Dáil Éireann - Volume 427 - 02 March, 1993
Financial Resolutions, 1993. - Financial Resolution No. 10: 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.
Mr. Cullen Mr. Cullen
 Mr. Cullen: I have had some time since the debate was adjourned last Thursday to reflect on what is contained in the budget. It is fair to say that all independent commentators regard the budget as a damning indictment of the Government. It offers nothing to the two major sectors in our society which need assistance. It is ironic that after such a short time in Government the Labour Party should, in one fell swoop, be capable of disenfranchising the employed and the unemployed at the same time. The budget offers no hope to the unemployed of gaining employment in the months ahead and it has substantially increased for those who have jobs the burden of being employed. For example, the 1 per cent employment levy speaks volumes about the typical attitude of the Labour Party in Government. The Government has taken this option in the hope that somehow or other it will be acceptable to those who are employed and that the money can be used in some way to satisfy some need the Labour Party has, without in any way thinking through the consequences it will have on employment. The Government increased employers' and employees' PRSI, and did not reduce the base or the higher rates of income tax. Indeed, one could fairly and safely say there have been increases in all areas of taxation in the budget.
How can the Government be serious about the creation of employment when the fundamentals are not right? Many Members recognise that certain areas must be addressed if jobs are to be created. Instead of decreasing PRSI, the Government has increased it. Instead of lowering taxation to make employment more attractive, the Government has done nothing, except introduce the 1 per cent employment levy on gross earned income. That represents a substantial increase in direct taxation. It is clear from what the Minister said that this 1 per cent levy is not a once off measure — I believe it is here to stay. The Minister in his Budget Statement said the yield from this levy would be in the order of £78 million this year and £130 million in a full year.
 That is too big a carrot for the Government to resist in future years. That is what the Irish people have to look forward to.
Already the signs for the Government are ominous. I am surprised at the speed of the mismanagement by the Government. It usually takes a year or two before the full extent of the Labour Party mistakes in Government are clear for all to see. However, we have seen within six weeks the approach to be adopted by the Government over the next four years. If the Government remains in power for the next three or four years the consequences will be catastrophic. We cannot afford the luxury of the policies which have been enunciated by the Government for the next four years. We know what happened when the Labour Party was in Government from 1973-77 and again from 1983-86. What has happened in the early days of this Government and the contents of the budget would lead one to believe that it will not be any different. The Labour Party will follow the same well worn path. It is obvious that Fianna Fáil is happy to be back in power after a devastating election for them. The party is happy to leave its policies to one side in an effort to hang on to power and do the minimum required of it. That is not acceptable.
Looking through history books one can see the measures taken in other countries during major national crises. I am referring to crises such as the arms crises in the First and Second World Wars, when Governments and Opposition politicians joined forces. We have such a crisis here now; we have a major economic war on our hands. If this is left in the hands of the two parties in Government to deal with the results will be catastrophic. In the budget, the Government has indicated to all sectors that it has nothing to offer the unemployed and is going to further burden and drive out of employment those who have jobs. When one breaks down the figures for those who are employed, the unemployed, those who depend on the State for part of their income and the farming community who depend on Brussels for so much funding, one can see that approximately 550,000 people are supporting a seriously and  desperately creaking ship which will be scuttled by the Government unless something radical is done.
I should like to analyse one of the nuggets of this Government, asset disposal or asset sales. In Opposition in the past seven years, the Labour Party berated the Progressive Democrats for bringing that concept to the fore. It brought the wrath of Cain down on us and anyone else who attempted, in their words, to sell the family silver. The Government has a new phase for privatisation, “asset disposal”. There is not a murmur from the Labour Party benches about this issue. The Progressive Democrats welcome this real conversion on the road to Damascus by the Labour and Fianna Fáil parties who were not helpful in this regard. They should have been more determined to pursue, with the Progressive Democrats in Government, this very useful programme. This conversion opens up many possibilities to us. I welcome the possibilities opened up by this. I see that these funds are to be used to inject some capital equity into Aer Lingus. That amounts to £68 million on the sale of the Greencore shares but we are a long way from clarity on that matter as evidenced by the reluctance of the Taoiseach and others to deal with it when it was raised by my colleague and party leader, Deputy O'Malley, today. Many questions remain. Are we to take it from all of this that there is a possibility that aspects of the business of Telecom Éireann will be privatised? Are we to take it that there is a suggestion that areas of public transport are to be privatised? Are these issues now on the agenda? Is there to be any honesty on the part of the Government in laying down a policy? They need not be afraid of those on the Opposition benches. We would be only too willing to support realistic well thought out policies that can bring real benefit. There are opportunities in this area but they cannot be dealt with in a sly way, in a way that causes confusion in the markets and to those that are involved directly in running the State companies. That is no way to enunciate  a policy at such a crucial time in the economic life of this country.
We are facing one crisis after another largely brought about by this Government's inability to deal with matters when they arise, and matters were allowed to slide since the beginning of the elephantine gestation of the formation of this Government. That is not acceptable. It is causing a loss of jobs in the country, uncertainty in the markets, confusion and lack of confidence both in the private and in the public domain. That is the kind of Government that this country cannot afford. We must divest ourselves of the type of “non-policy” that has been enunciated by this Government up to now. Otherwise, we are facing catastrophe.
