I move:
That Seanad Éireann notes the supply services and purposes to which sums have been appropriated in the Appropriation Act, 1989.
Appropriation Act, 1989: Motion.
First, I wish to comment on your statement to us yesterday in response to all the hassle in this House. You said: "The Cathaoirleach of the day cannot involve himself or be involved in debate." I would ask you, a Chathaoirligh, to alter that to "the Cathaoirleach of the day cannot involve himself or herself". I may return to the Chair.
Unfortunately, we are dealing with the present. History has no place in it.
Yes, but there is a future as well. I welcome with great warmth and sincerity the Minister of State Deputy Daly, to this House on behalf of the Minister for Finance. It must be a welcome break, even for the Minister with all the weeks of hassle he has had in recent times.
My main purpose this morning is to request the Government not to be deflected from the tough task of looking after all our affairs even by extraordinary pressures from various interested groups. I say that with great care. I understand the pressures on organisations when they have to face the Department of Finance and the Minister for funding. At the same time, every nation has only a certain amount of money to distribute. We have here today, therefore, the opportunity to look back over the past year and also to look forward.
Let us consider the central theme running through the Government attitude, even though there was break for some time; they are now back in Government although these may be in a different package. We have three items. We have Europe, we have Northern Ireland, which will always be on my Clár, and we have the economy to consider. At all times we have tried to face the realities of what has to be done and the problems facing us.
Europe cannot stay as it is at the moment and, as proved by events in recent weeks, it is moving even faster. I do not know whether it will eventually be for our benefit or not. I welcome the changes. I welcome the extraordinary commonsense of other nations in trying to work together for the good of the people. That is what this world is all about. I will make only a short reference to Northern Ireland, although it is not to be in this debate. It would be great if some kind of perestroika could be developed there to solve that sad problem.
In the last year the Government have reduced borrowing substantially and the current budget deficit. They have cut the rate of inflation and transformed our balance of payments position. I hope we are at least in some way masters of our own affairs. Having to govern a nation is not easy at any time, whether you are in Opposition or in Government, but enough of us have the common sense to realise the extraordinary pressures on us today. I am old enough and I have served long enough, whether it be here or with my late husband, Derry, to know there are greater pressures on us than on former Cabinet Ministers and their colleagues. Therefore, I think no Minister should come in here or to the other House or to any other forum and be too optimistic when he is talking about finance. It is dangerous to say that money is under control because, as we all know, you may well have to swallow those words at another time since national finances have a way of getting out of control very quickly and unexpectedly. However, as I look at the figures here this morning, we seem to have made progress and I hope for the sake of this country we will continue to do so.
The maintenance of a disciplined approach to our financial affairs is not alone in our interest but more so in the interest of our children to whom we will hand over this nation. We have to be big enough to admit we made mistakes. I witnessed the mistakes of the 1973 Government and, much more so, of the 1977 Government, one in which my party governed. I do not say this because of who was where at that time, but there were mistakes made in those two Governments from which we hardly have yet pulled ourselves back. It takes a strong politician to get up and admit that their own party made mistakes, but I have no trouble in doing that. We made mistakes at the time that were crazy, and the 1973 Government did likewise. I recall a previous Leader of this House and a former Cathaoirleach, Senator Dooge, had that courage also and I share now in some of the things he said away back years ago.
I hope we are all big enough to recognise that the Minister for Finance, Deputy Reynolds, tried to start something new and something different in his budget last week. It is important to put on record that a different kind of money is coming into the Office of the Revenue Commissioners and to note the implications that may have down the line for job creation. In 1989 companies paid over £300 million in corporation tax. This was money which was not available for reinvestment in job creation. This year corporation tax is forecast to increase by 11 per cent, yielding £338 million. It is estimated that the export sales relief this year will result in additional corporation tax revenue of between £90 million to £170 million per annum within the next two years. As a result of this measure alone, Government revenue from corporation tax could exceed that of the other countries of the EC within the next two years and the withdrawal of these funds from industry will significantly reduce the capacity of industry to invest and create additional employment.
I would like to pay tribute to Alan Gillis, the new President of the IFA, for his initiative in contacting MEPs last week and talking through their problems. I am not one who understands the farming world, even though my family background is of farming in south Tipperary. Somebody like the President of the IFA sees that Europe has taken away from us some of the controls over decision-making. Listening to the addresses of the IFA President, it appears he is trying at least within his organisation to set some control back over their own affairs. That is a good thing.
I would like to make reference to local government. I was never carried away with the word "environment". It is the "in" word how. As a member of a family who this year, between three of us, has served 73 years in local government, I think that when we decided to change the word "local government" to something else — and the Leas-Chathoirleach might agree with me in this as he is also a long-serving man in local government — we also took from the local authorities some of their power. They were not out for power as the word "power" is used in relation to other people. That is not what they were about. I pay tribute to their dedication and their commitment. Most of the Senators here are members of local government organisations. I think they are the basis of this nation. I do not say this because they elect me; I say it because I firmly believe it. I would ask the Minister for the Environment, Deputy Flynn — and I pay tribute to him sincerely for the role he is playing in his Department — to take a good look and give them back some of the decision-making——
And more finance perhaps.
——and to give more finance back to local authorities. I do think we made mistakes and we should try to correct some of them. I compliment the Minister on his role to date as Minister for the Environment, but I ask him to take a good look at this. We nearly had arrived at the stage where county councillors talked about not being listened to; we nearly arrived at the stage where they were regarded as a nuisance. They see the local scene, whether it be in health, education, agriculture or in housing people; and, seeing the local scene, they carry it through into the national area. There should be no gap between serving locally and bringing experience back onto the national scene and, therefore, getting the correct results and perhaps making fewer mistakes on the ground.
I would like also to make reference to FÁS and to the Department of Labour under the Minister, Deputy Ahern. I do this because there is some criticism of the part-time jobs under the Department of Labour and FÁS. I have helped people get some of these jobs. I have talked to families who are glad to see some of their young people going into these part-time jobs rather than just being around doing nothing. It would be wrong if some of us did not have the courage to say that FÁS are making a very positive contribution. I accept we all want full-time jobs for everyone but, if that is not to be, let us give credit for what is being done. I have here details of some of the schemes, such as the social employment scheme, £38,450,000; employment initiative schemes, £1,279,000; Teamwork, £2,361,000; enterprise scheme, £3,433,000. You are talking about a breakdown of days in training equal in 1989 to 14 years. The amount of time given to the employment schemes equalled 14 years. There are people who would prefer, as we all want for all of our people, full-time employment but because I have witnessed at first-hand people getting satisfaction from part-time work and not wanting to be unemployed we should give credit to a Department that continue that service to the people.
I was glad to see in the Taoiseach's address yesterday, when speaking on the budget, that Aer Lingus are going ahead with the major aircraft servicing project to create 560 jobs, which was evidence of the Government's commitment to job creation by expansion in the State sector. He said an even larger project is planned by GPA and the leading continental airlines in Shannon, and that there has also been significant investment in food processing. I am not going to go down the Shannon road or what happened here yesterday, but I would like to pay a tribute here this morning to people such as Dr. Tony Ryan for the extraordinary patriotism he showed in coming back here and investing that kind of money in the area. To me that is what patriotism means today. Senator Ryan will agree with me on that and also Senator Hourigan.
A good Tipperary man.
Oh, yes, a good Tipperary man, he could not but make right decisions. I noticed recently advertisements for jobs in the national newspapers are running at a strong level with particular demand for jobs for hotel and catering staff and for marketing and sales staff. There are more advertisements now for such jobs. If that is said in another place, they will say there are 1,000 for one job but, at the same time, there are more jobs coming onstream. I know we are losing out, but there are more jobs and together we can create jobs for all of our people.
I would like to pay tribute to our social partners. I hope for the sake of this nation and for the continued success of this country that the vote goes right this morning. I will single out Peter Cassells and all the senior union men who have been big enough to put their own interests aside at times and look at what this country wants. I hope that vote goes right today. When I say right, it is not because it suits us or that I am a member of the Government party — not like years ago when I was daft enough to think only party; I think about country now and the party might well come second. I was looking at the amount of money allocated in the Appropriation Act; the figure for social welfare is the highest, and the next highest is for health. An extraordinary figure has been allocated for the health services. I am not going to engage in a health debate, a Leas-Chathaoirligh, because you would not allow me to and I would not dare do it anyway, but when I see that much money allocated to a Minister for Health and when I look at some of the problems in the health services I think there must be mistakes in administration. We are putting enough money into the Department of Health but at the end of the day we do not seem to have the services for the patients that we should have. That is not the Minister's fault, and I would be the last one to come in here and defend the Minister if I thought it was his fault. I know it is popular at the moment to lash him. I am not too sure about what he has done yesterday with David Kennedy and the other gentlemen and whether that is the road he should have gone down. I do not understand it, I have not read it yet and I do not know what brief they have been given. I think he made a mistake when the local health committees were taken away from us and I would ask that they be put back in place. We would hope that the feedback from the people who served on the local health committees might get through and that the health boards might have to be restructured. The money is there and it is allocated to the Department of Health and yet there are problems.
Whose fault is it?
There will always be problems in the health services, there always were. I would like to pay a tribute to the Minister for Health for his allocation of £200 million to the mentally handicapped. I hope that money is allocated for all the counties and for other places that need money for child care assistant and to deal with class size. All the needs that are in the normal schools are also in the schools for the mentally handicapped. I hope that £200 million will be spent in the right areas.
The inflow of EC Structural Funds will not only help to improve our industrial effort but will help us also to achieve faster economic growth. This will be occurring in a European Community which is daily becoming more competitive and dynamic. For example, last year two million additional jobs were created in the European Community for the first time since it was founded. The opportunity of participating in the largest single market in the world has resulted in a massive increase in investment in Europe. I hope the Structural Fund money that will be coming onstream in this country will also be spent in areas that will create employment. I hope the expected private money that has to be put in place to get this Structural Fund money will be there.
There is a lot of talk about the Structural Funds and people might get the wrong impression there is a pile of money coming in on planes to Dublin or Shannon. However, the amount of private money that has to be here to get Structural Fund money is fairly high and I sincerely hope that is in place to allow us to get this Structural Fund money. I heard a European Minister some months ago say that if the private money was not in place it then would mean we would not get the Structural Funds and that the whole thing could collapse. I hope the private money is in place.
We have made progress in forestry in recent years. I recall 25 years ago Members here getting small grants for forestry areas in Clare. At the time they took over land which was not any good for anything else and it also created jobs. Today it is a joy and an asset to a county which depends largely on tourism. It appears the Government are spending sufficient money in the Department in dealing with forestry. The Minister, Deputy Daly, would know more about that than I do, but certainly it is something which I would like to see developed further. One sees miles of fields with nothing planted in them and I think there is nothing to be lost in putting more money into forestry.
I will now refer to facilities for recreation. The fact that I and some Members here do not have much time for recreation does not deter me from feeling that other people have more leisure time. I pay tribute here to the Minister of State, Deputy Fahey, for the money being made available for recreational facilities. There is great potential here for creating employment.
On a personal note, I wish to pay tribute to the Arts Council of Ireland for the new interest they seem to be taking in the world of theatre. It is a whole new world to me because somebody very close to me is involved. It is also an area which can create jobs and give new life to young people. I am not talking about Dublin theatre; I am talking about theatre in rural Ireland. It has created jobs and it has given a new interest to people who might otherwise have lost interest in going on. It brings the theatre to people who might have thought they never would be interested in that area. I say that with great respect, because I was of the opinion that the theatre was only for big shots. I was talking recently to somebody who is a strong believer that theatre is for everybody and it raised my heart to hear him say: "The next time we go on stage in five weeks' time I intend taking coaches up to the housing areas and bringing them down in the same way as they go to bingo." It was great to know that somebody young thinks those people should have the opportunity to attend the theatre. If more money is invested in the theatre outside of Dublin — I am referring to Waterford city — so be it; theatre should be for all and not for the selected few.
The Minister when replying might enlighten me on something about which I am confused — and I am rarely confused. I am referring to Item 12 — £160,000 for the Secret Service.
There are many Senators more capable of speaking on the Appropriation Act than I and I do not intend going on any longer. I am one of the long-serving Senators in this House — I am here since 1977 and I intend to stay here. In fact, if we had an election in the morning I would probably do better than I did a couple of months ago: they would have sympathy for me and I might be in other places rather than here. However, I am quite happy where I am and will make my contribution all the time while I serve and while there are enough people with common sense to re-elect me.
I appeal to the Minister this evening — and I would ask Minister Daly to convey it to him — that he would combine the tradition of economic fairness with the reasonable distribution of the money to all of its people. Let none of us go down the road that there are a secret few out there with lots of money and that they should be clobbered. I believe we should try together. I am not talking about national government; I am talking about commonsense, and that is what the Ministers in the Chamber have. We should all try to work together to look after the people of Ireland who elect us.
This is my first time for years speaking on the Appropriation Act which measure I welcome. I congratulate the Minister for Finance who is a most approachable Minister. You can face him the evening before a budget with a problem, I do not recall being able to do that before, I put on record here this morning the case of somebody who had a small taxation problem. You could face the Minister for Finance the evening before the budget, ask him about it and it was dealt with. I hope we are back to that type of politics again. If we are, the people who can benefit are ourselves as elected Senators and the people have respect for us, regardless of comments in the media. There is great respect for serving politicians who have respect for the people.
Since we are discussing the Appropriate Act I thought it might be appropriate to reinforce the calls made by Deputies Bruton and Deasy in Dáil Éireann yesterday for an inquiry into the leaking of the recent budget. It is a well known fact that on lunch-time news on the day of the budget most of the salient points of the budget were being discussed freely by journalists. It should be established who in the Cabinet is leaking the information and what is the political motivation for the leaks. That is an important point that should be made.
Cabinet secrecy should be maintained and the budget should have been secret until it was revealed on the floor of this House. It is a very sad day when the budget is revealed to one little group in society before it is announced to the country's sovereign ruling body. Obviously it has to do with friction within the Cabinet and within the Government, but it is a dangerous development from a national point of view. I reinforce the call of Deputies Bruton and Deasy yesterday. I hope this House will join in the call for an immediate inquiry into why there was a leak on all the budget details before the Budget Statement, why it was revealed to the press and discussed on national radio before being discussed on the floor of the House.
Senator Honan said that she had arrived at a stage in politics now where she puts country before party. Listening to the thrust of Senator Honan's speech, there is no risk about the future of her position within her party. It would seem that she has fairly broad lines there yet because it was essentially——
I am not at risk.
——a very party political speech. With regard to the Appropriation Act and the recent budget, the Minister — we are glad to have Minister Daly here today — might accept the point that the budget is no more than a holding operation. The budget and the Appropriation Act are non-statements, non-financial statements. They could be likened to a person who has been managing his finances in a certain way over a five-year period and then decides that in the next year he is not going to make any changes or adjustments. There are no changes in the Appropriation Act or in the budget. There are no solutions to the problem and nothing more than a holding operation is involved.
That is a reasonable assessment of the Estimates and of the Budget Statement. I believe the Minister accepts that to be the case. It is a great pity that at this early stage in the Government's term of office they did not attempt some radical initiatives, that there was not some radical change proposed in the budget. Rather than being radical, the budget is effectively a non-event, as is the Appropriation Act. I make that point because it does not address the major issues of the day.
The first major issue now confronting this country is the great haemorrhage of our people, the emigration of our people in their thousands. Forty six thousand people emigrated last year. It is not being overly colourful to compare the number of emigrants last year to a capacity crowd at an All-Ireland football final. That is the kind of numbers of people who emigrated last year. That is the first great national concern. It is my submission that the budget does not address that problem.
The next issue confronting the people must be the level of unemployment, the fact that over 200,000 people are on the live register. Amateur analysis would argue that the figure is higher but officially there are at least 200,000 on the live register, so unemployment is a great national concern.
The next national concern — and this was clearly established in the recent debate in Dáil Éireann and in the media over the last few weeks — is the question of the total breakdown of our health services. That is an issue of great seriousness for the country and it is my submission that the budget does not address that question either.
Emigration, unemployment and health are major issues. Personal taxation is another critical area that has only been tampered with in the budget and in the Appropriation Act. I have to be honest with the House and say that I am one of the people who do not believe that the reduction of personal taxation comes before all other considerations. I believe we have to address that question, we have to reform our tax system and we have to alter our tax system radically particularly for the underpaid and those in the poorer sectors of our workforce. However, our first priorities must be matters like job creation, unemployment, emigration and the breakdown of the health services. None of these issues has been addressed in this Appropriation Act or in the budget.
The basic thrust of what I have been saying is that there are no structural reforms in the budget, there has been no boost to the capital programme in any meaningful way. This is very serious in that major areas of infrastructure in the country are breaking down.
We are a peripheral country in Europe and we are trying to develop economically so it is important that we have a road structure. It is well known that the county road structure is breaking down. That is very noticeably the case in my own constituency of Cavan-Monaghan where we have a very extensive road mileage. This is a critical problem. Just as county road structures are breaking down so, too, are arterial and primary road structures. It is acknowledged by the Confederation of Industry and in most research surveys, that we have about half the speed of Europe when it comes to moving goods from A to B. That is a serious problem.
The question of developing a transport network, of developing a road system that would put us on a par with Europe, is not addressed in this budget. The NESC report specified roads as one of the really important areas for this country if we are to prepare for European integration and to compete properly in the European context. The failure to develop a transport policy. That has a number of implications in terms of the quality of life of the people, employment, development and our economic growth in Europe.
Another area that offered tremendous potential and was one of the areas the Government should have addressed in a very cogent fashion but have not addressed in this budget, is tourism. I believe tourism must be one of the major growth areas in the country at the moment for a number of reasons. There are growing signs that sun holidays are becoming less fashionable and that there may be medical evidence calling them into question. There is also the fact that Europe will be more integrated and that in a sense, we will be the Aran Islands of Europe, hopefully not economically but in terms of scenery. There is tremendous potential for tourism. This is an area that should be developed but has not been addressed in this budget. There is tremendous potential for cultural holidays, for the fishing industry and many other areas of tourism but we have not properly addressed this problem.
In the Appropriation Act, we have not addressed the question of our road infrastructure or the potential for tourism. There is an area of expenditure that the Government should immediately get involved with in a more radical way, this is the potential to expand the severely handicapped areas in the disadvantaged section of the country. I am told we are pushing an open door in Brussels if we are interested in taking this up. We can get 55 per cent funding in the severely handicapped areas. It is a known fact that most of the other money will go back into the economy fairly quickly in farm development and so forth.
There is a compelling case for expanding the areas designated as severely handicapped. A case in point must be my constituency of Cavan-Monaghan where we have population difficulties and we have difficulties with soil type, etc. Areas like the Fane Valley in Donegal and other areas with much better soil, better farming land, are included in the severely handicapped areas and only some sections of our area are included. I ask the Minister to take that on board and immediately put the case for expanding the severely handicapped areas to take in parts of my constituency. This could mean a loss of revenue for the people in my area if we do not take it up.
The area that has been discussed ad nauseam in the last week, with a lot of justification, is health. At the moment we are developing a two tiered health system in that we will have a health system operating through the private hospitals — the Blackrock Clinic and the Mater Private for VHI subscribers and those who are better off — and a different health system for those on medical cards or on the lower levels of income. I do not propose to labour the point by going over this ground again because it is acknowledged now that at this stage we need to take action.
There are people lying on trolleys in corridors in the Galway Regional Hospital. There is understaffing in hospitals and an over demand for hospital services. I know from political clinics that a tremendous number of people are waiting for long periods for hip operations, cataract operations and dental treatment. It is unfortunate that these issues are not addressed in the Appropriation Act.
The taxation issue has only been tampered with. We all accept that an adjustment of our taxation system would be an incentive to job creation. It is a conventionally accepted argument that by reducing personal taxation, particularly PRSI, we might improve job creation. We have missed that opportunity because there has been minor tampering with the taxation system on this occasion. I submit that an opportunity may have been missed here.
