In the case of the resumed debate on Financial Resolution No. 10, the speech of each Member called on shall not exceed 20 minutes. Is that agreed? Agreed.
Financial Resolutions, 1993. - Financial Resolution No. 10: 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).
I propose to share my time with Deputy de Valera.
Is that agreed? Agreed.
I welcome the approval for 3,500 local authority house starts because there is a significant increase in demand for housing, created mainly by the recession in Britain and the United States. Three or four years ago our housing facilities were adequate and young couples in my area could obtain a local authority house within three to four months of getting married. However, that is not the case at present. The waiting lists are increasing steadily because of the numbers of emigrants returning home. I welcome the employment these new house starts will create as the construction industry, in particular housing, has a spin-off effect in regard to job creation right down the line.
I welcome also the £25 million provided for the establishment of county enterprise boards and the £130 million which has been promised by the banks and financial institutions. The State agencies and local authorities should play their part with the various nominees from the private sector. I welcome the involvement of the private sector and the fact that a chairman will be appointed with experience in this field. Much work could be done and many jobs created in this area. Our approach to the environment has been reasonably satisfactory over the past number of years but the private sector has not responded to any great extent. I hope the local authorities, Government agencies and the private sector will co-operate in this regard and that jobs will be created.
Deputies from the Border regions have heaved a sigh of relief because it was expected that there would be a substantial increase in excise duties in the budget. Border areas have suffered a great deal because of Britain's withdrawal from the Exchange Rate Mechanism and devaluation, which created an upsurge in cross-Border trade. Thankfully, the effects of this have been eased considerably by the Government providing £50 million by way of the development fund. I would like to reply to speakers from the Opposition benches who were critical of the budget and stated that it was an anti-Border region budget.
I remind the Deputy that his time is exhausted.
Deputy Dukes should be grateful.
I thank my colleague, Deputy Leonard, for being generous enough to share his time with me. Against an international background of recession, very high interest rates and a number of pressures on the budgetary position, both at national level and arising from the EC Single Market, the Government has done well to present a budget which gives some tax relief and increase capital spending substantially while maintaining Exchequer borrowing at a low level. The Government has done this against a background of low single figure inflation, averaging around 3 per cent. This has been the longest sustained period of low inflation for more than 40 years. Low inflation has a positive effect on all sectors of society, business, farming, those on pensions, PAYE earners and social welfare recipients.
In forming the budget the Government was mindful of keeping down inflation, particularly following the recent devaluation. As a result of this determination there have been no excise duties on petrol which would have had a negative knock-on effect on the whole economy. The Vintners Federation of Ireland will be particularly pleased that there was no increase on beer and spirits as any such rise would have resulted in job losses, particularly in the small licensed premises in rural Ireland.
Reduction of VAT on service industries to garages, mechanical repairs and hairdressing from 16 per cent to 12.5 per cent was very welcome as was the reduction from 21 per cent to 12.5 per cent on flour confectionery and bakery products. Such measures result in immediate maintenance of jobs in those sectors with the possibility of growth which, in turn, could translate into future job creation.
The tourist industry will welcome the measures to improve availability of car hire. The Fianna Fáil strategy for dealing with unemployment is to give a big boost to public capital investment to sustain economic activity and this has been honoured in the budget. The public capital programme of £2.4 billion is the largest ever. The Minister for the Environment estimates that up to 9,000 jobs could be created directly or indirectly in the construction industry. The capital programme will mean investing in ports, roads, railways and adequate water and sanitary facilities. The stamp duty charge and the increase in the first time grant for new houses to £3,000 and increased mortgage interest relief will help the housing construction industry as will the proposed increase in local housing. I understand the construction industry has been in contact with the Minister for Finance in the hope that the house improvement grants will be re-introduced as this would have a positive effect on the construction industry and would translate into further jobs.
The 10 per cent special investment accounts and the renewal of the business expansion scheme should encourage business and set the right climate for future job creation in this sector. The Taoiseach stated that there would be further measures in the Finance Bill which will examine, among other things, the tax treatment of owners' capital for business start-ups and incentives for employee investment. It is encouraging that the Government is proceeding with the establishment of the enterprise boards. As a member of the committee on job creation which was in existence until the general election, I know that this was appreciated and agreed by most, if not all, members of that committee. I note that the Minister for Finance has allocated £25 million in the budget to this area and this will be coupled with the £130 million which will be made available from financial institutions.