The Government pretends that the Culliton report is to the fore in its thoughts. It is not. Let that lie now be exposed. It is not to the fore of this Government's policy because every action it has taken since they came into office, particularly in this budget, totally undermines the thrust of the Culliton report in terms of developing indigenous industry and creating employment here. Nothing this Government has offered over the last number of weeks would lead one to any other conclusion but that there has been a reversal of what one hoped for, a radical Government in the weeks and months ahead. We will pay a terrible price if this Government is not forced, whether from within or without, to change its ways in the immediate future.
Minister for Agriculture, Food and Forestry (Mr. J. Walsh) Joe Walsh
Minister for Agriculture, Food and Forestry (Mr. J. Walsh): I would like to share my time with Deputy Seán Haughey.
An Leas-Cheann Comhairle Joe Jacob
An Leas-Cheann Comhairle: Is that agreed? Agreed.
Mr. J. Walsh Mr. J. Walsh
Mr. J. Walsh: I am very pleased to participate at this early stage in the debate in support of a budget which is well balanced and right for our present economic circumstances.
Since EC and world market developments are of crucial concern to Irish farmers  I would like to introduce my contribution by laying particular stress on those two aspects.
The past year has been a very eventful one for EC agriculture. In June last the Council of Ministers agreed sweeping reforms of the Common Agricultural Policy. I have no doubt that the Common Agricultural Policy support arrangements needed to be adjusted and I am satisfied that the results achieved in those negotiations will benefit Irish farmers not just in the short term but for some considerable time to come.
I had been concerned for some time that the increased expenditure on the Common Agricultural Policy had not been finding its way through to farmers. Farm incomes were actually decreasing while expenditure has soared. Too much support was being dissipated among processors, cold store operators and various middlemen. Under the partial switch agreed last June from market price supports to direct payments, more EC support will go directly into the pockets of farmers.
I know well that farmers want to make their living from the sale of their produce. However, producing without regard to the needs of the market is a recipe for disaster in the long term. We have to export the bulk of our agricultural produce, about 75 per cent in the case of many of our products. While our exporters have been gaining an increasing share in the relatively high priced EC market, we still have a strong dependence on third country markets and on the intervention outlet. The institutional price reductions which will flow from Common Agricultural Policy reform will make us more competitive on Community and other markets while the compensatory payments in the reform have been put in place to ensure that farmers will not lose out.
By the end of the three year reform period direct payments to Irish farmers will have increased by at least £420 million and will be in excess of £700 per annum in 1995. It is vitally important that farmers optimise the benefits from the various compensatory payments. In  order to help farmers in this endeavour, my Department has held numerous information seminars on both the livestock and crop sectors. I have attended some of these myself and the size of the attendance and the interest shown at the meetings are a clear indication of the importance of such payments to our farmers. To further aid farmers, I recently launched a special Teagasc Common Agricultural Policy reform advisory service and I would urge them to avail of this service to maximise their payments.
This year's price proposals which were introduced by the EC Commission at the Agriculture Council in February are mainly the confirmation of the first stage of the agreed reforms. I am having them examined at present in my Department and that examination will be completed in good time to allow me to respond to the proposals at the next Council. I can asure Deputies of my determination to safeguard the interests of Irish farmers in these discussions both as regards the proposals themselves and in areas not covered by the proposals.
Another issue which will have a major positive impact on farm incomes is the recent devaluation of the green pound. This will mean an increase of almost 9 per cent in all support prices and in a range of market related premia and subsidies. The estimated full year effects of the devaluation should be in excess of £150 million. This will be of substantial benefit to farmers not just this year but also for the future. In order to maintain the increased competitiveness which agriculture-based industries gained by the devaluation of the Irish pound, I have not sought a fully matching devaluation of the green pound. I will, of course, keep the position on this under close review over the coming months.
There is a number of matters developing in the European Community and worldwide which will impact on Irish farmers' incomes and agriculture gen erally. They relate to the Single Market and GATT negotiations which were the subject of a debate here only last week and I think they were adequately deal  with. I will therefore move to matters in the budget which are of direct concern to farmers and agriculture. There has been a significant change in capital acquisitions tax for both inheritances and gifts. For gifts, agricultural relief has been increased from 55 per cent of eligible assets with a maximum relief of £200,000 to 75 per cent of eligible assets with a maximum of £250,000. This move will substantially reduce or even eliminate the gift tax burden for many farmers. The new probate tax of 2 per cent of all assets over £10,000 in value is, potentially, a significant burden for many people. However, this probate tax can be avoided, any CAT liability reduced by 25 per cent and the new higher agricultural relief availed of by passing on the property as a gift rather than as an inheritance. There is, therefore, a substantial tax incentive to give the family farm to the younger generation of farmers during the life of the owner.
Although the VAT refund for unregistered farmers was adjusted from 2.7 per cent to 2.5 per cent. I believe that this will continue to fully compensate farmers for any VAT paid on inputs. It should be noted also that this new rate of refund is still substantially higher than the 2 per cent rate which operated at the end of the eighties.
As Deputies are aware, a system of delegated administrative budgets was introduced into most Departments from 1 March 1991. These budgets comprise the costs of running Government Departments and offices. I have already indicate some of the changes which will arise from Common Agricultural Policy reform and the Single Market. There is also a continuing need to implement the information technology plan of my Department and to improve where necessary the management and control of existing schemes, both EC and domestic.
