Dáil Éireann - Volume 347 - 09 February, 1984

Financial Resolutions, 1984. - Financial Resolution No. 11: General (Resumed).

Debate resumed on the following motion:

That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.

(Minister for Finance.)

Mr. Power: When last I spoke on the budget I was remarking on the political fact that Coalitions here never seem to run for a second term and that this fourth and most disastrous of all Coalitions will be the final one — I doubt very much if there will be a fifth. Apart from history, I hope we will not have another Coalition. We have had the obvious capitulation [2216] of the Labour Party, as indicated by this budget, and then the departure of Deputy Cluskey from the Cabinet like the sudden descent of a gas filled balloon. This marks the end of an era in Labour politics. That party are peculiar in one way: a former leader of the Labour Party could not live with the Fine Gael and had to leave them, and a former leader could not live without them and moved house to live with them. By the time the next Coalition are mentioned, and that will not be for some time, Fine Gael will not have any willing partners to coalesce with them. We all know the object of Fine Gael is to go it alone, to have an overall majority, but I forecast they will never walk alone.

The principal criticism of the budget is that it has no direction, goal or strategy. People knew what Fianna Fáil's intentions were, they may not have agreed with it, but we had a long-term objective which was the long-term good of the country. As well, we had a short-term policy as to how we might cushion our people against the worst of the recession and help them to ride out the storm. Above all else, our objective was to keep as many as possible of our young people employed, to give them confidence and hope in the future. We may have been criticised for being too optimistic but is it not better to have tried and not succeeded in full than never to have tried at all?

That is the worst feature of this budget. It did not even try, it did not do one iota to help to improve the unemployment situation. Everyone agrees that our greatest problem is unemployment. One quarter of a million people are unemployed. It is getting worse. The figures released at the end of January are positive proof that the Coalition put more people out of work than ever before. The Government said the news was disturbing. That is a nice euphemistic expression. I would call it disastrous and diabolical. They said unemployment would get much worse and that they realise that 30,000 more people will be out of work before the end of the year. Judging by recent figures that might be a conservative estimate. Some statistical pundit said [2217] it was not as bad as the figures indicated because the rate of job loss was slowing down. This is utter nonsense. If a person is bleeding to death he will bleed more at the beginning than at the end. The fact that the blood loss is lessening is no indication that the person is getting better. The more people who are out of work the fewer people there are left to be unemployed. I defy any Government member to point out anything in the budget which will provide extra jobs or put people back to work. That is the real failure of this first Coalition budget of 1984.

The current budget deficit of £1,085 million will be about the same again next year. That is no consolation. People will be worse off and more will be out of work. There is no improvement as regards borrowing. The budget deficit will not be eliminated in 1987 as originally promised by the Coalition or in 1997 for that matter, but with a little help from certain quarters perhaps the Coalition will be gone long before that. They will be gone but not forgotten. They will not be forgotten by the building or construction industry. Here is an opportunity for any Government to restore confidence to an industry which utilises 95 per cent of Irish materials and labour and has the capacity to provide essential jobs overnight to turn a green field into a job-making construction site. Although 45 per cent of building and construction workers are out of work nothing was done despite pleas from all sources. It is quite clear that the Public Capital Programme is under-financed.

Why was the road programme not reactivated? Fianna Fáil provided money for the Naas by-pass. We gave the go ahead to that project. The Tánaiste arrived to open the road and lead in our winner that we bought and paid for. Everyone realises that was a good job. Kildare County Council decided that people would travel freely on that road and would not have tolls to pay. However, with the assistance of the chairperson of the council and the Minister — he was then Minister for the Environment but has moved house since — they reactivated the idea of charging tolls. He [2218] used his position that day to bring this up again. I hope it will not happen. Motorists, PAYE workers and those fortunate enough to have jobs are paying though the nose for the privilege of working. The motorist is repeatedly screwed in every budget and now they want to charge him for going to work. That proposal emanated from the Government and should be stopped. There is no logic behind it.

There was a second phase to that road programme. We had the expertise, planners, workers and a team capable of doing good work. A road was to be built which would by-pass Newbridge and Kilcullen. There is also the long awaited western by-pass which would by-pass Leixlip, Lucan, Maynooth and Kilcock and help people travelling to the west. Anyone travelling that road agrees it is a bottleneck. If an industrialist was brought to the west, by the time he got to Kilcock he would feel like turning back because he would say that the infrastructure was so outdated he could not dream of investing capital in such an area. We need vast capital expenditure for our outdated infrastructure. There is nothing in the capital programme to help that.

We need to look at our road system and the funding of our roads. Our secondary roads are a disgrace. There is no funding available and that answer comes back from the county engineer every time we write to him. I represent a county which once had a proud record of good roads. That record is badly tarnished. When I had the use of a ministerial car if I was out late I might doze off but I was always sure to be awakened when I crossed the Kildare border with the bumps on the road. We need to look at how we spend money and how we supervise engineering sections. It has come to light that out of every £100 that is spent by the engineering section in Kildare, 77 per cent goes on administration and 23 per cent on labour. No industry could afford to operate like that. We need local authority funding and a proper road authority to look at the problem nationally. It should have powers of supervision and ensure that we get value for money.

It has been recommended that we charge for specific services such as water [2219] and refuse collection. The first thing we should look at is what will happen when the people pay in their money. Will the people get value for money? In Kildare we have two systems which are comparable. One is direct labour and the other is run on a tender system. It can be seen that the tender system is £60,000 a year cheaper than the direct labour system. We can learn from that.

There is nothing in the capital programme for housing. In my area there are 400 applicants for 40 houses. That is an average of ten to one. Needy people have been denied houses for years. In towns like Newbridge, we build 50 houses where we would need 500. Great play was made recently about an extension to the contract which would enable 50 extra houses to be provided in that town. There were letters in the local newspaper saying that the Minister for the Environment told the Ministers, Deputy Dukes and Deputy Bermingham and Senator Conway about the good news of this extension. He neglected to tell us anything about it for one reason or another. I should like to tell the Minister that we need ten times as many houses in Kildare and the good news he has announced is frustrating to those waiting for houses. The local authority housing allocation system has failed to meet the needs of the people. We have a crisis in housing. I was led to believe that the inner city of Dublin was even more needy. My recent experience in a by-election there did not confirm that.

Our county has a crisis and we need help. If the local authorities do not have the capacity to deal with this problem, why not initiate joint ventures between local authorities and private builders and let them fill the gap? This needs to be done. Young couples and their families are living in dear, damp flats or in caravans and mobile homes. No real attempt has been made to help them. We could kill two birds with the one stone. We could provide for a serious need because we have the capacity to build the houses and we would give employment at the same time. I hope that something specific will be done about that matter.

[2220] The budget figures show that the Defence Estimate has been trimmed back as usual. We pay tribute to the members of the Defence Forces when they are dealing with security matters, with the maintenance of law and order or when they are called in to cope with every nasty job that must be tackled, such as some strike situation that becomes intolerable, but then we expect them to exist on a shoestring. When Mr. Tidey was rescued by the Garda and the Army we were all pleased. Indeed, the Ministers for Defence and Justice basked in the glory of that achievement. I was very pleased, too, because I have absolutely no time for the Provisional IRA. I regard them as despicable. However, shortly after the rescue operation when the hiccups and the mistakes began to emerge in respect of the operations at Ballinamore and Claremorris, the Ministers who had taken the credit for the rescue were not too happy about taking the blame for the mistakes. Consequently, they sought to find a scapegoat. Commissioner Wren looked to his subordinates while the Minister for Defence looked towards the Church and suggested they were wrong in their attitude and that they should excommunicate members of Sinn Féin for joining that party at all.

The Government should look towards themselves. Apart from the 300 men whose recruitment to the Army we had provided for in our budget there has not been further recruitment with the exception of those who had to be taken into the Naval Service to man a fishery surveillance vessel for which, incidentally, we also provided the money. I suppose one can understand a ban on recruitment in times when money is scarce. There are probably more people in the Defence Forces now than at any time since the Emergency but it is unfortunate that all those people who are anxious to join the forces cannot be recruited. However, what is unforgiveable is, as I was informed here, that the FCA is closed for recruitment.

It is unfortunate that the many young men leaving school and who have plenty of time on their hands have no legitimate avenue open to them in the event of their [2221] wishing to give national service voluntarily. This Government have failed to provide the necessary moneys for the FCA in terms of training and materials. If the Minister has made a conscious decision in co-operation with the Cabinet to bring about a situation in which young people are not in a position to give of their services voluntarily for the country, surely it is wrong for him to look for a scapegoat, whether that scapegoat be the Church, the Cardinal or any other and to say that the Church's attitude in not excommunicating certain people contributes to recruitment to illegal organisations.

I have some observations to make on the agricultural industry with particular reference to the sheep industry. The sheep industry is profitable and could be even more beneficial to our economy if sheep numbers could be doubled. This is a facet of farming that can respond quickly to any incentives given. The markets are available. We have explored the market situation in the Middle East and elsewhere and there is room for expansion of those markets. The greatest concern of sheep farmers is that of marauding dogs. Recently I attended a seminar in Athlone where I heard a farmer say that there is no point in talking about sheep unless we deal first with the dog menace. There is evidence of this menace from all over the country, evidence that was provided graphically some months ago in St. Stephen's Green. The problem has become very serious. I became involved in it to the extent that I was in a position to help provide a site on the Curragh for a dog shelter. The IFA and the local authority became involved at that time. The shelter is ready now but there is nobody prepared to fund the ongoing cost of running it. Neither the Government nor the sheep owners will fund this shelter. We were prepared to appoint a dog warden who would round-up stray dogs, whether they be unwanted pets which when they became a nuisance were dumped on the countryside or any other. These animals would be either kept in a safe place or homes found for them.

In the hinterland of Naas, which would [2222] include Two-Mile-House, Rathmore, Caragh and in Naas itself, there have been only 350 dog licences taken out. I venture to say that on any day one would see more dogs than that on the main street in Naas. It is obvious then that people are no longer buying dog licences. Not many people may be aware that since 1 January the fee in this respect is £5. Regardless of when a licence is taken out, it expires on the last day of the calendar year so we may presume that after the months of January, February and March, people do not bother to licence dogs. It might be well if the licences were on the basis of being current for a year from the time of the year at which they were taken out. I suggest that the whole system of dog licensing be handed over to individual local authorities, though perhaps the licensing might be done in some counties by way of private schemes, with the dog wardens being responsible for the collection of the licence fees so that there could be set up a system which would be self-financing. In this way we would be allowing sheep farmers to rest a little more easy at night. I hope my suggestion will be taken up. It is one that I have discussed with various farming organisations and they are confident that it is feasible and possible.

One of the most important questions of today is the question of jobs. Often we point to the failure in our industries. People have become openly critical of big foreign firms who agree to set up here and to provide employment. Perhaps one of the motives was that their operations here would give them a foothold on the EEC market, but now for some reason the word “multinational” has become a bad word. We were glad to see firms such as Ferenka, Polaroid and in my own county, Black & Decker, come here and begin operations. These firms came here in good faith when trade was booming. We made a great fuss of them then so I suggest that it is wrong to be critical of them now when things have gone wrong. At least it can be said that they tried, which is more than we can say for the Government in so far as the budget is concerned. I am tired of hearing these critics of the multinationals who say that [2223] these companies moved out when the tax-free holiday was over. In many cases that was not the reason at all. This carping approach is far from the céad míle fáilte image on which we pride ourselves. Now it is a litany of lamentation and of nagging.

We have been fortunate in the micro-chip high-technology field. It is an area in which we have been reasonably successful and this gives us hope for the future because it will help the people in the mainstream of technological progress. We were fortunate that the decision was made for us to become involved in that aspect of new manufacturing but it is important to realise that at a time when we are not in a position to provide hundreds of jobs we must think small. I am glad that the IDA have adopted this approach and are encouraging the smaller local industries and crafts. There was a tendency in the past in such areas of activity as joinery, concrete products or light engineering for the IDA not to give help. The stock answer then was that this was a very sensitive area and that if, say, employment were to be provided for ten people in a certain locality 20 others working nearby would be put out of employment. We must re-evaluate this thinking and try to meet local demand to the greatest extent possible. We must concentrate on import substitution. I have seen the good work done by local co-operatives. This is the sort of effort that should be encouraged. Every help should be given to small local efforts particularly in relation to the utilisation of indigenous produce.

