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Dáil Éireann díospóireacht -
Thursday, 3 Dec 1998

Vol. 497 No. 7

Financial Resolutions, 1998. - Financial Resolution No. 5: General (Resumed).

Debate resumed on the following motion:
THAT it is expedient to amend the law relating to inland revenue (including value-added tax and excise) and to make further provision in connection with finance.
—(Minister for Public Enterprise)

The budget is flawed by an internal contradiction. The Minister has tried to stimulate the economy while failing to take the necessary steps to give it the capacity to respond to that stimulation. The budget is like trying to inflate a child's swimming ring, while the child is still standing on it. It could also be likened to a huge blood transfusion to a body with arteries which are already blocked. The blockages in the arteries of the economy are most visible every day in the form of traffic jams. These blockages are also to be seen in spiralling house prices, the unavailability of child care and the lengthening waiting lists for medical care. The extra spending power in the budget will not relieve the traffic jams, bring down house prices, or relieve the child care or medical concerns of families. If anything, it will increase the pressure.

The Minister, on entering into the Da áil yesterday, had a budget surplus of £400 per year to distribute for every man, woman and child. However, child benefit will only increase by £36 a year while old age pensions will rise by only £312 a year. The standard-rating of income tax allowances is welcome and will remove a structural unfairness from the tax system. This will be potentially helpful for future budgets. However, the contribution of two budgets introduced by the Fianna Fáil-Progressive Democrats Coalition to tax fairness has been to widen the gap between lower and upper income groups. Following those two budgets, a single person on £15,000 a year is now better off by £14 per week after those two budgets, but a single person on £50,000 a year is better off by more than £27 per week. For a married couple, the difference is even more marked, with a gain of only £18 per week for the lower income couple, as against £38.67 per week for the higher income couple.

The old age pension increase of £6 per week looks much better than it is because £2.40 of it will be absorbed by inflation and £2.50 by Minister for Health and Children's reduction in drug refunds. That leaves only £1 per week of a real increase, out of which many pensioners will be obliged to pay an increase in their differential rents.

The £8 million for hospital waiting list reductions is measly. A number of weeks ago the Minister for Health and Children seemed to imply that he does not believe in waiting list reduction initiatives. Now he has introduced one, but it is so small it does little more than underline the Minister's lack of appreciation of the crisis facing our hospital services. The reduction in the tax on gambling amounts gives away more money than the entire increase in provision for services for the physically and mentally disabled.

The Minister for Health and Children revealed his long awaited waiting list report on budget night. He obviously did not want it discussed, therefore, he chose to publish it last night. This report has been in the Minister's office since last July, a period of almost six months. During that time waiting lists have lengthened and families have been traumatised by seeing loved ones suffer in pain as they await operations. Last July's report made a number of short-term recommendations. The review group states in its report: "a number of recommendations. could be implemented before the end of 1998". The groups clearly expected that these recommendations would have been implemented before the end of the year. Instead, the Minister effectively buried the report by refusing to publish it and nothing has happened as a result.

The Taoiseach told his party's Árd Fheis a number of weeks ago that no one in the country is obliged to wait more than seven months for cardiac treatment. That statement is untrue. If the Taoiseach had asked the Minister for Health and Children to check the lists he could have obtained the correct figures. At the end of September this year 832 people had been waiting for cardiac surgery for 12 months or more. The Taoiseach was as misinformed about the health services at his party's Árd Fheis, as was his predecessor when he called the 1989 general election.

The official waiting lists tell only half the story. Almost every person who finally gets on to the hospital waiting list has spent anything between six months and one year waiting to obtain an appointment with a consultant to have his or her name placed on the list. In many health board areas patients who visit their GP this week will not get a consultant's appointment before next summer. That is before they are even included on the waiting list. This issue is causing stress to families.

Another issue causing stress to families is child care. The lack of child care is not only depriving the workforce of people who want to take up paid work, it is also denying parents who choose, in an unpaid capacity, to care for their children, any relief to go shopping, visit a relative or any of the thousands of things a stay-at-home parent must do to remain sane or manage their lives.

In our policies on child care, we must deliver even-handed support structures to all parents. We must respect and value equally the work of women who fulfil the bulk of this essential, unpaid role, whether caring full-time at home or combining that role with work outside the home. Unpaid child care by parents, grandparents or other relatives must not be devalued by artificial incentives which place a higher financial value on paid forms of care for children. Initiatives in this area must neutrally support parental choices between paid care and care by family members on a voluntary basis. We must not introduce new inequities or financial incentives which artificially pressurise parents in one direction or another.

The crisis in child care arises largely because women's role is changing. There are 600,000 Irish women in paid employment. Of these, it is estimated that 46 per cent have children under the age of four. The number of women working is expected to grow by 37 per cent by 2011 as a further 218,000 join or rejoin the labour force. The change has increased the demand for child care dramatically. Meanwhile cre ches are being closed down because of planning difficulties, greatly increased regulatory costs and unsympathetic local authorities.

To help deal with this crisis the Government promised tax relief for child care. This would have benefited privileged high income families and penalised parents providing unpaid care for their children. The Government has not proceeded with this and has no alternative strategy. This is typical of the lack of foresight that characterises Government decision making on a range of other issues.

The revelation that the Education Estimates provision for 1999 is less than the no policy change provision for 1999 made 12 months ago shows that the Government is not giving priority to education. I have said time and again that my priority for public spending is education before all other forms of spending. Within education my priority is primary education. It is easy to see the social policy difference between Fianna Fáil and Fine Gael when the allocation for education did not match the Fianna Fáil no policy change provision.

Fine Gael does not agree with Fianna Fáil that there is no need for a policy change in education. One in five children still leaves school functionally illiterate, unable to read instructions on a medicine bottle or fill up a job application form properly. In a year when he opened his Budget Statement with the biggest budget surplus in the nation's history the Minister for Finance is adding only £10 million to the education budget to deal with disadvantage. That is equivalent to an extra 42p for every £100 the Minister for Education and Science spends.

The Government was wrong not to accept the case to include the self-employed in the family income supplement scheme. The self-employed have families and low incomes. Why should they be excluded from family income supplement if they can prove that their family income is below the qualifying level? The Government refused to accept this case and decided to make changes in farmer's dole. This was, surprisingly, welcomed by some farming organisations. It makes it look as if the farming organisations were not making a case based on equity between farming and nonfarming families when they could be so easily bought off with a selective dole change.

The farm income crisis should not be dealt with by special doles for farmers. It should be dealt with by treating farmers the same as everybody else and allowing them qualify for family income supplement. That is a sound principle to which no PAYE worker could object. It does not isolate the farming community as a minority group. Special dole for particular sectors, by its nature, causes resentment and isolates one sector from another. The Government has made the wrong choice. The farming organisations which have supported its choice are also wrong.

In the 1980s there was a national consensus to deal with the national debt. The Government of the day responded and the problem was solved. In the early 1990s there was a national consensus to deal with chronically high unemployment. The Government of the day responded and the problem has been partially solved. As we turn the page of a new century there is a growing national consensus that our next task is to narrow the widening gap between the comfortable majority and the uncomfortable minority. The gap is financial but it is also psychological, educational and geographic. The socially-excluded are not only worse off than the rest of us, they are excluded from the consumer culture of the majority purveyed through television, often attend different schools and live in different suburbs. That gap must be bridged. In the budget the Government has shown no coherent commitment to do so.

Last year the Government had a different set of tax priorities. There is no sense that it has a plan. It has a list of promises but it has no plan for housing, traffic, child care, farming or social justice. That is the fundamental weakness of the budget, it is not part of a coherent strategy. It is sufficient for the day but without any sense of what the ultimate destination should be.

Most economists did not predict the strength of the economy's growth. They are now suggesting that its growth pattern will not stop. We should not be too self-congratulatory, therefore, in our reliance on economists and their analyses. Economists, by their nature, are guiding the bus while looking out the back window. The data on which they rely is retrospective in character.

It is the job of politicians to analyse and identify the threats to current success. There are two risks facing the economy — inflation and deflation. It is hard to imagine from our current vantage point that deflation presents a threat to the economy but, as I will demonstrate, it could.

As the Taoiseach acknowledged yesterday, we have the highest inflation rate in the euro zone at 2.6 per cent. It has grown more quickly than in any other country in the euro zone. There is a view in central bank circles in Europe that the Government should have a fiscally restrictive budget and run a bigger surplus on current account to reduce the risk that the inflation rate will rise further.

That view is technically mistaken. It assumes that this is a closed economy and that one can inflate or deflate it by what one does on budget day. That is not the case. If one stimulates the economy on budget day, a great part of the stimulus goes on imports. One ends up, therefore, stimulating the British or American economy. If one deflates the economy to reduce the inflation risk, one reduces the demand for British, French or German goods. As a result the effect is spread across all our customers rather than being confined to the economy.

The analysis prompting comment in central bank circles in Europe that the Government should opt for a restrictive budget to deal with the inflation risk is mistaken for the technical reason given. This is not new but there remains an inflation risk. It is driven by the supply, not the demand side of the economy. It is driven principally by rising house prices and the rising cost of child care. This will force workers into demanding pay increases that the country cannot afford without fuelling inflation. The inflation risk is driven, therefore, by pay, not by consumer spending.

There is a serious problem with house prices, a structural problem which is affecting a minority of the workforce at present. However, as more new entrants come into the workforce it will affect, through mortgages, an ever increasing segment of the workforce. Even though house prices may not be rising very much at present, the number of people on high mortgages who pay those prices as a proportion of the total workforce will increase steadily as new people enter the workforce and others leave. The problem of house prices and its effect on pay will increase inexorably because of the transformation of the workforce. We need a fall in house prices, not just a stabilisation, if we are to avoid the inflation risk that rising house prices can cause.

The same problem arises with child care. In the case of a household, the decision to strike for more pay is made not just collectively but by the individual participants. If, for example, a woman going out to work finds that virtually all of her take-home pay after tax is absorbed in child care costs, even though her husband may be bringing in money which is paying other parts of the household budget, she will be so aggrieved by the cost of child care, that she, independently, will be disposed to go on strike for a very large pay increase over and above what the economy can afford.

I contend that those two pressure points in our economy — house prices and child care pose a very real risk of generating inflation. Unfortunately, the measures of inflation we use do not adequately take these into account. House prices are not included in the consumer price index and I have no doubt, given that historically child care has been, to a great extent, part of the black economy, its costs are not adequately included in the consumer price index.

Those two threats to the economy — blockages in the arteries, to return to the analogy I used earlier — are very real and have not been addressed in a coherent way in this budget. I realise there is not a huge market in the media this morning — perhaps the same will apply next Sunday in the post-budget euphoria — for those types of medium term considerations. However, I assure the House they are real and they pose a genuine threat. That is all I want to say about the risk of inflation.

I am glad Deputy Howlin, the former Minister of the Environment, is here because he is an expert on what I am going to speak about, the risk of deflation to the economy arising from fulfilment of the global warming commitments entered into at Kyoto. There is a comfortable view in official Ireland that one can send environmental Ministers to these summits where they sign agreements. However, no-one really expects anyone to do very much about them. At the end of the day all we need do is put on our leprechaun hat and say, "sure aren't we the poor Irish and can't we be exempted?". If it comes to the crunch, our natural charm will get us out of whatever problem we are experiencing because of the commitments into which we have entered. That unstated assumption we probably all make about Ireland's ability to escape from commitments will not work this time because global warming is a really serious issue.

Up to three or four years ago there was a debate among scientists as to whether it was actually happening or whether we were just seeing freak weather conditions which had no underlying pattern. That is no longer the case. There is now, as other Deputies will concur, a scientific acceptance that global warming is a growing problem. It is a human problem. It is not all about the erosion of the coastline in Bettystown and a few houses having to be relocated. Global warming is about more than coastal erosion. It is about Bangladeshi farmers finding that their formerly fertile fields are under seawater for a large part of the year.

I cannot remember whether one third or one half of the entire territory of Bangladesh has been underwater for several months. It is worth recalling that Bengali is the third most widely spoken language in the world after Chinese and English. This gives some idea of the number of souls affected by this flooding caused by global warming. The social consequences of this are enormous.

We will have no choice but to implement our commitments on global warming. We have probably broken our limits already which means that to reach the target for 2006 we will have to substantially reduce the amount of energy we use. I am not a scientist but I know there are three elements which contribute to global warming — the motor car, energy generation and agriculture, which is comparatively small but still significant as regards methane and livestock production.

It is clearly the case that excessive private motoring will have to be fiscally discouraged. There is no way around this. The sooner this is done, the less painful it will be. If it is left until the end of the phase in 2005 to implement some draconian measures to reduce global warming emissions from motoring, it will not work. It will be too late and people will be unable to change their consumption or life patterns quickly enough. If the Government makes fiscal changes now, there is some chance they will work. However, by failing to listen to the Minister for the Environment and Local Government, who kindly told the newspapers what he was saying at Cabinet about this before he said it, the Government is building up a large problem in this area.

The same applies to electricity generation. It is not feasible to talk about bringing private sector investment into electricity generation or to think about the idea of selling shares in the ESB until one knows the conditions under which the ESB will have to operate as far as compliance with global warming is concerned. People are being asked to buy a pig in a poke unless clear decisions are made.

Instead of the highly relaxed consultative process with reports being produced, which contain no solid plans, and the endless consultations on global warming, the Government needs to take decisions. It does not matter that the Buenos Aires Summit was a flop because the Americans and Chinese could not agree. This will happen anyway. The Americans and Chinese are playing politics.

The physical reality of climate change will force all of us to take action. The sooner Ireland acts, the better. There are historical precedents for my argument. One country which came out well of the 1973-9 oil shock was Japan. This was because it took steps before the oil shock to significantly reduce its oil consumption and make its economy less energy intensive. It sailed through the 1973 deflation almost unscathed, when the rest of the world, notably the United States, gas guzzling as it is, suffered the worst effects.

The same differentiation will occur as regards global warming. The countries that are well prepared and have taken planned voluntary steps to reduce consumption will come through well. That issue represents the biggest threat of deflation to the economy. If we face it too late, because we have not taken action in time, we will suffer.

I wish to raise the budget vote last night, particularly the vote of Deputy Blaney. Was there any interference with the Garda in the performance of their duty in a law and order matter in Kerrykeel, County Donegal, to ensure that the Deputy voted for the Government? The idea that the Garda might stall some operation to facilitate the political needs of the Government to get a Deputy to vote for the budget is deeply corrosive of our democracy.

Scandalous.

I would remind the House that two days before the presidential election there was a high profile arrest in a supposed leaks inquiry and we did not hear anything substantial about that matter after the election. It was terribly urgent when the Government needed to hype up this issue for political purposes. Afterwards it ceased to be of any relevance. If there is evidence that the Garda has been interfered with in any way in the performance of their duty in regard to an issue in County Donegal to meet the needs of the Government, then we have the politicisation of the Garda Síochána and that is not acceptable. This Government needs to be prevented from doing this sort of thing. We need a police authority which stands between the Minister for Justice, Equality and Law Reform and the officers of the law whose job it is to enforce the law. Before we give lectures in Northern Ireland on policing we should perhaps look in our own house first and see if we are ensuring that the Garda Síochána are afforded the degree of independence of political pressure which any respectable police service ought to have in any democratic country.

I am concerned about the reports I have heard about what was done to facilitate Deputy Blaney. I have no views about the location of this mast or about Deputy Blaney's advocacy of his case or that of his constituency. Was there any pressure exerted on the Garda Síochána to do or not to do something to meet the political needs of the Government? If so, does that explain to any degree the strange goings on before the presidential election?