In those circumstances I am particularly appreciative of the additional resources which have been made available to me by the Government and the Minister for Finance.
In relation to Common Agricultural  Policy reform alone, the measures agreed in May 1992 involve a major overhaul and improvement of existing livestock premium arrangements and the introduction of new compensation measures to offset support price reductions in the livestock/cereals sector and to compensate producers for “set-aside”. The number of livestock premium applications to be dealt with annually will, for example, increase from 236,000 at present to 420,000. A further 180,000 applications will arise under the headage payments scheme, while it is expected that all arable producers, who number 30,000, will participate in the arable crops scheme. In addition, the schemes are far more complex, due to the introduction of stocking density criteria, quota rights, national reserves, leasing and an integrated system of management and control.
Under the Single Market, the current system of frontier controls is, as I have mentioned, being replaced by veterinary checks and health certification at places of origin and destination of animals and foodstuffs. If my Department could not undertake these revised and new functions, Ireland would be unable to export live animals and animal products because the long-standing worldwide acceptance of our high animal health status would be put in jeopardy. Our animal health status has always been an important asset for this country. It is all the more important in the Single Market with the removal of frontier controls. The practical aspects of the implementation of the new regime are proceeding satisfactorily and provision has been made in this budget to provide extra staff resources to cope with the more extensive checks and controls which will be required. Our animal health advantages will be further enhanced by our recent attainment of Leukosis-free status, which will mean less restrictive requirements for our exporters.
The TB eradication programme continues to be a very expensive scheme and a provision of £43.5 million has been earmarked for the scheme in 1993. This is based on the normal contribution from disease levies. The position in regard to  the availability of funds from the Community is not yet finalised. I am making a very strong effort to have the level of the veterinary fund in the EC budget increased in order that the resources will be available to fund the re-vamped eradication programme which was agreed with the various interested parties during a series of discussions last year. I am particularly anxious to clarify the position with the Commission with the minimum of delay in order that we are in a position to put a coherent and properly structured programme in place for the next three or four years. In those circumstances the Estimates of my Department at this stage do not make specific provision for substantial EC receipts.
There is no doubt that the total eradication of bovine TB is a more difficult task than originally envisaged. There are many difficult and complex matters appertaining to the problem.
The existing EC support arrangements for Irish agriculture will remain in place. As these arrangements are funded by direct borrowings in foreign currencies by my Department, it has been necessary to make provision of £25 million this year for exchange losses arising from the recent devaluation.
I now wish to turn to specific matters in the budget. I am pleased, as I am sure are all Deputies in the House, that there is budgetary provision of £1 million to assist potato growers in County Donegal, which has a long tradition in that industry. I am also seeking to have that aid augmented by an appropriate contribution from the EC Structural Fund and I hope to be in a position to make a further announcement about that at an early date.
The Government is fully committed to the maintenance of an effective advisory and research service in the agriculture and food sector. In the 1992 budget the Government provided a sum of £1 million to Teagasc to create the small farm development programme. I am delighted that the 7,000 people who benefited under that programme will be augmented.
I am also pleased that research and  testing services have gained under the budget and that the Government has provided a special allocation to facilitate the introduction of a much-needed pig evaluation programme.
The Government has further emphasised the importance of food research in the context of job creation by allocating £250,000 to provide for new research in the food area. This is intended to stimulate the development by our food research institutions of joint projects and collaborative programmes which would be of wide benefit to the general food sector.
In relation to Common Agricultural Policy reform and accompanying measures, I am delighted to be able to give a start to the farmer retirement scheme. My Department is at present drawing up detailed rules for that scheme. Provision has also been made for the agri-environment element of several other schemes.
Deputies will note that the provision for livestock headage scheme payments in 1993 in the Abridged Estimates for agriculture and food is £85 million. That figure is additional to the provision by way of Supplementary Estimate of December last which allowed headage payment of £20 million scheduled for 1993 to be brought forward to 1992.
In addition to those payments, I am delighted to be able to restore grants amounting to £76,000 to various voluntary organisations.
These and other aspects of the Estimates of my Department and of the Estimates for Forestry, for which I now have responsibility, will, of course, be dealt with in the House in the coming months in the context of discussions on the individual Estimates of the various Government Departments and offices.
In summary, I regard this budget as a positive one from the agricultural viewpoint. It contains a considerable number of beneficial changes, changes designed to meet the needs of farmers, to contribute to structural improvement and to the needs of the food industry and, in general, to help in meeting the challenges  posed by Common Agricultural Policy reform.
I propose to allow the remainder of my time to be taken by Deputy Haughey.
Mr. Haughey Mr. Haughey
Mr. Haughey: I should first like to congratulate you, Sir, on your appointment as Leas-Cheann Comhairle and to wish you every success in that position. I thank the Minister for Agriculture Food and Forestry for allowing me to use some of his time, and I congratulate him, too, on his appointment to Government.
