Deputy Connor is in possession and has the full complement of time, 20 minutes, available to him.
Estimates for Public Services 1991 and Public Capital Programme 1991: Motion (Resumed).
The following motion was moved by the Minister for Finance on 18 December 1990:
That Dáil Éireann takes note of the 1991 Estimates from the Public Services (Abridged Version) and of the 1991 Summary Public Capital Programme.
Debate resumed on Amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
"Notes that the Estimates will do nothing to repair the social and economic damage of the last three years, and notes in particular that:
—no money is provided for the hiring of one extra teacher at primary or secondary level — as a proportion of GNP, overall education spending is 5.6 per cent — the lowest level since the start of the 1980s;
—third world aid, which has been savagely cut in recent years, has been cut again in real terms;
—increases in health spending are totally inadequate to meet the needs of long queues for services, and will neither reopen beds nor hire sufficient extra staff — the proportion of GNP spent on health, according to these Estimates, will be no more than 6.3 per cent;
—the Social Welfare Estimate will not even begin to paper over the cracks in the extent of poverty in Ireland;
—the revenue available to local authorities, many of whom are in crisis, is frozen for another year;
—there will be almost no public housing starts next year, and Dáil Éireann further notes that in capital terms, there is a shift in spending away from social infrastructure towards other sectors. Critical capital needs in the health and education areas are not going to be met for another year, and calls on the Government to take note of these major concerns and criticisms in the framing of the Budget for 1991.".
—(Deputy Quinn)
I will confine myself to remarks in relation to the Estimates for the Department of Agriculture and Food and the Office of Public Works. With regard to the Vote for the Office of Public Works, I have a particular interest in the Vote for National Monuments which has been increased to £7.85 million from £5.632 million in 1990.
This is a totally inadequate sum to have any kind of meaningful policy in relation to the protection of our national monuments. I appreciate that the Office of Public Works are well meaning and that they understand the problem, but the people who provide the money — and this of course is an historical thing — do not realise the wealth of historical monuments and, worse, the level of neglect to which they are subjected. There are, according to some estimates, almost 100,000 monuments of various kinds and ages in this country and probably 20,000 of the field earth work monuments date from the pre-Celtic period, the Bronze Age and the early Christian period.
The national monuments branch of the Office of Public Works have been in existence since 1886, 114 years ago, and in that time about 700 monuments out of a possible 100,000 have been taken into care by them. We are not arguing that we should be able to take on the 100,000 monuments, even in 114 years it would have been difficult to have a policy which would take every monument into care. However, it is not a great record of the way the resources have been targeted during the period that it is the sum total of the achievements of the national monuments branch of the Office of Public Works.
Many of our monuments, significant archaeological sites, have been encroached upon and are being destroyed by so-called farm improvements, so-called afforestation and by urban spread. There has been no response to that kind of thing taking place because we do not have the personnel or the resources to respond. We welcome any increase in the amount of money provided but the sad part is — it is a pity the Minister for Finance is not here because the Office of Public Works are part of his responsibility — that the increase will probably do no more than cover the increase in costs within the Office of Public Works in the coming year in relation to national monuments.
Another area covered by the Office of Public Works which is very rarely referred to in this House is wildlife and nature conservation. We have an appalling record in this area. In the Estimates under subhead I the allocation for the National Wildlife Service operated by the Office of Public Works goes up from a pathetic £1.263 million in 1990 to £1.637 million in 1991. In percentage terms that is a 30 per cent increase but it is an increase on a very small amount of money.
To say the very least the Wildlife Service is understaffed and underfunded and compared to similar organisations in other countries the level at which it is allowed to operate is pathetic. The Minister said before in the House that there has been an increase in contract work, but there is a limit to the number of contracts that can be handled and processed by existing properly trained staff. I am talking about the problems in relation to the environment with which ordinary administrative staff are not qualified to deal. There is a limit on the number of pieces of paper any member of an administrative staff can move around. What we need is an increase in the number of qualified people in the Wildlife Service.
We have nature reserves which cannot be protected because we do not have the personnel to manage them. We need wardens for game reserves, slob lands or whatever. According to figures I have, about 3.28 per cent of the surface of Ireland is designated as areas of scientific interest. These are nature reserves, the last undisturbed places in the country where wildlife and fauna have a safe haven to breed and flourish. Of that 3.28 per cent, at least 50 per cent is directly threatened by events taking place around it. Only a fraction of 1 per cent of that total area has been designated as protected. It is one thing to say we are protecting them by putting a protection order on them, but there is still no personnel to provide that protection and to stop these areas being encroached upon and destroyed.
There is a problem in relation to land acquisition. There is no funding worth talking about providing for land acquisition. A number of opportunities in which the State could have bought land were lost but every time we were beaten off because there were not any resources to buy these lands. We all remember the famous Inch peninsula case. It was lost to a private developer despite the goodwill of the owners who wished to sell it to the State. The State could not provide the funds and hence it was lost. There are cases of that kind all over the country. I know we are on a tight budget, but we have obligations under the Wildlife Act. We are promised another Wildlife Act but we are not honouring the obligations of the present Act. We are at present breaking the law under the Wildlife Act, 1976. We have obligations under EC regulations in relation to the protection of wildlife and nature conservation but it seems that we are in violation of those regulations. We are also bound by international agreements we entered into, for instance the Ransar Agreement which deals particularly with wetlands in environmentally sensitive areas. It is clear that we are not honouring our responsibilities under that agreement. We need a full-time acquisitions staff and a regular acquisitions vote.
I noticed that as one of the Minister's proposals, wildlife and national parks, which have been set apart here, are to come together after Christmas. Will we now get what one often finds in the public service, competition between two sections of the Department which are being brought together? One often finds that the stronger section will pillage the already weaker resources of the other and almost cut out of existence any work they may be engaged in. That is another fundamental question that must be addressed.
I would like to share my time by giving five minutes to Deputy Hogan.
