Dáil Éireann díospóireacht -
Tuesday, 26 Feb 1991

Vol. 405 No. 6

Financial Resolutions, 1991. - Financial Resolution No. 6: General (Resumed).

Debate resumed on the following motion:

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

—(The Taoiseach.)

Mr. M. Ahern

I spoke about the enormous national debt the previous Administration got this country into and the problems that put on the shoulders of the incoming Government in 1987. Frederick I said that the surest way to destroy a State is to have it governed by professors. It is clear to us who have been following the state of our economy that a professor leading a Government from 1982 to 1987 did his best to destroy this State. The restrictions, the actions, malpractices and the inability of the Government of 1982-87 placed on the incoming Government from 1987 are still with us today. The manoeuvrability of any Minister has been severely restricted. We have heard calls in the last hour or so for more money to be put into the health services; more money has been put into the health services. This Government would like to give more money to the health services but we can refer back to the Government by that professor from 1982-87, which is restricting the manoeuvrability of our Minister for Health today.

Despite this enormous handicap Fianna Fáil have, since 1987, faced the reality of the bankruptcy facing this country. They took the problem by the scruff of the neck and administered the corrective action needed to bring the country back from the brink. Fianna Fáil took this action in 1987 when we were a minority Government because we saw it was necessary to ensure that in years to come we would be in control of our own destiny, that we would have money to put into education, environmental projects and health care. We needed no push from parties of the Right or Left. We did what was necessary and will continue to do what is necessary.

During that period there were three main areas to be targeted — social welfare, taxation and budgetary discipline. In the tradition of Fianna Fáil since 1926, we looked after the less well off in our society. The increases in social welfare since 1987 have been consistently above the rate of inflation. We gave increases higher than the inflation rate to people in the lower wage bracket and those in receipt of unemployment assistance. We gave lump sum increases which did not relate to inflation, because if people depended on getting pro rata increases they would never be any better off. We have seen the necessity for giving lump sum increases in order to give a decent level of benefit to those on the lowest rung of the ladder.

We also recognised the children of the country by giving increases in the monthly rate of child benefit. We widened the qualification this year for the carer's allowance. This allowance has been misunderstood and misrepresented. It is clear that there were many people in our society who were not receiving any benefit. They were not getting unemployment assistance because they were not available for work and they were not getting unemployment benefit. Deputy Woods as Minister for Health decided to introduce a carer's allowance. Some people, for political reasons, tried to misrepresent this allowance as being something it was not and consequently it was misunderstood. It is now clear that it benefits people who had not been receiving any benefit. The Minister and the Government extended to 21 years of age the qualification for children of long term social welfare recipients in full-time education. This is a welcome decision because many people were not able to afford education. I welcome this decision to increase the age limit again.

I would like to congratulate the Minister and the Government for improving the family income supplement scheme. This is an excellent scheme which ensures that people will go out and work rather than stay at home and draw the dole.

I now turn to the area of taxation. I have listened to the Leader of the Opposition on numerous occasions in the last week or two saying that there has been no change in the income tax area and that there has been no movement in income tax rates, income tax bands or income tax allowances. This is not true, as the facts show. In 1987 the income tax rates are 29 35 per cent, 48 per cent and 58 per cent. In 1991-92, the income tax rates are 29 per cent, 48 per cent and 52 per cent which represents a change downwards. Income tax bands in 1987-88 were £4,700 at 35 per cent, £2,800 at 48 per cent and the balance at 58 per cent for a single person. The income tax bands in 1991-92 were £6,700 at 29 per cent, £3,100 at 48 per cent and the balance at 52 per cent. The rate for married couples are doubled with £9,400 at 35 per cent, £5,600 at 48 per cent and the balance of 58 per cent in 1987-88 and in 1991-92, £13,400 at 29 per cent, £6,200 at 48 per cent and the balance at 52 per cent. There have been significant increases in the rates and in the tax bands over the years Fianna Fáil were in power.

There have been minimum increases in allowances. There have been increases from £2,000 for a single person's allowance to £2,100 in 1991-92 and in 1987-88, from £4,000 for a married couple to £4,200 in 1991-92. There have been improvements in tax rates, bands and allowances over the years Fianna Fáil have been in power. To put it into context, we have to remember we are fighting a debt of £25 million and we are still improving income tax as well as reducing the debt placed on us.

One area that has concerned me is that of widowed persons. I would like to congratulate the Minister for Finance, Deputy Albert Reynolds, on introducing a special allowance this year for widowed persons. It shows that the Minister and the Government realise the great pressure which widowed persons experience. I hope this allowance will improve as the years go on and as the Government have more finance available.

However, I would request the Minister to look again at the BES scheme. There have been abuses of this scheme over the years but there are genuine people who in the last six or nine months made plans, in good faith, and now find themselves in great trouble. I would ask the Minister to look again at this scheme and at the hardship cases and allow some relief between now and the Finance Bill.

The third element of the budget relates to budgetary discipline. Since 1987 Fianna Fáil have worked wonders with the budgetary position. Foreign debt has fallen, and, more importantly, the debt-GNP ratio has fallen from 131 per cent in 1987 to 111 per cent in 1990. However, when one considers that the debt-GNP ratio in developed countries is in the area of 35 to 40 per cent, it puts into perspective the task that is ahead for this Government and for future Governments.

I commend the Government on the excellent budget they have prepared. It was prepared in a time of great strife and great difficulty, with negotiations in Europe, war in the Middle East, GATT negotiations and CAP negotiations. It was a time for battening down the hatches and keeping the ship on a steady course and I congratulate the Government for steering along the right course.

Mr. D'Arcy

I came here tonight to speak on the budget debate. Having listened in particular to the rural Deputies and the Minister for Agriculture and Food in relation to the advantages of this budget to rural areas, I ask myself a simple question: do we live in the same country as we try to praise or broaden out the benefits of this budget for agriculture? It is my intention in the time available to me to stay with the area of agriculture, because the greatest single problem for the economy of this country will take place in agriculture over the next couple of years. There is a lot of uncertainty and there is nothing more uncertain than the situation in agriculture created by the present Coalition Government led by Fianna Fáil. For the past 12 months we have had the Minister for Agriculture and Food insisting that the decrease in farm incomes is somewhere in the region of 6 to 7 per cent. However, he persisted in that line right up to 30 January 1991 when he called a press conference. Unfortunately he did not attend the press conference himself but sent his officials to talk to the press. I quote from an article by Mr. William Dillon, Agriculture Correspondent, in the Irish Independent of 30 January 1991:

The drop in real farm incomes last year was much higher than the seven per cent official figure vigorously promoted by Minister Michael O'Kennedy, the Department of Agriculture admitted yesterday.

Real earnings for farmers declined by more than 13 per cent when account is taken of a number of factors for which no calculation was made in the figures used by the Minister, senior officials disclosed.

Are we to take it at this stage that the officials of the Department of Agriculture and Food misled the Minister or did the Minister on purpose mislead the people? Those are the questions I pose at present. I have not the slightest doubt but that the latter is the truth, that the Minister set out to mislead the people. I claimed as far back as August and September 1990 that the real decrease in net income to farmers would be in the region of 15 per cent. The Minister is now prepared to admit that the decrease is 13 per cent or more. That is what his officials said. The Minister is treating agriculture with contempt when he was not prepared to attend that meeting and meet the press and answer the relevant questions.