One of the greatest examples of a need that can be met locally is given to us in the startling figures for the imports of food. In the future the emphasis must be on food processing. I am especially conscious of the need for this in the meat industry. In Kildare we have three factories and unfortunately not all of them are functioning full-time at the moment. Very few of the factories are venturesome enough to process meat and give it its added value. There is also the problem of continuity of supply, a subject I shall deal with later.

[2224] We have fallen down very much on the marketing of our produce. In many cases intervention was seen as a safety valve but it was counter-productive and was a crutch we used for far too long. We do not need stop-gap measures in agriculture. We need at least a five-year plan. If a person is to be encouraged to increase his herd numbers, whether dairy or beef, and if he embarks on such a programme he wants to know where he will be in five years' time.

Another industry that should cause concern is the flour industry. In 1980 we imported only 2 per cent of our needs of flour but that figure has become 22 per cent. Large firms have closed. Some have moved to England where the parent firm is located and possibly it suits them best to export their goods here. In farming there has been a major change over to winter wheat. If one is to judge by appearances and the mild weather we have had, the present crop looks excellent. It is up to the Government to ensure that it is utilised for milling and not for animal feed. We can grow our own wheat and we have proved we have the capacity to be self-sufficient. A country like England has never been noted for its flour milling and it has never been able to export to us. Why are we not in a position to utilise our wheat for flour? It could happen that in an emergency again we would be glad to have that capacity but if it is neglected now we will not have it.

One facet of the budget that has not received much attention is that dealing with social welfare recipients. They have fared very poorly. This year they will not keep pace with inflation. The 7 per cent increase they received should have been at least 9 per cent to enable them to break even. The social welfare increases have been staggered: some will be paid in July and the family income supplement will be paid in November. The reason is that the Government want to save money. VAT on clothes will operate from 1 May. At one time people used say “Don't cast a clout till May is out”: the new Dukes ditty will be “Don't buy a thing once May comes in”. The sum of £2.70 means very little in presentday terms to a non-contributory [2225] old age pensioner. The pensioners got a poor deal in the budget. I do not understand why 2p was put on the pint. This is generally considered to be the poor man's drink, although a person could not drink too many pints nowadays if he was poor. At the same time, there was no extra charge on spirits. It is hard to understand the thinking behind the charge on the pint. Maybe it was purely for financial expediency and what would yield most.

The Minister in his speech devoted three paragraphs to agriculture. It could all be summed up in the sentence when he said that the prospects for the coming year would depend on the outcome of the common agricultural policy talks on agricultural prices. Now we find the whole future of Irish agriculture will depend on the Minister, Deputy Deasy. I believe we are disadvantaged already in that respect because this Minister has shown his weakness from the word go. It is my belief he threw in the towel far too quickly. People have the sense to realise that the farming industry accounts for almost 50 per cent of our GNP and that it affects everyone. The super-levy is one of the greatest dangers to our economy and it is the most serious situation we have had to face in the EEC. Now the Minister dismisses all of that and says it will depend how we get on in the CAP talks. I am very doubtful about the present Minister. He was a very truculent Fine Gael backbencher; there are those who would say that quality was the one that caused his exaltation to his present post but he has been meek enough in his ministry and he has been very ineffective in Europe.

I should like the Minister for Finance to clarify the changes he has made in the method used for assessing for stock relief. Will the Minister say if he will allow for the building up of our national herd? This matter is causing great anxiety among farmers. If it impedes the building up of our stock it will do much harm to agriculture. Our country has the capacity to carry twice as much stock but farmers need incentives and help.

I have a relative in England and at one time I visited some British farms. There [2226] I could see signs of a thousand years of uninterrupted progress. I was lucky enough to visit the south of Italy where I saw the great advances that were made as a result of EEC money. They had entered the Community long before we joined and they were able to utilise the funds they got to bring their farms up to standard and to make them as productive as possible. They have an excellent infrastructure that enables people in the south of Italy to get their produce to the central European markets within a day, something that is denied us.

I thank the Minister for ensuring that the lime subsidy will be continued. People should be encouraged to use fertilisers. A proper crop rotation system and drainage system are necessary and that depends on the farm modernisation schemes. In many cases stock is still out in the fields. They are being fed on the dearest commodity of all during the winter months: they are drawing on the resources of their own flesh and it will take them months to catch up. We need proper housing for them. What is needed is a five-year co-ordinated plan that will cover all these measures.

The bloodstock and racing industry is a matter of great concern in my county. This time last year I had the temerity to speak on the Adjournment to explain how serious was the stealing of Shergar. We had many guffaws from the opposite benches. These people did not appreciate how serious this matter was and what a bad advertisement it was for our country. It is necessary to impress on people that racing is not solely the sport of princes or the preserve of the rich. It is a means of living for many people. On the Maddenstown and Brownstown side of the Curragh, there are three trainers who provide over 100 jobs. Even in the recession those jobs were there. They got no grants or handouts. This is a way of life for many people.

Some years ago I gave the Minister for Finance a dossier drawn up by people involved in the apprenticeship scheme for stable lads — Race — housed on the National Stud lands near Kildare. That would provide an opportunity for 45 jobs every year to train people to work in [2227] racing stables — some to become jockeys, some farm managers, stud farm managers, learning a little about grassland management, book-keeping and so on. One million pounds would have set up a scheme which would have provided 45 extra jobs every year. The demand is there for these jobs and all we need is the will to get this scheme going.

With regard to the racing industry, we should not be fooled by our victories in Britain, France and even Japan last year or the fact that prices are booming because oil sheiks will pay big money for horses. The industry is not that sound and it is not being helped by successive Governments. The main reason for this is that we take out almost £1 million by way of this 1½ per cent on course betting tax. This is never ploughed back into racing. The bookmakers' association visited the Minister and thought they were being well received. They hoped something would be done about this in the budget but I regret to say that nothing has happened. We have a climate that is conductive to a good blood stock industry. Our name is recognised all over the world. If the Government are not prepared to help this industry, at least they should not hinder it. Again I appeal to the Minister for Finance to remove this 1½ per cent on-course betting tax.

Everyone who speaks on television and radio about job creation has suddenly become very conscious of our forests and forestry programmes. Moves have been made to increase tree planting every year, but there is a limit to what the State can do. The State and private enterprise, such as companies with pension funds, should get together and invest in these projects because we have one million acres yet to be planted. We cannot wait 100 years and plant at the rate of 10,000 acres a year. We must accelerate this programme. I will clap the Minister on the back if he succeeds in getting private entreprise involved in this area. He should also look into the area of social welfare when people hand over their land because they are afraid that any provisions made under the farm retirement scheme will affect their pensions.

[2228] During our term of office we realised that Scarriff was our last timber processing industry making chipboard. We took a decision to keep this company going with a certain amount of State aid and local subscriptions. It can be said that that decision was justified in view of the recent figures which show that they can make a profit. It would be wrong to allow Scarriff to close, as the present Government appeared to be thinking of.

I would like now to deal with propaganda which has been heard a lot recently. It has been said that we are exporting timber at a £1 a tonne. I was responsible for that scheme and I am glad of this opportunity to explain the situation. When I became Minister for Fisheries and Forestry I inherited a situation where Scarriff was the only outlet for timber thinnings. Munster Chipboard and Athy Wallboard had closed. We had 300,000 tonne of thinnings every year and nobody wanted them. In the long-term I set a target to find somebody who would utilise that timber to the maximum extent, and in the short-term I did a deal with a person who was prepared to extract the timber, provide the labour and do the work the Department would have to do anyway, because if you want timber to mature properly, thinning must be done at a certain time. The Department would have had to do this work but this man took on this work and even set up a training school. The most he succeeded in exporting from the Waterford port in any year was £26,000 worth of timber. That was £26,000 into our coffers which we would never have had and we were saved the bother of getting this work done. This man's contract was for three years and he was told it would not be renewed. As I told this House, there is still ten times as much timber left and I told Deputies if they knew any local person who wanted this timber he should go to his local forester and he could have it. But nobody turned up with a chainsaw, because people have become increasingly lazy.

I will illustrate how, in my term of office, we succeeded in solving the long-term problems with the help of the IDA and officials of my Department. We [2229] brought a firm to Clonmel who are producing a medium density fibreboard. They have a market for this project in the EEC. They employ 250 people in the factory and a further 250 jobs will be available upstream when they are fully operational. They will utilise every bit of forestry thinnings, waste timber and sawdust we have. It must be said that the Department of Fisheries and Forestry are not geared to dispose of timber or with the future development of the industry. There was a reluctance to consider this. The returns from our forestry programme should be paying bigger dividends by now because it has been said that although we can grow trees more quickly than any other country, we are very poor on the marketing side. We need to encourage precision sawing, the presentation and drying of our timber and so on. This industry has great potential for employment. I would not like anyone to think I was being too critical of the Department. If anyone wanted to know how successful the Department have been since we got the reins into our own hands, he could be brought to our State forests. It is generally accepted that we have done more about afforestation than most other countries, such as the United States where they have considerable forests but do not worry about afforestation.

One of the failures in the present budget has been the state of PAYE workers. Everyone remembers the marches which took place some years ago because these people bore a burden to taxation which was out of proportion to their income. I would like to mention two points which came across in this budget. The Minister mentioned that 71,000 people paid tax in the 25p in the £ band and that he was pleased to announce that 15,000 would be removed from the tax band and would no longer pay income tax. The Minister neglected to emphasise, as I should like to do, that 56,000 of them are now paying tax at 35 pence in the £, that there will be 30,000 more out of work this year than ever before — that is on the admission of the government. In effect, therefore, 40,000 fewer workers on PAYE will be paying £300 million [2230] more in tax. These are indisputable hard facts. I do not know whether the unions realise this. It can be contended that the PAYE workers constitute one section of the community that have been bled white.

To turn now from them to another section of the community who appear to have lots of money. I do not know much about the intricacies of the stock market and I am not acquainted with the bond washing business, but I heard the matter discussed on television the day business on the Stock Exchange was brought to a standstill. The Minister was inclined to brush this aside saying it was a normal reaction to any budget. Immediately the Minister had concluded the commentator from the Stock Exchange — who apparently was there every day — said that never before had that happened on the Stock Exchange. It denotes a frightful loss of confidence in Government stocks. It is difficult to understand, when there is such loss of confidence at home, how we can face foreign buyers, asking them to contribute the money we need, when it has been illustrated in such a dramatic way that the people at home have lost confidence in Government gilts, stocks and shares. We need to borrow £1.8 billion this year. In normal years we would borrow £1,000 million of that at home and probably go abroad for the balance, the £0.8 million. I wonder will that now be available to us. I remember not so long ago the present Taoiseach was the very person who indicated that, because of certain attitudes in Fianna Fáil, confidence in our economy abroad had been undermined. What happened on the stock market the day following the most recent budget and on successive days was an indication that confidence was further undermined not alone abroad but at home as well.

The ESB have been mentioned this morning. They are back in the news again. Not very long ago they intended taking a decision that would reflect not alone on their workers who would be made redundant in peat-burning generating stations but also on Bord na Móna workers engaged in supplying those needs. It is our firm belief that these [2231] stations must remain open, using native fuel. I have seen no compelling case for their closure with regard to price or anything else. Even from an economic point of view it is quite profitable to keep them open. But, when it is a case of Irish turf versus foreign coal and Irish jobs versus jobs for coal miners in the United States or Poland it is economic madness for anybody to make such a suggestion. In addition we need to utilise the turf, we need to have cutaway bogs available to us eventually so that they can be developed under a proper management system.

It is my belief that some State bodies should remain in control of the drainage system and management of these vast tracts of cutaway bog so that they can be utilised for production. I notice certain farming organisations have a new-found interest in cutway bogs now that they feel they will be available to them. There have been experiments carried out and great experience of the potential of these bogs for horticulture, agriculture, biomass and for leisure pursuits. I want to see a conscious, continued effort made so that the midlands will not be denuded of jobs when the fuel has expired, that alternative industries will be established to provide employment for those who will then be out of jobs. I would not be so despondent because, as has been pointed out, the micro-chip and computer industries will in future do all the work, that people will no longer be needed to undertake such work — that should not be the end of the world at all. If the work is done profits will be made and, if those profits are shared out in any sort of an equitable fashion, people will have more leisure.

