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Dáil Éireann díospóireacht -
Thursday, 8 Feb 1990

Vol. 395 No. 5

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.)

Deputy Durkan was in possession and he has 15 minutes left.

With the permission of the House, I should like to give some of my time to Deputy Nealon. Is that possible?

You are placing the Chair in a rather difficult position, Deputy, because we usually allow that where a time limit has been applied. However, there is no time limit on the budget debate.

Very well.

In any event, the Deputy has only 15 minutes left and it is not usual to share time in circumstances where there is not a time limit.

When I moved the Adjournment I was saying that the budget could be viewed from two perspectives and that, depending on the perspective you viewed it from, it could be regarded as good or bad.

If you are a householder you must come to the conclusion that it was not a helpful or progressive budget. Let us look at how it affects a householder. A person with a mortgage of £25,000 or £30,000 has seen payments increasing by something in the region of £80 per month. Personal bank loans and borrowing generally have increased because of rising interest rates over the past six or eight months in particular but in general over the past 12 months. A telephone will cost 10 per cent more because of the imposition of VAT on bills. It has been argued that this will not be passed on to the householder but I argue from a different perspective. Over the years we have gained an entitlement to lower charges and at a time when Telecom Éireann indicated their willingness to pass on the lower charges to the consumer, the Government decided to ensure that the public would not benefit. That can hardly be regarded as a progressive move. Telephone users have long been entitled to a reduction in the charge for the services, particularly in view of the fact that they paid dearly over the years for an inefficient service.

I must criticise the Government for their decision to increase the VAT rate on ESB charges. We have been told that that increase will not be passed on to the consumer but I wonder if that will be the case. I resent that decision because ESB consumers here have had to pay the highest charges in Europe for many years. In recent times the board, through rationalisation and so on, made great efforts to reduce those charges. They also passed on the benefits of lower fuel costs but the Government have moved in to stop that. They tried to justify their decision to increase the VAT rate on the basis that we need to harmonise our tax rates before 1992.

We have been told that such a move was to be expected. I do not have any objection to tax harmonisation provided it is not all negative as far as Irish consumers are concerned. If we have to have tax harmonisation it should apply across the board, to VAT and excise duties. Irish people have had to pay a higher rate of duty on all imports than other Europeans. The Government's one-sided approach to tax harmonisation leaves a lot to be desired. It appears that Irish people will continue to have to pay more for imported cars, petrol, diesel and other items. They will not get the benefit of tax harmonisation. We are falling far short of what was expected. The Minister should bear in mind that moves towards tax harmonisation should be even-handed and Irish people should be given the benefits of the positive side of it. To date they have had to bear the negative aspects of tax harmonisation.

The Government do not appear to have any intention of housing people in the lower income bracket. We have heard a lot in this debate about the resurgence of the building industry. I accept that there has been a revival in that industry but it has not amounted to very much. We must remember that the industry has been at a standstill since 1987 due to policies pursued by the last administration. Any move since then has been dramatic because the industry was at a standstill and Fianna Fáil must accept responsibility for that. The recent revival in the industry has been based on moves in the commercial sector and the building of expensive houses. It is nice to be able to tell us there is a new confidence in the city, that international bankers are happy and that those involved in the construction industry are happy but we must bear in mind that local authority housing lists are increasing and that no houses are being built. Very little has been done in the last three years to deal with that problem. We have been told that the housing problem was resolved in 1985 but since then the demand for local authority houses has increased. No houses are being built in the greater Dublin area or within 40 miles of the city for people on an income of less than £10,000. Those people cannot afford to buy private houses. The maximum local authority annuity loan is £21,000 while the maximum income-related loan is £22,500. Those in a special category receive a loan of £27,000. The latter figure is the minimum a person requires to purchase an average three-bedroom house. It is unfortunate that very few qualify for that loan. The Government should give serious consideration to this problem in the coming year.

It is difficult in this short period to cover all the topics referred to by the Minister in his two-tier budget speech. I should like to refer to the decision to exempt employees whose gross earnings are £60 or below in a week from PRSI. On the face of it that appears to be a useful and progressive move. PRSI is a tax on jobs and it discourages employers from taking on young unemployed people. It is a gross tax on those who are prepared to make an effort to reduce unemployment numbers. There are very few people earning £60 or below in a week and there is a danger that the Minister's decision will encourage people to operate in the black economy. Some people may pay employees £60 or below giving them the difference in their pay in the form of expenses or allowances in order to avoid having to pay PRSI. That would do considerable damage to those earning between £7,000 and £8,000 per year and the companies who employ them. The Minister should give this matter his urgent attention.

It is important that we ensure that Irish exporters get an even break with their competitors on the continent. If they do not employees at home will suffer. I am disappointed that the Minister did not do anything to help them and encourage them to create more jobs. I know there are schemes, for example, the pre-retirement scheme, which are simply nice ploys to remove people from the live register. They are nothing more than that. They do not give them jobs; they do nothing more than change the name of their status from being unemployed and on the live register to something like being pre-retired for four or five years, from the time they reach 60 years of age. I can understand that that is probably a good thing but why not go the whole hog and give them a retirement pension? Why not call it off at that stage and reduce the age for qualification for the retirement pension rather than mess around with it and instead give them a decent recognition for having worked a lifetime? Why play around with it and say: "We will give you a pre-retirement pension which means you will not be registered or on the jobs market while you are in receipt of this — but you could possibly be if a job came up at some later stage — but for technical reasons at present you are no longer on the live register". That is a very nice way for coming up with statistical answers to the unemployment problems without having to produce jobs. Unfortunately, I do not think it is a great idea and it is annoying to the people who are unemployed and who have been unemployed for some considerable time.

I realise I have come to the end of my time but I should like to say that the budget is only a middling budget. That is the best I can say about it. I have already stated the reasons. I do not intend to go over the debate which took place here last night except to state that an extra £10 million has been allocated for health. As a member of a health board for more than ten years I believe the Minister for Health is a genuinely sincere, honest and decent man and he does his best, but I would advise him to kick the shins underneath the Cabinet table a little harder because the services that are required, having regard to the population structures at present, will not be resolved with an extra £10 million either this year or next year.

Listening to Deputy Durkan and his criticism of the budget reminds me of the fact that he has in his own constituency and right on his own doorstep an outstanding example of the current economic situation, the success of the Government's policies since 1987 in restoring confidence in our economy. Already construction work has started on the Intel project in Leixlip.

I bought the site.

I am glad that Deputy Durkan has drawn some proper benefit from the investment. When I was in California I made a number of speeches there in August 1988 and I had numerous meetings with industrial people. Intel were among the people with whom contact was made. They were concerned about coming to Europe. Their main motivation for coming to Ireland was not because I was there or anything of that kind, or because the IDA had offered them this or that package, because there were packages available from every country, but because they had made their assessments and because there was a Government in place in Ireland that was dealing with the country's basic economic and financial problems. They felt secure in moving to Ireland their investment in a high risk technology area. This was because the proper financial environment was created by a Government who were taxing public finances and who were commanding excellent economic comment in all financial journals in the United States and throughout the world, at the time, for the way in which the public financies were being tackled. This was creating an environment in which inflation was controlled and reasonable interest rates established.

Generally, they felt they could move to Ireland with this high risk technological investment and get under the umbrella of the European Community which was developing into the single market by 1992. They felt that Ireland, as a base within Europe, was best protected in terms of a financial environment within which they could legitimately prosper. That, plus the intelligence, educational and training facilities of Irish labour and management, were, broadly speaking, the factors that mattered. Our training and educational programmes, the intelligence of our workforce and management, plus the financial environment which had been created by the Government were the basic factors in deciding to set up here. A further factor was that there were sufficient Irish entrepreneurs here to participate in ancillary investment activities that would generate further jobs in industries related to the main project. I mention that as an example because Deputy Durkan sparked off that particular train of thought. It is a practical example of one project which symbolises what has happened to this economy since 1987. That project would not have started and would not even have been contemplated in the financial environment that existed here between 1983 and 1987.

What about 1981 and 1982?

There is no doubt that the establishment of a Government, which was seen by them and by financial commentators throughout the world to be in earnest about putting the public finances in order and providing for a proper climate for investment, were the factors that motivated them in choosing Ireland rather than any other centre throughout the European Community, which they had been seriously considering. In fact, there was a very serious push at that time — before they made their final decision in favour of here — for locating that industry in Scotland. Many improvements were brought about to try to achieve that. I mention that as one example because too often in a budget debate one gets into generalities. One can talk about economic theory and macro-economic theory, and so on. While that is all legitimate and proper there is nothing like beefing up that type of argument with a specific example, especially one that is pertinent to the last speaker who spoke in this House.

It is a good job.

He is a living example of someone who has, in a legitimate way, benefited from that particular project.

I will have a few cases to relate that were not so lucky.

I am trying to be constructive because generally what I say in regard to the period 1983-87 is a criticism of the attitude of mind that existed among all sections of our community. On being elected in March 1987 our first decision was to get a grip on the situation and we have continued to do that. I am somewhat disturbed by the prevalence of short memories in this respect. Many critics of the budget seem to have forgotten the dismal economic situation that existed right through the eighties, which we had to endure, and which led to a cessation of investment when the last but one Government left office in 1987. That was caused by spending public money before it was earned and by Government and budgetary policies that sought to borrow their way out of trouble.

That has a familiar ring to it.

The very solutions to our social problems now being advanced by groups inside and outside the House, involve the expenditure of funds which cannot be afforded and are, in fact, the causes of these very problems. For example, unemployment, emigration and poverty are the direct results of excessive Government spending in the past. They are the result of an indiscriminate attitude which thought that by throwing money at the problem it would solve the problem. We had an example of that last night from Deputy Yates. I watched Deputy Howlin of the Labour Party and himself on "Today Tonight" talking glibly when asked what would settle the health problems. Glibly, sums of £200 million and £300 million were being thrown out on the television screen; millions of pounds were being thrown around as if they were there for the settling of the health and medical problems of the country.

The teachers are waiting for you to throw a few millions of pounds at them for a few years.

Again, that is symtomatic of the attitude of mind which we want to get rid of. We have sought, since 1987, to rid this country of it at every level, both inside and outside this House. Encouraging that facile and downright dishonest approach to public policy is completely negative. Now that we are on the right path I would hope that all parties in this House would follow the lead. We can disagree in detail as long as we acknowledge the central fact that spending public money before it is earned in a run away financial policy is out. It is downright dishonest to advocate that as a solution. Only last night the health spokesmen of Fine Gael and Labour advocated that I should turn to that sort of policy. It was very discouraging, to put it mildly because if that sort of comment emerges during what is supposed to be a mature debate on the health services it would be natural enough for organisations throughout the country to take up the same facile attitude and put it forward as being the answer.

In the lead up to the budget there has been an endless succession of people competing with each other to give inflated estimates of how much the Government could afford to give away. It is clear that the policies which have been pursued over the last three years are beginning to bear fruit. That is why it would be downright irresponsible to depart from the path that is now being pursued at this stage. Adherence to a policy of fiscal responsibility has, for the first time in years, given a Minister for Finance some room for manoeuvre. However, in framing the budget there are many conflicting demands to be met. While there is no limit on the requests which can be made for extra spending in specific areas, there is a very tight limit on the amount of extra funding which can be granted.

Everyone must understand at this stage that it is costing the taxpayer over £2 billion to pay the cost of the annual debt each year. That is a substantial extraction from taxation. It illustrates the flexibility a Government would have in regard to social and economic developmental matters if that millstone were not there. Thankfully, last year over £100 million was saved on debt servicing because of our debt management approach. An important aspect here, and again a reflection on the confidence with which our reform of the public financial situation is viewed by the money markets abroad has been the large in-flow from overseas sources into the Irish gilt market. That has happened because there is confidence in the economy and in the stability of our currency and that is helping us in handling that debt which is costing £2 billion to discharge each year.

The key element in this transformation of the public finances and the economy is the reduction in public expenditure. If the steps to control public expenditure had not been taken we would be in the state of bankruptcy towards which we were very quickly drifting in 1987. We have achieved a reduction in public expenditure over the three year period since 1987 of over 11 per cent of GNP. That is what has enabled us to get the public finances right and create confidence in our public finances and in the progress of the economy generally.

If we were to ignore the overall picture and accede to demands for increases in individual items of expenditure which would lead to a gross increase in the total with consequent damage to the overall decrease of 11 per cent, we would put the whole process of financial recovery into reverse by spending more, taxing more and borrowing more. If we allow ourselves to think that throwing money at one area will solve the problems there without affecting the overall costs we will end up in the disastrous situation in which we found ourselves in 1987 and out of which we have dragged ourselves. To slip back into that situation would be unforgivable and downright irresponsible.

There are other aspects I would like to emphasise here. The budget is only one element in the Government's strategy for developing the economy. This is sometimes ignored in debate here and in comment outside. Other important elements which have become more pertinent in recent times include the agreement between the Government and the social partners set out in the Programme for National Recovery. That development, begun in 1987 and continuing successfully to date, has been the most welcome on the social and economic aspects as a follow up to the financial rectitude. This development in the social and economic spheres of participation by the social partners in the Programme for National Recovery has been crucial to the sustained development of the past three years and can form the basis of sustained progress during the nineties and right into the future, once it is established and entrenched as part of our whole macro-economic infrastructure.

Once we have this ongoing arrangement with our social partners it can be adapted under the provisions of the Central Review Committee and will act as a tremendous stabiliser of the various groups, the farming community, the industrial community and the trade unions in framing and planning with the Government the required achievements in investment, employment and development. This will be sustained by a continuing process of consultation and, if necessary, adjustment and adaptation of planning on an ongoing consultative basis. That sort of consultation in partnership is of great value and very few countries, even within the sophisticated Community to which we belong, have succeeded in developing this consultation to the fullest extent; some countries of the Community have developed it but others have not. We have made a very good start and I hope that start will be sustained. A lot of the planning which has gone into the budget has been designed to ensure that that process is sustained and helped.

The elements in relation to the Programme for National Recovery provide above all else for stability. Stability in regard to incomes and industrial relations are major factors in so far as investment is concerned. The National Development Plan is another major factor in the investment aspect. Substantial funds which have been provided from European Community sources will be backed up by public and private investments here in Ireland. This plan is designed to ensure that we have a sustained capital programme over the period ahead which will help provide the infrastructure we require, both physical and human, in terms of the social side of training and education. Taken together with the other investments in the agricultural and industrial spheres this investment will lead to improvements in employment, which is the important aspect at the end of the day for all policies. Much of the criticism which has been aimed at the budget and the allegations that it does not contain this or that do not take into account the fact that the budget is part of this wider framework that includes the Programme for National Recovery and the National Development Plan.

