(Laoighis-Offaly): This reminds me of “Looney Tunes” that are shown to fill in between the main programmes.
Before I moved the Adjournment of the debate, I welcomed the change of direction in this budget, moving away from a conservative and even Thatcherite philosophy to a philosophy of investment for the future of the country, particularly in the social infrastructure. I was interested to note the comments of Fine Gael and the Progressive Democrats on the budget. Those from Fine Gael were certainly contradictory. On 5 January this year Deputy John Bruton said, on the nomination of the Taoiseach, that the Government had a mistaken belief in the virtue of State capital spending to motivate the economy. He said that money would be poured into State originated projects and schemes which would create little short term employment and no long term employment. On the budget debate, however, Fine Gael demanded more and more State expenditure without saying from where this money should come while at the same time attacking our proposed revenue sources.
It is time Deputy John Bruton, and his party, made their minds up on where they stand. Deputy Bruton went on to ridicule public works programmes and those who devise and work on them. He also attacked the Labour Party's commitment to public housing. What does he want? Does he want to leave people in mobile homes and caravans? I know that Fine Gael councillors down the country certainly would not like to do that. Far from objecting to the amount of housing scheduled for the year Fine Gael were peeved it was not they who got to make the announcement. It is time they made up their minds on where they stand. They cannot have more expenditure without saying where the money is to come from.
In fairness to the members of the Progressive Democrats they, at least, have a clear ideological position. They believe in the much vaunted privacy of the market. However, our economic history since the foundation of the State shows just how well the market has worked. We have continuing unemployment and poverty and this shows a further lack of economic understanding. Those who have studied economics at even elementary level will know that in lesson one of the course they learn how the market works, and in lessons two to ten they learn what to do when the market does not work. The budget shows a judicious mix of letting the market work where possible but taking steps to intervene where it fails.
I commend to the Minister's attention the area of redundancy payments. Too often redundancy is seen as the termination of a working life rather than as a step to further work involvement. When people are made redundant — we have seen quite a large number of redundancies over the past number of years — they clear off financial commitments such as car loans and mortgages and then find, after a short period, that their income has reduced considerably, and are discriminated against if they have to claim social welfare. Another problem is that the redundancy payments which are supposed to ease their transition into their next job are taxed by the State. In effect, it is a form of smash and grab raid by the Government. Redundancy payments should be treated in a much more favourable manner for tax purposes. If the £3,000 limit which was introduced on non-statutory redundancy payments for tax exemption in 1964 was index-linked we would now have a situation whereby somebody could get a lump sum of up to £35,000 without having to pay tax on it.
I would recommend the Minister to introduce this index-linking and link such improvement to the setting up of a special State gilt fund in which this money could be invested. This would provide a source of investment for many of the small businesses which these people try to set up after they are made redundant. The fund could provide them with a monthly income and enable them to meet their ongoing commitments such as car loans, mortgages, educational loans and so on. Such a fund should be set up to take account of the money for a five year period after which it would be paid back as a capital lump sum to the investor. In my opinion that would achieve two objectives: it would save the redundancy payments being used to the benefit of the State and to the benefit of the financial institutions and allow for an ongoing income throughout a defined long term period for the person made redundant; it would also make available to the State a large amount of money for use in job creation, particularly in small businesses. The amount of money involved is not inconsiderable. In my own area of the midlands it is reckoned that up to £20 million was made available in Bord na Móna redundancies. It is also reckoned that up to £78 million may become available in the west of Ireland through Digital redundancies. I recommend to the Minister that he take this proposal on board and respond to the House at the earliest opportunity.