As this is my first speech to the House on economic matters, I should like to put on record my full and total support for the Programme for a Partnership Government. I particularly welcome its provisions that relate to the tackling of the unemployment problem, which has such serious consequences for our society today. I also fully support the budget policy and the requirements of the Maastricht Treaty, which are set out very clearly in the Programme for a Partnership Government. I particularly note my full support of the provisions for social partnership and consensus in relation to the management of the Irish economy. There is no doubt that the Programme for National Recovery and the Programme for Economic and Social Progress were a success in the management of our economy. Although not supported by all economists, in particular those from the far right, the consensus approach is the only way forward. I believe in the mixed economy concept and in a socially caring approach. It is my belief that all of those aspects are fully catered for by a consensus approach and by a social partnership approach. The Programme for a Partnership Government reflects traditional Fianna Fáil policy and the 1993 budget is the first step in the implementation of many of its provisions.
The budget of 1993 has received unfavourable comment from several commentators and economists. It is important to establish, however, where that criticism comes from. It has been said that the budget does not do enough  for job creation. The budget does tackle the unemployment problem but it can be expected to do only so much. The Finance Bill is yet to come before the House, a new industrial policy embracing many aspects of the Culliton report is yet to be fully debated and brought forward and the provisions of the Programme for a Partnership Government, as I mentioned earlier, have yet to be acted on. The budget is only a small part of overall economic strategy. Unemployment is a major priority of the Government. It must be remembered that the Government had very little room in which to manoeuvre on this occasion and was this year severely curtailed by the enormous scale of the public service pay bill and by the high costs of the Department of Social Welfare. Criticism of the budget is, therefore, unfair.
Most important of all, the 1993 budget is a socially caring budget. Perhaps that is the real reason it has been attacked by the laissez-faire economists writing in our newspapers. The provision of social welfare increases in line with inflation demonstrates that the budget is a socially caring one, despite the budgetary pressures faced by the Government. Social welfare payments were not always increased in line with inflation, in particular by non-Fianna Fáil Governments. In this budget child benefit is being substantially increased, £20 million is being provided for the reduction of hospital waiting lists, £16 million for remedial works, £1 million for the renovation of flats for the elderly in Dublin's inner city while there is a substantial increase in the number of local authority houses to be built in the coming year. There is a housing crisis at present and I appeal to the Minister for the Environment in particular to make sure that the local authorities implement the plan for social housing. They are proceeding with too much caution in this regard and many of the provisions of the plan for social housing are not being operated effectively by the local authorities.
I should also like to make a case on behalf of widowers and separated fathers. At a critical time the system  treats these people unfavourably. It is unjust to means-test the lone parent's allowance, whereby men can end up being taxed as single people, leading to a drop in salary and very often a decrease in mortgage interest relief. In addition I believe that tax concessions for expenditure on child care for this category of people is needed. I appeal to the Minister for Finance and the Minister for Social Welfare to review the plight of widowers and separated fathers as a matter of urgency.
I welcome the provisions in the budget which encourage a community response to job creation: £25 million has been allocated to the county enterprise partnership boards. The current structures stifle community initiative and enterprise; many people with good ideas come up against a brick wall when they seek financial assistance, ideas which would create local community jobs. This is particularly true with regard to the service industries. Communities can identify local niches in the market more readily and local initiative is the key; small scale, indigenous projects at a community level have a vital role and should be encouraged.
The budget has been imaginative in relation to overseas development assistance, the plight of mortgage holders and in its provisions for mortgage interest relief. It has also been imaginative in relation to the tourism industry and especially in regard to the car hire industry. The same applies to the VAT provisions in regard to flour, confectionery, car and hairdressing services. Above all, the budget is socially caring. The Government is giving job creation top priority and doing everything possible to bring about an adequate industrial policy and to implement measures to tackle the very serious crisis of unemployment.
Mr. Browne (Carlow-Kilkenny) Mr. Browne (Carlow-Kilkenny)
Mr. Browne (Carlow-Kilkenny): Bhí eagla agus sórt gliondair ar a lán daoine roimh an cháinaisnéis seo, mar cheap siad go mbeadh tairiscintí nua inti. Tá Rialtas nua againn agus daoine nua sa Rialtas, ach tháinig an rud céanna leadránach faoi mar a bhí ann leis na blianta. Níor deineadh  athrú dá laghad; agus ní aontáim ar chor ar bith leis an chainteoir deireanach.
If that was Deputy Haughey's first speech on economics I should hate to hear his first speech on fiction. He views the budget through rose-tinted spectacles. He said it was important to identify the sources from which criticism of the budget came but if that is the case we should also identify the sources from which priase for it comes. I have come to bury the budget, not to praise it.
The budget is the greatest non-event since I became involved in politics. It reminded me of my very young days when the discussion on the budget always concerned whether there would be 1p to 2p on cigarettes and the pint. In fairness I acknowledge that the children's allowance has been raised but it will mean very little to those depending on it. It was the same kind of budget as that introduced by Mr. de Valera in the good old days when he worked with a small group of advisers. Now there are Ministers, Ministers of State, advisers to the Minister and special advisers to individual Ministers. People were falling over themselves to give advice but they did not come up with one new idea in all their thinking and planning. It was the same old mish-mash at a time when we were looking for guidance and when the 350,000 unemployed were looking for a ray of hope. They wanted to see something happening which would give them encouragement. While there is an undoubted wave of cynicism towards politics at present it is very difficult to be surprised or amazed when one considers what was served up in the budget. At a time when the unemployment rate is going through the roof a routine budget was introduced which might have been all right if the country was booming, if a small number of people were unemployed and if we did not have to deal with so many problems. Unfortunately, there is massive unemployment and many problems, and unemployed people in particular deserved a better approach to solve their problems.