I see a great future in tourism. I believe it to be our second greatest potential industry after agriculture. Some time ago we had an image in tourism, when we were looked upon as being reasonably friendly. Those people who were unfortunate enough to leave their few belongings and money in the Welsh dressing-room last Saturday would feel that that image has been tarnished somewhat. But we still have good food and reasonably [2232] good hotels. However, I do not see that we should embark on a programme of producing counterparts of foreign hotels. Rather it is necessary that we be ourselves. That is what tourists feel when they come here. They do not want something they see everyday in large cities. They like to visit Ireland and see what it is like. Therefore we should not ape other countries. However, because of successive budgets, we have dear petrol, drink, car hire and now dear clothing. We cannot compete very well in these fields. We still have some unspoiled scenery unless the charges imposed for refuse collection kick back and people do not pay anything and dump their refuse. We have reasonable clear water, good fishing, sailing and sport. Above all else, we have physical room for people on our beaches and in our countryside. If we embark on a programme of enticing people here — perhaps providing sadly lacking camping sites — encouraging others to come here and, better still, our people to remain at home, those would be useful exercises.

I compliment the Minister on his grant for Irish centres in Britain. That was necessary. They do good work. I might compliment him also on his allocation for sport. I was disappointed that the same energy Fianna Fáil showed in bringing the gas pipeline to Dublin has not been evident in the present Government's extension of that pipeline to the North or possibly a spur of it to Kildare, Kilkenny or wherever the needs exist in industry.

Acting Chairman (Mr. Conaghan): The Deputy has five minutes remaining.

Mr. Power: The £2 million granted for school building is not at all sufficient. I know of one parish in Carbury, County Kildare where there is need for three extensions to schools and where the £2 million could well be utilised. If it is to be spread around the country it will mean an insignificant drop in the ocean.

One remark of the Minister for Finance about the budget has incensed people and has become a burning question at home, as evidenced in a local paper. The Minister was heard to remark at a meeting in Naas that people should [2233] not give up smoking, that he needed the money more than ever before. Someone has said the motto appears to be “Just flick your ash, I need the cash”. That is the heading in the local paper this week. This may have been said by the Minister only in jest but it has been taken up by doctors, members of health committees, teachers who have all referred to it as being absolutely irresponsible. I am sure a health conscious Minister like the Minister of State opposite at present would agree with me. Indeed the Minister for Finance was photographed in the newspapers taking a pull to steady his nerves before he produced his budget and afterwards. I know that out of every packet of cigarettes the Minister receives £1.07 in tax. But there is the sad fact that one in every three people in this country smokes. We smoke 7,000 million cigarettes every year. There is a necessity for the Minister for Finance to explain his attitude. Obviously smoking has not stunted his growth. But, from the point of view of young people, it is necessary that his remarks be clarified. I hope he was only speaking in jest. It is generally accepted that whatever about being Minister for Finance, his attitude would never qualify him for selection as Minister for Health.

The media have been remarkably kind to the Minister after his budget. If anybody got an easy ride after the budget it can be said it was the Minister himself. Journalists who can often be vitriolic and even inventive at times were personally helpful to the Minister's cause. I did not see anybody rushing to the radio or television to object about the treatment of the Minister. For many years politicians have been fair game. Certainly as far as Fianna Fáil politicians are concerned there has been no closed season for them; they were fair game for a shot at any time. Nobody's sense of fair play was outraged by this treatment. Therefore it is the height of hypocrisy to see the biased indignation that followed Deputy Doherty's appearance on the “Late Late Show”.

This is an entertainment programme in the main. Sometimes attempts are made to treat matters seriously, but it is evidently [2234] no longer the done thing to be nice to anyone. Gaybo was attacked on all sides after the programme. Some were not even content to use the normal channels open to them. Some journalists' wives even wrote letters to the papers about it. These journalists themselves — the Acting Chairman also heard the mavis singing — would be the very first to write to the papers criticising Mother of Ten for expressing her views. Perhaps she is not in keeping with the way of life being expounded and cherishes a different way of life, not being up to date in her thinking and not “with it” according to others. Recently, I read a book whose author is now living in Ireland. This author is always happy to have a jibe at Mother of Ten, but it is time that these pompous people had a look at themselves. If they think that they can be critical and hurtful to others, they should be able to take that treatment themselves. The thought of fair play and good manners should sometime cross their minds.

I must also remark on the publicity given to the tragic death during the week of a young girl and her baby.

Mr. Gene Fitzgerald: Hear, hear.

Mr. Power: The reaction of the family and those closely involved in this tragedy would appear to be “If you can help us or offer us comfort, you are very welcome, but if you want to make a story, with all the various angles that you would like to explore, please go away and leave us to our grief”. That would be my reaction, too. The intense publicity and particularly the TV coverage were very insensitive towards the family. We need to create here a climate in which parents, teachers and the general public will be sympathetic and helpful towards young girls to enable them to get through a crisis such as this and have their babies. Education and more help are needed. Possibly, the TV programme could have found a way, on a better occasion, using a better vehicle and with better timing, to achieve this object — if that was its object.

This budget is a compromise. It has tried to be all things to all men, but did [2235] not succeed so well. It lacks any purpose and imagination. Whoever is responsible for some of the pennypinching provisions in it has a very frugal mind, indeed. Some Members felt that the Labour Party were let down by the budget, but in reality everybody has been let down by it. Whatever plans existed for the good of the country have been jettisoned. Survival is the key word.

Some critics call this budget neutral. That is correct because they are getting nowhere with it. We are still in the midst of a sea of depression and in a worsening recession. The leading article in The Irish Times of 26 January spoke of the delicate recovery that was now visible. The author must have had better vision than I or the 215,552 reported by that same paper five days later as being out of work here. On an historic occasion a person facing his executioner said “Put not your trust in princes”. I do not think that anybody would say that now, but one could say after this budget “Ditto for Dukes”.

Minister of State at the Department of the Taoiseach (Mrs. Fennell): I have a short contribution to make. Firstly, I welcome this budget. I want to refer to a couple of remarks made by Deputy Power on the opposite benches who spoke about the reception given to the Minister for Finance's speech and budget and his contributions generally. The Deputy seemed surprised that the media were so kind and generous to him. I suggest that that is because we have a Minister for Finance of unusual stature——

Mr. Gene Fitzgerald: Physical stature, the Minister means.

Mrs. Fennell: ——a man of considerable talent. I speak of his stature in every way. In his hands the country is very safe and will proceed towards economic recovery.

I think I heard Deputy Power aright talking about a letter written to a paper by a journalist's wife. I am sure he would accept that that journalist's wife should be addressed in her own right and noted [2236] in her own regard as a journalist. That is just a point which he might note.

The budget brings us another step towards putting our economic affairs in order while at the same time helping to increase employment opportunities for our people. The burden which had to be imposed on people during the last few years in order to correct the seriously deteriorating financial situation is now being eased, with the extra taxes imposed being less than in the last four years. These taxes are balanced by welfare provisions matching the cost of living.

In the economic sphere one of the most positive indications is the drop in the rate of inflation. In this country in the past 12 months, exclusive of the cost of living effect of last year's budget, the rate of inflation was under 7 per cent. The lowering of the inflation rate has brought welcome relief to all sections of the community but must be of particular benefit to housewives on whom in large measure the burden of sharing the family income falls. Until recently the housewife never knew from one day to the next in what area the next increase in price would come. The relative stabilisation of the price increase will make the domestic budgetary task a little easier.

The budget has also provided for a range of positive measures designed to assist different sectors of the community. For instance, there should be a welcome boost to the tourist sector from the easing in certain VAT provisions and the allocation of an additional £300,000 to Bord Fáilte. It is very appropriate, in this year when we shall have a concentration of the American media around the country, that Bord Fáilte should have, and I am sure will well use, this extra allocation. This will be a rare opportunity for us to put into the shop window our scenery, which appeals to Americans, and the tranquility which they can have here. The dollar also is still a very good currency here.

As Deputy Power has mentioned and as I have said over the years, our facilities for what are called self-catering holidays in terms of carvanning, camping or the rent-a-cottage scheme deserve to be promoted, encouraged and expanded.

[2237] There are many provisions designed to encourage enterprise, on which so much of our future employment prospects depend. For instance, the Minister for Labour is considering the desirability of expanding the very successful Enterprise Allowance Scheme which is designed to encourage people who are employed for at least 13 weeks to set up their own enterprises. Additional resources will be made available for an employment support scheme to be provided by An Córas Tráchtála. These are just two of a number of budgetary provisions geared to expanding the wealth-producing sector.

Most importantly, this budget has shown concern for social equity. Provision has been made for social welfare increases, including children's allowances, in line with the expected increase in consumer prices during the 12 months from their date of application. I would like to refer briefly to the children's allowances scheme. I welcome this first increase in children's allowances since 1982. The estimated cost of the scheme in 1984 is £174 million compared with £50.9 million in 1978. It is understandable and there was speculation before the budget that this section of public spending was going to come to the special attention of the Minister for Finance. It would be very tempting for a Minister for Finance to put his fingers into that particular kitty and I am very happy that he did not. In recent years the child tax allowances and the children's allowances have declined in real terms, thus widening the gap between families and other groups.

By comparison with other EEC countries the proportion of national income which we spend on children's allowances is low, despite the fact that we have the highest birth rate and, with the Netherlands, the highest number of women working in the home. The rationale behind the children's allowances scheme is the recognition that there are heavy financial costs associated with rearing children and that it is a valid social objective to distribute funds to families at all income levels. This recognition is widespread throughout the Western world although it is fair to say that the debate about whether a degree of selectivity [2238] should be introduced into such a scheme is topical, mainly because of the serious public financial situation in many countries. Broadly, however, the rationale has been that while parents have a responsibility to care for their children, this responsibility is shared by society. Society shares part of the responsibility for the welfare of children, irrespective of the family structure within which children are raised. Recognition of an increased responsibility by society is particularly urgent in the case of families with special needs, for example, handicapped children.

Another important argument in favour of the present system is that children's allowances is the only direct payment made to the stay-at-home mother. According to the 1981 labour force survey, the estimated number of married women in the economically active age groups outside the labour force, i.e. women working at home, was 447,900. An important factor, sometimes forgotten and borne out by research, is that the wives of many high income husbands are not necessarily well off themselves nor are their children well cared for in the material sense. Without the force of property laws which would make the working and non-working spouse divide their incomes equally, means testing the children's allowance scheme could unfairly affect such high income, non-working wives. Even taxing children's allowances would bear unfairly on the PAYE sector.

I would not be opposed, however, to a full examination in an objective way of the children's allowance scheme to see how its operation and effectiveness can be improved. I hope the Commission on Social Welfare will be including this matter in their deliberations on the social welfare system. The social welfare provisions are not, however, the only social provisions in the budget. Tax changes include provisions which will place widows with dependent children in the same favourable position as married people. The Government's commitment to introduce a family income supplement, a provision to which our party has been strongly committed for some years, will [2239] be fulfilled later this year at an annual cost of £13 million.

One of the main objectives of this scheme will be to restore the incentive to undertake paid employment in the case of heads of families who are dependent on social welfare. The scheme recognises the fact that poverty is not confined to families where there is no one at work. We know, from statistical data, that there is a significant minority of families with one parent at work who are in the poorest groups. Poverty is also very much related to family size. Recent data informs us that while one in ten families with one child are poor, one in three families with four or more children are in the poorest groups.

This budget is a socially caring one with strong emphasis on the need for more effective redistribution of our scarcest resources to those most in need. In this context, I should like to refer to the recognition by the Government that the payment of the 1 per cent income levy is a severe burden on those who are on low incomes, perhaps with particular emphasis on old age pensioners. From April onwards, low income persons will be exempted from payment of the levy. In the case of employees the levy will not be payable in any week where income is less than £96. In the case of the self-employed, the levy will not be payable where income for the year is less than £5,000. It is heartening to note that 350,000 people will benefit from this exemption.

I should also like to refer to the reduction of VAT on theatre and live performances. The reduction from 23 per cent to 5 per cent is a tremendous boost to the theatre industry in general and very badly needed. We are only too well aware of the difficulties experienced in this industry in recent times, particularly the very high rate of unemployment among actors and those employed in theatres generally. It is estimated that this concession will mean a benefit of £5 million to live theatre, and other forms of live entertainment will benefit by a similar amount. I hope this financial boost will provide the impetus for more productions, [2240] greater experimentation and innovation, thereby encouraging more theatre-going. I hope it will also give an added incentive to smaller theatre groups, many of whom have found it impossible to continue because of financial difficulties. The existence of small groups such as these is vital to the life of local communities and, in many cases, are the only contact with live theatre available to young people or couples with family responsibilities.