It is just a formality of getting the House to agree. Is it agreed? Agreed.
Environmentally sensitive areas come within the ambit of the Department of Agriculture and Food but they are closely related to wildlife and nature conservation. Last year in the Book of Estimates £100,000 was provided for environmentally sensitive areas. There is no increase this year. What is not stated is that £65,000 of this sum is provided by the EC; all that the Exchequer is providing is £35,000. That would not pay the salary of a principal officer in the Department of Agriculture and Food, but that is the Government's contribution to putting in place a plan or a policy on environmentally sensitive areas of special scientific interest.
We often make comparisons, some of them odious, with what takes place in Northern Ireland but the Northern Ireland budget is £75,000 and there is a Government objective which supports farmers incomes and that is at the basis of these ESA schemes. There is a Government objective that supports farmers' incomes while at the same time protecting the environment. There is an important link. They are asking the people who live in these areas to be environmentally sensitive in the way they farm so as to enhance and protect a particularly delicate environment. It does not cost a lot because it is the people who live in these areas who must ultimately protect them. A warden scheme in areas where people do not live is fair enough, but there are many areas which are environmentally sensitive and of scientific interest where thousands of people live, and we can link those people quite cheaply into being wardens and conservationists. That is what is being done in Northern Ireland, and that is EC policy.
I find the Vote for Agriculture very disappointing. I refer particularly to the subheads which cover things like headage payments and income supports to farmers. Despite what the Minister has been saying, the amount of money voted for income support is down by 4 per cent on the 1990 figure. This is crucial. We go along with a policy which says we should provide income support for farmers. About 55 per cent of farmers in Ireland are marginal. That means that under the GATT round, these people in the short term will go out of business. However, for the short time they will be there, it seems that the Government support the idea of income supports by what they say but not by what they do. The only tangible income supports we have in this country which reach out to these people are the headage payments. It is unbelievable that the Minister announces that the disadvantaged areas in Ireland will cover 72 per cent of the land area in Ireland in 1991; it was 62 per cent in 1990, that is an increase of 10 per cent on what it has been since 1981 and yet the fund is reduced from £76.3 million in the current year to £73.5 million.
It is a pity that the Minister for Agriculture and Food and the Minister for Finance are not present but I would ask the Minister for Industry and Commerce to pass on what I have to say. I would hope that either of the Ministers will hear it on their monitors. Can the Minister explain how we can extend headage payments and income supports to farmers whose incomes will be adversely affected in the coming year by a world trade agreement while, at the same time, we cut the amount of money that finances these income supports?
On the Estimate for the Public Service, the first item I want to speak about is the need for an allocation in respect of an extension to St. Luke's Hospital under the Health Estimate. The Minister for Health made commitments in this regard during 1990. Throughout the entire year he and public representatives from the Government constituency of Carlow-Kilkenny clearly indicated that moneys would be made available to commence work on the project of extending St. Luke's Hospital. I regret that doubt is cast on this allocation of finance in the 1991 Estimate. I plead with the Minister for Health to find the appropriate money; if not in the context of the Public Capital Programme through Exchequer support, he can do so through an allocation from the national lottery in order that work can commence in 1991.
You will be aware, a Leas-Cheann Comhairle, that St. Luke's Hospital, the staff and patients, have put up with much inconvenience for the last number of years. It caters for a population of over 100,000 people in Carlow and Kilkenny. It has been kicked around as a political football for far too long. On this occasion I hope we will see the end of the controversy and that the people who are outside at the gates as we speak — who are demanding proper facilities for the patients and staff and for all the people who contribute enormously to the health services in Kilkenny — will receive fair treatment in the Estimates for 1991.
I want also to refer briefly to the income crisis in agriculture. I am sorry to say this Government have done nothing, in spite of the signals given over the past 12 months, to alleviate the problem of the income crisis in farming. One would imagine that nothing could be done and that there was no precedent for doing anything in relation to giving direct income support to the farming community in their hour of need. We had a precedent in 1985-86 when farm organisations were on the streets because of bad weather conditions when we had nothing as serious as the present income crisis. Unfortunately, late in the day they are beginning to realise that the small and medium-sized farmers are on their knees in terms of needing direct income support. I am besieged daily by farmers to give more flexibility to the social welfare code so that they will have some direct income support for Christmas. I call on the Minister for Agriculture and Food, with the help of the good offices of the Irish Commissioner for Agriculture on this unique occasion to put on the agenda of the EC and GATT negotiations which are taking place at present that the whole country of Ireland be declared as a disadvantaged area, particularly in the context of compensatory mechanisms.
The outlook for the agricultural community is not good. I should say the Minister is doing his damndest in a European context to soften the blow. I would like to hear him articulate what type of plan and compensatory measures are in the mind of the Government at present to compensate rural economies for the effects of this savage blow to their incomes at present.
I would like to refer also to an item under the Department of Defence Vote where £11 million is being allocated for air and sea rescue craft, under the heading of Maritime Protection. This is another political football. Some of the worst aircraft, which have a range of only 100 nautical miles, are being purchased by the Government from a Spanish company. We have not got any details from the Minister for Defence of the extent to which this maritime rescue service will operate, where it will operate from, whether the craft will be sufficiently equipped and whether the personnel will be trained or whether there is an allocation for this purpose in the Estimate? These are some of the matters that need to be addressed and fleshed out more fully in the context of the winding up speech of the Minister.
Over the past few years we have seen a striking turnabout in the economic position of this country. From a situation where we were facing economic ruin, we have moved to where we can now look back on a period during which: an average economic growth rate of 4 per cent per annum has been achieved; emigration has fallen rapidly and there has been a significant decrease in unemployment levels; Government borrowing at around 2 per cent is at its lowest level for over 30 years; and we have seen real decreases in personal and indirect taxation rates.
Within the past week we have seen how our inflation rate is now, along with Denmark's, the lowest in the European Community.