I welcome the £20 million provided to deal with hospital waiting lists in the health area and the additional £8 million for services mainly for people with a mental handicap. This, I understand, will provide additional residential and day care places and emergency and respite care support for up to 1,000 extra people caring at home for sons and daughters with mental handicap, as well as developing education and training facilities. I am assured this will also enable residential facilities to be provided so that more people with mental handicap will be housed in local communities. The provision of an extra £2 million has also been made in the Estimate for the development of the public dental service.
There has been much criticism of the carers allowance since its inception. Therefore, I welcome the 12 per cent increase in this allowance from £53 to £59. This recognises in a small way the unselfish work carried out by the carers in our society, the majority of whom are women.
The increases in this budget for social welfare beneficiaries have been protected. The special increase in short time rates of 5 per cent moves closer to the implementation of the report of the Commission on Social Welfare. However, I am sure the Minister will appreciate it is a long way off the complete implementation of this report. The major improvement on child benefit from £15.80 to £20 per month and the future improvement in the family income supplement are necessary and, therefore, welcome.
I wish to refer to the resource centres for the unemployed. It is vital that these centres receive core funding for a percentage of staff. When the scheme runs after 52 weeks the burden on the supervisor is horrendous. The preoccupation with fund raising and worrying about how to pay the employers' PRSI or rent — not covered by FÁS — draws from the purpose of these centres. With proper funding more time and energy could be directed to the appropriate areas of education, enterprise and job creation, as well as social welfare advice.
Those in the farming sector will be pleased to note that the Minister is providing an additional £1 million in 1993 for Teagasc, towards an advisory service in connection with the small farm development programme. The principal demand from farm organisations during the last election was for something to be done to substantially raise the tax thresholds for lifetime farm transfers between generations, complimenting the EC retirement scheme. This has been dealt with in this budget. The raising of thresholds and the probate tax provide a general incentive to lifetime transfers.
This budget is financially responsible, reasonable, pro-jobs, supportive of invesment, gives incentive to businesses to create jobs and is socially caring. It is a budget which I am happy to support.
I have taken the trouble to look at the last page of the Minister's Financial Statement which sets out the five principal objectives claimed for this budget. I find no evidence to suggest that it lives up to any one of those objectives. The first is to claim that the budget gives effective priority to the creation and preservation of jobs. In fact, the budget does quite the opposite. It increases taxes on employment by raising the PRSI contribution ceilings, thereby increasing the cost of taking on new workers or maintaining existing workers in employment. In an economy with over 300,000 people unemployed, raising taxes on employment is economic and social lunacy.
The Minister spoke about striking an appropriate balance between fiscal prudence and maintaining investment and growth in the economy. This is not a fiscally prudent budget by any means. Both the current deficit and the Exchequer borrowing requirement are projected to exceed the out-turn figures for 1992. The out-turn figures for 1992 substantially exceeded the budget targets that we set in that year. Therefore, effective economic management in this country is, regretfully, a thing of the past. Indeed, the general view in the financial sector is that the targets set in this budget for the deficit and the borrowing requirement will also be exceeded. Some believe this may represent an over-shoot in the order of £100 million to £200 million as a result of slippages in current expenditure, a lower growth rate than that assumed by the Government and probably injections of capital into the semi-State sector, a not unlikely scenario if we are to believe what we read these days. I very much fear that what we are seeing now is the beginning of the new economics so beloved of Minister Michael Higgins which, in fact, amounts to nothing less than the abandonment of even the most rudimentary economic commonsense.
I cannot see any evidence that this budget will maintain investment and growth. It contains nothing, for example, that will help to reduce interest rates which are now, in spite of recent reductions, still the key obstacle to investment and growth. If anything, what this budget does by increasing the deficit and the borrowing requirement is maintain upward pressure on interest rates and delay or prevent us from benefiting from reductions that are triggered elsewhere.
As far as I can see the Government in this budget is relying on the construction sector for most of its claimed job creation for 1993. For example, we have just heard Deputy de Valera claim that some 9,000 jobs will be created in the construction industry in 1993. It is worthwhile examining what is happening to the construction sector. The public capital programme, as it stood on budget day, will simply reduce the expected reduction in the volume of construction activity in 1993 from a range of between 5 per cent and 10 per cent pre-budget to a range of between 2 per cent and 4 per cent post-budget. Therefore, contrary to the idea that it will increase the volume of activity in the construction sector this budget will only reduce the drop in the volume of activity in the construction sector. Even if we add to this the effects of the injection of the first phase of the Cohesion Funds announced this week the volume of construction activity in 1993 compared to 1992 is likely to be static or, at best, will show a marginal increase of not more than 1 per cent.
We should not be fooled by any of these projections. There will not be 9,000 new jobs coming on stream in the construction sector in 1993. For the Minister or the Government to make such a claim is simply hot air. In fact, we will see a reduction in employment in the construction sector during 1993.