I welcome also the allocation of £149,000 to the Olympic Council of Ireland to assist in the preparation of the Irish team for the Olympic games. A further £10,000 will be made available to assist in preparing and sending a team to the Olympics for the disabled. Many participants will be women and I look forward to a high level of interest in the community in the various sporting activities involved.

I now wish to turn to my own budgetary allocation for 1984 and my plans for this year. I am pleased that funding for my office has risen by almost 23 per cent — from £110,000 last year to £135,000 for 1984. This funding will be used to finance support and developmental activities in the area of women's affairs. I will be making a significant allocation to the Council for the Status of Women to enable them to continue the role as an umbrella structure for women's organisations. I should like to take this opportunity to totally reject any suggestion, particularly as recently reported in the Irish Independent, that there have been drastic cutbacks in the 1984 allocation to the Council for the Status of Women. Indeed, well over 50 per cent of the total allocation to the sector for women's affairs is going to the Council for the Status of Women. I must emphasise that the entire allocation of £135,000 is for women's affairs and issues relating to women, and every penny will be spent on exactly that function, developmental, educational activities for women. I note from the Irish Independent article that the council's running costs are £67,000 per annum. This, broken down, is £5,500 per month before they start their developmental work or educational projects.

The direct allocation to the council in [2241] 1984 from this Vote for Women's Affairs is £72,000. This figure does not cover the cost of outfitting the council's new premises at 64 Lower Mount Street and any rental occurring before the council take up tenancy on 1 May 1984. I am very happy to have been able to announce that the council are getting premises which are roomier and less expensive but as central and as good as the ones they are occupying at present. This is in line with the express wishes of the council over the years. People in my Department and I went out to look for these premises and managed to secure what I consider will be a very desirable headquarters for them for the future. The cost of renovation will be met from the allocation to my office and, in addition, there will be a saving to the council on rent following the move.

In real terms, therefore, the 1984 allocation to the Council for the Status of Women is rather more than their 1983 allocation of £75,000. In 1981 the allocation was £54,000. In 1982 it was £95,000 but it must be kept in mind that this was the entire sum allocated for all women's issues. Last year the amount was £75,000 and this year the council's spending money is £72,000. Therefore funding has been maintained at a high level at a time when other areas have been experiencing severe cutbacks. I should like to assure the taxpayer and the council that the funding which has been allocated to my section will be spent very responsibly and will be accounted for and all used in the interests of women.

Staying with the question of funding, the council have already expressed their concern to me about the format used in the Book of Estimates. The executive seem to think that establishing a single subhead for women's affairs reflected some ulterior motive. That is not the case. In establishing a subhead the intention was to increase both the amount of assistance available for issues affecting women's rights and to broaden the categories eligible for such assistance by providing not only for an annual grant to the council but also to a variety of women's support and developmental activities. I [2242] am delighted to say that in 1984 the provision has been increased to £135,000.

On the question of the concern expressed by the council about the change in the vote I suggest to them that the work done by the council is recognised and the fact that it is very important that their organisation should continue to be an umbrella organisation for women's groups is well accepted by this side of the House and by the Opposition. They should not fear that there is some ulterior motive behind the change in the Vote. There is not. It is an expedient and sensible move.

From the remaining resources at my disposal I will be directing some funds towards the various voluntary organisations for whom even a small allocation can act as a lifeline to enable them to continue their work. Requests from these bodies will be judged on their relative merits. I am pleased to say that last year 30 groups received assistance from my allocation. These were involved in a host of relevant and worth-while activities ranging from self-help groups to adult education, support for unmarried mothers and their children, and pre-school playgroups. I intend to continue this funding programme with particular emphasis — and I mentioned this last year — on single parents' organisations and in particular those helping unmarried mothers.

Deputy Power refered to the sad and tragic events in County Longford last week. I should like to take this opportunity to express my deepest regret, and I know it is echoed around the House, about that very sad occasion when a 15 year old mother and her baby boy died. Our sympathy is extended to her family and to the community. Her death must not be in vain. Let us learn from this sad episode and realise that our omissions and our shortcomings as legislators and social planners may have contributed to the tragedy of a young Irish mother who died alone out in the elements at the time of her confinement.

Other girls and women have shared this distressing experience. During the week I have had an unprecedented amount of mail on this issue, letters [2243] expressing sympathy, sadness and concern. One of the letters is particularly relevant and I should like to read it into the record of the House. It is from a woman who had a similar experience last year. She was older than the young girl in question. It is from the west of Ireland and reads:

I am in my mid-thirties, and with the help of “Cura” gave birth to a baby girl. . . . The trauma I went through, with my family, and the fear of what would be said, when the neighbours found out was just hell. Yes, I did feel — death itself would be better than bringing this disgrace on my family. I did not care what happened to myself, but thank God, I had the maturity to realise that this little being inside me had the right to life. Only for two out of a family of six supported me, and if I had not their support. I could imagine myself giving birth in similar circumstances, as the 15 year old mentioned, even though I could be her mother.

But when “Fear” takes over, it affects all ages in this position. Thank God, I fought to keep my baby, but now live in fear for her future, e.g. the stigma of being illegitimate, and the birth certificate without her father's name. The Father does not want to know, or have anything to do with her. I could write pages about the uncharities one has to cope with being an unmarried mother, and I know you are doing your best in making the public aware.

Letters in a similar vein expressed sentiments which perhaps had not been expressed to other people closer to the letter writers.

I want to discuss briefly our attitude to the funding made available to unmarried mothers. It seems to me that there is a regrettable undercurrent. People have gone out of their way to make contact with me and say things to me such as: “Times are bad and money is scarce. We should not be paying out this money to unmarried mothers”. I have the figures. On 30 December 1983 the number of [2244] recipients of unmarried mothers' allowance was 8,671 and a rough estimate of the cost was £20 million. At the moment the payment is £47.70 per week and, with the increase, it will be £51 per week for an unmarried mother and her baby. I am very proud that we have allocated this payment to unmarried mothers. It is welcomed and well used by them. It may not be as much as many people would like it to be. Nobody will live very lavishly on it.

Such a separate allocation does not exist in other countries for women in this position. Those who would suggest that we should effect economies by cutting back or stopping this money should stop and think a little. We cannot have it both ways. As a nation we have rejected — and rightly so — the idea of abortion. We made this rejection very clear last September and I support that. If that option which, whether we like or not, exists in other countries for women who become pregnant is not available to Irish women, we have a responsibility to ensure that the best possible support and financial benefits we can afford are available to unmaried mothers. Funding of even very small amounts can mean a lot to adult education groups, pre-school playgroups and other small ventures which are supportive in the community but do not qualify for grants from any other Department and such funding will be continued.

I will also be funding research on areas relating to women and work and one such project will study the connection between labour force participation of women and their domestic arrangements. It has been decided that the research will be undertaken by the Centre for Adult and Community Education at St. Patrick's College, Maynooth. We tend to depend on research results obtained in other countries which may not relate specifically to conditions in Ireland. Working patterns and conditions to which women have to adapt are devised elsewhere and do not always take into account what women want. I have asked for this project in order to find out what women would opt for who are skilled and well qualified but also want to be parents.

I will also be examining the possibility [2245] of funding other research projects which would be useful in the context of the report of the interdepartmental working party on women's affairs and family law reform which will be completed by my Department by June. The Department are also preparing a national report which will be ready for the UN conference in 1985 and to that end a liaison committee is about to be set up.

I hope to organise seminars on key issues relating to women. I have had three or four seminars during the past year. In April I will be holding a public seminar on child care facilities based on the report of the working party on the needs of working parents for such facilities. It will bring together speakers on the British and Irish experience and will also include the research angle. Seminars are a useful medium to allow interested groups to discuss with the Government side in a public forum issues of relevance to their daily lives.

I was very pleased to note in the Minister's speech that the European Community's directive on equal treatment in matters of social security between men and women will be implemented during the course of 1984. I am gratified that the Government, given the difficulties in the economy, did not attempt to deviate from this. It will be an important milestone for many married women who currently find themselves accorded less than equal treatment as regards social welfare entitlements covering conditions of disability, unemployment, invalidity and occupational injuries. The practical substance underlying the principle of equal treatment is recognition that the concept of a husband as invariably the sole breadwinner in a family is no longer one that applies universally in our society and equal treatment in statutory social welfare schemes is welcome as a coming to terms with what is anyway a fact of life, as well as constituting an important step in the attainment of equal opportunities generally for women.

Moving on from the achievement of equal treatment in statutory social security schemes, in the immediate future my intention is to stimulate discussion on the wider application of the principle of equal [2246] treatment to all occupational social security schemes, in accordance with the aims expressed by member states in the European Community's action programme on the promotion of equal opportunities for women.

I congratulate the Minister for Finance on a very fair budget.

Mr. Gene Fitzgerald: Following the announcement of the budget it is debated over a period of weeks. Often there is a certain sameness in what is said. Democracy demands that those on the Government side try to defend the measures introduced and the strategy, if there be a strategy, of the Minister for Finance, while the Opposition point out the defects. My sympathies go with the Minister of State and her colleagues because of the dilemma in which they find themselves since the favourable pickings in the budget are so scare and insignificant that it could be termed an “Opposition budget”. Despite her opening comment that there has been some favourable reaction, the comments of the people generally, which are far more important than fed stories by any group of handlers, are very disappointing.

The Coalition's joint Programme for Government described the unemployment problem as a disaster. It has become so much more disastrous since they took office that the Minister for Finance stands indicted for having ignored this major problem of our society. I sympathise with any Minister for Finance. He faces an enormous task because the tax base is so narrow and the dependency rate is so high. There are needs in the areas of health, education and social welfare which must be met to try to provide fair structures for all. I accept that a base is needed to do that. I believe that only one strategy was aimed at in the budget, that of keeping two parties in power for at least another year, not the interests of the country or how best the budget might plan for this year and for the years ahead. Those aspects were not taken into consideration at all. They are essential ingredients in any budget. It is remarkable that the performance of this Government after 14 months in office is similar [2247] to that of their ill-fated Coalition predecessor. That Government ignored planning, employment and job creation and this Government are doing the same to their peril, as they will discover in the first opportunity offered.

I would like to quote from the joint Programme for Government prepared by the two parties who are now in Government. I want to quote from the section headed Planning for Economic Recovery. They are talking about setting up the famous task force. I was interested to hear the Minister of State who has just spoken talking about review bodies, seminars and committees. They are experts at setting up groups of experts to examine things. In this joint Programme for Government we hear about the task force for the first time and about the National Planning Board. They are both given two remits, one a long-term one and one a short-term one. They said:

Pending a soundly based recovery in employment based on competitiveness, emergency measures are needed to halt the rise in unemployment which has now reached disaster proportions. These emergency employment measures will be linked to the urgent need to remove bottlenecks in our infrastructure which if not tackled, will impede future growth.

That was at a time when on their own admission the unemployment figure was 170,000. The figure today is 215,500. If it was a disaster at 170,000 how much greater is it when it is over 200,000, especially when that figure does not include the many young people who have returned to school for an extra year, those in short-term training and temporary employment schemes?

This figure will be increased further by the announced closures which have yet to take place. There will be a further increase in the figure when approximately 20,000 net school leavers come on the market later this year. I refer to those people as net school leavers because the others go on to further education. This is the first area where the Government must implement the emergency measures they [2248] spoke about at that time. The Taoiseach has a responsibility to appoint a Minister with sole responsibility for employment and job creation. That person must be a full Cabinet member and must be given the authority to take emergency measures and not be entirely dictated to by the Department of Finance. The role of the Department of Finance in the administration of the country has increased enormously and the strings have become tighter and tighter.

We see measures adopted in the budget that had been pushed by that Department for quite some time. These measures can only impede further job creation and harm employment. The Minister to be appointed must have clout at the Cabinet table and must have full responsibility for employment and job creation solely and nothing else. Youth employment is very important but at all our clinics we learn of the trauma of the 47 or 52 year old father who comes in month after month genuinely looking for employment. Many of those people I refer to are on long-term unemployment assistance. They may have a few children still at school and are still paying a mortgage. This is where the real hardship lies.

I listened to the Minister of State talking about statistics and poverty. If she is attending her constituency clinics she does not need statistics and poverty. She should know the various levels at which poverty exists. Instead of the budget and the decisions allied to it helping those underprivileged and the less well off in our society, I believe it has gone further to harm them.

