I move:
That Seanad Éireann notes the supply services and purposes to which sums have been appropriated in the Appropriation Act, 1987.
Appropriation Act, 1987: Motion.
The Appropriation Act was passed at the conclusion of the last session. Today we have an opportunity to speak on the terms of the Act in general. I suppose what we are about is largely something of an academic exercise because the Act has been passed and the moneys have been well and truly allocated. Nevertheless, it is important that we should have an opportunity to range over the issue of Government expenditure and perhaps hone in on particular programmes which are of interest or concern to us and to raise and highlight areas where we feel there is room for improvement in policy, breadth of vision and wider thinking.
At the outset it is useful to take stock of Government financial policy and examine the state of the nation's finances, the management of which has been entrusted to a minority Fianna Fáil Administration. The purpose of the annual Appropriation Bill is to give statutory effect to the departmental estimates for the supply services both non capital and capital, including Supplementary Estimates, which were necessary during the year and, of course, the 1987 Appropriation Act follows the usual format.
The last year has seen something of a political and, indeed, an economic revolution. The revolution or the complete turnaround has been largely — indeed solely — on the part of the party in Government, Fianna Fáil, who have conducted a series of dizzying U-turns leaving backbenchers and, more important at this stage, supporters, winded and in many instances in need of systematic debriefing by senior personnel. It has been a most extraordinary about turn. While I am glad about it in the sense that the fiscal policy being pursued was put before Fianna Fáil by Fine Gael, nevertheless what saddens me and leaves me somewhat disheartened is what this U-turn or about turn has done to the body politic and the whole political system and to people's belief in the integrity of politics. It has in many ways damaged whatever trust and credence they had in the politicians who run this country.
I find that worrying and disturbing, but I console myself by saying that my own party, Fine Gael, will never treat themselves or the public with what I regard as contempt. We will not make liars of ourselves. It gives me no pleasure to say this; I do not like to have to say it but it is a fact. The Minister may shake his head and look rather anguished, but I remind him of posters such as "Health Cuts Hurt the Old, the Poor and the Handicapped". I remind him of the about turn and the savage swingeing, unthought out, bludgeon-like cuts which have been visited upon our health care.
I was interested to hear the Taoiseach in his first major interview since taking office on "This Week" the Sunday before last. The astute interviewer, well practised, confronted him with this whole question of the about turn and the complete change in economic attitude and handling of the nation's finances. I listened with bated breath to hear what the response would be. Frankly I found it specious and I am most unhappy about it. It was a half baked excuse and totally transparent in my view, in that a cliche ridden sentence or two were trotted out to the effect that "of course circumstances had changed and when we got in we really saw what the books were like; circumstances alter cases" and all that sort of thing.
I must say I was less than convinced as, I was interested to see, were the political analysts who had a good look at this long awaited interview and subjected it to fairly hard criticism. In my view they were right. What is being played out is a political game. I am confident that such a game will never again be tolerated by the electorate, and it should not be. Whatever Fianna Fáil say to the electorate before the next election, however soon that may come, I imagine will be treated with a good deal of disbelief by a long suffering electorate who could quite rightly feel that they cannot believe a word said to them by that party.
I should like to turn to some provisions in the Appropriation Act that are of interest to me in particular, ones which perhaps we do not normally have an opportunity to cover in a debate on the subject of finance. The items are very carefully listed and the supply grants and the Appropriations-in-aid are spelled out very clearly. I know that in the main Senators use the opportunity of the debate on the appropriations to range wide and free, perhaps to ride pet hobby horses, to raise particular concerns, to point to areas of gratification and satisfaction and to areas where there is a need for remedy or improvement, additional financing or wider policy initiatives.
One area I would like to cover is listed as item 6 in the Schedule to the Appropriation Act. It might not be seen as the most significant sum but I would like to draw the attention of the House to it and discuss it for a few moments. It is "For the salaries and expenses of the National Gallery including certain grants-in-aid." The supply grants have been listed at £803,000 and the Appropriations-in-aid at £1,000. It is important that we look at this. The sums involved are patently inadequate. I am very disturbed indeed by recent reports that paintings in the gallery are deteriorating. They are flaking, cracking and warping because of failures in what has now become a most obsolete air conditioning system. I am indebted to John Armstrong reporter with The Irish Times, who spelled out the situation in no uncertain terms in an article on Friday last, 15 January.
I refer to the air conditioning system which is so important when we talk about picture conservation and conditions in the gallery. This system breaks down frequently and because there is no refrigeration plant the rapid change and fluctuations in temperature levels and humidity cause the wood or the canvas backings of some paintings to crack and warp. The Director of the National Gallery, Homan Potterton, who I am sorry to say has announced his forthcoming retirement from the post, has gone on record and described conditions in the National Gallery as a national disgrace.
Homan Potterton is not an alarmist. He is not given to exaggeration and he is not a self-seeking publicist. He does care very deeply about the gallery and about its contents and he has done a tremendous job in his time in promoting the gallery and attracting people to it. His successful mounting of exhibitions has certainly ensured that he will have a very firm place in the history of curators and directors of the National Gallery. Because he is about to leave this post, I would like to take the opportunity to pay tribute to him for all he has undertaken in the most adverse of circumstances and to thank him on behalf of all those people who have enjoyed the gallery while it has been entrusted to his care and directorship. I would like to wish him well in the future in whatever area he pursues his career and furthers his talents.
Homan Potterton, in speaking on the gallery and the collection therein described the condition of some pictures, due to damp, as extremely distressing. I was distressed to read this and I think it is important to draw the attention of the Minister to the situation. I know funds are short and we have certain agreed parameters of expenditure but still it is important that Ministers should know what is going on, where the difficulties lie and the costs involved. They should give some assurances that the facts are known and that matters will be taken in hand.
I want to spend a little time on this problem because it is important to put it on the record of the House. There will be no point when some of these pictures are damaged beyond repair in involving ourselves in a great hand-wringing exercise. That would be too late.
A number of the gallery's most important pictures, including Murillo's "The Holy Family" and Titian's "Portrait of Baldassare Castiglione", have had to be removed from the walls for repair and restoration and gallery staff say that several other paintings, including at least three in the Spanish Room, are showing visible signs of "bloom", a cloudy discolouration of the varnish caused by damp. Visitors to the gallery have also noticed spots of paint flaking off various other important paintings and in the case of the icons, some of these precious artefacts have become so badly warped that large gaps are now visible between the paintings and their frames.
Daily measurements of air humidity and temperature in the gallery for the month of January and throughout last year have regularly exceeded both the upper and lower danger limits set out in the UNESCO specifications for art galleries and museums and the measurements have gone off the scale for class II galleries recommended by the scientific department of the National Gallery in London, one of the acknowledged international authorities on gallery environments. A spokesman for the Office of Public Works said yesterday that they accepted that the air conditioning and humidifying system in the gallery was not operating effectively. The Office of Public Works are quoted in The Irish Times of 15 January 1988 as saying, “We just don't have provision to satisfactorily modify the system or to replace it. We accept that a new system is desirable.” I understand that recently the Government postponed indefinitely a major £5 million refurbishment plan for the gallery which was to include the installation of a new air conditioning system and the thinking now is that it is hoped to implement this plan within the next few years subject, of course, to the availability of funds.