In analysing that figure I reckon that approximately £200 million, was taken out of agriculture last year. That is a disastrous situation but that is not the whole picture. At present we see the failure of the Minister to come before this House to have a proper debate on agriculture and discuss how the problems could be ironed out. We have the MacSharry proposals and the GATT agreement. I do not worry so much about the GATT agreement because it is spread over ten years and the overall impact will not be that great but I certainly worry, as does every farmer in the country, about the MacSharry proposals for the EC Commission. It is my belief that the farmers face a further reduction in net incomes of between 8 per cent and 12 per cent. I would ask the Government if there is any other section of the community who, over a period of two years, would be asked to take a reduction in the region of 25 per cent in their net income and what effect that would have on them. Still, they have brazened it out on the far side and I am glad that the local elections are forthcoming. They will not have long to wait until the farmers, particularly in Munster and Leinster, tell them plainly where they stand. During the last election the Taoiseach said he did not believe things were so bad in the health area but the people soon told him where he stood. There is a fair cushion in Connacht and Ulster where people in the severely handicapped areas can draw very substantial grants but not in Munster and Leinster where we have a very serious problem.

I should like to refer to the disadvantaged areas. We have heard from the Minister of the great allocation he has made to agriculture. I will read out the headings as they are in the budget speech. A total of £19 million is being allocated for the disadvantaged areas scheme, £2 million for farm improvements, £600,000 for installation grants, £1.2 million to Teagasc, and £1 million for low income farmers. The latter allocation makes a real joke out of farmers. He did not spell out on the day of the budget or afterwards what this £1 million meant. I reckon there are 30,000 low income farmers so that they will have about £20 each per annum out of this £1 million. That is what makes a joke of the whole thing. If all these figures are added up the total allocation to agriculture is £25.3 million. Of the £25.3 million I reckon that the EC will pay approximately £10 million, so that the total amount from the budget, so far as farmers are concerned, is about £13 million.

I was not a Member of this House when the Minister made his submission to Brussels on the reclassification of the disadvantaged areas in 1987. He withdrew that submission and has not as yet, almost three and a half years later, submitted new proposals. Yet he constantly states in this House that they will be approved next week or the week after. They were supposed to be approved last October but they still have not been approved.

Almost all the land in the West is a disadvantaged area. I understand there is a proposal to delare all of County Galway as a severely handicapped area. I understand from information which has been leaked that it is proposed to include only 34 per cent of County Wexford in the disadvantaged areas scheme. I want to warn the Minister that if he attempts to designate only 34 per cent of County Wicklow as a disadvantaged area we will challenge that decision in court. Like other TDs from County Wexford I have travelled throughout the county to examine the different agricultural areas. I have been in politics for 25 years and I have never seen poverty in agriculture such as that which exists at present. The Government should come clean on which areas of the country they are going to reclassify so that people will know what are the proposals.

We told the Minister we would not accept his decision in regard to the Mulder scheme and we challenged it in court. The milk quota taken from Irish farmers by the EC under the Mulder scheme was fully restored to them at that time. If the Minister excludes any areas from the reclassification of the disadvantaged areas schemes which qualify for inclusion under the criteria laid down by the EC we will challenge that decision in the courts. We are not going to allow the Minister to steamroll over the people of County Wexford. We would even go so far as to form associations throughout Leinster and Munster to ensure that certain areas are included in the scheme. We are not prepared to accept that type of decision making. The Minister is responsible for the decisions taken in regard to this scheme.

I want to refer to the inheritance tax. During the early seventies people had to pay death duties and it took the Coalition Government led by Fine Gael to remove those duties. The inheritance tax is much worse than death duties. I want to refer to the amounts which have to be paid in death duties. The legal costs plus stamp duty and inheritance tax on a 100 acre farm would be somewhere in the region of £25,000-£30,000. I cannot put an exact figure on the amount as it depends on the valuation of the farm. Unless a farmer with 100 acres has a substantial milk quota he will not be viable at present. An unfortunate young farmer who is taking over a farm from his parents will be asked to hand out about £30,000 in inheritance tax and legal costs. This makes it prohibitive on farmers to transfer their land to their sons. A son who wants to take over his father's 150 acre farm will have to pay almost £30,000-£40,000 in inheritance tax. It is not possible for such farmers to transfer their land to their sons. Fianna Fáil have neglected this issue down through the years. It took the Coalition Government led by Fine Gael to remove the death duties so that farmers could transfer their farms to their sons. The Minister for Agriculture and Food has stated in this House that he wants young farmers to take over the land because it is a young man's game. However, the present level of inheritance tax is prohibitive and will not enable farms to be transferred. This will be disastrous for agriculture.

I want to refer to the proposals in relation to green diesel, agricultural contractors, all vehicle parts in garages, land reclamation and agricultural services, including veterinary services. The cost to farmers of the 12.5 per cent taxation charge on veterinary services will be roughly £4 million. The extra charges imposed on agriculture in this budget amount to approximately £5 million- £7 million. If the Minister had made his submission on the disadvantaged areas to Brussels in time he could have ensured that farmers would be cushioned against a reduction in their incomes over the next two to three years. I accuse the Government of being neglectful in this area.

No recognition has been given in the budget to the benefits which can accrue to our economy from the agricultural sector. Last year agricultural exports amounted to about £3.2 billion while manufacturing industry amounted to about £9 billion-£10 billion. While the import content in the manufacturing sector is around 50-55 per cent, the import content in the agricultural sector is somewhere in the region of 20 per cent. This means that agriculture still represents between 35 and 40 per cent of the total economy of this country. While the exports may deny this, they will not say anything about the import content in the manufacturing sector. Approximately 200,000 are employed in the manufacturing sector while 205,000 are employed in agri-business. This gives an indication of the contribution agriculture can make to our economy.

If Commissioner MacSharry's proposals are accepted, the Government will be seen to be negligent so far as agriculture is concerned. I have accused Commissioner MacSharry of taking a western outlook to Irish farming, these proposals will be seen as an attack on the productive farmers, the people who have won our quota down through the years. Any attempt to take some of the quota from our top milk producers and distribute it among the smaller milk producers will prove disastrous in the long term. I am prepared to accept that I am being somewhat negative but in the time available to me I cannot put forward alternative proposals. During the council elections we will remind people of the Government's total neglect in regard to agriculture.

Mr. Nolan

I welcome the opportunity to speak in this debate. Lest it skips my mind later, I should like to defend the Minister for Agriculture and Food against the onslaught by the Deputy opposite. I believe the Minister for Agriculture and Food has shown down through the years that he has sought to protect the interests of Irish farmers at all times and it is nothing short of scandalous for a Member of the House to come in here and attack the Minister in such a manner. I believe proof positive of the Minister's desire to protect Irish farmers will be found when Commissioner MacSharry puts his proposals on the table and the Minister has had an opportunity to look at them. I have the utmost confidence that the Minister for Agriculture and Food and the Government will not be found wanting when the interests of Irish agriculture and farmers are threatened.

It is important to bear in mind that four factors influenced the framing of this budget in late December and January. The Gulf War and the uncertainty which surrounded the outcome of that war were uppermost in the minds of the Minister for Finance and the Cabinet at that stage. The great uncertainty which surrounded the international economic outlook for 1991 also had to be considered. The Programme for Government agreed in July 1989, and in particular the provisions which related to public expenditure control, taxation reform, employment creation, health services and social welfare, were also foremost in the mind of the Minister for Finance when he was framing this budget. He also had to bear in mind the provisions in the Programme for Economic and Social Progress and accomplishing them within the budgetary process.

It is only right that I should congratulate the Taoiseach and the Government for the successful way they have managed our economy since returning to power in July 1989. Indeed, this is just a continuation of the successful policies pursued by the Fianna Fáil Administration which took office in 1987. The Government's aim in this year's budget was to maintain the economic progress which started in 1987. The success of recent Government policy is a result of the Programme for National Recovery which expired in December. The commitment made by the Government to the social partners in relation to the overall economic policy and to the various other aspects of social equity and employment creation has been honoured.