I am convinced that if the Minister for Finance came up with a crazy idea and announced that he would put a tax on  working people to build a replica of the Tower of Babel he would get thousands of people walking up to Heaven every day and coming down again, if they were foolish. That kind of idea—mad as it is —would almost be accepted; people were longing for something which showed a specific effort to deal with the problem.
I do not want to refer to the farce of the Tánaiste's office because it has been highlighted by many people. However, I object to the kind of double talk about the cost of these advisers. Today I asked the Taoiseach a question about costs and, in reply, he said that advisers were getting 10 per cent more money. Was that 10 per cent added to their salaries and did those people have to be replaced? I cannot understand this: if advisers have been taken from the Civil Service will they be replaced by someone else and, if so, will it be an extra salary? If they do not have to be replaced and have been paid in the Civil Service over the years, then there should be a sworn inquiry into what they were doing.
Minister for the Environment (Mr. M. Smith) Michael Smith
Minister for the Environment (Mr. M. Smith): It is not as simple as that.
Mr. Browne (Carlow-Kilkenny) Mr. Browne (Carlow-Kilkenny)
Mr. Browne (Carlow-Kilkenny): It is very difficult to understand this matter. The Minister may know something; he is on the inside but I am on the outside. The Tánaiste, Deputy Spring, is indignant at people mentioning cost in regard to his Department. There are six people in it; if they were not employed previously they are getting new salaries and if they were already in employment they must have been switched from another office and somebody must replace them. If you carry that to its logical conclusion it means that somebody new must be appointed——
Mr. M. Smith Mr. M. Smith
Mr. M. Smith: Not necessarily.
Mr. Browne (Carlow-Kilkenny) Mr. Browne (Carlow-Kilkenny)
Mr. Browne (Carlow-Kilkenny): If the people who have been appointed do not need to be replaced there should be a  sworn inquiry into why they were employed in the first place.
Mr. M. Smith Mr. M. Smith
Mr. M. Smith: Ingenuity.
Mr. Browne (Carlow-Kilkenny) Mr. Browne (Carlow-Kilkenny)
Mr. Browne (Carlow-Kilkenny): Ingenuity? We had all kinds of tricks and magic before but we did not want that to continue. I thought there was a new partnership and that the Labour Party would keep Fianna Fáil on the straight and narrow. Fianna Fáil have dominated matters or perhaps the Labour Party have learned the tricks just as quickly.
Mr. M. Smith Mr. M. Smith
Mr. M. Smith: Neither the Labour Party nor the Fianna Fáil Party have anything to learn.
Mr. Browne (Carlow-Kilkenny) Mr. Browne (Carlow-Kilkenny)
Mr. Browne (Carlow-Kilkenny): I cannot hear the Minister but he should not be allowed interrupt me.
An Leas-Cheann Comhairle Joe Jacob
An Leas-Cheann Comhairle: The Deputy should be allowed to continue without interruption.
Mr. Browne (Carlow-Kilkenny) Mr. Browne (Carlow-Kilkenny)
Mr. Browne (Carlow-Kilkenny): It is shocking that the Minister should interrupt an innocent victim by talking across the table to him, when he has all the information at his disposal.
Mr. M. Smith Mr. M. Smith
Mr. M. Smith: We are at the back of the church praying for the salvation of all souls.
Mr. Browne (Carlow-Kilkenny) Mr. Browne (Carlow-Kilkenny)
Mr. Browne (Carlow-Kilkenny): In speaking about the church, I heard some unfair criticism on a radio programme in regard to the amount of ashes displayed by some Deputies in the House last Wednesday. Some of the people who made such criticisms might be better off it they attended church. I wonder about the question of Civil Service pay and so on. The delusions of grandeur suffered by some of the new Ministers are far removed from the delusions of reality they should have. There are many problems to be faced and there should not be self-glorification. I hope the new Minister present is noting my comments. Despite the long negotiations between Fianna  Fáil and Labour they made one mistake. They should have appointed a Minister for arrogance and there would have been great competition for that position. I would love to have been laying a bet on it.
The budget was a non-event, a lazy man's budget. The imposition of a 1 per cent levy was the easiest tax measure for a Minister for Finance. It will affect those earning more than £9,000; a married person with 15 children earning £10,000 will be liable to pay the levy. This is a tax and should be regarded as such and nobody knows for what purpose it will be used. Originally we had a “one page” Taoiseach and now we have a “1 per cent” Minister for Finance. The Minister for Finance took the easy way out.
The adverse effects of the imposition of 21 per cent VAT on clothes have not been carefully thought through. Anyone dealing in the real world will be aware that clothes shops have been experiencing difficulties mainly because of the activities of one chain store which have caused havoc for other clothing outlets. The 21 per cent rate on clothes is our highest VAT rate. For climatic and other conditions clothes are essential.
Mr. M. Smith Mr. M. Smith
Mr. M. Smith: Is the Deputy saying clothes are only essential because of our climate?