We have all been overjoyed with the munificent gesture on the part of Sir Alfred Beit who bequeathed his extremely valuable, indeed priceless, pictures to the nation and presented them to the gallery. This has given added urgency to the problems in the gallery. We might have allowed the thing to tick over and to have turned a blind eye to it had not these gifts been presented by Sir Alfred and Lady Beit. I do not think it is too much to ask that a small fraction of the value of that gift should be spent to fix the place up so that it would be a fitting home for the paintings that are already in it and for the Beit collection which we are privileged beyond words to have received. The Beit collection is valued commercially at between £50 million and £100 million and it is currently hanging in room 28 on the ground floor, next to room 30 where some of the largest humidity fluctuations have been recorded. That is why I have taken pains to deal at some length with the problem of air conditioning, the humidity and the effect that this faulty, obsolete and useless system is having on the paintings and artefacts which are the treasure of the nation, which belong to all of us and which have been solemnly entrusted to the Government to maintain, care and house in appropriate and fitting circumstances.
I would like to use the opportunity of my contribution on the Appropriation Act to draw attention to that and to the urgency which has been pointed up by Sir Alfred Beit's gift to the nation. I would ask the Minister to take it to heart and when this debate is being replied to I hope he will find it possible to say that strong consideration will be given to allowing funds, if necessary from the national lottery, to help out in what is a severe problem in the National Gallery.
I want to change tack completely from a domestic issue to a global matter. Our aid to the Third World is an issue which is dear and close to the Irish people. It is listed under Vote 45 — Contributions to International Organisations and for certain Official Development Assistance, including certain grants-in-aid. I was privileged to have been a guest at the film "Cry Freedom" which was given a premiere in Dublin last week and the proceeds of which went to the Third World organisation, Trocaire. The Minister of State, Deputy Seán Calleary, was at the premiere and was pleased to be there. However, in the course of an interview afterwards he was asked if he felt happy at the diminution in funding which is now to go to Ireland's official development aid in view of the impression made on him by this film. This film was obviously used as a vehicle to prompt the question. I felt sorry for the Minister of State, Deputy Calleary, because I felt his heart was not really in the reply. I know the Government would wish to see our contributions at least kept at the rate that they had been at and not cut. I am disappointed that they found it necessary to cut so drastically £11 million approximately out of the Estimates for overseas development aid. What I find most disturbing of all is the fact that the Vote for the Department of Foreign Affairs has been increased by 3 per cent and so the whole brunt of the cut in this area falls back on development aid, which is an area close to the heart of Irish people. They have demonstrated that in a very factual and practical way by an outpouring of generosity to campaigns in the past, most particularly the campaign which was orchestrated, led and prompted by our own Bob Geldof. While we are discussing this matter, it is important to make a plea in the context of the Estimates for 1989 that there should not be cuts of a similar magnitude because the net effect would be a dismantling of Ireland's bilateral aid programme and I think the public would not countenance that.
I am also very concerned about the actual effect of these kinds of cuts on the personnel in the field, the volunteer workers, the people who devise programmes, the individual indigenous people in the area served by these programmes who are subjected to a stop-start, uncertain, doubtful programme. It is difficult to work in a Third World situation as the climate is very often hostile and conditions are bad but to add to those factors and to have the situation blighted by an uncertainty of funding is very often the last straw. It is easy to lose heart when one is working in an area of deprivation, with very basic materials and with people who are oppressed, who need to be given heart and who need to have practical financial assistance.
I urge the Government to consider very strongly the feelings of the Irish people in relation to Third-World expenditure. The largest cuts have fallen on bilateral aid, that is, the aid the Irish Government give directly and voluntarily to the Third World. Our bilateral aid programme is concentrated on four priority countries, Lesotho, Tanzania, Sudan and Zambia. This bilateral aid has been reduced by 29 per cent, from £14 million to £10 million. Three of these countries are on the United Nations list of the 40 poorest countries in the world, with a per capita GNP of around $200 compared to Ireland's $5,000. The cuts we have implemented are affecting the poorest of the poor. Anybody who has been to a Third World country and who has experienced at first hand the living problems of other human beings, when returning to Ireland is subjected to an extraordinary culture shock because by comparison we are so much better off, so much better, so much better nourished and so much better cared for. I am deeply unhappy about cuts in this area.
The disaster relief provision was a derisory sum given the alarming reports from many parts of the Third World and the very real threat of a fresh outbreak of famine in Ethiopia which, of course, is being portrayed again on our television screens. I would like to think that somewhere there is money that could be used if pressure is put on us and if the situation in that country deteriorates. I hope that does not happen but I would like to feel that, in an area where we have a moral responsibility to our fellow human beings, we would have that little bit of fat somewhere in the kitty to give to the poorest of the poor in the world.
The contribution of £1.5 million to the world food programme which provides food aid in famine situations and which the Government pledged in March 1986 will not be paid according to the Estimates. For all the reasons I have mentioned, the case for maintaining and even increasing Third World aid by the Government needs to be restated, underscored and emphasised.
Again, I want to repeat that I am keeping very firmly in mind our economic crisis and I am aware of the very painful adjustments which have had to be made in so many areas of public expenditure in this country. Notwithstanding all of this, we must remind ourselves that we are still the 25th richest country in the world. Along with the other members of the OECD, we have accepted a responsibility to contribute towards the alleviation of mass poverty in the Third World which leaves 500 million people seriously undernourished. The situation in the Third World, and particularly in the Sahel or the sub-Saharan area of Africa, has deteriorated dramatically in the eighties. There are a number of reasons for this.
There has been a complete collapse of commodity prices to their lowest level in 30 years with the resultant fall of 15 per cent in the purchasing power of Third World exports between 1980 and 1986. There is a massive burden of Third World debt which now exceeds one trillion United States dollars. It is incomprehensible and difficult to conceive of that kind of debt and it certainly puts our debt in sharper focus. There has been a virtual disappearance of new voluntary commercial lending and stagnant ODA which resulted in 1986 in an outflow of resources of over 30 billion United States dollars from the Third World. All these matters, along with increasing malnutrition and tremendous political instability, particularly in the frontline states in southern Africa and in South Africa itself, must highlight the very real plight of so many of these people.
The need for ODA has never been greater and it is so sad that at a time when the need is greatest we take out our pruning shears and snip £11 million off that budget. If enough people were aware of the facts there would be an outcry. We discussed the whole area of development co-operation a great deal in this House during the last Seanad but now the Government have seen fit not to reconstitute the all-party Committee on Cooperation with Developing Countries, and therefore the question of debating reports of these committees does not arise. The whole issue has slid to the edge of the table and has dropped off. This may suit in the context of the cuts that have been made but it is not moral. A debate on the Appropriation Act gives me an opportunity, which I grasp willingly and readily, to enunciate my fears and my concerns about the absence of funding which the developing countries which we assist have been forced to cope with.
I hope I have done justice to that area. It is an area about which I care very deeply. The primary reason for giving aid to the Third World is a moral and an ethical one. It is important to keep that firmly in mind, although there are reasons of self-interest which I am sure are not lost on Government. Deputy Lenihan has spoken in the Dáil on this matter and I would like to quote him because if people do not buy the moral and the ethical reason for funding developing countries they might buy the arguments which follow the self-interested model. I quote from the Official Report of 8 November 1983 when the Minister for Foreign Affairs, Deputy Brian Lenihan, said:
Any reluctance or fall-back by the developed world in regard to its aid programmes can lead to the disadvantage in practical economic terms of the developed world by depriving itself of a market and, looking at it at its bleakest, the gradual overwhelming of the Third World by a huge deprived population ... who will not live indefinitely in that sort of deprived situation, making for enormous political and ideological upheavals in the years ahead.