A huge mythology has been built up concerning the local authority housing programme. For example, we have been promised 3,500 new local authority housing starts this year which, if it were to happen, would be a substantial improvement on recent years but a far cry from the situation that existed in the eighties. I would ask how many houses will actually be completed this year? It is always useful to examine what the Government will spend. The published Estimates indicate that the provision for local authority and social housing programmes in 1992 was £46 million and the provision for this year is just under £68 million, an increase of £22 million. One might say that looks like a substantial amount of extra money but even if we make the generous assumption that the average unit cost in these programmes is £35,000 — that is actually a very low figure because the actual average cost works out at almost £40,000 — in each of those two years we find that the 1992 allocation would have built 1,314 houses and the 1993 allocation would build 1,943 houses, an increase of 629 over last year. I can assure the Minister that I could find people to fill 629 new houses any day of the week without ever going outside the confines of my constituency or, indeed, the confines of only two local authority electoral areas in my constituency. We are not going to see 3,500 new local authority houses built this year. It is a sham to say that will happen. If 3,500 local authority houses are indeed started this year they will not be finished this year or next year; only one-sixth of the work will be done. Therefore we will not see a gross addition of that number of houses to the local authority housing stock.
Contrary to what is claimed, this budget does not give business a stable economic environment. It contains an unconnected and incoherent jumble of measures designed to create the illusion of purposeful action but which will only create new problems. There is no indication that the Government's approach to public sector investment is in any way strategically directed towards the long term needs of the economy. Only this week, for example, the Tánaiste tried to dress up the first tranche of the Cohesion Fund as an initiative. However when you look at what has been announced by the Government you will find that it is nothing more than a continuation of last year's unfulfilled public capital programme. There is no imagination in this and I see no reason to expect any constructive new thinking on the next tranche of Structural Funds.
The Government pretends this budget is fair and equitable and that it places the burden of necessary adjustments on those who can bear it best while protecting the less well off. Nothing could be further from the truth. On the income tax front the changes in personal allowances and the basic rate band are not enough even to keep up with inflation. The income tax bite will increase this year for everybody, including the low paid, and everybody will pay more VAT and excise duty this year. If we combine the effects of tax changes, child benefit, social welfare changes and other changes that affect people in their daily lives we find that the budget actually takes away from people £50 million more than it gives back. By any definition that is not equitable burden sharing. This budget shows the lethal result of combining the Labour Party's chronic tendency to avoid expenditure problems by increasing taxation with Fianna Fáil's infamous pragmatism which always leads it to prefer taking small, cosmetic steps in a wide range of areas to doing something worthwhile in a small number of priority areas.
The budget has of course been rumbled. The Conference of Major Religious Superiors, a body which the former leader of Fianna Fáil did not like because it called itself major and superior, has developed a very acute skill in the analysis of budgetary problems in recent years. It finds that the budget has failed to tackle poverty and the unemployment problem, failed to remove the barriers which block unemployed people from working when there are jobs to be done and failed to give priority to tackling the enormous problem of rural decline. That is a fairly damning, comprehensive and accurate indictment of this budget.
The budget seems to set a course for further rural decline. There is a vague reference to stock relief which is causing considerable worry. We know that the Labour Party usually, and wrongly, looks at changes in stock relief provisions as a means of extracting more money from farmers. That would be folly. A great number of farmers face the prospect, as a result of the Common Agricultural Policy changes that our genial and incompetent Minister for Agriculture, Food and Forestry has recklessly abandoned us to, of having to reduce stock levels. Unless the Government understands that necessity it is going to make a mess of changing the stock relief provisions in relation to agriculture in a way that would make it more difficult to maintain the productive base of our agricultural sector.
I was astonished to hear Deputy de Valera say that the 2 per cent probate tax is an advance. It is an imposition. It is not a part of any discernible policy on the part of the Government to give encouragement. Even the words used in this regard in the Budget Statement make it plain that it is just another means of increasing tax revenue, and it is a further imposition on farm transfers on death. It will mean that even at a time of quota restrictions, set-asides and difficult market conditions there will be further pressure to have capital realisations to pay the tax, thus further weakening the productive capacity of the individual enterprise. Nothing could be more stupid or more effectively designed to accelerate rural decline.
This is the budget of a Government that has no sense of direction and is incapable of making coherent decisions. That indeed has been admitted by the Government. We have been treated to the spectacle by the Minister for Finance and the Tánaiste whining their excuses in the face of the concerted barrage of justified criticism that has been directed at the budget. They say it is a holding operation and that there was neither the time nor the opportunity to make it otherwise. They have damned themselves and their colleagues by their cringing and whinging.