I am glad the Programme for Economic and Social Progress has been agreed and, only last week, approved by the Irish Congress of Trade Unions. This new programme takes up where the old programme left off. The 1991 budget was designed to underpin the economic progress which has been made so far and to ensure that the climate is right for the success of the new programme for national progress. Consensus between the Government and the social partners has brought new levels of prosperity through industrial peace in Ireland. The potential for even greater prosperity in our small country is still greater. Nineteen ninety was another milestone on the road to national recovery. The returns show a strong economic growth, sustained investment, a healthy trade balance and more people in employment. It is regrettable that our level of unemployment has increased, but this can be put at the door of more of our emigrants returning to seek employment at home. It is also an indication of the problems being experienced in the international economy. Prudent management of the public finances has resulted in an improvement in our economy. Budgetary discipline has ensured investment and consumer confidence has been restored — far from the dark days of the previous Coalition Government which left office in 1987.

Government borrowing is now at its lowest level in about 40 years. The Government are on course to balance the current budget by 1993. Having achieved that goal, no future Government should ever undertake the despicable practice of deficit budgeting which was started in 1973. That practice has been continued by successive Governments and has brought nothing but hardship and disaster to this country. Indeed, we are still paying for those decisions, and will be for a long time to come. It is the intention of this Government, and should be the intention of all future Governments, to balance the annual budget. Our foreign debt is now well below its 1986 level. Our national debt still stands at over £25 billion, and everybody should be fully aware that it is costing the taxpayer well over £2 billion per year to service that debt. Let us put this in perspective: all the PAYE tax collected every year goes towards paying the interest on our national debt. It is essential that we reduce this £25 billion debt as soon as possible in order to free funds for much needed projects in other areas of government. I commend the Government on the setting up of the new body to manage our national debt. This initiative has borne fruit already in so far as in the last year and a half major savings have been made in the management of our national debt.

The key to all recent improvements in the public finances and in the health of the economy has been the reduction in public expenditure over a four year period by almost 11 per cent of gross national product. The major change of policy in 1987 came not a minute too soon. If, as some are now beginning to suggest, we reverse this trend and again enter into the area of uncontrolled, unbridled public expenditure, the people we are supposed to represent would not forgive us. It is essential that we continue to exercise disciplined control over public expenditure, which has obtained for the past four years, in order to achieve substantial reductions in our national debt.

The Programme for Economic and Social Progress which was recently signed provides a structure and a framework for the development of the economy and for the development of social policies over the next three years. It will be a source of stability over that period. It is comprehensive in its economic and social policies. The overriding principle remains the firm control of public finances. At this stage we should commend the Government and the social partners who were involved in drawing up and negotiating the new programme. The Irish Congress of Trade Unions, FIE, CII, CIF, the IFA, ICMSA, the Irish Co-Operative Societies and Macra na Feirme in agreeing this programme, have done a good day's work. Some commentators have been critical of the level of wage increases agreed in this programme, and when the Government look back on the programme perhaps they might be a little concerned about the excessive levels of wage increases that were agreed, but in putting a programme in place and providing a comprehensive framework which will last for three years, I think they have done well.

Strict control of State expenditure is necessary to safeguard the future economic well-being of our people. This well-being was in serious jeopardy up to recently and needed to be carefully watched over. The choice we faced was simple: a continuation of the chronic economic and financial problems and being left behind as Europe and the rest of the world moved forward or to take the difficult course of correcting public finances, improving our economic performance and providing real prospects and opportunities for a worthwhile future for our children. It was a difficult choice and Fianna Fáil in Government from 1987 faced up to that choice manfully.

The correct decision was taken by the Taoiseach and the Government in 1987. We now have on offer a real prospect of finally overcoming our problems, no matter how difficult and intractable some of these still might seem. The reduction of our national debt must remain one of our main priorities. Our debt of £25 billion is still dangerously high. Our debtgross national product ratio at 123 per cent still does not compare favourably with some of our European partners, but when one compares it to 131 per cent in 1987 and 111 per cent in 1990, one can certainly see the progress that has been made in that area.

The aim of the Government in the immediate future is to reduce that ratio to 100 per cent. When one considers that developed countries have an average debt-GNP ratio of 40 per cent, one can see the problems we face. The achievement of the overall reduction in personal taxation is required over an agreed time span. This Government, more than any Government, have gone down the road of reducing personal taxation. When one makes the comparison of 1985 — which was mid-term in the previous Coalition Government — and sees their record when tax rates were 35 per cent, 48 per cent and 60 per cent and when we, in Government, are well on our way to having two rates by 1993 of 25 per cent and an upper rate of 48 per cent, one can see the huge leaps we have made in the reduction of personal taxation.

When one considers that the Exchequer borrowing requirement in 1985 was in the order of 12.9 per cent and that in 1990 we had reduced that to 1.9 per cent, I am sure even the most bitter Opposition Deputies must agree that formidable progress has indeed been made. This level of growth has been made possible by the improved financial position while growth itself has, in turn, contributed to further improving the financial situation. There was a slight rise in the rate of inflation in 1990. However, it remained below the EC and OECD average and several points below our immediate partners, the UK, whose inflation rate is currently at something over 9 per cent. Our inflation rate was indeed just over 1.5 per cent above the German inflation rate.

Forecasters are predicting a rise in the number of those employed in the year to mid-April 1991. This is very positive news for young unemployed Irish people. One of the major characteristics of the Programme for National Recovery was that almost all its objectives have been successfully achieved. I wish the new Programme for Economic and Social Progress success. I know, building on the previous experience of the last programme, that we can look forward to a good future for our young people.

One must also pay particular tribute to the social partners to this new programme. It is a team effort and, without them, the substantial progress which was made over the past three years could not continue. I commend the Government on the work they have done so far and I wish them continued success. I know that, with the goodwill of the public and all the community, we can continue to prosper and go forward.

Mr. Garland

There are two main criteria which we in the Green Party look for in a budget. First what does it do for the environment and, second, what does it do to remedy the dual scourges of unemployment and emigration? I regret that this budget, like the 1990 budget of this Government, fails dismally on both counts. If we look first at the environment we find that the only specific provision in the budget is a very minor, if welcome, taxation change in the farming area which gives fiscal incentives to farmers to install pollution control equipment. The cost to the Exchequer is estimated by the Minister to be £3 million, and that is the only public expenditure specifically targeted towards improvement in our environment out of a total Government expenditure of £11 billion.

There is nothing for renewable energy to supplement the meagre spending by the ESB in this area. There is nothing to redress the reduction in the Vote for energy conservation of 26 per cent announced in the 1991 Estimates. There is no increase in the amount of £1 million provided in the Estimates for the Environmental Protection Agency. There is, quite obviously, no sense of urgency in setting up this absolutely vital instrument in the fight against pollution. The need for both energy conservation and reducing our dependence on oil must be apparent to everyone in this House. The Gulf problems will not go away and even when the war is brought to a conclusion there will be many problems in this area.

I will turn to the second failure in this budget, that is, to address the problems of unemployment and emigration. The Minister in his speech talked about the new Programme for Economic and Social Progress. In drafting this programme he stated that growth in employment should be top of the list of priorities. The response by the Minister to this very laudable objective can only be described as pathetic. In his budget speech, he nevertheless admitted that unemployment will increase from 224, 700 to 228,000. There is nothing in this budget which does anything for employment or work creation. How can the Minister have the gall to state, in the same speech, that he wants to prioritise employment growth and at the same time admit that employment far from reducing is targeted to increase? Let us be quite clear that everyone — and I repeat everyone — other than those who are so mentally or physically handicapped to be unable to work, is entitled, as of right, to paid work. People want work not dole. No one should be obliged to leave Ireland permanently because of the absence of paid work. It is quite obvious where the Minister's priorities lie. His first priority is to cater for the needs of big business, particularly foreign transnationals.