The central objective of Government policy has been to create the conditions for a period of sustained economic growth. The growth rate which amounted to a mere 1.6 per cent of GNP in 1988 reached 3.25 per cent in 1989 with a rate of 3.75 per cent forecast for 1990. These rising figures represent the tangible proof that the Government's policy is succeeding. However, while encouraging growth the Government are obliged to keep a weather eye on a number of potential hazards. Chief among these is the rate of inflation. While our rate of inflation is by no means high compared with other countries it increased to 4 per cent during 1989. The measures contained in the budget will secure a reduction in the rate of inflation to 2.1 per cent by the end of this year. This is of crucial importance from many points of view but, first, that inflation is the enemy of wage moderation. The optimistic forecasts made by ESRI and other forecasters concerning our economic performance during the nineties are based on the assumption that the rate of increase will remain moderate. The rate of increase in incomes is related to the control of inflation. Favourable and optimistic forecasts in regard to jobs depend on the rate of inflation continuing to be stable.

It needs to be said loud and clear that inflation is the enemy of the poor. A rapid increase in the cost of living would quickly erode the increases in the real value of social welfare which have been granted in this and previous budgets. It needs to be emphasised again and again that inflation is the enemy of the poor. People who talk about combat poverty policies that lead to inflation, are doing a grave disservice to the less well-off sections of the community.

Our economic recovery has been led by a boom in exports. Any increase in our rate of inflation would increase costs substantially and our exporting industries would lose their competitive edge, which is a great feature of our economic success story at present. The competitiveness of our export industries has led to a dramatic improvement in our export performance.

It is universally accepted that there is a need to reduce the burden of taxation borne by ordinary workers. Further progress will be made during the current year with a reduction in the standard rate of income from 32 to 30 per cent with the highest rate being reduced from 56 to 53 per cent. These measures conform with the Government's stated target of achieving a standard rate of 25 per cent and a single higher rate by 1993. In reducing the burden of taxation the pace must be set by the condition of the economy. I want to emphasise that experience in other countries has shown that rapid tax cutting, which results in a sudden increase in disposable income, results in inflation. What happened in our neighbouring island following a budget of two years ago is a classic example of how rapid tax cutting policy introduced in one budget — a policy which led to a consumer boom in imports and consumer spending abroad and a sudden increase in disposable income, caused inflation and did not reflect in investment, as was expected.

Reforms are also required in the area of VAT. We are making preparations for the Single European Market by the cuts we have made. In reducing the burden on taxpayers the Government must do all they can to improve simultaneously the living standards of the weakest sections of society. Side by side with the tax cuts I have just mentioned the budget also contains a number of measures which will be of benefit to those on social welfare and in particular to those on low incomes. The total cost of these measures, including a 5 per cent increase for those on social welfare, increases in income tax exemption limits and PRSI relief for those on low incomes, will be £114 million. This is a transfer in the right direction, particularly to those on low incomes, where there is still a lot of room for further equity in the future.

All of the progress to date has been a direct result of the Government's restoration of order to the public finances. The lesson that needs to be hammered home is that any improvements by way of equitable redistribution at the lower level have resulted from improvements in the public finances which would not have been possible if it was not done initially in each budget as and from 1987. We need not be complacent in that respect at all because the ratio of our national debt to GNP, although falling, is still very high. Any return to the policy of throwing money at our problems is not justified.

The economy is in better shape than it has been for many years. ESRI and other independent commentators forecast that exports will grow by about 7 per cent in 1990, that unemployment should fall by about 10,000 and that jobs should increase by about 16,000 in the non-agricultural sector.

Where will the rest go?

I am giving the Deputy the facts which are spelt out in the supplementary data to the Minister for Finance's speech of which every Deputy has a copy. A fall in the level of emigration is also forecast. We are getting out of the cesspool in which we were floundering in 1987. The Exchequer borrowing requirement is set to fall still further this year, to around 2.1 per cent of GNP. This is a substantial achievement when one considers that in 1986, the last of the bad years, the figure was 13 per cent. We have cut our borrowing requirement from 13 per cent to 2.1 per cent. The strong recovery in investment will show a growth of 10 per cent in 1990. Of course, it is investment which underlines our whole future and we want this to rise more substantially. Growth of 10 per cent in 1990 is very substantial and the highest in recent memory.

Restoring the economy to the path of growth is not an end in itself. It is a means to an end. The Government's ultimate objective is to build a society where there will be sufficient resources to meet our social objective of improved living standards for all. However, there is no short cut to prosperity. It is not within the power of any Government to unilaterally decree an end to the social injustices which still pervade and will continue to pervade unless we take positive action to control our public finances and have a disciplined approach to economic development. There is no magic wand which the Government can wave to eliminate unemployment and emigration overnight.

We are not helpless in the face of these problems. The Government can and have exercised a considerable degree of control over the direction of the economy so as to provide the proper financial and economic framework. Within the limits of Exchequer resources the Government will be able to provide increases in the incomes of the weakest sections of society provided there is sustained growth in the economy. With aid from the European Community we can and are developing our infrastructure and with the co-operation of our social partners an orderly industrial relations environment can be permanently sustained. That is important. The conditions necessary to encourage investment, growth and ultimately job formation can be created and maintained.

The budget does not contain the answers to all our economic problems. I am not going to stand up here and claim that it does. It is unreasonable to expect that it should. However, the measures announced by my colleague will ensure that the public finances will remain under control, the Government's taxation reform a real increase and the economy will remain firmly on the path to growth. It is important that all the parties in this House, the outside organisations, the leaders in the community generally — be they in the political, social, economic or financial areas — and motivators in society recognise that there be proper consensus management of the economy.

Even though we may disagree on the detail, I realise we are now at a very important stage in our mature development as a society. There is broad consensus on all sides of the House that what I am saying here is right. Whatever Deputy Connaughton or anybody else may say, there may be legitimate and valid disagreements on the detail, but my analysis and that of my colleague, the Minister for Finance, is right. All that is required is the political will on the part of all in this House and those outside who have a contribution to make. We should never again depart from that consensus to mismanage our finances and misapply the thinking with regard to economic development, and we should organise our finances properly. We can allocate our investment and resources in this direction or that direction and disagree on the detail so long as we are concerned about having a system of fiscal responsibility to generate more confidence and respect and secure the investment we all require in our society to handle the remaining social problems.

If I was not living in the real world I would certainly say that the Minister for Defence has these problems solved for us. There is no doubt about that. I have heard it all today.

I take this opportunity to say that the budget contained little good news for the farming community and that the major problem of low incomes was not addressed last week. Unfortunately, when taken in conjunction with the Estimates published a few months ago, the only conclusion that can be drawn is that the prospects for farmers in 1990 are very bleak. The Government seem to be mesmerised by the latest developments in agriculture not alone here but in Europe and the rest of the world. I will refer to this matter in detail in a few moments; there are a few general points I would like to make first.

The question could be asked how many members of the public can recall the details of last week's budget despite all the hype. I contend that one could talk to any one of 20 people outside Leinster House without they being able to tell you the principal features of the budget. It was an instantly forgetable and neutral budget with nobody ending worse off. I acknowledge that. It was equally very difficult to find someone who will be much better off.

The main thrust of this cautious budget was to continue on the same road we all agreed was necessary four or five years ago, despite the ever changing economic climate both here and in Europe. The decision to reduce the rate of VAT to 23 per cent was a step in the right direction but I would have expected the Minister to signal what his plans are for the next three years. Will we be caught with an even worse trading imbalance on the Border in 1993? Will it be useless to try to cope with free trade if our VAT rates are excessively higher than those of our EC trading partners, particularly because of our close proximity to Northern Ireland? This is a big worry but the Minister did not signal what he intends to do over the next few years.

The budget contained a number of miserable and downright mean proposals. On social welfare, the decision — and I am glad that the Minister of State at the Department of Social Welfare is present to hear this——

He is not here. I have nothing to do with it.

Sorry, at the Department of Health.

The Deputy is confused as usual.

The Minister of State is doing his best to make sure that people are not aware that he is in the Department of Health at present, but that is neither here nor there.

I will not send out circulars which will not be implemented.

The House will be better off with the absence of these Galway pleasantries.

The Minister did not spend too much time in Galway Regional Hospital, but again that is neither here nor there.

I have visited it three times since last December.

The decision to increase the carer's allowance from £28 to £45 looks good. However let the electorate be wary. This carer's allowance is a straightforward replacement for the existing prescribed relative allowance. The rules governing that scheme are mind boggling. The greatest joke of all was the Minister for Social Welfare's decision to debar small farmers from the scheme. It was officially decreed that if a son or daughter had to look after 30 acres of land he or she did not have time to look after a parent. If social welfare benefit was being paid to a prescribed relative, irrespective of the size of the allowance, this meant automatic disqualification.

Contrary to recent announcements that the new carers' allowance would be given to parents of handicapped children, the official line is that this will not be so. If these parents are in receipt of the domiciliary care allowance from the health board the carers' allowance will not be paid to them. If the eligibility rule in respect of the carers' allowance is not greatly relaxed, the meanest public relations trick of all will have been pulled on people who are least likely to be able to help themaselves.

By puting VAT on telephones the Minister has taken another easy option to further tax an absolute essential of life. We should forget about Telecom Éireann absorbing the cost. We have been around too long to accept that. In a profit driven organisation the consumer will always pay the piper. The same is true of the ESB. That organisation has been quoted as saying that the price to the consumer would actually reduce. We will wait to see how it reacts to the budget provisions. The turf burning stations may well be the first victims of this efficiency drive. Bord na Móna should be far more apprehensive as to where those savings are to be made than they appear to be at present.

The budget, as I said, totally ignored the farming community. No budget that I can remember showed as little concern for farmers as this one, which was the worst ever. This budget, coming as it does when farming fortunes are in a valley period, would have been expected to point out Government thinking for this most important industry. The real problem facing Irish agriculture is simply one of low income. There have been other periods in the past 25 years that have been bad for farmers and some that have been good for farmers. This peak-valley syndrome is one of the heartbreaks of farming. However, there was always hope during the depressed periods in the knowledge that things would improve but there appears to be no hope at this moment of any reasonable reprieve. All leading commentators now acknowledge that the basic ingredients for a return to reasonable farm incomes are not present and are unlikely to be present. The reason is that general world prices for farm products have declined sharply, this putting pressure downwards on the higher EC prices to intervention level, which in monetary terms to an Irish farmer at the moment means he is £125 per beef animal slaughtered worse off this year than he was last year and at least £10 per lamb below 1988 prices.

Very seldom does one encounter a sharp downward revision for all farm products at the same time. I cannot remember any such time in the past 20 years. As I have mentioned, cattle and sheep prices are in a most depressed state. The pig industry is in chaos. Cereal profit margins are hovering around break even and bad news for dairy farmers is that their milk price will be about 90p compared with the 106p to 109p they got last year. Indications are that butter stocks going into intervention in the Community will be over 200,000 tonnes this year compared with none in 1989. In other words, not a single tonne of butter or milk products generally found its way into intervention last year. Now the question in Brussels is, "Will we be able to accommodate and have a facility big enough to take the amount of butter that is going to be put in because of the pressure from world prices?"

Recent remarks by Commissioner MacSharry that processors who manufacture the so-called dairy spreads will be denied access to intervention have sent a shudder down the back of every dairy farmer in this country. His speech, which has been well reported in the last 24 hours, if brought to its logical — or illogical — conclusion would mean that the processors who are manufacturers of the dairy spreads would be denied the right to put their product into intervention.

Does the Deputy believe dairy spreads should be in intervention?

I am talking about the butter element of dairy spreads, and let the Minister of State remember it was not the processors who caused this, it was the eating habits of the population. It is a typical matter of shooting the messenger. The product itself is produced on Irish farms as butter. Of course there are diversifications but principally it is butter. For better or worse, all over Europe, particularly in the last two years, there has been a dramatic call by consumers for less butter in the spreads. I do not agree with that. I see nothing wrong with butter, but it appears Commissioner MacSharry is saying this week that because the processors have acknowledged the buying power of the public, they will now be penalised for doing that. This is the craziest thing I have heard a Commissioner in Europe say for a long time. I hope he does not mean it, but it is part of his speech that has been reported around Europe in the last 24 hours, and it is time somebody told him that is not the answer to this problem. If ever there was a way of talking down prices to dairy farmers, that must be it. At this stage I call on all the processors and on Bord Bainne to ensure that the maximum price and maximum efficiencies will be made available to ensure that dairy farmers will get the best of what is going. Certainly they will be receiving 15, 16 or 17 per cent less on their gallon of milk than they got last year.

I come to another huge problem we have talked about for a fair number of years. There has been no shortage of analyses on it but nobody seems to have come up with the answer. I am talking about the demise of the winter beef fattener. I do not want to bore the House by being too technical on this but let me say that our efforts to maintain a constant supply of cattle to the processing plants to ensure that they in turn have a constant supply of product to the supermarket chains in Europe have been a total failure in that one out of every two animals slaughtered in this country last year was slaughtered in the last ten weeks of the year. In other words, we have no continuity of supply, and the seasonality has gone into a spin. No matter how the analysts look at it, there is only one fundamental answer. The winter fatteners have lost money on their cattle for the last three consecutive seasons and they just will not continue in this way. This is bad news, not alone for farmers but for people in the processing industry and, of course, for our value added projections on our product downstream.

The Government were at great pains to point out three years ago the huge untapped potential in the food processing sector. I remember being here day in and day out listening to the Minister for Agriculture — we hope he will be back in his office shortly — and particularly the Minister of State, Deputy Joe Walsh, at pains to point out that the only Government who ever thought about this new magic of food processing were Fianna Fáil. All of a sudden they said they had it on the fast track — that was the buzz phrase at that time. A thousand jobs would be created, they said, in a few years, £260 million would be committed to this end by the Goodman International Group and the IDA would commit £25 million. There would be eight projects all over Ireland based on Goodman International, one of which was to be in Tuam which obviously will not be there now. It was to be the package of the century. Not a single stone, brick, animal or product from any animal has issued in three years since that announcement. In other words, the whole thing was still-born.

