Exchequer borrowing requirement has been reduced from 12.9 per cent of GNP in 1986 to 2.4 per cent of GNP in 1989. In 1990 it should be no more than 2.1 per cent. This is a major achievement. We have in fact met the targets on the public finances set in the Programme for National Recovery three years ahead of schedule. We have now set ourselves the new target of reducing the debt-GNP ratio from the present 122 per cent towards 100 per cent for 1993. It is vital that we achieve this target, and if at all possible, surpass it. Despite the major success of recent years our national debt still stands at about £25 billion and the servicing of this debt is absorbing about £2 billion annually — money which is desperately needed to assist job creation and tackle many of our major social problems.

Continuing progress in reducing our national debt and in restoring order to our public finances is of major importance to the agri-food sector and to all farmers. This is because of the link between these factors and our interest and inflation rates. While interest rates unfortunately increased during 1989, this was mainly due to international interest rate developments. We would expect some reduction in these rates and in Irish rates during 1990. The vital importance of achieving the lowest possible interest and inflation rates will be clear to farmers who recall the period in our relatively recent past when high interest and high inflation rates contributed to a serious fall in farm income. In 1990 we are facing into somewhat weaker markets for some of our major farm products and a tight price-cost environment. This is all the more reason it is in the interest of Irish farmers and food processors that Government policy remains absolutely committed to a prudent stance on the public finances and to a low inflation economy.

I will now turn to some of the major aspects of the budget which are of particular interest to farmers. The Minister for Finance and other speakers have dealt with the changes in the rate of income tax and in VAT. These benefit farmers as taxpayers and consumers in the same way as other citizens, so I will note them but not dwell on them, other than to say that the income tax concessions aimed at helping low income farmers will be of particular relevance to many farm families.

There are also, however, changes in the tax code which are specially targeted at farmers. The VAT refund for unregistered farmers is to be increased from 2.0 per cent to 2.3 per cent. This means that farmers who are not registered for VAT will now be fully compensated for the VAT paid on their inputs. This continues the policy initiated last year and meets a consistent demand of the farm organisations.

There are also some important changes in the capital acquisitions tax which will meet the concerns of many farm families, although the changes apply of course to all citizens. The major change announced is that, in future, the thresholds which determine the value of capital which can be transferred before payment of the capital acquisition tax will be adjusted each year to take account of inflation. Taking the inflation rate of 1989 into account, applying this indexation will mean thresholds of £156,000 in the case of transfers between parent and child; £20,800 as between other family members and £10,000 for non-family transfers.

An additional change in the capital taxation rules has also been made, which has not received the same amount of notice as the indexation of the thresholds. In future, gifts between spouses are to be exempt from capital acquisitions tax and transfers of property from one spouse to another are to be exampt from stamp duty where such transfers have the effect of creating a joint tenancy in the names of both spouses.

The combined effect of these changes in capital tax legislation should ensure that many solid and well capitalised farms can be passed within the family from one generation to the next without imposing a major burden on the inheritor. Clearly a balance must be struck between a fair yield in capital taxation from the wealthier members of society and ensuring that we have an adequately structured farm sector which can compete on European and world markets in the years ahead. The changes in capital taxation in the budget try to strike that balance.

Finally on the taxation front, there is a change in rules for stock relief which is relevant to farmers subject to compulsory disposals under the disease eradication schemes. For disposals of diseased animals arising after 5 April next, the period allowed for restocking before claw-back of stock relief comes into effect will be extended for another year. This change will be of assistance where postponement of restocking is required under the statutory disease eradication schemes. It will be of particular importance to the relatively limited number of hardship cases where depopulation has occurred.

Moving away from the taxation field, there is a number of changes in the budget which provide resources to areas which the Government consider of importance for the future of the agri-food industry.

In recognition of the vital importance of providing adequate training for those entering agriculture, an additional £600,000 from Exchequer funds and £1.1 million from the European Social Fund is being provided to TEAGASC for agricultural training. This will go towards defraying the costs of residential training at agricultural and horticultural colleges. This allocation will go a considerable way towards removing the anomalies that exist as between the financial support given to agricultural and other vocational trainees. It should also encourage more young people to undertake full-time training in agriculture and horticulture.

I am also very pleased with the allocation of £3.5 million for each of the next three years to the Racing Board and Bord na gCon. This represents about 1.5 per cent of the off-course betting turnover. This allocation will be used for the development of the horse and greyhound industries generally. The distribution of moneys between the two sectors will be decided on later. Payment of grants will be contingent on the approval by the Government of suitable projects to be prepared and submitted by the two boards. This decision demonstrates the Government's commitment to the further development of these industries. The allocations will do much to restore confidence in the industries which generate about 20,000 jobs in total, from breeding to training, racing and ancillary services. Resources invested in this way should strengthen our tourist potential and will, in a very practical way, promote rural development.

Two other items announced in the budget are also relevant to our tourist potential and to rural development, in that they are part of the national environment plan. A total of £450,000 has been allocated for the promotion of organic farming and £100,000 for environmentally sensitive areas.