Responding to the budget yesterday, my colleague, Deputy McDowell, described it as the most public declaration of contrition in political history. One can only imagine the conversation which must have taken place between the Taoiseach and the Minister for Finance in the lead up to the budget. "Bless me, Taoiseach, for I have sinned. It has been 12 months since my last budget". "What have you done in the meantime, my child". "I have looked after the rich and powerful in our society". "Well, Charlie, we have local and European elections next year and a national agreement to get over so you had best mend your ways". Therefore, the Minister for Finance donned his sackcloth and ashes and performed the most spectacular U-turn we have ever witnessed in this House. In fact, yesterday's Budget Statement was not so much a U-turn as a hand-brake turn on an icy road.

Any Member of this House would have envied the position of the Minister for Finance yesterday. No previous Minister for Finance was in such a fortunate and powerful position to impact on society for good. He was, as we have read for several months, literally awash with money. For the first time in the history of the State there was a real opportunity to make major reforms in our taxation and welfare systems which could begin to bring about true equality of opportunity for everyone.

Yesterday's budget also provided an opportunity to improve housing, transport, water supply and roads. Our infrastructure is crumbling under the pressure of a booming economy. In a real sense we are like a developing country. Our economy is booming but we simply do not have the modern infrastructure to bear it or to sustain it. The real opportunity which presented itself yesterday to the Minister for Finance and to the Government to enable this country to sustain high levels of growth was simply missed.

Yesterday's budget did not grasp the opportunities which had been staring this Government in the face for some time now. Even a betting man would have assumed that most of these opportunities would have been grasped. We all know the Minister for Finance is a betting man. The cost of yesterday's windfall for the betting industry is £24 million in a full year. As Deputy Rabbitte pointed out to the House yesterday, that sum is more than the combined budget day allocation to deal with hospital waiting lists, mental handicap and physical disability. Altogether they did not amount to the sum of tax relief for the betting industry. That indicates skewed priorities. I read in one newspaper this morning — the spin doctors must have been doing well — that more than £300 million was provided to deal with waiting lists. That is far from the reality. The paltry sum allocated yesterday will make no meaningful impact on the 40,000 plus people who are waiting for surgical procedures up and down this country.

We can also safely and sadly assume that in the coming year the housing lists in every local authority will continue to grow, the traffic congestion will continue to get worse and, most frighteningly and unacceptably of all, the gap between the rich and the poor will continue to widen. We have real choices to make as our country becomes richer. The most important of those choices is whether to create a society which is genuinely equal or to have a society where the bulk of our people get on very well and a growing minority are totally excluded and fall further and further behind.

This budget was touted by the Minister for Finance as one "to benefit those who have not done as well as most of us in recent years". Regretfully, because of this budget some people will be more excluded and, indeed, some frankly will be worse off. In framing this budget a clear decision was taken by the Government to create a section in Irish society which it considers to be the undeserving poor. The 1999 budget flies in the face of Partnership 2000 by reducing the number of training and employment places for the unemployed. If one was unsure of the logic behind that statement, it was revealed rather well in the comments on "Morning Ireland" this morning from the Tánaiste, who basically made it clear that there must be a nice prod for the unemployed to get back into a job. There is a deliberate tactic to ensure that social welfare recipients would not benefit significantly in this budget lest, in the best Victorian tradition, they become indolent and not take the low paid jobs which are being created in this bountiful economy.

The increase in the back to work allowance scheme this year stands at £2,000. That is more than half the increase budgeted for in recent years. While the Government may argue that the unemployment rate is falling and, consequently, there is a lesser need to invest in training and employment supports, this paring back of the back to work allowance scheme is a major regressive step. The scheme is one of the most important measures in moving the group of very long-term unemployed back into the workforce — that core of people to whom it is important to reach out in the rising tide. In any study of the age by duration live register count, the fall in the very long-term unemployed is largely attributed to the take-up in the back to work allowance scheme.

The reduction in places on the community employment programme, as provided for in the Book of Estimates, is completely contrary to the commitments in Partnership 2000 to increase the scheme by 10,000 places. To the third pillar of Partnership 2000, this budget is quite simply a kick in the teeth.

There are good points in the budget which have been widely recognised in this morning's newspapers. How could it be any other way given the opportunities of historic proportions presented and available to the Minister for Finance yesterday? The Minister went some significant way towards repairing the damage of his inequitable tax package delivered in last year's budget. Targeting tax relief at the lowest paid was an essential move in improving the value of work for low earners. It will also maximise the impact of the national minimum wage. They are very progressive proposals which the Labour Party has no difficulty acknowledging and supporting.

However, the reforms in taxation are a little sloppy and anomalies are created through the increase, for example, in the health levy. In the Labour Party's view, the Minister had the opportunity yesterday, and the Government if it had the vision could have taken the opportunity, to introduce a full blown system of tax credit unashamedly targeted at low paid workers. That would have provided a real and lasting structural reform in personal taxation. The Minister said he went part of the way down that road after his Pauline conversion from moving fast in the other direction in last year's budget. His reverse and movement towards focusing tax relief at the low paid is acknowledged and welcome.

The taxation measures in the budget went some way to redress the mistakes of last year, but this budget will have a major impact on our society only if it represents the first of a series of budgets designed to redistribute income and give real opportunity. The Minister touted yesterday that he would present three more budgets. Maybe he will, but already it is seen that he is seeking to grasp defeat from the jaws of victory. He said yesterday that his basic philosophy had not changed and that he still believes in a low tax, low spend economy. He stated that the tax rate reductions in the programme for Government — those tax adjustments — remained his key goal in tax reform. This is not a repentant Minister who has seen the error of his ways; it is a chastised Minister determined to sin again.

Although the Minister may, this year at least, have got it nearly right on income tax, he got it wrong on corporation tax. The concessions in corporation tax were clearly targeted to benefit the major financial institutions and the banks. In a year in which the public has been badly let down by some of our banks, to reduce the standard rate of corporation tax for those institutions by 4 per cent, while freezing the low rate, is truly incomprehensible.

The current labour shortage and the resultant demand for the participation of women in the workforce has at last brought the issue of child care to centre stage in our discussions. In advance of the budget, it was made clear that investment in child care was crucial for maintaining our economic success. For the first time in aeons, employers, trade unions and voluntary organisations sang from the same hymn sheet as regards child care provision. However, no matter how loudly these groups sang in harmony, the Government was not listening.

The only provision to stimulate the supply side of child care were concessions to the private sector to invest in child care facilities. Are they concessions at all? Was there any example of benefit in kind being charged for such facilities? As a former dear colleague of mine used to say, "I think the Minister was betting with other people's money on this." There is no commitment on the part of this Government to address this issue. I put it to the Minister that this measure will not impact on child care provision and will have no impact on implementing the national anti-poverty strategy.

I am sure Fianna Fáil backbenchers were livid yesterday when the Minister disclosed this half-hearted provision on child care, if it can be described as a provision at all. I am sure among those who were less than pleased was the Taoi-seach's constituency colleague, Deputy McGennis, who only a few weeks ago marched the streets of Dublin in a call for child care provision. Where does she stand today?

The importance of child benefit in eliminating child poverty can never be overstated.

Hear, hear.

In the run-up to this budget, the Combat Poverty Agency, among many others, made a clear-cut and unanswerable case for substantial increases in child benefit as a real anti-poverty measure. It has been recognised as the most significant single thing a Government can do to give money to families who need it. It is a policy which the previous Government honoured and delivered on. The increase in child benefit, while a small step up on last year's disgraceful increase, can be described yet again as only paltry. Clearly, this Government does not understand the case for increased child benefit payments.

Child benefit is the only payment which is directly administered and delivered to the parent who carries out the household and the child care duties. Furthermore, child benefit does not create any unemployment or poverty traps. That is very important at this stage of our economy when we are attempting to genuinely and socially provide an acceptable welfare to work infrastructure.

Beyond this, the Government cannot stand over the increases delivered to social welfare recipients. I do not believe the Taoiseach can stand over and defend a £3 increase in the full rate of the basic social welfare payment. What will it mean in real terms? It barely covers inflation. Those dependent on social welfare will genuinely be worse off in 12 months' time. The failure of the Minister for Finance to link in some way welfare increases with real wage increases is genuinely contributing to the widening of the gap between the rich and poor. Whatever argument the Tánaiste makes in her Victorian attitude of prodding the indolent into work, a range of categories of people depend on our social welfare system to exist. They have a right as citizens of this Republic to benefit in the growth and prosperity which is more than evident among certain categories of our citizens.

The decision to freeze child dependant allowances is a travesty. If the Government's strategy was to move from these allowances to increased support through substantially increased child benefit, there would be no argument from these benches. However, the Minister has chosen to freeze child dependant allowances but not to provide the corollary of increased child benefit directly into the hands of mothers.

There is a clear indication from the content of the budget of a lack of strategic thinking and direction in what now must be seen as a once-off budget. This is the Minister's recognition of the requirement politically to get the new partnership programme agreed and to answer the great criticisms of inequity levelled against last year's budget. However, his heart is not in it. He does not believe in it and we can only expect him to return to his normal form when he next presents a budget.

Last night I listened to the Government side promoting the merits of the budget. The £6 increase in the old age pension was put forward by many as its main selling point. However, people should not be deceived. The £6 increase will only apply to the main pensioner. The adult dependant, usually the woman, will get half that amount, a miserable £3 per week.

The budget did nothing to address the issue of means testing of social welfare payments. We have long been aware of the fear faced by many older people about the impact of small nest eggs on their social welfare payments. How many of us are dealing with this problem? Many old age pensioners put money away for their funeral so that nobody will be left with that burden when they are gone and they are paranoid about the impact that might have on their social welfare entitlements. Previous Governments introduced saving disregards for people in that situation. However, the Minister chose to ignore that problem.

This budget could have been an opportunity to address all the inequalities in our social welfare code which we recognised and to end long-standing discrimination, particularly against women. The money was there, uniquely and historically, but the opportunity was missed.

Our system of tax incentives to the film industry has been a tremendous boost to this sector. We are all aware of the incredible growth in film making in Ireland in recent years and the substantial employment it brings. This is due to the Herculean efforts of the dynamic former Minister for Arts, Culture and the Gaeltacht, Deputy Michael Higgins, who brought the industry here from nothing to being a main player on the world stage. That system is due to end next April.

The Minister referred to detailed studies and independent consultants. However, he made no reference to what this Government intends to do post April next. The Dáil will adjourn in a couple of weeks' time and it will be back at the end of January, which is not too far away. Given the imminent lapsing of these reliefs, one would have expected the Government to indicate that it will renew or extend the scheme. Perhaps it proposes to introduce an alternative scheme of supports for the film industry. Unfortunately, the Minister could not provide any detail of the Government's policy on this issue.

It is becoming increasingly clear the Government has no idea what it will do. Any keen observer of the Government will not be surprised by this fact. The absence of direction and strategic thinking is becoming a hallmark of this Administration. There seems to be a propensity in the Government to fly kites high and then to ignore them. Ministers propose things which the people believe will happen, but then they disappear without trace.

Film making and production is a complex business. There is a huge financial outlay at the beginning of the process and each investor takes a substantial risk in financing it. In order to commit this finance, film producers and investors need to know clearly in advance the tax regime that pertains. A huge advantage has been given to the film industry in recent years. Our tax relief system has given confidence to investors and this has paid dividends for the country.

The Minister's speech yesterday compromised our success. There is no doubt that a major cloud hangs over the future of the Irish film industry. Producers do not know the future direction of Government policy. There is an obligation on the Government to move swiftly to retrieve this appalling situation, remove this uncertainty and outline Government policy on an industry which has been genuinely created in recent years under the tutelage of Deputy Michael Higgins.

Deputy John Bruton spoke about Ireland's commitment to deal with the issue of global warming. People have moved away from the title "global warming" because it is more accurately reflected in the title "climate change". There are internationally binding obligations on Ireland to reduce greenhouse gases — the basket of gases which are impacting on our climate. The European Union, being the most progressive, has set the standard and Ireland has negotiated a position within the European Union umbrella.

These are not easy targets for this country, an expanding economy, to achieve. I brought those targets to Government where we debated them fully and the minutes are there for the Taoiseach see. The former Department of Transport, Energy and Communications raised its concern about the degree of effort required to change Irish practices in terms of the creation of carbondioxide and other greenhouse gases from cars, lorries, trucks, heavy industry and energy generation. However, we agreed to sign up and that decision is as binding on this Government as it was on the last.

The Minister for the Environment and Local Government has been involved in many kite flying exercises in the past 12 months, but the one in relation to the introduction of a fundamental policy on greenhouse gases was probably his most spectacular effort. Nothing has been done to implement the policies that were all but agreed, if we believe the Sunday newspapers, on the proposition of the Minister for the Environment and Local Government.

Time is running out. The fundamental focus on greenhouse gas reductions will require structural changes in the economy. Like the millennium problem, the Government seems to park it until it has time to deal with it. Some £40 million was allocated yesterday to deal with the millennium bug which, months ago, the Taoiseach and his Ministers said was under control. There is a degree of panic and we have to provide a huge sum of money next year to deal with this matter.

Similarly, the issue of greenhouse gases will present a huge problem if we do not have a strategy. I have repeatedly asked the Government to outline its policy. This is not the exclusive responsibility of the Minister for the Environment and Local Government; it is the responsibility of the Government as a whole. The Government should state the structural changes which will bring about the reductions in carbon dioxide and other greenhouse gas emissions to which we are committed. Have we carried out an energy audit of every local authority and privatelyowned house? What infrastructural changes in transport will bring about the required reductions in private vehicle usage? We have no answers from the Government on this most critical issue. Deputy Bruton has rightly stated that this issue will not be solved by simply signing up in Kyoto, being positive in Buenos Aires and making commitments in the Council of Ministers, so long as no one asks for our money upfront or specifics of what we are doing. Ultimately, we will be asked and we had better have a sustainable answer.

There are three specific aspects of the budget that will haunt the Government when the dust settles. These are the paltry, disgraceful increase in the majority of social welfare payments; the appalling cutback in overseas development aid, which was not mentioned in the Budget Statement; and the fact that this Government has not allocated any significant additional money to deal with the problem of affordable housing faced by huge numbers of people. This is the biggest problem we face.

The Minister for Finance made a concrete decision, aided and abetted by his Cabinet colleagues, to bank £1 billion. He did so in the context of 45,000 people on local authority waiting lists who urgently need the most basic right — a home, a roof over their heads. Figures published in the past few weeks indicate that 6,000 people in this prosperous island are homeless and left to seek shelter on our streets. Surely these are the measures of success, rather than some notional figure for GDP per capita. How many people are on the streets for want of shelter?

For the second time, the Minister for Finance announced the allocation published in the Book of Estimates. Does he seriously believe that, in the face of the worst housing crisis in living memory, the provision of an additional £45 million will solve the problem? He admitted that it would not do so in his Budget Statement. With 45,000 people on local authority waiting lists, the Government has provided enough funding to begin an additional 600 houses this year. This will bring the total figure to 4,500 to deal with a waiting list of 45,000 people.

If the Government's response in the area of public housing has been pathetic, its response to those in need of purchasing a house on the open market is even worse. There was no mention of the housing market in the Budget Statement. Is it not odd that of the lack of affordable housing, one of the most serious social problems, does not merit a mention in the Budget Statement? It is clear that the measures introduced by the Government in the wake of the Bacon report have not resolved the problem. If the Government believes they have then it has lost touch with people. Thousands of workers, particularly young couples seeking a home for the first time, are priced out of the market. They have no option but to put pressure on local authorities. This spiral is continuing. It is estimated that an additional 2,000 people joined the local authority housing list in the past two months. The Minister has turned his back on these people and washed his hands of the matter. What was needed was a creative and imaginative response by the Government. For example, the removal of stamp duty for first time buyers of second-hand homes would have been a start. The conversion of the first-time buyer's grant into a monthly mortgage subsidy, increased substantially, would have been a valuable initiative. Either the Government's collective mind is incapable of understanding the extent of the crisis or it is unable to devise workable solutions to this huge challenge. Either way, ordinary people are paying the price for Government inaction.