Ireland has one of the lowest tax takes in Europe from corporation tax. Total revenue estimated for 1991 amounts to a mere 8.8 per cent of total current revenue. The owners and controllers of these businesses have no interest in or incentive to create employment. The Minister well knows that the only objective of a business enterprise is to maximise profits. Employing more staff quite obviously does not tend towards maximisation of profits. Our whole tax system is very antiemployment through the operation of the PAYE/PRSI system. While I welcome the income tax reductions, particularly for the lower paid, the whole tax system needs to be restructured and reformed in a radical way. To describe the minimal changes in our tax system over the last few years as tax reform, as claimed by politicians in the major parties, is a gross abuse of the English language.

There is only one short term answer to solving the unemployment and emigration problems and that is to share the work which is already there by job-sharing, reduced working hours, early retirement and career breaks. This will probably require most employees to take reductions in their gross pay. However, as there would be huge income tax reductions possible from the virtual elimination of social welfare payments, the reduction in net pay would be quite small. Profit sharing for medium sized and large firms should be introduced as an extra incentive. Such a radical change in this area would require to be phased in over a period. It would, of course, require the co-operation of employers and trade unions. I appeal to the trade union movement, which has in the past played such a noble role in safeguarding the interests of the poor and underprivileged, to accept that their current policies do not adequately address the evils of unemployment. There is a failure to accept the reality that the high-tech industry which they espouse cannot create sufficient jobs to solve the unemployment problem.

Of course, the brunt of such a major change in work practices should not be borne by the lower paid and unskilled but should be extended to managers and professional people. It is nonsense for politicians and economists to hold out the wonderful hope of growth-creating employment. There has been growth as measured in conventional terms over the past two years but unemployment, far from reducing, has increased. I ask the other political parties who cling to this illusion once and for all to admit collectively that growth is not going to solve our problem. Apart from anything else, growth based largely on the use of fossil fuels and on industry and agriculture without adequate pollution controls is clearly not sustainable in the long term.

In addition to the radical changes in the area of paid work we would like to have a tax system which will create incentives for work creation and, at the same time, bring our modern world into harmony with the needs of the planet which in the long run is essential to the well-being of all of us. The main thrust of the alternative taxation would be to bring in a tax based on energy and land. That the world is using up precious resources of fossil fuels must be apparent to us all, yet the world's energy pricing does not provide for this in its costings, thus resulting in energy from non-renewable resources being grossly underpriced. It is interesting that in an elite newspaper report it seems the EC is seriously considering a $10 a barrel tax on oil to reduce emissions and to reduce global warming. In addition, our own energy, particularly that emanating from Moneypoint power station is not carrying the real cost of the pollution control, due to the continued failure of the ESB to fit scrubbers to this station. A realistic tax on energy would solve a number of problems simultaneously. An increase in electricity prices would force industry into using more intermediate technology with a corresponding increase in the workforce. It would allow renewable energy in its various guises, hydro-power, wind power, tidal power, solar heating, biomass and so forth, to compete on a fair basis with non-renewable energy.

The other question which is not addressed is that of our real energy requirements. The Government should be targeting a substantial reduction in overall energy consumption over a 15-year period. I have little doubt that a combination of more conservation and less wasteful usage could reduce our energy consumption to perhaps half its existing level. With regard to petrol and diesel, further increases in taxation would reduce the use of private cars and encourage public transport. It would also encourage people to live nearer their places of work. With the increasing information technology the option of working from home is now very real.

The other main tax which should be introduced is a tax on land, on all land irrespective of its use. I want to make it quite clear that this is not just a tax on farmers but would extend to land users for houses, industry, shops, etc. As it would be based on the rent and value of the land the tax per acre would vary very considerably. The projected tax yield from these taxes would enable the abolition of VAT, income tax and PRSI. Excise duty would continue to be levied on drink, tobacco and other luxuries. In any event, income tax is fatally flawed as it is totally unsuited to a country such as ours with its very large informal economy. The introduction of a system of guaranteed basic income to replace social welfare would facilitate greatly these radical changes in our tax system.

To turn again to the budget, I welcome the social welfare increases even though in the absence of a basic income scheme such increases would increases the poverty trap. I would like to state once again that the real answer to unemployment is not increases in the dole but provision of paid work. The cost to the community and to these unfortunate people who find themselves unemployed is incalculable. Huge increases in crime over the last few years, particularly in urban areas, have been quite noticeable. The continued failure of successive Administrations even to cost a basic income scheme is quite incredible. The lack of incentive for the long term unemployed to seek work is notorious. The long term unemployed are not even entitled to educate themselves without incurring the risk of losing their dole. It is absolutely ludicrous to have 224,000 people paid by the Government to do nothing when there is so much useful work to be done.

The Minister in his speech estimates the number in the public service at 199,000 people, a reduction of 18,000 since 1987. The Minister is claiming great credit for this. I beg to disagree. What these statistics mean is another 18,000 people on the dole queues or who have taken the emigrant ships or are paid to do nothing. Any policy which results in this type of solution is absolutely crazy. However, the Minister is still not satisfied. He states the reduction in staff numbers must go on. Meanwhile there is a huge backlog of work in the income tax offices. The Registry of Deeds, the Companies Registration Office and the Patent Office are all grossly understaffed. These areas should be self-financing and run on commercial lines. They should charge an appropriate fee for their services and should have freedom to recruit the necessary staff.

The reduction in the numbers employed in the public service have resulted in the Government being unable to provide the required range of services in an effective manner. That is not to say the Green Party are in favour of a large public sector which, of necessity, requires high rates of taxation. Quite to the contrary, the Green Party believe in decentralisation of administration in all possible areas. This should result in a much more efficient and cost effective community service replacing a bureaucratic, centralised structure. This Government and their predecessors have attempted to run the same level of public service with a large reduction in numbers. This is clearly dishonest. It is now apparent that the present numbers employed in the public service are either insufficient to provide the level of public service the Government purport to provide or productivity in the public sector has not improved. In the long run, the only answer is the type of decentralisation administration I have mentioned.

One of the major budgetary problems we have had over the years is the funding of the interest on our national debt. The huge increase in both the amount of the debt and consequent cost of funding is probably the greatest scandal of all. This huge accretion in the national debt is a result of the most blatant vote buying, and virtually all parties in this House have to accept responsibility for this. The Minister himself has mentioned that more than £2 billion or nearly 75 per cent of income tax revenue goes on servicing this debt. This always means that room for manoeuvre in the budget is very limited.

What is not in the budget speech is perhaps more significant than what is in it. In a very lengthy statement, running to 58 pages, the Minister has devoted little more than a page to agriculture and food. It is quite amazing that what was once Ireland's major industry is now dismissed in such a cavalier fashion. What little there is about agriculture targets the wrong priorities. There is nothing about encouragement towards organic farming, nothing about the replacement of the now totally discredited CAP by a system of income support as recommended by the United Farmers' Association, a body who represent the interests of small and medium farmers. A radical reform of agriculture will be necessary in the interests of the environment and of the vast majority of people who do not earn their living from farming.

I propose to deal with the more detailed aspects of the budget in the debate on the Finance Bill.