It took longer to put this Government together than any other Government I can remember, and we are told it took that long because the two parties wanted to be sure they would come to a proper understanding of what they are about. I have to ask the question; what in God's name were they at for all those weeks since they have no understanding of what they are doing? That has been amply demonstrated in the last few weeks and again this morning by a succession of petty squabbles between the two Government parties about budgetary and non-budgetary issues. Looking at the budget and the limp defence of it by the Government, I can only conclude that we have a Government of political and economic wimps.
Classic diversionary tactics are now being used. It seems that the Minister of State, Deputy Joan Burton, has been promoted to a position that was occupied in a previous Dáil by the current Minister, Deputy Brian Cowen — that is the position of gurrier-in-chief to the Government.
The word "gurrier" ought not be used.
It has a very respectable provenance.
I doubt very much that it could be regarded as parliamentary.
It comes from the French word "guerrier" meaning warrior.
It comes from "guerre" meaning war.
It has the same root.
In my estimation it has a far more unworthy connotation.
Indeed, Sir, and its connection with the Minister makes it an even more unworthy word.
Please, Deputy.
Listening to the outburst from the Minister of State at the weekend I was reminded of a remark made to me some years ago by a frank colleague who, when presented with a problem about which he knew nothing, said that the depths of his ignorance on the issue had yet remained unplumbed. The Minister of State, Deputy Bruton, has shown that she has considerable unplumbed depths. A few simple facts might help to lighten her darkness and relieve her — I hesitate to say ignorance because that might be unparliamentary — misinformation.
The Fine Gael Press Officer, for example, is paid by Fine Gael, not by the taxpayer. A retired civil servant employed in Deputy John Bruton's office is employed by Fine Gael, not by the taxpayer. The staffing of Deputy Bruton's office otherwise is perfectly within the framework of the scheme for secretarial assistants that applies to all parties in this House, including the Labour Party. I speak as the only person in this House who went to the trouble of concluding a formal agreement with the staff who work for my party. The Labour Party did not do so, in spite of all Deputy Burton's protestations about concern for the workforce, nor did the Fianna Fáil Party, so far as I know.
Deputy Nora Owen has never been employed in a remunerated capacity by her sister, Mary Banotti, MEP, as claimed by Deputy Bruton. Mary Banotti, MEP, is by far the most accomplished Dublin representative in the European Parliament. She is much more effective than Deputy Burton's colleague who represents Dublin in the European Parliament and who is chronically addicted to the gossip that gives rise to the kind of outburst we heard from the Minister of State at the weekend. The Minister of State was right to point out that both Fine Gael and the Progressive Democrats received funds from the Exchequer, although the amounts, in all conscience, are small enough. We might be charitable and wonder why the Minister of State omitted to tell the rest of the story, and give her a fool's pardon on the basis of ignorance, but she should know that the Labour Party also gets money from the Exchequer as does Fianna Fáil. Has the Minister of State anything to say about the use that the Labour Party makes of the money it gets? Did it perhaps use some of that money to pay for the minibus that brought all the delegates to the Labour Party's Youth Conference in Cork last weekend or was that paid for out of the swollen budget of the office of the Tánaiste to make sure that in addition to his few dutiful parliamentary party members he had at least some kind of audience?
On a point of order—
Do you want to call a quorum, Michael?
On a point of order, a Cheann Comhairle. I just heard of Deputy Dukes' comment about the Minister of State, Deputy Burton and I object——
There is more to come. Stick around.
I know the Chair admonished him.
The Chair intervened then.
I am asking him now, through the Chair, to withdraw that despicable remark about the Minister of State. Deputy Dukes did not withdraw the remark. Deputy Dukes would want to be careful of his language, especially when speaking about a lady.
Please, Deputy, I deemed the remark at the time to be unparliamentary. There was no doubt about that.
I know that, but the Deputy did not withdraw it. I would ask him to withdraw the remark. It is unbecoming of Deputy Dukes to use such language, especially in the absence of the Minister of State who is not here to defend herself.
I am sorry that she is not here because I would very much like to discuss the matter with her. She has been involved over the last few days in spinning a tissue of fabrication in order to divert attention from the problems of the Government, and her skin is just as thin as the Deputy's.
(Interruptions.)
I can assure Deputy Ferris——
Please, this should end.
——that had it been Deputy Ferris who said those things I would say exactly the same things about him in a totally non-sexist and non-discriminatory way.
(Interruptions.)
The Deputy is acting like one himself.