All this has not come about fortuitously. It has happened because of decisions taken by Government, hard decisions, which often went against the grain, but which it was recognised had to be taken if we were to ensure a return to economic prosperity for our country. It was possible to do this, not alone because there was a will within Government to do it, but because within this time there was a new consensus between the Government and the social partners on how our economic problems were to be tackled.
Within the past 18 months, the agreed Programme for Government has given a clear orientation to that task. The programme, and the way it is being carried out, has shown how wrong were those who, in good faith or otherwise, claimed that a coalition could not work in this country. What will not work and what has been shown not to work is a coalition where the partners are basically ideologically incompatible.
In formulating the 1991 Estimates and Public Capital Programme the Government have been very conscious of the need to continue a restrained approach if we are to continue to improve our economic position and meet the targets we have set ourselves, especially in the priority area of job creation.
In formulating the Estimate for my Department care was taken to ensure that expenditure would be allocated to areas which could most constructively lead to increased employment opportunities taking account of the measures set out in the operational programme for industry agreed with the Commission, and the need to further improve the public finances.
The second Triennial Review of Industrial Performance carried out by my Department was published yesterday. The review records the improvement in the performance of industry in Ireland in the period 1987-89 as compared with the earlier part of the eighties. Output and exports have grown strongly while the trend of employment losses has been reversed and net job gains have now been achieved.
The review is primarily a review of performance, not of policy, and while certain policy changes are announced in it, I intend to review and, when necessary, change policy on a continuing basis. In doing so, I will have particular regard to the views of the social partners in the context of the current discussions on a new Programme for Economic and Social Development.
The total cost to the State of the industrial promotion effort between grants, advisory services, tax reductions and administration costs amounts to some £600 million each year. Given the overall results achieved to date, I am not convinced that the correct balance of industrial policy instruments has as yet been achieved. I am, therefore, considering the possibility of instituting a comprehensive reappraisal of industrial policy on the lines of that carried out in the early eighties.
In the meantime, however, I am arranging for measures to be taken to further improve the selectivity of grant supports to industry and reduce their costs while maintaining the key target of 20,000 gross new jobs per year in industry. These changes include: a reduction in the average grant cost per job for overseas industry to 75 per cent of the current level: this will all happen over a three year period; a reduction in the maximum fixed asset grant rate for overseas expansion projects to 15 per cent of investment; 50 per cent of all financial supports to medium-large indigenous industry is to be in the form of equity or other repayable or remunerating forms of aid; a maximum fixed asset grant rate for small industry expansion projects is to be set at 25 per cent as currently applies to medium-large indigenous industry; and a maximum rate of employment grants for small industry start-up projects of £4,000 per job.
The review concludes that there is scope for a significant rationalisation of the industrial development agencies. As a first step I have agreed with my Government colleagues that: as previously announced, the IDA will function as the sole overseas industrial promotion agency for Ireland; the activities of IDA and NADCORP will be more closely integrated; and Coras Tráchtála and the Irish Goods Council will be merged to form a new Irish Marketing Agency.
The allocation for 1991 to the Industrial Development Authority in respect of grant payments to industry has reduced from £110 million in 1990 to £106 million. When account is taken of revenue generated by the Authority, their total grant budget will fall by £6 million. The changes in grant programmes that I announced above plus the continuing effects of previous reductions will allow for this reduction to be accommodated without any adverse effect on the job creation effort.
In so far as Shannon Development is concerned the House will be aware that I announced certain changes in relation to the company's responsibilities in July last. During 1991 the company will, however, continue to be responsible for all indigenous industry in the mid west region, operating under delegated authority from the IDA, and all Shannon Free Zone industry, including aviation-related projects in the greater Shannon Airport area.
The company's grants provision has been increased to provide for payment of capital and training grants already approved by the Government in respect of what will be, I hope, the first of many such aviation projects in the area. This project, Shannon Aerospace, is a joint venture between the GPA Group, Lufthansa German Airlines and Swissair involving an aircraft maintenance facility for Boeing 737 and MD 80 aircraft and will provide over 1,000 jobs at Shannon over the next five years.
Shannon Development will also have responsibility for promoting, in conjunction with the IDA, Plassey Technological Park, including, particularly, International Business Incubation Centre of Japan projects, and the Shannon Estuary.
The allocations to IDA and SFADCo, £11.95 million and £3.78 million respectively, in respect of the provision of industrial land and buildings include increases of 4 per cent in line with the European Community GDP inflator. The levels of State expenditure in this area are considerably down on the very high levels incurred in the early eighties. State policy now is to act in a pump-priming role with the State providing the basic infrastructure and private developers providing the factory space. Private developers have already agreed with IDA to provide 25 new factories in various locations around the country. SFADCo have also been successful in this regard with private developers being involved in the provision of an International Science Centre and a high tech factory unit at Plassey Technological Park as well as the provision of space in the Shannon Business Park. I believe that the time is now opportune to carry out a fundamental review of State involvement in the provision of industrial space. I have, therefore, requested my Department to initiate such a study during the course of 1991.
Another successful job creation area is, of course, the International Financial Services Centre. To date, over 140 projects have been approved to set up in the centre and these will provide over 2,430 jobs when in full operation.
I would like now to turn to trade. One issue which will certainly take up a considerable amount of my and my Department's efforts in 1991 is the continuing negotiations on the GATT.
The suspension of the negotiations at the Brussels Ministerial talks was disappointing. We must hope that there will be greater realism on the part of our trading partners when the talks are taken up again in mid-January. The Community's united strength and its determination to follow, in the words of the European Council, a global approach, based on balanced concessions, will significantly contribute to the achievement of a global package of trade liberalisation in the present talks. The importance of our agricultural sector underlines the necessity for Ireland, and the Community as a whole, to convince other contracting parties to re-examine the Community's proposal on agriculture, which is both meaningful and realisable.
Our objective for the nineties and beyond has always been a newly invigorated and reinforced GATT which sets out unambiguously the undisputed rules by which international trade is conducted. In this way, new markets will be opened up for our exporters and existing markets secured against threats to close them in the course of trade disputes.