Mr. Browne (Carlow-Kilkenny) Mr. Browne (Carlow-Kilkenny)
Mr. Browne (Carlow-Kilkenny): I referred also to other conditions. I do not want the Minister to get carried away. It is a scandal that a 21 per cent VAT rate should be levied on clothes. The tax on essential clothing is the same as that on luxury materials such as fur. There was a great rumpus some time ago about clothes and it is wrong that the VAT rate on essential clothing such as a suit or a shirt is 21 per cent. The question of employment is involved in this. Many shopkeepers have given a lifetime of service, often carried down from their fathers and employ people on a full time basis, will have serious problems retaining staff. Some of the chain stores employing part time staff will have great fun counting their money but this  increase will add to the unemployment problem. People in the clothing trade have told me that business has declined in the past number of years. A suit of clothes costing £200 will cost £42 more when the 21 per cent VAT is added. I hope the Minister will reconsider the imposition of a 21 per cent VAT rate on clothes because it will lead to difficulties for many people.
Most people expected encouragement for employers in the budget. I accept it is difficult to come up with a solution to the problem of unemployment at more than 300,000. Everybody expected the PRSI rate to be cut. My party suggested this cut and many experts accept that a cut in the PRSI rate would encourage employers to employ more people. It is really a tax on employers for providing employment. They have to pay PRSI, collect income tax and VAT and employ people to do the work of the Government. Instead of giving employers an incentive which would encourage them to create more jobs, the Government is asking them to pay PRSI on an extra £1,000. I know employers who ceased trading because they were fed up with the worry of keeping accounts, VAT returns and so on. If we do not facilitate business people who employ small numbers of people, we will have major problems.
I know what the loss of 110 jobs means to a community from what happened in Carlow. It is a shock to any community when 110 people lose their jobs, but job losses in two's and three's across the country can quickly add up to 110. The Government should have made some effort to deal with devaluation rather than talking about patriotism and the value of the punt for three or four months before devaluing it, by which time the damage had been done. Many business people, and industrialists who compete with British firms are in difficulty and the question is, how long can they continue in business?
Greencore in Carlow is experiencing problems at present and answers cannot be got to the question of the golden share. Can the beet quota be sold off by a foreign company if it takes over? A statement  should be made to allay the fears of the workers in Greencore. Some 20 years ago there was a march in Carlow demanding quotas for beet and it would be dreadful if something happened now to decimate that quota in the one industry that seems to be succeeding here. I hope, despite the silence of the Taoiseach today and the sparse information given he will let us know what is taking place and ensure that the hard earned quotas are not decimated for the farmers involved in the sugar industry.
The sneakiest and meanest measure of all was announced on the eve of the budget when health charges were increased. One should not forget the fire, passion and absolute detestation displayed by Deputy Howlin, in Opposition when Fianna Fáil introduced health charges. It is unacceptable that on the eve of the budget the Minister for Health should introduce further health charges, making it more costly to get treatment. It is an amazing turnabout for the Minister for Health to defend such charges.
The Minister for the Environment is shaking his head, but he must accept there has been an increase from £10 to £15 for hospital visits and from £150 to £200 for a stay in hospital. It is, therefore, more costly to get treatment when ill under the Labour/Fianna Fáil Government than it was under Fianna Fáil when Deputy Howlin did a song and dance about the introduction of the £10 charge. That £10 charge for a casualty visit covered a person if they had to return to the hospital but that has been changed and now ranges from £6 to £42. Those who opposed the introduction of health charges under the previous Government should be answerable to the public for this turnabout.
Increases of 3.5 per cent have been given to some social welfare recipients and the rate of inflation is expected to be 3.75 per cent. People should not get excited about this increase because it is a farce at a time when the rate of inflation is expected to be 3.75 per cent and people will be expected to pay an extra 5 per cent VAT on clothes.
 A great deal of money could be saved and allocated in different ways. The increase of £6.50 in the carer's allowance was generous, however the only problem is that it is almost as difficult to qualify for that allowance as it is to become a Minister. Generally, it is the wife who looks after the elderly but she is assessed on her husband's income and is only allowed to earn £2 in her own right, before deductions are made from the allowance straight away. The carer's allowance is one of the really good innovations and people should be encouraged to take it up. Many people are doing great work in caring for the elderly, thereby keeping them out of hospital, yet find it almost impossible to qualify for the allowance. Those who qualify for it get the increase but there are many who cannot avail of it.
The elderly get a raw deal. I was amazed that a member of the European Parliament, a former Minister, hit the newspaper headlines when he warned Europe that there was a danger the elderly would be forgotten. I could do nothing but smile because nobody gets as raw a deal as do the elderly in this country. There is such a demand for hospital beds that pressure is put on the family of elderly patients to take them home even though they may still need hospital care. There should be beds where these people can be transferred from the general hospitals to other hospitals where they can be cared for. It is reprehensible that the elderly are not cared for. Those people stood by the country when we did not have very much, they worked hard for low wages and the least we can do now is look after them.
Alzheimers disease is on the increase but unfortunately nobody wants to admit victims of the disease to hospital because they demand a great deal of care. Such people must be taken care of. Any Minister worth his salt should have this whole area of care at the top of his agenda.
There is to be a probate tax of 2 per cent. However, if goods and chattels are handed over during the lifetime of the person concerned and inheritance tax is  paid, probate tax will not apply. Unfortunately not everybody lives to a ripe old age. People die in middle age and early old age. Even the dead are not escaping so far as this Government are concerned.
I welcome the payment of a £200 grant on the birth of twins. The money could be of some help to the parents involved.