The third point which will be remembered in the long term is the disgraceful decision concerning the Government's obligation on overseas development aid. The Minister of State with responsibility for overseas development aid, Deputy O'Donnell, walked to the edge of the plank in full expectation that Deputy Harney, her party leader, and the Minister for Finance would help her back again. They have not done so and she is stranded at the edge of the plank. On national radio she gave an indication of what she would do in this situation. It is time for her to live up to that indication. She knows that being high on compassion and low on action compounds the insult to thousands of Irish people working in the developing world.

In this House on 12 November 1998, when concluding the debate on overseas development aid, Deputy O'Donnell stated:

I hope, in the context of a caring budget, the Government will address the concerns I expressed last week and again today in this regard. Times are good in Ireland and it is imperative that we share our bounty with those people whose poverty has no parallel here.

There was no mention of overseas development aid — good, bad or indifferent — in the Budget Statement. Where now stands Deputy O'Donnell in her hope for a caring budget? The extent of this year's cutback is astonishing and represents a real reduction in provision. As Deputy McDowell stated, this is particularly repugnant given that Ireland remains a net recipient of external aid. Genuinely, if words mean anything, Deputy O'Donnell has no option but to resign forthwith.

Yesterday's budget was an aberration. For low and middle income earners it is a welcome one. However, it is a budget which this Minister was clearly reluctant to introduce and into which he insisted on inserting a paragraph setting out his own political beliefs and priorities. The stamp of the Minister's personal philosophy was evident nowhere else in the statement. The budget is a slap down for the Minister for Finance. It was forced on him by his colleagues because they know the political realities and what needs to be done. When he introduced his budget last year the Minister correctly pointed out that the public were getting what they voted for. He was right. Today's U-turn has been forced upon him and the Government political necessity and the realisation that the public now know that a disgraceful sleight of hand was engaged in at the last general election.

The Deputy speaks with nice fluency but no conviction.

As I stated last night, this is the most socially progressive budget of recent years. While underpinning economic growth and social partnership our overriding objective is to give a boost to people on low incomes, to encourage those who want to take up a job and to assist those who have retired. The sweeping tax reforms introduced in this budget allow us to target help at those who most need it. We are doing not only what our economy requires but what our society requires at this time. The jobs crisis today consists of the fact that we have thousands of job vacancies that need filling. This budget is about ensuring that we have people to fill them. The live register which has already fallen dramatically by 32,000 over the last 12 months will be further slashed, so that in 1999 it could plunge below 200,000 for the first time since 1983.

Our economic success since the major turning point in 1987 has been based in large part on social partnership. We have more than fulfilled our obligations on taxation under Partnership 2000. We were committed to introducing personal tax reductions to the cumulative value over three years of £900 million on a full cost basis. I calculate that the cumulative concessions amount to about £1.5 billion, or about 60 per cent above target, of which well over £1 billion will have been given back under the present Government. As a result, the net income increase of up to 14 per cent for all those on average earnings envisaged under Partnership 2000 will turn out to be around 18 per cent to 20 per cent.

This year, we are taking 80,000 people out of the tax net, which is dramatic. This is far beyond the 15,000 removed last year, and the 10,000 removed in Deputy Quinn's last budget. It has long been recognised that the gap between the tax-free allowance and the tax exemption limit represents a major poverty trap. This gap is being substantially reduced. Exemption limits will now be relevant mainly for the over 65s. The personal allowance, standard rated so that the benefit goes equally to all, is being increased by over £1,000, or over £2,000 for married couples, with an additional £200 added to the PAYE allowance. This means that for a single employee the first £100 earned will be tax free, compared to £79 at present. It will also be PRSI free per full-rate contributions, as the threshold for both tax and PRSI is now the same. While until now it has been the case that going off the dole meant pretty much going straight into the tax net, that will no longer be the position. There is a clear gap between tax-free earnings and what can be received on the dole.

It is my view that the vast majority of the unemployed are anxious to work. I have always held that view. Everyone who is able-bodied and mobile should be able to get a job. They need access to education and training, and encouragement and support to get back into work. This budget radically alters the morale-sapping disincentives to work. There is no real excuse any more for young people to stay at home. The days of the dependency culture are over.

Last year, we concentrated on reducing tax rates. This year, in terms of our programme, we are concentrating on giving people an incentive to take up work, as stated in the first sentence of An Action Programme for the Millennium.

I know that Deputy Howlin has a difficult task this morning. I listened to every word he said and I realise that our system of parliamentary democracy demands that an Opposition Member must come to the House and to the job he is doing. I admire his effort. However, a large part of what the Deputy has said is inaccurate. He appears not even to have read the first line of An Action Programme for the Millennium. I would forgive him for not reading all of it but I would have expected him at least to read the first line. It refers to "giving people an incentive to take up work". That is what was done yesterday. To say that the budget is not in line with the programme the Tánaiste and I agreed 18 months ago is incorrect. The substantial increase in the personal allowance achieves this.

After this budget, about 27 per cent of all people subject to income tax will have no tax to pay and only 32 per cent will pay tax at the top rate. Parties opposite will no doubt want to claim, for want of anything to criticise, that this represents their policy. I have heard this said in the past few days. It certainly did not represent their policy in general, when there was an increase in personal allowances for a single person of only £150 a year in 1995 and 1996, and £250 in 1997, a figure that we matched incidentally in the last budget. That tax-free allowance has now been quadrupled. Fianna Fáil and the Progressive Democrats have gone far beyond anything that they had envisaged.

The Taoiseach is ignoring the different economic situation.

Deputy Bruton did attempt to introduce a tax credit system in the 1982 budget which fell, but it did not feature in Fine Gael's more recent policies. We have eliminated the employment and training levy introduced by Fine Gael in the early 1980s but we have increased the health levy, giving a net reduction of 0.25 per cent.

The only party that wanted to put anything into the tax-free allowances at the last election was Democratic Left but it was in the context of limited tax relief overall. The total relief figure of £1,500 million over five years was the rainbow target at that time. I would point out that in just two budgets, and with three more to go, we have provided just under £1.1 billion in full year personal relief or over two-thirds of what the rainbow parties were prepared to contemplate over a five year period. They showed by their record in Government that they did not regard reducing taxation as an important priority, except at election time. They wanted to do only what was strictly required by social partnership. Under this Govemment, real tax relief is not confined to election budgets once every five years. The tax system is a vital aspect of competitiveness and jobs. Lightening the tax burden makes it easier to create and fill jobs and to keep down inflation. It is the only way to sustain social partnership and full employment is the best means of tackling social exclusion, even if it is not the full answer.

For far too long the burden of funding public services fell on too few shoulders. In 1986, we had 1,080,000 at work, of whom between one quarter and one fifth would not have been in the tax net. Today, close to 1.5 million people are at work, which makes it possible to spread the load and reduce it.

After today's budget, the personal allowance together with the PAYE allowance will compare well with basic allowances in Britain, but at higher levels of income there is still a substantial gap in tax levels, especially for single people. The width of the tax band and the rates are matters that we will have to return to in future budgets, particularly if we are to attract the skilled people we need into the workforce and to keep them here, given international mobility.

This is a reforming budget. I am glad it is being seen as such. We have been focused in our approach. We have moved to introduce a tax credit system, which is a major reform that has long been recommended in many important analyses of the tax system. The tax credit system allows for better targeting and transparency of tax changes. That is the main justification for its introduction and our detailed analysis over a number of years has shown clearly that this system can target directly.

In years to come when Ministers for Finance have less money to spend, it will be possible to target that small amount of money directly into a particular area. That will be a great benefit. The benefit of the tax credit system will be more obvious in years when the Minister for Finance has very little to spend than in years of plenty such as this and, I hope, the years to come. Previous Ministers for Finance were forced to spread Government spending too thinly and with very little effect.

That is true.

This reform will change that this year and in the future. That is the main justification. Previously, when all funds were directed at raising personal allowances, the lion's share of the benefit went to those on higher incomes. This forced Ministers for Finance who wanted to help those on low incomes to raise exemption limits. However, that created poverty traps. I have argued for many years about exemption limits. They are misunderstood in this House because people think they solve the problems of low paid people whereas they do not.

They move the problem further up.

Precisely, and the problem is then three times harder. We have taken a strategic step to create a fairer and more socially progressive tax system. We have moved beyond debating the theories of social inclusion to implementing radical reform.

Higher earners did well in last year's budget. This year the benefits are more evenly spread. A married couple on one income with four children taxed under PAYE at £40,000 a year will be £800 better off in tax terms compared to just over £900 last year, and this is approximately the same as in Deputy Quinn's last budget. The net reduction in levies of 0.25 per cent will be of benefit across their entire income. Taking the two budgets together, the higher earner has nothing to complain about and can look forward to future budgets under this Government which will ease a burden heavier than in most other countries.

There is no significant clawback as far as indirect taxation is concerned, apart from 5p on a packet of cigarettes, which is the minimum which can be justified from a health point of view. There is no increase in excise on beer, spirits or petrol.

Vehicle registration tax.

Since 1987, in all the budgets in which Fianna Fáil has been involved, there have only been rare increases in the so-called old reliables. This has helped keep inflation down and ensure that what is given with one hand is not taken back with the other.

In the context of both EMU and social partnership, we are anxious to reduce inflation to 2 per cent in 1999 so that neither jobs nor living standards are put at risk. Under EMU, higher inflation means now more than ever a loss of competitiveness and jobs, so it must be avoided.

We are ready to use the tax system to promote environmentally friendly developments. We are consciously increasing tax on less fuel efficient vehicles. To promote public transport, we are encouraging the provision of park and ride facilities by a capital allowance scheme and freeing the provision of monthly travel passes from benefit-in-kind taxation.

To relieve pressure on the housing rental market, and in response to representations from third level institutions, section 23 relief is being extended to cover the provision of student accommodation, an area highlighted this summer as likely to experience great difficulties with the enormous number of people seeking residential accommodation. This is now the chance for all the developers who told the Minister for the Environment and Local Government, Deputy Dempsey, his Minister of State, Deputy Molloy, and me at many meetings that, because the Bacon report forced them out of this area, they believed there was a capacity for huge investment. We await their proposals.

This is the largest social welfare and social inclusion package ever introduced. For purposes of comparison, Deputy Quinn's social welfare package amounted to about £114 million in 1997. This year it came to £125 million. Next year it will cost £155 million, also in the calendar year. The full year cost of the budget's social welfare and social inclusion measures is £378 million. I calculate that almost £1 billion has been spent on social inclusion measures or nearly double what was promised in Partnership 2000. Not only has there been no slackening of the pace since the change of Government, the pace has accelerated. Providing effective help to the less well off has everything to do with good management of the economy and nothing to do with ideological labels.

Excluding the old, the general social welfare increases are at the top end compared with the rainbow Government's budgets. I listened carefully to Deputy Howlin's almost savage attack on the Government about the scandalous rates. I remind him of what he was involved in not so long ago.

We did not have £1.4 billion. It is a time of bounty.

No, it is a matter of how the economy is organised. The rate of increase under the rainbow Government amounted to 2.5 per cent, 3 per cent and 4 per cent from 1995 to 1997. The long-term unemployed in this budget receive an increase of 5.25 per cent or £3.60 per week to bring remaining payments up to the indexed minimum recorded by the Commission on Social Welfare and as promised in Partnership 2000. Others receive a £3 a week or 4 per cent increase, double the expected rate of inflation.

And the banks get 4 per cent.

While I know it is depressing, I remind Deputy Howlin that the increases under the rainbow Government were £1.50 in 1995 and £2 in 1996 and 1997, which is a total of £6.50 in the three years when economic growth was 6 to 7 per cent. The Minister for Social, Community and Family Affairs, Deputy Dermot Ahern, has given increases of £3 in 1998 and in 1999. In two budgets he is only 50p short of what the then Minister for Finance, Deputy Quinn, gave in three budgets. When Deputy Howlin uses the word "outrageous", he is obviously not criticising the Minister, Deputy Ahern. If he is, he must feel Deputy Quinn's increases of £1.50 and £2.00 were absolutely outrageous. I am glad he indirectly compliments the Minister, Deputy Ahern's, 5.25 per cent increase.

The main focus of our entire budget package is the older citizen and the family. The contributory old age pension is increased by £6 a week to £89 or by £9 for a couple, so we are on target to reach our goal of a pension of £100 pension a week for a single person in the lifetime of the Government. It represents a 7.25 per cent increase on top of the 6.4 per cent or £5 increase last year. The total is now very close to 14 per cent. In addition, we have given the largest increase in tax exemption this year. By comparison, the exemption increases given in the rainbow Government's budgets for the 65-74 age group were £200 in 1995 and 1996, and a very generous £100 in 1997. We raised it by £400 to £5,000 in 1998, almost as much as the three previous budgets. For 1999 we have raised it by another £1,500 to £6,500 or £13,000. This tax exemption level is now significantly above the UK age allowance level, especially for a married couple.

Improvement and liberalisation in the carer's allowance and tax encouragement for the provision of convalescent homes are also for the benefit of old people. We are also allowing those not in pension fund schemes to put more aside for their old age by greatly increasing the allowable size of tax-free contributions, particularly over the age of 50 when there are less likely to be a lot of children in the family and when people are beginning to worry about providing for their old age.

The family and children are central concerns of this Government. We have continued to raise child benefit weighted towards the larger family. We have improved the family income supplement. We are also encouraging employers to provide child care facilities by capital allowances and also by disregarding their use as benefit-in-kind. I recognise that this is only a limited response to the demand for help with the cost of child care. We will study the report of the interdepartmental group when it is completed in February and it will form part of further deliberations on the subject. It is a subject to which we will have to return and I look forward to doing so when we have the report.

We have also provided substantial further support for people suffering from disabilities with improved provision for carers, extra places and improved facilities to help those with learning disabilities and further help for the physically handicapped. There will be an 11 per cent increase in gross current health spending to target priorities, including waiting lists and services for older people.

I do not want to target poor Deputy Howlin but I remind him that he was Minister for Health in 1994 when £10 million was spent on waiting lists.

The Taoiseach was Minister for Finance at the time. I spent what he gave me.

The Deputy must not have made much of an impression.

Yesterday £20 million was given. If it is so appalling——

I got as much as I could.

The Taoiseach without interruption, please.

When the Deputy was Minister for Health he was extremely happy and popular, but he wanted to move from that ministry.

That is not true.

The Deputy was doing very well in that ministry.

I am very content to be here.

He was doing a good job, but he was spending half the amount of money the present Minister is spending on the waiting list initiative.

The Government recognises that education and science are in many ways the key to our future. The education capital programme for 1998 and 1999 is running at at least double the annual average of the years 1995 and 1997, and will amount to £239 million next year. The increase in the current education budget at 9 per cent will be at least four times the rate of inflation with a heavy concentration on people with learning difficulties. Since we came to office, we have improved funding to scientific research and innovation, tapping sources of private funding with matching State aid. We have provided tax relief in the budget for personal and corporate donations to our scientific and technological education investment fund as well as on a smaller scale to libraries.

I question Deputy Bruton's claim that his priority is primary education. The provision for first level education under the rainbow coalition Government increased by 4 per cent each year when he was Taoiseach. It increased by 7 per cent in the two years that I have been Taoiseach. The capital programme has increased from £34 million in 1997 to £55 million in 1999. A comparison of those figures does not augur well for the priority Deputy Bruton attached to primary education.

Many non-commercial farmers have been having a very rough year. We provided an income floor through the farm assist programme and also improved access to pensions. We restored the farm installation aid scheme and the control of farm pollution scheme. Farmers will also benefit from lower interest rates and tax reductions in the budget.