There is one area to which I would like to draw the House and specifically the Minister's attention to, and that is the under-funding of agricultural education compared with other areas of apprenticeship and post-school training. People who do ordinary apprenticeships with FÁS and other agencies get a weekly allowance but the same does not apply to green certificate students and people in agricultural colleges. The difficulty here is the capital value of the farms these young people are inheriting, and because of the critical importance of agriculture to our economy, it is very serious that young people are not being properly prepared for farming. There is no doubt that people who have done properly structured agricultural courses perform better as farmers and make a better contribution to the agri business generally, and to their organisations. For that reason the Government should look immediately at the question of funding for agricultural education and opportunities therein. That issue is not clearly addressed in the Appropriation Act.
The essential weakness I see in this budget and the Appropriation Act is that they address nothing properly in the sense that if you believe that income tax should be radically low, that we should have a 25 per cent band — I honestly have difficulty with total acceptance of that view at the moment — the budget disappoints you. If you believe that there should be massive improvements in social welfare — there is a case for that — then the budget is a disappointment. If you believe that the budget should have been a vehicle for job creation and reducing unemployment then the budget is a disappointment. Essentially, no matter what sectoral interest or particular lobby group you belong to or what per interest or economic theory you might have, there is no consolation for you in the budget. If you are a believer in the view that there is much more potential for corporation taxes and corporate taxation, that is not in this budget either so that effectively the budget was a nonevent. It would have been in the interest of the country if the Minister had said to the Dáil that he was effectively engaging in an evasive action on this occasion, that he was leaving things alone for the moment. This was a wonderful opportunity, at an early stage in Government, for radical initiatives but there have been none.
To return for a moment to the area of social welfare, the Appropriation Act and the budget do not address the questions raised by the religious superiors or the Combat Poverty Agency report. It would be petty of me not to welcome the increases in long-term unemployment assistance, but they are the only substantial social welfare matters in the budget. My view of the entire matter is that we are dealing with a failure in that nothing has been properly addressed in the budget and the Appropriation Act. No sector of society has been adequately satisfied, no new initiatives have been taken, nothing that is likely to stimulate economic growth has been done. We only have a holding operation and things have been put on "hold" for another 12 months.
It is the business of Government to do more than put things on hold. It was the business of the Minister for Finance to produce some kind of panacea for the country. He could have said he would cut taxes radically and hope that that would result in job creation. He could have said he would not cut taxes but would radically increase social welfare because he believed this would mean a redistribution of wealth. He could have said he would radically increase corporate taxation because he believed the money was there. He could have said he would initiate job creation incentives around the country.
My contention is that no such statements have been made, no policy decisions were made, no visionary line of attack has been adopted and it is just a cop-out exercise. That is a great pity. I hope the Minister will go back to the Cabinet and say that it is time something is done about emigration, health and employment that the inactivity be reversed and that the Government aggressively tackle these issues.
I would like to welcome the Minister here. I would also like to welcome the appropriations that have been presented to us. The first thing we have to consider in any situation involving the appropriations is the availability and the state of the finances of the country. I would like to congratulate the Government on the transformation which has taken place in this country's finances over the last three years. It has been an enormous improvement. Unless we have proper finances we cannot hope to carry out all the many very desirable measures that Senator O'Reilly and others have mentioned.
We have transformed our finances. We have come a very long way. There is still some distance to go and it would be very foolish at this stage to relax, in any way, the measures which have proved so very successful. It is very pleasant now to visit international financial centres in London and elsewhere and see the total change in attitude which people in positions of responsibility there have towards this country. From being a source of concern we are now a source, to some extent, of envy. I would like, particularly, to congratulate the Minister for Finance, the Taoiseach and the Government for their support of the new financial services enterprise here in the centre of this city. It is proving a tremendous success.
I would like also, while we have with us the Minister who has been so involved at times in maritime environment, to pay tribute to the steps being taken in this respect. In Dún Laoghaire we are pleased to see that the Dún Laoghaire Harbour Bill will be before us shortly and that an interim authority has already been established.
In order to combat poverty, to deal with unemployment and emigration and to deal with health or, perhaps the most topical of all issues now, the environment and all its aspects, the first thing we have to do is to get our finances right. Otherwise it is all just so much airy fairy talk. Some consequences of foolishness can be seen in many countries. Inevitably, at the end of the day, poverty would become far worse and we would have no hope of dealing with unemployment if we do not get our finances right. Emigration, which was spiralling, is reducing again.
With regard to our health services I would like to congratulate the Minister for Health on doing a fine job. I particularly appreciate the way he is supporting the new hospital in Tallaght. This was a very badly needed hospital for Dublin and in particular for Tallaght. He is doing a very good job given the limited finances. Without those finances he cannot possibly provide the sort of health services we would all like to see.
One other small aspect issue I would like to refer to is associated with the environment and with our natural resources. I am delighted to see that appropriations of a far more generous nature are being made in relation to forestry. It has been one of the terrible deprivations of this country which was once a very beautiful well-forested country. Those forests, over the century, were devastated. Now at last we are beginning to get them back on some sort of serious scale. It is particularly nice to see that the trees will be broad-leaf as well as conifers, on which, perhaps, there has been a little too much emphasis.
We are in a time of very great change but one thing does not change: the necessity to get the finances of the country right if its economy is to have any hope of succeeding. We have many natural resources. Perhaps our best resource of all is our people. Irish people have shown themselves well able and capable of competing and succeeding at the highest level throughout the world. We must encourage the conditions which enable them to compete and succeed in this country. Our recent budget and the Government's other budgets which it has followed, are providing the necessary financial basis for that advance. I join in congratulating the Government on the budget.
I am a newcomer to this Chamber and I am only finding my way around. I am finding it quite difficult to understand what is going on, what is relevant and what is not. I am not sure what is relevant today. My name went down to speak so I will speak. I am told by my very helpful colleagues that one can more or less talk about anything in relation to tax and the budget.
I could range over a great number of things but I suppose it might be better to concentrate on one thing about which I feel particularly strongly. I will be talking possibly in the context of a Senator who has been a member of Dublin Corporation for the last 15 years. I would like to say something now which I did not get an opportunity to say at our council meeting on Monday night, the reason being that the council meeting got out of order on a number of occasions, the Lord Mayor, unfortunately, apparently being unable to control his own rather rowdy members. I had wanted on that occasion to pay a compliment to the Department of the Environment, to the Minister for the Environment, and indeed to the junior Minister, Deputy Mary Harney, for the new environmental protection steps which they are taking. I welcome them, particularly regarding the whole question of smog as it affects Dublin. It is relevant, since we are talking about the Appropriation Act, that the Minister said on that occasion they are putting aside £1,000 million for this whole area of environmental protection. This is something which I greatly welcome.
It is fairly well known that over the 15 or 20 years I have been in public life it has been one of my passionate interests and endeavours to heighten the awareness of the importance of the environment. Politics is often very frustrating but I have found a certain personal satisfaction in realising how much progress has been made over the years now that we have that document which was produced to us and which is in many ways very comprehensive. It deals with a whole range of things like smog, sewerage, the problems created for the environment by agriculture and problems with fish farming, etc. I hope the Government are serious, as they and the Taoiseach seem to be. He wants our Presidency of the EC to be known as a green Presidency and I greatly welcome that as an image which is extremely important for this country. We have that image, but if we are not careful we will lose it. With this initiative we can keep that good image which we have abroad.
It is very important for the country in a great number of areas and particularly for tourism, which was mentioned by one of my colleagues. It is also important for the future of our food industry and our agriculture. I hope the Government will stick with it. It is easy to get up, have a press conference, launch a programme and talk of spending £1,000 million, but it is not so easy when you get down to making the though decisions and the unpleasant about saying "no" to dirty industries or taking tough steps, with, perhaps, the farming organisations, etc. I hope that will be done and that we will maintain the good image we have.
With regard to the city of Dublin, since it appears that the environment aspects of the city are being tackled, there is one important issue now outstanding in the city which is particularly of concern to me and which has not been tackled. The Government, in my view, are continuing down the wrong road. Dublin Corporation are going down the wrong road. I speak of the area of transportation. I believe it is now the one most important area which has not been seriously considered and where the wrong decisions, as far as I can see, are still being taken. If I am incorrect and if the Government, the Minister for Tourism and Transport and the Minister for the Environment have other thoughts which have not come to us yet, I will be very happy to know there is a change of heart.
The reality is that there is now a proposal, which I know has Government backing, to spend £200 million on the eastern by-pass. That is what I call it. The name of it has been changed on a number of occasions but basically it is the eastern by-pass we have heard so much about, which was thrown out by the democratically elected representatives of this city when the 1980 plan was being adopted, but which is back again virtually the same but under a slightly different name.
The 1971 development plan has no less than 47 major road proposals for the city of Dublin. The 1980 development plan had 61 long-term proposals and 115 short-term proposals. That adds up to the staggering figure of 223 altogether. I would ask the Minister if we could have even an informed guess as to what those proposals have cost the taxpayers. I do not only mean how much it has cost to lay the tarmacadam and do the basic building of the roads. I would like to know, although I do not believe anybody can tell us, what has been the cost of the acquisition of property down through the years, going back to 1971. It is some absolutely staggering figure. It is rather like bovine tuberculosis — the problem has not been solved. Everybody seems to be in agreement that the problem is getting worse. The traffic problems in this city are not improving. People must face up to the fact that we have spent some staggering amount of money, which I unfortunately am unable, with my best endeavours, to even hazard a guess at and that situation is not improving. In fact, it is getting worse. That seems to be generally accepted.
What we must now recognise, face up to and admit is that we have made mistakes and have been implementing the wrong policies. As long as we continue to implement those policies, we will not solve the problem. What capital city has solved its traffic problems by building more and more roads? If you think of that figure I gave of 223 proposals for the city of Dublin, it has, of course, resulted in untold damage to the city. It has led to widespread dereliction, decay and to very unsavoury sites in the city. The situation at the moment, if one cares to look at the road reservations, is still extremely serious.
Are the Government seriously asking that another £200 million be spent on the eastern by-pass, when there is not adequate funding being put into a balanced transport system? The Minister may say I am a member of Dublin City Council and ask why I am not taking the blame for it. I blame the corporation for the areas for which they have responsibility, where they have made mistakes, but unfortunately the transportation system is a three-legged stool, so to speak. There is the question of roads but there is also the whole question of public transport and enforcement of the traffic regulations.
The problem for Dublin Corporation is that we are the roads authority. We can build more and more roads if the Government give us the money, but we cannot have any adequate say in the public transport area. There is nothing that we can do. There is now nothing we can do about the enforcement of the traffic regulations. This is why I appeal to the Minister and to his colleagues to tackle these areas and to ask if we are pursuing the right policies or has the time come for us to admit that the mistakes have been made, to cut our losses and now to put our resources into public transport.
Recently I interviewed Lewis Clohessy who is in charge of the arrangements in respect of Dublin as the cultural capital of Europe in 1991. I was interviewing him for an article and I asked what did he think was the single most important thing for Dublin coming up to the 1991 cultural capital year. He said, to my amazement and great joy that the single most important thing that could happen to Dublin and the best present they could be given to Dublin would be an enforcement of the traffic regulations. There is a great deal more in that than there appears to be. What he is saying is that this city, as a great, fine cultural city which is to be the cultural capital of Europe in 1991, has been and is being destroyed by the lack of enforcement of the Traffic Regulations, by cars being allowed to choke up the city, to make the air filthy for people to breathe — the noise, the tension created in the city, people parking where they want to, blocking up clearways, blocking footpaths, so that women with children in prams cannot walk freely on the street, so that people who want to come in and enjoy the city cannot do so. The whole new approach to urban life is that it should be an enjoyable experience but this cannot be so as long as the traffic problem is as it is.
I do not think it is a question of money; it is simply a question of political will. The Government should ensure that there is the kind of enforcement which would cope with this problem. I accept that the corporation have responsibilities which they are not living up to. Senators may be the first to point the finger at me and ask what are the Corporation doing. There the areas where we should be doing things. We should be stopping all the illegal car parks on vacant lots around the city. There is a great range of things we should be doing but we need to get together.
I asked that the decision would not be taken to include the eastern by-pass in the draft development plan until we had got together — the corporation, the Minister for the Environment and the Minister for Tourism and Transport — and thrashed out a balanced transportation policy. I am not, as it may appear, totally against every road proposal, but it is fair to say that if 223 of them have already been made, we have done quite a bit and we have to look at other areas. I would ask that that £200 million, put aside for the eastern by-pass, would be looked at again and that we would consider what Iarnrod Éireann, Dublin Bus, DART and all these other areas need. We were told that DART costs far too much and that it could not be extended. We were told to scrap the link along the Liffey between one station and the other. In my view, these things are only peanuts beside the real cost the roads are gobbling up in the way of finances at the moment.
There are other things like cycling facilities. We cannot even afford simple things like ramps to stop traffic speeding through residential areas; they cost £2,000 each. We are told we cannot afford them to save the lives of children playing in small back lanes and mothers trying to walk children to school. There is not enough money. There is never enough money for those sorts of things but there is never any shortage of money when you want a few hundred million to build another road. While welcoming very genuinely from the bottom of my heart the steps taken by the Department of the Environment with regard to the environmental matters, they should now turn their attention to this whole area and come up with some concrete, worthwhile, innovative solutions. I do not think it is ever any shame to admit that we have made mistakes. Things change, policies change, attitudes change and I do not think there is anything wrong with saying: "Look, we have made mistakes and as quickly as we can, let us get on to the right track".
I agree with my colleague who mentioned the whole area of tourism. The tourism potential of this country is only waiting to be opened up. The allocation for tourism in the budget is rather modest. Suggesting supplementary budgets later on is not a very satisfactory way. When I was Lord Mayor I travelled abroad a great deal assisting Bord Fáilte, as every Lord Mayor does, in promoting the city. They need a great deal of forward planning and I do not think they should be lurching from one financial crisis to the other. Money spent developing tourism and Bord Fáilte being given the sort of money they need to promote Ireland abroad can only be money well spent. They have to plan ahead. Here again I compliment the Government, and the Taoiseach especially, for their vision in promoting tourism and in seeing its potential. It is up to every one of us to assist with that and to do whatever we can to ensure that the tourism potential of the country is maximised. On this issue the whole environmental question is extremely important.
Cultural tourism is one of the great things of the future and this country has a great deal to offer in this area. We are a very old and a very historic country, but there is a whole chunk of our culture that for years was neglected. We wanted to decry the 17th and 18th centuries for political reasons because we were under domination. We did not want to accept what an important part of our culture that was. Fortunately now that has changed but we still are allowing great numbers of the fine 18th century houses to be destroyed. I would ask the Government, in view of their enlightened approach to the whole tourism area, to look at how important these are. When these magnificent houses and buildings are gone they are gone forever. For discerning tourists — and I understand that is the sort of tourist we are looking to attract to this country — there is no great appeal in going to an ugly, soulless, characterless, modern hotel. What they love is to go to the Irish country houses. We have a great number of them that are doing a very good job, but we need more. The Government should look with great sympathy and with great generosity on the efforts being made by people, sometimes in very impecunious circumstances, to try to ensure that this part of our heritage is maintained. I do not think they get enough by way of tax incentives and tax breaks. Very often these places can be seen falling into ruin. They are and could be a very important part of the tourist potential of the country. I might just mention that as one specific.
I would like to make a few references to the Structural Funds. I suppose we are all overjoyed by the moneys that are coming to the country under the Structural Funds. As I understand it, the basic purpose of the Structural Funds is to make this country competitive so that in 1992 we will be able to compete with the other areas in the European Community. We have problems and the Government are tackling a great number of them with great enthusiasm. In a recent history of Ireland by Professor Lee, which has been much publicised, he speaks about the lack of success which we have had since the foundation of the State at developing our economy. In fact, he goes so far as to say that it would have required quite a lot of effort on our part to do worse. I am not sure that the reasons for that result are very clearly addressed. In the context of the Structural Funds this is extremely important.
Another speaker said earlier this morning that it is not simply a question of throwing money at problems. Senator Honan said in regard to the health service that it was not the Minister's fault, there was plenty of money there, the problem was the money was not being used properly. I do not know whose task it is, if it is not the Minister's, to see that the money is used properly. I would have thought that was the Minister's job. The same applies to the Structural Funds. It is not sufficient that we simply throw money at areas and hope that problems will be solved. It also requires fundamental changes in the approach of Government, of bureaucracy, of civil servants, to the way they treat in particular local government, local organisations, voluntary organisations etc.
I have been a community councillor for many years; I have never been in a political party. I was involved around the country last year in the Tidy Towns Competition, and there is nothing which more stimulates local initiative and gives people an opportunity to contribute on a voluntary basis. The fundamental problem is that we do not have local government. We do not have initiatives. We do not give local groups, local councils, the opportunity to take initiatives. We all know we are the most centralised country in Europe. We like to keep tight control. We inherited it from the British when they needed to keep this unruly country in order and everything was centralised. We have not got away from that.
Compared with the other countries in the European Community, we have a stultifying centralised system. If that continues I do not think it matters how much money we throw at these problems, they are not going to change. Politicians have an extremely important role to play in creating the environment in which local initiative will have an opportunity to develop and people can make a contribution, whether it is on a voluntary basis, a business basis, a commercial basis or whatever.
The one thing I am not allowed to talk about today — tax — has an important part to play. There is also the question of attitude. I am so new here that I am not sure how the system works but is it possible to have replies to anything? I understand there is a committee being set up with regard to the reform of local government. There are even rumours that the local elections are to be postponed until this problem has been sorted out. As long as I have been interested in local government, and that has been for 20 years, there have been talks about doing something but nothing has happened. Many years ago Fianna Fáil published a document on what should be done, but it is sitting on my shelf at home, the same as it is sitting on everyone else's shelf, and nothing has been done. We must tackle the whole question of local democracy, local reform, and give local councils subsidiarity, where the attitude is that all local decisions can be taken at a local level and decisions are not taken at a higher level if they can be taken at a lower level.
The problems with regard to the health services have been aired in other Chambers but I have no doubt that if subsidiarity was rampant, as it should be, and if it had been for some time, we would not have the problems we have with the health services at the moment. If we had subsidiarity in these areas, local people would not be kept in the dark. Information would not just be kept in civil servant's offices but people would be told about the problems and encouraged to identify the solutions. They would be told there are problems and that there is a cake of a limited size which has to be cut up and shared around. If local people are given the facts about a problem and asked to make difficult decisions, they are quite prepared to make them in a mature way. They resent politicians making decisions which they may believe are for party political interests.
A Senator referred to Senator Honan as saying that she had now come to a stage where she put country before party. That is a most horrifying admission. To say that she was not always putting country before party is monstrous, but that is the impression that people have of politics and of politicians. If we had the sort of local government and the reform of local structures I speak about, people would know much more about what is going on and would be able to assist politicians to make the right decisions. If possible, I would like to know if there is any movement or any progress about setting up the committee to discuss local involvement or is it just going to continue to be talk?
In common with my colleagues, particularly on this side of the House, I would like to acknowledge the success of the Government's economic policy over the last two and a half years. Despite the obvious problems in our society in specific areas, it is heartening to note that the overall thrust of our policy has resulted in some major economic milestones and achievements which have been aspired throughout this decade are now beginning to bear fruit. I speak, of course, about the reduction in the inflation rate, the reduction in the interest rate relative to our largest trading partner, the UK, where we are 4 per cent below their current interest rates, and the superb results that have been achieved by our exporting companies throughout the world.
There is an old saying that "accidents don't happen, they are caused"; equally, economic policy and the success of economic policy does not happen — it, too, is caused. The results we are now witnessing are mainly due to the concentrated efforts of this and the previous Administration in fuelling the engine room of the economy.
Having acknowledged the success of our economy, I would like to return to a them I picked up during the Appropriations debate last year. I said then, and would like to repeat, that many of us are extremely disappointed that the private sector has not responded more adequately and more positively in the economic environment that has been created by this Government. I am talking specifically in the area of job creation. I share the opinions expressed in this House and outside by commentators, particularly those in the trade unions who have a legitimate point of view in this area. It seems difficult to accept that when a Government create the proper environment for investment, when they accommodate the private sector to such an extent as they are accommodated, our employment rate should not have increased or, conversely, that our unemployment rate should not have been reduced significantly. When one looks at the economic indicators for the EC as a whole, it makes sorry reading to find Ireland still in the lower half, and substantially in the lower half, of those member states who still have a serious unemployment problem.