I should like to refer to a few areas where I am disappointed about the impetus of the budget. Section 84 is an old Department of Finance potato. It should go in the interest of good accountancy practice. The Department of Finance would argue that it was never introduced with the intention of being used for the purpose for which it has been used in the interests of manufacturing industry, basically that of making cheaper money available. Surely industry needs cheaper money now in order to encourage the jobs we badly want. We all hear throughout our constituencies the self-employed [2249] and employers continually complaining about the increasing costs of employment. Everybody in the House has a responsibility to say that we should try other ways, that we should make it cheaper to employ and selectively reduce taxation to create activity. I believe this experiment is worth trying because the activity generated would more than compensate for the reduction in income at the lower tax levels.

I regret the decision to withdraw section 84. I suspect it has something to do with placating certain interests of the Government because it appears to be hitting at a certain level of people in our society. The people we are really hitting are industrialists and employers. Surely they are the people we need to encourage more than ever before with 215,500 unemployed and 67,500 of those under 25 years of age. The budget was introduced on 25 January and a week later the figures for the month of January became available and we discovered that the unemployment figure for January had increased by 7,500 over the figure for the previous month, which is the highest increase in unemployment figures ever recorded. The Minister for Finance between now and the introduction of the Finance Bill should consider the implications of that and the impact on industry. We have seen enough job losses. I would prefer to see the Minister priming the pump, stimulating rather than retarding and putting other jobs in jeopardy.

There was one thing I welcomed at the time because all of us who have been in Government over the years have tried to achieve certain things and sometimes bureaucracy beats us. I liked the following statement in the Programme for Government document:

These emergency employment measures will be linked to the urgent need to remove bottlenecks in our infrastructure which if not tackled, will impede future growth.

I do not know what bottlenecks have been removed in the last 14 months; none to my knowledge. I will talk about one bottleneck that concerns every Member of this House, particularly those living in [2250] areas of development where planning is a major concern. I believe in the proper physical planning of our country. We must preserve certain amenities within it. That wonderful luxurious greenery and our trees must be preserved as far as possible and we should provide adequate open space. However, I wonder if we have gone too far with the bureaucratic control of planning. I believe we have, and therefore we have slowed down development to an enormous degree in many instances.

Any person in this House living in a city or its surrounds or in a town will know of many instances of planning applications being made, the local authorities considering them, asking further questions perhaps at the end of two months, a further two months go by and perhaps permission is refused. Then it goes to An Bord Pleanála, whether it is the new board or the old board makes little difference if the structures of that board are not changed. Nearly a year ago in this House we passed a Bill introduced by the then Minister for the Environment providing for a new planning board. I do not think they have yet been set up but are about to be set up. Whether it be a new or old board that is not where the bottleneck is. The bottleneck lies in the administrative functions attached to that board. The four months I have referred to at local authority level now become a year and a half or in some instances two years. Let us assume that then permission is given, but it is given when perhaps the need for the venture is less than it was two years previously. The cost of the venture has escalated to an extent which makes the venture no longer viable. Because of the reduction in the number of planning applications many local authorities at present perhaps are over-staffed with people finding time to pick holes in an application and query it or refuse it on grounds that most of us would not agree with.

The media have great responsibility in the downgrading and decrying of public representatives of all parties. My experience of local authorities has been that public representatives approach in a responsible way the functions which they [2251] were elected to perform even if it is not because of their commitment to them. Most people who enter Irish public life do so because they believe they have a contribution to make and when they go on that local authority body they all do their best to serve the public and their constituents. The power that they had regarding planning was not usurped or abused. They have to face the electorate every four, five or — when Governments such as this are in power — seven years. Even that time is a deterrent and they still must face their ultimate jury who decide whether they are to be re-elected. If during that time they have erred in hurting or harming the environment that should be protected they will pay the price. Compare that with the position of the bureaucrat whose post is guaranteed whether he makes a right or wrong decision. Whether he delays a planning application for two months or two years it does not affect him but it may well affect a number of jobs among all of our constituents.

I say to the Minister — not in any party political way because this problem has been around our necks for a long time and he is a practical man who has come through the local authority system — that he should consider restoring planning powers to the elected representatives. Whatever steps we take under the present system will still leave much to be desired. The inspector, assistant planner or official whoever he may be — may lean one way or the other because he may be too well disposed towards development and may neglect the environment or on the other hand he may be overcareful of environmental protection and so harm development. It is difficult to find the balance. Public representatives and the media also have a role to play. They can measure and report on the progress of decisions taken by local authorities, and so bring planning back closer to the ordinary people. I ask the Minister to have a look at it.

I return to the financial considerations in the budget. Regarding social welfare, the Labour Party must be extremely embarrassed about the size of the [2252] increases. Early this morning the Minister of State said that the increase in children's allowances was the first since the 1982 budget. She did not say that for the first five children it was 20p per week per child. She seemed a little embarrassed at the size of the social welfare increases generally. She spoke about the unfortunate tragedy in Longford and about the unmarried mother's allowance. That allowance, welcome though it may be, is not in any way generous. In regard to the tragedy she mentioned I, too, offer my sympathy to all concerned and I hope that people who should learn a lesson from it have done so. I am not saying this for the sake of making a publicity meal of it, but let me compliment the many dedicated and committed voluntary workers who without any publicity or media coverage work for people who have problems. Perhaps if some of those who shout loudest did their little bit too they could make an enormous positive contribution to improving the attitudes of people when unfortunate incidents like this occur. Attitudes are important whether in the home, the school or the country generally.

I advise the Minister of State not to get any idea that the allowance at present available to unmarried mothers is in any way adequate. It is not. It is helpful as is every increase applied to social welfare even though it may be only 20p per week, but it is not even keeping in line with the position of a year ago. The same applies to the overall increases. To the breadwinner of a family who is now on unemployment assistance does 7 per cent make any difference? It does not compensate him for the terrible trauma he and his family are going through. Why can the voice of the Labour Party not be heard in Government? Why can we not have that Minister that I referred to appointed as an emergency measure and given a packet of emergency measures that were promised 14 months ago to tackle a problem that has become so much worse now?

Alterations were made in VAT rates in the budget and like others, I regret that clothing was included. I am at a loss to understand how justice or equity can be established in the case of a ten-year-old [2253] child. I am sure we will hear a lot about that in the coming months. It is tragic that the Government decided to apply VAT to clothing because it hits big families hardest, the families the Minister of State referred to.

I welcome the decision to reduce VAT on theatre tickets. When I was referring to selective taxation earlier I was thinking of the theatre and other areas. I hope the Minister's decision will stimulate activity in that area. Many people are employed in the theatre which also provides an educational, entertainment and cultural service. In preparing the Finance Bill the Minister should consider extending the exemption a little further to cover amusement arcades at summer resorts that operate from Easter. That exemption would not cost a lot of money but it should be remembered that the people who operate them give substantial employment and provide a lot of entertainment for holiday makers. I should like to draw the Minister's attention to a resolution of the European Parliament on the status of mobile trades, No. C277/164. That resolution considered it necessary to improve the legal and economic status of mobile tradesmen within the Community and called on the Commission to take into account the position of fairground workers particularly by introducing and harmonising the rate of VAT applicable to them throughout the Community. Those employers hire a substantial number of unskilled people and train them as heavy-duty truck drivers, painters, refurbishers and mechanical welders. Understandably, the circus is included and, for the sake of a small amount of money, the Minister should take in the area I mentioned.

I should now like to deal with some of the capital measures. The Taoiseach assumed office in June 1981 with trumpets blaring about the financial mess the country was in and downgraded the outgoing administration. Obviously, that was a well orchestrated ploy by his handlers to get a message across and to build on over a number of years. He had done some deals or strokes that tarnished his pure white image and got away with them for a while. However, they misfired [2254] when the Labour Party and Fine Gael agreed to put VAT on footwear and clothing in February 1982. The Member from Limerick who had been courted by the Taoiseach for so long pulled the plug and the Coalition had to go to the country. The Taoiseach lost power and there was an interruption in the plan his handlers had mapped out for him. If the Government are good at anything they are good at public relations exercises and planning ahead although the hiccups are becoming more frequent. As the year progresses, and the performance of the Government is exposed, they will become more pronounced.

In June 1981 our foreign debt was 31 per cent of GNP but at the end of 1983 that had increased to 52 per cent. We all heard of the great man who was going to do so many wonderful things. The famous phrase, “financial rectitude”, was buried at 1 p.m. on 14 December 1982 and will not be resurrected. We have not heard since of the four-year plan to eliminate the current budget deficit. The Taoiseach's handlers have not explained that U-turn. There has been a lot of talk about generating activity but the building industry is in a worse state than it was during the ill-fated days of the Coalition Government in the fifties. Unemployment in that industry at national level stands at 50 per cent and it is higher than that in the Cork area. On the capital side in the budget a few small handouts were distributed. We have heard of the £300,000 for Galway airport. I wish the people of the city well in that development and I look forward to using that extended airport. However, the decision to mention it in the budget speech was a ploy.

The Minister included £2 million for school buildings and I should like to ask him about a school problem in my constituency, at Ballincollig. I would be obliged if the Minister would explain to me the reason for the delay in constructing a new school there. The local parish priest, in the course of a letter to me, pointed out that as he had repeated to me ad nauseam, more than 600 children were being accommodated in pre-fabricated buildings in this miserable weather. [2255] He informed me that they had more than 30 pre-fab units for which they had not received one penny. In fact, he pointed out that the money collected for the new school had to be spent on those huts. That is part of the problem of planning.

In that expanding area in my constituency there is no plan to cater for growth in population. A promise was made to have the new building ready by September next but we do not know when work will commence or if the money is available. Has it been included in the £2 million? Another sop was given to Cork and I do not know the reason for it. On many occasions I referred to the need for a deep-water berth at Ringaskiddy and to the fact that in our budget last year we had provided £1 million for that work. I pleaded, and deputations were received by the Taoiseach, but there was no reference to it until budget day. Now we are told it is to go ahead.

Why did it take so long? Have the Government considered how important it is in the activities than can be generated? The IDA have an extensive land bank there and it is being opened up by this development. A worth-while development recently was the setting up of a heavy water using industry. Of course, that was begun by Fianna Fáil. That new industry expected to have deep water facilities available. However, I am afraid that it is the old story of the chicken and the egg — if you get an industry the Government immediately will approve expenditure on a deep water berth. At last the Government have seen the light and we are to have a deep water berth in Cork.

I am speaking of an area which has been hit harder than others by job losses. It has been very dependent on the old traditional industries which are experiencing difficulties throughout the world. Cork is suffering particularly from lack of commitment by this Government in regard to job creation. We have a growing population but we have an unemployment rate of nearly 24 per cent. The deep water berth is only one step. We must try to resurrect employment in such an employment-starved area. The thought [2256] of a 24 per cent unemployment rate is frightening in a city like Cork.

I ask the Minister for Finance and the Government to designate Cork Harbour as a free port. We had an announcement by the UK Government last week of the creation of five free ports, some of them fairly adjacent to each other. Cork is one of our great ports. Shannon was designated a free airport a long time ago and the designation of Cork would be just priming the pump, particularly when we remember that oil exploration is continuing off the south-east coast and that any finds will be convenient to Cork harbour where we have excellent shipping facilities, no thanks to the present Government. The shipping of any oil found would be a major benefit to the city because of spin-off activities, apart altogether from the primary purpose to which the oil would be put. Therefore, I urge the Minister for Finance to consider seriously the establishment of a free port in Cork. I hope he will make such an announcement soon.

Speaking specifically of oil exploration, the Minister for Finance has a duty to ensure that the very best results will accrue to our people from any oil finds. We hope there will be a major one which can be put to use for the benefit of the ordinary Irish people. It would contribute to employment, added value and many other improvements. We have a State-owned refinery, thanks to Fianna Fáil Government, and do not let anybody else claim credit for it. If we were to build that refinery today it would cost £70 million to £80 million. Of course, it needs more investment because of recent technology, but it is doing a good job at the moment. I understand there is a court action being proceeded with in Europe and we hope the result will be favourable. Even if it is not, the Government have an obligation to ensure that we overcome consequent difficulties. If the French can mess around with our meat trucks I do not see why we could not take action to get out of our economic recession. Any oil we find could be piped to the refinery which is only 37 pipeline miles from the site of the exploration.

I am particularly worried about the [2257] lack of reference in the budget statement to gas spurs to Limerick and Waterford, which seem to have been forgotten despite the strong cases by the two cities for extensions.

If oil comes on stream it should be piped to the refinery even if it has to be reshipped when the refinery is not able to cope with it. The important thing is that the maximum benefits be garnered from our oil find. This is another reason why the Government should have no hesitation in designating Cork as a free port. I know the Minister for Foreign Affairs has a special interest in this and I hope he will bring his influence to bear on it.