Every budget has to have a lighter element.

This year it is a budget for the punter. Horseracing is a national sport enjoyed by all sectors of the population. Keeping the bets in Ireland is another way of keeping the racecourses open. I look forward to my next flutter at even keener odds and to there being a much higher tax take from this. Anyone who knows about the industry will know that all the bigger bets have been going out of the country for many years. This provision will ensure that our industry will expand and develop——

Along with Ansbacher.

——and it will not cost us a significant amount of money.

The Government supports commemorative projects that reflect our heritage. My Department will give £200,000 to help with the construction of the Dunbrody project.

That is an excellent project.

The Minister and I have been instrumental in providing £300,000 to secure the family home of Pádraig Pearse, which is quite near Leinster House. We are happy to give £300,000 to the Irish School of Ecumenics in recognition of its continuing contribution. I thank it for its good work.

Our ambition is to make Ireland one of the best countries in which to do business. Small businesses will be pleased at the increase in the lower 25 per cent corporation tax threshold to £100,000 in fulfilment of our election manifesto pledge. We are continuing the reduction of the standard rate of corporation tax by 4 per cent and mapping out the route whereby we will reach the standard rate of 12.5 per cent by the year 2003 in line with an agreement with the Commission last July. Our corporate tax regime going back nearly 40 years was designed to offset our peripherality, while countries in the centre of Europe boomed. Every important move since then has been negotiated with Brussels. The question of unfair competition does not arise. It seems some of our European partners are afraid not of unfair competition but simply of competition. We account for a mere 1 per cent of inward investment in the EU, the vast majority of which comes from outside the EU.

There are isolated instances where firms relocate or rationalise from one part of the EU to another, and that has happened occasionally to our cost and to our benefit. In general terms, manufacturing industries are not relocating from Germany to Ireland. There is competition in the financial services area and some years ago we made special tax arrangements to meet certain German concerns.

My understanding of a single market is that it is an arena in which companies and countries compete. It is not a closed cartel, which protects inefficiency or high costs. The high tax high spending route will do nothing for Ireland and we will not go back down that road. We live in a global economy and Europe has to compete and work in partnership with low tax economies in the rest of the developed world and, notably, in North America.

For the first time ever a Government is able to budget for a large surplus. In 1998, the outturn is estimated to be £668 million and there is a surplus of £925 million budgeted for next year. The general Government surplus is in each instance somewhat higher, but a constant 1.7 per cent of GDP. We are observing the rules of the European Stability Pact.

I note a sharp contradiction in the critique coming from left to right. The Fine Gael Party seems to regard the budget as too expansionary, with dangers for inflation, although I note that this morning Deputy Bruton moved away from what Deputy Noonan said yesterday.

Will the Taoiseach please yield?

Will the Taoiseach yield?

As I explained this morning, my concern is the possibility of inflation because of structural factors in the economy. I do not criticise an expansionary budget as such. Budgeting to stimulate the economy is good so long as it can have effect if the structural bottlenecks are cleared.

I withdraw what I said. I was present for most of the debate yesterday. I cannot quote what Deputy Noonan said yesterday, but he gave the impression that he was against this expansionary budget. Deputy Bruton clarified that this morning, he has clarified it again now and there the matter rests.

I fail to understand the mania for continuing to pay precious taxpayer's money to bankers, foreign and domestic, in perpetuity. Why are Labour and Democratic Left so determined to be the international bankers' friend? Why should we go on forever paying more than £2 billion a year to the bankers, when we could be spending it on improved services, providing a hedge against a downturn and lowering taxes on the PAYE sector?

One does not pay off one's mortgage when one's roof needs repair.

If we spend the surplus we will go on forever paying such money. This year, the figure is £2.74 billion. We are spending 30 per cent — the increase in the capital programme. We are spending £2.5 billion on a capital programme. Others think we are mad to do that. We do that because there is an infrastructural deficit. What the Deputy's party wants us to do is to spend 60 per cent of the surplus which would mean we would continue to have a huge interest burden when our children grow up. That does not make sense. It is a stupid policy which we need to move away from.

The steady improvement in the national finances since 1987, about which some Opposition parties were not happy, has been one of the foundations of our present prosperity. Our general Government debt-GDP ratio has more than halved since the late 1980s and it now stands at an estimated 59 per cent of GDP, just under the Maastricht criteria. It is due to fall to 52 per cent in 1999 and by another ten points by the year 2001, if we consistently follow the Government's policies. It is no accident that the wealthiest country in the EU is Luxembourg, a small country with virtually no public debt.

We have increased spending for next year to the absolute limit of what is prudent. The main concentration is on public investment, which will now rise by more than 30 per cent and its job is to tackle the bottlenecks in housing, transport and all the other needs of what is now a rapidly growing population, of which the most recent CSO estimate is 3.7 million. It is legitimate to switch expenditure from unproductive debt servicing to current services, and that is what we have done within an overall average 4 per cent limit. If we were not reducing our debt services expenditure at the same time, it would not be prudent to increase day to day expenditure by an average of 7.7 per cent over the next two years.

All of us when we pause to reflect, are somewhat bemused by the rapid growth of the Irish economy in ways that seem to defy the laws of economics. We could be scared by the opportunities, but the Government is determined to rise to the challenge. The basic formula adopted since 1987 remains the right one and we will stick to it and try to make the best use of the fruits of growth for the benefit of all.

As the Taoiseach and a former Minister for Finance, I am very proud of this year's budget. I am very proud of the Minister for Finance, Deputy McCreevy. Some of the most deprived people live in my constituency, and I know it will help most of them, but it is also what the country needs at this time. There will be a renewed sense of fairness. There are priorities in our programme for Government that we have not yet been able to implement. We have three more budgets in which to do that and we will do that.

The budget will keep the economic success story going. It honours Partnership 2000 commitments and provides a sound basis for the continuation and deepening of social partnership into the next millennium. We promised lower taxes to individuals and businesses as well as a new deal for the old. We are delivering the best set of economic conditions and the most prolonged ones that the Irish people have ever experienced. I am proud, along with the Tánaiste, to be part of a Government that has introduced one of the best budgets ever in this State.

It has been said repeatedly in the run up to the budget and in the debate that has taken place so far, but it deserves to be said again, that no Minister for Finance in the history of the State has been in the lucky position of preparing a budget in such favourable economic and fiscal circumstances as those which the Minister, Deputy McCreevy, has been able to enjoy over recent months. It is probably not an exaggeration to say that few Ministers for Finance anywhere in the developed world have had such a favourable background in which to prepare a budget, or have enjoyed such a range of positive options as those open to Deputy McCreevy.

Never before has a Minister had such resources at his disposal. Never before has a Minister had so many easy decisions to make. It is against this unique background that this budget must be judged. Comparisons with a budget three years ago, or even 12 months ago are irrelevant. The economic picture has changed beyond recognition and it is understandable, therefore, that people's expectations have changed also.

I will start by giving credit where credit is due. The changes in the tax system announced by the Minister are probably the most significant to have been made since the introduction of the PAYE system. It is not so much the extra money in people's pockets this year — an extra £6 or £10 will not make anyone rich — but if they are built on in the years to come, these changes will provide the basis for a much fairer and more equitable system of taxation.

The question that must be asked, however, is why were these changes not made a year ago? Why did Fianna Fáil and the Progressive Democrats insist on flying in the face of the national consensus that existed last year — that the correct way to proceed was to increase allowances and widen the bands — and concentrate instead on reducing rates in such a lop-sided way that the benefits went disproportionately to high earners? Whatever way the Minister tries to depict it, this is one of the most dramatic U-turns in the history of Irish politics but, let it be said, a U-turn that is very welcome.

If the Minister is entitled to credit for the tax changes, he deserves contempt for the way in which he has turned his back on the poorest and most disadvantaged in our society. The poor have never been high on the Minister's list of priorities. His brief period as Minister for Social Welfare is still recalled with dread by the most disadvantaged. The contemptuous way in which the Minister dismisses those who work to highlight the plight of the poor, often for very little financial reward and in circumstances of great difficulty, as "the poverty industry", serves only to highlight his own arrogance and indifference to those most in need.

With the resources at his disposal the Minister had the opportunity, never open to anyone in that position before, to declare war on want. He had an opportunity to make a real difference to those who have to subsist on minimal incomes and to take on the deprivation in many urban blackspots.

The Minister's political and economic conservatism is highlighted by his decision to allow for a current budget surplus in excess of £2.3 billion next year. He has basically decided to tuck £2.3 billion into the national mattress when housing, health, education and child care are crying out for additional resources. On every occasion over recent years the budget outturn has been better than expected, so it is quite likely that the surplus will actually be greater than £2.3 billion.

I do not think anyone will be impressed by the Minister's folksy parable, with which he ended his speech yesterday, about putting money away for a rainy day. Every family knows that if the roof is leaking, if a child needs new shoes, if the baby needs medical treatment, they will spend the money on those priorities and will not put it away for a rainy day.

While there are a number of improvements in social welfare that are welcome and while certainly nobody will begrudge the elderly their few extra bob, the general increase of £3 per week is pathetic, given the resources available. Claims of the biggest social welfare package have to be viewed against the reality of the greatest ever resources available to a Minister for Finance. It is not only the unemployed who have been limited to £3 per week, as many journalists and commentators seem to think. Other than old age pensioners, more than 600,000 people are dependent on social welfare who are limited to the £3 increase, including the bulk of the 212,000 unemployed, 120,000 widows, 130,000 disabled and 74,000 lone parents. Not for the first time the message to the poor from this Minister is: "You are on your own".

The changes in the tax system are genuinely radical, but there has been no similarly radical approach to those who are marginalised. Given that most of those at work will benefit from tax changes to a far greater extent than £3, those on social welfare will generally fall behind and the gap between wage earners and non-wage earners will be widened even further.

In many cases much of the £3 increase will be clawed back in other ways. For instance, I received a telephone call this morning from a woman in a low paid job, whose husband is on disability benefit because of a serious heart problem. She is low paid, but is still over the limit for eligibility for a medical card for her husband. She makes the point that her husband will get £12 extra per month through the increase in disability benefit, but that he will have to pay an extra £10 per month for medication as a result of the changes announced by the Minister for Health in the drugs refund scheme — a net gain of £2 per month for that family. What sort of justice is that? What kind of equity is that?

There are some who have done well, some who apparently have an inside track to the Minister's office. I read somewhere that the only delegations the Minister received prior to the budget were from the bloodstock industry and the Irish Bookmakers' Association. The bookies certainly have had considerable success in their lobbying, winning tax concessions amounting to £24 million in a full year. I suspect they were pushing an open door, in that the Minister, Deputy McCreevy, long before he was a Minister, was quite happy to go on RTE to discuss how he evaded betting taxes. Regardless of whatever problem there was about telephone betting to the Isle of Man, those who will benefit from these tax changes include some of the wealthiest people in the country; people who, no doubt, benefited from the Minister's largess last year in cutting capital gains tax in half.

The Exchequer will hand back to the bookies £24 million in a full year — more than the extra money allocated to reduce hospital waiting lists, more than the extra money allocated for carers, more than the allocation for the needs of those with mental or physical handicaps and more than the cost of additional initiatives for educational disadvantage. People at the bottom of the ladder, who have been told time after time that they must wait until economic conditions are better for their situations to improve, were entitled to expect their needs would move to the top of the political agenda. They have been largely ignored in this budget.

I am in politics to try and bring about a fairer, more equal and more democratic society. A prerequisite for this is a more equal distribution of wealth. For as long as I can recall, we have been told by conservative politicians and economists that this could not be done, that we were a poor country with an underdeveloped economy, that we did not have the wealth or resources and that any attempts at redistribution would cripple the economy and create economic chaos. None of these excuses now apply. We have a booming economy with growth rates that are the envy of much of the developed world. We have a level of per capita income that is approaching the EU average. We have an overall tax burden that is low by EU standards.

We have a boom, but what is beyond dispute is that the benefits of the boom are not being shared out equally. Companies are making huge profits. The £500 million profits reported by the Bank of Ireland for the first six months of the year were only exceptional in their size. Multi-national companies are repatriating profits on a scale never experienced before. Land speculators and builders are making vast sums at the expense of those who need housing. The halving of capital gains tax in last year's budget brought even greater fortunes to profiteers.

The picture for the rest, however, is very different. The vast majority of people are, at best, treading water and, despite the welcome changes made in the tax system, will continue to struggle to survive. Even worse, a substantial minority — concentrated by and large in about a dozen urban black spots — is falling further and further behind. The recent United Nations Development Report for 1998, which showed that Ireland had some of the highest levels of poverty in the industrialised world, should bring a dose of realism to all the hype about the Celtic tiger. The statistics in the report showing that Irish women are worse off economically and that we have the highest level of functional illiteracy amongst the industrialised states surveyed, are particularly alarming.

The report confirmed what I indicated earlier — that substantial sections of the population are not benefiting from the unprecedented economic growth and amid a sea of plenty, there are islands of deprivation that are in danger of being totally swamped. The real period of economic recovery started during the term of office of the Rainbow Government. As Minister for Social Welfare in that Government, I was very conscious that, despite the hugely improved economic situation, there was a real danger that many of the poor would be left behind.

One of the achievements of my time in office of which I am proudest, was the establishment of the National Anti-Poverty Strategy. This was an initiative designed to place the needs of the poor and the socially excluded at the top of the national agenda in terms of Government policy development and action. One of the key objectives was to ensure that the battle against poverty would be a priority, not just of the Department of Social Welfare, but across all key Government departments.

Unfortunately, apart from adopting the rhetoric of social inclusion there is not a strategic approach evident from this Government that indicates a seriousness about tackling poverty, and there has been a complete failure to work towards the targets set out in the National Anti-Poverty Strategy.

Another issue which has raised serious questions about this Government's commitment to fighting poverty, and which must be considered in tandem with this week's budget, is the disastrous way in which it has handled the preparations for the next round of EU Structural Funds. The decision by the Government to draw an artificial line through the heart of the country and to create two totally artificial regions, was a cynical move that has more to do with the perceived political needs of the Government than the economic requirements of the country as a whole. The Government has spurned an opportunity to ensure that the benefits of economic growth will, in future, be spread more evenly throughout every community in every corner of the country and effectively turned its back on some of our poorest and most deprived communities and abandoned the 70 per cent of the unemployed who live outside the area singled out for preferential treatment. The Government has made a nonsense of its own claims to have a coherent policy on regionalisation by creating, purely for party-political expediency, a totally artificial region that leaps over the Shannon estuary and bypasses impoverished communities in the City of Limerick. There is every chance that the EU will recognise this proposal for the political "stroke" it is and reject it, thus damaging the standing of Ireland in the Community. The Government has persisted with this strategy despite the explicit warning from Commissioner Wulf-Mathies that there is no guarantee that dividing the country in two will deliver a single extra ecu or that securing Objective One Status will result in any preferential treatment for this area in the period after 2006.

It is now clear that the various figures on which the Government has been making a case to the EU for preferential treatment for some parts of the country are virtually meaningless. I urge the Taoiseach to use the opportunity presented by the December summit to urge other EU leaders to agree to a more rational and logical measure of need. In the meantime, the Government should withdraw the damaging proposal to divide the country into two so-called rich and poor regions.

The variety of figures floating around simply confirm that it is not possible to measure wealth or need in this way, especially in the context of the unique characteristics of the Irish economy. Just take the county by county figures produced by the CSO a week ago. Does anyone seriously believe that Tipperary South Riding produces almost twice as much wealth at Tipperary North Riding, as these figures suggest?