Indeed, that is so. That is an incontrovertible fact and, as I say, if we do not buy the moral and the ethical reasons and the correctness of the action, then perhaps through self-interest or fear or anxiety we will keep our contributions up to the level which we have given in the past even if we are not able to increase them.
When I mention the Minister for Foreign Affairs, Deputy Brian Lenihan, I would like to send him good wishes for a speedy recovery. I was sorry indeed to hear that he was hospitalised. He was in this House a great deal during the last session and I wish him a speedy recovery.
Another area I would like to discuss is the area of cuts in funding for women's organisations. I gather that some money has now been made available through the Department of Health and that organisations are entitled to make a case for themselves and apply for some small funding. I am not sure that this information has got out to the necessary quarters because a habit had built up of approaching the office of the Minister of State with special responsibility for women's affairs over the past four years. Women's groups and organisations had liaised effectively and to very good effect from the financial point of view with this office. They found that their requests were met with understanding and sympathy, and if not with the amount of money they asked for, at least with some funding or with some practical assistance from the Minister of State and her officials. Now, the whole thing appears to be subsumed into the Department of Health.
I understand the Minister of State, Deputy Máire Geoghegan-Quinn, has some sort of co-ordinating role in ensuring that legislation and areas affecting women will come together and will have a particular or single policy thrust or will be monitored in some way. I am unhappy about that because if responsibilities are spread around several Departments and if the person who is responsible for monitoring is not given a centralised area and funding, it sometimes ends up that nobody is really responsible. I have a list here of information which was requested by the all-party committee on women's affairs from different women's organisations and it makes fairly bleak reading as to how these groups will be funded in 1988. They fared badly in 1987 and they faced a great deal of uncertainty and anxiety as to their funding. Many of them wondered if they would actually be able to continue to exist. Here I come to a general criticism of what Government is about.
I know we know there is an emphasis on fiscal policy and I know we know that it is important to get the nation's finances under control and that it is necessary to cut Government expenditure and offer inducements to people to resign from their public service jobs. Apart from getting the finances under control I see very little else in the way of policy thinking, broad strategy — other than that of sheer political survival — co-ordinated responses, breadth of vision targets. I really fault the Government for this because they spent their four years in Opposition denying a reality which they now accept and they entered office absolutely bankrupt of policies. This is starting to show.
When they realised that cuts of a certain magnitude were needed in the public service and in the funding of Government Departments and services to the public generally they went wild. There was a disorderly riot. There was no attempt at an evaluation in any sphere or in any area. I think even they would concede that they hope, in 1988, they will have at least a planned, co-ordinated, evaluative response to the problems and to the cuts which I do not deny are necessary but which I would criticise roundly and soundly on the basis that they were poorly thought out, ill-conceived and not particularly diplomatically handled. It is not that it is ever easy to cut. Of course it is not. It is never easy to take anything away from anybody, even a child who has a lollipop. There are ways of doing things and this Government when they took office and did their about turn and their U-turns did not enjoy the confidence of the people precisely because they were publicly seen to renege on all they had said over the past four years, on all their election promises and plethora of posters and all the rest that they asserted they stood for.
It is no wonder that the public feel a massive and enormous discontent and that the backbenchers and supporters of Fianna Fáil, in particular, are feeling so restive, and so unhappy. There is talk of constituency revisions and boundary changes in order to enhance the political popularity of the party who hold power by the slimmest of minorities and, indeed, hold it by virtue of the political responsibility and concern for the country of the Fine Gael Party. We will be watching with interest what will be put before the Dáil on 27 January. Many of us remember another January when the budget was followed by a certain change of direction and thereby hangs a tale or two.
I will refer now to the women's organisations to which I want to draw the Minister's attention. The National Association of Widows in Ireland is a grand organisation, a great bunch of women and they are there a long time providing a counselling and information service for widows. They are one of the earliest of the women's self-help organisations. They raise funds through raffles, sales of work, jumble sales and cake sales. Now, is not that just grand? I would love to be introduced to the men's organisation that raises money with cake sales and jumble sales. I know they have raffles but by and large they tend to get a greater degree of Government funding than do women's organisations.
In particular I would like to make the point that the National Association of Widows in Ireland over the past 20 years received only £5,000 approximately from Government sources and that is a pretty lousy track record, and a pretty poor one I would think. They are under tremendous stress through lack of funds and will shortly have to consider if their head office can be maintained. That is just one women's organisation feeling the pinch keenly, one that provides an important service to widows. It must be remembered that, statistically speaking, men die earlier than women and there are a large number of widows in this country, many of them of quite a young age with young families to rear.
I would like to refer to the Federation of Services for Unmarried Parents and Their Children. They are normally funded by the health boards, Government Departments including the Departments of Health and Social Welfare and the Department of the Taoiseach, membership subscriptions and the Health Education Bureau — now subsumed into the Department of Health. The got a once-off grant of £6,000 from the Department of Social Welfare and they can only remain open, it seems, until perhaps the end of the year. They have a recurring need for finance of £23,000 approximately. Health board grants in the past have provided £13,000 but they urgently need a further £10,000. They are the Federation of Services for Unmarried Parents and Their Children.
Does anybody remember the referendum? Does anybody remember the furore that aroused and the cant, the hypocrisy, the soft talk and sweet words directed towards the unmarried mother and her child? We are great, just great at words. We are great verbalisers, but when it comes to funding, maintaining, succouring, preserving, conserving and cherishing, we fall short. In funding that organisation, it is manifestly proven that we have done very little indeed and that all our lip-service has not been matched by practical generosity. For the AIM group for family law reform, there is no funding available, and without funds it will have to close in April 1988. That group provides information, counselling and services to people who really have nowhere else to turn. They operate throughout the country. There is an active, small group in Waterford to whom I have referred people, and from whom I have from time to time sought advice and information. I am very disturbed that so many good voluntary groups in the country are facing the prospect of closure.
The Rape Crisis Centre has got publicity. It does a tremendous amount of good work. Incidence of rape appears to be on the increase. Some of the cases which have been reported have been terrifying. The Government need to put resources into organisations and groups who are prepared to cope with counselling and dealing with the aftermath of horrendous crime, such as rape. Rape crisis centres should be able to get funding. More importantly, they should know that the funding, however small, is available.
The Waterford Rape Crisis Centre received a grant of £500 per annum from the South Eastern Health Board in 1984, 1985 and 1986, but it is now dependent on voluntary contributions and fund-raising. I happen to know of the work that body is doing because I live in Waterford. I realise that apart from the actual sum, which is small, the feeling that the State was behind them, and was prepared through the health board to fund even that small amount of money, was important and significant. Apart from the money itself, the actual support of that kind of backing was good and useful. In Waterford, new premises is an absolute priority but unless there is some injection of capital the situation looks bleak and pretty hopeless. That is one area I choose to illustrate because it is one that I know of intimately.
The umbrella body for most of these organisations is the Council for the Status of Women. It has 60 affiliate organisations. With its present cuts, it expects to be the sole supporter of half the population of this country. The Council for the Status of Women is a prop, which gives information to and concerns itself with the needs of more than half the population. It is very important at a time when cuts are being made in health, particularly as they impact on womens health — and my colleague, Senator Nuala Fennell, has a request for a debate on the Adjournment on the lack of cancer screening facilities for women — that a body such as the Council for the Status of Women would be able to oversee, comment on, criticise and draw attention to cuts in spending on health, education, social welfare and employment.
