I would like to put on the record that I stand four square behind the comments made by Deputy Yates yesterday. His first performance as spokesperson on Finance, very much off the cuff, replying to the Minister's budget speech which lasted two hours, was superb. It was a valid repudiation of many of the assertions which the Government, the Minister for Finance and the Minister for Enterprise and Employment would have us believe is part of this Government's so-called success story.
I do not share the enthusiasm of the Minister for Enterprise and Employment for what he calls a budget for enterprise and employment. In justifying the 1 per cent levy he mentioned that the pain was worth while. I wonder was the pain worth while to the 40 workers who lost their jobs at Claremorris Limited? Was the pain worth while to the 300 workers whose jobs at A.T. Cross are now on the line? Is the pain worthwhile to the 800 people whose houses were repossessed last year because they lost their jobs and have not been able to meet their mortgages? I wonder is the pain worth while to the 296,000 people who face the dole queue every weekday and for whom this budget offers no hope whatsoever?
In the past, budgets have come in every hue, shape and size. We have had hair shirt budgets, we have had give-away budgets. I do not think it was simply that this budget was well leaked in advance and that we heard all the more salient details from various economic commentators, the Cliff Taylors and the Michael Ronaynes. Perhaps it is part of the new Labour philosophy of open Government to leak the budget in advance so that what we get in the House by way of presentation from the Minister is very much the leftovers, a bit like stale porter. This is a bad practice and should be frowned upon. In terms of preserving its own integrity any Government worth its salt should revert to the long established practice of keeping the details of the budget a secret until such time as it is presented to the people to whom it should be presented first, the Teachtaí Dála, the people sent here to represent the people of Ireland from various constituencies.
This was a bad budget. We have had bad budgets, colourful budgets, hair shirt budgets. However, I cannot think of any budget as drab or as grey as yesterday's performance since I began to take an interest in budgets. It was a dull budget, and it was particularly dull in the light of the great expectations that something very significant was about to happen. The tragedy, apart from the lack of colour, was the failure of the Government to use its very powerful position and the fact that there is responsible Opposition in this House to really bite the economic bullet and employ some kind of cutting edge in order to eat into unemployment.
This is a budget of bits and pieces. There is a bit added here and a bit substracted there but between the checks and the balances, the swings and the roundabouts, there is nothing much in it for anybody. It is a "keep the finger crossed" budget, a budget hoping that something will turn up; it is a holding operation, it is treading water and that is not what we need at this juncture. There is absolutely no vigour in it, no energy, no dynamism, no positive thrust, no attempt to bite the economic bullet. Certainly there is very little realisation in it that the Government has 100 seats, the largest majority ever, a mysteriously high opinion poll rating, responsible Opposition and some real money with which to tackle the problems, and yet it failed miserably to do anything significant about the two millstones that are pulling this country down — unemployment and the crippling national debt.
Last year's budget was looked upon as a missed opportunity, and irrespective of how the Minister for Enterprise and Employment may try to defend his colleague, it was a missed opportunity and that is how economic commentators saw it in the post-budget period. This year's budget was a double disappointment. It was disappointing in its content and it was disappointing because when Minister Ahern was Minister for Labour he had been chomping at the bit, anxious to spread his wings and develop his full potential in an economic Ministry. When the "Mercs and perks" were being given out by the previous Taoiseach Deputy Ahern made no secret of the fact that he wanted Finance or nothing. He got Finance but, unfortunately, he has not produced anything because budget after budget have been failures and disappointments.
In his speech, the Minister was particularly loud in his praise of our fiscal financial performance. He said that Ireland's fiscal performance has been among the best in the European Union over the years. No matter how we try to delude ourselves by talking about keeping the Exchequer borrowing requirement below 3 per cent of GNP, the Exchequer borrowing requirement in this budget is £593 million. When added to the 1992 national debt of £28.5 billion, our national debt is almost £30 billion. The raw reality of that statistic is that 60p of every £1 collected in income tax by the Minister will as a result of yesterday's budget go to servicing the national debt. Effectively, that is wasted money. The Minister missed a golden opportunity yesterday to do something positive about this when he had some real cash. As long as that national debt hangs around our necks we will go nowhere, and ratios are irrelevant in that context. The fact is that our national debt is steadily increasing. When the Minister had the figures on his side he should have done something about it.
Ireland has become an unemployment society. In spite of all the rhetoric the Government has given up the ghost. In the last election the people voted for change; they voted for The Labour Party in an effort to bring about a change in the country's dismal unemployment record. They invested heavily in The Labour Party as the instrument of that change, but if one takes unemployment as the barometer of success, that was an extremely bad investment; it has backfired. For a Government that has put jobs at the top of its agenda, a figure of 300,000 unemployed is appalling. I note that the Minister patted himself on the back with some glee because the predictions for last year were not met. That is part of a conditioning process. In reality, unemployment will continue to increase and the Government accepts that the position will deteriorate. Despite all the economic data, the forecasts, the figures and the analyses nobody at Government level is in a position to indicate when we will turn the corner in regard to unemployment.