There was still more bad news for the Government on the food processing front in the last few weeks, this time from Ballybay Meat Exports in County Monaghan who were identified as having a bright future in the pig export business. Less than a year ago, the IDA grant aided the project to the tune of £3 million between the Exchequer and FEOGA grants and 175 badly needed jobs were created. However, this project is now in receivership after about nine months with debts of £7 million. Farmers are owed £2 million for stocks supplied. However, the collapse of the food processing factory is potentially very dangerous for all other Irish meat exporters. Claims have been made that an inferior beef product from Hungary found its way to the US market in containers stamped to indicate it was Danish meat. It is now suggested that some of this consignment originated in Ireland and the Danish police are investigating it at this very moment. The Minister for Agriculture and Food announced an investigation into the affairs of the company a few weeks ago.

Despite my best efforts to get solid information from the Minister on the Adjournment here last Thursday evening, I have to say the reply was pathetic and did not relate to the question. The issue was sidestepped, and I am more convinced of that in the light of what I have heard since. Because of the potential danger to all our food exports, which the Minister referred to, I want the Minister to comment on the claim that Hungarian pigmeat — I will go so far as to tell the House that legs of pork were involved — was found in a Ballybay Meat Exporters' box clearly labelled and bearing an Irish export number. That claim has been made publicly, I am now asking the Minister to state very clearly if the Department of Agriculture and Food have in their custody a box such as I have described. If that is so, I have to ask how meat from outside the EC was imported into Ireland? It is incumbent on the Minister to state clearly if the claims are true, but if they are false I want to ensure that Ballybay Meat Exporters are vindicated and that above all else that we clear the name of Ireland, thus ensuring that our exports are not tainted by these allegations. As I have said, it is a potentially dangerous situation and I am calling on the Minister and indeed the Taoiseach, with whom I tried to raise the matter on the Order of Business this morning, to clear this matter up once and for all.

There are two or three other matters which I want to refer to in the time at my disposal. I was particularly disappointed that there was no reference whatsoever to the proposed extension of the disadvantaged areas in the budget. I was equally disappointed with the Estimates. I want to place on record that the extra £10 million provided for headage payments in the Estimates has no bearing on the inclusion of the newly surveyed areas in the disadvantaged areas scheme. The provision of this extra £10 million is to cover those people who will be admitted to the scheme when the off-farm income limit is removed. There was no provision in the Estimates for the extension of the disadvantaged areas scheme. That can be overcome by another mechanism but much worse than that the file has not gone to Brussels. I was told by the Minister for Agriculture and Food in this House in November that the file would be in Brussels in December; in December I was told that the file would be sent to Brussels in January, but I have been informed the file is still in the Department of Agriculture and Food, Kildare Street. I cannot fathom what is happening, as I understand from the best authorities in Europe that every other country has submitteed its files for adjudication.

Let the Deputy remember the one that went in February 1987.

If it had been submitted, every farmer in County Galway would have received his headage payments today. The Government backed off and the Minister found out what the people thought the night he was down in Athlone.

It was thrown out.

But the Minister will have a lot more trouble the next night he is on the platform.

We will do without act 2 of the Galway pleasantries.

I am sorry, a Leas-Cheann Comhairle. The basic problem in Irish agriculture is the low income of farmers. There is no way that the pricing support mechanism in Brussels will work to the advantage of the small farmer, because their scale of operations is too small. The operations of the small farmer with 30 or 40 acres, which comprises the great majority of farmers, are so small that even if you added on an extra £100 per annum — not to take account of what is actually happening with the reduction of £120 per annum — and pay an additional 10p or 20p per gallon of milk, it would not make any great difference. This touches on a fundamental point of policy — direct aid. If we believe in retaining a reasonable level of population in rural Ireland we have to ensure that farmers get direct aid. I believe the nearest one can get to the concept of direct aid to farmers is via the severely handicapped areas payments. These are paid on a headage basis for every animal. Such a scheme would be controllable because there an upper limit can be based on the number of animals and the level of the premium. Obviously the scheme is very easily controlled. However, more importantly it would mean that the postman would bring the benefit to the farmer; it would not come through the processor, the MCAs or refunds. It is alarming that the Government have shown no sign of having the resolve or the dedication to come to grips with this problem. Down through the years we have talked about the problem of small farmers but unfortunately we do not have within our resources the ability to solve this problem on our own. This was one of the reasons we joined the EC in the first place.

The EC has been quite good to Irish farmers at a certain level, but in the past few years, particularly last year analysts have pointed out that there will be dramatic changes for people on low incomes. I was astonished that this problem was not addressed in either the Estimates in November or in the recent Budget Statement.

I estimate that there are at least 30,000 small farmers all over Ireland — they are not confined to the west or the north-west. The small farmer with the low income has the same problems in any part of Ireland. If the Government were serious about their plight, it should be expected that the vast majority would be included in the disadvantaged areas scheme. There is no reason to believe that any more than 5,000 or 6,000 would be included.

I believe that the rot set in at the beginning of 1989 when the Government were negotiating the Structural Funds. At that stage it was highlighted in the news every morning that the Government were likely to get £3.2 billion or £3.1 billion in Structural Funds over the next five years. In fact it was considered vital to get funding of that order or more to ensure that structures were in place to enable us to compete in a free internal market in 1992-93. What was cloaked up was that the Structural Funds for Irish agriculture were negotiated and rolled up in the overall Structural Funds.

I want to put on record that the Government sought £668 million for the structural side of Irish agriculture over the next five years, much of which would go into headage payments to which I have referred. For some unknown, strange reason we received only £508 million, losing almost £160 million. I must say that loss has not been highlighted. I can assure the House that, when the relevant file is returned from Brussels, when the areas for inclusion in those severely handicapped areas are announced, that figure will suddenly become magic.

In recent months I have endeavoured to raise this matter at all levels. It is my belief that the Government bungled a most important aspect of Irish farming. Only when the results are seen on the ground will we rue the day that we did not put in the boot where it counts most. I always remember the day the big story broke. I had tabled a question to the Minister for Agriculture and Food inquiring how that aspect of funding was progressing. I was informed it would take a considerable length of time before that would be known. However, 24 hours earlier, at a private meeting in Limerick University, Mr. Hoobar, Head of the Structural Division of the EC, had announced the actual amounts Ireland was receiving and identified the relevant subheads. I endeavoured, by way of parliamentary question as late as yesterday to ascertain — within the Structural Funds — exactly how much money is being earmarked for headage payments. It is my understanding that we sought £266 million and received only £216 million. Over five years that means there are £43 million available for headage payments throughout the whole industry.

The Programme for Government between Fianna Fáil and the Progressive Democrats stated specifically that over the next four years it would be Government policy, where possible, to extend the relevant designated areas and increase headage payments to people already in receipt of them. With the funding allocated unless our Exchequer does something for agriculture it has not done in 25 years, I cannot see that promise being delivered. I should like to place on record that the next time the Minister for Agriculture and Food comes into this House he has much explaining to do.

There are two or three other matters to which I might refer briefly. The first is the Uruguay round of GATT negotiations which have been taking place over the past year or two. I do not have the time to go into the ins and outs of all of these negotiations. Nonetheless those negotiations are most important because they will determine the future of Irish farmers. There is a difference of opinion on the basic models proposed for agricultural structures within the EC, under the other various trading pacts around the world and with the United States. In the United States they are talking about reducing prices to world levels. If, by some remarkable feat, the United States are able to pull off that goal, if the EC succumb to that type of system, then I predict we will be talking about halving the prices of all our farmers' produce. That is something we could not live with. I know the Minister for Agriculture and Food will do everything he can — it is incumbent on him to do so — but that will not be sufficient because we must remember we are small players on this huge stage.

During our Presidency of the EC the Taoiseach should avail of every possible opportunity to ensure that our unique problems are appreciated and examined so that, within those GATT negotiations, our future will be secured. We are aware that there will have to be changes made. It is frightening to hear the views of the various delegations worldwide because they all have a different view of how the overall agriculture scene will emerge in the future.

It is my firm belief that the CAP arrangement within the EC is as valid today as ever. Its fundamental principle was to ensure a plentiful supply of good food at reasonable prices. I know cynics will contend that we got the good food, not too cheaply, and it cost much to produce it. Those are all matters that can be resolved. I am talking about the fundamental principle involved. I want to place on record that it is my belief that our best hope in the future is to remain within that CAP system ensuring, in so far as possible, our farmers are protected because, in so doing, we will be protecting our agricultural industry overall.

With regard to the inheritance tax provisions in the budget, obviously the Government missed the point altogether by proposing a 4 per cent increase in the thresholds for property based on 1978 levels. There are now many farming families unable to transfer land to their sons or daughters. That is a problem which must be addressed urgently. I shall expand on that matter at a later date when I have an opportunity to do so.

I am pleased to be afforded this opportunity to contribute to the budget debate. I might congratulate the Minister for Finance on a job well done. Naturally, I do not share the pessimistic view of Deputy Connaughton.

Mayo farmers are doing well.

I did not think he would need reassurance that the Taoiseach and his Ministers would look after our interests fully during our Presidency of the EC. However, I should like to reassure him now that that will be done well and truly. Incidentially I wish the Taoiseach and his Ministers well during our Presidency of the EC.

Given the nature of politics I suppose it is inevitable that speakers on this side of the House would pick out the many positive aspects of the budget while those on the far side of the House would identify its less positive aspects. On this occasion our task has been rendered very much easier than theirs because this is a thoroughly positive budget. Therefore, I do not accept the contention of many that it is a budget of lost opportunities. That has been the contention of those whom I suspect wish the Minister had gambled with the economy. It is my view he was correct not to place at risk the progress made under the Programme for National Recovery to date. Though not easily achieved this progress has been dramatic. Indeed, adhering to that formula constitutes the only road to success, which is what the Minister is doing by way of this budget, applying the pedal on stretches where acceleration can be expected to be beneficial and administering the soothing oil where the wear and tear of life has brought friction and pain. This budget demonstrates the wise head, steady reliable hand and warm, generous heart of the Minister for Finance.

All heart.

This accounts for its good reception by the media and the public in general. The PRSI, income tax and VAT changes, the social welfare increases and its special provisions have all received a massive nod of approval from the public in general.

Except house rents.

The reductions in income tax and VAT along with other proposed changes will stimulate further economic growth, increasing employment opportunities so badly needed. Only by so doing can we hope to halt and reduce the levels of emigration and unemployment condemned so often. I do not propose to quote the relevant statistics; they are well known to everybody. In resisting pressures for more dramatic reductions, particularly in income tax, the Minister demonstrated he was using his wise business head.

In this budget a helping hand has been extended to the less well off in our society, those who must depend wholly or partly on social welfare payments, where the relevant increases range over all existing schemes with two new ones being introduced. I shall not go into the details of the various schemes but deal with a few only. For example, I welcome the general increase of 5 per cent in all social welfare payments. This figure is well above expected inflation rates and will ensure a better standard of living for those depending on those payments, which is as it should be. It shows the caring attitude of the Minister and the Government towards the weaker sections in our community. The Fianna Fáil Government have consistently acted in this way down the years and we would not expect them to do any less on this occasion.

I welcome especially the special increases of between 7 per cent and 15 per cent to various categories of social welfare recipients. For example, those on long-term unemployment assistance will get an increase of 11 per cent; the single woman's allowance has been increased by 11 per cent; the adult dependant allowance has been increased from 7 per cent to 15 per cent and there has been an increase in the disabled person's maintenance allowance. It was with the nice little touches, such as allowing a companion to travel free with the recipient of a disabled person's maintenance allowance and allowing people over 80 years of age who receive a free electricity allowance and free television licence to retain those benefits even if someone comes to live with them, that the Minister showed heart. Another example is where invalidity pensioners who transferred to retirement pensions are allowed to retain those benefits. I am aware that the Minister for Social Welfare had promised and urged that those changes, which are long overdue, would be made and he deserves some of the credit.

I want to give a brief but special mention to one of the new schemes — the carer's allowance. I listened very attentively to Deputy Connaughton who seems to know more about this scheme than I do. I welcome the introduction of this new allowance which replaces the old prescribed relatives' allowance, except in certain specified circumstances as it is to be means tested. When the Minister announced its introduction in the Dáil last week he gave no details but said that the Minister for Social Welfare would do so later. I listened carefully to the Minister for Social Welfare's budget speech but he did not announce any details of the means limits, probably for the very good reason that they are not finalised yet. It is in those circumstances that I wish to make a few brief comments on the new scheme.

There has been pressure on all public representatives and on various Ministers for a long time to have such a scheme introduced or to have the old prescribed relative's allowance scheme modified. The Minister made an important modification in the old scheme in that the allowance was paid directly to the carer rather than to the recipient of the pension, as was the case previously. He has now introduced a new scheme which will be an improvement on the old one. Certainly the increase in the allowance from £28 to £45 is a generous one. I would suggest to the Minister that means should not be the sole criterion of entitlement to this allowance but the nature and degree of the pensioner's illness, which will determine the amount of care required and given, should also be taken into account. The means limit, which should be generous in keeping with the allowance itself, should be adjusted accordingly and if this is done the scheme will, I am sure, prove to be very successful. The new scheme should also be extended to provide that married ladies qualify as carers. This will undoubtedly guarantee the success of the scheme. The scheme will benefit the pensioner first and foremost who will be nursed in his or her own home by his or her relative; it will benefit the carer, usually a woman as the Minister said, by giving her a reasonable reward for her services and, lastly, it will benefit the taxpayer by ensuring that old people are looked after for as long as possible outside costly hospital care.

I want to refer very briefly to one other matter the Minister mentioned in his budget speech, that is, means testing in general. Many schemes mentioned in the budget are subject to means tests. I was very pleased to hear the Minister say that considerable progress has been made in his Department towards simplifying and rationalising the means test for various schemes, so much so that he could envisage that uniform means tests criteria would apply to all social assistance schemes administered by the Department of Social Welfare. He proposed to reduce home visits by social welfare inspectors and said he had already gone some way towards doing so. In addition, he proposed to simplify the means test for other types of claimants such as farming families. I welcome this and I encourage the Minister to press ahead with those reforms of the means test as we know it. I am quite certain there is enough ingenuity in the Department to introduce a standard means test, as envisaged by the Minister.

If a person is means tested for one scheme, that should suffice in the case of any other scheme for which he applies, within a reasonable time of course. There is too much duplication with regard to means testing. I have in mind particularly the granting of a medical card. A pensioner who gets a pension on foot of a means test has to be means tested again by an officer of the health board if he applies for a medical card. That is unnecessary and wasteful duplication and I would ask the Minister to consider this matter. As I said, if a person is means tested for one benefit, the result of that test should be available for any subsequent application for benefit under any other scheme.