The estimates which this body submitted to the Department of the Taoiseach have been severly cut. Maybe it is a very mean thought on my part, and perhaps I should not voice it, but I am going to. I wonder is it because a lot of these organisations are critical and point out shortfalls and gaps, that they are finding the squeeze coming on them, in the same way as independent bodies like An Foras Forbartha, the National Social Service Board and the Health Education Bureau suddenly found themselves under threat? What are the Government afraid of? Are they afraid of independent voices? Are they afraid of criticism? Do they want to dampen down voices that will be raised when there is an attack on an area of deep concern to them? I am fearful lest this become a pattern. I am watching it and I notice that many people made criticisms along those lines when the National Social Service Board, the Health Education Bureau and An Foras Forbartha were given the chop. Many people expressed that view and it is certainly one that is giving concern. I would hate to think that a pattern of some sort was being laid down.
I will leave the issues of the women's organisations now, except to say that women, so far, have not received particularly advantageous, sensitive or special treatment under this Administration, in sharp contrast to the awareness of their position under the last Administration, when it was certainly a policy signal and an actual fact of policy that cognisance was given to the fact that there had been and that there was an imbalance in the way in which men and women were treated both under the law and in terms of funding for their areas of particular concern in this country. It is disappointing that on so many fronts the whole area of women's affairs has been put on the back boiler or, as I have said before, has managed to slip off the table. Again, I would just like to voice my concern and my disappointment at the way in which funding has been given to them.
Vote No. 3 is for the salaries and expenses of the Department of the Taoiseach, including certain cultural and archival activities and for payment of certain grants-in-aid. Here I would refer to an archival matter. It really is an archaeological matter, but I expect it could be covered under Vote No. 3, if not under another one. It is an issue of funding which concerns recent valuable archaeological finds in Waterford city. I will use the opportunity of the debate on the Appropriation Act to draw attention to it. We were particularly pleased in Waterford when we were included in the special designation under tax and rates for city centre development. Our ambitious and far-seeing city council and our fine City Manager, Mr. Michael Doody, immediately set about organising the best possible utilisation of this breakthrough which we had achieved.
We have three sites in the city centre which are now the subject of development and upon which building will commence, it is hoped, in April of this year, but we have come across a problem which is unique to Waterford, which is why I want to draw attention to it. We have found that in this whole area which we wish to develop there is a treasure trove of archaeological remains. So far, £130,000 has been expended and the only State subvention in all of this has been £10,000 from the Office of Public Works. We need to complete this archaeological dig because posterity will not forgive us if we deal with it as we dealt with Wood Quay, and we are not going to do that. We want to see that the artefacts are uncovered, the layers fully explored and the whole operation done properly and that we have the best possible people on site. We have now discovered that to complete the archaeology further digs must be undertaken, particularly in Olaf Street — that is a fine Viking name — and, indeed, in the Peter Street area of the city. Buildings have been demolished and the dig will commence. It is thought that it will take up to 16 weeks or, indeed, less if possible. It is important to get this done in the timescale which I have indicated because if we delay the construction work then there could be very serious problems.
A particular point which I want to make relates to the cost of all of this and further excavation of corporation sites, which will be about £70,000, making a grand total of £200,000. To all of this must be added post-excavation work which is at present being estimated but could be up to another £40,000. This involves cataloguing and describing all finds, cleaning and storing and preparing a detailed report on the digs. It is entirely appropriate that the Minister of State with responsibility for the Office of Public Works should be here this afternoon, which is another reason which prompts me to raise this matter. I do hope he will have an opportunity to reply to this debate and to indicate that he has taken very careful note of what I have said.
The developer in this instance has been extremely generous with the corporation. As part of his planning permission, he has agreed to build a special basement in his development to house St. Peter's Church, which was uncovered in the excavations and which is, I understand, a national monument. The developer has informed the corporation that this will cost him a minimum of £370,000, excluding fees. Great credit is due to him. That is extraordinay generosity and it will be a most pleasing feature of the complex when it is completed. I am confident it will be unique. If you add in that £370,000 which the developer is generously giving to preserve St. Peter's Church and the other sums I have mentioned, the grand total of the cost of archaeology on this site comes up to £600,000. No State grants have been made available up to now, except the £10,000 mentioned.
We are the first city to hit this particular problem. It has not happened in Limerick, in Galway or in Cork. If we regard our past as being important and significant, worthy of conservation and preservation, if we do not want official vandalism of this priceless remains, if we in Waterford are confronted with what is an embarrassment of riches, we should be able to look to central Government for help and assistance in all of this. I hope the Minister is going to be able to say that he will find it possible to get the money from somewhere — maybe the national lottery again, I do not know. That seems to be the great swag bag you dip into if the situation is sufficiently important and it is in this instance.
I hope I have made the case not only for Waterford but for the whole country because it is a part of what we were. It tells us who we are and it is necessary that something should be done. It is suggested that State grants to cover the cost of archaeology undertaken to date and yet to be undertaken, including post-excavation work, to a total of £240,000 should be made available. Waterford Corporation have passed a resolution seeking £240,000 to assist in this area — and, of course, the developer will still give the £370,000 minimum which he has so generously agreed to provide. Again, it is a large issue in a local matter, but it is peanuts in terms of the State's expenditure. Waterford should be able to look with confidence to the Minister and I am so very pleased that just the right Minister is here this afternoon when I am speaking on the matter.
There are many other areas I could cover but many of them my colleagues will address themselves to and on many of them I have spoken before because we have, in the Seanad, debated the health cuts, the education cuts and the cuts in the Department of the Environment at great length, in particular specialised debates. I do not see any great merit in opening up these areas which will be dealt with more than adequately by my colleagues. I am obviously pleased to have had the opportunity to address myself to the few areas that I covered. I hope I did justice to the particular difficulties that I decided were worthy of airing and that the Minister has taken it all to heart.
I realise that the budget which will be put to the Dáil on 27 January next is unlikely to be one that will make us all snuggle back in our armchairs and feel happy. That is not today's fiscal climate. We all recognise that. I really would like to see evidence of thought, of policy, of planning, of evaluation, of sensitivity, which has been so sadly lacking in the cuts in so many areas to date. I recognise it is not easy to effect cuts in health expenditure but it should be easy to have a planned health policy. It should be easy to decide that we are not going to cut the frontline people who deliver health care, that we are going to spread this evenly.
It should not be necessary to have people panicking, as they are panicking today. I understand the association concerned with spina bifida and hydrocephalus are demonstrating in a number of health board areas because they are fearful of the long term illness scheme and of what is going to happen under that. It should not be necessary to disturb these people who already have a sufficient burden to carry. People who objected to the refund of drugs scheme, and quite rightly so in my view, were subjected to 24 hours of acute distress when the Labour Party, presumably on a tip-off, or on inside information, or whatever, decided to launch the notion that this programme was under attack. I heard the most distressing interviews being given on radio by people who were riddled with anxiety, on top of their physical illness, at the prospect of an attack being made on this particular programme which was vital to their health and well-being and their mental and emotional sanity. Please, can we have a situation where there are no more kites being flown, no more scares — no more than is necessary. Quite obviously, it is necessary to do harsh things, but I think people would accept it better if there was evidence of co-ordination, planning, thought and evaluation. On that, I will conclude my remarks on the Appropriation Act.