It defies logic that a case should be made to Brussels for preferential treatment for certain areas on the basis of figures that include the profits of multi-national companies, which are almost always repatriated out of the region, but excludes many farm grants, such as headage payments, which are almost certainly spent within the area. It would make as much sense to base a case to the EU for additional resources on the number of garden gnomes or colour televisions in a region.

What is now very clear is that the Government has made a mess of this whole process. The Government, on the basis of very doubtful figures, has decided to divide the country into two artificial economic regions. This is a false and damaging basis on which to construct a national plan for the next six years. We must plan on the basis of real income and disadvantage and not on the clearly discredited GVA basis being used by the EU.

Even at this stage, I appeal to the Government to go back to the drawing board. There are many more satisfactory ways to measure wealth than those being used in the current debate, such as the Household Budget Survey, which reflects much more accurately the wealth of people in the various areas. These should be the figures on which national policy in regard to the next round of EU Structural Funds should be based.

This debate has been depicted as a case of the west versus Dublin or a new urban-rural conflict. It is not. It is about recognising that disadvantage is a country-wide problem and that it is just as severe in Ballymun as in Belmullet. If we are serious about ending disadvantage, economic help to improve living standards and enhance employability must be aimed at clusters of people and not areas of land or parts of maps.

I fully appreciate the problems of rural poverty, and that a number of farmers are experiencing very real problems. Attempts have been made, especially by Fianna Fáil, to demonise me with regard to the farming community, because I have questioned the level of tax paid by many farmers and have queried the consistently dismal picture of farm incomes being painted by some of the leaders of the farming organisations. I am a farm labourer's son. Later in my life my father started a family business as a potato merchant, and I ran the business for a number of years, so I know quite a good deal about farmers and the farming sector at first hand, good and bad. As Minister for Social Welfare I took many farm family-friendly initiatives, such as easing the means test for non-contributory pensions, introducing easier and better conditions for seasonal workers, and enabling income for the rural environment protection scheme to be disregarded in assessing entitlement to smallholders allowances.

I also introduced the security for the elderly scheme which provided grants for voluntary organisations throughout the country to improve security in the homes of vulnerable elderly people. Tens of thousands of people have benefited from the scheme, mostly in rural areas, many of them farmers or retired farmers.

I am proud of my record, but that does not mean I will not ask the awkward questions that need to be asked, and the questions that continue to puzzle many PAYE workers. During the big farmer demonstration in Dublin, the IFA President, Mr. Tom Parlon, asked for "the understanding of the wider community for the crisis facing farmers". It was understandable if this met with no more than a conditional response from PAYE workers, given the failure of the farming organisations to paint a full picture of the growth in farm incomes over the past decade or to acknowledge the inexplicably small tax contribution the farming community continues to make to the Exchequer.

If the wider public are sceptical about the current difficulties, it is because they have heard Mr. Parlon's predecessors year after year forecast doom after every wet day and disaster with every temporary fall in the price of cattle. Agriculture is, of its nature, cyclical, but a look at the figures produced by independent bodies like the CSO and Teagasc suggest that farmers have done very well over the last decade and that the rate of growth in farm incomes has been well ahead of the increase in the average industrial wage. Alongside this growth in income is the inexplicable gap between the tax paid by farmers and PAYE workers. In 1987 the average PAYE worker paid £2,904 more in tax than the average farmer. By 1997 the gap had grown to £3,552.

These statistics will be of little comfort to farmers, especially those with small holdings, who are now facing genuine difficulties. However, these difficulties will not be overcome by raiding the coffers of the Department of Social, Community and Family Affairs under the guise of extending family income supplement to farmers and the self-employed. I am glad the Minister, Deputy Dermot Ahern, has declined to go down this road.

Given the undoubted evidence that is there that some farmers are facing acute difficulties, I find it surprising that farmers in need have not been applying for the various social welfare supports that are already there for them and for everyone else in need. For instance, under existing arrangements, self-employed people, including smallholders, whose income falls below the rate of unemployment assistance appropriate to their family circumstances are entitled to claim unemployment assistance. The Minister, Deputy Ahern, told me last week, in reply to a question, that a number of initiatives are being introduced to increase access to the scheme by low-income farmers. However, he added that there had been no upsurge in new claims or in requests for re-assessment in recent weeks.

I had also asked the Minister the number of farmers who had applied for and received supplementary welfare allowance and special needs payments since 1 August — payments which are available to farmers on the same basis as to everyone else. He told me that just 12 farmers — 40,000 marched in Dublin — had applied for and received supplementary allowance and special needs payments since 1 August at a cost of £1,586. These figures appear to suggest that either the income crisis is not as severe as we have been led to believe or farmers in need have not been made aware of the supports that are available.

The Minister for Finance yesterday announced provision for a revamp of the smallholders' unemployment assistance scheme at a full year cost of £15 million. However, no details of this proposal have been given so far. Perhaps the Minister for Social, Community and Family Affairs will elaborate. I acknowledge the problems facing a number of farmers and appreciate the need for assistance for those most in need. However, are we to understand from the Minister for Finance's announcement that there is to be a two tier form of unemployment assistance, with easier access to this form of benefit for farmers than applies to non-farmers? If that is so, it would be a disgracefully discriminatory and retrograde step.

As the numbers on the live register decrease and the numbers at work increase, housing now threatens to overtake unemployment as the country's main social problem. The housing crisis is now so severe that it is affecting all types of people for whom housing would never have been a problem previously. The local authority housing lists have reached levels never before experienced and the failure of the Government to provide sufficient extra resources for housing in 1999 inevitably means they will be longer in 12 months' time.

Irrespective of whether the additional money allocated to the Department of the Environment and Local Government is sufficient for 200 houses, as has been claimed by a prominent economist, or 600 houses, as the Minister of State, Deputy Molloy claims, what is beyond dispute is that it will have no more than a marginal impact on the numbers on local authority lists. They now total almost 46,000. Nothing in the budget or the Estimates adequately reflects the seriousness of the housing problem facing the country. With the escalating price of housing — up 23 per cent in the first nine months of this year — and the failure of the Government to do anything to control prices, more and more people are being driven out of the private market and onto local authority housing lists.

Local authorities cannot meet the current demand with the resources available to them and more families have to spend even longer periods in inadequate private housing, often in cramped and insanitary conditions. With unprecedented resources at the disposal of the Government, it had been hoped that 1999 would see a serious assault on the housing crisis. Even at this late stage I appeal to the Government to recognise the real hardship involved and to considerably increase the allocation for housing for 1999. The quality of life for thousands of young families will be diminished if it does not do so.

The failure, despite the pre-budget hype, to do anything about child care is also disappointing. I have always been doubtful about the wisdom of tax allowances for certain categories of children to pay for child care outside the home. This procedure would, for example, ignore the needs of thousands of parents who are married to social welfare recipients, those who stay at home to mind their children, families below the tax threshold and parents who live with taxpayers but are not married to them.

The best way to recognise the work of parents who stay at home to mind children and to help with the child care costs of those who work outside the home is to increase child benefit. This payment goes to all parents, regardless of whether they work outside the home. If child benefit is to help meet child care needs, it would have to be increased by a much greater amount than the £3 granted by the Minister for Finance. With fewer resources at my disposal in 1995 I increased child benefit by £5.

Apart from the child care dimension, child benefit has long been recognised as a crucial element in combating poverty, as families with large numbers of children tend to be on the lowest incomes. Despite the resources at his disposal, the Minister ran away from an opportunity to make a real assault on child poverty.

There appears to be a distinct shift in strategy, which the Minister for Social, Community and Family Affairs can confirm, by the Department of Social, Community and Family Affairs. It involves putting major resources into income for the elderly and thereby reducing the resources that are available for other people on social welfare. Not all these people are unemployed. Many simply cannot access work for a range of reasons. This is a major change in the strategy introduced by the previous Government, which was to concentrate on seeking to eliminate poverty in families.

No matter what size budget the Minister can claim he secured this year, there is always an outer limit on what can be achieved in terms of acquiring money from, or permission to spend money by, the Department of Finance. There are always, therefore, choices to be made about how that money will be spent. It can be spent either by scattering it across all categories of recipients or the Minister can decide to concentrate it on one.

I suspect, rightly or wrongly, that a conscious decision was made by this Government to concentrate these resources on increasing payments to the elderly, a demographic element in our society that is growing steadily and in terms of its capacity to be heard. It is also the section of the population whose members are most likely to vote. Children do not have votes. I do not deny that the elderly need resources, but choices must be made and the elderly appear to be the focus of this Government's choices in the social welfare area.

Another area that attracted considerable attention in the period before the Budget Statement is Ireland's contribution to overseas development aid. A number of factors have contributed to increased public consciousness in this regard. There has been the undoubted impact of the terrible trail of destruction left by hurricane Mitch in Central America last month. There has also been increased awareness of our moral and political obligations to the developing world at a time when our economy is booming, but when we also continue to look to Europe for assistance.

The Government package for overseas development aid can only be regarded as miserable given the scale of need in the developing world. It is clear that the Minister for Finance, Deputy McCreevy, won the political battle with the Minister of State, Deputy O'Donnell. She, correctly, objected to Department of Finance plans to freeze the level of ODA for 1999, even suggesting that it was a matter on which she would consider resignation. She blinked and ODA is effectively frozen at this year's level. The poor of the Third World have been told to wait and accountancy has won over humanitarianism.

At a time when a number of parts of the world are facing continuing famine and when countries such as Nicaragua and Honduras are facing a frightening battle to recover from the impact of hurricane Mitch, the freezing of ODA is unforgivable, especially given the most favourable economic situation ever faced by a Minister for Finance. Despite the promised three year package, it is now extremely unlikely that the Government will meet its ODA target of 0.45 per cent of GNP by 2002.

No other sector has a comparable case for front loading an aid package rather than deferring payments, as the Minister of State now proposes to do. For some people in the developing world this decision will mean the difference between life and death, between health and illness and between nourishment and hunger. According to the development agency Concern, yesterday's budget means that in 1999, payments for grant-in-aid for development will be reduced from £70.8 million in 1998 to £66.174 million in 1999, a 7 per cent reduction. Funding for humanitarian assistance will be reduced from £6 million in 1998 to £5 million in 1999, a 17 per cent reduction. This is a shameful decision and, even at this late stage, it should be reversed to ensure, at a minimum, a substantial increase in the 1999 ODA allocation.

In setting out the social, community and family affairs aspects of this budget, I am tempted to expound on the spend, the increases and the amounts. However, that would be to miss a vital point — that this budget is setting out, as no previous budget did, to turn Ireland into a country where nobody is left out. As of now, many people are left out. There are people reading the headlines about growth, about the booming economy, about industry and thinking "What is that to me? How is my life improved?". There are people watching the cranes moving over almost every town and city, watching Ireland being reconstructed for a new millennium and wondering if they will be as lost, as left out and as under-valued in the new millennium as in this one.

Social exclusion is a phrase that hides hopelessness and worse than hopelessness. To have the feeling that no matter what one does or how hard one tries one will always be left out, will never have an influence, will never be in full control of one's own life — that is the reality of social exclusion. To have the sense that age or disability is limiting one's freedom, constraining one's options, reducing one's possibilities — that too is the reality of social exclusion. To hear oneself categorised — sometimes with contempt — as "long-term unemployed" or worse, as "unemployable"— that undoubtedly is the reality of social exclusion.

This Government is absolutely committed to bringing people in from the cold of social exclusion and this budget is a powerful statement in that regard. It invests over £305 million, in a full year, in social inclusion measures. It is an unprecedented investment, a gesture of confidence in the value of all our citizens. Even though the amounts of money are unprecedented — that is acknowledged by all — what is of more fundamental significance is the strategy within which the expenditure fits. To put it another way, the moneys are unprecedented but the method is pivotal.

We are pulling together in a new way. We are pulling all Departments and public bodies together. Instead of putting £X here and £Y there we are co-ordinating the output and creating synergies that have not previously existed. Ireland has changed, developed and grown more in the past ten years than at any time in the past. Industries we never imagined have sprung up. The economic boom gives us a chance to invest in the future through the PRSI system, to put away money now as an act of social solidarity for future pension costs, to pay for the time when we have more older people who will need decent pensions and decent care provision. As a Government we must focus relentlessly on ensuring all our citizens have the opportunity and incentive to participate fully in the social and economic life of this country and, just as important, to share in the benefits of economic and social development.

Our older people must be able to share in the benefits of growth. They have made this country what it is today. We must make it a good country for them The budget contains a package of measures designed to improve the position of older people in society. In An Action Programme for the Millennium, we said we would ensure the contribution made to society by older people would be recognised. The Government is fulfilling that commitment. We said we would bring the old age pension up to £100 over the lifetime of this Government. We are emphatically delivering on that commitment. The budget provides for a £6 increase in the personal rate of pension for people over 66 and for those over 65 on retirement and invalidity pension. Deputy Howlin suggested not all people would get that £6. That is the case. He implied that was not the case when he was in Government. The fact is that not all people are on the maximum personal rate but 271,000 will receive the extra £6 and 56,800 will receive a slightly lesser sum, depending on the contributions made. We have also provided for an increase of £3 in the qualified adult allowance payable with old age, retirement and invalidity pensions. That is an increase from £1.50 last year. This follows on the unprecedented £5 increase provided in last year's budget.

The effect of these increases is that the old age contributory pension will now stand at £89 per week, a 14 per cent increase on the rate payable when we came into office 18 months ago. Under the rainbow Government, old age pensions stood still compared to the growth in earnings. We have increased them well above the increase in average earnings. A couple in receipt of the old age contributory pension will be £9 per week better off as a result of the increases provided for in the budget and £15.50 per week better off since we came into office.

In our election commitments last year we promised to address the issue of people who narrowly failed to qualify for a pension, essentially self-employed people who were aged 56 or over when social insurance was extended to the self-employed in April 1998 and who therefore could not satisfy the condition of having entered insurance at least ten years before pension age. The Government is introducing a special old age (contributory) pension for those who have paid at least five years contributions since 6 April 1988. They will be entitled to a new pension from 6 April 1999. This group of pensioners will have access to all the free schemes. It is expect that up to 10,000 pensioners — approximately 8,000 pensioners and 2,000 qualified adults — will benefit under this scheme.

Once off payments will be made to certain pensioners who applied for contributory pensions prior to 1 January 1997 but who were late in applying. These once off payments which will cost £10 million will benefit some 4,000-5,000 people; on average individuals will receive £2,000. Those pensioners who have already made inquiries to my Department on the matter will be contacted in connection with this good news immediately. These two issues — which relate to self-employed pensioners and arrears of late claims for pensions — were on the agenda of the previous Government but it did little or nothing on them. We are delivering on these issues because, apart from the general increases for old age pensioners, we considered they affect the elderly in society who, through no fault of their own, missed out.

My Department will carry out a comprehensive review next year of the qualifying conditions for old age (contributory) and retirement pensions. This review will pay particular attention to the operation of the yearly average qualifying condition, including the possibility of using contributions paid prior to 1953. This is a matter on which many Deputies have made representations. It will seek to provide a mechanism to allow women who take time out for family reasons to continue contributions for pension purposes.

Another area due for examination is the free schemes provided by my Department. Originally they were designed to benefit mainly older people in receipt of a social welfare type payment who were living alone and required additional assistance. It is timely to institute a fundamental review of the schemes to assess whether the objectives of these schemes are being achieved. This review will be undertaken in 1999 and will involve a wide consultation process.

I have commented before on the practice of "integrating" social welfare pensions with occupational pensions. In this process, account is taken of the person's old age contributory pension entitlements so that the occupational pension effectively tops up the social welfare pension to provide the total pension specified in the private pension scheme rules. In the vast majority of pension schemes, this process is carried out once only at the point of retirement and it enables employers to provide their employees with an earnings related pension.