In the budget speech the Minister made provision for an additional sum of £2 million in the current year for the further development of services for the mentally handicapped. I welcome this. This section of the community is entitled to the best services and the best funding we can afford. The Minister mentioned the Dublin area as having a specific urgent need in this regard and went on to say that money will be made available also to meet specific priority needs in other health board areas. I know enough has been said about health in the last two nights but I wish to remind the Minister for Health, as he is already aware, that in the Western Health Board area there is a fine new facility, a new hospital for the handicapped in Swinford, County Mayo, but it is only 25 per cent occupied at present. This hospital was built at a cost of £11 million. It is a shame that so many people from the west are in inferior institutions and in institutions in other parts of the country when they could be cared for in this new facility in Swinford where they would get much better and more up-to-date treatment. I appeal to the Minister to use some of the extra allocations available to him to ensure that a reasonable step can be taken this year towards the complete opening of that facility in County Mayo.

I notice that £3 million extra has been made available for the dental services. I know the Minister is aware of the situation in the Western Health Board area where we had to abandon the adult dental scheme for medical card holders in 1984 due to lack of funds. Deputy O'Hanlon was not Minister then, but we have not been able to restore this service. As well as that, there are now approximately 12,000 people awaiting treatment. The Minister is also aware that there are 16,000 children awaiting dental treatment and 3,500 of them require orthodontic treatment. The board have not been able to recruit an orthodontist since their foundation, nor have they been able to fill a vacancy for a dentist, despite the fact that they advertised the post on several occasions. This is not the Minister's fault but it is a serious situation that money alone will not solve. Are we not training enough dentists or orthodontists or are taxpayers training professionals to such an extent that they cannot afford their services when they need them? This is a drastic problem which requires drastic measures. I appeal to the Minister to take whatever action is required to solve the problem. I note also that the fund for national schools in disadvantaged areas has increased to £1.5 million. I welcome that tripling of the fund. It was a much needed increase which will provide for an additional 125 teaching posts. I welcome also the increase in capitation grants to national and secondary schools, as well as the increase of 3,600 places in third level education. I also welcome the decision to pay grants for agricultural students on residential courses. This should encourage greater interest in agricultural colleges and it will remove the anomaly that existed between agricultural students and their counterparts in FÁS and the RTCs. I welcome too the extra 5,000 social employment scheme jobs being provided by FÁS. This will greatly ease unemployment among the long-term unemployed.

An additional £2 million is being made available to Board Fáilte to encourage tourists to come to this country. Tourism is very important, particularly to the west, as opportunities for the other development along the western seaboard are very limited, for reasons I will not go into now. We rely heavily on tourism to sustain our economy and also for the future development of our economy. The Minister in his budget speech committed further investment to tourism and I welcome that as the industry meeds additional investment. The Minister expects to increase the tourist visitor numbers in 1990 to 3.2 million people from the 2.8 million people who are estimated to have visited the country last year. The 2.8 million was an increase on the 1986 figures and it shows that the measures taken to develop tourism are succeding.

The target for this year is realistic. We in the west would like to help the Minister achieve the figures or to exceed them and we can do this without having to spend more money. We can do it if the Minister will allow transatlantic charter flights to fly directly into and out of Knock Airport. The Minister could relax the mandatory stop regulation at Shannon, on a trial basis, for a limited number of charter flights. There is a strong lobby in the west and the north-west to have this regulation relaxed in time for the coming season. In putting this idea forward, we are not ignorant of the part Shannon plays in our economy, nor do we begrudge the further development and success of Shannon, but it is anomalous to have Bord Fáilte and the Department encouraging visitors while on the other hand Americans who wish to fly directly to Knock are being prevented from doing so. We will lose all that business if we do not fly them direct to Knock.

The regulation should be relaxed to allow people who have a specific interest in visiting the west to come directly to Knock. Their reasons for wanting to fly direct to Knock are not our business but we should not, on the one hand, hinder them from visiting us while, on the other hand, the Minister, the Department and Bord Fáilte are saying that they want to encourage everybody to visit here. The loss to Shannon would be infinitesmal but the gain to the west would be significant, having regard to the relatively undeveloped state of tourism in the west. I have every confidence that the Minister will ensure that this anomalous situation will be brought to an end, by relaxing the present regulations for charter flights only, and only for a specific number of flights in any one season.

The budget also provides an additional £20 million for the national Environment Action Programme. I welcome this and congratulate the Minister for the Environment and his Minister of State, Deputy Harney, for launching this programme. I wish the plan every success in achieving its objectives. The environment is important in so many ways and each one of us — no matter what part of the country we come from — has an interest in preserving and keeping the environment as clean as possible.

I also congratulate the Minister on the success of the urban renewal programme under which very good work is being done. However, I suggest to the Minister, the Minister for Finance and the Government that there is also perhaps need for a rural renewal programme. I am aware that the Department of Agriculture and Food have provisions for the development of the rural community which will contribute in a meaningful way to a significant improvement in the economy and the economic, social and environmental living conditions of people in rural areas. This is particularly true in regard to proposals involving the extension of the suckler cow premiums, the redistribution of milk quotas to small farmers, the payment of an increased new premium in disadvantaged areas and aids for the production of traditional environment friendly cereals. However, there is a need for a more concentrated effort which would involve other Departments as well as the Department of Agriculture and Food.

I am aware that structural funds will help but there is also a need for a more concentrated effort and programme for the renewal of rural areas, particularly in the south-west, west and north-west. I say this because small towns with a population of 1,000 or 2,000 people have come under enormous pressure over the last number of years. These pressures are a sign of changing times and the reasons for them are many. There have been various changes in the Common Agricultural Policy which is under threat from year to year. These towns also have to contend with emigration and the difficulty of attracting industry into small towns. Years ago there were advance factories in many small towns but that source of development and investment seems to have dried up.

For all those reasons, it is necessary to do something about rural renewal before it is too late. A recent report prepared for the Western Health Board shows the kind of dilemma which the west faces. It is borne out by what is known as the dependency rate in the population which relates to the number of persons under 14 and over the age of 65 as a proportion of those aged between 15 and 64. Taking that statistic into account the national proportion is 61.1 but the Western Health Board, which comprises Galway, Mayo and Roscommon, have a figure of 74.8. One can see the considerable divergence in age in that area and it is even greater between the west and the east because the overall national figure obviously includes the Western Health Board region in calculating the figure.

I congratulate the Minister on a good budget which was based on the solid foundation of the successes of the Government over the last three years in restoring confidence in the economy and guaranteeing its continuation and further growth and improvement throughout the nineties.

This year's budget, like all previous budgets, lays down markers for the general public as to the Government's political and economic programme. It indicates which sectors of society will be called upon to meet the costs of implementing that programme. What does the 1990 budget say regarding the Fianna Fáil — Progressive Democrats Coalition strategy? Fianna Fáil claim that the aim of this "first budget of the new decade is to promote more economic growth in jobs at home and a better standard of living for all our people".

These are glorious — but hollow — aspirations. On 3 February, three days after the Minister for Finance announced his budget, the headlines of the national media announced that unemployment was up by 3,339 on the figure of December 1989; 234,467 people were registered as unemployed in January 1990. This means that during the period which is being heralded as an economic and financial boom time, with profits rising sharply and set to continue to rise in the future, 18.1 per cent of the labour force is unemployed.

When one considers that about 50,000 people are engaged in various schemes — SES and others — and that the budget announced a further 5,000 temporary jobs, it is clear that the true rate of unemployment is nearer 20 per cent as the 50,000 people involved in schemes are not entitled to be registered as unemployed. In other words, one person in five is at present without a job. If one includes the 47,000 people who officially emigrated between April 1988 and April 1989, it is clear that the total unemployment level is nearly 350,000. That is some indictment.

Others in The Workers' Party and the trade union movement have already expressed their extreme disappointment at the budget and at the Government's profound inability to come to grips with the unemployment crisis. Let us make no mistake about it, this is a crisis of the greatest magnitude. It is patently obvious that if emigration had not provided a safety valve — the approximate 224,000 people who left this country between 1982 and 1988 — the unemployment crisis would have exploded on the streets of every town and city in Ireland.

Against this background, Government projections that the economy will create 12,000 new jobs in 1990 is laughable as well as tragic. The impact of continued Government policies is to condemn and abandon the majority of those at present unemployed to a life of permanent unemployment. The unemployed have been marginalised geographically, economically, socially and educationally. It is worth recalling a statement by a famous Jesuit, Father Micheál Mac Gréil in his famous study, Prejudice and Tolerance in Ireland, to the effect that Dublin was one of the most rigidly class divided cities in the world. That view has been substantiated by further and more recent studies by the ESRI who have argued that Ireland has a more rigid class structure than the UK. Ghetto life, long associated with the United States, is now a permanent and visual feature of Irish society.

On the pretext of caring for the poor and the unemployed the budget is a cynical exercse giving enough to placate the trade unions and those in the constituencies where Fianna Fáil and the Progressive Democrats are weak or where their Members are under threat. In time that will be seen to be the sham it is. The budget endeavours to hide the fact that those who have given most to the economic recovery of the past years will gain little or nothing now. The hidden agenda of the Fianna Fáil-Progressive Democrats budget, and the economic strategy, is to maintain Ireland's status as a platform economy with persistent high levels of unemployment, emigration and endemic poverty residing side by side with booming economic indicators.

The emergence of the two nation society has become glaringly obvious since 1987. Ireland consists of a society ruthlessly divided into three distinct socio-economic sectors. We have a permanent under class of unemployed. They are marginalised from the economic, social and political spheres of society. We have slightly rising living standards for those at work and, at the top of the pile, we have increasing wealth for capital, business and top management.

I should like to look a little closer at some of the aspects of the budget. The social welfare benefits look substantial when presented in percentage terms but are derisory in real terms. Similarly, an old age pensioner with a £3 per week increase will not benefit from the VAT reduction on the price of new cars. He or she will not benefit from the 5 per cent differential in the cost of unleaded petrol because many unemployed people do not have the bus fare to travel to sign on the dole. According to the motoring correspondent of the Irish Independent in last Wednesday's issue of that newspaper the luxury car distributors are understood to have done exceptionally well. The correspondent pointed out that Mercedes sales in January were up 58 per cent and would have been higher had stocks not run out. That is a telling statement about the nature of Irish society.

What will affect the poor and the old as a result of the budget will be the increase in the rate of VAT on electricity which, despite Government claims to the contrary, will eventually find its way to consumers. The decision of the Minister for the Environment to ban the use of coal outright appeals to those for whom the conversion to non-pollutant fuels does not present a financial problem but what about the pensioners, the unemployed and the thousands on low pay? Are they to be condemned to freeze? Where is the assistance for them? Will grant conversions be made available to them? I shall return to that issue at a later stage.

Many local authority tenants have already discovered that with rent increases of between 5 to 25 per cent they will find themselves no better off after the budget. It is ironic that in the week meagre increases were announced in the budget the local authorities, at the behest of the Minister, increased the weekly rentals to the poor. The budget lacks a comprehensive integrated programme aimed at tackling and eliminating poverty, as outlined on numerous occasions by the Combat Poverty Agency and the Conference of Major Religious Superiors. The budget displayed a growing detachment and political arrogance that left Fianna Fáil embarrassingly exposed during the 1989 campaign when the Taoiseach claimed he was unaware of the impact of the health cutbacks. It is interesting that that view was repeated by the Minister for Health who asked us where the crisis was in the health services.

It is an utter scandal that not one penny more is to be collected from the corporate sector in taxation. The budget represents the second missed opportunity to attempt to rectify the glaring inequalities in the tax system. The reduction in the top and lower rates fails to deal with the major complaints about the Irish tax system, that the tax base is too narrow and that PAYE workers start paying the high rates of tax on relatively low or modest incomes. Ten years after the historic tax marches the call for tax equity has been unscrupulously recycled into a Thatcher-Reagan like campaign for less tax.

We should be clear about what is intended. Less state revenue equals fewer public services. The equation is clear. The impact is privatisation of basic services with the dismantling of our comparatively weak welfare state by stealth. The legacy of the budget is failure to widen the tax base, failure to tax the corporate sector leaving them with their mouths open with continuing pleasure and amazement, that they had been let off, failure to tackle unemployment, failure to tackle poverty and failure to tackle emigration. The Minister does not appear to tackle anything. In the course of his speech he indicated that he intends to implement a five year programme of privatisation. When one considers the total inability of the Irish private sector, recognised as one of the most pampered and grant assisted in the western world, to create employment it is amusing to hear the Minister promising that over the next five years large, as yet unannounced, chunks of our national assets are to be sold or given away.

That constitutes nothing less than highway robbery. The Minister has learned little from the UK experience where privatisation has succeeded only in increasing the personal wealth of a handful of financiers and managers. The most recent case in the UK of the sale of the water authorities, a ludicrous concept in itself, was grossly under priced and actually cost the British Government money. I wonder what greedy, sweaty, pulsating, lipsmacking, pin stripe-suited, risk taking business man have Fianna Fáil lined up to share with them in the spoils of a privatised State sector. Are Fianna Fáil so ideologically blinded by the UK-Thatcher experience or is it a case of the Progressive Democrats tail wagging the Fianna Fáil dog?

Fianna Fáil allowed the sale of NET and the Irish Hospital Services Board when they were in office in 1987. Other companies are lined up for sale. The decision to grant Ryanair exclusive rights at the expense of Aer Lingus raises fundamental questions about the Government's commitment to the State airline as well as suggesting that they will stop at nothing to prop up private enterprise when it is struggling. Similarly, the role of the Minister for Communications in negotiations between RTÉ and Century Communications over transmission costs represented unfair and wrong interference in an effort to prop up Century Communications, a company that less than six months down the road had to cut salaries and rip up their contracts. More recently the Minister engaged in similar tactics with regard to the disposal of Cablelink. So much for free trade.

Similar moves are afoot with regard to Irish Bus. That is exemplified by a recent report in The Irish Times business section to the effect that in 1988 the Department of Education reduced by £1.5 million the amount they paid to Irish Bus for running the school bus service. There was no suggestion that Irish Bus were charging too much but instead the reduction was arbitrarily set forcing Irish Bus to either absorb the losses or increase the charges to parents. This is an insidious underhanded cut in so called free public education. It seems patently clear that the Government are moving closer towards the sale of the Great Southern Hotels, Irish Life, the Irish Sugar Company and even Bord na Móna. I want to put on record that The Workers' Party will vigorously oppose any move to privatise these companies. Many of these companies are very profitable and are excellent examples of good public enterprise with long records of good employment and service to the Irish community.