Miss M. Wallace

There was a time when budget day was the highlight of the parliamentary year. It is still a very important occasion but in recent years I feel budget day tends to be less unique an occasion when the great blueprint of the Government's economic strategy is revealed. Budgets for a number of years have had to take into account many various policy areas. For example, in the 1991 budget which we are debating at the moment the various aspects of the budget had to take into account the new Programme for Economic and Social Progress and, on a more general level, the fact that we are moving closer to completing the Internal Market and to European integration. There is nothing wrong with using the budget in this way and seeing it as part of a bigger instrument or a wider articulation of Government policy. In the past some Governments tended to work in isolation from the various sectors of Irish society as if they were mutually antagonistic. In the sixties Seán Lemass attempted to change this with his approach to budgets. The Taoiseach has followed that policy today in involving each of the social partners on the path towards national recovery and progress. Accordingly, not only can each sector participate and benefit from such discussions but they and the Government can ensure that nobody will be forgotten or precluded from taking full advantage of the opportunities in a ten year strategy for progress in the linked areas of social and economic progress. In any context, such progress is possible only if the Government maintain a disciplined approach to the public finances. In general terms the Minister for Finance has achieved this. As a result the Minister can give encouragement to continued investment, keep the underlying borrowing trends within targets and continue economic achievements and policies which since 1987 have seen the country re-established on a sound economic footing.

The country was in an economic mess in the mid-eighties and the Programme for National Recovery was aptly named at that time in 1987. The programme lived up to its brief. There have been four budgets since 1987 and all of them, including the one before us this year, reflect the Government's commitment to economic stability and progress whether in areas of taxation or expenditure particularly in the big spending Departments of Social Welfare, Health and Education. There is a clear long term strategy not only to restore stability but to ensure that all sectors of society are carried towards recovery in a way which is detrimental to none.

The 1991 budget reveals a sense of balance in so far as the business community is concerned. It will encourage the investor confidence necessary to increase employment. This is not being done at the expense of the weaker sections. I was pleased about the increase of 4 per cent in social welfare, which is above the rate of inflation of 2.7 per cent. This, taken with the cumulative effect of reducing the standard tax rate by 6 per cent since 1989 and the changes in the FIS makes it clear that recent budgets have tended towards substantial improvements for those on lower incomes, whether they are on social welfare or are employed on low income. In addition, the Minister's concession to increase the rate for the long term unemployed to £55 represents an increase of nearly 6 per cent. There is also an 11 per cent increase for the short term unemployed in that this benefit has been increased from £45 to £50. The budget reflects a tangible commitment to assist those on the lower end of the scale.

I will concentrate now on an area which might not have been addressed in much detail by other speakers, that is the £500,000 in the budget for women's groups. This provision was first made last year by the Government to be divided between the Rape Crisis Centres and women's organisations. My difficulty with the provision last year was that the women's aid and refuge centres, a group which I particularly represent, could not be covered. I am glad that both the Minister for Finance and the Minister for Social Welfare referred to this, this year, and ensured that money would be provided to finance the much needed work done by this group. I have a particular interest in this not only as a member of the Oireachtas Joint Committee on Women's Rights but because of the Meath women's refuge which is located in my county in Navan which covers counties of the north-east, Louth, Longford, Monaghan, Westmeath, Cavan, Meath and parts of County Dublin. Refuge centres such as this provide a much needed service by people who are giving their time voluntarily on a 24 hour day, seven day a week basis. It is difficult for these people to go out and fund-raise as well. I am delighted that the £500,000 in this year's budget will assist these groups in their work.

The money allocated last year for womens' groups was divided between 200 groups in rural and urban areas. The representatives from these groups attended a seminar in Dublin Castle in January. I was glad to be able to attend this seminar where representatives of the groups explained what a magnificent opportunity it has been for them to get funding in the budget. It is important for voluntary groups, particularly women's groups to get Government funding, no matter how small it is because it gives them recognition. The Government should be complimented on recognising the need last year, and for this year including the provision in the budget again and for specifically targeting the area with which I was particularly concerned as was the Committee on Women's Rights, the area relating to women's shelters. The Minister for Finance and the Minister for Social Welfare should also be complimented on it.

Many Irish women are caught up in an ill-defined world of part-time work. Part-time working has increased dramatically here and in the EC in recent years and there has been too little effort to regularise it in the past, perhaps because part-time work was not in operation in so many employments. Because the vast majority of part-time workers are women I have a particular interest. The inequality already existing between male and female workers is reinforced by the fact that part-time workers are not properly regulated. I am glad that in the budget part-time workers are being recognised in the Social Welfare provision for them and I am glad that later on this week in the House we will discuss legislation from the Minister for Labour regarding part-time workers. About 70 per cent of part-time workers in Ireland are women. Women are finding part-time work in the service and sales area and this has tended to create a two-speed labour system, with full-time workers enjoying the usual rights and part-time workers enjoying no rights. Little was done to regulate this up to now.

In the EC 85 per cent of part-time workers are women, the vast majority of whom are in insecure employment without social welfare protection. I know this area is complicated and difficult to regulate but I am glad that at last something solid is being done in this area. The budget suggests that the Government are making a good beginning in this area. I welcome the proposals to link social welfare payments to wages, particularly in cases where part-time workers cannot work because of illness or because of unemployment. I would also urge the Minister to consider relating pensions to wages, although I understand that this will have to wait for the National Pensions Board.

An Ceann Comhairle

I intervene to advise the Deputy that some five minutes now remain of the time available to her.

Miss Wallace

My second last point is in relation to another area which has been covered in the budget and specifically relates to women in the community, the carers and home helps. Women are mainly the people who provide this service in our community. Many of us have had difficulty with the carer's allowance, the fact that some people did not qualify, and others were not getting enough as it was means-tested with social welfare payments. I am glad the budget has recognised disabled person's maintenance. The majority of refusals I was involved with were within the area of DPMA. I am pleased these are now recognised as being eligible for carer's allowance. There were complaints about people who were not getting the full allowance of £45 because of means-testing. In some cases they were only getting £13 or £14, but that is £13 or £14 per week more than the family would have been getting. If the husband was in receipt of unemployment assistance he would have been getting the allowance for himself and his wife. Most of the difficulty stems from the fact that he is getting £34 less while his wife is getting that £34, plus an additional £14 approximately. Their combined income is approximately £14 more and his wife is getting £45 into her hand. I see no problem there. I am glad to see in the budget that the carer's allowance has been increased from £45 to £50 per week.

The most important concern of our economic planners must be to ensure a proper balance between the various socio-economic levels of Irish society. This year's budget reflects this sense of balance and, within the broader context of the integrated and more long term Programme for Economic and Social Progress we can get back to the days not only of economic health but of the optimism and self-confidence which comes with it. I am pleased the budget recognised and offered support to a number of women's groups which must be nurtured if women are to achieve anything near their potential in Irish society.

Mr. Deenihan

At this stage most of the provisions in the budget have been debated in depth by several Members on all sides. However, listening to many speakers, and I am not referring to Deputy Wallace, it is rather cynical of a number of Fianna Fáil speakers, and indeed some Progressive Democrats speakers, to try to impress upon this House that the economic ills of this country originated during the period of the Coalition Government from 1983 to 1987. I admit that economically that Government were not too successful. However, any effort they made to correct public finances during that period was met with a barrage of abuse from the then main Opposition party, Fianna Fáil, and also well orchestrated resistance from organisations and individuals representing several diverse views throughout the country.