Gulf Oil are involved in our oil exploration and I hope something can be done about the idle jetties at Bantry. We began negotiations when in Government more than 14 months ago and I ask the Minister if there is any hope of developments in that respect. All these things are connected with benefits for our huge growing labour force and our massive unemployment rate. At the moment 196,000 are employed in the manufacturing industry, but we must develop our services sector. As well, the south and west are ripe for further tourism development. The budget has given a little help but not nearly enough. Selective taxation in regard to tourism would give enormous returns by increasing activity in spin-off employment.

I will finish by referring to two points which could not be pushed hard enough. One is the “Buy Irish” Campaign. We have been told we cannot be over-selective because we have to abide by EEC rules. A lot of documentation must be filled out when goods are being exported to France. Sometimes forms have to be filled out in nines. These exports can be held up if a “t” is not crossed or an “i” not dotted.

I am not blaming this Government because all Governments were keen to play the rules. We are dependent on the EEC to a large extent but we must consider the way we have been treated over the super-levy. I will not deal with that now as there are others more closely connected with agriculture who will speak [2258] about it. The Buy Irish Campaign must be escalated. I was disturbed to hear Deputy Vincent Brady raise the question of whether fitters had been employed from abroad by Dublin Gas. I cannot say if this was right or wrong. I understand he will make an approach to the Ceann Comhairle to raise this matter. If it is true it is awful. I am not sure of the accuracy of the report.

Buying Irish is important but selling Irish is equally so. We cannot have enough of import substitution. Little things can create employment. I am glad the IDA have become more aware of the need to support small projects. I attended an OECD meeting on unemployment a few years ago and was amazed at how dependent many American states were on projects which employed less than 100 people. We also must be concerned about small projects if there is employment at the end of them. They should get all the attention and support they need. We must continue to identify items that can be made at home. We have come a long way since the sixties. We now have AnCO and various skills taught in second and third level education. We have a very skilled and talented work force. That is our greatest asset. We must use it to the best advantage.

This Government dishonestly came to power on the basis that they would bring in emergency measures to rid the country of the disaster of unemployment. To date they have done nothing. Fourteen months later 45,000 more people are unemployed. How many of the unemployed do not receive unemployment benefit but unemployment assistance? How many have lost the pay-related benefit they were drawing then? Their circumstances have become much worse.

The Minister said that for every 1,000 people on the dole it costs in the region of £2.5 million a year. Last night the Minister for Labour, whom I wish well, was exceptionally flippant. His speech contained many academic nuances. There is no magic formula. Any suggestions he brings forward will be constructively considered from this side. The proposals he suggests, important though they be, will only have a marginal impact. [2259] What he is doing is welcome but it is only a small part of what must be done.

Public investment in roads, sewerage, infrastructure and so on would pay for itself and would provide us with a more attractive base for manufacturing industry. The Government must take action on unemployment. There is nothing in the budget to help unemployment. The January figures are the worst since records began. This surely disproves the claims that have been made that the Government will reverse the trend. They said they would reverse and halt the trend of unemployment. A Minister must be appointed to deal with this and nothing else. He must have access to the Departments of Labour, Industry and Finance and must also take the 200,000 people who are unemployed into consideration together with those young people who will come onto the job market this year and in the years ahead.

Mr. Coogan: Deputy Fitzgerald said the Labour Party must feel a degree of embarrassment as a result of the budget. They do not need to feel that. The state of the economy can be likened to a patient being attended to by two surgeons — those in Fine Gael and those in Labour. They must examine the condition before making a decision on treatment. They must look at the pros and cons, the positives and negatives.

On the positive side industrial expansion is up by 14 per cent, agricultural exports are up by 3 per cent and the volume of manufacturing is up by 6 per cent. Inflation has been reduced from 17 per cent in 1982 to 10½ per cent in 1983. That is a dramatic drop. On the negative side the balance of payments is a major problem. Investment has fallen. Growth has been choked and stifled. Along with falling investment we have a fall in consumption. The Government weighed up the pros and cons and decided not to go for major surgery. The effect of cutting too deeply might be recessionary, particularly at a time when we see OECD countries and the US slowly recovering from the recession. The Government decided that they must prepare for this [2260] recovery. Major surgery was not the way to do it.

One of our major problems is foreign borrowing. The net borrowing for 1983 was £793 million. That is about 50 per cent below the 1982 figure of £1,148 million. As a percentage of GNP, net borrowing was reduced from 12½ per cent in 1981 to 6 per cent in 1983. The Government are to be complimented in that it was as a result of the 1983 budget that this level of borrowing has fallen dramatically. Nevertheless, we still find it necessary to borrow. We borrow to meet Exchequer requirements and in addition the Government are faced with maturing foreign loans. These loans were raised in previous years and must now be repaid. They will be peaking in the next couple of years and will continue to be high for the next decade. We must eliminate the need for foreign borrowing.

Turning to more specific elements of the budget, I welcome the increase in both long and short-term social welfare benefits. One of the greatest problems for any Government is that of arriving at a decision about the level of social welfare benefits. If the level is such as to mean only a marginal difference between social welfare benefit and take-home pay, it is understandable that those at work would experience a certain degree of chagrin and might ask themselves why they should bother to work in such a situation. We all know of cases of people on short-term unemployment benefits who take up additional but unrecorded employment and who very often have incomes that are higher than those who are at work. This sort of situation causes great frustration among those at work. It leads to a lowering of moral standards. Therefore, the whole question of social welfare payments is a rather delicate one. The 7 per cent increase in social welfare allowances this year should keep pace with inflation and ensure that those who are in need of such payments are looked after for the coming year.

I welcome the provision in respect of the family income supplement. Last year the figure in this regard was £5 million and I look forward to the announcement by the Minister of the details of the [2261] scheme. There are people who are living below the poverty line but who either because of pride or of lack of knowledge do not avail of social welfare or other benefits to which they are entitled. There are people who do not like to be seen by their neighbours to be taking what they consider to be hand-outs.

I take this opportunity of referring to a point that was raised by Deputy Fitzgerald. I should like to compliment the Government on the provision of £300,000 for the expansion and extension of Carnmore airport. This provision was badly needed because if we are to ensure the future industrial development of the area and secure high technological industries there, we must have this airport. The chamber of commerce who, together with industry, are promoting the airport will require about £900,000 in the next couple of years. I presume that the additional £600,000 will be provided for in the Estimates for 1985.

It is particularly gratifying that this money is being provided for Galway at this time because this year marks the 500th year since Richard III enabled Galway to elect a mayor by giving the city a charter. The city has expanded gradually but in a balanced way down through the years. It is a centre of tourism, of trade, of fisheries and forestry and of farming. Galway has moved gradually into the high technology area but like most high technology industries in the country the bulk of the work consists of assembly. As we know from the recent experience in Cork, it is possible for any foreign company operation here to leave if their operations are no longer profitable. Most companies have little social conscience but we must endeavour to ensure that foreign companies have reasons for staying here. We must keep abreast in terms of research and development so as to ensure there are good communication networks and good infrastructures for these people in addition to the availability of grants, tax concessions and so on. The building of this airport at Galway is a step in that direction. The easy access provided by it will encourage other industries to come to the area. In addition, the availability of the airport will help to [2262] stabilise those industries already operating in the area. I may be accused of being provincial on this issue but I make no apology for that.

However, there is an urgent need for the Government to produce a unified regional airport policy. Up to now the development of regional airports has been on an ad hoc, haphazard and unplanned basis. In many cases airports have been built as a result of local pressure. Very often they bear little relationship to the commercial needs of the country. The regional airports at Waterford and Sligo meet only the minimum standards required of regional airports. Both have adequate runways, buildings, safety measures and equipment for operating at night but it is imperative that all existing airports should be upgraded to at least minimal standards. Additional work should not be carried out on any regional airport that has been brought up to minimal standard unless it can be proved that the project will be viable economically. I understand that the cost of up-grading the airports at Galway, Farranfore, Letterkenny, Dundalk and perhaps developing regional airports in the Mullingar-Athlone area would be in the region of £6 million. A substantial amount of that money could be raised locally as was the case in Galway, Waterford and Sligo. This would probably reduce the cost to about £4 million so far as the Exchequer would be concerned. When these standards have been reached there should be little need for further subvention by the Government. Before the work of up-grading an airport would be undertaken, the airport should be able to prove capable of meeting its own running costs by way of landing charges, freight handling charges and perhaps bar and restaurant facilities. If Deputy Fitzgerald or any other Member of the House wishes to come to Galway at any time to spend money, there will be a great welcome for him.

The GAA have been granted a sum of £100,000. All of us recognise the contribution made by that organisation in the past 100 years. Incidentally, I thought that if £100,000 is to be given to the GAA in its centenary year, perhaps Galway [2263] should have got £500,000 in its quincentenary year rather than the sum of £300,000. I welcome also the £140,000 given to the Olympics Committee. I wish our representatives every success. They are our ambassadors abroad and in the past year Ireland has proved itself as very successful in many areas of sport. We can be proud of the people who represented us. They need encouragement and, recognising that, the Government have given this sum. I welcome also the £10,000 given to the special Olympics for the handicapped. I am always delighted when I see people taking part in and assisting in the running of these games.

I am sure all of us have discussed at times the true cost of having a person employed as against having a person unemployed and we have treated the matter in general terms. Recently I came across an article by Fr. John Brady, SJ in the publication “Accountancy Ireland” dated December 1983 in which he referred to the fiscal effects on a worker earning £7,000 per year when he loses his job and joins the long-term unemployed. This was based on the budget provisions of 1983.

The example given was that of a married man with two children with a gross wage of £134 per week. The loss of his employer's PRSI contribution at 11.6 per cent was estimated at £15.61; the loss of PAYE, income tax, PRSI contribution and levies worked out at £42.20: the payment of unemployment assistance at the urban rate would be £29.80; the loss of indirect taxation and public transport revenue due to a fall in consumption spending would work out at £20 per week; and the loss of direct and indirect taxation worked out at £8. If we total the items I have mentioned from one to five we get a figure of £115.61 and if we total items two to five we get £100. The difference between the gross wage and the loss to the Government of these contributions is £20 approximately. It could be argued it costs £20 to keep a person at work. These figures are indicative of the need to ensure employment.

I wonder if it would be possible for the Government to make a special contribution [2264] to industry? For example, if a company get an export contract and they find they have not an adequate work force, if they employ more people they may not make a profit. The Government should consider giving the social welfare contributions to the company for any people employed by them on an export contact.

This budget has been a delicate and a sensitive budget. It has been delicate in the sense that it has measured the needs of the country and balanced them against its economic health, and it has been sensitive to those needs. I compliment those involved in the budget and I hope that its success will be equal to the success of last year's budget.

Mr. L. Fitzgerald: Ar dtús, tá áthas orm go n-aontaíonn Deputy Coogan liom sa mhéid go bhfuil tábhacht an-mhór ag baint le fostaíocht i láthair na huaire. Caithfidh mé comhghairdeas a dhéanamh leis agus an iarracht a rinne sé a chur in úil don Aire Airgeadais chomh simplí agus atá sé tacaíocht a thabhairt do thionscail agus do na daoine atá dífhostaithe faoi láthair. Ach im' thuairimse tá an cháinaisnéis seo i measc na gceann is lochtaí dar leagadh os comhair na Dála le fada an lá. Caithfidh mé a rá nach léaraítear ann nó tríd ach gníomh meata polaitíochta. Faic ní dhéantar tuilleadh fostaíochta a chruthú. Faic ní dhéantar ar son na mbocht. Faic ní dhéantar chun sprid mhuintir na tíre a athbheochaint. Bhí cách ag impí ar an Aire, ag impí ar an gComhrialtas agus ar an dTaoiseach spreagadh is dóchas d'ath-chruthú sa tír. Masla a thug an tAire Airgeadais dóibh mar fhreagra. Ní fheadar an bhfuil aon tuiscint ná fiú amháin suim ag an Aire nó ag an gComhrialtas faoi neart is cumas eacnamaíochta na tíre, más féidir é, a spreagadh, é a mhealladh agus é a stiúradh. Cuma gruama atá forleathan, agus is amhlaidh a bheidh go dtí go gcuirfear as oifig an Rialtas nó an Comhrialtas i measc na gceann is measa i stair na tíre.