However, in a small number of instances the integration process is continued after retirement, thus depriving the pensioner of the full benefit of the increases in the social welfare pension. This practice is unconscionable. I call on trustees of pension schemes to ensure pensioners are not disadvantaged. I propose to bring forward in the 1999 Social Welfare Bill the necessary amendment to the Pensions Act, as recommended in the national pensions policy initiative, to prohibit reductions in occupational pensions already in payment, arising from increases in social welfare pensions. There is no reason why, when the Government gives increases of £5 and £6 of taxpayers' money to old age pensioners, it should be clawed back by arrangements made under private pension schemes. I propose to bring forward that amendment in the forthcoming Social Welfare Bill.

The objective of bringing all social welfare rates up to the minimum rate recommended by the Commission on Social Welfare has been reached during my tenure as Minister for Social, Community and Family Affairs. However the job is still not complete. The Government will continue to further enhance the position of those who rely on the social welfare system for their income.

The personal rate for all social welfare payments other than those for older people is being increased by at least £3 per week which is twice the rate of inflation. The lowest payments, short-term unemployment assistance and supplementary welfare allowance, will be increased by £3.60 which means that these payments will reach the minimum rate recommended by the CSW. All other payments are now in excess of that rate. I already stated that the qualified adult allowance is being increased by £3 for all old age, retirement and invalidity pensioners. The budget provides a £2 increase in the qualified adult allowance in respect of all other welfare payments.

The difficulties facing farm families as a result of the recent poor season have been well aired in this House and outside it in recent weeks. The Government is committed to supporting the maximum number of family farms and intends to establish a separate scheme which will be known as farm assist, to distribute income support among farmers in genuine need. This new scheme, which will come into effect in mid-1999, will replace the smallholder's assistance scheme. It will include income disregards of £100 for each of the first two children and £200 for each subsequent child. Under the current arrangements for the smallholder's assistance scheme income is assessed at 100 per cent — in other words there is a pound for pound withdrawal rate once income exceeds the rate appropriate to the family size. Under the new scheme, income will be assessed at 80 per cent, thus providing an incentive to claimants to increase their income from farming and other sources. An additional full-year provision of £15 million over and above the £30 million being paid under the smallholder's assistance scheme is being provided in the budget for the new farm assist scheme.

I am reluctant to use words such as "generous" when describing the supports the budget provides for older people, carers and people with disabilities. I am reluctant because the word "generous" implies in some ways that the State is the giver. The State is the gainer, not the giver when it provides proper supports for its people.

There is a great zest and enthusiasm about living in Ireland at this time among those in employment, particularly for those involved with the success stories. However, there is a danger in the current success, or rather, a danger involved in our handling of that success. The danger is that we may lose some of the concern, care and kindness that distinguished society in less affluent times. That concern, care and kindness was part of a rich mixture of civilised living. In that context, when we spoke of "mé féiners" we did not want to be counted as one of that bunch. At present, to be a "mé féiner" is not always regarded as a bad thing. Some people subscribe to the philosophy that you should grab what is going and show off what you have gained. We see a tendency to assume that it is the State's job to take care of old people or those with disabilities. There is also a tendency to assume there is no real poverty or deprivation any more and that there are systems to take care of everything. No system can take the place of a human being who gives to another the priceless gift of attention, who gives time and respect to someone who is sick or disabled or who puts aside their urgent hopes and ambitions to take care of another.

In the budget, greatly increased provision for carers has been delivered. The Government is pointing to the contribution of immeasurable value to the nation made by carers. That contribution is an education and a reminder to everyone. In its Action Programme for the Millennium, the Government is committed to progressively relaxing the qualifying criteria for the carer's allowance to ensure that more carers can avail of it and increasing the value of the allowance in real terms. I am introducing a range of measures at an additional annual cost of more than £18 million to improve and develop the position of carers.

To allow more carers qualify for carer's allowance, I am extending the scope of the scheme in two important areas. This will take effect from August 1999. The first of these extensions will mean that all carers who are caring for someone between the ages of 16 and 65 will be able to apply for carer's allowance, even where the person being cared for is not in receipt of a social welfare qualifying payment. I am also extending the scheme to cater for carers who look after children in receipt of a domiciliary care allowance from health boards. What is the difference between what they do in terms of effort or quality of care and what is done by someone caring for an adult? I see no difference, that is why I have extended the allowance to those in receipt of domiciliary care allowance at a cost of approximately £9.5 million.

From my discussions with carers, it is clear that one of the key things they need for survival is respite care. Regular planned breaks are vital in managing the stress of caring and I am introducing a new annual payment of £200 for all qualified carers as a contribution towards respite care. The review of the carer's allowance launched in October proposed a once-off payment of £100 for this purpose but I decided to increase this to £200, a figure on which I hope to build in future years. This payment will be introduced in June 1999 and it will be awarded to all qualified carers in payment at that time to use as they see fit.

Significant isolation and emotional stress are often the pay off for carers. In recognition of the need for contact with vital services and as an important source of social contact with family, friends and support groups, I am providing, with effect from August 1999, that all qualified carers will be entitled to free telephone rental allowance regardless of their household composition. Last year I extended free travel to all qualified carers.

I am relaxing the residency and full-time care and attention qualifying conditions to introduce greater flexibility into the scheme, while safeguarding the needs and interests of care recipients. The residency requirements will be relaxed to allow for carers who are broadly "living next door" to qualify. The full-time care and attention requirements will be relaxed to allow carers to work for approximately ten hours per week. The psychological, economic and social benefits of work are important to carers and they should be encouraged to remain active in the community. I support their wishes and as part the changes to the means test, carers will be able to earn up to £75 per week without affecting their eligibility for full carer's allowance. A number of other measures designed to remove inconsistencies in the operation of the carer's allowance are listed in the appendix to my statement which has been circulated.

I have already signalled the Government's establishment of a working group to examine the proposal to introduce a needs assessment of all carers and care recipients. This group will begin its work in January 1999 under the chairmanship of the Minister of State at the Department of Health and Children, Deputy Moffatt.

A new carer's benefit scheme to allow carers to leave the workforce on a temporary basis will be examined by a consultany project in my Department in 1999. The report "Financing Long-Term Care in Ireland", published today by the Irish Association of Pension Funds, the Irish Insurance Federation and the Society of Actuaries in Ireland is an important contribution to the debate in this area.

All 11,500 existing recipients of carer's allowance will benefit from the measures outlined while we estimate that an additional 3,500 new carer's will qualify for the allowance. The total package for carers amounts to more than £18 million extra annually. This is a considerable increase on the £45 million spent on carers in 1998 and it indicates my commitment and that of the Government to carers and the appreciation we have for the valuable role they play in society.

With regard to people with disabilities, as a result of the budget, my Department will spend an additional £20 million in 1999. All payments to people with disabilities are over the level recommended by the CSW. The Commission on the Status of People with Disabilities highlighted the need for a number of major equality measures — some of them funding, some of them not funding based. We are taking action in respect of as many of those measures as possible.

The provision of support services for people with disabilities is a critical area of concern. The commission recommended the establishment of a disability support service as a single point of contact for information, advice, support and advocacy for people with disabilities. The Government has decided that such a service should be put in place through a merger into a new organisation of the National Social Services Board, which supports a national network of citizen's information centres, and the NRB network of information centres. This new organisation will provide a single information support service and will operate under the aegis of my Department. I will bring forward the necessary legislation early in the new year.

In the budget I have also taken an important step in the direction of another of the commission's main recommendations. The commission stated that disability allowance should be paid to people living in institutions and health care facilities. At present, people on disability allowance lose their entitlement if they enter long-term institutional care. Their maintenance costs and an element of pocket money are then met through funding from the Department of Health and Children. I am currently in discussions with that Department regarding the wider implications of this, but as an immediate step I have decided that from August 1999 entitlement to disability allowance will be continued where an existing recipient enters hospital or institutional care. This matter will be kept under review.

I want to ensure that people with disabilities have access to educational opportunities and improve their chances of securing employment. Therefore, I am lowering the qualifying age limit for the back to education scheme for people with disabilities from 21 to 18.

It makes no sense to pay people to be unemployed. It makes perfect sense to invest to make people employable. Last year I set a target of pushing the proportion of unemployment spending on active employability measures to 20 per cent. This target will be exceeded in 1999 with total investment in employment supports of £200 million. There is a programme of measures in place targeted primarily at the long-term unemployed, designed specifically to provide them with the opportunity and incentive to take up employment and training.

The budget provides for a number of enhancements to that programme. The number of places under the back-to-work allowance scheme is being increased by 2,000 to 29,000, reflecting its success in giving the long-term unemployed a secure source of income as they seek to re-enter the world of work. A further 1,000 places will be created and confined to participants in a new pilot scheme aimed at those who have been unemployed for five years or more. This group faces particular difficulties in re-integrating into the labour force and employers are sometimes reluctant to offer them employment opportunities. Under this scheme participants will be placed with employers for five to six weeks while continuing to receive their full social welfare entitlements with a special allowance of £25 a week towards travel and meal costs. At the end of the trial period they can proceed automatically to the back-to-work allowance.

In November 1997 I introduced a tapered qualified adult allowance to provide an incentive for the unemployed to avail of employment opportunities. Under these arrangements a reduced allowance continues to be payable where the income of the qualified adult ranges from £60 to £90. The budget provides for an extension of this income range to £105. This will increase the incentive for such persons, normally women in the home, to enter the workforce.

On family income supplement, the budget provides for an increase of £8 in the weekly income thresholds at each point. The effect will be to provide an increase of almost £5 a week for all claimants.

Other elements of the employment support services are being improved. The back-to-education allowance scheme is being enhanced with an increase of £50 in the cost-of-education allowance paid to participants at the commencement of the academic year. The allowance will now be £200.

The family is at the heart of society. It must also be at the centre of all Government policies. An extra £40 million is being invested in the family through major increases in child benefit. It appears people have incredibly short memories. Deputy Howlin castigated the increase in child benefit of £3 per month for the first two children to £34.50 and £4 for subsequent children to £46. This means a family with four children will now receive £161 per month or more than £37 a week. The figure of £40 million compares favourably with the figure of £25 million provided for by the rainbow coalition Government in its final budget. In 1996 it provided for a figure of £26 million.

Deputy Howlin suggested that the Government has frozen CDAs. It has done no more than the rainbow coalition Government. CDAs were considered a disincentive to work as they were withdrawn once a person entered employment, unlike child benefit which continues to be paid. The qualified adult allowance is being increased by £3 for old age pensioners and £2 for others. This compares with a figure of £1.50 last year. It ill behoves Deputy Howlin, therefore, to castigate the Government. As a result of the investment of an extra £40 million, in the region of £480 million will be available for child benefit next year.

An extra £1.8 million is being provided in 1999 for the continued development of marriage and child counselling, bereavement counselling and marriage preparation, the family mediation service, and the development of the network of family and community centres. An extra £2.55 million is being provided for supporting voluntary and community activity. An additional challenge grant of £300,000 is being provided for the Foundation for Investing in Communities which I launched recently, bringing total support to more than £1 million. Funding is being provided in fulfilment of the commitment in Partnership 2000 to establish an additional ten community development projects.

I listened recently to a group of young people with disabilities discuss discrimination, prejudice and other problems. The comment that most annoyed one of the group was, "You do not need to worry about that". On the face of it, it is kind and helpful, but that is not the way he saw it. He believed he was being told, "We will take care of you. We will solve your problems. Leave that to us".

That is the way we thought in the past about groups such as the long-term unemployed, older people and people with disabilities. It was a compassionate and pitying response. It is redundant and time to give it the P45. Older people, people with disabilities and those who have been out of the workforce for a long time do not want compassion or pity, they want equality and respect; to dream dreams and see possibilities; to belong to a society that includes them in its culture; to be heard, seen and inform our thinking; and to control their lives and contribute to the lives of others.

I would not pretend this or any other budget could achieve such fundamental change, but I claim with confidence that this budget is a strong indicator of the Government's passion to include and its determination to make the structures and systems of the State serve all the people.

I wish to share time with Deputy McCormack.

Is that agreed? Agreed.

The economy continues to enjoy unprecedented growth and the public finances were rarely, if ever, in better shape. Most parties have contributed to its success. It is disingenuous to claim this is due to the efforts of the Government. Any fair-minded individual will accept that the basis for our prosperity was laid during the two and a half years the rainbow coalition Government was in office. That Government initiated the process of tax reform.

In this budget there has been a reverting back to the philosophy of the rainbow coalition Government of targeting the lower paid by increasing allowances, broadening tax bands and introducing targeted tax credits. This is the policy that evoked that infamous headline in one of our main national newspapers "Payback time" before the 1997 general election. I am convinced it is the reason the Minister's party is on the other side of the House.

People are more intelligent than that.

The rainbow Government gave £450 million in the 1997 budget to lower and middle income groups, in less favourable financial circumstances than we enjoy today — something which is overlooked.

Having listened to the Minister repeatedly state in this House and in committee that his idea of tax reform was to cut rates, the tax provisions in this budget represents a welcome departure and a U-turn by the Minister. The Government's stated intention is to reduce the top income tax rate to 42 per cent and the standard rate to 20 per cent during its term of office. Thankfully, the Minister has departed from this objective in this budget. The tax concessions in this budget were in line with the policy of the rainbow Government, as outlined in its manifesto before the last election.

This budget could be the last opportunity for the Minister to put his unique imprint on the economy. I am sure we will be able to face into the new Europe better prepared for the new era of competition which will confront us. How will the Estimates, published two weeks ago, and this budget address the factors that threaten to stunt or derail our current economic buoyancy and prosperity?

We are facing many problems. The country's infrastructure is seriously strained. Labour shortages and skills deficits are now more apparent and wage inflation is increasing. We can see the effect of the collapse of the Asian economy on the US economy and the resulting job losses. In time that could have a negative effect on our economy. We must be prepared for all these eventualities.

This budget is one of contrasts — good for some people and very bad for others. It is good for the corporate sector and it contains a welcome departure for the lower and middle income groups — we must accept that. However, it fails abysmally in tackling poverty. As a result of the budget, there will be no significant reduction in the number of people living in poverty. Housing and hospital waiting lists will persist at totally unacceptable levels and may even increase. Adult illiteracy will remain largely untackled and rural exclusion will continue as before.

The budget exhibits an extraordinary failure to understand the severe struggle of those who live on social welfare. This has been outlined by all the Opposition spokespersons, including the leaders of the main parties. Thankfully, the minimum payment rates recommended by the Commission on Social Welfare in 1986 have now been reached. However, the number living in poverty is not declining. Social welfare payments have not kept pace with growth in average industrial wages. This budget will not effectively tackle poverty.

The increases in the old age pension, both contributory and non-contributory, the widow's allowance and unemployment benefit will not keep pace with the cost of living and the rising cost of consumer products such as fuel, food and other necessities. At the end of next year, these people will be worse off as a result of this budget. The Minister for Social, Community and Family Affairs, Deputy Dermot Ahern, accepted this to some degree.

I will put the budget in context by citing some examples. There are more people with incomes below the poverty line than there were a decade ago. There were 172,000 people unemployed in 1990. This number was the same in November 1997. By May 1998 the number of unemployed had fallen to 126,000. However, this number excludes everyone who was unemployed even for one hour in the course of a week. The numbers employed grew by 95,000 up to May 1998. However, this figure includes 60,000 part-time jobs. There are 26,000 more people on schemes, such as the community employment scheme, compared with 1990. These people are listed as employed in the labour force survey. A net gain of about 35,000 jobs is needed to eliminate unemployment. The figures are distorted at the moment. I would like clarification from Ministers as regards the figures I cited. People who are working on a part-time basis cannot be regarded as being full-time employed.