I would like to refer briefly to marketing. The very strong growth in our export performance in recent years has slowed considerably in 1990 and CTT are now predicting exports for the year to approach £14.6 billion the same as 1989. While the volume of our exports is expected to rise by 6 per cent, a similar level of price deflation will result in no growth in the value of exports this year. Structural changes in agri-business and in computers combined with a marked slowdown in some of our major markets and the uncertainties created by the Gulf crisis are all negative factors which will impinge on this year's outturn.
Expectations for 1991 of course are subject to developments in the international arena. However, it is evident that some major economies are slowing considerably and with recession in Britain and possibly also in the US, 1991 will be a difficult year for our exporters. However, our low inflation rate and continuing gains in competitiveness, especially in comparison with the UK, should help offset these trading difficulties to some extent.
As I have said our export performance in 1990 has not been as strong as in previous years. It is, however, the case that many indigenous companies are now undoubtedly fitter, leaner and more competitive. Indeed CTT surveys this year indicate that the value of indigenous exports has risen by some 4 per cent compared with the static position for total exports. Given the challenges that lie ahead in terms of both increased access to and increased competition in overseas markets, it remains essential that Irish companies respond by placing a greater emphasis on the marketing function. For too long Irish industry has paid lip service to the need for improved marketing performance.
As Deputies are aware, an important part of the process towards a more integrated Europe after 1992 is the doubling of Structural Funds to less developed regions, including Ireland, by 1993. As part of the support package negotiated for industrial development we have succeeded in attracting significant financial support from the European Commission for programmes which are designed to improve the marketing capability of Irish firms. Marketing programmes operated by Coras Tráchtála and the Irish Goods Council will attract the highest support, 75 per cent, available under the industrial programme.
This level of Structural Funds support is the underlying reason the Government are able to allocate in 1991 £32.5 million to Coras Tráchtála, an increase of 32 per cent and £2.065 million to the Irish Goods Council, an increase of 15 per cent. The exceptional degree of support is pretty well unique these days. It reflects the Government's, and indeed the European Commission's, will to do what they can to tackle a fundamental weakness which has plagued Irish firms in the past and which is still very evident today.
I want to make it quite clear, however, that the continuation of this level of assistance has a timescale and it should not be seen as a panacea for the marketing ills of Irish industry. Funds will only be devoted to projects which promise strategic development and major incremental growth within companies.
The additional allocations for marketing services will be devoted to specific new programmes which have been developed over the past two years. CTT's regional markets programme is helping Irish firms build long term business relationships in selected regions in Europe which are showing above average economic performance. Regions where the programme has already commenced, like Baden Wurtemburg and Rhone Alps where work started this year, will be the subject of further follow up activity. CTT will also bring new regions like Portugal, the Rotterdam area and East Germany into the programme in 1991.
The other area of CTT activity which will receive additional resources next year is its targeted marketing consultancy programme which was launched in January this year. Over 30 approvals under this programme have now been made by CTT involving grant payments over the next two years in excess of £11 million. The target sales of the projects approved to date amount to over £500 million. I am hopeful that this programme will prove of major benefit to our exporting efforts in the years ahead.
The picture which emerges from the Estimate for my Department and the reorganisation measure which I announced yesterday is of a more focused delivery of increased State resources to support the marketing efforts of industry. I expect to see a significant response from industry. State support can only be an instigator and catalyst for action by firms themselves. What is on offer are attractive but disciplined supports which will be extremely helpful to firms which are committed to significant development.
The Science and Technology Programme, initiated in 1987, will in 1991 have an allocation of £26.882 million. This will allow us to continue to build on the considerable success which has already been achieved in the existing elements. These include various programmes in advanced technology, dealing with such areas as biotechnology, advanced manufacturing technology and optoelectronics, as well as initiatives in the area of higher education-industry co-operation which is succeeding in improving the linkages between the expertise available in our third level institutions and the needs of our industry. All these elements will be continued and, indeed, strengthened in 1991. A number of initiatives intended to strengthen the regional scientific and technological infrastructure will also be commenced in 1991. These initiatives will focus on the potential of the RTCs to respond to the needs of industry.
Before concluding, I would like to refer briefly to important legislation involving the commerce area of my Department. I intend to bring forward early in the next session a Bill to give effect in Irish law to the EC Council Directive concerning liability for defective products. The main purpose of the Bill will be to impose strict or no fault liability on the producer of a defective product irrespective of whether any negligence was entailed in the manufacture of the product. This will make it easier for consumers to obtain redress in cases of damage arising from defective products.
The year 1990 has certainly been a landmark year as far as company law reform is concerned, with two Acts of major importance passed. The Dáil was, of course, recalled in August, and passed the Companies (Amendment) Act, 1990 which introduced, ahead of schedule, new company protection provisions.
Only last week, the Seanad passed the Companies (No. 2) Bill, 1987, which had earlier in the month been passed by the Dáil, and this Bill has now been submitted to the President for signature. This Bill is, by any yardstick, a major piece of reforming legislation, and I think Deputies from all sides of the House deserve a great deal of credit for improving and refining it along the way.
I am satisfied that we now have, as a result, a modern code of company law within which Irish companies can operate in the years ahead, one which is at least on a par with what exists in most other developed countries, and indeed is more advanced than many, in some respects.
The Bill is not the end of reform in the company law area, however, since we must now turn to the implementation of several outstanding European Community Directives in this field. While the Bill made modest gains in this respect, implementing three such directives along the way, there are still another eight due to be implemented within the next two years, and my Department will be working on these in the coming year.
Further important new legislation will be introduced at the beginning of next year in the area of competition policy. The Programme for Government contained a commitment to incorporate provisions similar to Articles 85 and 86 of the Treaty of Rome in Irish law. These Articles prohibit anti-competitive behaviour and the abuse of dominant position within the European Community. The objective is to bring these rules and codes of behaviour to bear on business activity within the State.