Statistics for this country are frightening. In the first year of a partnership Government who talked about putting trust back in politics, receiverships increased by 63 per cent. There were 716 liquidations, 30 per cent of office space is vacant and 11 per cent of costly IDA advanced factory space built on a wing and a prayer in the hope of attracting industry is unoccupied. Redundancies have increased by 26 per cent. We have had the Culliton and Moriarty reports, the recommendations of which were loudly commended and the broad thrust of them accepted. Rather than acting on those recommendations, the Government spent most of its time on bureaucratic reorganisation of State agencies.
As if we did not have enough State agencies with a plethora of bodies such as FÁS, Forbairt, the IDA, Bord Fáilte, CTT and so on we now have county enterprise boards and the sub-division and amalgamation in some cases of agencies which have failed. By amalgamating agencies which are proven failures we are guaranteeing a collective failure. We have layer upon layer of State agencies many of whom are staffed by individuals who do not have real experience of the cut and thrust of economic life outside. There is no recognition of the fact that if a person is to manage a State agency or work in a Government Department which handles a large portion of the public purse, whether it is the Department of Enterprise and Employment or the Department of Finance, he or she needs experience in the competitive world. Most civil servants never worked in the "real" world and have never had to endure the buffeting of the recessionary winds or competitive practices. Those people need experience in the competitive world. Any reorganisation of the public service, whether in the IDA or the economic ministries, should include the key personnel in those offices being expected to work in the real business world outside in order to experience the pressures and become conditioned to the reality of economic life and bring that experience to bear on their policy decisions. In saying that I mean no disrespect to those involved. They are of a high calibre and intellect and have tremendous ability, but experience is the best means of training, honing, refining and giving a person the perception needed for the real world.
As in previous years we have had announcements of initiatives and programmes in this budget. We have gone down that road before and many programmes have been unsuccessful. I welcome the FÁS schemes in that they afford people the dignity of a day's work. I recall the present Minister for Tourism, Transport and Communications, Deputy Cowen, when he was Minister for Labour announcing an initiative under which we would liaise with Holland and other EC countries in regard to apprentice exchanges. The number of such exchanges is not very flattering and perhaps the Minister might give that idea another kick-start because it is a potentially good one. The global figures mentioned at that time were far from realised. That is what makes people sceptical, especially those on the dole queue. The lid is being kept on them in respect of social welfare increases. With a figure of 300,000 unemployed, unless we turn the corner soon we will be on the brink of a social backlash. In that regard the taxing of unemployment benefit which one receives for only a 15-month period following the trauma of losing one's job is unfair and insensitive. That measure should not have been introduced in the budget. People receive unemployment benefit for a short time following which they receive unemployment assistance for which they are means tested. If one spouse is working that is automatically taken into consideration in determining a person's means.
I had hoped this Government, with its huge majority and so-called healthy fiscal position which boasts of a 4 per cent growth rate, low inflation, a balance of trade and an educated but disappointed workforce, would use this budget to restructure economic life here. However, there has been no restructuring and no reforming. What this Government needed more than anything at this juncture was a budget to foster employment, but this budget falls far short of that. Despite what the Minister for Enterprise and Employment, Deputy Quinn, said in regard to nurturing employment, the reality is that because of our taxation regime and our PRSI — not because of high wages — it is far more cost effective and economic for a person to have a garment made in Manchester than in Claremorris. That is why the clothing industry is buckling at the knees. The budget has done nothing to resolve that situation. Unfortunately, because of the vulnerability of the clothing industry at present there will be more closures. The clothing industry is on a hiding to nothing.
In the Minister's speech there is a heading, "Agriculture and Food", but I respectfully submit that the word "Food" should not have been inserted because the food industry has not been mentioned in the speech. The food industry represents a squandered opportunity for job creation. From a reply to a statistical question I asked the Taoiseach yesterday in relation to the imports of confectionery products for the year 1992, I learned that we imported sugar confectionery, not containing chocolate, to the value of £33.8 million, chocolate and chocolate goods to the value of £55.4 million and pastry, cakes and biscuits and other bakers' wares to the value of £70.2 million. Those figures represent a total of £159.4 million of confectionery imports, long life products, which are to be found on the shelves of supermarkets from Ballybay to Ballybunion throughout the length and breadth of this country. With some encouragement all those products could be manufactured here. Yet, the Industrial Development Authority and the Department of Enterprise and Employment show scant concern for import substitution. There is a strong bakery trade in my county. I know several bakeries who have the know-how and the will to counter the importation of confectionery products, but the official policy of the IDA is singularly directed towards exports. I do not understand why people do not realise that £1 saved on substituting an import has exactly the same value as £1 obtained from exporting a product. Yet, there is no evidence that our blinkered, rigid bureaucratic approach is about to be broken down and in the meantime the imports continue to grow apace.