I deeply resent the ill-founded assertions of some managers of some of these companies that privatisation is in the companies' interest. The real concern is their own personal financial interest. This has been achieved in the United Kingdom under similar measures not only by doubling and trebling managerial salaries but after privatisation through share option schemes. By this I mean that the company shares are offered at, for example, £1 in the market while the bosses give themselves the option to purchase at 80p which they may not have to act upon for a year or two and by that time the market value has perhaps reached £2 or more. This is the real scam of privatisation.

To date, the trade unions have been quite on the issue of privatisation but they, with The Workers' Party, will oppose this profiteering at the publics expense. I notice from the Progressive Democrats-Fianna Fáil manifesto that they will not privatise without trade union support. I prophesy that this will not be forthcoming. If the State companies are so attractive and desirable, why has the State not chosen to invest in them? Why have the Government not chosen to use the State companies to make more money for the State?

The Government should explore the many options to raise private capital for the State sector through mechanisms such as the Telecom Éireann subsidiary, Irish Telecom Investments. Rather than selling off these companies the Government should seek to develop their expertise for job creation and wealth creation on behalf of its shareholders, the Irish taxpaying public. Other late developing economies such as Austria, Switzerland, Norway, Japan and Sweden have all managed to maintain full employment throughout the global crises of the seventies and eighties through aggressive interventionism. Rather than follow the tired old solutions of the UK and the United States — two economies with deepening economic difficulties and endemic unemployment and poverty — we need to adopt new strategies. I see none of that in this budget.

I would like to speak very briefly about the situation prevailing in Dublin City where we have a housing crisis in the local authority area. At present there are 5,000 families on a waiting list for local authority accommodation for which no funding has been made available in the house building programme or in this budget. There are new obligations on the local authority to house the homeless. There are increasing demands from people living in inferior local authority housing schemes — particularly those in the inner city flat complexes — to transfer from unpleasant physical and environmental surroundings. The Government have made available only £51 million nationally for a refurbishment and housebuilding scheme. That is totally inadequate and is forcing the management of local authorities in an attempt to recoup some money because of the cutbacks in funding to local authorities to penalise those who are unfortunate enough to be on marginal incomes, the unemployed and social welfare recipients. The statistics for Dublin state that 75 per cent of the occupants in local authority accommodation are totally dependent on social welfare. Because of the cutbacks the management of local authorities are forced to extract more money from the socially dependent classes. I condemn the under-funding in this budget.

I should like to refer to the position prevailing in Dublin city, with particular reference to my constituency, Dublin South-Central, where a budget allocation of £4 million is being made available to grant assist people in Dublin's only smoke control zone areas A, B, C and D of Ballyfermot. They are being allowed grant assistance to convert from the burning of bituminous coal to using smokeless fuels or appliances. Tremendous, progressive dedicated work was carried out in Dublin city particularly by the environmental health department of Dublin Corporation who produced massive reports, which they were obliged to do under the Air Pollution Act, 1987, in order to create smoke control zones.

Dublin City Council have already agreed that areas A and B of Crumlin are to be declared smoke control zones. Area C of Crumlin has been completely surveyed and is to be presented to Dublin City Council for ratification as a smoke control zone this month. Already Dublin County Council has listed Neilstown-Clondalkin areas A and B for smoke control zone status but the Minister for the Environment, speaking on how important he viewed the environment, stated that he would not ratify any further smoke control zones in Dublin city. That means that notwithstanding all the work done by the local authority and the health board he is now depriving areas A and B of Crumlin of any grant assistance to change over from burning bituminous coal to other fuels.

Does the Minister think the people in Crumlin, Drimnagh and Bluebell will agree to be declared second-class citizens when compared to those in Ballyfermot? When the monitoring of the Old County Road in Crumlin showed that that area was just trailing Ballyfermot, which is the worst area in the city, what sort of logic is the Minister attempting to apply in regard to smoke control zones? Is he throwing the Act out through the window? The Act allows the Minister to make grant assistance available. This is the situation that prevails internationally, that prevailed in London when areas were being converted to smoke control zones. The same situation prevailed in Northern Ireland which, even after 17 years of smoke control zones, is still bringing more and more areas into smoke control catchment areas and providing grant assistance.

There are serious questions to be asked. Is it the intention of the Minister not to ratify any further smoke control zones? Cabra, on the north side of Dublin, was to be the first north side area to be declared a smoke control zone. I am informed by Dublin Corporation that because of the Minister's statement the compilation of reports to make clean air projects for Cabra, which were half completed, have been abandoned. Surveyors have been taken off the streets and put back to other work. It is not good enough that £4 million is made available for conversions just to areas (A), (B), (C) and (D) in Ballyfermot. It is not good enough just to use the whip to make people burn more expensive alternative fuel; there must be a carrot available too. I am appealing to the Minister to make allowances, equal to those being made available in Ballyfermot, to the 30,000 people in Crumlin, Drimnagh and Bluebell, which should be officially classified as smoke control zones but where, because of the witholding of the signature of the Minister for the Environment, people will now be forced to buy a more expensive alternative fuel with no assistance.

The budget introduced last week by my colleague, the Minister for Finance, is a decisive first step in implementing many of the key policy proposals agreed between the Progressive Democrats and Fianna Fáil and set out in our Joint Programme for Government last June.

The fiscal, monetary and policy measures set out in this budget are a direct result of the positive and constructive debate entered into at Government and the agreed budgetary package reflects the commitment of this Government to making necessary changes in major areas such as: reforming the tax and PRSI systems; creating economic conditions which will facilitate employment; improving the position of social welfare recipients and maintaining discipline in the public finances.

Job creation is a major priority of Government and it is vital that our recently improved economic performance translates quickly into increased employment for our workforce. To that end, the Progressive Democrats have identified several key factors where action is essential. We must expand massively the employment creation possibilities within our economy by reducing the large tax burden on work.

We must also make our economy more competitive at every level and obviously, as Minister for Energy, I have major responsibilities in this regard.

I believe we have made a significant first step in this budget to ensure that we realise our tax reform, target of a standard income tax rate of 25 per cent by 1993, that we have just one other higher rate, that we get our indirect taxes down in preparation for the Single Market in 1992 and that we remove the burden of PRSI from the lower paid.

In the context of tax reform, I am particularly pleased that the two parties in Government have agreed to examine what possible changes can be made in next year's budget well in advance of that event. In that way, I am hopeful that we can make even more significant progress in the 1991 budget.

I would now like to turn to the areas for which I have responsibility, namely, energy and forestry. Both energy and forestry have a fundamental part to play in the ongoing development of our economy. The availability of adequate and secure energy supplies at the most competitive rates possible are vital for the survival and growth of any economy. The maximum development of our indigenous resources will ensure a higher degree of energy security and reduced import bills. Forestry has also been clearly identified by this Government as a sector which can provide significant job opportunities, underpin rural development and create additional wealth.

The sectors for which I am responsible will make a significant contribution in 1990 to the continuing aim of strengthening the public finances. This year, Bord Gais Éireann will contribute a dividend of £15 million to the Exchequer from anticipated profits, the first time such a payment has been made since 1986. The provision in the budget to increase the rate of VAT on electricity from 5 per cent to 10 per cent without increasing consumer prices will provide £11 million this year and, in a full year, the yield will be £18 million. There is a significant reduction in the current grant-in-aid to Coillte Teoranta which reflects improved efficiency within the company and increased revenues from timber sales. Exchequer spending in the energy and forestry sectors is being maintained at the absolute minimum necessary to discharge the important functions involved.

I would now like to say a few words regarding the reference last week by the Minister for Finance in his budget address to the considerable progress which has been made over the last year in relation to the introduction of new procedures and arrangements for fixing departmental overhead costs on a three-year basis.

My Department, being one of the three line Departments chosen to set the pace in this new initiative for the Civil Service, is very keen to see the new regime in operation at an early date. To this end we will be working very closely with the Department of Finance over the next few weeks in order to complete the procedural changes involved.

In my view, one of the most noteworthy and fundamental features of this pilot project, which I hope to see underway very shortly, is that it represents a movement away from a centralised funding approach to one where real budgetary power and responsibility is devolved to people working, as it were, on the front line. The existing centralised system is inherently rigid and I am satisfied that a new system based on maximum devolution and minimum intervention will prove to be more cost-effective and more in keeping with modern management and business practices.

It is important to stress that the success of this new initiative will not be gauged solely by how much spending is reduced in real terms but also by that other very important criterion, namely, ensuring that the money spent is money well spent. The activities and functions for which my Department exercise responsibility are many and varied and, more than ever before, rapid and decisive policy responses are required. I am quite convinced that the new system, once it is sufficiently decentralised, will enable locally based management to deploy resources to better effect in order to meet evolving priorities.

In relation to the European Community, I am determined, during the course of our Presidency, to ensure that substantial progress will be made on energy matters which are important to Ireland. At present there are three draft directives, a regulation amendment and an energy demonstration programme under discussion. The demonstration programme (THERMIE) is a replacement for two programmes which expired at the end of 1989. Ireland can expect to benefit financially as it did in the past from demonstration projects under which part-funding will be made available from the Community in the fields of solid fuels, rational use of energy, new and renewable sources of energy and for hydrocarbons. I will be making every effort to have it adopted during our Presidency.

The three draft directives are on the transit of gas, the transit of electricity and transparency in gas and electricity prices charged to industrial end users. The transit proposals relate closely to a fully integrated Community energy infrastructure and I am attaching special priority to them on the basis that we will be in a position to avail of the resulting benefits through having a full Community network in both electricity and gas. Focusing on price transparency and transit will help towards liberalising the market and make for the efficient use of investment in the energy sector.

The central objective of Community energy policy must continue to guarantee security of energy supplies under conditions which will enhance economic competitiveness and prosperity. The new approach, which has been adopted under the proposals, is complementary to that objective and is needed in order to achieve the internal market in energy.

The budget contained a series on initiatives which will have a very beneficial impact on the oil products market. Based on current prices, the reduction in the 25 per cent VAT rate to 23 per cent on 1 March will lead to a fall of approximately 4.0p per gallon on petrol and 3.5p per gallon on auto-diesel. From the point of view of curbing inflation and enhancing competitiveness, these reductions, although modest, are very welcome.

Before this year's budget, unleaded petrol enjoyed a price advantage at just 5p per gallon on premium leaded. The additional price reduction of 5p per gallon incorporated in this year's budget means that unleaded petrol is now 10p per gallon cheaper than leaded premium petrol. This initiative could double unleaded sales this year to over 20 per cent of the petrol sales market. This increased penetration of unleaded sales will set the scene for a variety of far-reaching environmental initiatives taken both on a national and European basis, aimed at curbing the toxicity of vehicle emissions in the next few years.

Moves to secure the upgrading and reactivation of the oil facilities at Whitegate and Whiddy are continuing. Discussions in this regard are on-going. Although, no definitive proposals are to hand at the moment, I am determined that our efforts to encourage investment interest in these facilities will be successful.

The provision of funding in the budget for financial assistance with regard to the changeover to smokeless and low-smoke fuels is a concrete example of the Government's determination to bring about rapid improvements in the quality the environment.

If we are to ensure that our air is unpolluted and that the health and welfare of our population is protected, then tough decisions are necessary and must be taken. The Government decision to ban the marketing, sale and distribution of bituminous coal in the built-up areas of Dublin from 1 October 1990 is a crucial step in this regard.

It is fully recognised that low-income groups must be immunised from the costs arising from the need to use smokeless or low-smoke fuels and the Government have provided £3 million in the budget for this purpose. My Department will be in contact with smokeless and low-smoke fuels suppliers in the near future to consider any supply-related issues which will arise out of the prohibitions imposed on bituminous coal in the Dublin area.

In the context of environmental protection generally there are two further matters to which I would like to draw the attention of Deputies. Since coming into office I have given a high priority to the question of the environmental impact of prospecting and mining activities. I am satisfied that minerals prospecting has little or no impact on the environment but I have enjoined on prospecting companies to proceed with great care in their operations and especially to obtain planning permission in advance for any aspect of their operations which might require such permission.

As regards the impact of mining itself on the environment, I have decided that in future no mining leases will be granted unless a full and detailed environmental impact assessment has been carried out by an independent expert acceptable to my Department. I expect that, in due course, the new Environmental Protection Agency will play an important role in relation to these matters.

In addition to having excellent environmental qualities, natural gas is unquestionably one of the most vital energy sources for the future. It is efficient and versatile and is by far the cleanest of the fossil fuels. It has already begun to make a significant contribution to the reduction of atmospheric pollution in our urban centres and can be expected to play an even more important role in the future. Natural gas is also very price competitive. In view of these advantages, it is no surprise that natural gas has become the main source of energy to industry in areas where it is available.

Minerals prospecting activity is being maintained at a high level throughout the country. There are at present about 750 prospecting licences held by some 55 companies. Gold is a principal target for much of the current exploration activity and encouraging results have given the exploration industry a welcome boost. The discovery of a promising lead and zinc orebody at Galmoy, which straddles the Laois-Kilkenny border, together with consistently high prices on the international market for base metals have also been contributing factors in maintaining the level of prospecting activity. The discovery of a new gypsum deposit at Glangevlin, County Cavan, gave the industry further encouragement.

A minimum of six wells are expected to be drilled offshore this year. Two further wells are scheduled for drilling by Marathon, one by Conoco and one by Aran Energy, all in the Celtic Sea. One well will be drilled in the Irish Sea by Hydrocarbons Ireland Limited, a subsidiary of British Gas. A successful outcome from any of these exploration wells could lead to the drilling of appraisal wells. This very satisfactory level of drilling activity creates valuable employment for Irish workers in the provision of goods and services, as well as enhancing the possibility of further oil and gas discoveries in our offshore.

While we as a Government are confident of the potential of the Celtic Sea to yield even more discoveries, we are not complacent. Security of supply is critical to the economy and with this in mind, we are at present investigating the possibility of interconnecting our natural gas grid either with that of Britain or of the Continent. I am hopeful that significant progress in this area will be made in the next few months.