In 1987 Fine Gael presented a framework for the future shape of our economy to the electorate. This was rejected by the people. No doubt they were influenced by the very cynical and skilful campaign carried out by Fianna Fáil on that occasion. I will always remember those billboards: "Health cuts hurt the old, the weak and the handicapped". Another beautiful billboard depicted a passport being handed to some young individual, implying that the only solution was to hand him a passport and get him out of the country. Another billboard had a long queue to a social welfare office. Those posters were displayed around the country for a year before that election and they had a major effect on the people. As a result that Government were destroyed in the 1987 election. However, when the Fianna Fáil minority Government went into power in 1987 they took on that very same proposal almost verbatim and with the help of Fine Gael, through the Tallaght strategy, and the social partners, put that programme in place. I am sure the Minister would agree that it was that type of co-operation and goodwill that ensured the success of that Programme for Economic Recovery. It is rather cynical that Fianna Fáil speakers one after another should claim all the credit and claim it as their own agenda, when really, going into the 1987 election, they presented no agenda to the electorate.

Since 1987 Fianna Fáil, and now their Coalition partners, the Progressive Democrats, have benefited substantially from certain measures like the bonanza from the tax amnesty which brought in over £500 million. The sale of local authority houses which resulted in a major cash injection into local authorities substituted for Exchequer spending. There was the windfall from the national lottery put in place by the previous Government. This ensured that when the worst cuts were taking place, Government Ministers were able to go around and keep the people happy with little hand-outs or promises of hand-outs. Now we are experiencing the doubling of the EC Structural Funds. This is another cash injection into our economy which was not there previously.

The improved tax collection system, or revenue buoyancy as it is called, which we are experiencing at the moment, was put in place by the previous Government when they appointed sheriffs in each county. Definitely our whole tax collection system has improved substantially since we appointed sheriffs in each county to pursue defaulters.

Last year in this House I listened to Deputy Dick Roche endeavouring to rewrite the economic history of Ireland. Of course, he made no reference to his own part in the economic recklessness displayed in 1977 when he was personal adviser to Dr. Martin O'Donoghue. I was disappointed to hear so many Fianna Fáil Deputies, and some Progressive Democrats Deputies, follow the very same line in this debate. I am sure they have a lot more to offer and they could address our present problems rather than reflecting back and blaming all the ills on the period from 1987 to 1987. They all failed to mention, except Deputy Charlie McCreevy, that from 1977 to 1981 the country was subjected to reckless economic strategies. I refer to measures like the removal of car tax and the removal of rates from private houses, which plunged local authorities into a situation that they have never recovered from. They have never funded themselves adequately after that removal of rates. They will never refer to that period but they will always refer to the 1983-87 period and I hope we will not have a continuation of this in the next budget.

In 1983 the incoming Government inherited an economy with inflation running at 22 per cent and interest rates at 18 per cent to 19 per cent. By 1987 inflation was at 3 per cent and interest rates reduced substantially. It is time for Deputies on the Government side of the House and Ministers to address the economic problems that we are experiencing today and not to refer continually to 1983-87. That is a deliberate ploy to divert attention away from their own failures in certain areas of the economy. The greatest failure of this budget is its failure to address the major problem in our economy which is unemployment. RTÉ are running a programme at the moment where they go to several different provincial towns around the country. Each town has a worse story to tell. Small towns are being denuded of their young population especially because of the lack of employment opportunities. We have heard no reference to that except by the Minister himself. Other Deputies prefer to ignore that instead of addressing the problem.

I would like to refer to the problem of youth unemployment. This has been brushed under the carpet despite the fact that unemployment for people under 25 years of age is now running at 23 per cent. This is 7 percentage points higher than ordinary unemployment rates. Provision in the budget for young people is severely lacking. There is no increase in the numbers being recruited by FÁS on Teamwork and SES schemes despite major oversubscriptions in Teamwork. There is no provision for increasing the numbers of young people in apprenticeships despite shortages in industry. It is now easier to get into third level education than to get an apprenticeship, which is ridiculous. There is no increase in FÁS trainee allowances. This is disgraceful considering that allowances were cut by £10 in 1988 and have remained static with no increases for national understandings and inflation.

The Programme for Economic and Social Progress states that all training allowances will be reviewed. When will this happen and will allowances be increased? The problem of emigration is still very serious. Approximately 31,000 people emigrated in 1989-90. Those emigrating are, in the main, young people taking with them their enthusiasm, education and expertise. This very serious situation is compounded by the underfunding of emigrant services abroad. There have been no increases in funding for these services despite repeated calls from many concerned groups. The £880,000 combined allocation for England and America is a mere drop in the ocean and is not sufficient to meet the needs of these services. When one hears of the reports of the level of psychiatric illness among young Irish emigrants in England, it is then we should realise how important it is that we adequately fund our services for these young emigrants.

The fundamental flaw in this year's budget is that it has failed to bridge the gap between unemployment and employment. While those on social welfare and on low incomes in employment get more money, there is no provision in the budget to help bridge the yawning gap for young people. The most startling aspect of the budget is the admission by the Minister that unemployment will increase to an average of 228,000 for 1991. After the publication of the January figures the Minister will have to revise his estimates upwards. This must be a first for a Minister for Finance, having to frame a budget and admit to an increase in unemployment. This is all the more bizarre as Ministers recently claimed that Ireland is experiencing an economic miracle. If this is an economic miracle I dread the effects of a recession.

I do not intend to engage in political point scoring on the dreadful prospect of continuing high unemployment and emigration. I would rather compliment the Minister on his frankness. It is a pity that many of his Deputies were not as frank. This debate gives us an opportunity to deal with the problems with maturity. Over the past few years our unemployment figures have been artifically depressed by the extraordinarily high levels of emigration particularly to Britain. However, recent economic forecasts from across the water are alarming and have a strong bearing on our own economic prospects, particularly on rates of unemployment. A survey a few weeks ago by the Confederation of British Industry showed that prospects for manufacturing output and employment are the worst since the recession of 1981. Manufacturing investment is expected to fall by 16 per cent this year. It is forecast that 90,000 manufacturing jobs will be lost over the next three months. The outlook for the service sector is no better. The London Chamber of Commerce is predicting rising unemployment in this sector. Britain will let unemployment increase as a means of dampening demand to reduce their inflation figures. This gloomy outlook will have serious repercussions on our future. Our high levels of emigration to Britain will ease with a corresponding increase in our levels of unemployment and the range of social evils that accompany it.

The Government seem to have a fatalistic attitude to the problem and seem to think that creating the right economic climate will solve the problem. This process will only have an incremental effect and will make no major impact on the figures. The recent data on the 1989 school leavers is alarming. It shows that nearly 17 per cent of school leavers had either emigrated or were unemployed a year after leaving school: this represents 25 per cent of that year group. In the light of this information I would ask the Minister or the Taoiseach to immediately assemble an all party forum on unemployment and bring in the social partners, representatives of the unemployed as well as the Conference of Major Religious Superiors. We now need fresh and radical approaches to this problem before irreversible damage to the social fabric of our society is caused.

I would like to refer briefly to the special allocation for the Olympics in 1992. This is the third year of the Olympic cycle. It is now traditional that the Government make a special allocation in the budget to the Olympic Council of Ireland to fund the various training and preparation programmes for their athletes. However, this year the Government failed to do so. It should be brought to the attention of the Taoiseach who has a very positive attitude to sport to ensure that many of our better athletes will not be denied the opportunity of winning medals in Barcelona.

Minister of State at the Department of the Marine (Mr. Noonan

, Limerick West ): Let me start by complimenting the Minister for Finance on the excellent job he has done on this year's budget. In what has the makings of a very difficult year, he has managed to balance the many differing priorities and produce a budget which builds upon the successes achieved since 1987. This budget, taken together with the Programme for Economic and Social Progress agreed last month represents the first stage of the next phase of economic and social development and provides a basis for growth well into the nineties.