The State is carrying out its functions in creating the proper environment. The results from the semi-State bodies, whose annual reports have come our way in recent months, indicate that they, too, are playing their part in helping to develop the wealth of the country. Therefore, I would suggest to the Government that perhaps the time is fast approaching when they need to look at the advantages that have been built into our system over the past 30 years of our industrial development, advantages which are accruing to the private sector in the area of grants, tax breaks and all the other paraphernalia of the modern state in a social democracy and that they should perhaps, fire a warning shot across the bows of private industry that it really is past time they got their act together and started to put back into the economy, in terms of jobs, what they have been allowed to take out of it through the benign Government policy of successive Administrations over the past 30 years, but especially in the last three to four years.
I am highlighting the unemployment aspect of the ongoing debate here on our economy because I come from a part of the country that is facing even more serious problems than it has in the past. County Leitrim, like many other parts of this country, particularly on the western seaboard, has had a long tradition of high emigration, poor infrastructure and lack of industrial investment. It is very difficult to tell a young school leaver, coming out of a second level college in County Leitrim that there are no jobs, not only in his or her own immediate area, but in their region and, quite possibly, in their country. So, the cycle continues.
I believe that the action that has been taken by this Administration on the economic front is the first serious attempt to break that traditional cycle of emigration. Jobs are being created on the periphery, in the regions, where possible. The IDA, against tremendous international competition, are doing a good job in attracting the type of industry and industrial investment to this country that fits in easily with our culture and our geographic locations. I am thinking, for example, of the increase in data processing companies that are setting up here and subsidiaries of major American insurance companies where an industry of that sort need only have a well educated young work force to set up effectively and efficiently. They do not have to set up in Dublin, Cork or in a major capital urban areas. They can set up, as they have done, in places like Castle-island, County Kerry. More recently there has been an announcement concerning Clonmel, County Tipperary. The major Irish companies, who are now increasingly major players on the international scene should start looking once again at their native country as an outlet in which to invest profits.
I welcome the policies of semi-State bodies who are in profit and who are now beginning to invest some of their profits — or at least are looking for ways of investing some of their profits — in local, indigenous industries. This gives me an opportunity to single out the Electricity Supply Board, one of the major players in the Leitrim-Roscommon area. Senators will be aware that a debate in this House as recently as last evening centred on the decision of the ESB to cease purchasing supplies from a number of mine owners in the Arigna area for use in the Arigna power station.
I would like to put on record how much I appreciate the initiative that has been taken by the Minister for Energy in this area. He has agreed to seek a deferral of the closure date from the ESB, which has given extra time to the local community. He has further agreed to continue to fund a geographical survey of the coal reserves in order to establish, finally and officially, exactly what the reserves of coal are in the Connacht coalfields. Further, he has agreed to consider adding a full-time secretariat to the industrial task force that has been set up in the area in recent weeks in order to speed up the deliberations of that august body.
I welcome these initiatives. I welcome them not only on their merits but because they will help to restore some faith among our people in that area in the art of politics. An old saying is: "politics is the art of the possible". If ever an example of that somewhat clichéd saying was in evidence, it was here in this House yesterday evening when the Minister took the initiative and made a significant contribution to what I hope will be a resolution of the on-going problems facing my area in the context of employment and industrial development.
I mentioned earlier how a number of semi-State bodies were beginning to initiate schemes at local level in order to identify themselves with their local communities. In this context I applaud the ESB for having committed themselves to leaving a legacy in the Leitrim-Roscommon area when, inevitably, the coal runs out in the Arigna coalfields. I would ask the ESB — and through them I would plead with the Government — to give serious consideration to putting back on the political agenda the idea of the location of a crow coal power station on the Slieve an Iarainn side of Lough Allen. The blueprints were drawn up. The feasibility studies were all done. The decision was taken in the early eighties to establish such a power station in order to mine the millions of tonnes of what is known as crow coal — coal which has a higher ash content than high grade coal, but which is in the Arigna valley in untold reserves. This would allow a continuance of the mining industry which has been established in that area since the middle of the 16th century.
This is not an idle plea to Government or to a semi-State body. If it were to be implemented it would mean that a group of people who are somewhat unique, the mine workers, would be able to continue operating their trade. Research has indicated that mine workers worldwide are extremely difficult to retrain and adapt to new or different industries other than that to which they have become culturally and other wise attached. Indeed, a comment from a schoolmaster colleague of mine in the area indicates that even in the current generation children of mine workers find it difficult to adapt to the strict regime and discipline of industry outside their own working environment, to wit, mining.
At a time when the ESB have stated in their annual report that in anticipation of an increase in electricity demand through the nineties as a result of rising economic tides, they would again have to look at investment in capital projects, surely there is a case for a serious reexamination of the original promise to locate the crow coal power station in the Arigna area. It is, after all, a natural resource. Why should this country allow itself to be increasingly dependent on outside forces for its fuel supply? While I have no wish to draw it into a controversy over the Moneypoint power station, it is increasingly likely that as the decade progresses more and more of our fuel supplies will be coming in through Moneypoint which in itself is not an unhealthy development. Of course, they will need to improve the environmental nature of the Moneypoint facility to make it even more healthy, as I am sure the Minister of State will readily recognise.
In that context it is heartening to note that the Government are committed to spending over £7 million on environmental development in that area. The point I am attempting to make is that because of the huge capacity of Moneypoint, which is currently operating at 60 per cent capacity, it seems likely that, as demand increases throughout the nineties for more electricity, more and more of our coal will be imported.
That particular point, I believe, should be addressed by the Government. Should they not encourage the development of an indigenous coal industry, even though I will admit that the provision of a crow coal station is an expensive commodity? Where does expense end and obligation begin for any government? Which is it better to do, to spend an estimated £3 million per year maintaining Government subsidies — because after all that is what social welfare is about — over an infinite period, or develop an industry which will not only give people jobs and welfare but will also give them dignity? Nobody likes handouts. Indeed, the cry of the Arigna protest action committee is: "we do not want hand outs; we want hand ups".
I do not want to dwell too long on the question of industrial development in my own part of the country. I want to avail of this debate to highlight once again the seriousness of the problem facing the particular region I live in, in which I wish to raise my children and in which I intend to spend my time. Consequently, I have an emotional attachment, like anybody has to their home area. I would like, like everybody else, to see it do well and to prosper. I am so concerned at the imminent closure of the mining industry and the subsequent loss of 250 jobs in an area which traditionally has not been able to attract industry that I believe the pressure must be maintained to ensure that a viable alternative industry will be provided.
In that context, I should also like to request the Government to consider sympathetically the location of a wood pulp processing plant in the Leitrim area. Over the last 12 months, three consortia have indicated that they wish to invest in a wood pulp processing plant in this country. The Government have gone on record as saying that there are now sufficient trees maturing in the north-west region of the country to justify the location of such a plant. Unfortunately, all three consortia have indicated in recent weeks that they do not wish, for one reason or another, to proceed with their plans.
It is important for me to put on record that of the three consortia only one carried out a feasibility study, aerial survey and on the ground investigations. They eventually stated a preference for one area in Ireland. That area was in the Carrick-on-Shannon/Drumshanbo region. Due to a corporate decision taken at boardroom level by the American side of the consortium, shortly before Christmas, a decision was taken not to proceed in the short-term with the development of such a facility. However, the important point to note is that of the three consortia, the one that did state a preference that was for my part of the country.
I am sure the Minister is very well informed in this area, but for the record, I should like to say that the provision of such a wood pulp processing facility in any part of Ireland would, for the first time, bring on stream the maturing trees which are now increasing in abundance as a result of the Government's forestry programme. This is to be welcomed. It means that we will not only be able to cease dependence on outside supplies but we could become a net exporter which would help the economy generally.
On a local level, the provision of such a wood processing facility would mean in the building phase — according to the best information available to me — almost 400 jobs. It would mean in its eventual operating phase, 250 jobs, with up to 1,000 jobs downstream. These would be in the area of transport, administration, despatch, etc. Such figures in a county that has a population of 26,000 would indicate heady days ahead. It would mean, that the future of our region would be saved for all time.
I would respectfully suggest in this debate that whatever influence can be brought to bear should be utilised at Government level to brief the Industrial Development Authority that, in any negotiations they enter into with would be entrepreneurs wishing to set up a wood pulp processing industry in this country, the preferred area of the Government would be County Leitrim/North Roscommon. I believe that this would be important psychologically to the area and any would-be entrepreneur wishing to set up here in dealing with a State agency and expecting State grants and incentives, would be amenable to such a suggestion coming from the Government.
Before I conclude, I should like to turn to the area whose brief I hold here in the Seanad — that of tourism. Tourism and industrial development are interlinked anywhere you go in Ireland. It would, perhaps, be too parochial of me to suggest that my part of the country has any greater claim to tourism development than perhaps even the Minister's part of the country, in Clare or anywhere else.
However, the Government have recognised tourism, with agriculture, as the single largest input into our economy.
Consequently, the commitment of the Government in the area of tourism is to be welcomed.
The development plan for tourism, 1989-1993, published last year has already started to bear fruit. The Minister for Transport and Tourism, Deputy Seamus Brennan, announced publicy only some weeks ago the specifics of the multi-million pound investment plan for tourism in Ireland. Here — and I am being parochial — it is important to put on record the satisfaction that has been felt in tourism circles in the Border counties at the commitment of the Government to invest over £15 million of Structural Funds in the development of the Ballinamore-Ballyconnell canal. The significance of this development has yet to be seen. I have no doubt when the canal is finally opened in 1993 that the benefits that will flow from that locally, regionally and nationally, will be of such a magnitude the people will be asking why we did not think of it before. I commend the Government for taking the intiative in this cross-Border project which will not only be of benefit to our part of the country but will have benefits also to our Northern neighbours. I hope it will also be seen internationally as a gesture of hope and conciliation for the future, in that both sides of this island can work together in a common interest.
The development of the Ballinamore-Ballyconnell canal will impinge very much on where I live. It will impinge are such an extent that local interests are increasingly becoming vocal on the development of the Lough Allen canal. It is vitally important that the Government recognise that once the Ballinamore-Ballyconnell canal project is up and running it would be economically insane for them not to give serious consideration to funding the reopening of the Lough Allen canal. The canal, which was closed by the ESB in the Thrities in order to hold Lough Allen as a reservoir of water for the power station at Ardnacrusha, is of such importance not only to the county but to the region and to the country that I believe it is only a matter of time before this canal is reopened. However, the momentum must be maintained. I see my role in this House as a representative of the people in my area as helping to maintain that momentum and taking any opportunity I can publicly to impress upon the Government the importance of the development of that canal project.
I would also like to suggest in this debate in the context of tourism that the Government might give consideration to legislation covering unregistered bed and breakfast accommodation. I am aware that this is a sticky, sensitive subject. Coming from a tourist area — and anybody listening to me who comes from such an area will understand this — I have a great deal of sympathy for people who spend their own money on providing bed and breakfast accommodation. They plough profits into their own businesses in order to maintain certain standards. They register with Bord Fáilte and that implies maintaining a particular standard in their houses. This requires money, and the money usually does not come from State sources in the main. It comes from the people themselves.
I have a great deal of sympathy with those people when they then point out that their neighbours down the road can stick up a bed and breakfast sign at will but fail to return income tax or to pay any VAT. Most important of all from a tourist point of view, they fail to maintain the standards that are being set by Bord Fáilte. Ultimately when the people who, for reasons best known to themselves, stay in those unregistered bed and breakfast locations, do not get the service they expect they will return to their native countries criticising Irish tourism standards. It is in that context that I add my voice to the many others on this subject. The Government should give serious consideration to legislation in respect of bed and breakfast accommodation. One could then only get a licence by being registered and paying the various taxes that are due. It is not so much because of the opportunity to make more money for the Government that I am raising the issue but in order to maintain standards across the industry. Such standards are being excellently maintained by those who go to the trouble of registering.
In the recent budget the Minister for Finance announced that while looking at the activities and action of the business expansion scheme he has decided for the moment to leave things as they are. I welcome this because the amount of development in the hotel industry that is taking place, not only in Dublin but in various other parts of the country, cannot have gone unnoticed. It means that the development of these facilities will help to increase Dublin's and Ireland's status in the world. Those of us who travel — and Ministers particularly will be aware of this — know that when one looks at the hotel chains of the world or at the conference centres of the world Dublin or Ireland rarely features. This is primarily because we are under-developed in this area. The opening of the Conrad Hotel in Dublin has gone some way to remedying that situation. There are many other multinationals who are giving serious consideration to coming into this country and locating their major hotels here. This is bound to have a spin-off effect by bringing more people in a specialised market such as the conference and business area, into this country. These facts are already well known. In the context of the Minister's Budget Statement about the BES scheme, the importance of the workings of that scheme in hotel and tourist-related development should not be lost. I hope that when the investigation is completed it will not in any way hinder the ongoing development of tourist facilities.
It would be remiss of me if I did not, in the context of Ireland's Presidency of the EC, welcome the Taoiseach's and the Government's commitment to improving the environment. It was a brilliant initiative on the part of the Government and the Taoiseach to highlight one particular issue during the six months' Presidency. It had to be an issue that would be achievable and attainable. The Presidency is a rotating function. We are one of 12 member states. We have something like 2 per cent of the population of the EC as a whole. Our influence as a country goes far beyond our position on the periphery of Europe. Therefore, to take on board for the six months of the Presidency an issue which is so germane to life across the member states and to indicate certain specific commitments that will be undertaken during the lifetime of the Presidency and beyond, can only be welcomed and commended, and I would like to do that. One can only hope that the targets which have been set by the Taoiseach and the Government in this area, if they can be met within the six months, will become part of a rolling programme of development over the next two to three years, leading up to 1992, so that Ireland will truly be able to say to the world that we are a green and pleasant land.
Judging by the contribution of Senator Mooney, we can now change the pharse "whom are you neutral against?" to "whom are you parochial against"? It was a bit weighted in that direction. I was wondering whether we are representing Leitrim or whether, in fact, we are here to represent the country as a whole. I hope it does not affect our transfers.
We are in a very tricky situation at the moment. I hope the Irish Congress of Trade Unions in their deliberations today do, in fact, decide to continue the Programme for National Recovery. That having been said, the point must be made that if that decision is made, then we must get down to talking about a new phase of the programme. In this new phase the people who have made enormous sacrifices in 1987 and 1988 must be assured that the increased prosperity will, in fact, be translated into more jobs. That is the real key to getting Congress to row in behind us. At the moment one of the reasons that there are doubts about how the decision might go — it is not only the question of the Northern Ireland delegates — is that there was a growing feeling in the trade union movement that those who contributed most to the economy, as usual, were benefiting least from the recovery. We cannot say that nothing has been done to alleviate the problem but progress has not been sufficient to do the job that the Irish Congress of Trade Unions wanted it to do. I hope, for example, that when they do enter this new phase of national recovery the question of sharing the benefits will be clear and definite and that it can be seen to be equated right across the board.
It is not a question of Congress demanding that the purse strings be opened and more money thrown at the country just to solve the problems, but nevertheless they have made a great contribution towards removing the millstone of the national debt. Therefore, they are entitled, on behalf of their members, before they enter into the next phase, which I certainly hope they will do, to talk in very definite and hard terms about the question of jobs, tax reform and, of course, the reduction in the level of poverty in society.
As I said, I hope that Congress will make the decision to enter this new phase today, but those things have got to be borne in mind. It is a new phase and they are entitled to get a little bit more out of it on the next occasion than they did on this occasion and at the end of the nineties the whole question of job creation should be very much a priority because in the long run if you want to ease the poverty in our society everything will stem from jobs.
With regard to the Appropriation Act, from the point of view of the trade union movement it would be true to say that the Government did have regard to those things that are nearest to the hearts and the objectives of the trade unions as a whole. I would list those as follows: the achievement and maintenance of full employment; the steady rise in living standards; equality of opportunity; a fairer distribution of income and wealth; the elimination of poverty; comprehensive and adequate welfare services and an improvement in the quality and life of the environment. It would not be correct to say that no real effort was made in the budget to bring those things to a stage where you can make greater improvements in those particular areas, so I will not go overboard in being critical of what has happened. I will look on it as a beginning, and that is why Congress should enter the new phase of the national agreement to keep it going.
When I consider the moneys that are given to State agencies to create jobs, I always worry about whether we will ever get this real, good beginning. One of the problems about a lot of money being allocated to State agencies, etc., is that the beneficiaries of State agencies, for the greater part, are in fact private firms and they only respond to profit and tax and grant incentives, etc. In other words, even the larger of those private firms will avoid the undertaking of the major long-term investment required to build up the sort of large scale operations and the technology and marketing strengths necessary for success. They tend to go for the more attractive investment outlets in sheltered industries such as property, services, Government securities, investments abroad. Most Irish firms are simply too small to undertake these major long-term investments in the high productivity industries. When we consider that very substantial amounts have to be provided by the taxpayer through State expenditure and assistance for industrial developments, we must be entitled to insist that this State expenditure must be tied closely to meeting the job creation targets.
Government policy seems to put the emphasis on an increase in output rather than on job creation. I do not think this is deliberate but that is the way it happens. This is obviously wrong, because the share in manufacturing total employment in Ireland is significantly lower than in most, if not all, of the OECD countries. Therefore, the scope for a substantial increase in industrial employment is there, but because we do not look at it correctly and concentrate too much on the productivity, and hope that the productivity will have spin-off jobs, it does not work that way. It has not worked that way and it makes us productivity-conscious as against being job creation conscious.
I believe we have to look beyond the IDA's approach. They seem to sell Ireland as an attractive place in which to put a little part of a multinational. The numbers of new jobs occurring as a result of this seem to be somewhat exaggerated, particularly so when the failure rate is fairly high.
The policy of increase in output of manufacturing industries rather than aiming at job creation is not a great strategy. What happens is that there is a hope, if you like, and no more than a hope, that increased output will create these jobs that I was talking about earlier, that because of this strategy, where you lose jobs through rationalisation, productivity, work study schemes and so on, jobs elsewhere would be created, particularly in the service sector. I do not think we can accept this any more. If the Irish Congress of Trade Unions are to convince their members to become involved in the Programme for National Recovery, the best means of doing that would be to get jobs created and have this as one objective. The emphasis must shift to job creation, and I could not emphasise that strongly enough. I say that bearing in mind that we are in fact a developing country. We cannot afford to allow huge sums of State money be given in incentives and grants for the main purpose of profits. If we are going to rely on a strategy of higher productivity in the vain hope that jobs will result, we are only codding ourselves. It has not happened before and it will not happen through these agencies unless there is a conscious effort by the State to create jobs.
Most of the growth in employment in the past has been in the public sector; but in recent years, of course, the cutback, particularly in education and health services, have been very high. This has affected the job situation, with no policy or strategy there to take up the slack. This is a pity because this is an area in which we have some expertise of reputation. The whole question of the decline in tourism earnings is also very worrying.
When you are talking about the prognosis for the coming years and having regard to your own objectives we, as trade unionists always have to say: where will the new jobs be created, for example, in the services sector? In the not-too-distant past more than half of the work-force was employed in the services sector and that remained the case practically through the decade, except that it started to decline as a result of the cutbacks in education, health, etc; not that it started to decline really but that it was very much aggravated.
Trade unionists are entitled to be sceptical about the offers of various Governments to tell them that the strategy they are following is a good strategy for the creation of jobs. I do not think in the services area anyway we are likely to get any significant increase because we are dealing with a whole mass of new technology now. For example, services such as the fast-growing information services are likely to provide some employment in Ireland, because we are really under-developed, not only in the economy, but in this particular area. They start from a very low base and they may not in the long-term help to increase employment.