The Minister for Agriculture, Food and Forestry, Mr. Walsh, spoke about the early retirement scheme for farmers. If he does not get to grips with this issue we will have another shambles on our hands. So far as I can see the scheme will not be of benefit to most farmers though they think they can benefit from it.
I will conclude on this final point: if one is in the best of health, a parent of twins, not unemployed and, above all, lives in a nudist colony, this budget is not too bad; otherwise there is very little to be had from the budget.
Minister for the Environment (Mr. M. Smith) Michael Smith
Minister for the Environment (Mr. M. Smith): I may have to share some of my time later and I hope I shall have the agreement of the House to such arrangement, should it be necessary.
I have much time for Deputy Browne. Normally he is very sensible but today, for some extraordinary reason, he seems to have decided to take a day off from the normal, serious course he follows. Our philosophy and social concern were put before the people during the election campaign whereas neither the Fine Gael Party nor the Progressive Democrats had anything in their manifestos which would improve the health services——
Mr. Browne (Carlow-Kilkenny) Mr. Browne (Carlow-Kilkenny)
Mr. Browne (Carlow-Kilkenny): This Government has increased the various charges.
Mr. M. Smith Mr. M. Smith
Mr. M. Smith: ——or develop social housing. Their line was to cut public expenditure but now we have the hypocritical situation that everywhere there is an adjustment made to accommodate expansion of services for the mentally handicapped or in the provision of housing, for example, the Members opposite are crying about it. The Opposition do not want us to raise this money——
Mr. Browne (Carlow-Kilkenny) Mr. Browne (Carlow-Kilkenny)
 Mr. Browne (Carlow-Kilkenny): The Minister is not defending the charges.
Mr. M. Smith Mr. M. Smith
Mr. M. Smith: The Opposition are not interested in having solid progressive social development.
The difficulties facing the Government in planning this budget are well known— high unemployment, high interest rates, adjustments required on foot of our entry to the Single Market, and so on. However we must look to the future rather than lament our difficulties. We must have confidence in ourselves, confidence in our country, and the confidence to build a better future for ourselves and for our children, using all the resources we can bring to bear and all the assistance we can expect from our European partners. In short, we must invest for the future.
That is why last week's budget, as well as providing for the continuation of essential current services, provides a very large increase in funds for capital projects. The expanded capital programmes and projects are vital for the growth of the economy and they will lead to a large increase in employment, directly and indirectly. I propose to devote the remainder of my remarks to these capital programmes.
The allocation of nearly £90 million of Cohesion Fund expenditure to roads, sanitary services and environmental services will bring spending in these areas to record levels in 1993. I will give details later of how the additional spending will be applied, and how it will improve levels of service. But first, I want to draw attention to the immediate impact on the construction industry and on jobs.
Investment and employment in construction is determined in large measure by the general economic climate. But the Government still plays a significant role in encouraging activity in the industry through the financing of a diverse range of public projects and by influencing the overall level of private sector investment.
The total Public Capital Programme expenditure on construction activity is estimated to be £1,367 million this year, an overall increase of over 22 per cent on last year's outturn. This increased investment  should generate a substantial increase in the number of direct jobs in the industry and thousands more in ancillary industries. In housing, for example, the 3,500 new starts which have been authorised should lead to about 2,000 direct on-site jobs and as many more off-site. The £117 million extra to be spent on roads and sanitary services should lead to some 2,300 extra jobs, and many more in ancillary activities. Overall, on the basis of the increases in investment provided for in the case of my own Department's services, I estimate that up to 4,500 extra jobs should be provided directly, with possibly as many more being supported in ancillary industries and activities.
The Government's strategy for the construction industry has been broadly welcomed in the industry itself. The unavoidable increases in VAT rates will have some effect on output but this will be more than compensated for by the impact of the extra funds provided for the housing sector and other services. The extension of the time limits for urban renewal projects and the revision of stamp duty on houses over 125 square metres will also benefit the industry.
The large increase in capital spending this year puts an extra onus on all of us to ensure that the funds available is spent in the most efficient and effective manner. The funds must not be wasted. I expect local authorities to ensure that proper procedures, from the initiation of a project to its completion, are in place to ensure that value is got from the resources available.
Every organisation, whether in the private or public sector, must continue to seek ways to improve the efficiency and effectiveness of its operations and the delivery of its services. Consequently, I have decided to establish a value for money unit in my Department to assist local authorities in the provision of services in the most efficient and effective manner. The new unit will be integrated with the financial and regularity audit of local authorities but its work will be reported on separately. It will operate in  consultation with local authorities and the local government audit service. I will be contacting the city and county managers shortly to set out the basis for this initiative and to stress the benefits it can bring to all parties.
With the support of funding committed under the Opertional Programme on Peripherality and new funding anticipated under the Cohesion Fund, investment in the improvement of the national primary and secondary road network will total £242 million in 1993, compared with over £167 million in 1992. The introduction of the Cohesion Fund is responsible for £40 million of this total increase of £74.5 million. The new funds will enable us to further accelerate the pace of construction and improvement work on our national road network and to bring forward a significant number of desirable projects.
However, I can say that I intend to transfer a number of high profile major schemes to the new Cohesion Fund. The schemes involved include the Lucan-Kilcock Motorway, Contract 2; Setrights Cross, Clare; Drumsna-Jamestown, Leitrim; Sliabh Riach, Cork; North Road Finglas, Dublin; the northern section of the Dublin Ring Road; and the Belview port access road, Waterford.