The difficulties facing the Minister in framing the budget should not be underestimated. Even before the Gulf conflict started, the outlook in the US and UK economies was giving cause for concern in terms of our growth prospects for 1991. The situation in the Gulf only adds to the uncertainties associated with these difficulties.

This budget, however, steers a sure path between the need for continued vigilance on the public finances and the need to make further progress on tax reform, social welfare and jobs. I firmly believe that this budget succeeds in these key areas.

The successes of the last few years cannot be squandered now, they must be preserved and built on. The maintenance of the downward pressure on the Exchequer borrowing requirement in a potentially difficult year is proof, if proof were needed, of this Governments's total commitment to reaching the targets they have set themselves.

The budget impacts directly on most sectors of the economy through its expenditure provisions. I will, therefore, devote some of my time to specific aspects of the Department of the Marine's responsibilities which cover most areas of the marine economy. Due to the shortage of time I want to restrict myself to a few activities in which I have a personal interest.

Our inland fisheries are a valuable natural resource, a fact recognised in the Programme for Economic and Social Progress. Irish angling is worth in the region of about £65 million to the economy each year and generates the equivalent of about 1,900 full-time jobs. My objective, therefore, for the inland fisheries are to facilitate and encourage the development of inland fisheries to their full potential; to ensure the conservation and protection of fish stocks and their environment; and to optimise the amenity, recreational and environment value of the resource. Their objectives have been set with a view to maximising the return to the economy both in terms of output and in terms of employment.

The importance of our inland fisheries is shown by the fact that the total area covered by freshwater lakes is approximately one-fifth of the total area covered by the State. In addition there are some 8,600 miles of main channel rivers. These surface waters comprise a much higher percentage of total area than in many European countries, including England, Scotland and Wales.

We must develop and protect this valuable resource. I am particularly conscious of the physical damage which pollution can do to inland fisheries and to its image at home and abroad. Regular contact between my Department and other Government Departments, State agencies and fisheries boards is ongoing to prevent and control water pollution. I am pleased that our community has been much more keenly aware of the importance of clean water, an area in which the fisheries boards are continuing to play an active role.

The boatbuilding industry is another important area within my Department's remit. I believe that close liaison with the industry is essential if we are to identify and understand its needs. A committee has been set up comprising representatives of the Irish Federation of Marine Industries, BIM and the Department to examine all aspects of the industry. I can assure Irish boatbuilders that their concerns will be carefully examined and that so far as it is possible, whatever can be done to improve the commercial viability of this great resource will be done.

I would like to draw attention also to the related sectors of shipbuilding and ship repair. The sale of Verolme Dockyard in Cork to Damen Shipyards of the Netherlands has now been completed. Following some essential refurbishment the yard will reopen for ship repair activities. The owners eventually intend to move into shipbuilding, specialising in smaller vessels with the prospect of employing 400-450 people within five years.

The Government's aim in designating Ringaskiddy as a free port is to encourage real industrial activity in the area through the use of fiscal and financial incentives. Manufacturing industry locating in Ringaskiddy already qualify for a wide range of incentives such as deferred liability from customs duties and VAT as well as simplified customs documentation and procedures.

Around 85 per cent of Irish exports are handled by our commercial ports. The Government are committed to the development of these ports in order to offset the disadvantages of our location in the Internal Market after 1992. In this regard the ports of Limerick and Foynes in the Shannon Estuary, among others, have been put forward for aid under the EC-assisted operational programme.

The Limerick Harbour Commissioners project, now completed, involved the installation of radar surveillance equipment. This equipment will assist vessels using the Shannon Estuary, particularly those of over 100,000 deadweight tonnes.

The Foynes Harbour Trustees have completed the first half of their project and have installed dolphins to facilitate the handling of bulk liquid cargoes. The trustees will also be acquiring a crane which will be installed later this year.

In November last, the first tranche of EC aid under the operational programme, totalling in excess of £2,713 million, was made to ten commercial ports, including £45,000 for Limerick and £93,000 for Foynes. Total investment of about £69 million is envisaged under the programme. Major developments have been undertaken by the Department in the area of maritime safety in recent years.

Moneys have been provided in the 1991 Estimates for the implementation of the main recommendations of the Doherty Report on Air-Sea Rescue Services, which were approved by the Government, in particular the cost of a search and rescue helicopter service contract. This helicopter, to be based at Shannon Airport, will provide a countrywide medium range search and rescue service to complement the short range recovery and air ambulance service provided at present by the Air Corps.

The report also recommended the establishment of a single marine emergency service under the control of my Department which would be responsible for the co-ordination of the response to all types of marine emergency, including search and rescue, shipwreck and sea and coastal pollution. I expect the recruitment by open competition of a director for this service to take place shortly.

A further commitment to safety at sea is the opening of coast and cliff rescue service stations at Achill and Killala in County Mayo, Killybegs in Donegal and Castletownbere in Cork. The Achill and Killala units will be specialist cliff rescue units bringing to eight the number of these elite teams in the service. The service now has four inflatable boats for coastal search and supporting cliff rescue. Extensive training has been provided to the crews using these boats and they without doubt are a major addition to the effectiveness of the service.

Legislation has recently been passed in this House for the establishment of the Marine Institute and this legislation should be enacted shortly. The aim of Government in establishing the Marine Institute is to bring together, under one authority, all the resources of the State which are currently allocated to marine research, and to co-ordinate the activities of marine research agencies. The objective of the institute will be to undertake, promote, co-ordinate and assist marine research and to provide related services. As many as possible of its activities will be carried out on a commercial basis.

It is generally agreed that there is a case for applying increased resources to marine research in Ireland. We account for about 15 per cent of Community waters but national expenditure on marine research represents only 0.7 per cent of the total expenditure by all member states on such research.

To begin to address this situation, and in the context of the imminent establishment of the Marine Institute, the Department of the Marine are embarking on a programme of expanded research and development in which priority is being given to developing new or underexploited resources and determining the most effective means of harvesting the sea's resources. It is the Government's intention to ensure that funding from EC sources for Ireland's marine science programme is maximised to the greatest extent possible in the future.

Managing the economy is not a book-keeping exercise for the Government. We see the correction of budgetary imbalances not as an end in itself but as a necessary prelude to the generation of lasting growth and employment. Our success in these twin objectives over the past few years is there for all to see. The progress made is perhaps nowhere more visible than in the mid-west, particularly in my city of Limerick. This city which was neglected and in decline not five years ago has undergone a dramatic rebirth recently with almost £40 million having been committed to urban renewal developments. Almost 2,500 jobs were created in the mid-west in 1990. Tourism in the region has grown significantly in the past few years with a large increase in the number of visitors and investment of almost £50 million. By 1993 it is expected that tourism revenue in the region will reach £75 million and result in the creation of an additional 3,660 jobs. These are real tangible improvements. They demonstrate very clearly what can be done when the climate for investment is right.

The budget will ensure that the progress made over the last few years will continue and that the benefits of economic growth will benefit all sectors of the economy. This is an excellent budget. Notwithstanding anything said by Members on the opposite side of the House, it will ensure that further progress will be made in our economy during 1991. I have no doubt that the Government will reach the targets they have set out in the budget, as they have done since 1987.

An Leas-Cheann Comhairle

I call Deputy Bradford who must finish not later than 10.29 p.m.

Mr. Bradford

I will take note of your very specific instructions, A Leas-Cheann Comhairle.