In effect this will amount to a new and radical approach to the competition law here. We will be adopting a general system of prohibition on anti-competitive behaviour in place of the existing legislative tools which permit us to control anti-competitive practices on a case by case basis. Work in my Department has been proceeding at an intensive pace which has included thorough interdepartmental consultation. This process is now complete, and the parliamentary draftsman, who has been occupied with other legislation emanating from my Department, is now in a position to give his full attention to the final and definitive draft of the competition Bill.
We are also well advanced in the process of significant reform in the area of unit trusts legislation. The Unit Trusts Bill, 1990, which updates and repeals the 1972 Act, has just completed its passage through this House and is due for consideration by the Seanad later this week. The Bill provides for revised, modernised arrangements for the control and regulation of unit trust schemes.
The 1991 Estimates have been formulated to continue the improvement in this country's economic position, and ensure the provision of a better business climate. The Estimate for my Department will contribute towards this with the creation of a significant level of sustainable employment in manufacturing and the services area and a greater concentration of resources on upgrading the marketing and technological performance of Irish industry, where we have traditionally been weak.
Europe is changing rapidly with the completion of the internal market and developments in Eastern Europe. I believe that we can look forward to the future with optimism.
An Leas Cheann-Comhairle
I now call on Deputy Rabbitte. In accordance with the Order of the House, the Deputy must conclude not later than 4.35 p.m.
If I had known the Minister for Industry and Commerce was going to speak, I would have geared my remarks specifically to the publication of the second triennial report on industrial performance. I did not know that and, to the best of my knowledge, the Minister has not yet provided us with a copy of the report.
I am sorry about that.
I am sure he will do this during the course of the day as it is probably the most critical question we should address. A great deal has been said about unemployment and poverty being the alternate sides of the same coin but it can only be tackled if we create more wealth and generate more jobs in the economy and that brings us back to our industrial strategy. From what I have seen in the newspapers, I would welcome a number of aspects of the analysis of our performance in the period under review. However, the Minister did not go as far as we might have reasonably expected him to in a number of areas. It is disappointing that he should say at this stage, having regard to the contents of the report, that he will now initiate a major review of industrial policy. A great number of the reports which have been produced show where our industrial policy is going wrong and that, having spent billions of pounds on industrial policy during the past 20 years, we are not getting good value for money. Those areas have been identified.
Having regard to the fact that it is more than ten years since the publication of the Telesis report it is disheartening that we are only now getting a commitment from the Minister to act on it. He has stated that he is going to implement a number of measures immediately, most of which I would welcome, but he shied away from the rationalisation of agencies we might reasonably have expected him to enagage in. I presume the reason for this is the fierce political lobby which is capable of being mobilised in that area. However, there is no doubt that there has been waste, overlapping and duplication in this area and I presume this caused the publication of the report to be delayed. The Minister has trimmed the edges but has not initiated the fundamental institutional reform we might have expected and that is disappointing.
There are a number of other matters in the report that I welcome. I am a bit surprised at the figure of £600 million per year being the cost of our industrial promotion policy in terms of direct grants and the cost of tax breaks. I am virtually certain that in recent times I have been quoted figures in excess of that in replies to parliamentary questions. Even if the figure of £600 million is correct it is still a great amount of money and there is no doubt that we have not been getting value for money.
I welcome the Minister's seal of approval for the taking of stakes and equity participation in companies as a way forward in the future; in other words, when people look for loan capital or grants in the future, the agency will have the right to look for equity participation and this is to be welcomed. The targeting of money on companies who have the capacity to grow is also welcome.
The performance of our indigenous sector has been lamentable. That is where the major defect in our industrial strategy has taken us. Whatever one might say about foreign owned companies, they provide employment — the figure stands at about 90,000 people at present — but the performance of the indigenous sector has been very poor and concentration on it is well merited. I sincerely hope the Minister will make arrangements for us to debate this very important subject in the future. He has said that he is considering the possibility of instituting a comprehensive reappraisal. The reports point in the right direction. The Minister must take his courage in his hands and confront his colleagues in Cabinet with the facts of life which have been established since the Telesis report. Some of these measures must be implemented.
The Minister for Finance referred to the role which the Programme for National Recovery has played in creating the climate which has brought some economic indicators right, albeit not employment. The apparently successful termination of discussions yesterday between the social interests on the parameters for a new programme will be widely welcomed as good news for the economy. It will be seen as continuing the unprecedentedly favourable climate of stability and certainty that was provided by the previous programme. It is a matter for the parties to the negotiations to choose when to reveal the contents of the new draft agreement. The deadline of 20 January which they have set as the date by which they must secure the allegience of their respective constitutencies presumably means that we will know the details quite shortly. If changes are necessary by 20 January the Minister will have to see whether these changes can be accommodated in the budget.
My party have traditionally supported the concept of national bargaining because we believe in seriously addressing the question of the social wage rather than notional percentage increases. The Government must necessarily be involved along with the other social interests if the social wage is to be delivered. If we are to make serious advances on issues such as job creation, income tax reform, profit sharing and a national minimum wage we need new legal and institutional structures to allow for these.
If the proposed new programme for social and economic development does not seriously and in a relevant and meaningful way address these issues then it will founder. I say that as a former trade union official because in the eyes of a great many workers the Programme for National Recovery was no more than a mechanism for wage control. It heralded a period of bonanza profits for leading companies in which workers who contributed to the creation of those bonanza profits may not by definition share. Therefore any new agreement, as well as establishing a pay norm, must have the flexibility to permit bargaining at plant level, based on the performance of the individual plant or enterprise. For all the sacrifices made by workers and their families during the three-year period of the recent programme, they understand that very little of the profits spiral was reinvested in new job creation and that the problem of poverty in our society has worsened.