In 1996 more than 33,000 households were on waiting lists for housing. This will rise to more than 50,000 in 1999. Last week in one of the national newspapers, I saw a distribution of the waiting list per county which showed a remarkable increase in all counties. The principal reason for this is the rise in the cost of housing across the country. Private housing is no longer affordable for many lower and middle income groups. As a result they are forced to go on the public housing waiting list. Although there is an increase in the number of houses being built this year, nevertheless, it will take nearly ten years to eliminate the waiting list, not counting the numbers being added to it. The Government cannot be complacent about poverty and housing.

I would like to discuss some aspects of the budget, especially the motor industry, which got an unfair rap. Judging by reports in the newspapers today, the main representatives of the motor industry are disappointed and unhappy with the budget. In the past five years they have created jobs and turned the industry around. This is the thanks it gets for the great efforts it has made. The motor industry fears that the increases in VRT will have a negative impact on its growth.

In the past four years the industry has provided about 6,000 new jobs and employs more than 46,000 people. It will provide the Exchequer with £2.2 billion from motor related taxation in 1998. The Society of the Irish Motor Industry sought a reduction in VRT to a single rate of 20 per cent. The response of the Minister was to increase VRT on cars with an engine capacity of 1.4 to 2 litres from 22.5 per cent to 25 per cent, on cars of 2 litres to 2.5 litres from 22.5 per cent to 30 per cent and on cars over 2.5 litres from 28 per cent to 30 per cent.

This increase in VRT is estimated to raise £43 million. However, in a press release this morning, the Society of the Irish Motor Industry, said it found the increases totally unacceptable and it will oppose them vigorously. The press release states:

Prices of family cars from 1.4 litres to 2 litres will rise by 3.5 per cent, from 2 litres to 2.5 litres by a horrific 11 per cent and over 2.5 litres by 3 per cent. The measures will in fact impact negatively on motor industry jobs, increase emissions and ultimately reduce Government revenue by up to £100 million and not raise £43 million as the Minister claims.

I remind the Tánaiste that the Irish motor industry lobbied for a 20 per cent rate of VRT. Instead this is the response.

Because of the exceptionally high rate of VRT, Irish consumers pay 25 per cent more than the average in main European markets for a new car. Each year 40,000 used cars are being imported into Ireland yet none are being exported because of the residual element of VRT in the price of used cars in Ireland. The 6,000 jobs created since 1993 could be vulnerable because of the threat of large volumes of second-hand imports. The recent VRT reductions since 1993 and the scrappage scheme have helped to keep down the numbers of used imports. These job gains and the lower level of used imports may not be maintained.

I want to mention some of the points which were raised today in this morning's media. The tax increases will lead to a rise of £550 to £600 in the price of the average 1.6 litre family car. On this matter alone, even if the Government raised the level from 1.4 litre to 1.6 litre for the bottom rate of VRT, it would be of some help to the industry. Through my party's spokesperson on Finance, Deputy Noonan, I will table an amendment to this effect in the Finance Bill.

It was stated in The Irish Times this morning that “A few weeks ago, most motor industry observers were predicting new car sales next year of around 140,000 — approximately the same as this year. Last night, those predictions had fallen to around 115,000 or less”.

It further stated that Mr. Dave Shannon, managing director of Toyota Ireland, estimated that the price of a 1.6 litre Avensis, currently retailing at about £16,350, would increase to about £16,925. That is a considerable increase. Mr. Shannon stated: "This is crazy. Where's the logic of these increases when we are supposed to have tax harmonisation? This makes no sense with us going into the euro currency. I hope we can do something in Brussels about it". Another lobby group is going to Brussels to complain about the actions of the Government.

Mr. Eddie Nolan, chairman and managing director of Ford Ireland, saw the budget as "deeply disappointing". He pointed out that cars like the 1.6 litre Mondeo were also used in many company fleets. "That £550 to £600 increase will also have a serious impact on the cost of doing business here. It will have to be passed on.", he said. "When VRT was introduced in 1993 we were told that there would be a genuine effort made to harmonise car prices with those in Europe. Today's budget totally flies in the face of that promise".

Ironically, cars over 2.5 litres, which are in the luxury category like Jaguar, Lexus, etc., escape with the lightest increase in tax. The tax increase is just 2 per cent, from the current rate of 28 per cent to 30 per cent.

There is further bad news in the budget for many people who drive to work. Most people in rural areas must drive long distances to work basically because there is no employment locally in their villages and towns. They drive 40 and 50 miles to work and they need a good car because of the condition of the roads. The Minister announced that people with car parking spaces provided by their employers may be required to pay benefit-in-kind tax as a result of a review which he has ordered. He said that he had asked the Department of Finance and the Revenue Commissioners to undertake a review in order to produce a "fair and workable system" of applying BIK to parking spaces provided by employers. That is totally contrary to the policy of encouraging people to take their cars to work and I ask the Minister to clarify that statement when he is addressing the various issues raised.

I want to refer to the child care crisis. Certainly there is a labour shortage at present and there is a skills deficit. One way of releasing many married women into the workforce is to provide proper child care facilities. There are people with expertise whom the country needs. However, they cannot leave their children because of the lack of child care facilities and also in many instances because of the cost of paying somebody to look after them at home if they go to work. This is something which must be looked at seriously from the point of allowing these people, many of whom are professionals, to realise their potential. Whereas they want to be good mothers and rear their families, at the same time they want to realise their potential, up-date their skills, etc. There is nothing in this budget, apart from one paragraph about child car facilities provided by employers which relates to BIK, which will in any way enhance the provision of child care facilities for many women.

Yesterday one of my colleagues, Deputy Clune, stated in a press statement that there is a crisis developing in the child care industry whereby quality child care is becoming more difficult for parents to access and afford. Irish parents are spending 20 per cent of their income on child care, yet European parents pay on average only 8 per cent. This anomaly must be addressed if we are to encourage more women to enter and rejoin the work force.

Recently all Deputies were circulated with a good publication by IBEC on this issue. In that briefing document IBEC stated that up to 70 per cent of employers are experiencing recruitment difficulties. Much of this problem could be alleviated if the Government addressed the problems which the parents of young children are experiencing in accessing child care facilities. It is unacceptable that the work skills and experience of so many women should be locked up. It does not make sense that there are women with the necessary skills who want to work and there are employers who want to employ them, yet the State has not addressed their problems in accessing quality affordable child care facilities. This is certainly an area at which the Government must look carefully in view of labour shortages, etc. The IBEC document states that Ireland has one of the lowest labour market female participation rates in Europe. Of the current labour force of 1.5 million workers, approximately 600,000 are female. There are currently 400,000 mothers in Ireland with children under 15 years of age. Less than 30 per cent of these mothers are in full-time employment while approximately 10 per cent are in part-time employment. Clearly, responsibility for child care arrangements rests with both parents but, in practice, this responsibility continues to fall predominantly on women. In this context, it is time the Government looked seriously at this question.

I would like to say to the Taoiseach and to the Minister for Agriculture and Food that agriculture is collapsing, as is the whole fabric of rural Ireland. If that change is to be arrested, it needs to be managed. The Government is adopting a laissez-faire market driven approach to the farming crisis in rural Ireland. There is nothing in this budget to deal with the problems facing many farmers. I have never seen less reference to the farming issue than in this budget. It reflects present thinking within the Government on this crisis; it just does not care about it.

I was amazed to hear the two farming leaders welcome aspects of this budget last night. They are certainly not representing their membership throughout the length and breath of Ireland. They will get a reaction to their response to this budget, at a time when the Minister had £1.4 billion to spend, but all he could give to help with the worst fodder crisis in the history of the State was a measly £10 million. He said last night this amount would be increased to £20 million which, in terms of the overall give-away, is derisory.

The Minister had a unique opportunity yesterday, instead of the usual situation where Governments had to borrow to balance the budget. On this occasion the Minister was in the enviable position of having a £1.4 billion surplus. Despite this outstanding surplus, the budget must come as a grave disappointment to those on low pay and on social welfare. As a result of this budget low paid workers will get an average of £6 per week, pensioners will get £6 a week in seven or eight months' time and others on social welfare will get £3 per week. That is the reality of the budget for them. There is nothing in it to dampen house prices. What good is an increase of £6 per week in a person's wages if a couple is saving for a deposit on a house?

There are significant changes in the tax code, but no corresponding improvement in social welfare allowances. I have often spoken about the carer's allowance and an annual provision of £200 per week was made. The Minister for Social, Community and Family Affairs made great play of this £200 and said regular planned breaks can be of great assistance in reducing the stress for carers. I agree with him, but what good is £200 per week to the carer at the intense end of caring who works up to 365 days a year for a bed-ridden and perhaps incontinent patient? That carer could not get a person to work for £200 per week, it would cover only two or three days respite care in a year. That is not good enough for carers who provide an intense level of care.

The Minister also referred to a personal allowance for carers. This will be of no benefit to the full-time carer. It is no good claiming carers may earn £75 per week if they are caring for somebody 365 day per year who is bed-ridden or incontinent. The carer who must provide that level of care cannot go out and earn £75 per week. While it may be of benefit to those who do not provide full-time care while qualifying for the carer's allowance, it will not benefit those who provide an intense level of care.

There is another anomaly which I am almost blue in the face raising with the Minister over the past year and a half. He told me to write to him personally, which I did. He then told me a review group was dealing with the carer's allowance and was due to report in January, then in May but which finally reported in October. I made submissions to that review group. I came across this anomaly in my constituency work and many TDs will have come across similar ones. In the case with which I was dealing, the woman's husband, a small farmer, was killed on the road on a tractor. She cared, and continues to care, for her husband's relative who lives in the house. She applied for the widow's pension when she became a widow to compensate her on the loss of her husband's income because she must pay somebody to do farm work. She got the widow's pension, but immediately lost the carer's allowance. I asked for that anomaly to be rectified but nothing was done in this budget despite the modest increases in the regulations concerning the carer's allowance.

When I rang the Department of Social, Community and Family Affairs I was told nobody can get two social welfare allowances. Will the Minister make provision for such a case? There cannot be many carers who become widows while continuing to work as carers. It is a scandal that when this woman's husband was alive he could earn up to £150 and she could get a carer's allowance, but now that she gets a widow's pensions of £73 per week she is denied the carer's allowance. That anomaly must be corrected.

There is another anomaly in this area. If people who live in local authority houses become carers, they qualify for the full carer's allowance of £73.50 because they care for people 365 days a year, who may be bed-ridden, in their homes. However, when the next rent review is carried out, the local authority takes 20 per cent of the carer's allowance back because the household income has increased by £73.50 per week — in other words, the local authority is stealing £17 or £18 from that person's carer's allowance. That anomaly should also be corrected.

The Minister also dealt with health issues and indicated that he saved £24 million on the drugs refund scheme. What will we get for the £24 million saved? One third, or £8 million, of the £24 million will go towards the waiting list initiative. That is no good because £12 million was provided last year to reduce waiting lists in hospitals but, in the meantime, they increased. I will quote figures from my local hospital. In June 1997, for example, the waiting list at University College Hospital Galway was 2,079 while a year later, in June 1998, it was 2,891 — an increase of 812 or 39 per cent. Worse still, from June to the end of September, the last time for which figures are available, the waiting list increased by 626 to 3,517, a 21 per cent increase.

Over the first 15 months of this Government there has been a phenomenal 69 per cent increase in the waiting list at University College Hospital Galway which is currently facing a crisis, as the Minister of State, Deputy Molloy, and the Tánaiste well know. We are looking for £1 million to keep two wards and a theatre open in the hospital and to keep the staff employed. There is now a divide and conquer situation, where the management has satisfied one union but not the other. That has nothing to do with keeping the wards open, but with a staff decision on whether or not to work to rule.

I appealed to the Minister for Health and Children to provide £1 million for our hospital when the Supplementary Estimate was introduced earlier this week, but that appeal fell on deaf ears. It is no good telling me about a waiting list initiative for next year and that £8 million will be provided on top of last year's £12 million. That will not reduce the waiting lists, as I have proved by those figures. I am sure the numbers on the waiting lists will increase substantially from September to December. I ask the Minister of State at the Department of the Environment and Local Government, Deputy Molloy, to encourage the Minister for Health and Children to concede the £1 million budget that will keep the wards open and help to control the waiting lists at University College Hospital Galway.

I do not seem to be living in the same country as Deputies Deenihan and McCormack because what we have heard for the past half an hour is gloom, doom and crisis everywhere. It is worth mentioning that just over a decade ago when the Fine Gael Labour Government left office in 1987 this country had a national debt the equivalent of 125 per cent of GNP and rising rapidly. At the time it took all the income tax revenue to service it. Today that national debt stands at approximately 55 per cent of GNP, is declining rapidly and it consumes less than half the income tax take.

We were also running huge budget deficits during that period. In the 1980s, 60 per cent of the population left through emigration. As we saw from the statistics published on Monday, 44,000 people came to this country over the past 12 months. We had net emigration of approximately 22,000 people. People are coming back to better opportunities at home than they had abroad.

I want to clarify something Deputy McCormack said about the carer's allowance. The carer's allowance is not being increased to £200 a week, although I wish it could be. The £200 is being provided for respite care annually so that the carer can have an opportunity to take a holiday or a break while alternative care is provided for the person being cared for.

It will give them approximately three days off a year.

I ask the Deputy to allow the Tánaiste to speak without interruption. The Deputy was not interrupted when he was speaking, so I ask him to show the same courtesy to the Tánaiste.

May I ask the Tánaiste a question?

The Deputy cannot ask a question at this stage.

I will answer parliamentary questions from 2.30 p.m., so the Deputy can ask me as many questions as he wants at that stage.

The Tánaiste should not misquote me.

Yesterday the Minister announced a relaxation in the qualifying conditions for the carer's allowance, particularly for people who do not reside with a carer. That will make a huge difference to many people who require full-time care.

I will respond to Deputy Howlin's call on the Minister of State at the Department of Foreign Affairs, Deputy O'Donnell, to resign because of the 1999 Estimates for overseas development aid. The Minister of State has negotiated with the Minister for Finance a multi-annual budget for the next three years which will increase the amount of discretionary aid by approximately 66 per cent. It will give us £400 million in direct aid, excluding administration and staff costs associated with administering the overseas development aid in the Department of Foreign Affairs. That is a substantial sum and it puts the target within reach. It will take Ireland from being twelfth in the league of 21 donor countries to eighth position.

That is quite an achievement and the Minister of State must be congratulated rather than asked to resign. I do not know how many times Ministers are called on to resign. One does not achieve many things by resigning but by staying and effecting change, which is what the Minister of State has done.

As leader of the Progressive Democrats, I am proud that this is the most radical and reforming budget this country has seen in a long time. It effects the biggest transformation of our income tax system in a generation and it delivers the biggest package of tax reductions ever for working people. In addition, it makes substantial resources available to improve living standards for older people, addresses the needs of people with disabilities and promotes social inclusion. It is based on a clear political philosophy, the belief that by reducing the burden of taxation we will stimulate increased economic activity which will generate the extra revenue needed to fund additional spending on social services.

Budgets should spell out clear economic signals and no budget has ever sent a clearer signal than this one. There has been a massive increase in tax free allowances, sufficient to take the first £100 of weekly income for a single person completely out of the tax net. The Progressive Democrats have always stood for real tax reductions and that amounts to real tax reduction in anyone's language.

The Government is sending a clear and unmistakable signal that working people are entitled to their dividend from this country's economic success. They are entitled to their reward for guaranteeing the pay moderation and the industrial harmony that have underpinned our economic growth for the past ten years. We are also sending an equally clear signal to those who are not working. We are telling them that it is now worth their while to work, to come off the dole and move into paid employment.

In recent times the Labour Party has posed a phoney choice between raising allowances and cutting rates. In Government, it made little progress on either front. Last year the Progressive Democrats-Fianna Fáil Government took four points off tax rates in one budget. Over the past decade, 17 of the 18 points taken off the tax rates have been taken off by Progressive Democrats-Fianna Fáil Governments. Labour could only manage one point in five budgets. The Progressive Democrats have now delivered in one budget a bigger increase in tax free allowances than Labour could manage in five.