In time, political and economic historians will regard this budget as one of the worst and most ineffective budgets ever put before this House. For a Minister to have professed so much in the past year [2265] and to have done so little must be regarded as one of the greatest national sins. For the past 14 months this House and the nation have been inundated with statement after statement from this Coalition Government, from the Minister for Finance and the Taoiseach, of their determination to tackle the country's difficulties. We have been told of their intention to turn round the economy and to put it and employment on a firm footing. As the previous speaker from this side of the House reminded the Dáil today, they could not get into office fast enough to criticise the measures brought forward by Fianna Fáil. They could not get into office fast enough to attempt to indict us for a programme that was realistic and positive. Day after day during 1983, statement after statement left nothing but a trail of deeper depression and greater despair in its wake. Even if we were to have assumed that the pronounced policies were founded on some degree of conviction — albeit whatever kind of conviction it might be — where is that conviction now? Where is the commitment to reform personal taxation? Where is the commitment to a deficit of £750 million, a figure bandied around often enough in the latter half of 1983 by the Taoiseach and the Minister for Finance?

This budget is a super cop out. It is a gross act of political cowardice and it clearly manifests irreconcilable divisions within a Government whose common touch is merely an act of expediency. It is all too clear that what we have thrown together in this Coalition is a conglomeration of half-baked political and economic ideologies which seem to oscillate from a form of Trotskyite socialism to right-wing chauvinism. The manner in which both tails have wagged the dog in this instance must surely be seen as an audacious exercise in political and economic gymnastics with professed disregard for ever-rising unemployment and sinister derision for ever-increasing poverty among the ranks of the unemployed, the aged and the disabled.

After such an act of political expediency, how can this Government continue to govern and hope to retain any [2266] credibility? I have to tell them that they have beguiled, misled and mismanaged this country. They have distorted the truth for 14 long dreary depressing months. It may be that they will survive in office in the short-term by way of expediency, but they will no longer hoodwink most of our people by their insincere and inconsistent postulations.

It is only fair to say that every Minister for Finance inevitably and of necessity must bring in measures which will not find favour in the short term with everybody. We all have to admit that steps have to be taken, legislation has to be introduced and taxes have to be collected which can and do hurt in the short term. However, the Irish public are a very discerning people. They realise that the budget is, or should be, the major instrument of economic and social policy for the year ahead. Where they find that in the main there is clear direction, leadership and a positive sense of purpose, they are eventually willing to accept these short-term personal aberrations as being in the interests of the overall common good.

The cry that had gone out loud and clear across my constituency and every other constituency preceding this budget was a desperate appeal to the Government for hope and positive encouragement. If ever this country needed hope, incentive and encouragement, we need it now. That cry has fallen on deaf ears. What we are witnessing in the unfolding and discussion of this budget is a little bit of this and a little bit of that, 19p for you and 8 per cent VAT on clothing for me. There is no clear cohesive policy or statement in this budget.

The Minister for Finance admitted this is a neutral budget. I have looked at various interpretations in economic dictionaries of the word “neutral” but even taking the most favourable I have to tell the Minister there is no such thing as a neutral budget in a dynamic economic situation. You either go forward or back, and it is my view that we are going backwards, and we have been over the past 14 months. As we go back we will be adding to the poverty among the dependants in our community with rapidly [2267] lengthening dole queues and a deeper depression among our people.

If one reads the statements of the 1983 budget and the 1984 budget one will see that there is very little consistency. During the summer of 1983 the Minister for Finance made it crystal clear on numerous radio programmes that he was going to hold firm on financial rectitude and a reduction of the deficit. He said things would go according to plan up to 1987. Very recently the Taoiseach said that £500 million would have to be saved. Juxtapose those statements against the text of this budget and one wonders which tails are wagging which dog.

This is a very serious matter at a time when there is a crisis of confidence and when young people and people who have been thrown on to the unemployment queues are looking for encouragement and incentives. It must be very disappointing to the people who persevered through 1983 that no further capital investment has been provided in this budget, and that there was nothing by way of reform in personal taxation. When we refer to those less fortunate among us who have been long-term unemployed, the derisory increase which this Government have had the effrontery to offer must be regarded by them as the greatest kick in the teeth they could get.

Prior to last Christmas the Government issued statements expressing how heartened they were by the decrease in the underlying rate of unemployment. They said the budget was having its effect. The unemployment figure has now reached 216,000 — probably today that figure has increased to 220,000. By the end of January 216,000 people were unemployed. I was very heartened to hear Deputy Coogan's analysis of the cost to the State of keeping people in jobs. Nobody would deny the very damaging social evils this represents and this trend must, and should, be arrested as a matter of priority. The Government tried to take comfort from the reduction which occurred during part of 1983, but there is little comfort for them now. That reduction was shortlived and seems to have been illusory.

[2268] The Government's budgeting programme accounts for an average of 225,000 unemployed in 1984. When a Fianna Fáil Deputy asked the Minister for Finance yesterday if he would be prepared to revise those figures upwards he refused to do so. Already this figure has become somewhat of a sick joke. The probability is that we are heading for a position of in excess of 250,000 unemployed before mid-year. When the Taoiseach was asked about the unemployment situation, preceding the budget, he said it would have to wait. I would like to remind him that the unemployed are not prepared to wait, that the situation is rapidly deteriorating and escalating out of control. If he has any knowledge as a Dublin Deputy — indeed the Minister for Finance is not too far removed from the Dublin region — he will be aware of the enormous level of unemployment there, the enormous degree of social unrest caused, particularly in relation to youth unemployment. Surely he must realise that the real cost to the State arising from vandalism, which is a manifestation of frustration on the part of our young people, and from other forms of social unrest is huge and, if used, would go a significant part of the way to taking on and arresting what can only be described as the most serious threat to the stability of the fabric of our society? Does the Taoiseach not realise that as the national cake shrinks so does the national take? By deliberately condemning tens of thousands more to the dole queues during 1984 — which is exactly the effect of this budget — the potential for Government revenue is reduced and the amount of expenditure automatically increased.

I have heard people on the other side of the House analyse, and indeed the Minister himself, the desirability or otherwise of capital projects and refer to the cost-benefit analysis of any form of boost to investment and development. Everybody would agree that any form of investment must be carefully examined in terms of cost-benefit. However, it is all too evident that the short-sighted policies outlined in this budget for this year, rather than act as a holding situation, will [2269] cause a greater stifling of investment both international and domestic. In the course of an interview given to The Sunday Press on 30 January last when the Minister was asked why the capital programme had been reduced he said there were a number of projects which were held back because further cost-benefit analysis had to be done on them. This is not a sufficiently good explanation to the people who are unemployed, who are desperate. I do not accept that this is anything but an easy way out for a Government who simply have got their philosophy wrong. We on this side of the House have consistently held the view that capital expenditure should be increased.

The construction industry is a disaster. Yet it has an employment potential with very high labour intensity. Present indicators are that it will suffer a further decline this year. The most recent EEC/CIF surveys shows that orders are declining in this area, with engineers, surveyors, architects, all of the related professions in this industry, giving the same message. While everybody must accept that inevitably that industry is affected by the world recession, that does not negate the need but rather promotes the need for positive measures which, if the will was there, could and should have been taken, which would not alone have improved the industry but would have put some of our skilled and unskilled people, recently unemployed, back into the labour force. The Minister cannot deny that the construction industry itself is regarded by economic commentators around the world as one of the greatest multiplier industries in terms of employment. Little or no account seems to have been taken of that factor.

Confidence is the key to success in this as in all other areas of capital investment. Yet all we get is despair. Well over 50,000 of the construction workers unemployed at present costs the Exchequer an enormous amount of money, as Deputy Coogan said, in two ways, first through loss of revenue by way of employer and employee contributions and, secondly, by way of payment of social welfare. We were given an average yearly figure yesterday of £2.47 million as being the cost [2270] of 10,000 unemployed. This is enormous when one thinks of what could be done with that money, when one realises what could be done by way of promoting other related industries. There is an economically sound argument for increasing capital expenditure both publicly and privately funded. For example, the CIF put forward a number of ideas in their submission to the Government, none of which seems to have been taken account of.

It is important that we deliberate on those for a moment. The CIF have suggested that there should be increasing capital expenditure in general. They have suggested it can be done by way of promoting joint projects between local authorities and private developers. This is an area that has weakened in recent times. They have also suggested that, by introducing incentives to promote private sector investment, a significant contribution could be made to the employment situation. Government response in this case is negligible and, in the overall, negative. They fail to take account of the fact that cutbacks on capital expenditure, in an effort to control Exchequer borrowing are counter-productive, particularly in labour-intensive industries. As we well know in those circumstances, the labour force will fall directly in proportion to the cutbacks in expenditure. As a direct result of this budget I estimate that an additional 5,000 construction workers will be placed on the dole queues before the end of 1984; I have no doubt but that that will be the minimum number that will be affected.

If the Government were prepared to be positive about it, to face up to their responsibilities, to the needs of the country, they would see that the key to success in manufacturing industry is to coax and promote the operation of capital, now dormant, in private organisations, in the private sector generally, into active operation in investment and in industry. This would constitute an effective contribution in the short term to job creation.

For a long time now I have consistently advocated the more rapid promotion of small industry. In his budget the Minister for Finance made some small gestures to [2271] the small manufacturing industry and to long-term risk capital. But these gestures are very meagre and inadequate. He says he proposes income tax relief up to a specific ceiling each year for individuals who provide long-term risk capital for new manufacturing enterprises. This is welcome but is minimal. It goes but a small part of the way to solving the problem. Also welcome are the stock relief provisions, the claw-back provisions, which gave rise to difficulties, about which everybody involved had been speaking, and which, in line with price increases, are welcome but not nearly adequate.

Whilst I readily agree that small industry cannot make a major contribution to arresting an increase in unemployment, in an atmosphere where investment by foreign entrepreneurs is significantly on the decline, we must balance that situation by far greater incentives at home. I was glad that my colleague, Deputy Fitzgerald, touched on something which has been of interest to me for some considerable time. As everybody in this House knows, the IDA have drawn up a programme of import highlights. I know that they have stated that in general manufacturing cannot provide the ultimate solution. Nonetheless I believe that if we take those import highlights and consider them carefully, which I hope the Government will, even before the termination of the discussions on this Financial Resolution, it will be seen that these highlights if they could be adapted, as I believe most of them could be, to both urban and rural conditions, those with capital — and there are some around, some of whom have it in pension funds, building funds and so on — can be encouraged by way of incentive to put that capital into operation for small industry. A theme I once used — bring Shannon to Dublin — can very easily be realised.

North Dublin, with which I am very familiar, is crying out for greater assistance, promotion and incentives. Ordinary people have become unemployed perhaps after ten to 30 years of steady employment and are for the first time in their lives forced into a corner, with their [2272] pride being hurt and their spirit being demoralised. Many such people have suggested to me that they have ideas and small amounts of money but nowhere to go with that money. They want to put it into operation for the good of the economy as well as their own entrepreneural spirit and for the good of employment. Yet, the existing structures, which are no fault of the IDA but can be accredited to long-term planning, are too unwieldy and too cost-prohibitive. These people cannot take on such overheads in the short term. Therefore, they cannot make a start.

The Minister might also examine the level of personnel in the IDA, assuming, that is, that he agrees with the view that small industry should be promoted. One of the great problems experienced by my constituents who have the spirit of enterprise is that they put forward an idea to the IDA, are asked to make a formal submission, which in all cases they do, but then it takes a considerable length of time before any decision can be taken. If the IDA staff were increased, aligned to a policy which would promote this type of enterprise, far more would get up off their backsides — people who have been criticised time and again by others who are more fortunate. These people would be far more ready to get small enterprises going in their local communities.

I appreciate that there are some difficulties with SFADCo, but I have been encouraged by the imagination, the simplicity, the cutting through of red tape which have characterised SFADCo schemes throughout the mid-western region. On recent visits to that area to examine some of these projects I have been very heartened by the spirit of enterprise and the encouragement which people in isolated areas have received. I have seen the success of such projects realised in at least seven or eight different places. I have no doubt that in north and south Dublin, but in particular north Dublin where I am aware there is a high rate of unemployment and of social unrest, there could be a rapid development of this type of project. I hope that the Government will take cognisance of my remarks in this regard.

[2273] It is not the time for long, protracted deliberations on cost benefit analysis with regard to projects. A good businessman must make a decision quickly and in the short term as to whether his project is viable or non-viable, on the basis of the research available. It is not in any way justifiable for a Government or a Minister for Finance, in the course of a Budget Statement or in a subsequent discussion in a national newspaper, to say the cost benefit analysis in his Department takes more than a year for a number of projects. That is not good enough and the public at large are not prepared to accept this. They will see it as just what it is — an easy way out, to try to confuse on the basis of what the Minister would regard as economic reasoning.