Deputies will be aware of the announcement in the budget speech that the VAT rate on electricity is to be increased from its current rate of 5 to 10 per cent. This will yield the Exchequer an additional £18 million per annum. The net cost of this increase will be met by the ESB who will reduce the domestic tariff by approximately 5 per cent thus offsetting the 5 per cent increase. VAT on electricity was first introduced in 1988 as part of the EC moves towards harmonisation of VAT by 1992. This latest increase should finalise that process in so far as electricity is concerned.

Since January 1985 electricity prices to all sectors have been considerably reduced. As a result of these reductions industrial prices have been reduced by 19 per cent, commercial prices by 14 per cent and domestic prices have fallen by 12 per cent. Furthermore, comparisons with EC prices show Irish domestic prices are now lower than the EC average price while the average Irish industrial price was also found to be lower than the EC average price. The importance of keeping Irish electricity prices competitive, which in turn helps keep Irish industry competitive cannot be stressed enough. To this end, it is the intention of the ESB to hold prices at their present level until 1992.

As part of the National Environment Programme, Ireland will accede to the Helsinki Protocol under which sulphur dioxide emissions must be cut by 30 per cent by 1993. Power generation accounts for about 50 per cent of existing national emissions and through a combination of measures the ESB will contribute significantly towards meeting these stringent limits. In relation to the reduction of nitrogen oxide emissions the ESB will begin installing the necessary equipment at Moneypoint later this year at a cost of £7 million.

The development of our peatlands continues to be a major aspect of our energy policy. While a significant contribution is being made these days by the private sector, with annual production in the region of 1.5 million tonnes, the brunt of this development work is, and will continue to be, carried out by Bord na Móna. It is, therefore, vital to our overall energy strategy that Bord na Móna remain a viable and effective organisation. This is of critical importance to the production of a large volume of indigenous energy and to the development of various regions of the country.

Like many other State agencies, Bord na Móna have, during the last decade, found themselves facing major challenges and greatly increased competitive pressures. There has also been a growing acceptance generally that State agencies, must, like the private sector, operate on a basis which is economically sustainable. I am glad to say that Bord na Móna have given firm evidence of their willingness and ability to come to grips with these challenges. Major changes are taking place within the company which will move it forward into the 21st century as an active profitable organisation. Naturally, there will be difficulties along the way, as with any organisation which is in a state of fundamental transition. I am confident, however, that the board are rising to the occasion and that they have the necessary talent and resolve to see themselves through.

I will also be pushing forward as quickly as possible with the Turf Development Bill, 1988, which reached Committee Stage during the last Dáil. This will provide much needed flexibility for the board in reorganising the company thus enabling them to preserve jobs and to continue to contribute to regional and national prosperity.

In so far as environmental matters are concerned I see a major role for peat briquettes, as a fuel with a low pollution content, in dealing with the smog problem in Dublin. I have no doubt that Bord na Móna have the capacity to meet the increased demand for their product which will come about as a result of the banning of smokey coal in the Dublin area.

It is becoming more and more clear that energy usage, particularly the burning of fossil fuels, can damage the environment. One of the most cost effective ways to mitigate this problem is through effective energy conservation measures. Energy Conservation has of course a vital bearing on our economic security and cost competitiveness and I intend to give a high priority to this matter during my term of Office.

The Programme for Government, 1989-1993 has targeted forestry as a major area for development, the central objective being to increase substantially the area under forest. The main objectives are: to achieve a national annual planting rate of 30,000 hectares by 1993, a doubling of the rate achieved in 1988; to increase harvesting and marketing programmes from 1.5 million cubic metres in 1988 to 2 million by 1993; to increase the level of self-sufficiency in sawn softwood from 60 per cent at present to at least 80 per cent by 1993; and to develop the tourism potential of the forest estate.

The development of Irish forestry is progressing at a rapid pace. Planting by both the public and private sectors broke all records again last year, at a total of 18,600 hectares. Deputies will be aware of the operations of Coillte Teoranta, the State forestry company, in this sphere, but it is afforestation by the private sector which is showing the most spectacular expansion. Private afforestation last year reached a massive 8,600 hectares, the highest level of private planting ever achieved by the private sector in the history of the State. Coillte Teoranta achieved their 1989 planting target of 10,000 hectares and aim to plant a further 10,000 hectares this year.

Ireland has obvious advantages for increased afforestation. There is a ready market for forest produce — the UK imports more than 90 per cent of its timber requirements and the EC about 50 per cent. The growth rates of Irish forests are the highest in the EC, their yield being over three times the Community average. Finally, when we consider that the area under forest in Ireland is currently only 6 per cent compared with the EC average of 24 per cent, it is clear that there is great scope for expansion.

My Department have drawn up an ambitious five year operational programme for forestry and this is now in the final stages of negotiation with the European Commission to secure eligibility for Structural Fund assistance. This programme, together with related measures which will also benefit forestry, will generate a massive injection of over £66 million into Irish forestry by 1993. I expect to have Commission approval shortly and I will then be in a position to announce the detailed measures aimed at the development of our forestry sector.

The operational programme sets out the new schemes which my Department propose to introduce to promote afforestation and to achieve the Government's target of doubling planting by 1993.

All these new schemes are provided for in this year's budget. Yesterday, I launched the first of the new schemes — a forest premium scheme. This new scheme provides for the payment of an annual forest premium to farmers throughout the country. The premium will provide farmers with an income of up to £47 per acre each year for up to 20 years while their trees are growing. I believe the scheme will give a major boost to farm forestry as the premium overcomes the drawback of lack of income from forests during their early growing years. The premium, which is payable in addition to the planting grants already available, is designed to encourage the increased planting of broadleaves because of the importance of these trees for the environment.

The introduction of the forest premium is an important step towards promoting rural development and supporting the structure of rural society. By providing a strong incentive for farmers to diversify into forestry, the scheme makes a major contribution to the important social aim of maintaining farmers on the land and providing them with an income generating alternative farm enterprise. Farmers who avail of the scheme and others living in rural areas will reap the benefits which increased afforestation will bring, including the expansion of employment in forestry development and, eventually, timber harvesting, transportation and the development of wood processing industries.

Broadly, the other proposals to be financed under this year's budget aim to: improve the existing western package planting grant scheme; introduce similar planting grants outside the western package areas; place increased emphasis on species diversification and the promotion of broadleaves in all areas; introduce more generous grants for the improvement of woodland; introduce grants for the reconstitution of woodland damaged by fire and other natural causes; and provide grants for the construction of forest roads throughout the country.

There is a growing awareness of the interaction between forestry and the environment. The harmony between the two, which must be maintained, is reflected in the particular duties placed on Coillte Teoranta in the Forestry Act, 1988, to have due regard to the environmental and amenity consequences of their operations. It is also reflected in the new forestry measures under this year's budget — these make compatibility with the environment an essential consideration.

Particular emphasis is being placed on protecting the environment and the measures proposed are geared towards ensuring that forestry development generally will improve rather than detract from the environment. My Department's policy is to encourage the increased planting of broadleaf species over the coming years and a substantial increase in the grants for broadleaves is provided in the budget. The expansion of forestry which will result from this year's budget and, ultimately, from the considerable injection of EC funds between now and 1993 will, I believe contribute significantly to environmental improvement.

Overall, I believe we have much to look forward to in the forestry sector this year and over the next few years — substantial EC funding, attractive new incentives, expanded planting levels and forestry developments which contribute to the environment. I look forward to formally launching the remaining new and revised incentives and the full details of the EC assisted programmes over the next few weeks.

I welcome the views expressed by the Minister for Energy and in particular his kind words about Bord na Móna. He indicated that he foresees an increased demand for briquettes in the Dublin area. This would be welcomed in my part of the country where Bord na Móna have the capacity to increase production of briquettes. However, this view appears to be slightly at variance with the view of his colleague, the Minister of State at the Department of the Environment, who seems to be obsessed with CDL products rather than with Bord na Móna products.

May I interrupt the Deputy? That is not true. My colleague fully supports the sale of peat briquettes and is actively encouraging this.

She should say so through the media. The budget as outlined by the Minister for Finance last week marked a milestone in the history of Irish life. In the budget, the Government set down their financial strategy, targets and priorities for the coming dacade. I propose in the time available to me to indicate how the budget struck against family life, the institution enshrined in the Constitution. At the stroke of a pen the Government made great strides increasing the hardship on family life and if this trend is pursued during the next decade then at the turn of the century, it will be uneconomical and impossible to rear and educate children.

It is important to remember that the Government are borrowing heavily to support the economy. In last week's budget the Government indicated that they were borrowing money to subsidise the music industry and horse and dog racing, yet they cannot find enough money to fund the educational system and the hard pressed health service.

The family home is of great significance in Irish life and over the years, through the provision of grant aid and mortgage interest relief, we have encouraged a very high rate of home ownership. However, the Government did nothing to ease the burden of mortgage repayments. In last year's Budget Statement the Minister for Finance indicated that he was reducing the rate to 80 per cent. He said he was doing so in the light of the reductions in interest rates which were to follow later that year. However, in 1989 interest rates rose on four occasions and they are set to rise again fairly soon. In many households, mortgage repayments have risen by as much as £100 per month. We will soon reach the stage where they will be at the highest rate ever, yet the Minister refused to grant interest relief for the full amount. This was a gross error and a blow for families who are striving to pay their way.

The Minister also reduced the capital expenditure available from central funds — from £39 million last year to a mere £6 million this year — for the provision of local authority housing. In County Westmeath there are approximately 240 families on the house waiting list. However, the indications are that this year we will be lucky to house six or seven of those families. Is this an indication of the emphasis the Government place on providing local authority housing throughout the country? If we go back to the time of the last Coalition Government, from 1982 to 1986, we will find that on average, they built 52 houses per year in County Westmeath. Does this not once again demonstrate that this Government in the 1990 budget see no role for the family?

The further reduction of income tax relief on insurance policies is another blow this Government are striking against the family. The prudent householder who invests wisely in assurance and insurance to provide for himself and his family for the years ahead is now being penalised by this Government. The implications of this restriction on insurance are of even greater difficulty for those who are buying their houses on endowment policies. Instead of helping our people to become householders and house owners this Government are making it even more difficult.

The Government's attitude is probably best summed up in the childrens' allowance. The Minister has granted to each child who qualifies for an allowance the enormous sum of 2.5p per day increase. Is this even an extra slice of bread for each child? Is this the esteem in which the Minister holds children? Is this the esteem this Government have for our children who will be our future? The future of this country depends on its young people and the Minister's attitude towards children's allowance in the increase he has given them is a poor reflection on the Government.

In the budget the Minister has indicated that the capitation grants for children in primary schools should be increased by £1.50 per child. Let me remind the Minister what his colleague the Minister for Education said in 1986 when she was Opposition spokesperson on Education. The capitation grant at that stage was £24 and she described it to the then Minister as totally inadequate. Is the Minister happy now, four years later, that this increase has kept pace with inflation and with the rising cost of heating, lighting, cleaning and running primary schools? Is the Minister happy that primary education is adequately funded by this Government? Is it not true that the inadequacy of the funding of primary education in this budget means that parents once again are going to be burdened with the responsibility of running fund raising functions, organising draws and collecting money just to keep their children at school? It is this Government's responsibility to educate our children. The Government have once again failed to honor their responsibility to the families of Ireland.

Let us not forget it was a Fianna Fáil Government who increased the pupil-teacher ratio, a move previously unheard of. Again this Government have failed in their responsibility by their lack of help to families who are sending their children to third level education and funding them. There is an urgent need to raise the ceiling for grant qualification or to have grants decided perhaps on net pay rather than gross pay. The present position sees many families on the one hand wanting to send their children to third level education and fund them through it and on the other hand struggling with their financial commitments. This budget and this Government have done nothing to help those families. This is another blow against the family.

The various social welfare increases averaging perhaps 5 per cent have been welcomed in many quarters. Indeed, the media seemed to have been aware of these increases well in advance of the budget. However, these increases of 5 per cent scarcely keep abreast of recent inflation trends and in the light of the recommendations of the Commission on Social Welfare are totally inadequate. If we are to evaluate some of these increases properly we must look at other increased costs facing the social welfare recipient. These increases must then be seen in the light of the inflation rate. Regarding the increased charge levied on local authority housing, on Saturday last I met somebody whose council house rent had been increased by 100 per cent. A 5 per cent social welfare increase is not much good to him.

The Minister decided that the threshold for inheritance tax was inadequate at £150,000 so he raised it to £156,000. Let me remind him that this threshold of £150,000 was brought into being in 1978 and if we were to use the capital gains multiplier as approved by this Government this £150,000 should now be in excess of £600,000. The Minister's failure to increase this threshold adequately again strikes a blow at family businesses and family farms because thereby perhaps these businesses will not pass on to members of the family. Surely a more realistic figure would be in excess of £500,000. I ask the Minister to look at this again. The Minister informed us that when the VAT increases on ESB bills and telephone bills come into being it will be at no cost to the subscriber. Does he expect us to believe he can increase ESB bills by 5 per cent and telephone bills by 10 per cent at no cost to the consumer? There is something radically wrong in his thinking there.

When we look at the unemployment figures we know the majority of people on the dole are heads of households and over 25 years of age. Employment incentives, job creation schemes and the like that are necessary to give a future to these people are nowhere evident in this budget, unfortunately. The lack of incentives in the budget hits at the family home and at the family who are struggling to survive. Are these people to be left without a proper job because this Government will not provide the incentive to create work and the jobs that will give them a living and dignity and keep them in Ireland? Are they, too, without hope? Are they to join the stream of emigrants seeking work elsewhere?

By abolishing PRSI on wages of £60 and below is the Minister not creating a situation for the exploitation of young people at work? Is he not encouraging the employment of low paid employees? Are we to judge by the Minister's policy that he is encouraging exploitation and the payment of unjust wages to people in these categories?

We can only assume that this Government's policies at the start of the final decade of this century have deliberately set out to destroy the very fabric of our society, the family unit that is enshrined in the Constitution. Fianna Fáil and the Progressive Democrats have taken the initiative to abolish it by their budget of 1990.

I join the vast majority of the public in welcoming this budget and I can say there has been almost universal acceptance of it. In fact, many Opposition Deputies were most gracious in their acceptance of it. It is a very structured, positive programme for the future control of our finances. The budget is very much part of a broader long-term policy aimed at a continuation of the good work we have seen for the past three years or so.