Order, please. I dealt with the matter at the time. I deemed the reference unparliamentary and I think Deputy Dukes accepted that fact from me. That was as much as the Chair could accept at the time.
I regret the fact that the Chair would find what seems to me to be accurate and otherwise perfectly respectible reference unparliamentary.
The word "gurrier" is utterly unacceptable to me as the Ceann Comhairle of this House——
You did say that.
——as applied to any other Member.
I accept that, a Cheann Comhairle.
I can assure Deputy Ferris——
(Interruptions.)
I can assure Deputy Ferris that I will seek to find a word that is not unparliamentary to describe the same being and I will give myself the pleasure of using it. If Deputy Ferris continues to carry on in the way he is carrying on now I will use it about him also.
I have no problem——
(Interruptions.)
Let us end this personal abuse.
I accept your ruling.
I am not abusing the Deputy at all.
Deputy Dukes is coming to the end of his speech. He has about two minutes in which to finish.
I wish he would finish it.
I want interruption time from Deputy Ferris. The Minister of State's intemperate and deliberately misleading outburst was an attempt to deflect away from curiously sensitive Labour Party hides the flood of criticism that has burst on them in recent weeks. The Minister of State would do better if she would try to understand the cause of the criticism, because it is to be found in real palpable public outrage at the immence gap between Labour's rhetoric in Opposition and its pitiful whining in Government, in its vertiginous fall from the high moral ground that it held in opposition to the absolute pit of mire in which it has immersed itself since it came into Government. Yesterday's heroes have turned out not only to have feet of clay but to be spineless as well. We see that——
The Deputy is now almost exhausted——
I am not exhausted, Sir, but I will conclude in a moment.
I would be grateful if he would bring his speech to a close.
We are exhausted listening to him.
We see that in a whole series of issues. I will give the short version of the issues: they are, Mullaghmore, section 31, budgetary policy, employment, Castlebar Regional Technical College, Aer Lingus, Greencore, and the third banking force. On every one of these the Labour Party has climbed down from the heaven it inhabited before it got into government to the absolute muck it is deservedly in now.
It is time to call another speaker.
Only God knows what else they have in store for us. None of us is particularly surprised by the incompetence and superficiality on the part of the Taoiseach or the Fianna Fáil Ministers, but we expected better of the Tánaiste. This budget is a failure. It is a gross injustice to the unemployed, the poor, the marginalised, to the young and to all the people who in spite of adversity still work for their country. The Government should be ashamed. It has betrayed those people.
(Laoghis-Offaly)): As a new Deputy who has listened to debates in order to inform himself of the procedures in the House, I was most disappointed at the personal nature of many of the remarks of the previous speaker who is a person of ability with Government experience. Deputy Dukes belittled the reputation of ability he has.
Deputy Dukes addressed some of the points which I want to address. This budget marks a turning point in a strategy which was initiated in 1987 when Deputy Dukes supported the Fianna Fáil minority Government in what was a financial and budgetary U-turn. This policy was continued under the influence of the Progressive Democrats in the last Government so that we were aping the Thatcherite and Reaganite economics being applied in Britain and the US. Those of us who have had the opportunity to visit Britain to keep ourselves informed of what is happening there will know of the destruction to the social and economic fabric of that country which has followed from those policies. Such destruction was being visited on us as a result of similar policies being followed by the Government from 1987 until now. This budget has started to address the wider area of social need and responsibility which must be addressed by the Government. The writings of the late John Healy were writings that I always enjoyed although I did not always agree with him. One of his criticisms of the last Labour — Fine Gael Government was that it was trying to govern an economy whereas the job of Government was to govern a country populated by people. This budget has started to address the needs of the people who live here. Ireland is not simply an economy. If we left ourselves at the mercy of economists, God knows where we would be. Those who recall the lead up to the currency devaluation will remember that economists wrote in the newpapers telling us that devaluation was a bad thing. Yet, When devaluation had taken place there was a barrage of comment from the same people saying how it should have been done months ago.
As a result of policy followed here since 1987 under the Tallaght strategy and under the influence of the Progressive Democrats in Government we saw a massive cutback in investment in public capital programmes, and we saw privatisation of companies such as Greencore. Given that that was a matter for discussion here last week I would remind the House that Greencore was privatised by a vote of 119 to 23 in the last Dáil. In relation to Aer Lingus, every obstacle that could be put in the way of Aer Lingus growth and development was put there, to facilitate the haphazard introduction of air services for short term gain, without any air transport policy. We saw the changes in welfare and it was put to people that it was their responsibility to find a job or a house. The budgetary allocations in those areas were cut back as a result of a change in policy.
Debate adjourned.