First, I should like to welcome the Minister of State to the Seanad Chamber and to congratulate him and the Minister for Finance on the tremendous work they have been doing over the last year in ensuring national recovery and bringing about sanity in the public finances. I was slightly dismayed to read media speculation that the Minister for Finance may be considering opting out of Irish politics. I would sincerely hope that that is not the position and that he will continue to play a role in the great work in bringing about national recovery.
On a few points that Senator Bulbulia made, she mentioned, as many Fine Gael Oireachtas Members have mentioned, U-turns and turnabouts by the Fianna Fáil Party. I do not want to say too much about that, but what I would say is that maybe the Senators in the Fine Gael Party would consult The Way Forward brought out by the last Fianna Fáil Administration in 1982, which called clearly for the public finances to be brought under control and the budget deficit to be eliminated in a short period of time. I would also draw the Senator's attention to another interview which the Taoiseach gave this time last year, in January, just when the general election was about to get off the ground. I remember that time very well. He gave an interview at that time suggesting the absolute necessity to curtail public expenditure. That was in the context of a general election. All Fianna Fáil Governments of recent years have been firmly committed to the task of bringing about fiscal rectitude and bringing about——
What about the posters?
An Leas-Cathaoirleach
The Senator must be allowed to continue without interruption.
I have been referring to both the previous Fianna Fáil Government and the present Fianna Fáil Government. Getting back to the motion before us, last year was a very fascinating one. It was a decisive year. First of all, the Single European Act was endorsed by the people and in the process they showed that they were committed to an integrated Europe. That more than anything else brought about a radical change in the attitudes of the people and it showed that they were prepared to be dragged kicking and screaming into the 21st century.
In the economic field also there was a radical change in attitudes. The Government set out in a decisive manner to bring about a change in attitudes and a change in the economy. They challenged the existing attitudes and mentalities and they did so in a very decisive way. Although there were massive cuts in public expenditure there was a broad consensus that it was the right way to go about achieving national recovery. It is fascinating to watch. We are living in extremely interesting times.
The media comments on what is happening are also interesting. For example, one Sunday national newspaper, The Sunday Tribune, said this is the best Government Ireland has had since the minority Government of Seán Lemass 20 years ago. That is certainly interesting coming from that newspaper. What I am saying is that the Government have changed the economic climate radically, that they have turned around the economy decisively but, more than that, they have changed attitudes. The attitude that you can get something for nothing has now been rooted out of the Irish mentality. When the history of 1987 comes to be written all of this will be seen in the context of the overall development of the economy. This is a great time to be observing what is happening in the political field and Ireland is now setting about the task of economic recovery for the first time.
I am a firm believer in the idea of a mixed economy where both the State and private enterprise play a role. A mixed economy is best suited to our needs but over the last decade or so we got the balance wrong. What the Government have done — I do not know whether or not they would agree with this — is injected a quick sharp dose of free enterprise into the economy and that is very welcome. We got the balance wrong and this quick sharp dose will bring us back to our senses and make us more efficient. A mixed economy will bring about the best economic results.
As I have said, the Government have had a number of major achievements over the past year. First of all, I congratulate them on bringing out the Book of Estimates well in advance as this enabled people to debate them. Bringing out the Book of Estimates well in advance was a very good precedent to set as it enables each sector to know exactly where they stand and to make adjustments. The major achievement of the last year was that confidence has been restored. That is the one element that had been missing over the previous five years during which there was paralysis of Government. Confidence has now been restored not just in the business sector but in all people.
People accept that we are living in tough times and accept what the Government are doing in the hope that it is the right thing to do. I am confident that what they are doing is the right thing to do. Our exports are rising rapidly and our interest rates have declined and that is very important. Once interest rates come down economic activity can begin again. There is now stability in the national debt and the budget deficit is under control. There has been growth in the economy for the first time in a number of years and the economic predictors are forecasting a growth rate of either 1 or 2 per cent this year. I hope that that increase will be achieved. Inflation is at an extremely low rate for the first time in a number of years and that will lead to an improvement in our competitive position and boost economic activity.
Now that the base for economic recovery has been laid growth and employment should be our major priorities. We should now start looking towards the creation of employment. I represent the north city of Dublin where the unemployment rate in some estates is between 50 and 60 per cent. I hope the Government will look at a number of areas in this regard. The IDA and our industrial policy must now be looked at in a critical way in order to see whether the measures the IDA are introducing are the ones to bring about an increase in employment. All institutions must be examined in a radical way and Bord Fáilte must be looked at very critically to see if they are serving our needs and creating employment and growth in the tourism industry. As I have already said, the measures introduced by the Government over the past year have the support of the vast majority of the people and will continue to have it.
Another major achievement of the past year was the signing of the Programme for National Recovery which was agreed between the Government and the social partners. That charts the way for the next three years and will be extremely successful if the commitments given are implemented. It augurs well for the future of the economy.
I would now like to deal with social welfare. As I said at the outset, I represent the north city of Dublin in the Dublin City Council. Unemployment in these areas is extremely high and social welfare is of great importance to many people. I suggest that the Government have acted in a responsible manner in relation to social welfare. I note that £1.61 billion is to be spent on the implementation of social welfare schemes and services and this is an increase of £12.7 million over the 1987 Estimate. The Government have had to come to terms with that huge expenditure and in doing so they have protected those most in need. Everybody accepts that rationalisation of the system was necessary. In particular there was a need to stamp out abuse. Everyone I come in contact with in my daily political duties says that there is abuse in the social welfare system and that something has to be done about it. The Government have set about doing something about it while at the same time maintaining the basic fabric of the social welfare system.
I congratulate the Minister, Deputy Woods, for introducing measures to stamp out social welfare abuse. I also congratulate him for maintaining the basic fabric of our social welfare system. For example, 30,000 of the long term unemployed were brought into the free fuel scheme. In addition, dependent spouses of insured workers can now claim dental and optical benefits and this was a major issue for the wives of insured workers. The Christmas bonus was paid at the same rate as last year and I congratulate the Government for finding the £19.8 million to do so. It was very much appreciated. Finally, the Government paid the 1987 increases in July rather than in November which the previous Fine Gael Government had contemplated doing. That demonstrates quite clearly that the Government are committed to protecting those in need and to maintaining the basic fabric of our social welfare system.
There is a misunderstanding, to say the least, in relation to social welfare abuses. On one side of my electoral area in north Dublin which includes such estates as Artane, Darndale, Coolock and so on, there are people who — for want of a better word — are middle class, have their mortgages and are working or in some houses there are two people working. On the other side of the constituency there are huge corporation estates with 60 per cent or 70 per cent unemployment, a great dependence on social welfare and the administration of social welfare schemes. It would be fair to say that there is no understanding whatsoever by the people in middle class homes with their mortgages and jobs of the plight of the person who is on social welfare.
There may be a general tendency to think that everybody who lives in a corporation estate is cheating the system and getting money they are not entitled to. That, of course, is not the position. Only a small minority of people cheat the social welfare system, and a very small minority at that. Unfortunately, that is not the perception. I know from my daily contacts in those areas that many people believe social welfare fraud is rampant and that the people living in corporation estates are cheating the system but that is not the case. We will have to educate people on the true position.
