Never has a Government which promised so much turned out to be such a disappointment. We were promised change but nobody believed it would be change for the worse. Those who, during the election campaign, were promoted as political Messiahs have already shown that they have feet of clay. The first 100 days of any government in office anywhere in the world always receives close scrutiny because this period is normally regarded as establishing the brand or stamp of a government. We are now more than 50 days into the life of this Government and the sense of public disappointment and letdown has been palpable. Most people expected a flurry of announcements, policy initiatives and new legislation during the early days of the Government. Instead we have had from this Fianna Fáil-Labour Government a humiliating U-turn on devaluation, an inept and botched attempt to save the Digital jobs, a budget that has disappointed virtually everybody, a decision to sell the remaining public shareholding in Greencore and a legislative cupboard that is virtually bare.
The sense of public disappointment has been compounded by the apparent preoccupation of Members of the Government and, unfortunately, Labour Ministers, with appointing extra advisers and staff drawn, in the case of Labour, from party supporters or family circles. What is even worse is that all of this is adding to the public cynicism and disillusionment with politics which was at such a high level anyway and which contributed to worryingly low turn-outs at recent elections.
The potential annual cost of the special advisers, assistants and programme managers for Ministers and Ministers of State — I am not identifying solely the Labour Party element, because this applies right across the board to the Government as a whole — may amount to more than £2.25 million, according to information supplied to my colleague, Deputy Gilmore, in written replies to Dáil questions. The potential cost to the taxpayer of that exercise, should the Government last its full term, is more than £10 million. Ministers and Ministers of State are, of course, entitled to the support necessary to enable them to do their job but the appointment of special advisers and assistants has now got out of hand. Some control will have to be introduced.
According to the replies received from the Minister for Finance each Member of the Government is allowed to appoint a special adviser at a maximum salary of £40,500 per year and a personal assistant at a rate of up to £21,500 per year. If those appointed are paid at the full rate — and it is expected that most will be at or close to it — the total cost of the 15 advisers and special assistants will be £607,500 and £344,000 respectively. Each Minister will also have a programme manager, also at a rate of up to £40,500, accounting for another potential £607,500. In addition each of the 15 Ministers of State are entitled to a special adviser at a rate of up to £32,500 and a personal assistant at the rate of £18,500, accounting for another £757,500. The total potential cost, therefore, in respect of Ministers and Ministers of State is £2,316,500. It should be noted that this amount does not include the cost of personal secretaries or of those employed in the constituency or private offices of each Member and Minister of State which, in some cases can be as many as six, nor does it include the cost of paying two drivers for each Minister of State, but even without these it is an unacceptably high cost.
We have been told repeatedly by Ministers from both parties in Government that times are extremely difficult and that there will have to be cutacks but there seems to be no difficulty in finding public money to employ extra advisers and managers. Ministers will now have to accept that these appointments have got out of hand, and they must make greater use of Civil Service staff.
The budget presented an opportunity for the Labour Party to recover some ground and to show those who had voted for it that it was going to have a real influence on economic issues. When the Programme for Government was published we acknowledged that the Labour influence was evident in regard to its commitments on the liberal agenda but that the econmic sections reflected Fianna Fáil conservative thinking. Now, again, Fianna Fáil conservative thinking on economics has determined the shape and format of the budget. Indeed, any Labour influence is hard to detect.
Judged against the major economic issues facing the country — mass unemployment, widespread poverty for those on social welfare and low pay, and privilege and inequity in the tax system — this budget has to be considered a total disappointment. That is not just our judgment. The headlines in the newspapers on the day following the budget give a flavour of the responses: "Employers Unions join in Criticising Income Levy"; "Concern over Health Increases"; "Worst in Years says ICMSA"; "Hotels Group Voices Dismay at VAT"; "Tourism Federation sees Increased Costs" and so on. The list is endless.
One of the most objectionable features of the budget has been the decision to apply the 1 per cent levy to many low and middle income earners. The sum of £9,000 is below the average industrial wage so that many ordinary workers who are already substantially overtaxed will have to cough up more. I doubt that the 1 per cent levy will cause much concern to the self-employed or to farmers or professionals who are able to massage their income down to artifically low levels for the income tax man but it is an unacceptable additional burden for many in the PAYE sector. It will also create another poverty trap and encourage low pay. A person earning just below the weekly threshold of £173 will find it a virtually valueless exercise to apply for an increase. They will not only have to pay tax on the increase but if it takes them over the threshold they will have to pay the 1 per cent levey on all of their income whereas before they would have been exempt. This will even be the case if they receive the 3 per cent increase due to most workers under the Programme for Economic and Social Progress agreement this year. The Minister claims that the increase in the general exemption levels will remove 13,500 lower paid from the tax net but the increase in exemption level is so small — 2.8 per cent — that even if they receive wage increases in line with inflation, workers would be back in the tax net within a matter of months.
Each year we go through the ritual of shuffling the rates a little here, changing the bands a little there and so on but that is not tax reform. This has been done year in, year out, yet the average tax paid by a PAYE worker in the period between 1989 and 1991 increased by 14 per cent compared with an increase of 1.6 per cent for the self employed while the average tax paid by farmers decreased by a staggering 30 per cent.
I was interested to hear the Taoiseach's remarks the other day in regard to tax and the discovery he has now made that reducing tax rates does not create jobs. I can recall over the last number of years in this House listening to the Minister for Finance and the Taoiseach, both in his role as Taoiseach and as Minister for Industry and Commerce, supporting proposals to reduce the top tax rate bands on income on the basis that this would provide an incentive to create jobs and an incentive to work. The other day the Taoiseach castigated the Progressive Democrats for this philosophy and said this was never his philosophy. However, he is on the record of this House as claiming it was his philosophy. Over the past number of years he introduced and supported budgets based on that philosophy.