I believe that if we are to solve the jobs crisis the public service must be allowed to play a major role in the process of job generation, and new areas for the development of public services can readily be identified. The areas where we have made cutbacks, such as life-long education, the provision of childcare facilities, community health services, public recreational facilities and other existing services need to be developed and particularly the education sector.
We have to go down the public road a bit more, because the history and the evidence is there that the private sector, either through an unwillingness, through the bad industrial strategy pursued by the Government or through their own bad marketing skills, lack of aggression or of enterpreneurial skills or something like that, do not seem to be able to do the job. That is not new. It is a historical thing. Do not forget we are talking about people who have had very attractive incentives for new industry. Millions upon millions of pounds have been spent on the private sector and certainly in my time it has never created sufficient jobs to keep pace with the job losses.
I know it is not an easy task, but it is absolutely clear to me that the enormous task we face now in creating jobs cannot be met by the strategy that is based exclusively on private enterprise. The question of the development of a more dynamic and more varied public enterprise sector is now urgent. It is not being provided by the private people. If it was, we would certainly give them more encouragement and back them up more but it is just not happening.
There is an urgent necessity for action now if the Government want to be faithful to their promises in the Programme for National Recovery. They have got to start getting into the public sector now and making it that much more dynamic than it is at the moment. There is a lot of inefficiency there. We all accept that, but is there not inefficiency in most of the private concerns? Is that not why they rationalise and look for new equipment and follow programmes of wastage, etc. The fact of the matter is that we should be looking at this public enterprise sector in a little more effective way than we have been doing. After all, both the Labour Party and the trade union movement down through the years have been strong advocates of the mixed economy. They have never made the case that public enterprise alone was the answer but that a mixed economy was the way to do it. But, unfortunately, there has been a sliding away from the question of the public sector. It is a bit frightening now to hear people talking about privatisation and this in a situation where the private sector has not shown any evidence that it can take up the slack of job losses through agricultural machinery coming in or any other agricultural improvement or any other areas where productivity is increased. They are just not able to take up the slack.
There is nothing wrong with the public enterprise, in co-operation and perhaps in merging together with private enterprise getting into this whole area of enterpreneurship. I feel greater efforts would show itself in results. To my mind, if people faced up to it, many of the larger firms could develop on the scale and with the marketing capabilities that are necessary to compete internationally. It would also show we were emphasising that we must move into the large scale, higher productivity industries, such as machinery, transport equipment, electronics, consumer durables, chemicals, technical instruments and highly processed food products etc. We can develop a special niche for ourselves in some of these areas, even if it takes public enterprise coupled with private enterprise to do it.
It can be done. The evidence is there in other countries where this is taking place. The evidence is there that the Irish private companies will not take the long-term major investments required to build up these large-scale operations. Therefore the State has got to be into the risk business as well. These private people will go the whole hog in the long term. That is the only way you can guarantee success and secure jobs and get out of this habit of merely allowing the private enterprise people to go for the sheltered sort of enterprises.
It seems the reason the Government are refusing to give a role to public enterprise is because they do not want the public sector to compete with the private sector. Possibly they are influenced by the fact that some of the major State companies have been experiencing major financial problems. We would be the first to recognise that the problems of some of the existing enterprises must be rectified and we have welcomed that where it has taken place. We could see the necessity for public enterprises to be looked at as well in the sense of efficiency, etc. However, we would also look at the overall picture where we have good experiences of places like the ESB and other areas of the public sector which have done tremendous work in providing jobs and showing enterpreneurship. In many cases they have been able to compete very well with the private sector where that was called for. Given the support of the State, they could go for long-term planning and perhaps work together with the private sector in partnership.
A lot of the problem in the State sector was due to the fact that they were always under-funded. The only way their request for capitalisation could be met was by State guarantee and by additional foreign borrowing. Obviously the State, because they are guaranteeing the borrowing, see there is a problem there and are nervous about it. There is nothing to be nervous about at all. The public sector is there. The other people have not done their job. It is only logical, to my mind, that, if you have two sets of people in the area of providing services or goods, then the people who have shown themselves to be effective in the services area should be encouraged to develop beyond that and move into the area of job creation and go into competition if necessary, or even into partnership, with some private people. That cannot be emphasised enough.
One of the problems also with the State companies and one of the difficulties that made some of them look a little inefficient here and there, was that there were many social obligations on them which were never clearly identified or funded. For example, many State companies down through the years were forced to purchase goods at uneconomic prices from the private sector and they were for a long time subject to stringent price controls. There was a lack of control by some of the management of the State companies over future plans, possibly due to Government interference. There is a case to be made where there was inefficiency but there is also a great case to show that many of them were efficient. Given the support of the Government and being allowed direct involvement in the public enterprise sector, particularly the high growth area and manufacturing, I feel that this natural resource based industry can do well and should be allowed into this sector.
Some politicians in recent years and some of the spokesmen in the private sector were calling for major cutbacks in public services. They were calling for the privatisation of particular services and a curtailment of the activities of public enterprises. They did not have regard to some of the points I have made, which I will not go over again. However, many people were listening to them, particularly some of the politicians who had not gone into the whole question of the role of the public sector and what it has done for the country. It is important to recognise that the expenditure on the public service goes overwhelmingly to provide for the health needs of the people and the many varied community, transport, security and local services. Without these services society would collapse. Yet we are very ready to enter the fray when it comes to the role of the public sector and to get out and to criticise it very harshly. If they did not provide those services how would you underpin the whole economic and social existence of the community? It would be very difficult. You certainly could not do it by the private sector alone. It is a very essential ingredient in the whole question of assisting the economy, particularly in regard to getting into the industrial manufacturing area on a much stronger basis with the support of the Government.
I will repeat it: I can see nothing wrong with the private sector and the public sector embarking on long-term industrial projects. On its own the private sector does not seem willing or able to do it. Therefore, it has got to be given a prod by the Government. I say that in all sincerity and in the hope that I am driving the point home on this whole question of job creation, which is a very major problem for the trade unions because every other thing stems from it. If job creation can be put right we start to think about poverty levels, etc. and the spinoff for the economy, consumers and community can be very effective. This is very essential. It is not a problem you can deal with by being a bit laid back and saying we always have had emigration. That has been the mentality down the years. That will not obtain any more. People just do not accept that any longer. I am not saying that everyone who emigrates emigrates because they have not got a job, but the mass of people who emigrate emigrate because they have not got a job. Those others who emigrate and have jobs do not have good jobs, or the jobs are not permanent, they are not realising their full potential in the jobs and therefore they go and look for other outlets. I am talking about over 200,000 people who have not got jobs and who would be willing to work in their own country.
We have had all sorts of people coming up with different solutions about job-sharing, etc. As a trade unionist, I certainly would have to reject job-sharing. It is not a strategy for combating unemployment. What you are talking about there is job splitting. That arrangement is where two or more people share one full-time job and share the pay and benefits between them. That will not create any new jobs. The number of jobs that would lend themselves to this type of arrangement would not be that plentiful. You would not get anything out of that and it would not create jobs. The real limitations on the application of a scheme for job-sharing make it meaningless in the context of creating jobs. Somebody comes up with this hare-brained idea and they think this is going to solve the job problem or else they use it as a diversionary tactic to tell you that something is being done about the job problem.
There is job sharing and work sharing. Work sharing is an aspect we could well look at in the context of creating jobs. That includes measures such as the shorter working week, the restructuring of overtime, the provision of longer holidays, leave for education and training, etc. All of these, collectively aimed at bringing about a reduction in working time for individual workers would, in fact, make a contribution to redistributing the amount of work available among a greater number of people. Job sharing will not work. It is not practical but work sharing might be one of the ways and I would not go overboard on that either — if people want to talk about job sharing. I heard it mentioned in this House before that we have, generally speaking, deterred Irish firms from investing in strong marketing and advanced technology. Frankly, I do not know what the relevance of that was. We need somebody to be more enterprising, more outgoing and more risk-taking in this whole question of investment and getting into advanced technology and high-powered marketing, etc.
I want to emphasise the matter of the biggest Irish industrial firms. It cannot be said often enough. They are heavily concentrated in naturally sheltered activities, such as building materials, print and packaging and basic food processing, as well as in low wage, easily entered sectors like textiles, clothing and footwear. There is little sign of indigenous firms moving into the larger scale, high productivity industries such as machinery, transport equipment, electronics consumer goods, chemicals and technical instruments, or the more highly processed food products.
We have had many White Papers down through the years and most of them have failed to outline a programme for the development of large Irish firms in these areas but these are the type of industries that must be developed in order to generate a wider-base for job creation. High wage employment and high value-added exports result. Reliance on the private firms responding to the profit moulds and to the tax and grant incentives will in fact fail to acheive the purposes of the Programme for National Development. That is why the public sector has to be brought into it in a much more forceful way.
We are concerned that the priority and the strategy are not right. It is time now, on the whole question of job creation, to give serious consideration to this whole strategy of how it is approached. There are problems standing in the way of developments, for example, in international trading, in the indigenous industries. These problems must be addressed to overcome some of the problems I mentioned earlier. Established industries in the advanced industrial countries have built up competitive advantages over relatively late developers like us. These advantages are so strong that they create, as was pointed out in many of the NESC reports, serious barriers to entry for newcomers in many manufacturing industries. That is why we say the State has to help people to get over these particular barriers. They cannot do it by allowing the private sector to keep taking up the option of getting into sheltered industries with somebody covering them in the sense of attractive incentives, tax and other grants, etc.
The only way to make sure that the commitment they have given to the Irish Congress of Trade unions is adhered to is to ensure that job creation is not only regarded as a serious matter but must be the number one priority in the Programme for National Recovery, even if the State has to change its present strategy to embrace public enterprise, give it the back-up and allow it to get into the area of industrial manufacturing, so that it can compete effectively with the private sector. There should be no fear nowadays in this world of competitiveness. Everyone stands up and tells us that the market forces will sort out everything. If that is the way the private enterprise people think why is there fear of a little more competition from the public sector getting into the manufacturing area?
I have covered the ground in regard to inefficiencies. If any remain, they can be tackled. I have given the reasons why some of them became inefficient. The Government have made their massive cuts in public spending, especially in expenditure on the social services. They should seriously consider ignoring calls for more cuts. Not only are we talking about the question of job creation, we are talking about the living standards of the unemployed, pensioners and other deprived groups in our society.
We are inclined to ignore a lot of things. The private sector, in the long run, receive more from public expenditure in the from of direct grants, subsidies and infrastructural services etc., than they actually contribute in taxation. For examples, if my knowledge is correct, I do not believe the ESB owe the State one penny. Even though they were forced to borrow at high rates of interest outside the State, they have paid their way and paid back all their loans. Other good examples are Aer Lingus and the entre-preneurships.
We have the people and we have the facts to tell us that the private sector cannot create sufficient jobs to take up the slack or the job losses caused through rationalisation programmes, increased productivity, etc., which most people go for in the hope that they will create jobs elsewhere.
Productivity does not do that. I have had the experience of dealing with the whole question of new technology, new schemes being introduced by Guinness's for example. Over a 20-year period, thousands of jobs have been lost not just by people employed full-time in Guinness's but by CIE, who got a lot of work out of it. Not only are there a few thousand people gone out of Guinness's but we will never see those jobs being recreated. I am just taking Guinness's as one example. A lot of State money went into Guinness's to help them provide the machinery, etc., which caused the job losses. There is no evidence there, even in that one example of jobs having been taken up anywhere else in the country as a result of the job lossess in Guinness's.
One particular firm in Tara Street, Richardsons, had about 30 lorries on the road, primarily engaged in delivering and distributing Guinness. Many of the distillery workers, who are only seasonal workers, were guaranteed a full year's work, but they are all gone. Some of the building contractors had an agreement that when there was no work in the building trade the casual list could take up many people but that is gone. That amounted to 232 people per day. That is just one example from the private sector. We have listened to all of the arguments that if you increase productivity there will be a spin-off of jobs created elsewhere but it has not happened. If it has happened why have we had large scale emigration and over 200,000 still unemployed? It does not stand up to examination.
It is not a question of ideology with me. I have always been in favour of the mixed economy and most of my colleagues, ordinary guys like myself, think in those terms. If a person has the entrepreneurial flair to go out and do something good, benefit himself, his family and the country and create jobs, good luck to him.
We are talking about the policy of the Government, their industrial strategy, the way they look at things and the problems they have allowed to grow through under-funding etc., in State public enterprises. This has made them abandon the whole idea of a mixed economy being the best, particularly in the area of job creation, because they are listening to a lot of people talking about privatisation etc. They are talking about privatising the beneficial parts and letting the State keep the rest and bear the losses. The Government owe it to the trade unionists. When I talk about trade unions I am talking about half a million people and the spin-off for their families etc. I am talking in a broader context than my colleague from Leitrim, who is certainly very parochial. I hope that my contribution goes a little bit wider than that, because I am talking about jobs in Leitrim, Dublin or wherever we can get them.
Something was done in the construction industry. The Government took a little hand in it and people were a lift up. They had suffered disastrously but they are starting to come back into their own again because they got encouragement. The same encouragement should be given and the same attitude taken about the public enterprise people. We should let them know that so far as we are concernced there is nothing wrong with them getting into the area of competitiveness but that we, as a State, will undertake to correct the strategy and lay down the right policies so that it can be done. We have got to do a little more than we have been doing. The economy has been stimulated, and it is being turned around successfully. It would be foolish to say otherwise.
The whole question of whether we redeploy resources is another matter and also whether the strategy is right. For example, in the case of the construction industry, we might need to have a look at some of the aspects there and see if the State's construction company could play an important role in modernising and improving overall efficiency in the industry. Direct labour construction units could be established by local authorities. Many of the people who were taken off the labour and put on the roads in the thirties were on direct labour schemes and it went on for longer than that. It is not a new concept and it can be done.
The timber supply industry has grown fairly rapidly in this decade. The important short-term priority, rather than talking about the long-term one at this particular time, is the development of a sustainable products industry. Forestry is of tremendous importance and forestry-related industries are also. A lot of the investment and initiative has, in fact, come from the State.
The State could be directly involved in a more forceful way here in job creation. In the past the trade union movement have made detailed submissions to the Government on forestry but now decisions have got to be taken in a number of areas. In the not so short term the shortfall in the State afforestation programme, has got to be made up. The harvesting and processing divisions will have to be established on a firmer basis. There should be a review of the forest and wildlife services. These things need appropriate organisation so that the State forestry sector and the spin-off industries can be more effective. Again, there is an area where the State can do a lot and give undertakings. If the State do not try something new or radical there will not be enough done by the private sector to take up the slack of the job losses that will occur throughout the next decade, particularly when we have stronger competition.
At the moment things look good but we have a long way to go. We are going to be up against very drastic situations. We can even have problems in the insurance field where there is nothing to stop a person from France setting up an insurance business here and vice versa. It is a question of whether we can get the people to go out as well as getting the people to come in. These are reasons why the State must have a change of attitude in their concept of the role of the public sector.
Fisheries is another area where major decisions will have to be taken. Senator McGowan will probably take up that particular point. Whether he agrees with me or not is another matter but he certainly could not disagree when we are talking about job creation. There is need for job creation and for a lot more protection for fishermen. In recent years there has been substantial State investment in modernising the fishing fleet and providing harbour facilities etc., but the fishing sector does not seem to have developed dynamically enough. I do not know if crisis is the right word to use. In order to adopt the fishing industry to a new phase of development the Government must develop a national policy for fisheries. I am not saying they have not got a national policy but they have to develop a strategic plan for the development of the different sectors. That should be looked at by Bord Iascaigh Mhara in consultation with the industry. Maybe they have done that but it needs to be looked at again with the emphasis shifting a bit. We are talking about product development, marketing and quality control. Bord Iascaigh Mhara should be given a key role in stimulating the production of quality fish products. Those are public sector areas. I will not discuss oil or gas as other people are waiting to make a contribution.
At the moment the decision is being made by Congress whether they will continue with the Programme for National Recovery. I hope they do. I would like to see them going ahead when this term is over. Having regard to the emphasis being put on job creation as a means to alleviate all the other social problems, it is going a good deal of the way towards alleviating the situation particularly on the question of poverty.
Everybody has had something to say about environmental services and the health services, so I will not bore the Seanad. I will leave those two areas alone. We cannot talk about putting things right in this country and letting the Third World go to hell as they are potential trading partners. We must think about job creation in its broader context. Even if our economy is not too healthy we cannot stand by and not do a little bit more for Third World countries. I am concerned about the official development assistance which has gone down by over 30 per cent since 1984. On television we see that in the Sudan, Ethiopia, Tanzania, Zambia and Lesotho their basic needs — with the exception of Ethiopia — are food production and water supply. We gave them £15 million in 1986 but now we are giving only £9 million. That is a substantial drop having regard to the cost of delivering these goods to meet their basic needs. We cannot go on indefinitely along this road. Let us hope that if the economy continues as it is at present, next year we will have regard to the fact that 40,000 children die unnecessarily every day from malnutrition and that we will have regard to the fact that we reduced our contribution to UNICEF drastically and our allocation to the world food programme. In fact we have halved it. These are very serious considerations. Even though our own people are in trouble we cannot ignore other people. We are the bottom of the overseas development aid list when it comes to contributions. We contribute one fifth of 1 per cent of GNP compared with 1 per cent of GNP from Norway, Denmark, the Netherlands and Sweden. All our contribution to official aid to the Third World in 1989 was equivalent to about 2.5 pence per person per day. This is not acceptable for social and humanitarian reasons. When we are talking about job creation, and the elimination of poverty in our own country, we cannot overlook the fact that when we make a contribution for the Third World we are helping the people there to help themselves. If they get sufficient help from all countries, new markets will be opened up. As I said, we have an obligation on social and humanitarian grounds to help them.
I welcome the opportunity to say a few words on the Appropriation Act which is a stocktaking opportunity for us to look at the progress of the nation. It is fair, without being on a political bandwagon, to compliment the Minister for Finance, the Taoiseach and the members of the Government who have steered the affairs of the country back to the point where the man in the street believes he has a future. That is the greatest achievement in the last number of years.
I support my colleague, Senator Jack Harte, 100 per cent when he highlights different areas; he might say he differs with me and others but I cannot see any difference. Job creation is the number one priority for any reasonable thinking person. I believe the Government have done what is necessary and have started on the road to create confidence. I do not believe there is a magic button you can press to build ten factories or 110 factories and provide employment. That is not the way it is done. It has been said time and again by members of the Government that it is important to create a climate where people can be employed and where the small employer, rather than shedding workers has enough confidence to take on two, three or ten workers. That is the area we must tackle if we are to succeed in providing jobs. The only way to provide jobs for our young people is to have the unions, the Government and everybody concerned constantly working together.
Senator Hederman said it is not a question of money but of how well you use the money. Everybody has a different idea. There is a great deal of expertise in the country. Every pressure group and every sector, whether it is the environment, tourism, or job creation, has simplistic answers. They believe if the Government spent money more prudently all our problems would be solved. My colleague Senator Hederman said this morning there was far too much talk, even though she is not in the Chamber I compliment her and say she is not at the bottom of the pile when it comes to talk.
I believe it is fair to encourage the members of the Government and to encourage Deputy Reynolds, who has been one of the best Ministers of Finance this country has had. He was very fair. The day after the budget he went on open radio and faced those who were prepared to be critical. He answered in great detail all of the people who had grievances or had simple solutions about the whole ambit of administration and of financing.
It gives me great pride to stand in this Chamber today and to claim the country has regained its confidence. I see that, coming as I do from a rural area in Donegal where we have had our share of problems, high numbers of unemployed and high numbers emigrating. I state with confidence that progress has been made and achievements have been reached and we have been successful in establishing confidence in those who are now prepared to commit themselves and who feel safe to do so. Senators can talk as much as they like but at the end of the day the question is how to maintain the confidence in people to do something for themselves. It is not the hand-outs and it is not the support grants; it is nothing other than getting people to take off their coats and commit themselves, in banks or whatever, to their chance of surviving and making a decent living. I claim there has been success and progress made under that heading. I will not go into all the details; one could talk for as long as one would have the stamina.