There is dire poverty among certain families in Dublin. We must work towards alleviating that severe poverty and bringing about an improvement in living standards. It would be of benefit to all concerned if social welfare fraud was stamped out. It will only affect a small minority of people but everybody will agree with such action. It will bring about a change in attitude and will be to everybody's advantage. I congratulate the Minister on what he has done in that regard.
A number of improvements could be introduced in the social welfare system. We need a more efficient system. There is nothing worse for a person whose social welfare book has run out than having to wait for the arrival of a new social welfare book and having to call to the post office daily to check on it. Those people may be left in severe financial difficulties for three or four days. We must eliminate that delay and the books must be delivered on time. We need a more efficient system.
Appeals to the Department of Social Welfare should be decided on more speedily. People who have been cut off social welfare must wait a number of weeks before a decision is made on their appeal. We must improve on that.
I appeal to the Minister for Finance to continue the alleviation payments introduced in relation to the social welfare equality directive. It is hard to imagine that at one stage a Government contemplated reducing the income of a family on social welfare by up to £50. However, at the end of the day right prevailed and alleviation payments were introduced under that directive. It is important that those alleviation payments continue in the context of overall social welfare increases. They could be implemented over the next few years so that there would be no fall in the real income of people affected by this directive.
A number of proposals have been made in relation to the Commission on Social Welfare and the Government should look at them in a calm fashion, decide on those that are practical and set about implementing them. That is all I have to say in relation to social welfare. I should like to congratulate the Minister who is doing a great job. I am sure that if he is given the time he will introduce further reforms and ensure that the system is made more efficient.
I would also like to say a few words about expenditure by the Department of the Environment. We discussed this in the Seanad some months ago on a motion by the Labour Party. It is important to see how the cuts in expenditure in the Department of the Environment have operated. Everybody agrees that we need to get value for taxpayers' money. There has been a decrease of only 11 per cent in the Estimate for the Department of the Environment. Everybody agrees that waste must be eliminated, in relation to local authorities in particular, and that economies have to be effected. There is also the problem in relation to duplication by local authorities. We have local authorities implementing services side by side with similar services in adjoining counties. That must be looked at in the context of trying to achieve efficiency in local government. Duplication by local authorities should be looked at.
Local authorities have to play their role in trying to achieve a more efficient and more productive Ireland. Dublin Corporation cut their budget this year by £6 million and I watched very carefully how that was implemented. Certainly, I have seen no deterioration in the services provided by Dublin Corporation over the past few weeks. There have been voluntary redundancies within the corporation; 300 people or so have left the corporation but that has not resulted in a major deterioration of services. Management have set about redeploying staff, providing services in a more efficient way and that is to be welcomed. When local authorities have trimmed their budgets we should set about reforming the structure of local government. When local authorities are providing services in an efficient way we should examine reform of local government and make the system more efficient. We are proceeding well along those lines. The cuts in the rate support grant for local authorities were necessary and that move will be to the advantage of all local authorities. In the next few years efficiencies will be achieved.
In relation to the Department of Health, I should like to congratulate the Minister, Deputy O'Hanlon, on finally opening Beaumont Hospital in north Dublin. It is a very welcome facility in the area. It is an absolute disgrace that that hospital was lying idle for a number of years, at a cost to the taxpayer, I might add. The people of north Dublin — Beaumont, Coolock, Artane and so on — are delighted that that hospital has been opened. It was great to see the Minister opening that hospital, a much needed facility for north Dublin. The Minister for Health has done an excellent job in his Department. Health service expenditure in 1974 was £146 million, in 1986 it was £1,298 million — which represents 19 per cent of expenditure — and in 1987 it had increased to a massive £1,314 million, £16 million more than in 1986. One can see from those figures that health expenditure had gone out of control. I congratulate the Minister on rectifying that matter. He has the broad support of the Irish people and, indeed, of many of those in the health services. When one talks privately to nurses and doctors they say that there was massive waste in hospitals and in the health services and everybody knows that is the position. I congratulate the Minister on taking firm decisions which will be to the benefit of all people.
I am aware of the interest of the Cathaoirleach, as was mentioned earlier, in the plight of disabled people. I am delighted that the Minister for Health has made available £150,000 from the national lottery to the Irish Wheelchair Association. They are very appreciative of that money and it will allow them to continue to provide the much needed services which they provide. There is speculation in the media at present regarding the VAT and excise duty in relation to disabled people buying cars, that the administration of that scheme may be transferred from the Revenue Commissioners to the Department of Health.
The bodies representing disabled people are not happy that that has been proposed. The Minister will not give any indication of what may or may not be in the budget next week, but I appeal on behalf of disabled people that the administration of excise duty and VAT remission in relation to cars for disabled drivers should remain with the Revenue Commissioners to ensure that that scheme remains in existence. I hope the Minister will bring my remarks in that regard to the attention of the Minister concerned.
Hear, hear.
Let me say one brief word about the Department of Labour. I would like to congratulate the Minister, Deputy Ahern, on the amalgamation which he has brought about in relation to the National Manpower Service, the Youth Employment Agency and AnCO. He has taken a very important decision. Unemployed people were very much disheartened when they had to go to these three institutions in order to try to obtain suitable employment. The amalgamation of these three bodies into one institution called FÁS is a great development. Unemployed people in particular will be delighted with it. Much unnecessary bureacuracy has been removed and I hope this new institution, FÁS, will deal seriously with the problems of unemployment and obtaining jobs for unemployed people. I wish the new institution every success.
Senator Bulbulia made a very eloquent case on behalf of the National Art Gallery, women, Third World aid and archaeological developments in Waterford. I fully accept that these are all very genuine cases and interests. However, in bringing about stability in the public finances the Government have to take into account the common good of all interests concerned. They cannot just specialise in two, three or four different interests. The Senator appreciates that and I know she is genuinely concerned about the four issues she mentioned, but the Government have a common duty not to favour any special interest group. An ingredient of their success during the past year is that they have taken the greater good into account and have not been influneced by any single pressure group.
With that I conclude, I hope the Government will continue on the course of action they have initiated. If this Programme for National Recovery is carried through, Ireland will be ready for the next century to play its role in the world as a fully developed economic nation.
A Chathaoirligh, is cúis áthais dom bheith ar ais arís i Seanad Éireann don chéad uair san bhliain nua. Guím athbhliain faoi shéan is faoi mhaise daoibh uilig agus táim ag súil go mbeidh bliain eile shásúil i leith eachtraí polaitíochta agus airgeadais ár dtíre againn go léir.
Seanad Éireann facilitated the passage of the 1987 Appropriation Bill immediately before the Christmas recess on the understanding that time would be made available as soon as possible after Christmas to enable Senators, particularly those who did not have an opportunity to participate in the restricted preChristmas debate, to discuss Government expenditure policies and the performance of the economy generally. The purpose of the motion before us is to facilitate this discussion.
As the Minister for Finance, Deputy MacSharry is heavily engaged at present on the preparation of his financial statement to be presented in Dáil Éireann next week, he is unable to be here today. He has asked me to say, however, that he will be following closely the course of the debate today and tomorrow and will be most interested in hearing what Senators have to say in their various contributions. I am looking forward to these contributions also.