With regard to the whole area of small industry and the spirit of enterprise which is coming to the fore, I suppose out of necessity — and and we have all heard about necessity and invention — I would be interested to know how many private individuals have approached the IDA during 1983 and how many to date have been accepted as having ideas which could be considered as viable. Also, what departmental estimate is there of the potential for likely candidates for schemes of this kind, if they were only given the encouragement and the tax incentives to take on this work?

There is another very serious and important aspect. The Government have been talking about competitiveness in the foreign markets and I agree that this is very important. We rely very largely on foreign markets for our manufacturing products and have given incentives on products for export earnings. Might I suggest that there is room for serious consideration of tax incentives on profits for the domestic market as well, where those projects can be encouraged to take on imports in a substitutive way? I hope that the Minister for Finance will take this aspect fully into account in the immediate future. Our substitution potential is very great and I hope that it will not be lost because of fumbling on the part of a Government who do not seem too clear on what they want, or where they want to go.

[2274] Infant industries cannot be expected to survive from day one on their own. Apart from tax incentives, other measures should be brought to bear to enable them to prosper for the first few years. I am disheartened and saddened that the Minister did not see fit, in his budget, to make some provisions in this area to employers by way of PRSI contributions. He failed very badly in this regard and he must not have taken full account of the records available with the Revenue Commissioners. I know of some of those records because I have dealt with some of the cases of small industry, manufacturing, construction and others, who have come across enormous difficulties in recent times. There is little point in saying that this has happened over the past six or 12 months; it has happened over a progression of time.

These difficulties have peaked in recent months, especially in relation to a number of individuals with whom I have had to deal. People in these small industries have appealed to the Minister to lessen the blow to enable them to ride out the bad times. They have sought by every means at their disposal to convince him that they are willing to pay their taxes as early as possible but that the rate is prohibiting them from proceeding with a level of employment which they have the potential to maintain. I know of at least one individual who had to inform the Revenue Commissioners that if there was not some little leeway of discretion irrespective of the existence of legislation — we understand that the Revenue Commissioners have to act in accordance with the word and the spirit of legislation — he would have to let three of his work force of seven go. That is not good enough unless the Government have deliberately embarked on a programme of shedding employees where accountancy standards and criteria are not strictly met on the basis of cost benefit. The creation of a venture capital pool is needed. Many people whose capital is lying dormant are willing to risk it, but they must have the incentives to do so. The Government could make the first [2275] contribution by improving their capital programme.

Another directly related aspect to growth and employment is spending power in the community. While one readily appreciates the need to ensure that expectation generated inflation is not promoted — I think everybody would accept that — this Government had given a clear commitment to reform personal taxation. This commitment was given on the basis of several statements during 1983 in response to questions and debates in this House. Approximately £40 million has been made available this year — I believe it is about £67 million in a full year — by way of concessions on personal income tax. That is to be welcomed, but it is very insignificant. The minimum requirement would be the indexation of the income tax allowance.

I regret the Minister chose to keep the figure so low. There was no genuine attempt to tackle the overall problem of inequity in the tax system which the Government acknowledged on numerous occasions and which fosters divisions between different sections of the community. It also seriously damages the national effort, because if people are watching each other we will never work out the nation's difficulties; we will never improve productivity or have effective spending power. It has been said that the incentive to work is absent but what does 80p to 90p per week of a difference make to the incentive to work? None. Analysts agree that before the end of 1984 there will be a reduction in take-home pay which could range from £4 to 7 per week.

I understand that the unions are very concerned at this reduction in take-home pay and I do not think it will do anything to promote good relations between the Government and unions. Inevitably, if spending power is reduced it will have a direct bearing on growth and, therefore, employment. Rather than projecting a growth rate of about 2 per cent for 1984 it would be far more realistic to be talking in terms of between ½ per cent and 1 per cent for the current year.

Everybody agrees that the burden of taxation is excessive. The Government [2276] are concerned about its effects on incentive yet they have failed to make the slightest inroads by way of reform. Are they not seriously interested in reforming the level of personal taxation? Were there so many tails wagging the dog that they were not in a position to make a fundamental decision on it? In the Budget Statement the Minister for Finance said that they are awaiting a report from the National Planning Board next April before they formulate their own medium term plan. This report, in conjunction with the report of the Commission on Taxation, will help them in their deliberations. The public are very cynical about reports in relation to areas of inequity and their cynicism will be even greater in this instance.

VAT on clothing is one of the most anti-social measures which was ever brought in by a Government. It is part of a very meagre effort to widen the tax net but it hits at a basic necessity. Our school-going population are affected immediately and already overburdened parents will find the little they can put aside further diminished in real terms as a result of this measure. How can the Tánaiste attempt to justify this anti-social measure? Over 10,000 jobs have been lost in the clothing manufacturing industry in recent years and the Government seem determined to wipe out the remaining 4,000 or so as rapidly as possible. There is no other logical explanation for their action. They have sounded the final death knell for one of the most vulnerable industries in the country. In The Irish Press of 26 January the Tánaiste is quoted as having said that, because wealthy people spend a lot more of their income on clothes compared with the poor, VAT on clothing is justified. I reject that out of hand. This is little consolation for those who scrape and scrounge to try to clothe themselves and their families. To say that the family income supplement next November will offset this hardship for those in what is referred to as the poverty trap is really saying — live horse and you will get grass. I do not believe the people affected will accept that.

In the meantime the Government say to the people who cannot afford to buy [2277] clothing because of this 8 per cent: “Patch yourselves up. Wear paper. Wear anything until we come to your rescue next November”. Will they come to the rescue and, if they do, by how much and from where? How many will benefit in real terms? These are questions to which the Government do not seem to have addressed themselves. In view of the farcical tax credits in the 1981-82 Coalition Government's budget one must be extremely sceptical.

The Government spent 1983 trying to run families out of their homes and their jobs. They now seem to be hell bent on running them out of their clothes. It would be farcical if it were not so serious. The only consolation is to be found in the totally unworkable mechanism for the collection of this tax.

If the Labour Party want to claim — as they seem to do — that they had a major input in the formulation of this budget, why did they so unreservedly and so callously condemn the needy and the unemployed to even greater and deeper impoverishment for the year ahead? The 7 per cent increase is postponed until later this year for the categories of people taking the hardest bashing of all. This is a terrible indictment of a party who profess to be socialist and caring about the less well off. This miserly increase is a terrible insult to those who have had to suffer the indignity of being deprived of the right to work. The measures here seem to deliberately condemn these people to a further absence of that right during the current year.

The Labour Party should examine their consciences over the next few weeks and decide whether they can in all seriousness go back to their own people in their constituencies and convince them that this is good medicine. Having agreed to a programme in 1983 of financial rectitude with no serious imbalance on the capital programme side which causes extreme hardship, can they now justify an increase of 29p per day per person which will not be paid for the next few months, in the times that are in it, when clothing will be more expensive and when there is no hope of a job? Can they seriously and honestly go back to their [2278] people in a convincing manner on this issue? I do not believe they can. I do not believe their people are prepared to accept one iota of that. I hope their people will see the error of the Labour Party's ways and tell what appears to be the right wing of the Government that this measure is callous and unacceptable.

There has been much debate in recent years among economic analysts and political analysts on the level of the current budget deficit. This budget proposes a deficit of £1,028 million. I say “proposes” because there is no provision for increases for the public service. If a Fianna Fáil Government had attempted this exercise, would they not have been subjected immediately to a most decisive and incisive attack and the accusation that this was a deliberate attempt to mislead the public? This Government did many U-turns during 1983, and it seems they propose to do many more in 1984. When will it stop? On the basis of the provisions here there will be a mini-budget in the early autumn, if not before the summer. There is no way in which the circumstances created in this budget will hold a deficit of the figure mentioned.

On several occasions last year I made representations to the Minister for Finance regarding the difficulties caused by cross-Border smuggling, difficulties which might seem to some people to affect Border areas mainly, but I can assure the House that this problem has affected the Dublin region very significantly too. As it affects the Dublin region — let us not be short-sighted about it. — it affects employment in the Dublin region.

I received a number of assurances from the Minister last year by way of correspondence that it was his intention to monitor the provisions in the 1983 budget very carefully. We all know the figure mentioned of losses from leakage of revenue from this economy during 1983, and particularly in the last couple of months of 1983. We all know how serious and how damaging that was. Despite that, not one single concrete measure was incorporated in the Budget Statement to attempt to combat or mitigate that situation. That has to be spelled out clearly [2279] to the Minister. He has received numerous submissions from various interest groups in the community affected by this. The wine and spirits group, RGDATA and a number of other organisations made very detailed and concrete proposals and submitted them to him. He ignored them completely. The situation we considered bad in 1983 will be far worse in the year ahead.

I believe — and this is not a happy statement for anybody to have to make — that at the end of this year the unemployment figure will be going rapidly towards 300,000. I want to ask the Taoiseach how, with the best economic wisdom in the world, assuming it is available to him, he hopes to arrest that trend in the next two, three, four or five years, assuming he allows that pattern to continue. We are basing our assumption on what is here. As this figure increases the vicious spiral becomes more vicious. This budget takes no account of the human reaction or response to the proposals made in 1983. The Labour Party in Coalition will have a great deal to answer for before this year is out.

Mr. L.T. Cosgrave: This is the second budget introduced by this Government since they were given a mandate in November 1982. It marks a continuation of the policy of bringing a certain amount of stability into the nation's finances. This course was set in train as far back as 1981. There was a temporary and damaging halt in it during the brief debacle in 1982. The mandate given to the Government in November 1982 was clear and unequivocal. Following that unstable period the people wanted a stable Government which would last and take decisions. During that election the public realised there were difficult times ahead.

The difficult times that existed last year will continue for some time to come and there are no easy options. It is important to recollect the reason for these difficulties. They are the ill-effects of the mismanagement of the economy, particularly since 1977, and are due to a certain extent to the ill-conceived policies in the Fianna Fáil manifesto of that year. It can [2280] never be forgotten that many goodies were promised in order to buy votes. Rates were abolished overnight without any clear conception as to what would be substituted. The abolition of rates was the policy of both major parties but a phased basis might have been more logical. Most of the local authorities are now in serious financial difficulty because they have not been able to recoup this money. Many local authorities must find ways of financing services or making people redundant. This problem will remain, no matter which side is in power, and the House will shortly have to address itself to the problem. Another measure adopted in 1977 was the abolition of road tax.

The figures for net foreign borrowing in recent years are as follows: 1979, £509 million; 1980, £566 million; 1981, £1,285 million; 1982, £1,148 million. The amount doubled but did growth or exports double? This money must be paid back by every taxpayer. These borrowings make it more difficult for young people to find employment and to lower the personal levels of taxation. Eighty pence in every pound goes to service foreign debt and only 20 pence is available for health, social welfare, security and education. This is the legacy of those opposite and it is part of the reason for our present difficulty.

There are, however, signs of hope. The recent document from Allied Irish Banks states that the outlook for the economy of the Republic of Ireland is better in 1984 than it has been for some years and that grounds for this view lie in the improving economic climate in the major industrial countries, the progress achieved in correcting the existing imbalance in the national finances and, not least, the substantial improvement in our position on external payments. They go on to say, however, that there is no room for complacency.

This budget represents a realistic attempt to stabilise further the nation's finances. It goes some way towards creating a climate that will help employment and ensuring that conditions are such that young people will find jobs and those in their thirties and forties will remain at [2281] work. Older people who lose their jobs find it difficult to obtain alternative employment.

The Government have made good progress in reducing inflation. It is still high by the standards of other European countries but it has been coming down. There is also an attempt to exert some measure of control over public expenditure. The major items are health, the maintenance of security, education for all our children, as well as adult education, and social welfare payments. At all times we have a duty to look after the less well-off. We must ensure that those without jobs, old age pensioners, the disabled and others have at least enough to get by and, hopefully, a bit more if the country can afford it. We owe them a certain standard of living.

This budget has buried the myth that some commentators and members of the Opposition were trying to perpetrate that the Coalition would not last. They were predicting the fourth general election in just over two years. The budget has shown that the Government are united, that they will last and will implement their various policies. On the other hand, it has probably demoralised the Opposition who are trotting out the same old verbiage, the same old long-playing records which have been played before and are not being listened to by the public, who realise that the Government have honestly tackled our problems and taken the flak of unpopularity.

Debate adjourned.