I was interested to hear the last few comments made by the Minister, in particular his statement that the progress made by the Government over the past few years would continue. While I would be the first to admit that certain progress has been made in the management of our economic affairs, unfortunately the central problem of unemployment and the related problems of emigration and poverty continue to haunt the Government and all politicians. Unfortunately, there was nothing new in the budget which addressed these major problems. If the main function of the Minister for Finance in his Budget Statement is to outline the new approach being taken to tackle old problems then I am afraid the budget was only a PR job designed specifically for the advent of the television cameras.

It is almost a month since the Minister for Finance, Deputy Reynolds, announced his plans and proposals for 1991. While the gloss, much of the publicity and even the press have gone, unfortunately the problems still remain. When the time comes to discuss the 1992 budget — hopefully we will all still be here — I believe we will still be talking about the 250,000 people who are unemployed, the tens of thousands of our people, particularly young people, who are leaving our shores in droves because they cannot find employment at home and the one third of our people who are living in poverty.

This budget has failed to put forward one new idea or one shred of evidence to suggest that real employment creation will begin in the way needed if we are to address our major problems. These problems have affected people in every town, village and townland throughout Ireland. Politicians have to take note of these problems and address them. No parish, townland or community has escaped the ravages of unemployment and emigration. While it is great to hear that progress is being made in the management of the books of State, that the level of our national debt is being reduced and that the Government have kept to their financial targets over the past three years, unfortunately it has to be noted that there has been no improvement in our unemployment problem and the level of emigration has increased.

The Taoiseach gave a very interesting answer last week to a parliamentary question on the number of Irish people who have emigrated over the past seven or eight years. If my memory serves me correctly, he stated that approximately 250,000 Irish people had emigrated over the past eight years or so. That is a frightening figure. Leaving politics aside, it is almost the population of Cork city. All politicians have to take some of the blame for this problem. Not only should we continue to speak about this problem but we should also try to devise solutions to it. I would be the first to admit that there are no automatic solutions around the corner or automatic ways of creating the 250,000 jobs needed over the next few years. We have to keep putting forward new proposals in this area and move away from the very constrained economic approach we have endured over the past three years.

There was a certain degree of hope among people after the 1989 general election that the Progressive Democrats input into Government would bring radical taxation reforms which would prove to be a stimulus to job creation. However, the tax proposals which have been put forward by the Government since June 1989 have not unfortunately been radical or brave enough to bring about the economic miracle we need in our economy. The slight changes in our tax system introduced over the past few years and the slight reduction in personal rates of taxation have not been sufficient to provide the economic stimulus which our economy urgently needs if growth in employment is to increase to the levels needed. I am disappointed the Progressive Democrats, the party of radical tax proposals, as they would have called themselves a number of years ago, have failed miserably to ensure the introduction of any serious tax reforms.

There are many problems apart from unemployment and emigration which continue to haunt us and have not been addressed in the budget. We have been told that the main problem facing rural Ireland today, the crisis in agriculture, is something over which the Government have no direct control. The GATT proposals, and the EC price proposals, will be decided by people not totally removed from the Cabinet table, but certain decisions will be made over which we have no control. Notwithstanding that it is very important that the Government, and particularly the Minister for Agriculture and Food, lay down very strong markers as to what is and is not acceptable to rural Ireland, to the Government and to the people of the country.

The present proposals for agriculture are so draconian that they affect not just the farming and rural communities but every citizen of the State. If the proposals from the GATT negotiators, and the MacSharry proposals, are agreed the economy will be decimated overnight, unemployment figures will rise sharply and emigration will continue on the up and up. It is very important that the Government are seen to be more active in opposing the price cuts which are being proposed. I am gravely disappointed that we have seen so little opposition by the Minister and the Government to these cuts to date.

I was here last Thursday for questions on agriculture when the Minister, Deputy O'Kennedy, outlined his views and offered certain assurances that he would be very strident in defending the Irish position in Brussels and at the GATT talks, but we need more than words from the Minister; we need action. When the proposals go before the Council of Ministers and the Commission the Minister should make it abundantly clear to all concerned that as Ireland's national interest is threatened he will use the veto to ensure that these proposals are not accepted.

What is proposed — this must be often repeated — is a reduction in tillage prices to the extent of 50 per cent, a reduction in the price of beef of up to 20 per cent, a reduction in milk prices of 10 per cent and a reduction in the Irish national milk quota of at least 5 per cent. When one considers those drastic proposals and reflects on the negative impact they will have on rural Ireland and, as I mentioned earlier, on the Irish economy it is amazing that public representatives and Irish MEPs are telling us that these proposals are good for us. They tell us that reducing the income of some farmers by 50 per cent and reducing the Irish national milk quota by 5 per cent is good for the economy. I do not know what sort of gurus are behind that type of approach. It is about time we spelled out loudly and clearly that if those proposals are accepted rural Ireland and, indeed, the Irish economy will face decimation.

It is ironic and disappointing that a former leader of a farmers' organisation, a man who spent many months leading opposition to far less drastic cuts, is now appearing on television and radio telling the farming community on an almost daily basis that the MacSharry proposals and the GATT proposals must be accepted, and not only that but that they are good for us. I am glad that as late as tonight the IFA leader made clear the position of his organisation. I am glad the farming organisations are at long last beginning to speak up on these issues. I remember not so many years ago during the reign of another Minister for Agriculture, Deputy Deasy, these farming organisations marching the streets in opposition to cuts far less severe than those we now face. I am glad these organisations are finally coming to their senses and are beginning to lead the campaign of opposition to the MacSharry and GATT proposals. It is important that all rural communities join in that opposition.

I would like to refer briefly to the Minister's comments on social welfare. Changes have been made this year in the carer's allowance. The Minister informed the House that there will be an extension to that scheme. I took that remark with a grain of salt because I recalled 12 months ago the same Minister informing the House that approximatey 20,000 people or so would benefit from this scheme, but when I put down a question some weeks ago to the Minister, Deputy Woods, on the carer's allowance I was informed that of 3,600 applicants for the allowance in 1990, 1,200 applicants were successful. When one contrasts that with the figure of 20,000 applicants whom we were told would benefit in 1990 it makes one sceptical about the Minister's promise to extend the scheme in 1991.

The idea of the carer's allowance scheme is very good but, unfortunately, unless the rules and regulations are changed radically the whole purpose of the allowance — permitting elderly people to remain in the care of their families in their homes — will be lost and people will not benefit from the scheme to the extent that they should. I appeal to the Minister, even at this late stage, to bring about the necessary changes in the scheme to make sure the people who deserve it benefit from it.

I would like to make one brief point in relation to housing. The Minister for Finance, Deputy Reynolds, informed us a month or so ago that a marvellous housing package will be laid before us by the Minister for the Environment, Deputy Flynn. The package announced was far from marvellous. It is ironic that it is called a programme for social housing because it does absolutely nothing for the social welfare applicants on our housing lists. I suggest that up to 80 per cent of housing applicants to local authorities today are social welfare recipients. If one is dependent on social welfare for one's income one has no possibility of purchasing a house under a joint ownership scheme or of obtaining a £3,000 mortgage subsidy because one cannot obtain a mortgage. What is needed is a housing policy which will ensure that public housing programmes will start again.

An Ceann Comhairle

I would be grateful if the Deputy would now bring his remarks to a close.

Mr. Bradford

I will conclude by appealing to the Minister for the Environment to ensure that the public housing programme which, unfortunately, has ceased since he came to office in 1987, will begin again so that those people who genuinely need housing and cannot afford to buy their own homes are looked after. That is not the position and it is something which has to be urgently addressed. It certainly was not addressed in the so-called programme for social housing.

Debate adjourned.