Since the Minister addressed the House before Christmas the end-year Exchequer returns have been published. They demonstrate clearly the effectiveness of the Government's management of the public finances in 1987. The current budget deficit for the year was £1,180 million, or some £20 million below the very tight target set in the March budget and over £200 million below the previous year's outturn. Overall Exchequer borrowing for capital and current expenditure combined was £1,786 million. This is £72 million below the budget target and almost £360 million below the corresponding figure for 1986. What is especially remarkable about these figures is that they were achieved, to all intents and purposes, in the nine month period April-December 1987. Spending for the first quarter of 1987 followed the pattern set by our predecessors.
Significant savings totalling a net £44 million emerged on non-capital supply services — the day-to-day costs of running the country. These expenditure savings emerged over a wide range of services but the principal areas involved were Education £24 million, Agriculture and Food £8 million, Defence £7 million, Labour £5 million and Environment and Tourism and Transport £4 million each.
The outturn on non-capital supply services is all the more satisfactory when account is taken of the fact that the Government financed the payment of a social welfare Christmas bonus costing almost £20 million last year and paid out £8.5 million under the public service voluntary redundancy package, neither of which had been provided for in the budget of 1987.
There were savings of £42 million on Central Fund services, some £16 million of which was due to a saving on our contribution to the EC budget. The balance of the saving was accounted for in the main by savings on foreign and domestic interest payments.
Significant savings also emerged on capital expenditure. The Exchequer-financed public capital programme was some £28 million below budget. Savings were achieved right across the spectrum of expenditure. Capital spending for the Finance group of services was down by £7 million mainly because of lower than expected expenditure by Fóir Teoranta. On the Environment group, savings totalling £13 million on house improvement grants more than offset excesses on sanitary services and other housing grants. There were also savings on industrial grants, commercial harbours and shipping investment grants. Exchequer-funded non-programme outlays out-turned at almost £32 million less than the £75 million provided in the 1987 budget. The overall Exchequer savings on the expenditure side of the capital budget were, however, offset to some degree by a small shortfall in Exchequer capital resources.
On the revenue side of the budget, the 1987 outturn was below expectations. Tax revenues, particularly indirect taxes, were below the budget targets reflecting weak consumer spending. Even though buoyancy under other tax heads made up for part of the shortfall, overall tax revenue was some £76 million short of target. Non-tax revenues on the other hand were slightly above target for the year after taking account of the £8.5 million received from the Central Bank under the arrangements for the financing of the public service voluntary redundancy package.
All in all, therefore, the Government's successful management of the public finances during 1987 is cause for considerable satisfaction. The results achieved are all the more impressive given the fact that the late introduction of the 1987 budget greatly narrowed the time-span for the achievement of the targets set.
Let me now deal with recent developments in the economy. As the Minister for Finance said in this House last month, 1987 was a good year for the economy in many respects. Most of the main economic indicators were positive throughout last year and this gives us great encouragement and hope for the future. The growth rate for the year is now estimated to have been higher than in previous years and, indeed, higher than economic forecasters had anticipated at the start of the year.
The main reason for this higher growth was the very strong growth in exports. Export growth was most buoyant in the high-technology sector, especially electronics. However, other sectors also did well. Food output, as the Minister mentioned when speaking in this House last month, was up by over 10 per cent in the first nine months of the year compared with the first nine months of 1986 and the traditional manufacturing industries, like textiles, clothing and wooden furniture, overall saw steady growth for the second successive year. On the services side, tourism earnings were up substantially. Output and export growth was fairly broadly based last year and this is a very positive sign for our economy.
Another important development last year was the further substantial improvement in the balance of payments. This is an important economic barometer for a small economy like ours. As the trade balance has improved over recent years, so too has the balance of payments. The trade surplus virtually doubled last year, an all time record. The balance of payments deficit also showed a substantial reduction. While final figures are not yet available for 1987, a small balance of payments surplus is the likely outcome. I note that many economic commentators share this view.
Agriculture also did well last year. After two bad years, farm incomes recovered strongly. There were a number of factors operating here — the favourable development of prices was the main one. Output prices were better than in 1986 while input prices fell. At the same time, the volume of farm inputs also fell because of the better weather conditions. Overall, there was a substantial recovery in incomes — the Central Statistics Office estimate an increase of 13½ per cent compared with 1986.
Senators will also be aware of the improvements in other areas. Inflation was only 3¼ per cent last year, the lowest inflation figure in 20 years. One of the most significant developments was the dramatic fall in interest rates from their exceptionally high levels when the Government took office in March 1987. Since then, key wholesale interest rates have fallen by up to 5½ percentage points and the prime overdraft rate of the associated banks has fallen by up to 5 percentage points to its lowest level for ten years. These reductions in interest rates reflect the progress already made in reducing Exchequer borrowing; the continuing improvement in the current account of the balance of payments; the low inflation rate to which I have just referred; the significant increase in the level of the official external reserves together with the inflow of funds into Ireland; and the level of interest rates internationally.
The reduction in interest rates achieved is a clear endorsement by the financial sector of the Government's prudent handling of the public finances. We have taken tough but necessary decisions to prune public expenditure and reduce Exchequer borrowing. Furthermore, we have secured the co-operation of the social partners in a strategy to further reduce the annual borrowing requirement which will help create the climate for even lower interest rates in the future. Lower interest rates will encourage investment and growth and help to generate much needed employment. It is hoped that wealth creators in the private sector will respond to the new atmosphere of confidence generated and take full advantage of the improved climate for profitable investment.
Despite the overall positive outturn last year, developments in some areas were disappointing. The building industry remained weak and personal consumption was virtually unchanged compared with the previous year.
Average registered unemployment in 1987 was 10,900 above the 1986 level and its reduction remains a central objective of Government policy. While acknowledging that the average number unemployed rose again last year we can take heart from the fact that in the 12 months to end-April last, the live register rose by 18,400 but in the 12 months to end-December 1987 there was actually a small fall of 100. This was the first such fall for December this decade.
The Government remain absolutely committed to tackling the deep-seated problems of the public finances and to creating the conditions for a return to sustainable growth in the near future. The difficulties which confront us are of such magnitude that we must look to sustained action over a period of years to deal effectively with them. It is unrealistic to expect that corrective action in one budget or, indeed, one year will suffice.
Our objective for 1988 is to build on the progress achieved last year. Impartial commentators who have studied our situation support the broad thrust of the Government's expenditure strategy for 1988 as set out in the abridged estimates volume and summary public capital programme and which were discussed in this House last November. The OECD also endorsed the main lines of Government policy in their recent survey of the Irish economy. We are, in fact, building on the consensus which emerged in the NESC Report, "A Strategy for Development 1986-1990" and which was carried a stage further in the Programme for National Recovery which was agreed with the social partners late last year. The Government's policies are clearly recog-nised as being the right ones and they are already contributing to a major improvement in our economic prospects.
Despite the effect of the expenditure reductions on certain elements of domestic demand, gross domestic product is likely to show some further — albeit modest — growth next year. Much will depend on the domestic response to lower interest rates and improved confidence. On the external side, while there are of course major uncertainties regarding the pace of growth in our trading partners next year, I am confident that, given a reasonable international environment, we can achieve a further substantial expansion in the volume of exports again this year. Inflation is likely to remain moderate at under 3 per cent and there are good prospects that the balance of payments will move further into surplus. Competitiveness should improve further reflecting the modest level of wage increases provided for in the Programme for National Recovery.