I appreciate very much that Fianna Fáil is the great chameleon of Irish politics and can adjust itself very quickly and easily to the environment in which it finds itself, but I was fascinated by another statement the Taoiseach made in his speech. The Labour Party may be interested in this statement because not too long ago when it was on this side of the House it criticised Fianna Fáil for its Thatcherite policies and the implementation of those policies. The Taoiseach said, and I quote:
Neither my party nor our partners in Government have ever subscribed to the view that it is sufficient to keep the economic fundamentals right and to leave the rest, and especially job creation, entirely to the market.
If that is the new found philosophy of Fianna Fáil I applaud it. I know that when the Labour Party was on this side of the House it was its philosophy, and I hope it is still its philosophy. If that is the effect the Labour Party has had on Fianna Fáil, I applaud it.
I ask the Labour Party in the role it now has of riding shotgun on Fianna Fáil that it will seek to ensure that the policies pursued reflect the philosophical statement made by the Taoiseach the other day and that it is not just presented as cotton wool to reassure the Labour Party element in Government, while at the same time the Government introduces budgets which are, by and large, Fianna Fáil budgets and which, by and large, pursue the philosophy that it is only necessary to get the fundamentals right and that the market will do the rest. That is the fundamental theory underlying this budget. I will deal with other aspects of the budget later. As I said, the Labour Party needs to be very careful with regard to the statements being made for public consumption and the actual underlying philosophy which exists when decisions are made, particularly decisions in relation to the budget and social welfare issues.
The social welfare increases are barely in line with inflation. This would be fine if the basic social welfare rates were adequate, but this is clearly not the case. Indeed, I would draw the attention of the House to another statement made by the Taoiseach and I quote:
The social welfare measures in the budget are well targeted, and they continue the practice established since the 1989 budget, of doing more than is strictly required for the least well off in our society.
What does he mean by "doing more than is strictly required?" What does the term "strictly required" mean so far as Fianna Fáil and the Taoiseach are concerned? Where are the limits that he sees, or is he denying already what he said in the earlier statement to which I referred, that things should not be left solely to the market and that, in particular, the poor and unemployed should not be left to the market?
As I said, it would be fine if the social welfare rates were adequate but this is clearly not the case. In addition, the payment of the paltry increases has again been put off until the end of July, a practice which was roundly condemned by the Labour Party last year. It is sometimes forgotten that up until the early eighties the increases were paid from April and that they have been pushed back further and further each year. On the other hand, the increases in VAT have come into effect already; in other words, those on social welfare have to pay now for the increased cost of food and clothing but have to wait for five months for their extra few bob.
Of course, the budget represents only part of the picture. Many of the decisions impacting on the economic wellbeing of people have been taken outside of the budget. The increases in hospital charges announced by the Minister for Health, Deputy Howlin, on the eve of the budget have received considerable public attention and criticism, especially in view of the strong opposition to those charges by Deputy Howlin and his colleagues when they were on this side of the House. I should like to quote from a statement made by Deputy Howlin on behalf of the Labour Party in 1987 when he moved a motion in this House which proposed that the health services regulations should be annulled. He said:
Not content with bringing about a situation which threatens to produce chaos in the service the Government propose also to charge all but the very poorest members of our community for access to a service which has for many years been free at the point of delivery. The three regulations to which this motion refers were published on 14 April last. They are the concrete expression of decisions taken and announced by the Minister for Finance in the budget. When they are put together they add up to an outright and vicious attack on a fundamental principle. That principle has underpinned the health services for a generation. It has provided a basic bottom line guarantee to those who are ill or infirm, to the parents of small children, to the aged and to those who sought the assistance and support of the State in times of great distress. It is the principle that health care should be free at the point of delivery for those in need.
On the eve of the budget, the Minister for Health, a member of the Labour Party, introduced increased charges for hospital services.
I make these criticisms not because I bear the Government any ill will. In particular, I do not bear the Labour Party any ill will. The Labour Party is part of a Coalition. It is not a Coalition I would have joined. I believed the Labour Party was mistaken in joining this Coalition. If the Labour Party does not watch itself I believe it will be out of Government very soon because there is a ground swell of concern outside the House among those who supported the Labour Party during the election.
Before I conclude I wish to bring one other matter to the attention of the House. I am referring to the decision announced by another Labour Party Minister on the eve of the budget which received virtually no public attention, that is, the scrapping of the community employment development programme, which was an enhancement of the SES scheme. This decision effectively goes against the decision of the social partners with regard to the 12 area based programmes seeking to deal with the long term unemployed.
The other point I wanted to make — I do not have enough time to deal with it now — is that last week the Minister for Social Welfare gave me a commitment in the House that the restrictions on the use of supplement by community welfare officers in terms of giving help to people with ESB bills was reversed. I understood that is what the Minister said in the House. Community welfare officers have informed me that they cannot breach the instructions in the letters which were issued, 14/92 and 18/92, unless they receive a further letter from the Minister specifically instructing them that those two circulars no longer apply. I am appealing to the Minister of State, Deputy Burton, to ensure that a letter goes out to the community welfare officers informing them that circulars 1492 and 1892 have been withdrawn or else to tell us honestly that they have not been withdrawn. There are people depending on community welfare officers to keep lighting and heating in their houses. If the community welfare officers are not able to help them, they should know exactly who to blame.