Under Labour, years were spent tinkering with allowances without delivering any significant improvement to people on modest incomes. When Labour left Government in 1997, a single person was still entering the tax net at £77 a week. This budget addresses the needs of those on low to middle incomes in a way that Labour and its allies in Democratic Left were never prepared to do when they were in power. The needs of those people have been definitely addressed by this year's budget.

It is hard to keep up with developments in tax policy these days. Last Sunday we heard the Leader of Fine Gael on RTE radio denying that his party campaigned for a cut in the top rate of tax in last year's general election. Picking up the newspaper the following morning, one was confronted with the amazing revelation that Deputy McDowell of the Labour Party was calling for a cut of 4 per cent in the top rate of tax in this year's budget. For a moment I thought The Irish Times might have got its McDowells confused, particularly as the Labour Party went almost apoplectic at a cut of 2 per cent in the top rate last year. Labour's official policy is now apparently 4 per cent off the top rate. I am delighted that Deputy Michael Higgins and Deputy Stagg have been converted to the Progressive Democrats policy position. I hope they will be able to bring Deputy De Rossa with them next February.

It seems the only people in this House who are now opposed to rate cuts are Deputy Joe Higgins and Deputy John Bruton. It was Deputy Quinn, as Minister for Finance, who set out the policy of cutting the standard rate of corporation tax to 12.5 per cent. He was right to do so and he deserves great credit for it. It would be completely illogical for the Labour Party to argue now that the banks should have their tax rate cut to 12.5 per cent but that their employees should have no reduction at all in the 46 per cent rate at which they are taxed.

The rates are not being cut this year because all available resources have been devoted to the massive increase in allowances. However, I assure Deputy Quinn and the Labour Party that the Government will deliver on its rate cutting commitments over the next three budgets. I look forward to their support on those occasions.

The Progressive Democrats gave a clear commitment in last year's general election to move to tax credits, which would effect a major reform of our personal tax system. The experts told us it could not be done or that it would take years to achieve. However, after 18 months in Government we have delivered fully on that commitment. Others talk about tax reform, but we do it.

The switch to tax credits represents a dramatic overhaul of our income tax system. It makes it fairer. Up to now a £1,000 increase in the basic allowance was worth £240 to one person on £10,000 a year but £460 to a person on £100,000 a year. None of the social engineers in the rainbow coalition bothered to do anything about this.

Under a tax credits system, an increase in allowances, or credits as they now are, will be worth the same to all taxpayers, regardless of income. The move to tax credits also makes it easier to target resources at those on modest incomes. The cost of delivering the equivalent of a £100 increase in the basic allowance was £53 million under the old system. Under the new system of tax credits it will fall to £39 million. This will make it more affordable to take people out of the tax net at the bottom end. This Government is firmly committed to controlling inflation and this budget is part of that process. I reject suggestions from the other side of the House, particularly from Fine Gael, that yesterday's package will be inflationary. If putting an extra £6 a week in a pensioner's pocket is inflationary then we can all give up.

Budget day normally produces a strong policy debate on taxation and spending. However, this was not the case this year. When the Minister for Finance sat down yesterday the Opposition parties had little of substance to say. The basic pitch from Labour and Fine Gael appeared to be the same. The tax package was too big, but yet too small. Public spending was too high but still not high enough. One would have heard a more rounded critique of the budget in an undergraduate debating society. In any event, lectures from Fine Gael on the need to control public spending are a bit rich, coming from the party that wanted to pay kids for going to school.

One of the Government's main objectives in this budget was to improve the lot of older people. Pensioners have made an enormous contribution to our current economic prosperity. They worked hard and saved hard to build the Ireland of today. Our current good fortune owes a lot to their sacrifices and efforts and it is only right that we should afford them the recognition they deserve.

The increase of £6 in the old age pension is the biggest in any budget. It takes the value of the contributory old age pension to almost £90 and brings us within sight of the £100 per week mark which was a key commitment in the Progressive Democrats' election manifesto. We are well on course to delivering on that commitment within the lifetime of this Government.

This year's increase is in stark contrast to what was done by the previous Government. The Rainbow Government managed an extra £3 in 1997, just £2.20 in 1996 and only £1.80 in 1995. These were miserable increases at a time of rapid economic growth. So much for the Labour Party's commitment to older people.

The Government has also taken decisive action to reduce the tax burden on pensioners. The generous increases in the exemption limits will give a significant tax break to the over-65s and will take thousands of them out of the tax net altogether. The budget makes provision for the relaxation of the qualification requirements for medical card for people over 70 and this will be a significant benefit to many older people.

I am also pleased that my Department will be able to fund a pilot programme for training older people in information technology. This is an imaginative project which should help to open up the world of computers and computing to the older generation. The budget will deliver very substantial benefits to older people next year, which is particularly fitting given that 1999 is the International Year of Older Persons.

For many years we did not have enough jobs for our people; today we do not have enough people for our jobs. That is a problem, but it is the kind of problem we always wanted to have, the kind of problem that comes with prosperity and economic success. Labour shortages are causing difficulties in many sectors of the economy. Many employers are now going abroad to recruit staff. Others are finding it impossible to fill vacancies. One manufacturing company told me recently that it could hire another 500 people if it could find them.

What is truly remarkable is that, alongside this labour shortage, we still have over 120,000 people unemployed. This is the great economic paradox of Ireland today. The budget offers a real solution to this paradox. It sends out the clearest signal that it is worthwhile to work and that one is better off working than on the dole. The message is simple: one pays no tax on the first £100 of one's weekly earnings. Thanks to last year's budget, the first £100 is also free of PRSI. These are the kinds of radical changes that will make a real difference to the welfare to work equation, that will deal with our new jobs crisis, measures that will put people into the jobs that are available.

We are making enormous strides in solving the unemployment problem. CSO figures released earlier this week show that unemployment fell by 32,000 in the 12 months to last April. The numbers on the live register have fallen by more than 30,000 since this Government took office, and a further significant fall will be seen when the November figures are released tomorrow. Our unemployment rate now stands at 7.8 per cent, one of the lowest levels in Europe. This is hardly surprising as we are generating additional jobs at a rate of 2,000 per week.

Our national objective now must be the achievement of full employment; in other words, a job for everybody in this country that wants to work. That objective would have seemed like pie in the sky only a few years ago. It is now a realisable if ambitious target, but one that we may credibly aim for.

Full employment can be achieved only if the problem of structural, long-term unemployment is dealt with. I am pleased that the Government is successfully dealing with long-term unemployment. We are always told that the Celtic tiger is by-passing the long-term jobless. However, the CSO figures released earlier this week tell a different story.

CSO data show that the number of long-term unemployed fell by a third in twelve months and that there are now just 63,500 people in this category. It is worth noting that long-term unemployment has fallen even more rapidly than overall unemployment since 1994 — down from 9 per cent to 3.9 per cent. That means that over 80 per cent of the total fall in unemployment in recent years has been accounted for by the fall in long-term unemployment.

None of this should suggest complacency. The current positive economic situation provides the best opportunity ever to prevent further inflows into long-term unemployment and to reintegrate those who have been out of work for a long time. From a labour-market perspective the key issues facing the Government are preventing another generation from drifting into long-term unemployment and helping those who are long-term unemployed into jobs.

As part of the Government's employment action plan I have given a new orientation and impetus to FÁS as the major labour market delivery agency. It is becoming the primary gateway from welfare to work for many unemployed people. Working in close harmony with the Department of Social, Community and Family Affairs, we have launched a programme which offers supports to young people under 25 who cross the six-month unemployment threshold. Our objective is to help them get a job or to offer them appropriate training or education which will enhance their employment prospects. We have ring-fenced 7,000 skills training places to meet their needs. It is early days but the signs are encouraging. Of 900 young people referred for interview in September, more than 40 per cent had signed off the live register by the end of October. This is twice the normal rate after the six month period. This process will prevent people drifting aimlessly into a life of unemployment and unemployability. We are committed to rolling out the same process during the new year to cover older age groups crossing the twelve-month unemployment threshold.

This Government does not believe in a passive approach to the unemployment problem. We believe in dealing with it through active intervention. The relationship between the State and those who are unemployed is a form of social contract. The State has a responsibility to the unemployed which goes beyond handing out a dole cheque. It must provide them with real help and guidance to smooth the path from welfare to work. Equally, those who are unemployed also have responsibilities. They must be prepared to take up reasonable offers of work, training or education.

Cutting taxes has been the key to Ireland's tremendous economic performance. We have cut taxes on labour, capital and companies. We have given huge tax breaks for investment in films, urban renewal and the development of tourism. Socialists do not believe in low taxes; they believe in high taxes. The biggest threat to our continued economic prosperity comes from European socialists who are envious of our low tax regime and who want to foist on us the kind of punitive tax rates that have saddled them with massive unemployment. Socialism has never been very popular in this country and the last thing we want is to import it from Europe. This budget is another major step on the road to tax reduction and tax reform. As long as we in Ireland keep on that road we will continue to prosper.

It is interesting to note that over the past decade tax rates have fallen substantially on corporations, capital and income yet the tax take has doubled. Low taxes and high volume suit the Irish economic experience. As the Taoiseach stated yesterday, it is better to get 5 per cent of something than 10 per cent of nothing. In its three remaining budgets, the Government will continue its tax reduction strategy as it is the most successful way to encourage economic activity, to generate new job opportunities, reward those who work and to show that there is a real incentive if one makes an effort. This is a caring, radical and reforming budget. The elderly, carers, those with disabilities, those at work and those who wish to move from welfare to work were the Government's priorities when framing this budget and we got our priorities right.

Much reference was made this morning to the issue of child care. This is not an easy issue to resolve and Governments cannot solve every problem that arises in society. However, the tax breaks which have been given to employers and the removal of benefit in kind tax from child care facilities which employers provide will encourage them to provide such facilities for their workers. Deputy Deenihan spoke about the need to give women who work the opportunity to have child care facilities provided through a tax allowance. Equally, women at home may feel that if women in paid employment get a break, they should get one too. Tax breaks will give no help to the 25 per cent of families who are at the lowest income level. The recent Commission on the Family recommended that the Government use child benefit and not the tax system to help families with children. There is merit in that recommendation.

At £3 per month.

This year we have made a start in encouraging employers to provide child care facilities and it will be interesting to see the response to this measure. I expect a good one. It is not true to say that only big businesses will avail of this facility. Small businesses can group together, as they have already done in one part of the country, to provide child care facilities for their staff. The removal of tax liability from this benefit in kind will encourage employers to do so. In the short-term this is the most effective way of dealing with some of the problems which have arisen in this area. Child care is a problem in many areas of the country, particularly in poorer areas and different strategies need to be applied in different areas. It would be wrong of the Government, in advance of receiving the report from the expert working group on child care, to make decisions in this regard.

My Department will shortly take over responsibility for training people with disabilities. Because of that FÁS is obliged to make major changes in many of its training centres and £7 million is provided in the budget to enable it do so over the next 12 months. In addition, employers will now receive a tax relief on double the cost of employing someone with a disability and disabled people will receive the same benefits which were introduced last year for long-term unemployed people to allow them to return to the workforce. This will encourage employers to give the employment opportunities, which are being created by our economic progress, to people with disabilities. It is right that the training of people with disabilities should become a mainstream issue and that the buoyant economy which has been providing large numbers of jobs in recent years should also provide opportunities for disabled people in society.

Ba mhaith liom mo chuid ama a roinnt leis an Teachta Bernard Durkan and tá mé buíoch de as sin. Tabharfaidh mé stracfhéachaint leathan ar an mbuiséad agus ba mhaith liom féachaint ar an bpobal ina iomlán agus ar an bpobal taobh amuigh den tír seo chomh maith.

The American Jesuit priest and environmentalist, Thomas Berry, in a lecture in UCD some years ago remarked that, in economics the discontinuity between the human economy and the earth economy has been disastrous beyond measure, that a rising gross human product with a declining gross earth product is surely an absurdity and to preserve the integrity of the earth economy should be the first purpose of any economic programme. In so far as the budget sets out an economic programme, or rather sets out to adjust the economic programme established by the Government's first budget, it is appropriate to stand back and look at the budget in the wider context that Berry suggests.

Is the budget environmentally friendly? It clearly is not. The opportunity to introduce meaningful reform in taxation policy was talked about, but passed over. There is a measure of welcome reform with regard to personal taxation, indicating that the Government is prepared to accede to public and political pressure and to change its strategy in this area from the course it charted for itself in the earlier budget. However, the general flow of income to the Exchequer, which is what taxation amounts to, still comes too heavily from taxes levied on personal income and not enough from taxes levied on environmentally damaging processes. We are still waiting for an incentive to discontinue the use of that symbol of our throwaway consumer boom, the plastic bag. The ESRI, as well as the European Commission, has cast the cold eye of accountancy on the subject of green taxes and concluded that the replacement of a large proportion of PAYE with green taxes would enhance competitiveness. What further arguments are needed to persuade us to set about the unilateral task of reforming our tax regime?

Will the budget improve the quality of life of the poor? This question must be considered in the context of the poor, and it is difficult to see how it does. According to the 1998 United Nations human development report, poverty in Ireland is ranked second only to the United States within the OECD while Irish women are among the worst off of the 16 countries surveyed. Is a £3 per month child benefit increase a meaningful response to the documented prevalence of child poverty? I do not believe it is. Yet another budget has neglected to increase the child dependant increases for social welfare claimants. Is the Minister aware of the incidence of child poverty throughout the country? It is difficult to believe he is. Is he aware of hospital waiting lists? He says he is, yet I receive letters every day from people who cannot get treatment although expensive medical machinery lies unused because of a lack of resources.

Does the budget reflect the application of sustainability indicators? This question was also talked about, but not acted upon. Catastrophes such as those that befell Honduras and Nicaragua remind us of the necessity to develop sustainability indicators which, like poverty proofing measures, could be built into the process of creating the annual Budget Statement. The absence of sustainability indicators in the framework of this budget is especially unforgivable, given Ireland's commitments with regard to greenhouse gas emissions.

Even without such indicators, let us take a reality check on the lot of Irish people. The Minister of State at the Department of Arts, Heritage, Gaeltacht and the Islands, Deputy Ó Cuív, referred last evening to the movement of people from the west to the east of the country where congestion is leading to social and environmental problems. Rural Resettlement, a voluntary group, is doing its best to redress this imbalance. Fianna Fáil and the Progressive Democrats, when they were together, had a mandate to develop local economies and to maintain people on the land, but that mandate has not been honoured. Children no longer go without shoes but they go without supervision, love or a sense of meaning and home. The budget has failed to recognise issues of this sort, much less address them. We must examine radical measures such as guaranteed basic income and value the kind of community work which has been taken for granted for too long. This budget has failed to take that reality check which needs to be undertaken urgently.

This, like all budgets, has positive and negative aspects. Governments tend to concentrate on a budget's positive aspects while Oppositions home in on the less positive ones. One of the most glaring omissions in the budget is the failure to deal with the housing problem. I mention, particularly, the aspect of this question which will affect future Government policy. It is generally recognised that the lack of access to affordable housing by a large sector of the community will drive wage claims upward and will fuel inflation. If this trend continues we will face a serious problem. The Government has done nothing to address or even recognise this issue. References have been made to previous Administrations, but there is no sense in speaking of what happened two years ago. We are now in a different era with a different population. The Government is more than one year in office. This is the time for the Administration to address the issues presented to it and not as they were presented to its predecessors. It should be remembered that it is at a great advantage which is neither accidental nor relates solely to the change of Government.

Debate adjourned.
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