Recently there has been an outburst of claims about the health services. Does anyone in the country think there were no politics involved? Was all the concern pure and honest, with no politics whatsoever? Only a fool would have such a belief. Wildly exaggerated claims have been made and these cannot be sustained. This country is spending substantial sums of money on the health services and I believe they are reasonably good. There are times when it is not good enough, like in mid-winter and a period when there are many people ill. It might not then be good enough, but this country is not rich in so far as it has to pay for its services out of its resources. That is understood by the vast majority of the people. This country compares favourably with other European countries and much better than many of the countries who are capital powers, let it be the US, the Soviet Union or many other countries. We are ahead by miles in our health services. We are not lagging behind and nobody has been denied these services.
I would claim to be in touch and to come from an area where we have a poverty trap. We have unemployment with all its difficulties and we have medical card holders, perhaps the highest percentage in the country. I can go back to my own people in Donegal and claim there are health services here very near, if not above, what the nation can afford. That is the yardstick we have to use at all times. Those who are in Government have a responsibility to provide services up to the maximum the nation can afford. That is the barometer and the barometer has been reached. I would claim that we must not as a country, as a Government, continue to pump any more money into the health services. It has to be examined and wisely and prudently spent. The mass of the people out there realise that waste, extravagance and duplication in services, to be under-scrutiny and to be examined. Waste has to be eliminated to provide a first-class service.
People may think that throwing another couple of million pounds here and there is the answer. That argument tends to give the impression that more money can solve the acute difficulties that arise occasionally within the health services. I do not believe it. The Minister for Health is a caring Minister. He has the basic qualifications; he is a doctor who has a first-class knowledge. The country, the Government and the people are fortunate to have a Minister of Health like Deputy O'Hanlon. I recognise, and I think the country recognises, he is a first-class Minister and he has given an account of his commitment and his administration and it is acceptable to the mass of the people. Those are my observations on the health service — a first-class Minister giving a good service to the country, to the maximum the country can afford.
I refer briefly to the environment which is very near the top of the list of concerns being expressed. People in Dublin have woken up within the past year or two to the fact that Dublin is choking with pollution and fog. Has it all happened in the past two years? It has got to the stage now when the advertisement on the radio and television for selling gas starts off with somebody choking. I just wonder, did they start to choke within the past couple of months and the past couple of years? I have been coming to Dublin for quite a number of years and I think the fog and the smog have been here for a while. Those people who have new-found knowledge have discovered that we are the worst in terms of pollution in Europe. Where were they during the past 25 years?
The Minister for the Environment is announcing very substantial capital expenditure to convert the use of fuel in Dublin. I would ask the Minister if he has the right to respond to the pressure groups who are advocating that there must be an elimination of the fog and the smoke. He is responding to people who are overnight experts on everything. Those of us who come from rural Ireland totally support the Minister for the Environment, totally support the elimination of the use of fuel that is causing a problem in this city, but it should not be done within a year or two. It has to be done in an organised fashion, in a way that this nation can pay for it. There has to be a balance in the approach to environment control.
I have strong views on the number of pressure groups we have. I am prepared to listen and examine, but I always ask the question afterwards: where did this fellow or where did she get her knowledge? Where did she get her expertise? One might not have to dig too deep to find out that they might be on a bit of a canter. The Department of the Environment and the Minister for the Environment recognise, whether in relation to pollution of our rivers and lakes or smog in Dublin, that there is more concern to eliminate pollution, to clear our cities and make this a clean and green island than there has been in the past 25 years, or maybe in the past 50 years. We have all become aware of the difficulties overnight but there has to be a concerted effort which will not be paid for in one or two years but in line with competition for other services and developments which are necessary. The Minister for the Environment is doing a first-class job and I believe the majority of our people would support that view.
I referred briefly to the Minister for Finance and to the confidence he has instilled in the people who would like to believe in the future of our country. The economy of the nation plays probably the most important role in the success of the nation. The greatest encouragement I see is our standing in Europe. The value of our currency, the value that is being placed by outsiders on us, the fact that we are no longer depending on Britain and no longer the poor relation of sterling, has been of tremendous value to this country. Our financial and economic standing in Europe has been greatly improved. Every man who believes in his own country and has pride in it recognises that this country is doing well at present. Its financial affairs are strong, there is a commitment to financial control and a commitment to manage the country's affairs in a way the monetary experts in Europe and throughout the world believe in. That is the best barometer and best yardstick.
Ireland has taken its place in Europe as it has never done before. It is fitting that it should have its financial standing and its financial affairs so well organised at a time when we have taken over the Presidency of the EC. As a small country, Ireland has come out of the doldrums and has worked its way up as a nation to be recognised and recorded as paying its way and having a financial future. I compliment the Minister for Finance again for that.
In relation to the fishing industry, Ireland has had serious difficulties. For years we had not developed that industry. When we became a member of the EC everybody in Europe wanted to share in the allocation and control of our fishing. At the same time we expanded our fishing fleet. Perhaps we did it too late. We have difficulties in that at the same time as we are expanding our fishing fleet we have quota restrictions. That is a major difficulty in my county where committed fishermen are expending approximately £10 million on boats and, at the same time, we have quota restrictions. To respond to the quotas set by the European Parliament, we have had to restrict catches. This presents a major difficulty and is something which the Government must continue to fight. We must help these fishermen who have no other way of making a living. The Europeans who believe there should be quota restrictions should fly over the west coast of Ireland and examine the terrain there. They would then see that if the development of our fisheries and quotas are restricted, automatically the full development and income of the people living in that area is restricted. The Government must negotiate for that area in the strongest possible terms to secure a living for our fishermen. This problem cannot be solved by money alone. The financial support given to the fishing industry over the past number of years has been great. Ports and harbours at Greencastle and Killybegs in Donegal and numerous other places along the west coast of Ireland have been built up and accommodation at these ports is first class. The fishermen have committed themselves to the job. The boats and fishing fleets have been built up but the quota restrictions at present are a serious problem for that industry. As a representative of County Donegal I am obliged to say to the Government that this is an important area. The livelihood of good, hard working people is at stake. I would ask them to do their best to negotiate the best possible quota arrangements for our fishermen.
There is no simple answer to the question of taxation and how much should be taken from a man's wages. Nobody wants to pay tax. If I earn £1,000 in a week or in a month, I want that £1,000. I do not want to pay tax out of it. This represents a major problem for a Government. Everybody has a different answer. Some people say that the tax band should be 25 per cent — everybody has his own ideas on it — but we should not go overboard and offer quick solutions. Steady progress is being made and that has been recognised. Somebody has to pay for the expanding services and the increased costs whether it be in the schoolroom, the expansion of our schools, our water services, roads or housing. All these services are costly and the costs have to be balanced and paid for. At the same time, the incentive to work must be maintained.
I believe that the taxation programme of the Government is on course. There is acceptance that taxation and incentives are about right. I would like to see the balance changed a little more in favour of the worker who takes off his coat in the morning and does a day's work, as against the man who gets X pounds on social welfare. The man who goes out to work should get twice that of a man on social welfare benefit. If that is not done there will be no incentive to work. I strongly advocate that taxation should be looked at on an ongoing basis. The Minister for Finance is consistent and is aware of the direction he is travelling and I believe he is succeeding.
I have referred to the different advisory groups that have sprung up and what people describe as the poverty trap. There are people in every country in the world in the poverty trap and until the end of time there will still be people in the poverty trap. The only way you can take people out of the poverty trap is by incentives and by encouragement, not by provision. The over-commitment to support people who are on social welfare or who are in financial difficulties is not the best approach. To go overboard to sustain people who are in the poverty trap actually defeats itself. I come from a county that would have its fair share of poverty and poor people. Everybody who wants to highlight the poverty trap can indicate cases where improvements could be made.
I would like to instance what I believe to be a very important factor. My county will get sufficient funding from the Department to start 150 new houses this year. We have 450 people on a waiting list. It would be great if the Minister for the Environment and the Minister for Finance could give us sufficient funding to start 450 houses, and I would be pleased to announce it. But the reality is that if we get sufficient funding, which I believe we will, to start about 150 houses, we will select people — and I am not afraid to say this — who have got themselves into a situation where they have families and caravans and who are unemployed. I am not anti-poverty and I am not carried away with any sort of ideas that these people have to work themselves out of their difficulties. We must however, recognise that a local authority house repayment over 30 years is £90,000. If we have 100 people looking for houses and we build ten or 20 houses, and then select the least progressive people to live in those houses, they will never be able to pay anything, not even the maintenance on the house. This is a drain on the nation and one that has to be tackled.
My answer, and I am as entitled to have thoughts on the problem as everybody else, is that grants must be restored and help given to people who are prepared to help themselves. I am hopeful that the Government will be able to phase out and reduce the number of local authority houses, that they will give a grant incentive of as much as £10,000 for those who are on local authority housing lists for one year. That will encourage people to take off their coat, get out and work and contribute something to their future.
I encourage the Government to look hard at the possibility of an alternative to the local authority house, to look hard at providing an incentive of about £10,000 towards the average cost of a house and a site. If the local authorities continue to build houses, they have to acquire the site and face legal difficulties for about two or three years in relation to the whole development of the site and the title that goes with it. Meanwhile a person could be living in a caravan that lets in water and going to see his public representative every weekend. Anybody who believes that the way to rescue somebody on social welfare with a family living in a caravan is to give him a house that he has no hope of ever paying for is multiplying the problem. There must be a change of direction to support more the people who are prepared to do something for themselves.
I strongly advocate that the Government examine the possibility of helping people to house themselves rather than giving them a house, whereby they are a burden. The cost is about £90,000 per house spread over 30 years. It is never appreciated. I have seen cases where somebody would get a new house and 12 months later he would not clean the soakaway at the back of the house. I do not blame the tenant of the house. I blame the conditions under which his house was provided and the conditions under which he was led to believe that that was his entitlement. I would strongly urge that we look at the possibility of giving people an incentive at that point. We must not provide an answer that will destroy incentive and ability. I would strongly urge that approach.
We must look at areas where job creation is feasible. I see areas where it is possible, especially in black spots where employment and job creation is necessary. The tourist industry is one in which there are big possibilities. I have looked at the amount of money Bord Fáilte are getting. It is certainly — subject to correction — under £20 million. That is not enough support for an industry that has such great potential. I am looking at this as a rural representative. In the last ten to 20 years the expenditure from Bord Fáilte has been concentrated in large centres, including Dublin city. At one stage the late P.V. Doyle was chairman of Bord Fáilte and he stated that we had enough development in the hotel industry and that we should now start to market the hotels, the developments and the extensions. He saw it actually from where he stood. He saw Dublin as the country. But there is a potential out there in rural Ireland for a major development in the tourist area that will provide jobs. Rural Ireland has never been fully developed. Bord Fáilte have never reached rural Ireland and I say that with some knowledge and experience. They have been selective in the centres they have developed. They have not yet got to the areas where jobs could be created. I would encourage much more support for Bord Fáilte.
We come now to FÁS, the training organisation. FÁS are a major success. As against Bord Fáilte, who are directly involved in the provision of jobs and in the development of our tourist industry and who get under £20 million, we are giving £174 million to FÁS. The greater part of it is coming from the EC, which is very welcome. Maybe I am unfair in comparing the two in support of my argument. FÁS are doing a first class job. They have encouraged young people to believe in themselves and to start work. They encourage them to do work experience programmes and they have placed young people in jobs. However, they have only got to the stage of having the programme accepted nationally. There is a big future for FÁS. I am not advocating a reduction in the amount of money being allocated to FÁS but rather am I making the comparison and encouraging the Government to look at the possibility of giving Bord Fáilte substantially increased money to spend in areas which they have not yet reached. Bord Fáilte have not reached anything like their potential and development in rural Ireland. It is my hope and aspiration that the Government will continue to recognise that Bord Fáilte have a major role to play.
It is important for all of us to contribute in a sincere and committed way to the discussion when it comes up here. As I have already commented, at present the country has an abundance of expertise in every field.
Our national media recognise that if somebody protests outside the gates of Leinster House tomorrow, if three, four or ten people arrive with placards, there will be a phone call to RTÉ. They will be down in ten minutes and it will be shown on the news that night. Their point of view will be expressed nationally through the media. Perhaps that is right. It is exciting and it is critical. Perhaps that is the kind of news the people want to see. I refer particularly to our national television network where, in fact, every single pressure group has time and time again, to the total exclusion of Government representatives, been seen on most of our current affairs programmes. The Workers' Party hog it. I have been waiting for an opportunity to say that.
On a point of order, could I ask if the Senator is aware that there have been many recent instances when RTÉ programmes have contacted the Government with a view to providing a speaker and they have declined?
May I remind Senator Norris that it is not conventional that he should interrupt the Senator? That is not a point of order. The Senator will, I am sure, appreciate that he will have an opportunity of making his own contribution in the debate.
I stand rebuked, but I am not a conventional person.
I am glad the Senator has admitted it. I will continue to record my objections to the way our current affairs programmes are continually manipulated. Two or three nights a week, at peak viewing time, the panel of speakers is totally manipulated. The panel of speakers automatically select their supporters to the total exclusion of Government representatives. Not too long ago, the Minister for Health, Deputy O'Hanlon, was on RTÉ. Olivia O'Leary would not let him answer. She tore in and would not let the Minister reply.
May I now raise a point of order? I understand that it is not appropriate to name persons outside the House who are not in a position to reply.
Acting Chairman
I take note of Senator Norris's intervention. I am extremely reluctant to remind Senator McGowan that we are dealing with the Appropriation Act. Perhaps he is straying slightly off the subject.
The only thing I can say in my own defence is that I find myself less often interrupting or interfering or not responding to the Chair and to procedure than the Senator who has interrupted me.
Acting Chairman
I appreciate the Senator's comments.
My intention is to keep to the procedure of the House. I believe strongly that there are people in our national media who conform to no law or regulations except what they draft themselves. The Workers' Party control the RTÉ media. Only the panel of speakers and the audience that The Workers' Party will allow or accept are on RTÉ. I am finding it very hard to refrain from mentioning the promoters of the programme one by one. They are on the morning programmes and on the evening programmes. I am finding it hard to restrain from mentioning them. It has got to the point where this is not acceptable to large numbers of people in this country. RTÉ are a biassed organisation. They are anti-Government. They have allowed people actually to present current affairs programmes which are totally imbalanced. They are selected and controlled largely by The Workers' Party.
The Workers' Party would not have a footing if, in fact, they did not control the national media to the same extent. That has added to the number of pressure groups all over the country. You would not need to be a scientist or having many qualifications to be projected on RTÉ if you had a sensational point to make. The Senator who interrupted me would know what I am talking about. Whatever way he manipulates it, he does a fair job of appearing on every kind of programme, whether it is about pollution or other matters that he is more personally interested in. It is time this Government recognised that there is a distortion in the picture coming from Montrose.
I want to compliment the Government on getting the affairs of this nation back to the point when our youth believe in themselves. The greatest single achievement that has been made in Ireland in my years in political life is that there are numbers of people now who are back to see how they can start an industry and how they can get involved. Those numbers have increased. That is a welcome development and I compliment the Minister for Finance on his achievements and success.
Senator Harte referred to the new incentives for forestry development. I would like also to welcome that very acceptable development. I would like to congratulate the Minister, Deputy Smith, for his groundwork in putting forestry on a footing which is going to contribute to the financial and economic development of the country. I am speaking about the new incentive where we will have as much as £47 an acre for those small farmers in rural Ireland who have land that has been less than productive. This will be a major breakthrough. Holdings that were not economic will now be economic. The development of our forestry has now new possibilities.
I would like to thank Deputy Smith especially for the aggressive and businesslike approach that he took, when Minister in charge of forestry. From de Valera's time and Seán MacBride's time it was recognised what the development of our forests would do for the economy of the country but unfortunately it did not go as far as those people had hoped. Now, with the solid groundwork that has been done and with the incentives that have been made available, the rural farmer who has land unsuitable for tillage will look in a serious way at utilising part of the land by adopting this scheme. It is a worthwhile and important scheme. I believe it will be very successful.
One could go on and cover every aspect of life in every Department. We could discuss every hospital yard, every employment exchange and all the roads but, basically, this country is doing reasonably well. I am proud to announce that my county got an allocation of £10 million for road development. That will create many jobs and pay for road repairs. If that amount continues to be provided for my county, it will surely leave County Donegal with a first-class road service, equal to the best in Europe. It was a very useful contribution by the Minister for the Environment and I welcome it.
I encourage the Minister for Finance and the Government to continue with the present programme. This country has reached the stage where it is respected in Europe and we all hope that will continue.
I am glad of the opportunity to speak on the Appropriation Act, which enables people to review the events of the past 12 months and perhaps make a prognosis of the possibilities that lie ahead of us, as well as an opportunity to discuss the problems that confront us at present. I would like to welcome the Minister of State, Deputy Smith, who was on these benches not so long ago. He was an active participant in the Appropriation Bill debate and in other debates before he went to higher places. I would like to associate myself with the remarks made by Senator McGowan as to the very definite impact he made particularly on the afforestation programme, that is very important to this country.
I do not think that 1989 was a good year. It all depends on how you measure what is good and what is bad in the context of progress but while the major cutbacks in the spending areas were effective in getting the financial situation in a better condition, it has led to a great deal of hardship for the people of this country.
If one is evaluating what is good and what is not good, one must take into account primarily the question of employment. Employment, or the lack of employment, determines the quality of life of the people of any country. Most recent figures would suggest a slight improvement in the unemployment figures but the actual figure is significantly more serious than it has been ever before. We have a very high level of emigration but that figure is not always recorded accurately, and sometimes not at all. We would have very serious unemployment problems at this stage were it not for the unfortunate state that has become a way of life once again, that is, emigration. It is not emigration to nearby Britain but to Australia or Canada. It is very serious.
I am not blaming the Government but I would say quite sincerely to the Minister of State and to his colleagues in the Government that the question of unemployment must be seriously addressed. There is no point in having the target of improving the unemployment figures by something like 10,000 or 12,000 per year. This is only infinitesimal and of no consequence. We must also remember that while we are creating new jobs — and nobody will deny that — we are, unfortunately, losing long-established jobs on an on going basis. As I see it, the wellbeing of this country must be judged on the basis of how our people who are here are doing and, indeed, taking into account the necessity of emigration for some people. This is how we can assess how well the country is doing. I believe earnestly that people in this country, from those caught in the poverty trap to those who are not in that situation are finding it difficult to live and to pay their way. Over the last 12 months in particular the biggest single factor that has caused very serious financial hardship has been the increase in interest rates. We had increases of 4 per cent over roughly a 12 month period. Senator McGowan talked about people paying for houses. The average loan for what one would regard as the middle class house purchase is £35,000. The increase in interest rates alone has adjusted that repayment by £100 per month. That presents a very unexpected strain on the person who is confronted with that situation. There is no doubt, as was stated earlier to day, that we are and have been for some time suffering from the mistakes of Governments. Without being political about the matter, one has to talk about the major mistakes in 1977. The results of those mistakes, unfortunately, continue to live with us. There is no point in going into all the details of what was done and what should have been done in those days. Two measures took much needed finance from the Exchequer — the abolition of rates on houses and the alteration of charges in car taxation. However, we must deal with the situation as it is now and see how we can best deal with it.
We are, of course, no longer masters of our own destiny. A substantial portion of our financial resources are coming from the EC. We have been a member of the EC since the early seventies. We have lost out in different ways, but we have been absolutely and definitely net beneficiaries from our membership of the EC. There is no point in saying that we ought not have joined and that we should have done something else. We were net beneficiaries last year to the tune of about £900 million.
In that context, I too would like to be associated with the developments in recent times in Eastern Europe where democracy is coming on stream, thankfully, as in Russia. The developments yesterday raise questions in our minds. The position there could have an important bearing on the whole EC situation. In the event of Germany being reunited it would no longer be in a position to contribute to the extent that it has contributed financially to EC funds over the last number of years.