In publishing the triennial report on industrial performance the Minister for Industry and Commerce is reported today in the Irish Independent as stating:
Around £1,400 million has been raised by Irish companies on the Stock Exchange but only £100 million has been invested in manufacturing in Ireland. The rest of it went abroad or was used for non-manufacturing purposes. I find that very disappointing.
I too find it disappointing. The major challenge facing our economy is to cause a greater proportion of the substantial profits being generated here to be reinvested in productive job creation.
It is shameful that while this is going on the Government are engaged in a rampant programme of privatisation of some of our most successful State enterprises such as Irish Life, Telecom Éireann and the Irish Sugar Company. This is happening in regard to the Irish Sugar Company in the context of the desperate need to create a substantial food industry, the collapse of the Goodman effort in conjunction with the IDA to do that, and the fact that the Sugar Company has the skills and technology to enable it to be built upon and used as an engine for job creation. It would be very regrettable if the Government continued that programme of privatisation. It is an ideological assault on the State companies. I should like to have had a great deal more time to expand on this subject.
At the outset let me thank all those Deputies who have contributed to the debate. I want to begin my summing up by looking at the amendments to the Government motion under discussion.
There is, I must say, an element of dejà-vu about the proposed amendment by The Workers' Party. Last year they also called on the Government to redraft the Estimates “...to enable unemployment and emigration to be tackled by stimulating a far more rapid rate of job creation”. This year The Workers' Party have used exactly the same wording despite the fact that this Government's record, and that of our predecessor, on job creation has been outstandingly good.
In the year to April 1990 total employment is estimated to have increased by 30,000 or 2.8 per cent. This rate of increase compares more than favourably with that for other EC member states: the 1990 forecast for the total Community is an increase of 1.7 per cent.
In the three years to last April there was an increase in total employment of 40,000. This figure masks an even more impressive reality. When one allows for the full reduction in public sector numbers, one finds that the increase in sustainable non-farm private sector employment was well over 60,000.
The increase of 30,000 in total employment to last April was the best performance since 1979 and contrasts very favourably with the fall of 76,000 in the seven years to 1987. More important, the employment growth now taking place is soundly based and is sustainable. The Government could, of course, do as The Workers' Party want and increase employment by means of inflated public expenditure. This would be a very short term measure indeed and is probably the fastest way one could think of to wipe out the gains we have made in the past three years, kill off our growth prospects and raise both unemployment and emigration.
All available indicators since April 1990 point unambiguously to further strong increases in employment throughout the economy, with the key manufacturing sector doing particularly well.
The 1990 Labour Force Survey also showed a further large fall in unemployment, down 19,000 as compared with April 1989, giving a total fall of 49,000 or 21 per cent in the three years since April 1987. On a live register basis unemployment will fall again this year, although not as fast as in 1989.
It is estimated that there was a reduction of 15,000 in the total net emigration figure in the 12 months to last April as compared with the figure for the previous 12 months from 46,000 to 31,000. The limited information available since April, while not a direct measure of emigration, strongly supports the view that the figure is continuing to decline. Inevitably, this trend affects the level of registered unemployment, but it is not a reason for a departure from the successful policies of the last few years. On the contrary, the best hope for the unemployed is that the thrust of policy remains unchanged.
What The Workers' Party are apparently unable to grasp is the basic fact that the rate at which employment can be created is dependent primarily on the rate at which the economy can grow. I am glad Deputy Quinn acknowledged this point in his contribution when he linked economic growth with the wealth creation needed to provide services and employment. Let me stress that we ignore this essential relationship at our peril. Artificial job creation — for example through increases in employment financed from unsustainable levels of public expenditure — is ultimately self-defeating and extracts a heavy price. We have only to look at the experience of the eighties to see this: mounting indebtedness, a rising tax burden, lost competitiveness and falling employment. We will not repeat the mistakes of the past.
We have already put in place many of the essential building blocks for real employment growth and general economic and social progress over the medium term. I reject out of hand the assertion in the amendment in the name of Deputy Quinn that Government policy since 1987 has resulted in social and economic damage. The welfare and best interests of the least well off have been and will remain high on our social agenda.
Our progress over the past few years under the policies of sound economic management pursued since 1987 has been remarkable. For example, the Exchequer borrowing requirement has been brought down to levels below those prevailing in most other EC countries. As a result the national debt/GNP ratio is firmly on a downward trajectory. Interest rates here are lower than in the United Kingdom — still our main market — and inflation is now down to 2.7 per cent lower than the German rate. While on the subject of interest rates let me once again put on record the dramatic gains made since March 1987. In March 1987 three-month money raised in the Dublin interbank market was over nine percentage points more expensive than on the three-month money market in Germany. Today it is only 2 percentage points more expensive. This gain of over 7 percentage points is attributable to the disciplined economic approach we have followed since 1987 and represents a major competitive advance for Ireland.
The exchange rate is stable within the EMS. On the question of the exchange rate, I want to assure Deputy Noonan and indeed the whole House that there is no uncertainty whatever about our exchange rate policy. As I made clear in my 1990 Budget Statement, my objective is to pursue a strong currency policy within the EMS and to implement whatever monetary and other measures may be necessary at any time to secure this position. Some people have quoted the example of Belgium to me for quite some time. Anybody who looks back over the last couple of months will see how often Belgian, indeed the Netherlands and others within the EMS narrow band, had to raise their interest rates. This is a feature that will come more into play as we move towards full capital liberalisation in 1992.
Throughout his contribution Deputy Noonan criticised the Government, and me in particular, for not cutting back more on spending. He then proceeded to fall into the old trap of picking a pet spending area — compensation for criminal injuries — and wondered why the Government had cut so much. The Deputy cannot have it both ways, or indeed the Members of his Front Bench either, some of whom complained that the cuts had not been sufficiently severe while others sought more and more spending in various areas. I want to enlighten Deputy Noonan, as he failed to grasp what I had said yesterday. The Government made an additional £4 million available this year to complement the £2 million included in the Estimate to pay for the criminal injuries awards that had stacked up over a number of years past. The £6 million provided in total in 1990 will go a long way to reducing that backlog. In fact 84 per cent of that backlog will be eliminated this year. The £1 million provided for next year will clear the remainder of that backlog and indeed many of the awards that will be made in 1991.