As already announced, the Minister, Deputy O'Kennedy, is setting up a special unit on organic farming in the Department of Agriculture and Food. The unit will have an overall co-ordinating role and will assess the opportunities for expansion in the sector. It will assist in the production and marketing of organic products and liaise with the European Commission and other relevant organisations. The budget makes a special provision of £450,000 designed to cover measures for the promotion and development of the industry as well as the expenses of the new unit. Organic production is a small but growing sector of the agri-food industry. Ireland is in an ideal position to capitalise on this development and the action now being taken is designed to ensure that we realise our potential in this area.

I very much welcome the provision of £100,000 for the introduction of a scheme to protect environmentally sensitive areas. The scheme will provide for the payment of annual premiums to farmers in such areas who introduce and maintain farming methods which protect the environment or maintain the landscape. Our friends in Northern Ireland have experience in the operation of environmentally sensitive areas schemes and we will be glad to benefit from their experience.

Finally, provision has been made in the vote of the Department of Agriculture and Food to support the recruitment of a specialist for the establishment of an agricultural unit within DEVCO, the State Agencies Development Co-operation Organisation. The purpose of this unit will be to promote the use of skilled Irish resources in development programmes abroad. The programmes for economic reform in Eastern Europe, as well as the many on-going programmes in developing countries, are putting a major emphasis on agricultural and rural development. The agricultural unit in DEVCO will work towards matching the opportunities in these development programmes to the professional and technical skills which Ireland undoubtedly possesses in the field of agricultural and rural development. I would like to see Ireland carving out a reputation not just for being the source of the finest quality food and drink, but also as being a provider of high quality skills and agricultural technology. The allocation to DEVCO is a recognition of the potential which exists in this area and of its desire to promote Irish services abroad.

To conclude, I welcome this budget in its overall approach of maintaining discipline on the public finances and of easing the burden of taxation in order to promote incentive and to enable people to retain more of their incomes. From the specifically agricultural viewpoint, there is a number of changes introduced which meet key demands made of the Minister for Finance, in the field of the Capital Acquisitions Tax, the VAT refund and support for agricultural training. There is a number of imaginative proposals regarding the development of the horse and greyhound industries, organic farming, the environment and the promotion of Irish agricultural skills abroad. It is a budget which, in my view, strikes the correct balance between prudence and innovation and which has broad support throughout the country.

Mr. Gilmore

This is the first time that I have had the privilege of hearing the budget speech here in this House. I remember a couple of years ago watching reportage of the budget on television in a public house in Cork and coming back on the train calculating how much better off I would be as a result of that budget.

Mr. Deasy

Murphy is cheaper than Guinness.

Mr. Walsh

And Beamish is still cheaper.

Mr. Gilmore

I felt so good about it that I even felt a certain degree of affection for the then Minister for Finance. It was a feeling that wore off rapidly when I got my first pay cheque in April and discovered that what I had thought was a great windfall did not make any difference at all. That is an experience that will be shared by many people as a result of this budget.

It is presented as a great giveaway budget with something in it for everybody. Ministers are emphasising the various giveaways contained in this budget and the extent to which people will be better off as a result of it. The media appear to be confirming that point of view.

It is disappointing that there has been little critical examination of this budget or of the environment action plan which was announced a couple of days beforehand and about which I intend to speak in detail later. The State broadcasting services almost ran out of superlatives on budget night to describe this budget. I do not think there will be too many causes for apology on this issue.

When all the hype dies down people will find that they are not better off, unless of course they are already well off. They will find that in the area of tax, for example, personal tax allowances are not being increased but are still at the 1988 levels. There is no increase in PAYE or PRSI allowances. Much of the Revenue buoyancy that was talked about will result directly from this. In other words, spending by those on the lowest incomes will help to balance the budget. There is no change in the 48 per cent tax bracket. The single earner earning £9,636, £1,400 below the average industrial wage, will come into the tax net at the 48 per cent band and, on any income over that, when various levels of PRSI are taken into account, will pay 53 per cent.

Then there are the various clawbacks when one takes into account the extra charges for electricity and telephones. It is dishonest of the Government to suggest that these increases will not result in extra charges to the public. The increase in VAT on electricity and telephone charges will have to be paid somehow and they will be paid either by increased cost to the consumer or by the jobs of workers in the ESB and Telecom Éireann or some combination of both. On top of all of that will come a possible mortgage interest increase in April as a result of the interest increases we have already seen.

So, in a few short months most PAYE workers will wonder what on earth all the fuss was about and why the budget was presented as being of great benefit. The Minister laid particular emphasis on his assessment of the economic indicators. It is remarkable, therefore, that he did not comment on the contribution of Irish workers to economic growth. Between 1980 and 1989 the productivity of Irish industrial workers increased by 130 per cent at a time when 50,000 industrial jobs were lost to the Irish economy, over a period when real earnings grew by only one-twelfth the rate of increase in productivity, or 11.8 per cent. As productivity increased, profits to the corporate sector also increased, from £1,739 million in 1980 to £2,815 million in 1986. In return for that, corporation tax is being reduced. As the ICTU convenes this week to consider their position on the Programme for National Recovery what is the message in this budget for the most productive workers in Europe? The message is that those who have profited most from better economic growth will get the most concessions and those who have contributed most to that economic growth through their productivity and through their labour will get the least.

There is a peculiar introduction in this budget. No doubt it is to be welcomed that employees' PRSI is to be abolished for workers earning under £60 a week. What that also does, however, is introduce a second threshold, a second disincentive for workers who are low paid, very often working in part time jobs, to actually seek a pay increase.

Debate adjourned.