There are many uncertainties about the future. We must, as a nation, do everything in our power to make certain that our particular problems and difficulties are taken account of and fully recognised by all concerned. Frankly, in the context of the vast European scene, we are a very small entity. We are a small island on the periphery of Europe. We should press a great deal more for special concessionary measures. I appreciate that we do enjoy concessions, but I believe that our circumstances, geographically and economically, justify our being considered far more seriously for special treatment. We do not want anything for nothing, but I believe that we play a vital role in the context of the EC. Our strategic location from a political point of view is very important. We are located on the verge of Europe. We must not apologise to anybody for establishing clearly in the minds of our 11 partners of the EC that we have special problems which need special attention.
Senators referred earlier today to local authorities and the importance of decentralising a lot of the business of the nation. I agree with that. Perhaps we have tended in recent years to have too much of the management of the nation's affairs centred in Dublin and too little at regional, county or local level. There is merit in reverting to that kind of situation. We are, as I said, a small country. We have three and a half million people. That puts us at a very significant disadvantage from the point of view of a home market. It is a very significant disadvantage, indeed in the whole area of food production, especially perishable goods that have to be disposed of quickly.
There are three distinct areas that can help our economy. It behoves us all to give any assistance we can to the Government. The Government have an obligation to ensure all areas of agriculture, industry and tourism are developed to the maximum. It is only by developing these areas that can earn money for the economy that we will be in a position to provide the much-needed money for education, health, law and order, public service and so on. There is no doubt but that there is a lot of further development needed in these three areas and areas directly or indirectly linked with them. I believe we do not have perhaps sufficient expertise in some cases to develop the full potential that exists so that we would earn the maximum from these three areas — agriculture, industry, and tourism.
As far as the spending side is concerned, education is a very important area. If our young persons and those not so young are forced to emigrate it is important that they are equipped with a good education, that they are not forced to go abroad uneducated and forced into inferior positions in some other country.
I disagree seriously with Senator McGowan when he suggests that the health service is very good. I do not think for a moment that that could be substantiated. I believe also that there is a position in this country whereby preferential treatment exists between those persons who are medical card holders and those persons who are paying patients through VHI or whatever. In fact, I recently had an example myself, when after an accident I was in hospital. I spent two weeks in that hospital while I am certain that one week's stay in the hospital would have been totally adequate. Talking to other persons in the hospital, I found their experience was the same. At the same time other people are on long waiting lists to get into hospitals, but just because in our instances we happened to be members of the Voluntary Health Insurance, paying patients, we were treated differently. I believe that that is discrimination and I do not think it is fair, reasonable or correct that that should be the case.
I referred there a moment ago to agriculture and what it can do for this country. It has done a great deal, in fact. I do not want to downgrade the whole industry. The agricultural industry and the agri-business generally have done a great deal, but I do believe that we must pay more attention to added-value and diversification. We have been doing a certain amount in this area, but a great deal further potential does exist. I would also suggest that in the agricultural sector in recent times in the processing side of the business there has been a tendency for very large units to develop. All that is big is not necessarily beautiful. We should be very mindful and careful as to the long-term consequences of monopoly situations developing as a result of these very large units. We have had some examples of them, where our meat processing is now confined to a very small number of persons. This is not very healthy and it is something that we must pay attention to.
On the question of diversification and added value, we must do a great deal of research in these areas because we must produce what our customers want, be they in Dublin, Cork, London or Paris. We must assess quite clearly what is the requirement of the customer, whether it is in the food area or in any other consuming area. Having done that, we must then set about producing that food product or manufacturing that item to the satisfaction of the customers we hope to do business with, because, in the past very dynamic sales operations have been conducted here and very excellent people have gone abroad; they have sold against very hard competition, but they have sold to people what they have produced; they have not had the advantage of knowing precisely what are the requirements of the people, to have that particular product available and to sell that product. There is vast potential in that area.
In the whole sphere of industry the IDA, and SFADCo in a more localised area of the mid-west, are doing an excellent job and I believe that, in conjunction with the Government, they can greatly improve our industrial position.
I referred earlier to unemployment. I, too, very briefly want to make mention of the debate here last night on the proposed closure of the Arigna coal mines and power station. I believe, that with 250 jobs involved, it is a matter that should certainly not be proceeded with. I believe that, should it be necessary and should it be inevitable that the coal mine and the power station have to close, it should not happen until such time as we have sited in their place an industry or industries that will take up the number of people that will be affected by this proposed closure.
I would like to compliment the Minister for Energy, Deputy Molloy, for announcing to the House here last night that he would delay any closure for six months. I made the point, and I repeat it now, that it is not that the ESB, in my view, who should have any say as to whether Arigna is closed or not closed. They are, of course, using 95 per cent of the product in Arigna; but I believe that the Government and the State are responsible for Arigna and not the ESB. The ESB happen to be an instrument or a body in between. It would be absolutely disastrous if the ESB had the power to proceed without the Government's full and clear imvolvement in this venture. I do not want to dwell further on that except to appeal to the Minister for Energy, through the Minister of State here, to find an alternative industry or industries for the Arigna area prior to any closure being carried out. I would further suggest that perhaps there is no necessity to close anything at the present time. I suggested last evening that there should be an independent investigation into this whole area. While it is welcome to hear the Minister talk about six months, I do not believe it is sufficient to put anything in place; and these industries must not be removed until something is put in their place.
I have talked about agriculture and its importance to the economy. This has been stated and restated by anybody who has ever stood up to speak about agriculture. The other fact not understood fully at present is the very serious income position of the farmer. I speak in particular of the non-dairy farmer. By that I mean the person who does not have a milk quota or who does not have a licence to produce milk. Those people had very low incomes in 1989. In certain cases they would have been living on reserves that they might have had from previous years. I am speaking of the position of persons engaged in a beef unit or in pig units, etc. There may be some exceptions, but even dairying, unfortunately, is now faced with pretty dismal prospects as well. There is a strong likelihood of a reduction in the price of calves — which, of course, will help the beef industry. It takes away a big slice of the dairy farmer's income. Dairy farmers will agree readily when I say that they had it good in 1989, but the prospects for 1990 do not look so bright, and further along the line the same could be said.
We must, of course, bear in mind that from 1992 we will have the Single European Act and the Single Market. With the exception of a few areas in relation to energy, transport, telecommunications, water supplies, etc., the programme has been essentially agreed. The first phase will start in July of this year. I believe that we must prepare ourselves a great deal more to be in a position to avail of the opportunities that will be presented to us on that occasion. There is no point in going into all aspects of the Single European Act. There are other Senators here who want to speak and I do not intend taking up too much time.
I have referred to the health services and I want again, with your indulgence, a Leas-Chathaoirleach, to make one further reference to it. There are examples, which can be substantiated quite clearly if necessary, where persons who have suffered heart conditions have been left in waiting rooms in hospitals for a matter of hours before being attended to. This, to my mind, is a very serious matter. I would suggest that lives have been lost by the lack of an effective comprehensive health service at present.
The recent budget, apart from what people might say about it, was one in which the Minister for Finance had an opportunity of, perhaps, helping in the area of taxation and other areas to a substantial degree. I appreciate there was a certain amount done in the budget, but it was all too little and in fact nobody gained to any extent from it. I have already talked about interest rates, but I would say to the Government, through the Minister of State, that if any influence can be exerted by the Government to bring our interest rates into some sort of reasonable line it would help enormously. There is nothing that will affect the private lives of people, business developments or anything else as much as interest rates. We have had a situation over the last 12 months where at the beginning people were quite enthusiastic about developing projects, but when interest rates began to rise I am afraid these developments fell by the wayside.
We must be very mindful of the fact that unless we have full utilisation of the resources available to us, we cannot make the sort of headway necessary, we cannot have the jobs that are needed and the quality of life to which I referred. While at the end of the day, with cuts in various sectors, our balance of payments statement will look very well, the actual situation will have suffered very seriously. There is, as I said already, a great deal of money coming from Europe in the form of the Structural Funds and I believe it is vital that these funds are disbursed and allocated with very positive and definitive thought.
Senator Harte in his remarks earlier today talked a lot about the public sector and the private sector. I believe that if the right inducements were given to the private sector they would respond. Unfortunately, with the interest rates to which I have referred and inflation as it is now, the sort of climate for people to make developments and strides into the business world are not there as we knew them in the past.
There is a great deal more that I could say but I do not want to hog all this time when people are anxiously waiting to make their remarks. While certain progress has been made in the last 12 months, and we are poised for a reasonable development in the future, we must be mindful of the price we are paying for this. Unless we redress the serious position of unemployment and unless we stop emigration — I do not mean forcibly stop it — especially for the people who do not want to emigrate, we will not have made much headway.
Finally, I appeal to the Government to leave no stone unturned in the context of our EC membership to make certain that we will not be treated like other countries from now until 1992 and indeed afterwards. I repeat: we are a disadvantaged country, grossly underdeveloped. We are a small island far distant from the main marketplace of Europe. I know the Minister of State will relay any matters of value I may have contributed to the appropriate levels.
Tá an-áthas orm an deis seo a fháil labhairt ar na cuntais seo. Is dóigh go bhféadfaí a rá gur cinéal athbhreithniú siar ar obair na bliana seo caite agus súil ar aghaidh ar obair na bliana seo chugainn atá anseo.
Looking back on the period 1987-90, the first thing that has to strike us, and it is something that is overlooked now, is the fantastic progress that has been made in tackling the borrowing situation and particularly the problem relating to current budget deficit. The fact is that between the years 1973 and 1987 we built up an accumulated budget deficit of £24,000 million, and £12,000 million of that was built up between the years 1984 and 1987. In the past three years we have added only £1,000 million in that debt.
I am one of those people who always thought we should never have gone down that particular road, that it was dishonest of one generation to basically borrow and live beyond their means and leave the tab for another generation to pick up.
I look forward over the next year or two to the elimination in total of the current budget deficit, not as some monetary exercise for its own sake but indeed in the interest of the young people of this country, who should not be saddled with the burden of debt through our waste. But that said, I also feel that over the past 20 years we were slow in coming to necessary decisions regarding capital expenditure. If the money we spent on current budget account had been put and borrowed for productive capital expenditure, if we had £25,000 million worth of roads, harbours, airports, services, sewerage systems, water schemes, etc. if we had some of that money put into industry and agriculture in a productive way, not only would we not have the current debt level but we would also have an infrastructure that would allow us develop this country in a positive way. However, there is no point in talking about spilled milk. We should learn from our mistakes and make sure that we never again go down that road of current deficit budgeting.
Secondly, in an overall view we have to look at the fact that in the past few years we have started programme planning but that we do not really have any regional strategy. It is very important that we keep in our minds in everything we do the necessity to ensure an even and balanced development of this country. One of the problems we now face, both in the capital city and throughout the country, is the total imbalance in the population which causes an overstrain on services in this city and which, on the other hand, leaves huge social problems in its wake in rural areas.
Special cognisance has to be given to areas that are particularly deprived and also areas that have over the past 20 years lost some of the traditional industries that sustain these areas. I have always felt that one of the ways, particularly with modern computer technology, of providing alternatives in areas that have lost traditional industry is through the devolution programme. I cannot see why this programme cannot be speeded up and in that way provide very necessary jobs in the rural part of this country. I hope to see the day that everybody in this country would live within 30 to 40 miles of a centre where there would be some developed Government service. For example, if you take the city of Galway and the towns of Castlebar, Tuam, Ballina, and Sligo, we have moved rapidly in the direction of providing devolution to these areas and in that way vast regions around them have now got the chance of employment in the administrative services without leaving their native areas.
The second type of devolution we need here is a devolution of powers to local authorities and to the regional agencies, regional offices of the IDA, the tax service, etc. Sometimes it is difficult to impress on people that in the country we now live in and with the big increase in educational levels the skill levels that at one time were probably centralised in this city are now available throughout the whole country. The need for a very centralised system of decision-making, particularly in medium to small scale decision-making, is no longer necessary. As an example of what I am talking about, the move to devolve the administration of the group water schemes to the local authority is a first step in this direction. I would like to see that followed rapidly by the devolution of the administration of housing grants, etc, to the local authorities for administrative purposes, that they would administer them on behalf of the Department of the Environment. In that way you would not have duplication and centralisation which is unnecessary.
When we talk of the economy and 1992 I sometimes think we get lost in statistics, in big figures and in billions of pounds. At the end of the day we must get back to basics. The basics are that the aim of everything we are doing is to provide a basic standard of living for all the people of this country. In a nutshell I put it this way: you have to provide everybody either with a job or, failing that provide an adequate social welfare system. You have to provide hospital beds, education, houses and roads to their houses. These might seem very fundamental but at the end of the day the whole idea of developing the economy is to make sure that these fundamentals are provided for all.
Any practising politician will testify that at grass roots level the success of any Government is measured by the people on how they deal with these issues. We will have to pay a lot of attention in the coming year to the administration of this State. Down the years we have not been radical enough in looking at various programmes and changing them to suit changing circumstances.
I would like to take this opportunity to praise the Minister for Finance on the Budget Statement and the Minister for Social Welfare on his statement in the budget debate, for the steps they have taken to reform many anomalies that have grown up in their spheres of activity. These things do not hit the headlines, but they make life a lot easier for the ordinary person and also make development work for the industrialist, the farmer and the person involved in tourism a lot easier to carry out. One aspect of this budget that has been overlooked is the reforms that have taken place. That said, we need to speed up this process. We need to ensure that modern methods of communication and technology are applied to our public services and that computerisation will become the norm, because in that way we can provide competitive and good services for our citizens.
We need to examine our programmes to ensure that they are not contradictory, to ensure that the programme of social welfare, for example, is not contradicting the tax code. We had a move in that direction in the budget when an anomoly between the FIS scheme and the exemption limits in tax was rectified. This is a small example of the type of anomoly that we have to eliminate from the system.
The second thing that we have to do is to eliminate inertia, and resistance to change, whether in this House, in the State sector or in the private sector. There are obvious examples of where change has long been overdue and where for one reason or another we seem incapable of grasping the nettle and doing something about it. As a co-op manager, for example, I know we are still operating under a 19th century Act. Everybody in the co-op industry knows that that legislation is out of date, archaic and is not responsive to the needs of modern society. There is the obvious difficulty that once a person becomes a shareholder he is always a shareholder. There is no mechanism whereby one can generate continuing sources of capital and whether it is a small co-op of a large dairy society, the biggest problem they faced in the seventies and eighties was of enticing capital from their basic shareholders. Over the years they became over-dependent on borrowing and in some cases, they have had to turn to PLC structures to try to overcome this difficulty.
On the administrative level, there is need of reforms in the Companies Office, where the same methods have been used for as long as I have been dealing with them. We need to reform the method by which Bord Telecom charge for telephone calls. Basically they are using a system of charging that was laid out in 1956 at a time when, in many rural areas, there were only three and four telephones, and now there are 300 and 400 telephones. There is the crazy anomoly where people in rural areas often have to make a trunk call to dial their local town. This is an unfair burden, an irrational burden, to both business and domestic users.
Many people look to the private sector to solve our problems, and this cannot be left out of the reckoning. One of the most stimulating debates we had in this House before Christmas was on the Trustee Savings Bank. In this area we find inertia; in 1990 these banks open at 10 o'clock in the morning, close at lunch time and again at 3 o'clock in the afternoon. It is about time that lack of service was eliminated from our society.
Our courts too need reorganisation, as do the insurance companies, in the legal and administrative areas. The lack of action in sorting out the fundamental cost disadvantages of insurance in this country has placed an undue burden on business and made us uncompetitive with our neighbours in Europe and across the Irish Sea. That has to be tackled on a legislative and administrative level.
When one looks at the budget, it could be said that four Departments account for most of the expenditure. First, there is the Department of the Environment. We all welcome the Government programme on the environment that was published last week and I certainly welcome the commitment to provide adequate sewerage systems throughout the country because this has become a great problem particularly in the last ten or 15 years.
We had the publication of the roads programme before Christmas. That was long overdue and we have a lot of ground to make up in the provision of a national road network system that allows for competition in this country compared to our neighbours. Having provided the prestige projects, we also have an obligation to ensure that the county roads, the small roads, the roads that most of us use every day, are also maintained and developed so that the people living on the periphery do not suffer inordinate disadvantages.
One of the things that worries me is a potential problem in the housing sector. We must ensure that the tradition in this country of a high owner occupancy is maintained. Irrespective of what other countries do, it is desirable that we maintain that social standard and devote the necessary resources to ensure that everybody has adequate housing. As a first step to that we should make one final push to ensure that every house has running water and toilets, etc. That is a fundamental that would not cost us much to achieve. There are some places in the country where this is not so and between local authorities and Government we must put that on the top of the list and ensure that that programme is completed.
The other three big spending Departments are Health, Education and Social Welfare. There has been much criticism of the health service over the last few months. That said, we will spend £1,233 million on health this year. It is important, when we talk about health, that we examine all the structures and the areas of responsibility, and that clearly defined responsibility is laid at the various levels of the health services.
The running of hospitals should be a matter for the managment of hospitals. Anybody who is in constant contact with the health services will admit that there are very many steps that could be taken within the existing budgets to improve the health service by using better methods of administration and by better use of resources. When those things are done and when we have achieved the standard we want we must also ensure that we provide the resources for health. A large increase was given in the current budget to ensure that the basic right to a health service is given to everybody. In doing that we must ensure that certain interests within the health sector do not get more than their fair share and do not use the system to extract wealth out of it above what is just and right.
A very welcome reform has been taking place in the social welfare code. I look forward to the speeding up of this reform so that it is easier for applicants for social welfare benefits to get their entitlements. Often these entitlements are there but they are not availed of because people do not know how to go about it or they think that it is too difficult and too much bother to get them. We must ensure that the social welfare system is user friendly, to coin the jargon, and is readily available in a positive way to those who are entitled to its services. At the same time we must ensure that abuses of the system are eliminated.
I welcome the steps taken recently regarding the registration of sub-contractors in forestry and the building industry so that that area of abuse is eliminated. It does not matter whether we talk about health, education or social welfare, we must ensure that the money is put to good use and if people want good social welfare and health systems, they will have to take the choice between increased revenue and cuts in expenditure. You cannot have the bread buttered on both sides. If we are to apply more money to these services we cannot reduce revenue on the other side. The equation must balance.
As I said in my opening remarks the idea of returning to current budget deficiting is totally out as far as I am concerned. Those people who think that throwing money at problems is a solution should have learned the lesson of the past 20 years. There is an obligation on them, if they want money spent, to outline in detail where they think this revenue will be raised, or whether they are proposing to go back on the merrygoround that we were on for the last 20 years.
On industrial policy, the reforms that have taken place in the tax code over the last few years are welcomed as a first step but there is a lot we need to do to ensure that our industry can compete in an open market after 1992. Services to industry will have to be competitive. I have mentioned the need for telecommunications and roads. Our industrial incentive schemes will have to move away more rapidly from the methods, the grants and incentives of the sixties and seventies, to incentives that are more appropriate to the world we live in now.
I have long argued that we did inestimable damage to our industrial potential by persisting for too long with the simple formula for industrial development of advance factories, high capital grants and export tax reliefs. We want industry to provide wealth and to provide jobs. It has seemed to me to be contradictory to have high taxes on labour, high road taxes, to have high taxes on transport, the things that we should have cheap, and at the same time to make capital very cheap. I recognise that improvements have taken place, that some of the schemes that literally make capital cheap and labour dear, such as the leasing schemes and accelerated depreciation, have been eliminated. I also welcome the idea of a lower corporation tax but it should apply across a broader band of the spectrum of industry.
The idea of having the same industrial incentive package for high tech industry, for services, for resource-based industries and for traditional industries, is illogical, because the requirements of these industries are totally different. For the high tech industry transport is not a big factor. For services it is telecommunication charges that count. For traditional industries it is labour, because they were traditionally very labour-intensive, and for resource-based industries high insurance costs and transport costs are normally the bugbear.
We must develop policies that are suitable to each sector, and the package offered to an industrialist in a sector should be tailored to the requirements of that sector. In the post-EC entry period we did not do enough to create special conditions so that our traditional industries could have survived better than they did and developed in the new circumstances.