(Limerick East): And next year's claims could go on for 18 months.
Deputy Noonan also raised the question of the sale of State companies. With regard to changes in the ownership structure of commercial bodies in the State sector I have made clear frequently what is the position of the Government which was set out in the Programme for Government. Any change in the ownership structure of such bodies will take place only where it is in the national interest, the interest of the body concerned and its employees, after consultation with the social partners.
Or with what private citizen Michael McDowell says.
These are the criteria which will apply in this area.
With regard to specific companies named by Deputy Noonan — he mentioned some going through the system at present such as Irish Life, CSE and ICC. I do not know from where Deputy Rabbitte gets his information about Telecom Éireann. Perhaps it is from his own members within the various organisations.
I get it from Michael McDowell. I have a list here from private citizen Michael McDowell.
But I want to assure the House that the proceeds of asset sales will not be used to fund current Government expenditure. To date such proceeds have served to increase the capital resources available to Government to reduce borrowing and, therefore, the burden of debt.
In the amendments to the Government motion before us today criticism has also been levelled at a wide range of areas such as health, education, welfare, local authority housing, overseas aid and so on, many Members seeking more and more expenditure with other Members from the same parties complaining that the cutbacks have not been sufficient. For example, allocations for health in 1991 have been increased by 5.5 per cent to make an indent on the queues obtaining. I should say those queues have been lessened which is a reflection of the caring philosophy of this Government. I might add it is mischievous to label the 1991 provision for health as inadequate.
On social housing Deputy De Rossa contended we do not have a programme.
I might remind the Minister that he has less than one minute remaining.
On social housing we have a programme; it is there; if Deputy De Rossa does not know about it I would ask him to read my remarks — there will be 500 housing units created through the voluntary housing programme this year. In addition 3,000 people will be housed through casual vacancies and 1,000 new houses will also be completed this year. I might add that 4,500 social housing units have already been provided this year and total outlay on local authority and voluntary housing will increase from £60 milllion this year to at least £71 million in 1991.
Poverty is a symptom of all industrialised societies. To those who want to paint it I would say to them: would they ever tell me where there are to be found the levels of poverty about which they speak in this House. This Government have done more in that £3 billion have been expended on social welfare this year, £1.5 billion on housing, education, social housing and other areas. There have also been increases in overseas development aid, details of which have been lodged in the Library if Members would only take the time to get the facts right before coming into the House and make some of the silly statements they do from time to time.
Therefore, the need to continue a policy of tight control of public finances is clear-cut. The Government will not be deflected from that goal. Finally, Deputies can be assured — Deputy Noonan may have some doubts about this — that I will do the right thing for this economy in the forthcoming budget on 30 January 1991.
In the meantime may I wish all Members on all sides of the House a very happy Christmas. We look forward to a reasonably good year in 1991.
The question, on amendment No. 1 in the name of Deputy Quinn, is: "That the words proposed to be deleted stand."
The Dáil divided: Tá, 68; Níl. 24.
Tá
- Ahern, Bertie.
- Ahern, Dermot.
- Ahern, Michael.
- Andrews, David.
- Aylward, Liam.
- Barrett, Michael.
- Brady, Gerard.
- Brady, Vincent.
- Brennan, Mattie.
- Brennan, Séamus.
- Briscoe, Ben.
- Browne, John (Wexford).
- Calleary, Seán.
- Callely, Ivor.
- Clohessy, Peadar.
- Coughlan, Mary Theresa.
- Cullimore, Séamus.
- Daly, Brendan.
- Davern, Noel.
- Dempsey, Noel.
- Dennehy, John.
- de Valera, Síle.
- Ellis, John.
- Fitzpatrick, Dermot.
- Flood, Chris.
- Flynn, Pádraig.
- Gallagher, Pat the Cope.
- Geoghegan-Quinn, Máire.
- Harney, Mary.
- Haughey, Charles J.
- Hillery, Brian.
- Hilliard, Colm.
- Hyland, Liam.
- Jacob, Joe.
- Kelly, Laurence.
- Kenneally, Brendan.
- Kirk, Séamus.
- Kitt, Michael P.
- Kitt, Tom.
- Lawlor, Liam.
- Leonard, Jimmy.
- Leyden, Terry.
- Lyons, Denis.
- McDaid, Jim.
- Morley, P.J.
- Nolan, M.J.
- Noonan, Michael J. (Limerick West).
- O'Donoghue, John.
- O'Hanlon, Rory.
- O'Keeffe, Ned.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Malley, Desmond J.
- O'Rourke, Mary.
- O'Toole, Martin Joe.
- Power, Seán.
- Quill, Máirín.
- Reynolds, Albert.
- Roche, Dick.
- Smith, Michael.
- Stafford, John.
- Treacy, Noel.
- Tunney, Jim.
- Wallace, Dan.
- Wallace, Mary.
- Walsh, Joe.
- Woods, Michael.
- Wyse, Pearse.
Níl
- Bell, Michael.
- Byrne, Eric.
- De Rossa, Proinsias.
- Ferris, Michael.
- Foxe, Tom.
- Gilmore, Eamon.
- Gregory, Tony.
- Howlin, Brendan.
- Kavanagh, Liam.
- Kemmy, Jim.
- McCartan, Pat.
- Mac Giolla, Tomás.
- Moynihan, Michael.
- O'Shea, Brian.
- O'Sullivan, Gerry.
- O'Sullivan, Toddy.
- Pattison, Séamus.
- Quinn, Ruairí.
- Rabbitte, Pat.
- Ryan, Seán.
- Sherlock, Joe.
- Spring, Dick.
- Stagg, Emmet.
- Taylor, Mervyn.