The aim is to create 35,000 new jobs in tourism during the next six years. That is a noble aim and it is possible, but I do not believe it will be realised. The tourism industry seems to be a mighty conundrum. Global figures are thrown out in relation to the number of bed nights and so on, but their accuracy is questionable. Many assertions have been made about the booming tourist trade and last year being a good year. However, the people at the coalface providing guest house accommodation had a bad year and, unfortunately, I do not believe 1994 will be much better because we have not grappled with the nitty-gritty of the problem. Costs are simply too high. Car insurance costs, care hire and, following the budget, the cost of food and drink, are too high. We have developed a fine array of large hotels with good facilities, on a par with the best hotels in the world, which provide top class accommodation. The Minister has provided £5 million, mainly for marketing, and that is welcome as marketing is vitally important, but I make a special plea for funding for the small hotel sector which does not receive any grants and which are fundamental to the tourism industry. Until now hotels with 40 rooms did not qualify for European Regional Development Fund funds. I urge the Minister to greatly reduce the qualifying threshold to assist the small hotel sector.
It is ironic that the Minister should lay heavy emphasis on 1994 being the International Year of the Family and then proceed to introduce one of the most anti-family budgets in the history of the State. Mortgage relief has been slashed. The same applies to VHI relief, which is the main health safety net for many middle income families. Disability and unemployment benefit have been taxed, but this will arise only in the case of a married couple where one spouse is working. There has been a monumental failure to pay tribute to the family during the International Year of the Family in that tax relief for dependant children has not been restored.
I welcome the additional allocation for Youthreach, but planners still do not seem to accept that there would be no need for many education rescue initiatives, such as Youthreach, meritorious though they are, which try to help people who left school without educational qualifications if sufficient resources were invested at primary school level. The Minister of State at the Department of Education appreciates more than anybody that there is a "bottom up" approach to education. Unfortunately, primary education, the corner-stone of education, is very much the poor relation. It has been proven time and time again that education intervention at the earliest possible date pays dividends. Unless we get matters right at primary level, get the three Rs right and pupils are able to proceed from one class to another, having reached a competent standard in the previous class, there will be a major education deficit. This involves remedial teaching at a later stage, Youthreach, VTOs and other compensatory schemes whereas if the money was invested at primary school level much trauma and expenditure down the road as well as the social problems which arise would be eliminated. We have a good education system here. Wittingly or otherwise we seem to train people psychologically to apply for rather than create a job. We train people in the cast of employee rather than as an employer. The Green Paper referred to an enterprise culture but that idea has not been fleshed out. I do not know how one creates enterprise entrepreneurial skills and the capacity to "give it a lash". Those skills are lacking and the education system, for all its merits, tends to cast people in a conservative rigid mould. I understood there would be some relief for education in the budget given the signpostings for the higher education grants sector. In this House we have laboured the point that in all the discriminatory, anti-PAYE anomaly ridden systems nothing could compare with the higher education grants system. Recently, I received a letter from a parent in County Tipperary who has two children in third level education and one child at home. The father's income is £18,000. The mother decided three years ago to go back to work and is earning a mere £8,000. The family's income is £26,000 which seems a good income. The reality is that it is reduced to £19,000 when the figure for income tax, including the 1 per cent levy that applied last year and PRSI are taken into consideration. The mortgage of £4,200 reduces their income to £12,000. The college fees for their two children must be paid in total and taking their VHI contribution into account the family's net disposable income is £123.50 per week. If that family had stayed on the dole their income would be £132.50 per week and they would be entitled to a medical card, clothing allowance and various ancillary benefits, possibly free fuel allowance.
The Minister stated that covenants will be reconsidered in the context of the review of higher education grants which is due to be announced at the end of February. I do not know what will emerge from that review because the scheme needs to be shaken from top to bottom. Unless there is a fundamental overhaul and cognisance of the difficulties and hardship faced by thousands of PAYE workers who have no escape hatch the review will have been in vain. There is room for improvement. Recently, I asked the Minister the cost to the Exchequer of covenants last year and I understand they cost £33 million in terms of tax savings. I hope there will be more than a token recognition of the plight of the PAYE sector in the forthcoming review.
I come from the west where there are five counties. In the Six Counties in the North there is a massive human tragedy unfolding. I commend all the efforts to bring about a cessation of violence and a peaceful solution to enable the North to develop as a social and economic entity. There are 1.5 million people in the North and the number is increasing; there are 500,000 people in the west and the number is decreasing. Between 1926 and 1991 the population in the west declined by 132,000. Recently I asked the Taoiseach for the number of townlands in the west which had disappeared from the electrol register between 1926 and 1991. They are Galway, 224; Leitrim, 145; Mayo, 175; Sligo, 67 and Roscommon, 148; a total of 759 townlands have no population. All that remain are tumbledown homesteads. Villages that were once vibrant communities are now dead. If we had an up-to-date assessment of the position between 1991 and 1994 we could possibly add another 50 or 60 to that figure.
I hope the Taoiseach will make the long overdue announcement that a regional technical college will be built in Castlebar. Castlebar is entitled to a fully fledged regional technical college, with no outreach or subsidiary courses to the regional technical college in Sligo or Galway. The case has been proved and the plans are on the drawing board. Promises have been made but time and again they have been broken. We will accept nothing less than a fully fledged regional technical college for Mayo. That could prove to be at least part of the catalyst to getting the economy of my county back on the rails.