There is a great deal of worthwhile development going on in the tourism industry but we must ensure that when that development has been effected the benefits of tourism will be spread over as broad a spectrum of the economy and of the country as possible. One of my fears under the present schemes is that some of them appear to suit the bigger projects rather than the smaller projects. As I have often pointed out, if 1,000 people can create two jobs each you have 2,000 jobs. That is better than one person creating 2,000 jobs. The chance of a whole myriad of small enterprises going under simultaneously is very small, but the chance of one huge enterprise going under as we have seen to our cost, is very great.
In relation to the west, there are two developments which offer us great hope, development of the forestry and fishery industries. Forestry is an industry which I know particularly well. I see its potential not in the planting of trees or in the growing of trees but in what we can do when we reach the stage of harvesting. Employment in forestry begins when one goes to fell a tree. That involves the harvesters and the transport people and then there is the very valuable product of the tree itself. In most people, saw milling consists of cutting big planks of timber and building houses from them but those of us in the industry more and more realise the added-value in terms of jobs in processing and packaging and the better use of by-products.
Four years ago we were dumping bark, we could not give it away. Today that same bark, which is 10 per cent of the weight of timber in a tree is fetching £10 a tonne ex-Cornamona. The added-value that can be obtained from that one byproduct is symptomatic of what can be done in this industry. It is regrettable that at the moment we export this bark raw and it is processed in our neighbouring island. It gives us some idea of its value when it is worth somebody's while to pay us £10 a tonne for it, bring it across the water, process it, bag it and sell it as a horticultural product.
Unlimited developments could take place. There are export markets and export niches that we can compete with both in Britain and on the Continent, but to do that we will have to develop products that are of uniform standard, that are also of a design that suits, and are packaged in such a way that the consumer will recognise that we have the best product.
The mariculture industry has caused a lot of debate in the last few months. We must develop this industry, not as a one product industry, farming salmon only, but we must concentrate more and more on the possibilities of added-value particularly with regard to our valuable shellfish resources. Here we have an indigenous resource that is environmentally friendly, which can fetch the highest price on the market and which is readily adaptable to processing and, therefore, the creation of jobs. I see a place for finish farming, as it is called, but it would not be right to do that to the exclusion of all the other possibilities that exist in the mariculture industry.
When talking about money and the spending of money the idea is to provide a full life for the people of this country. In development work and the spending of money too often we look at it in a purely mechanical way and forget that the human being responds to stimuli other than money and simple economics.
We looked at school statistics in Connemara, we compared three areas for school numbers. In the parish of Round-stone we took the 1960 and 1990 school figures. In that parish, which has no community development, no efforts of self-development, there was a decrease in primary school population in those years of 57 per cent. In Recess, which has now one school but at that time had four schools, there was a decrease from 157 pupils to 45. That school is on a national secondary road and is in that way not particularly unfavoured as regards geographic location. We then looked at the Clifden parish, which is in a big town. Within the town the figures had gone up marginally but in its hinterland they had dropped dramatically. Taking the whole parish together, there was a decrease of 20 per cent. On the island of Inishbofin, there was a decrease of 80 per cent. Then we went to another rural parish, a parish that in distance from Galway was further than any of the other parishes I have mentioned but which has had a long history of community development, self-help and self-confidence. We found that within that parish the school numbers had increased 5 per cent in that period. There was no major employment created in that parish during that time but there was a lot of social and economic activity and comprehensive development was taking place. The statistics seem to bear out that that approach to rural development bears fruit.
I have not yet put the statistics together for the north Connemara-south Mayo area but from the statistics I have available I find that a similar pattern is evolving. For example, the town of Clonbur has a decreasing school population and the village of Cornamona, which traditionally had a much smaller school population, has had, between 1980 and 1990, nearly a 100 per cent increase in school numbers.
In the Tourmakeady area, even though there has been sustained employment, the population of school numbers has decreased. The only logical conclusion that one can draw from that is that the areas in which economic activity was combined with social activity and social dynamic, were the areas that sustained their populations. Furthermore, it would in my experience also relate to the fact that that type of community development normally draws to itself and into communities people with high levels of technical skill and local management and that they act as a centre in their communities for development. More and more in the work I have been doing as a development manager in my area, as a co-op manager, we have departed from the idea of the co-op actually managing the enterprises to the idea of building a whole spread of enterprises where we would provide technical back-up and know-how, so that there is no limit put to development being created.
In our timber industry, we see six separate industries created out of one, the harvesting industry which is self-run, the transport industry which is self-run, and our firewood industry which is a residue industry. We are talking now about splitting our sawmilling in two, the stake and the pallet. Finally we have, independently of all of that but working to an integrated plan, a new enterprise starting using what we call a finished product as a raw material to provide added-value products for the leisure and garden industry. This is the way we would see a lot of rural developments being carried out.
For this to be successful and to give an impetus to this, two things will have to be recognised: the necessity to create in every area this central core of development people, to give them the opportunity to make decisions, to give them access, whether through schemes such as an extended business expansion scheme, catering for and adapted to rural requirements and open to investment in co-ops or through the straight giving of capital or allowing the drawing of capital out of the community in ways the community find acceptable.
We would have to have a fundamental change of attitude as to how schemes are developed. In my experience schemes tend to be developed centrally for the convenience and the perceptions of those who are in the centre who will administer those schemes and not according to the needs as specified by the people actually involved in the field in development work.
I do not wish to interrupt the Senator in his train of thought but the Minister is due to come in at 4.30 p.m. and there are a few more speakers on the list. If the Senator chooses to speak until 4.30 p.m. there is nothing I can do about it, but with a little generosity we could fit in some other speakers.
It is important to ensure that development strategies are developed in line with the thinking of the workers in the field.
Tá brón orm má bhí mé ró fhada ag caint. Tá mé ag fanacht suas le 16 bliana ar an deis seo na rudaí seo a rá agus a chur ar thaifead poiblí, agus tá súil agam go mbeidh fiúntas agus tairbhe le baint as an méid a dúirt mé.
I welcome the Minister of State back to this beautifully redecorated Chamber. In welcoming him I also have to sympathise with him because I imagine that the kind of duty he has undertaken this afternoon must represent some specialised from of exquisite intellectual torture because of the enormously wide-ranging contributions we have heard throughout the day. I say that, however, in the knowledge that for me at least it was to a large extent redeemed by the contribution by Senator O Cuív. His contribution had an overwhelming vision. There was an integrity about what was said. There was a viewpoint and there was something visionary in it. Everything was related to each other part in it. I listened with great respect and attention. I felt that it was a speech that did great justice to this Chamber.
I cannot, however, say the same of all the other contributions. There was something mildly bizarre about the attacks on RTÉ and its apparent alleged lack of balance. I would simply be compounding that felony if I continued along that road. I was glad that after some assistance from myself the attention of one of the speakers was drawn to the fact that it is not the custom of this House to name public servants who cannot respond and certainly do not have the privileges of this House.
I would like to express my considerable pleasure at the news I have just heard which is relevant to this debate, that is that the Programme for National Recovery has been passed by a margin of 14 votes. This is quite a splendid achievement. I welcome it, not without some reservations because it was important that the Government had a narrow shave in pushing this through. These narrow shaves make them sensitive and responsive to public opinion. It was interesting to note the response in official circles to the employment of their democratic vote by certain representatives of the trade union movement on a Thirty-two County base. It is rather interesting that once again we have from a Government who purport to claim jurisdiction over the entire island an application of the practical advantages in economic terms of Partition and I have no doubt that this point will be noted in various sources.
In deference to the fact that a number of speakers want to come in I will try, although I am loquacious by nature, to confine myself, so I will really be giving headlines for a speech rather than making a real speech.
I was glad that a number of Senators brought up the question of forestry. This is, or can be, an environmentally friendly area. It is one that needs to be watched because you must ensure that the right kind of trees are planted, otherwise you can ignorantly do damage. This is an important area and it goes back far beyond persons like Sean MacBride. It goes back to the last century when my own distant kinsman, Lord Castletown, the MacGiollapatrick, took a considerable interest in this area, as I had opportunity to point out to the Minister of State when he was an excellent Minister in this particular area.
I hope the Government will take careful note of the expert reservations that have been internationally noted with regard to the environmental impact of an airport at Clifden. I hope no public funds will be made available for the despoliation of an important national resource. While I am speaking about airports, let me say that I did put three little items down to test the waters with regard to what I consider the political involvement of the Cathaoirleach and one of them was the question of Knock airport. I would ask the Government to look at this again because the question of Shannon Airport and whether flights can come directly into the capital city is an important matter. If we are talking realistic economics, we have a success story on our hands here in the financial services centre. But nobody who knows anything whatever about international financial services and the practices and human attitudes of international financiers and Wall Street stockbrokers is going to believe that any of these gentle persons of either sex is going to be at all impressed or amused by being expected to sit for a couple of hours on the tarmac at Shannon. I know from my contacts in the international tourist industry that it is a principal obstacle to the development of tourism in this country that we cannot have international carriers flying straight into Dublin. I say that mindful of the remarkable and wonderful work that was done in the development of Shannon Airport and in the very forward-looking development of the free airport at Shannon and so on. I am quite sure that the kind of ingenuity that was displayed there by Dr. Brendan O'Regan can be applied to produce further analagous industries.
With regard to the environment, I would like to hope that we will be careful in the spending of money, that we will not be treated to further spectacles as we have had in the review of public accounts when we discover that buildings in Kildare Street, for example, are acquired on behalf of the State and then allowed to run down, so we have to spend many millions of pounds in restoring them. That would suggest to me that the title of this Bill should be the misappropriation Bill rather than the Appropriation Bill.
I hope the Government will look very carefully at the operations of one of the most noxious enterprises funded from central State moneys in this city. I refer to the vocational education committee who have systematically devastated some of the finest 18th century buildings in the city, which are part of our tourism potential and then has the unmitigated gall and cheek to present the bill for their restoration through the tourist authorities to the plain people of Ireland. I hope note will be taken of that when the vocational education committee are applying for further funds.
I hope also that the Government, conscious of their Green Presidency of the European Commission, will not fund the gassing of badgers until a clear casual relationship is demonstrated, a mechanism of transmission between the tubercular infection in badgers and TB in cattle.
I hope also that we will at last learn from the European mistakes with regard to the development of road networks. I hope we will see that so many European cities, including capital cities, are not now building further roads to compound the difficulties and the problems but are actually beginning to produce disincentives to motorists to enter large conurbations. People are being taxed, fined and charged for bringing their cars in. This is what we should think of instead of the kind of devastation we are going to get with the development of the road network schemes.
I would like to mention two areas where I have very particular concern. I would like to hope the Minister may be able to pick out these things and ask about them. I certainly will in using other machinery of this Parliament because I do not want to take too much time today. The resignation of Professor Watts, the Chairman of the Medical Research Bureau, is an extremely worrying phenomenon because of the lack of funding. It is the deliberate collapsing of an exceedingly important area of intellectual exploration and development, which means we may no longer have adequate methods of training our own professional people in these areas where we do have an international arena. I have requested that this matter be raised on the Adjournment so I am not going to be tedious and draw it out, but I think it is a very important area and I believe it should be looked at.
The Minister, I am sure, is also aware of the general public concern with regard to the legal aid scheme and the fact that here again, because of the lack of application of comparatively small amounts of money, there has been a series of devastating resignations.
I would like to turn to the Appropriation Act itself. It is interesting to note that the sums involved are £6,500 million which to me, as an ordinary housekeeper balancing a domestic budget, seem to be comparatively large. Then, luckily, I am innumerate so I can only do rather piffling sums, but even I can realise that this is about one-fifth of our national indebtedness of £25,000 million. That puts into context whatever expectations may be generated by positive comment by financial commentators with regard to what we can afford to pay ourselves when we realise that what we are spending in total this year is one-fifth of our indebtedness. If we were to spend nothing for the next five years, we would only just commence catching up with our debt. I think that is a context within which all kinds of matters such as the health services and all the rest of it must be considered.
Nobody feels more passionately than I do about the accessibility of health services. I think the £10 charge is miserly and disgusting, but I also have to say that I have some sympathy with the Minister for Health because I know the way in which people's expectations of the health service have multiplied over the past ten or 20 years, in addition to the fact that medical techniques have become so infinitely more sophisticated.
There is a lot I could say about salaries and expenses of the Houses of the Oireachtas but I suppose it would be ungenerous. There are all kind of matters of postage and I hope that the business of international postage for Members will be rapidly sorted out because it is part of our responsibility. I think we are quite right to employ this postage system. I do not agree with some of my colleagues in the House from, I may say, the Government benches who rather cavilled at the fact that, as they whispered very audibly around the restaurant yesterday, the Cathaoirleach had sent over 8,000 Christmas cards to his constituents. I am only sorry that I did not get one because I am actually a voter in this matter, too.
Acting Chairman
The Chair would prefer you would not bring up that matter in this debate.
I blush disarmingly but the moving finger writes and having writ — I regret it is beyond recall. However, I withdraw any unjust aspersion. I was merely regetting the fact that I had not got a Christmas card and perhaps putting myself in line for getting one next year.
I would like to continue to item No. 12 — for the Secret Service we are paying £160,000. I am devastated by the pure simple charm of this statistic. I am obliterated. There is a friend of mine in Amsterdam who used to say je suis bouleversé. I am overwhelmed by this £160,000. Does that represent one large secret or a considerable number of small secrets and who is being paid to keep quiet? I must say it is so modest that it confirms my suspicion that, like the phrase “British Intelligence”, the Irish Secret Service is a contradiction in terms. Since this is the case perhaps we would manage to excise it altogether and either keep totally mum about the Secret Service or pay them the going rate. You would not get very far; maybe it is the telephone tappers who are being paid — I do not know. I am not advised of these situations so I have to be very careful in dealing with them.
I am aware of the fact that there are other speakers. I would like to take one minute to draw attention to a matter that was referred to and that is the question of Structural Funds. It is my practice to leaven what I have to say with a certain amount of humour, but I would like to send a shot across the bows here and give a little indication that there could be storms on the horizon with regard to the application of some of the Structural Funds. The Minister will be able to convey to the relevant authorities in Government the disquiet that is currently felt at the fact that the name of James Joyce was employed in Europe quite deliberately and consciously in order to trigger certain funds and that these are now being looked at with a view to — I will not say misappropriating them but I am not quite sure what the correct word is — ensuring that they do not travel in the direction for which they originally intended. That is just a little signal because if the situation, which involves Bord Fáilte, is not resolved there will be a problem which will not be just of national dimensions but will be of international dimensions in terms both of the tourist interests and also the international scholarly and professional community. Out of deference to the fact that I know there are other speakers wishing to speak and I would like to leave them some small amount of time, I will simply reiterate my pleasure at seeing the Minister in these appropriately beautiful surroundings.
Acting Chairman
I know we have only ten minutes left but there is another Senator offering.
I would not deprive my colleague, Senator Jackman, of an opportunity to speak. Therefore, I will deal with one matter which is of concern, bearing in mind the many debates we have had on unemployment and emigration. That has been dealt with by previous speakers and I wish to lend my support to that discussion.
I would draw the Minister's attention to the law on inheritance tax and the budget proposals with regard to that matter. The budget proposed that the threshold would be increased to £156,000 before tax. Such an inheritance tax is of particular worry to farmers, and recent increases in the value of land are bringing people into the inheritance tax net who would not have been in it before. Land, especially land with a quota, has appreciated substantially in value, and it is not unusual in many parts of the country for such land to reach up to £3,000 per acre. In transfers from a parent to a son or daughter assets up to £150,000 in value are tax-free. As agricultural relief applies, land, farm buildings and the farm house are valued at 50 per cent of the market value. I presume that farms up to £312,000 market value, assuming the proposals are double the £156,000, can be transferred from a parent to a son or daughter tax-free. Increases in the value of land have brought the value of many holdings above this level, and we must bear in mind that this is the family income of the people involved. We must also bear in mind that such agricultural relief does not apply to the stock on the land. The Minister should look at the thresholds and raise them, as many young farmers will be left with two bad options, either to borrow or to dispose of a portion of their property to pay the tax.
Transfers between relatives other than parents and children are extremely onerous on the people concerned, and carry enormous tax burdens. This is extremely unfair in circumstances where, for example, two brothers work jointly on a farm which is in one of their names. The inheritance tax then is very penal on the surviving brother in the event of one of them dying.
Acting Chairman
I must draw your attention to the fact that this is more relevant to the Finance Bill.
I ask the Minister to take these matters into consideration when he is formulating the Finance Bill. I am pleased now to allow Senator Jackman some time to make her views known.
Although Senator Norris is not here now, I do not think that a few minutes waiting on the tarmac in Shannon Airport is too much to expect in relation to the spin-off effects that come to the mid-west by the landing of aircraft at Shannon. I am not on his wavelength as regards his comments on that matter.
I am rather pessimistic in relation to the Appropriation Act. It has not been successful to the degree that the Minister has stated. Senator Honan spoke today about patriotism, but nobody so far in the debate has made reference to the patriotism of Deputy Dukes and the Fine Gael Party in relation to our contribution to the stability and continued improvements that we have found in Government developments in the last while. Obviously it has been disregarded by the Government and disregarded by the electorate. Economic improvements go back not just to 1989 but right back to 1982 where low inflation, the trade balance, surpluses of exports, national roads plan, business expansion schemes, home improvement schemes, social employment schemes, housing etc. had all been put into play and have just been continued by the present Government. I would have to say in relation to local government that little reform has taken place and that block grants have not even kept in line with inflation. There are positive things, but I still see 5,000 applicants on the list in Dublin for 17 local authority houses built in 1989.
The Government just survived by the skin of their teeth with regard to the Programme for National Recovery. I was disappointed yesterday in relation to the motion asking the Minister, Deputy O'Rourke, to accede to an improved teacher-pupil ratio in all schools, and not just the retention of the 19:1 pupil-teacher ratio. The 14 votes could easily have gone the other way because the ASTI did vote against, but the TUI balanced out on the other side. I would put on record that we have had no increase in capitation grants up to this year. Lip service has been paid to the teaching of languages in the sense that the young teachers coming onstream for German are last in and first out, and I cannot see that any improvements towards integration in Europe are going to continue if that is the policy. Likewise that applies to technology. I could go on and on about the lack of increase in funding for the National Association of Literacy, but times does not allow me.
I must mention the £10 hospital charge. I have asked and have not been able to get the figures with regard to the money collected and outstanding and whether it would balance the amounts that are actually spent in the administration of that charge. I will be asking about the statistics because I believe it should be abolished as it is an unnecessary encumbrance on the staff of hospitals and is contributing little to the health budget.
Reference has been made to the Structural Funds, and I would applaud the vision that Senator Ó Cuív showed in stating that community involvement is the only way forward. That has not been given any opportunity in relation to the drawing up of plans or the distribution of funds. The Minister will be particularly interested in how integrated rural development will be funded in his area, the Slieve Phelim area, which is also my area, and I look forward to improvements there within the budget.
Despite all the applauding of the improved economic situation in Ireland, I regret that the Government have not seen fit to increase overseas development aid, despite our crawthumping about tremendous contributions to the Third World. The allocation in 1989 actually dropped from 0.7 to 0.16 per cent. That is a shame for a country with Christian ideals.
The last point relates again to the mid-west. SFADCo had a remit for tourism and industry in the region, and I wonder whether the Minister for Industry and Commerce has a bias towards IDA involvement in that area, because no extra resources have been given to Shannon Development to do anything to improve the situation for industry or tourism in the area. I am sorry I am negative. If I had more time I would give my idea as to how a long-term strategy and plan could be put into play for improvements for all of us and to spread any wealth that has accrued to all sectors of the Irish community, particularly those who are most in need, those below the poverty line.
I would like to extend to the House the Minister for Finance's regret at being unable to participate in the debate today. Unfortunately other pressing business prevents him from being here.
As we have come to expect from the Seanad, the debate on the 1989 Appropriation Act has proved to be a stimulating one, with many interesting and at times constructively critical contributions from the floor and in that regard I would like to extend my appreciation to all Senators who participated in the debate.