I would like to refer to issues raised by other contributors including Deputy McGrath and Deputy Gerry O'Sullivan who referred to different issues in what I thought was a derogatory and misleading fashion. Deputy O'Sullivan yesterday raised the question of the Cork-Swansea ferry service and said we should have three year funding. I agree with that, but he presented it in a fashion that I took to be Labour policy. While agreeing with the three year element, I must refer to the lack of support from other areas within that party and specifically to the parochialism displayed by another Labour Party Deputy from Wexford. Deputy Howlin made what I thought was a most savage and vindictive attack on the Taoiseach and members of the Fianna Fáil Party for allocating £1 million to this ferry service, so what hope have we of getting three continuous series of £1 million with that? He said, and I think I am quoting him accurately, that it was a shameful waste of the taxpayers' money and an attempt by Fianna Fáil to blatantly buy power in the south west. That quotation was wrongly given under the name of Senator Avril Doyle, who also had a history of opposition to this ferry service. I consider this was a show of parochialism from somebody representing an area in which millions upon millions of taxpayers' money have been invested in the infrastructure of their harbour. I thought it was petty and one of the worst forms of parochialism. I would now like to ask my colleague, Deputy Gerry O'Sullivan, whether he or Deputy Howlin is the official Labour Party spokesman? Is the Deputy who asked the Taoiseach for three years continuous support for the Cork-Swansea ferry service, or Deputy Howlin who told us that this would be a shameful waste of taxpayers money, the official Labour Party spokesperson? I think the ghetto mentality as illustrated by Deputy Howlin has dragged this country down for years. We must get rid of it.

Both Deputy O'Sullivan and Deputy McGrath referred to the house building programme in Cork. It is a fact that there has been a massive cutback in the number of public housing starts in the Cork area. However, I would point out that there was an increase of 54 per cent in the number of houses built by the private sector in the Cork area. But I thought it was most unfair of Deputy O'Sullivan not to complete the picture and he failed to point out that there had been a deliberate switch from new housing starts to a programme of refurbishing existing houses. I had repeatedly lobbied the Minister for the Environment to do something for this sector and I make no apologies for that. There are thousands of families living in three categories of houses, first, the system-built houses, which are now being bricked up and refurbished, second, houses that were constructed 20 to 25 years ago with mineral felt roofs and third, the old rows of corporation houses, now usually assigned to the elderly, which had skylight type windows in the roofs and outside toilet facilities. There was a deliberate policy to invest £3.5 million in refurbishing these houses in the Cork area. That amount of money would have built 116 new houses at a cost of £30,000 each. I make no apologies for saying that people living in those three categories of houses deserve the same standard of housing as young couples and others going on the housing waiting list for the first time.

There are just under 1,000 people on the housing waiting list, and this is a more accurate figure than the one quoted yesterday. In fact there has always been a similar number on the waiting list since 1974 when I first went on the city council. The number on the waiting list is between 800 and 1,000 at all times. It is only fair that we should draw attention to the progress that has been achieved. The Minister for the Environment gave his support to the well devised refurbishment programme for the Cork area. I make no apologies for the switch in expenditure and I will argue that case in any forum.

A number of Deputies referred to the failure to implement the recommendations of the Commission on Social Welfare. This is an incredible assertion. Deputy McGrath referred to the attack on the family — rhetoric and rubbish that you will get at times like this. The simple fact is that the four priority areas in the commission's summary have all been dealt with: a basic payment to families, that is child-related benefits and so on; broadening the insurance base — people may have forgotten that last year the self-employed were brought into this area — and the delivery of the services. It stated that the accelerated development of computerisation and the upgrading of social welfare premiums are priorities. There has been a massive programme of computerisation. All Departments have benefited from computerisation but, in fact, an extra £2.5 million was allocated to the Department of Social Welfare to computerise the vast majority of the local employment exchanges and the whole service at central level. The commission also recommended a basic payment of £45, and if we take account of inflation it would by my calculation, work out at £53, and all long-term payments are at or above that figure. Those things should not be overlooked.

I think we must look at the record of previous Governments. The Fine Gael and Labour Coalition backed off from broadening the insurance base. Therefore it is most unfair of them to say that the Commission on Social Welfare Recommendations were ignored. Mr. John Currie, the former chairman of the commission, admits that fantastic work has been done and that the facilities have been improved. I will now refer to Cork — and be a bit more parochial for a change — where a massive new unemployment exchange is practically completed. The old exchange was unsuitable and not fit to meet modern day changes and increased use. That is being repeated throughout the country — almost all exchanges have been upgraded or totally refurbished. There is a great range of areas where the recommendations of the Commission on Social Welfare have been implemented. However, at random, they recommended that the two national fuel schemes should be reorganised. That has been done and in fact it has been extended to the long-term unemployed, which was an unexpected bonus. They also recommended that unemployed people should be allowed take short-term or part-time courses, perhaps up to six months duration. That has been implemented under three or four different headings, people can do voluntary work and extended relief work. There is also the VTOS, previously known as the educational opportunities scheme, and there is a part-time job incentive scheme.

They also recommended that the means test for social assistance should be simplified. As Members know, work is being carried out on this at present and the Minister for Social Welfare referred to it in his speech. There is the matter of cutting down the number of visits and so on. The extension of PRSI to the self-employed has also been achieved. They also recommended that social insurance should be extended to all ministers of religion and members of religious communities, and this was done last year. Every councillor and TD are aware of the plight of people who did not qualify for a retirement or old age contributory pension because in the past their earnings were above the insurable limit and as a result, they have a broken insurance record. These were known as the pro rata pension groups and they were facilitated last year. Hopefully the Minister, in the not-too-distant future, will be in a position to deal with the very last group in existence, people who transferred from manual work to white collar work and are caught in a pension trap. This group have a very appropriate acronym, DOAP, deprived old age pensioners. I have been working with this group for the past two years and have been trying to have their position dealt with. Hopefully the Minister will be able to do something for them in the not-too-distant future. These people have given a lifetime of service to the State and I do not apologise for pushing their case.

The payment structure has been overhauled. It was recommended that the rate of payment to a couple should be 1.6 times the rate of a single person and this has been more than achieved. The Members making a contribution owe it to the general public to check out which recommendations of the Commission on Social Welfare have been implemented. I am not saying that we have a perfect system, but many areas have been improved.

Deputies referred to the lack of commitment to employment, and Irish Steel was mentioned at some stage. The delay in completing the privatisation of the company was criticised. I share their concern to complete this transaction fairly rapidly. It is also a worry to the marvellous workforce of Irish Steel who increased the output of steel six fold in just over ten years and produced and sold 280,000 tonnes of steel last year. People speak of State and semi-State bodies as if they were lame ducks. Irish Steel now employ about 50 per cent of the numbers employed 15 years ago. Their output now is the highest per employee in their sector in the EC. That should be recognised. I would like to highlight the action taken by the then Minister for Industry and Commerce, the present Minister for Finance, Deputy Reynolds in this area. He foresaw difficulties in the year ahead. He realised the need for investment and realised that we were prohibited from investing under EC regulations. He took action. He was recently criticised by a member of the Opposition on the north side of the city who asked him to come clean and state what was happening. The Minister moved in when he saw that a particular company there could die a lingering death and took action. I want to contrast that with the inaction of the mid-eighties. I do not want to be negative, dwelling on the past. Nonetheless some people might forget that we in Cork lost companies like Fords, Verolme and Dunlops in addition to 40 others. At a time in Cork when we had five Fine Gael/Labour Ministers our unemployment rose from 5,000 in January 1980 to 16,000 in January 1987. That is the legacy with which we must live and will find if very difficult to overcome. However, the actions of the Minister for Finance and others will help us in that endeavour.

Prior to 1987 when we in Cork bought what is known as the Model Farm for conversion into a high technology industrial estate a previous administration told us it was a non-runner, that because of the way the country was running down industrially this would not take off. The present Minister for Finance stepped in and said it could work. I was present when the Minister took over the controls of a JCB and laid the first sod. There are now three companies operational in that industrial estate and planning application for a fourth is at present with Cork Corporation. The Minister made that possible by encouraging private enterprise to build modern factories there which attracted companies to the location. The Minister took the initiative. This was achieved with no expense to the State. That is the type of action needed, not negative, snipping criticism. The record is there for anybody who contends that not sufficient action is being taken. Nonetheless we have that legacy of 16,500 unemployed in Cork as a result of the inaction of a previous Government. I do not make any apologies for attacking people politically. In the past I have asked all Cork Deputies to endeavour to be positive and work together. This is rendered difficult when one hears the type of rubbish being spoken in this House or reported in the Press daily.

It would be my earnest hope that the position in Irish Steel Limited be dealt with conclusively and satisfactorily within the coming month. There is indeed a need to lift the morale of my former colleagues there with whom I worked for 26 years. Previous experience there has been bad. I do not want to attribute my criticism to the wrong person but I think it was Deputy John Bruton, though possibly former Deputy Boland, who as Minister, gave Irish Steel 24 hours notice to accept 25 per cent redundancies, a three-year pay freeze and a number of other restrictions or otherwise a receiver would be sent in. That highlights the difference in approach between the then and present Ministers. The present Minister is taking action in that regard.

Deputy McGrath contended that this Government had not borrowed for health or education purposes. I hope I am quoting Deputy Michael Noonan reasonably accurately when I say he appeared to be complaining that this Government were spending 21 per cent of total expenditure on health, increasing that amount by 8 per cent this year. He appeared to be critical of that fact. Perhaps Deputies Noonan, Yates and McGrath would get their act together properly because there appears to be confusion among them. Deputy McGrath contended that this Government had rendered it difficult for people to become house owners. Has he heard of the tenant purchase scheme introduced by the Minister for the Environment, the most generous ever in the history of the State and with the greatest take-up? The concept of home ownership is one with which I agree totally. I do not go for the big brother concept, that the State should own such property with the tenants merely having it on loan. Bearing in mind happenings elsewhere I hope we will move away from that type of thinking.

There has been an almost tangible sigh of relief at the budgetary provisions. Many people may find it difficult to understand how such a turnaround could take place within the short space of three years. Many Deputies have accepted that it is an excellent budget but, of course, there are those who may think somewhat differently. It must be very distasteful for any Opposition spokesperson on Finance to deal with this budget. Nonetheless some people are designated that role. In American football I think it is described as running block and, in some other sports, has a less distasteful description. We have seen those tactics in this House throughout this debate and in recent budget debates. For example last year Deputy Noonan, the Fine Gael spokesperson on Finance, sneered at what he described as a "steady as she goes" type budget. This year he told us we had a "populous-type budget. I presume he meant a budget that was popular with the vast majority of our people. If it is, I make no apology therefor. I say, well done, Minister, you have done a good job. I suppose Opposition Members could contend that he had responded to the legitimate claims of various groupings. That has been the critical approach of Deputy Noonan and his colleagues, Deputies Dukes, John Bruton, Spring, Mr. Barry Desmond and a number of others, who left us a legacy including 254,000 of our people unemployed, 84,000 having been added within their four year term in office. That legacy included also a national debt of over £25 billion, £12.5 billion having been added within the same four years. Last year one Fine Gael Deputy shouted across the Floor of the House to the effect that Fianna Fáil had spent all of those £12.5 billion even though we had been in Opposition for those four years. Bearing in mind their record, the sneering criticisms of Deputy Noonan and others do not bear much credence.

We need to be positive, to listen to the public who elected us. As the Minister for Finance said, there was need to put a human face on the budget, the type of action for which I have lobbied over the past two years. The type of action for which the parents and friends of the mentally handicapped in Cork have lobbied for for ten years, is to allow a companion travel free with a mentally handicapped person who will already have a travel pass in their own right. I say, yes, that is the human face of this budget. If those are the kinds of actions with which Deputy Michael Noonan takes issue I am sorry for him.

Fine Gael speakers contend that this budget, in its provisions, is anti-family. I ask: which is it? Is it too popular or is it unpopular? There were more sinister tactics employed by Deputy John Bruton because he went on to make allegations of there having been leaks. That is a very serious allegation. Hopefully it will not be allowed die down as quickly as perhaps Deputy John Bruton might wish having received the headlines he did from so doing because, in making such allegation he is pointing the finger directly not at the Minister, but at public service staff.

I would like to see that followed through because staff deserve better. As a former Minister, the Deputy should be well aware that there are certain guidelines that would help one to anticipate certain changes in the budget. Presumably this year, because bonded warehouses were not checked out, some clever people anticipated that there would be no increase in cigarette prices. One would not need to be years in Government to understand that. If there were leaks surely the fact that the first major move we have made, against all the odds, in bringing down the VAT rate would have been anticipated and discussed. That was a very unfair allegation to make. I would like the Deputy to repeat it outside the House, particularly if it was directed at the Minister, and then we might see some action.

We have a duty to make general comparisons between what happened before 1987 and what is happening now. From 1982 to 1987 the Fine Gael-Labour Coalition had the power to do many things; one which springs to mind is the tax amnesty. Deputy Noonan mentioned tax reform and said we should get rid of the national debt, to which his party contributed. He and his colleagues made two attempts at introducing a tax amnesty. I do not know the exact figure they raised but I think it was about £200,000. We must contrast that with the tax amnesty introduced by Ray MacSharry which brought in over £500 million. There is a knock-on effect in that area. People find it difficult to understand where the money is coming from but it is simply that the people are continuing their payments in a legitimate fashion as a result of that tax amnesty. Lest we forget, that £500 million was run up during the time of the Fine Gael-Labour Coalition Government. They did not collect the taxes at that time but left it to Fianna Fáil when they came to office.

I do not want to make any off-the wall statements, as did Deputy Noonan, but I have to use some of these figures to point out what is happening. In his contribution, Deputy Noonan stated that our national debt is twice the EC average and is higher than that of any other EC country. He made an incredible statement that we should recognise our national debt which amounts to a sizeable sum of money. Again, I would have to point out to him he must surely recognise it because he and his colleagues, including Deputy Dukes and others who were in office then, contributed to that record.

The Opposition complain that there has been an increase in the national debt in the last three years but that increase is minute. The simple fact is that if the increase had continued at the 1982-87 rate we would now owe over £37 billion. Comparisons can be made at all times. The Coalition Government of 1982-87 failed to increase income from capital and corporation taxes and failed to make any improvement whatsoever in the ratio between the PAYE sector and the business professional and self-employed sector but this Government have made improvements in these areas in a very short space of time. There were difficult problems to be overcome and tough political decisions to be taken but they have been tackled. However, one matter that we must hold up to the public as an unmitigated disaster is the tax amnesty. The public will understand when we tell them that one person raised £200,000 from two tax amnesties while another raised £500 million from one, and people are now paying their lawful dues.