Tellers: Tá, Deputies V. Brady and D. Ahern; Níl, Deputies Howlin and Ferris.
Question declared carried.
Question put: "That the motion be agreed."
The Dáil divided: Tá, 66; Níl, 63.
Tá
- Ahern, Bertie.
- Ahern, Dermot.
- Ahern, Michael.
- Andrews, David.
- Aylward, Liam.
- Barrett, Michael.
- Brady, Gerard.
- Brady, Vincent.
- Brennan, Séamus.
- Briscoe, Ben.
- Browne, John (Wexford).
- Calleary, Seán.
- Clohessy, Peadar.
- Coughlan, Mary Theresa.
- Cullimore, Séamus.
- Daly, Brendan.
- Davern, Noel.
- Dempsey, Noel.
- Dennehy, John.
- de Valera, Síle.
- Ellis, John.
- Fitzpatrick, Dermot.
- Flood, Chris.
- Flynn, Pádraig.
- Gallagher, Pat the Cope.
- Geoghegan-Quinn, Máire.
- Harney, Mary.
- Haughey, Charles J.
- Hillery, Brian.
- Hilliard, Colm.
- Hyland, Liam.
- Jacob, Joe.
- Kelly, Laurence.
- Kenneally, Brendan.
- Kirk, Séamus.
- Kitt, Michael P.
- Kitt, Tom.
- Lawlor, Liam.
- Leonard, Jimmy.
- Leyden, Terry.
- Lyons, Denis.
- McDaid, Jim.
- Morley, P.J.
- Nolan, M.J.
- Noonan, Michael J. (Limerick West).
- O'Donoghue, John.
- O'Hanlon, Rory.
- O'Keeffe, Ned.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Malley, Desmond J.
- O'Rourke, Mary.
- O'Toole, Martin Joe.
- Power, Séan.
- Quill, Máirín.
- Reynolds, Albert.
- Roche, Dick.
- Smith, Michael.
- Stafford, John.
- Treacy, Noel.
- Tunney, Jim.
- Wallace, Dan.
- Wallace, Mary.
- Walsh, Joe.
- Woods, Michael.
- Wyse, Pearse.
Níl
- Ahearn, Therese.
- Barnes, Monica.
- Barrett, Seán.
- Barry, Peter.
- Bell, Michael.
- Belton, Louis J.
- Boylan, Andrew.
- Bradford, Paul.
- Browne, John (Carlow-Kilkenny).
- Bruton, John.
- Bruton, Richard.
- Byrne, Eric.
- Carey, Donal.
- Cotter, Bill.
- Creed, Michael.
- Currie, Austin.
- Deasy, Austin.
- Deenihan, Jimmy.
- De Rossa, Proinsias.
- Doyle, Joe.
- Dukes, Alan.
- Durkan, Bernard.
- Fennell, Nuala.
- Ferris, Michael.
- Finucane, Michael.
- Flaherty, Mary.
- Foxe, Tom.
- Garland, Roger.
- Gilmore, Eamon.
- Gregory, Tony.
- Taylor, Mervyn.
- Taylor-Quinn, Madeleine.
- Harte, Paddy.
- Higgins, Jim.
- Hogan, Philip.
- Howlin, Brendan.
- Kavanagh, Liam.
- Kemmy, Jim.
- Kenny, Enda.
- Lowry, Michael.
- McCartan, Pat.
- McCormack, Pádraic.
- Mac Giolla, Tomás.
- McGrath, Paul.
- Mitchell, Gay.
- Mitchell, Jim.
- Moynihan, Michael.
- Nealon, Ted.
- Noonan, Michael. (Limerick East).
- O'Shea, Brian.
- O'Sullivan, Gerry.
- O'Sullivan, Toddy.
- Owen, Nora.
- Pattison, Séamus.
- Quinn, Ruairí.
- Rabbitte, Pat.
- Reynolds, Gerry.
- Ryan, Seán.
- Shatter, Alan.
- Sheehan, Patrick J.
- Spring, Dick.
- Timmins, Godfrey.
- Yates, Ivan.
Tellers: Tá, Deputies V. Brady and D. Ahern; Níl, Deputies J. Higgins and Howlin.
Question declared carried.
A Cheann Comhairle, there are not many of us left at this stage but I would like very much from the Government benches to wish everybody on all sides a very happy Christmas. I extend that wish to Deputies and to their families and, of course, your good self, a Cheann Comhairle.
I would like, on behalf of my party, to join with the Taoiseach in wishing Deputies on all sides, and their families, a happy Christmas and a prosperous New Year. I would also like to wish a happy Christmas to the staff of the Houses of the Oireachtas who have served us so well over the last 12 months and to the ladies and gentlemen of the press and all who have helped us in our work in this House. I wish them all a happy Christmas. I thank them for their work in the last year and look forward to the next year.
On behalf of the Labour Party I would like to take this opportunity to extend Christmas greetings to all of my colleagues in the House, and their families, to the staff of the House who have served us very well despite enormous pressure, difficulties and late sessions. I should like to extend greetings to the Press Gallery and all concerned. But for the absence of the Independents we might be making different speeches.
Is mian liom buíochas a ghabháil leat féin, a Cheann Comhairle, leis na hoibrithe uile sa Teach agus, go deimhin, leis na hiriseoirí freisin; murach an chabhair a fhaighimid uathusan ní dóigh liom go mbeimis anseo in aon chor. Ba mhaith liom Nollaig shona a ghuí don Taoiseach, do na Teachtaí John Bruton agus Dick Spring agus do Theachtaí go léir na Dála.
I am very pleased to reciprocate your greetings on this happy occasion. I extend to all the Members and staff of the House greetings for the holy season. A very happy Christmas and a bright and prosperous New Year to you all. Nollaig shona agus athbhliain faoi shéan is faoi mhaise daoibh go léir.
The Dáil adjourned at 5.10 p.m. until 12 noon on Wednesday, 30 January 1991.