There have, of course, been some few wisps of fleecy white and even dark clouds on subjects far from the Appropriation Act straying across the skyline of the debate, but that is something which happens in all Houses of Parliament. It was part of my Seanad experience and I am sure I infringed as much as anybody else. The more things change, the more they remain the same. I will respond later in my contribution to some of the more noteworthy points raised today and during the earlier discussion before the Christmas recess.
The budgetary results for 1989, as revealed in the end-year returns were, for the third year in a row, much better than had been originally expected.
The amount borrowed by the Exchequer at £479 million was some £530 million less than the £1,055 million envisaged in the budget. The reduction in the current budget deficit was even more striking — down from last year's budget target of £819 million to a year-end £263 million. In terms of GNP, Exchequer borrowing finished the year at 2.4 per cent compared to the budget estimate of 5.3 per cent. Thus, in the space of three years, the Exchequer borrowing as a percentage of GNP has been reduced from almost 13 per cent of GNP in 1986 to little more than one-sixth of that level last year.
Overall, tax receipts were about £430 million or 6 per cent ahead of what had been expected at budget time. This reflected, in particular, very strong growth in indirect taxes, largely as a result of the sharp pick-up in consumer spending, especially on cars. The exceptionally buoyant property and stock markets also made a significant contribution to the increase in indirect tax receipts. There was a good performance also from the direct taxes, mainly as a result of the intensification of collection measures.
For the third successive year, spending on non-capital supply services came in below budget with the outturn £29 million below the target figure of £5,595 million. As in 1988, the biggest contributory factor was lower than expected expenditure on social welfare, reflecting, in the main, buoyancy in Social Insurance Fund receipts. These overall savings on non-capital spending were achieved even after allowing for the £23.7 million cost of the Christmas bonus to welfare recipients.
Overall, the 1989 Exchequer results were very impressive. Compared to 1986, Exchequer borrowing has been reduced by some £1.7 billion and in terms of GNP is now at its lowest level for some 40 years. As a result of the dramatic improvement in the public finances last year debt — GNP ratio, which was stabilised in 1988, has now begun to fall at a significant rate — down from 131 per cent at end 1988 to about 123 per cent at end 1989.
As was the case in 1987 and 1988, the low level of new borrowing last year was accompanied by a further improvement in economic performance. It is now clear that a virtuous economic and budgetary circle has been established by the Government. While lower Government borrowing has created the conditions for stronger economic growth, tax revenues have, in turn, been boosted by the higher growth and this has led to further reductions in borrowing.
Growth in 1989 was broadly based, with domestic demand making a substantial and, particularly in terms of a pick-up in investment, very welcome contribution. Consumer expenditure grew by almost 5 per cent in volume terms. The combined effects of increased disposable income, arising from the growth in numbers at work and from the tax-reliefs granted in the 1988 and 1989 budgets, and the climate of confidence engendered by the success of the Programme for National Recovery, brought this about. This House will welcome the result of the vote today which ensures the continuation of the Programme for National Recovery. This same climate of confidence underpinned the remarkable recovery in investment last year. Total fixed investment was around 10 per cent up in volume terms, with building activity markedly stronger and a further increase in plant and machinery purchases.
The manufacturing sector was again a major contributor to output growth in 1989. Production has risen at an average annual rate of more than 12 per cent in the past three years. Last year was also an excellent one for tourism, with numbers of visitors expected to be up by about 15 per cent.
Exports of goods and services turned in another buoyant performance, growing in 1989 by over 11 per cent in volume. For the second year in a row, the trade surplus passed the £2 billion mark. For the third consecutive year the current account of the balance of payments is likely to have been in surplus, confirming the basic strength of the economy when the fundamentals are right.
The performance of manufacturing, tourism and exports is strongly dependent, of course, on the international competitiveness of our economy. Our relatively low inflation rate, coupled with the moderate wage increases agreed between the social partners under the Programme for National Recovery, contributed to a further improvement in our competitive position during 1989, helping to underpin the strength of exports and to secure increased investment.
Last year we saw some slippage on the inflation front after the remarkable performance in 1988, when the inflation rate dropped to its lowest level in almost 30 years. However, the cause is not to be found in a worsening of "core" inflation; it was, for the most part, due to external events over which we had no control. Happily, the international outlook is more sanguine, and there is little reason to expect a repetition of these other factors in 1990, rather the reverse.
One of the most encouraging features of the economic regeneration is the improvement in employment. All indicators point to strong employment growth in 1989. The IDA announced last month that the highest level of new job creation and the lowest level of job losses in manufacturing industry in the decade was achieved last year. As a result, employment in manufacturing rose by an estimated 6,000, or close to 3 per cent in 1989. In building and construction, the latest figures show that employment increased by over 10 per cent in the year to last October, thus continuing the pattern of improvement which began in early 1988.
An especially encouraging feature of the employment picture last year was the decline in job losses; notified redundancies last year were at their lowest level for ten years and were 42 per cent lower than in 1988. With all these positive developments on the employment front, it is estimated that non-agricultural employment increased by an average of 13,000 in 1989. Over the two years, 1988 and 1989, private sector non-agricultural employment is forecast to increase by well over 30,000.
The upturn in employment was reflected in the continued fall in registered unemployment throughout 1989. Last year the average number on the live register fell by almost 10,000, the biggest fall on record. Many Senators in their contributions referred to the necessity to create new employment opportunities and while we all have to accept that the unemployment levels are still running at unacceptable levels, we have, nonetheless, to understand that it has taken quite an extraordinary turnaround to get a growth in employment following a period during which, in the first five years of the eighties, 80,000 jobs were lost. It took considerable pain right across the whole spectrum of the economy in terms of new management and prudent management of the public finances to get the underpinning situation to a point where we could get that real growth. We intend to build and sustain that and see that there is further dramatic improvement in the future.
Just last week the Minister for Finance introduced his 1990 budget. It can reasonably be described as a sympathetic and balanced response to the needs of the unemployed, the taxpayers and the least well-off in the community. It contains a well thought out package of tax and expenditure measures aimed at promoting job creation, investment and competitiveness and at protecting the living standards of those on social welfare and on low incomes. It also provides, through a further reduction in borrowing, for the consolidation of the fiscal progress made over the past three years. As a result, it provides a firm fiscal foundation for future progress.
The prospects for additional employment are particularly enhanced by the budget through the further significant improvements it makes in the tax system. The reduction in the standard rate of income tax from 32 per cent to 30 per cent and in the top rate from 56 per cent to 53 per cent will not only improve the incentive to work but will also price more people into jobs. Moreover, it will facilitate a continuation of pay moderation which, together with the reductions in VAT and excise duties, will keep down inflation and improve our cost competitiveness. The end result will be more jobs and an underpinning of our strong export performance.
The budget also continues the process of reforming the corporation tax system, begun in 1988. It provides for a further reduction in the corporation tax rate and a termination of accelerated capital allowances. These changes will benefit employment by reducing the cost of labour compared to capital and are another example of the pro-employment thrust of the budget.
The budget also has a strong caring dimension to it. Those on social welfare and on low incomes are specially looked after. It provides for a 5 per cent general increase in all social welfare weekly payments which will take effect from July 1990. This is well ahead of the expected 3¼ per cent increase in inflation. Special higher increases are also provided for certain beneficiaries. For example, those on long-term unemployment will receive an increase of nearly 11 per cent, bringing their personal rate from £47 per week to £52 per week. For the first time since April 1986 child benefit payments were increased across the board by 5 per cent.
The income tax exemption limits are also being increased; by £250 in the case of a single person and £500 for a married couple. Furthermore, the child addition to these limits is being increased from £200 to £300. As a result, a single person earning £3,250 or less a year and a married couple with 5 children earning £8,000 or less a year will pay no income tax in 1990-91.
Mindful of the fact that PRSI bears particularly heavily on the low paid, the Government have decided that as from April 1990 employees whose gross earnings are £60 or below in a week will not have to pay social insurance in that week. Over 50,000, employees are expected to benefit from this change.
The Government's concern for the provision of health services generally was also reflected in the budget with an additional £10 million earmarked for health spending this year on top of the additional £122 million in the Estimates for these services. The Government are particularly aware of the needs of the elderly and made an extra allocation of £5 million towards improving health services in the areas of home nursing and home help support and in the provision of more facilities for increased day care and shortand long-term stay care. The Minister also announced the introduction of a new carer's allowance of £45 per week as an incentive to families to care for their elderly relatives in a home setting. It has been widely welcomed as an imaginative innovation.
An extra £2 million was made available towards further development of services for the mentally handicapped and £3 million for improvement of dental services.
The welfare improvements in the budget at a full year cost of almost £235 million clearly show that the Government are determined to ensure that the disadvantaged share fully in the benefits from the improvement in the economy.
Significant additions were also made in the education area. Primary schools in disadvantaged areas will benefit from the trebling of the special fund for disadvantaged schools to £1.5 million. Capitation grants at first and second level are being increased at a combined cost of £3 million this year. Third level intake is being expanded by 1,200 students per annum over three years from October next and to facilitate this £4 million is being made available for capital works in third level colleges.
Overall, then, the 1990 budget consolidates and builds on the tremendous progress that has been made over recent years in addressing the problems in the public finances, yet still manages to protect and improve the position of the least well off in our society while providing a supportive environment for our continuing economic recovery.
As to prospects for the economy this year, the further reduction in Exchequer borrowing, to just over 2 per cent of GNP, provides the clearest possible signal that we are continuing to manage our affairs in a prudent manner. This will, as a consequence, benefit interest rates and encourage foreign investment in this country.
The budget will help to lower inflation. The reduction in VAT rates and other budgetary measures will help to reduce consumer prices by at least 0.5 per cent on average this year and by around 0.7 per cent by the end of the year. In this regard, the Government welcome the announcement earlier this week by the board of the ESB that the increase in VAT on electricity will not be passed on to the consumer. The Minister for Industry and Commerce is determined to ensure that the benefits of the VAT reductions are passed on to consumers so that the whole community can benefit. There are welcome early indications that some traders are preparing to pass on these reductions even before 1 March and I would strongly commend others to follow their example.
Furthermore, a number of the factors which contributed to higher inflation last year will either be absent, or better still, will be working in the other way this year. Food and energy prices which, together with interest rates, were an unhelpful influence on inflation last year should prove more favourable in 1990. The weakening of sterling and the dollar since last autumn and the better outlook for international inflation will help to reduce the cost of the goods and services we import. As a result, it is reasonable to assume that inflation has now peaked and we can look forward to seeing it falling steadily as the year progresses. As the Minister for Finance said in his Budget Statement last week, if we manage our affairs properly, inflation could be less than 2½ per cent by the end of the year.
The budgetary measures will assist the continuation of the strong but sustainable recovery in consumer spending which we have been enjoying since 1987. Over the last two years, private consumption growth has averaged about 4 per cent a year and I am confident that this can be maintained in 1990.
The volume of fixed investment is expected to grow by a further 10 per cent this year. Substantial extra public investment in roads, bridges and sanitary services, in part reflecting the increased Structural Funds programmes, will contribute to this enhanced investment performance. Private investment will be boosted by stronger domestic demand and by the need to prepare for the challenges of the Single European Act.
Taking account of these factors, GNP growth is projected to be over 3½ per cent this year. This should be sufficient to stimulate a progressive improvement in the employment situation in the course of 1990. Non-agricultural employment is expected to increase by about 16,000 in 1990 with substantial job creation in manufacturing and international services, tourism and construction. With redundancies in the market sector now much reduced, job creation can be expected to have a more pronounced impact on employment growth than in the past.
Employment growth this year should be sufficient to permit both a slowing down of emigration and a further reduction in unemployment. The average number on the live register in 1990 is expected to fall to below 222,000 which compares with an outturn of 231,600 last year.
In brief, this year should witness satisfactory further economic growth, lower inflation and higher employment. Conditions are right for higher investment activity, modest but realistic improvements in living standards together with increased employment and lower unemployment and emigration. The budget will contribute to progress on all these fronts.
I now want to address some of the many points raised during the course of this debate. Many speakers, and Senator Doyle in particular, raised the question of poverty and what was or was not being done to solve the problem or alleviate the position of those who find themselves in poverty. A lot has happened, of course, since the pre-Christmas debate. While social welfare is invariably a significant focus of attention in any parliamentary debate on public expenditure, the fact that we have recently had a budget containing the biggest social welfare package ever will clearly be very much in the minds of Senators. That this can be done while not jeopardising continued fiscal discipline must surely be welcomed by all.
Our commitment in the Programme for National Recovery was to maintain the value of welfare payments and, to the extent that we could find additional resources, to improve the position of those on the lowest payments. I am pleased to be able to say that we have done this and more in the last two budgets. Not only have welfare recipients generally been kept ahead of inflation, but the increases in real terms given to those on the lowest payments have been unprecedented in value and comprehensiveness.
For example, in the 1988 budget, the personal rate for the long-term unemployed was increased by 11 per cent to £42. This was followed in 1989 by an increase of almost 12 per cent to £47. Now, this year they will get another 10.6 per cent increase bringing it to £52 per week, or 33.6 per cent of an increase over a span of three years.
The minimum rate for child dependants was increased from £8 in 1988 to £10 in the 1989 budget, a 25 per cent increase, and was followed in the recent budget by a further 10 per cent increase, bringing it to £11.
Our commitment to social justice is deep and long established. The economic turnaround of recent years has afforded us an opportunity — which we have used to the full — to achieve greater social equity in our society.
The quality of our health services is to the forefront of public debate and comment at present and many Senators touched on this issue in their contributions. In this context you will be aware that the Minister announced in the Dáil debate on Health on Tuesday a widespread strategy including a commitment to maintain, through 1990, overall hospital activity including the special initiative on waiting lists in the latter half of 1989; an outline of precisely how the £10 million allocated in the budget to community care will be spent and a commitment to further development in this area; a major initiative on efficiency in the health service; further initiative on Dublin hospital services; a radical new approach to patient care, with appointment systems in all hospitals; patient-consumer care plans for all agencies; an appeals system for medical card cases; a clear commitment to a five-year capital programme to implement policy and replace equipment; and an improvement in information systems and management development. This strategy along with the extra resources announced in the budget demonstrates the Government's commitment to providing a caring and efficient health service.
The Government do not accept that we have a two tier health service. Access to hospital services is on the basis of medical need. Last year the Government launched an urgent action programme aimed at increasing the capacity of the acute hospitals and reducing waiting lists particularly in areas such as orthopaedics, cataracts and ear, nose and throat services. The Government reaffirmed their commitment at that time to ensuring that admission to hospital is on the basis of medical need, not ability to pay.
The Government are satisfied that the health services have responded well to the exceptional demand for services recently arising from the very high level of illness particularly among the elderly. This gave rise to a significant increase in the level of emergency admissions all over the country.
Senator Doyle referred to the assessment of eligibility for medical cards on the basis of gross income rather than net income. I must point out that a person whose gross income exceeds the published eligibility guidelines is nonetheless awarded a medical card if he or she meets the statutory criterion i.e. that, in the opinion of the Chief Executive Officer of the relevant health board, he or she is unable to arrange general practitioner services for himself and his dependants without undue hardship. On a related point, Senators will no doubt have welcomed the reference in the Minister for Finance's Budget Statement that the Government are taking steps to ensure that no person loses the medical card as a result of claiming the family income supplement.
Dr. Upton's statement that the accident and emergency services in Dublin are used as a backdoor to the hospital is incorrect. Recent information tells us that no more than 2-3 per cent of those being admitted through the accident and emergency departments at Dublin hospitals are actually on the waiting lists.
In relation to dental services, I have already mentioned the announcement in last week's Budget Statement of an additional allocation of £3 million, to the health boards dental services in order to further improve services for eligible adults and to treat further top priority orthodontic cases.
In relation to the orthodontic services, there has been an increase in demand for this expensive service in recent times while the health boards have experienced difficulties in recruiting consultant orthodontists to provide the necessary treatment.
As regards ophthalmic services, while waiting times for appointments for sight tests have increased somewhat in recent years, the health boards grant priority to persons who are elderly or who have a medical condition which necessitates a prompt sight test. Sight testing is now mainly provided by their own ophthalmologists as most health boards have ceased using the services of the private opticians for sight testing.
On the question of aural services, which are carried out for adults by the National Rehabilitation Board, there were some delays during 1989 but the problems which contributed to those delays have now been resolved and in most areas the waiting times are within manageable limits.
Turning now to education, Senator O'Toole made an impassioned contribution in this area with particular reference to primary education and the need to provide additional resources for the disadvantaged. I have already remarked on the significant changes in the education sector which the Minister for Finance announced in his Budget Statement last week. It is no harm, however, in replying to Senator O'Toole to expand a little on these and other initiatives taken in the primary education area for it has been the consistent policy of this Government to assist a wide range of disadvantaged areas and groups, including travellers.
To be specific: at first level the pupil-teacher ratio is being improved with effect from next September. Moreover in primary schools in disadvantaged areas up to 95 additional teaching posts are being created in 1990, along with an extra 30 remedial posts. There are currently some 870 remedial teachers, serving approximately 1,150 schools, and this measure, together with the reduction in the pupil-teacher ratio, will certainly enable school managers and principals to improve the organisation of remedial measures.
Early last year the Minister for Education indicated her plans to initiate a pilot school psychological service for primary schools in a disadvantaged area in Dublin and in a rural area. The pilot project will operate in Clondalkin, west-Tallaght and south Tipperary. At present arrangements are in hand for the appointment of four psychologists through an open competition. Psychologists from the existing psychological service in the Department of Education will commence preparatory work in the designated areas at an early date.
In addition to those measures the disadvantaged fund at first level has been trebled for 1990 to £1.5 million. By means of this fund participating schools will be given special grants for the purchase of books and equipment, home-school-community liaision initiatives will be encouraged and strengthened, special inservice training provided and finance made available for equipping pre-schools for travellers. Also at first level the 1990 provision for school books for needy pupils has been increased by 20 per cent.
These various improvements, together with a basic increase in the capitation grant — from £26.50 to £28 per pupil — represent a substantial investment in primary education with a particularly important, and necessary, emphasis on measures which will alleviate disadvantage.
Turning now to the fishing industry, there were a number of misleading and uninformed statements made during the debate.
The Government, in the national plan, have recognised the very considerable potential for the further development of this industry and have committed a significant level of Exchequer funding towards such development. For example, during 1990 the Government is providing total funding of £11.3 million to Bord Iascaigh Mhara; this represents an increase of almost 9 per cent on the 1989 provision.
On the question of fish quotas let me say that my colleague, the Minister for the Marine, Deputy John Wilson, has achieved quite a remarkable success in the negotiations. He managed to win agreement to a complete reversal of the general trend in the Commission's initial quota package, as it affected Ireland, by turning a 12 per cent reduction into a net gain. This was a most impressive achievement when compared to the very sizeable reductions in quotas imposed upon most member states.
I would like to reply briefly to some of the points raised on the issue of fleet capacity. It is true to say that development in the Irish fleet has to some extent been constrained by EC Commission decisions relating to the gross registered tonnage of the Community fleet. However, arising from the recent exercise of re-registration, the establishment of a new fleet register is well advanced and will, perhaps for the first time, give an accurate picture of fleet capacity. This exercise has made it possible to meet the 1989 capacity objectives set for Ireland and will make a significant contribution towards facilitating the achievement of further objectives.
The positive progress being attained on the GRT issue has been recognised by the Commission, who recently approved grant aid towards the construction of eight new Irish fishing vessels. In addition, it should be stressed that owners of vessels wrecked during recent storms in the south-east can be accommodated in replacing their vessels within the new GRT arrangements. Such replacement vessels will be entitled to both EC and national grant assistance for boat construction.
Good news.
I am sorry to say that time does not permit me to go into comprehensive replies to many of the contributions that were made subsequently and, indeed, earlier this afternoon. It is sufficient to say that quite a number of the contributions were aiming at the areas in our economy which require further improvement, mainly employment, as being a central issue. As far as the Government is concerned the last three years have been ones during which very radical improvement has been made in the economy as a whole. Every step that can be taken to improve the situation with regard to employment in dealing with other matters in the economy will be attended to as resources permit.
Question put and agreed to.