Next year unemployment is expected to rise again but somewhat more slowly than in 1987. The Jobsearch programme will continue to help the unemployed and FÁS — the new manpower authority — will continue the work of providing the unemployed with job experience and training to enable them to acquire the skills demanded in the labour market. The Government's fiscal and monetary policies, together with the development measures set out in the Programme for National Recovery, will together provide the soundest possible basis for achieving and sustaining the considerable potential for umployment growth which exists in this country.
The scale of the budgetary adjustment envisaged for 1988 inevitably means, however, that it will be a difficult year. Nevertheless, the potential of the economy to respond positively and quickly to lower interest rates and improved confidence should not be underestimated. Government policies have already created the conditions in which the economy can take maximum advantage of the real, if modest, growth expected in the international economy next year.
Senator Brendan Ryan, we are concluding this matter at 5 p.m. I do not like interrupting people when they are in full flight. If you wish to start you will have ten minutes.
Sometimes it is difficult to interrupt when I am in full flight.
We will resume this debate first thing tomorrow morning and you will be in possession.
It is quite possible that I will be finished by 5 p.m. I do not want to talk, although it is traditional, about much of the details of what is in the Appropriation Act but, it needs to be said, and said unequivocally, as Harold Macmillan said close to his final years, that whenever he had found the Establishment was unanimous about anything it was almost invariably wrong. We are now in that classic position: we have an Establishment of the Government, Fine Gael and the Progressive Democrats who, notwithstanding the shadow boxing, are unanimous about the economic strategy for this country. They have the good fortune, which I suspect Harold Macmillan or the British Establishment did not have, of having the virtual unanimous support of the media as well.
One can understand the unanimous support of the private sector media because after all they are products of the same philosophy based on the same ideology as Fianna Fáil, Fine Gael and the Progressive Democrats, but one cannot understand the extraordinary commitment of the national broadcasting service to a particular political and economic ideology, the consistent espousal of a particular economic view and the deliberate choice of Right-wing economists to produce what are ostensibly independent views on our economic situation. I can absolutely assert that whatever independent economist appears on the budget programme next week by our broadcasting organisation he will agree with the Government's economic strategy. There are many independent, equally well qualified economists who will not so agree but they do not count and they do not rate. If Radio Telefís Éireann want a list of independent economists who do not agree with the present strategy I will give it to them, but they obviously do not want such a list. They know as well as I do where these people live.
The country deserves and needs a fundamental dialogue on what is going on at present. A number of things need to be said. First the present strategy will result in a position where in the forthcoming year — and this is built on this year's expenditure — the single greatest contribution will be interest repayments on debt. If we did not have those interest repayments on debt we could reduce income tax by 60 per cent and pay for all our public services.
The underlying assumption which lies behind the Fianna Fáil, Fine Gael and Progressive Democrat view of the economy, which is that we have awarded ourselves a standard of living and a quality of public services beyond what we can afford, is wrong because the standard of all those services is not out of line with our development. Many countries developed more comprehensive services than we did at a time when they were less developed. The United Kingdom initiated a comprehensive national health service and a comprehensive welfare service immediately after the war. At that stage the United Kingdom, in terms of economic development, was well behind our present position. Their standard of living was considerably less than ours. It is ridiculous to suggest that somehow we are now being penalised for a splurge on our own behalf to give ourselves services we could not afford. That is simply not true. The cost of services, of health, welfare, education, security, housing, industrial development, etc. is not a particulalry heavy or onerous burden. The problem is the scale of debt repayment that has to be topped up on that. Consequently, when people tell us that we must cut back public expenditure, to say the least, they are being less than honest because they are, first of all, saying that close to 40 per cent of public expenditure, that is the area of debt repayment, is absolutely untouchable. That is not to be examined, scrutinised, questioned or challenged. That is an absolute which must not be touched.
The same applies to the close to £700 million which is spent on security. The same independent, unbiased, unpolitical economists will ignore that area of expenditure. They have consistently done so, as have the present political structure. Suddenly we discover that close to 50 per cent of public expenditure is actually sacrosanct in the minds of this consensus Establishment which has persuaded the Irish people that they must do penance for their sins. The one thing that needs to be said is that whatever the Irish people have got out of the last ten years of mismanagement, it is not an excessively high standard of living, it is not an excessively developed education system, it is not an excessively developed health service and it most definitely is not an excessively developed welfare system. What they have got is mismanagement.
One of the intriguing aspects of this mismanagement is the way those on the Right, in other words, those who sit in front of me with the exception of the Labour Party and the entirety of the people who sit over here, with the exception of my honourable friends on Independent benches — the overwhelmingly 85 per cent Right-wing majority that now rules our country — pick certain items as the items on which we spend too much. They will tell us, for instance, that we took on too much in the area of welfare and that half the welfare bill represents the excess of expenditure over income, or they will tell us that the education bill represents the excess of expenditure over income. They will never tell the people that it is the £2.4 billion in interest that represents the excess of expenditure over income. They pick the soft target and blame that soft target for the country's budgetary problems.
The fact that we are now paying 5 per cent real interest on the national debt when ten years ago we were probably paying an interest rate which was less than the rate of inflation is never adverted to. If interest rates had remained as they were in the seventies, at rates which were less than the rate of inflation, this country would not have a problem because interest would not have run way ahead of national income. That is not a problem of gross mismanagement, it is at the very worst, a problem of misfortune and at the very best something that we should confront. The fact that close to £0.5 billion has been paid in 1987 to the Irish commercial banks to repay lending given by them to the Irish State needs to be adverted to.
Let us remember that this lending is absolutely secure; it is absolutely guaranteed repayment. A serious question should be raised as to whether those sort of absolutely secure lendings justify or need real interest rates of the order of 5 per cent or 6 per cent. I do not believe that anybody investing in an external enterprise could actually look for a return on investment in the medium term or in the longer term which would be guaranteed to be 6 per cent in excess of inflation. That would be regarded as an extraordinarily good performance for that sort of investment. I am not talking about the sort of investment that is made by multinationals who talk about a 26 per cent or 27 per cent rate of return. They are far more a reflection on our national generosity in tax breaks than they are in any way a reflection of their real peformance. The truth is that it is safer, more lucrative and more profitable for the Irish financial institutions to loan money to the State than it is to loan money to genuine enterprise, particularly the only kind of enterprise that is worthwhile, enterprise in manufacturing industry, in the production of goods or enterprise which involves internationally traded services.
Let us forget about all the small petty entrepreneurs who are involved in the provision of services which simply consume the wealth created by other people, or in some cases simply suck imports or imported services into the country. The only real form of enterprise is the enterprise which creates wealth and the enterprise which draws wealth into the economy, that is, internationally traded services and manufacturing industry. We have failed singularly and completely to identify those two areas. We have paraded entrepreneurs, some of whom can have two pages of The Sunday Tribune devoted to their alleged virtues but whose contribution to this economy has been negative. Because they have made money they are called entrepreneurs.
The real entrepreneurs, of course, make money and I have no great objection to people who take risks and work hard and produce wealth and sharing in that wealth. But I have an objection to the term "entrepreneur" being extended to those who, by opportunistic manipulation of the financial markets, by opportunistic investment in something like speculative land deals, make an awful lot of money and because they make a lot of money they are somehow classified as entrepreneurs. Equally, I have no time for our financial institutions which regard that sort of investment as somehow acceptable and are far more prepared to invest in the person than they are in the idea. All that needs to be said in order to deal with the philosophy which lies behind the strategy of the frightening consensus that exists in our society.
Debate adjourned.