The foreign debt has fallen by £100 million and it is important to point that out. It is more important to point out that Government borrowing has been reduced since the last Fine Gael-Labour budget. At that time the figure for foreign borrowing was £2,145 million or 13 per cent of GNP and it is now down to £449 million or 2 per cent of GNP.

The Deputy has one minute left.

In the one minute I have left I would like to say that a good deal has been achieved in Cork since Fianna Fáil came to office. There has been a lot of support for roads. After years of procrastination an extension has been made to Cork Airport and there is a lot of work taking place there. We need to continue that progress as well as our efforts regarding river crossings. We also need decentralisation of Departments or sections of Departments to the Cork area but, I hope, we will make our case in a more positive fashion than that made by some Deputies in their contributions. There are still problems in the Cork area, the greatest of which is that there are 16,500 people unemployed. I am very hopeful that the climate that has been created by the Government over the past three years will continue. I would castigate the private sector for not doing more, in view of that great climate of industrial relations, low interest and so on. The Government have created a situation whereby we can be optimistic in regard to reducing the unemployment figure.

(Carlow-Kilkenny): Tá sé deacair ábhair a thabhairt isteach a bheadh nua, mar tá a lán ráite ag gach cainteoir a d'imigh romham. Mar sin féin ba mhaith liom mo thuairimí féin a nochtadh anois faoin cháinaisnéis. Is í seo an chéad cháinaisnéis domsa anseo sa Dáil. Cé go mbeadh suim agam sa cháinaisnéis nuair a bheinn ag féachaint ar an teilifís, cheap mé go raibh sé leadránach ar fad, an iomarca cainte agus ganntanas gnímh. Ach sin mar a bhí i gcónaí agus mar a bheidh go deo. Ní thagann athrú ar an áit seo ró-thapa agus ní dóigh liom go mbíonn polaiteoirí gan caint.

An áit a mbíonn polaiteoirí bíonn caint.

(Carlow-Kilkenny): Is dócha é. Ag tagairt don cháinaisnéis, bhí rudaí maithe ann agus rudaí nach raibh ró-mhaith, b'fhéidir, agus ba mhaith liom cúpla focal a rá leis an Teachta Dennehy.

I have to take up the challenge that has been afforded to me by what Deputy Dennehy has said. Unfortunately I do not know much blame I can put on him because I do not know how long he has been in the Dáil. I would like to remind him that to make a negative speech in which one criticises the Opposition for being negative defeats itself. A lot of the Deputy's speech was devoted to attacking decisions that were made or were not made three years ago. Deputy FitzGerald took over the running of this country when inflation was at 21 per cent but most people forget that. In fact the Deputy's colleagues claim credit for bringing inflation under control. When Deputy FitzGerald left office inflation was 3.3 per cent but it is now rising again. I hope that problem will never arise again for any Government. When Deputy FitzGerald came to office the balance of trade deficit was £1.8 billion but by 1985 there was a credit of £318 million and there has been a credit ever since. It would suit me, from a political point of view, to start hitting back but it is amazing how figures can be ignored and forgotten.

I will be positive for a while. Because I am a very kind man, I welcome very much one particular provision in this budget whereby an anomaly against which I have campaigned for over two years has been corrected. I submitted a motion to the health board and got it to the Minister who seemed to ignore it and at the first opportunity I put down a parliamentary question to the Minister relating to this dreadful problem where single disabled persons on disabled person's maintenance allowance were not allowed to have a companion travel free with them. I am glad the Minister has now taken up that suggestion and I hope I helped to being that problem to his notice.

At this stage old age pensions, free fuel and so on, are dealt with from Sligo and as it is very expensive to make a phone call I seriously suggest that the Minister consider setting up a free phone for people making inquiries about the social welfare schemes. People making such phone calls can least afford to pay for them. They find themselves standing in a phone box ringing up to find out why money has not arrived, watching their money disappear into the coin box while they hear nothing but silence on the other end of the phone because, as we all know, it sometimes takes quite a time for officials to look up the required documents and so on.

The Minister should tackle the social welfare maze. The person who invented all the rules and regulations should be resurrected and canonized. That is about the kindest thing I can say for him. At the moment I am dealing with a person on a medical certificate who needs 260 stamps to qualify for benefit; 259 are not enough because there is legislation requiring that there be 260 stamps. If, in the meantime, that person is transferred to a different social welfare benefit, there will have to be an investigation and eventually the person will get paid a higher amount. I do not know why we have so many different systems. Perhaps the Minister would use one of the FAS schemes, taking a number of young people and getting them to burn every rule and regulation in the office so that we could start off with three or four levels of payment so that we do not have to have all sorts of investigations into people's entitlements. I have often been impressed and depressed at the ingenuity of the social welfare system and I can well understand why people will cod the system if they can. People often suffer hardship because of a technicality which, in the long term, makes no difference in terms of money.

I have to admit that I have a very soft spot for Paul Daniels and his magic acts on television, and because of that I very much enjoyed the Taoiseach's performance on budget night when he told us repeatedly and doggedly that the 10 per cent VAT on electricity would not mean an increase for the consumer. Where are the ESB to find £18 million in a full year to pay this bill? If it can be found now, why could it not have been found in the past? If my colleagues, Deputies McCreevy and McGahon, were here they would be looking for a stewards' inquiry and the verdict could easily be that ESB officials would be suspended for lack of effort in the past, or the Taoiseach would be found guilty of over using the whip on ESB officials to get this through. It does not make any sense to say that £18 million will be paid by the ESB and that it will not cost anything. Despite all the huffing and puffing, someone will have to pay and that someone will be the electricity consumer.

Money does not grow on trees, the acid rain has washed it all away, and the Taoiseach should know that from his experiences in the late seventies. Likewise, Bord Telecom will not be able to absorb the cost of the VAT they will have to pay. Either we will pay more on our phone bills or we will not get a break we should have received. The budget has been a con job.

I cannot understand the shilly-shallying in relation to farming disadvantaged areas. This has gone on for a long time. More than three years ago some parts of Carlow and Kilkenny were assessed for inclusion in the disadvantaged areas scheme, and they are still waiting to be included. In the meantime, the farmers are losing money that should be coming their way. We are tired of hearing that a submission will be made. There are frequent announcements about what will happen, but for some strange reason nothing happens. It is time the Government included the parts of the country which should benefit in the submission and send it off to Europe. It is time to put an end to procrastination which it is the thief of time. Where farmers are concerned it could be the thief of lime because they could have used that money to enrich their lands. Farmers should have the opportunity to avail of these grants. It is difficult for a farmer to look at his neighbour's fields which are included in the disadvantaged area scheme while his are not. I hope the Minister and the Government will deal with that.

During the budget I was surprised that inheritance tax was dealt with so lightly. I know it is index linked, but we are dealing with a limit established in 1975. Things have changed since then, so it is disappointing to realise the the same values still hold. If one is not directly involved in inheritance tax it means nothing and one can say that the people who have to pay can afford it, but for many farmers' sons who are taking over the land it is easy to understand why it is a major problem. They may be getting a farm with valuable assets but assets are only valuable if they can be used. If they have to be sold they are of no value to the farmer. Nowadays we hear a lot about foreigners buying land and if we make it difficult for young farmers to take over the land it will have to be sold and more foreigners will come in, and because of our EC membership we will not be able to do anything about it.

Another problem relating to farming is the delay in paying grants. It is ludicrous that farmers have to wait for payments that should have been paid before Christmas. This delay is the result of a complete cock up in the transfer of civil servants to Cavan. I was making inquiries yesterday and the office in Dublin is so busy trying to catch up, that they do not even have time to answer a phone call. It is grossly unfair to farmers who have arrangements with banks, not to mention the normal day to day running of the household, that they are at the mercy of civil servants who send out cheques when it suits them. When my colleague, Deputy Connaughton was in office he ensured for three years in a row that payments were sent out before Christmas. This year some payments did not come until the end of January, and some have not come yet. This should not be tolerated. The Department should wake up and ensure that this money is paid as soon as possible so that farmers can plan

Sometimes I wonder if the budget will turn out as well as people think it will. PRSI has been increased by 1 per cent for the self-employed. It is calculated on a person's gross income and, balanced against tax cuts, a person will probably pay more. A discussion is taking place about whether the public sector should pay PRSI and if they do it could mean an increased payment of 2 per cent or 3 per cent of their salaries. PRSI is at present a dormant volcano but it might erupt next summer.

I am very disappointed that the 100 per cent mortgage shelf no longer applies and that the 1989 figures of 80 per cent has been retained. The average young couple, who were brave enough to build a house, are paying an extra £80 or £100 — maybe more in the Dublin area — because of the increase in interest alone. If we do not encourage young people to build their homes they will rely on the Government to do it. The country needs people with courage and determination, people brave enough to put their money into housing instead of looking for help from the Government. I regret that the Minister did not come to their assistance in the budget. We should encourage those people because public housing has come to a halt. In Carlow at one time we were building 55 houses a year but in recent years the figure has gone from seven in one year to ten in the next. We are awaiting an announcement from the Minister for the Environment and from the unofficial Minister — who is not my colleague — who keeps saying that we will make an announcement.

I do not understand what the Deputy is getting at.

(Carlow-Kilkenny): I admit that it is slightly complicated but there is a spokesman who masquerades as a Minister in the area. The Minister should make an announcement as we want to get on with building houses for the queue of applicants.

I wish to comment on the delays in the Land Registry. This has been mentioned so often that I presume the Government will move on it. It is grossly unfair that transactions should be held up because the workings of the Land Registry are clogged. At present I am arguing on behalf of a widow who handed over her land to her son 18 months ago but, because the Department of Social Welfare want to see registered documents, she cannot gain from it. It is not her fault that the Land Registry are behind in their work. I can understand how solicitors feel when clients come in asking about the delay. They are probably convinced that solicitors are holding up everything. It is indefensible that there has not been a major move in relation to the Land Registry. I cannot understand why the Minister is not embarrassed by the long delays.

The fact that three of the top men have resigned from the board of the free legal aid centres speaks for itself. It is humiliating to have to tell a person seeking free legal aid that he will not be able to see a solicitor for a month. Indeed I was amazed to discover that the service is not free, that people are charged for the services based on income. However, many of these people are involved in great expense because they invariably have to cope with marriage problems, barring orders and separations. I hope the crisis will be solved shortly because it would not be possible to keep it going otherwise.

Ó thaobh oideachais de — agus tá áthas orm go bhfuil an tAire anseo — cuireann sé ionadh orm i gcónaí nuair a chloisim an tAire ag rá go bhfuil feabhas ag teacht ar an pupil-teacher ratio mí Meán Fómhair.

This will apply in September.

(Carlow-Kilkenny): Yes, ach is í an tAire féin a rinne an dochar don pupil-teacher ratio.

(Carlow-Kilkenny): Sea, is dócha go bhfuil náire uirthi, cé go bhfuil sí ag gáire, go ndearna sí an dochar sin. Caithfidh feabhas a theacht ar an ratio mar ní féidir leis dul in olcas as seo amach.

It is unfortunate that so many of our young teachers, who could have gained experience if the pupil-teacher ratio had not worsened, have gone to England or Australia.

While I accept that the Minister has introduced remedial teachers I have discovered that most of them are in Dublin. Her officials told me that they were appointed because of the large schools in Dublin. The Minister is a rural, down-to-earth person and she must know that there are many schools in rural areas where teachers have two or three classes. A remedial teacher going between two or three schools can do tremendous work. I was very disappointed that remedial teachers were not allotted to any schools in Carlow. I appeal to the Minister not to be convinced by her officials that all the problems are in Dublin. I know there are difficulties in Dublin, especially in disadvantaged areas, but country children cannot be sacrificed as they also deserve a break.

The Minister for Finance has just come into the House and I want him to know that I am worried about PRSI. The budget appears to be a benign one but if the public sector have to pay more PRSI than they gained by a reduction in tax, it may well have a very different complexion by the summer. Perhaps the Minister will give a guarantee that that is not the case and that the discussions will only be in relation to its workings. If he does that I will be very happy.

I am very honoured and pleased to have an opportunity of speaking on this budget.

On a point of information, is the budget debate continuing? I thought Question Time would intervene.

Questions will commence at 2.30 p.m.

I am asking about Question Time.

Does the Deputy wish to speak on the budget?

Well, I am sure that the Deputy will be facilitated later.

You might as well call it off, it is ridiculous. I tried to make this point last week but it seems to have fallen on deaf ears. You are the custodian of the rights of the Members of this House and I want you to bring to the notice of the Committee on Procedure and Privileges — over which, I understand, you preside — that other Members, apart from those of major parties, have rights in this House and that they are being progressively denied——

I am well aware of the rights of the Members of this House and I shall protect them to the best of my ability. I was not aware of the Deputy's interest in speaking just now.

I had already offered.

The Minister for Education is in possession.

I am very pleased to have the opportunity of speaking on the 1990 budget and particularly to speak on the provisions within the Department of Education.

On a point of order, I drew the attention of the occupant of the Chair in the Ceann Comhairle's absence, to the fact that the rules say that apart from Ministers introducing business speeches are not delivered from scripts. In other words, Members make their speeches. In saying that I am not having a go at the Minister for Education.

Please, Deputy.

The Chair should not ignore this. The Chair has ignored this rule.

I thought the Deputy had a legitimate point of order to raise.

I am raising a point of order.

The Deputy is deliberately, for his own reasons, picking a row with the Chair. This is deplorable conduct.

I am not picking a row with the Chair but I am drawing attention to the fact that the Chair is not applying the rules which he is so adept at doing in other respects.

The Deputy has come into the House to kick up a row and that is obvious.

According to the rules scripts should not be read in the House except by Ministers. The House should change the rules if it wishes but should not ignore them.

The Chair is adhering to the normal practice in the House.

It is not a question of practice; it is a question of the rules, my dear Ceann Comhairle, rules.

The Deputy has decided to pick on the Chair for his own selfish reasons.

That is not the point. The Chair should apply the rules or not. The Chair should not refer to the practice because the practice is bad.

I will take no lecturing from the Deputy on the manner in which I discharge my duties.

Scripts are not allowed under the rules and I am asking the Chair to apply the rules.

Why did the Deputy not apply that years ago?

Just do that now; the rules are still there.

I am calling on the Minister to move the Adjournment of the debate.

Debate adjourned.
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