The release of major schemes from the existing Operational Programme on Peripherality will enable me to bring forward under that programme a substantial number of new major improvement schemes spread throughout the country. These will include major pavement improvement works at locations such as Shannon-Limerick; Grange-Piltown, Kilkenny; Enniscorthy-Edermine, Wexford; Kilbeggan-Rochfortbridge, WestMeath; and Fermoy-Mitchelstown, Cork. Projects of this nature will have highly visible and tangible impacts and enhance the overall road network by improving significant sections of road between other major completed projects.
Additionally, work will start this year on major projects at Broomfield-Castleblaney, Monaghan; Bolton Hill, Kildare; Minish-Curraglass, Kerry; and the Sweep Extension, Waterford. Overall,  the substantial resources now being provided will make it possible to continue, or to commence, over 30 major road improvement projects throughout the country in 1993. In addition, with the level of funding now available, it becomes possible to put the emphasis on a network approach instead of concentrating on individual isolated schemes. In effect, we can now begin to put together a coherent package of measures for each priority route, combining by-passes, major improvement schemes, widening, lining and pavement improvement projects, which will, over a reasonable period, provide for the full development of the route to the established national standards. That approach will respond to the criticism of the lack of uniform quality and standards along particular routes and the problems created by moving from improved road sections to unimproved sections.
Despite the very severe financial difficulties which we face, the Government is again providing substantial funding for non-national roads in 1993 and local authorities will also be devoting funds from their own resources to this purpose. I have spoken on many occasions of the need to ensure that the greatest possible value for money is secured from this investment. In the last four years, the Exchequer has provided over £250 million for works on regional and county roads and returns to my Department indicate that local authorities have invested almost the same amount. It is important that this investment continues to give results.
A key concern for the Government is the creation of employment and road investment is making a major contribution to this on two fronts. First, investment in this vital part of our national infrastructure provides support for the productive sectors of the economy, including industry and tourism. It helps to sustain existing jobs and to create new jobs by reducing transport costs, improving reliability of journeys, and improving competitiveness. Road investment also creates significant direct employment spread throughout the  country and has a significant impact on local economies. I estimate that an additional 1,400 man-year jobs, at least, will be generated in 1993 arising from the increased investment.
The increased provision made for the ongoing water supply and sanitary services programme this year allows for continued progress to be made on the construction of new and improved water and sewerage schemes throughout the country. A significant proportion of the expenditure relates to schemes that attract Structural Fund support under the Operational Programmes for Water and Sanitary Services and under the Envireg and Interreg Initiatives.
New sewage treatment plants are to be provided under the Envireg Programme at a number of coastal towns, including Wexford, Bantry, Greystones, Letterkenny, Dingle, Killorglin, Kenmare, Caherciveen and Tralee. I have instructed the local authorities in these areas to expedite the planning of these schemes with a view to getting them to construction stage as early as possible in 1993.
The budget allocates an additional £42.4 million for water and sewerage schemes in 1993 on foot of the new Cohesion Fund. The overall provision for 1993 will, therefore, total nearly £120 million which is by far the largest ever provision for this programme in any one year. This level of funding demonstrates clearly the Government's commitment to “build on and speed up implementation of the 10 year National Environment Action Programme” in line with the Programme for a Partnership Government.
The Cohesion Fund will particularly support the objectives of the Government's Environment action programme and of the EC Urban Waste Water Directive in relation to better sewage treatment and termination of sewage sludge dumping at sea. The design and management of coastal sewage treatment systems will be a particularly challenging feature of this programme. We will need new design concepts and and new technologies to deal with coastal discharges  and the new volumes of sludge that will be generated by treatment systems.
I am putting forward to the EC for approval projects to serve Dublin, both Ringsend and Howth, Cork, Limerick, Galway, Wexford, Waterford, Westport, Drogheda, Dundalk, Wicklow and in 15 other locations spread throughout the country. In addition, major water supply schemes to serve Dublin city, Dún Laoghaire, Galway, Tuam, Limerick, Thurles and three other areas are included. EC approval is necessary before these individual projects can be included in the programme and I will be seeking that approval without delay. Some of the projects are at an advanced stage of planning and it is my intention to see that they get to construction as early as possible in 1993. This investment will create this year up to an additional 900 jobs directly in construction as well as additional jobs in ancillary activities.
Housing is another of the high priority areas where the Government's twin concerns of directly addressing social needs and employment creation can be tackled together. The changes in mortgage interest relief announced are a well targeted response to the present level of mortgage rates. Despite the severe budgetary constraints, the Government was anxious to ensure that those most in need, namely first-time purchasers and existing borrowers with average sized mortgages, got the maximum benefit. The measures in relation to the first-time purchasers will do much to ease, in the critical first three years, the affordability problem caused by high interest rates. The new arrangements will ensure that a couple purchasing their first house, with a mortgage of around £35,000, will get increased mortgage interest relief amounting to over £700.
The rationalisation of the stamp duty position of new houses is a welcome move. The impact of a full stamp duty on new houses which exceeded the limit of 120 square metres for new house grants has been a source of grievance for new house buyers and builders of larger family houses in recent years. The new  measures announced in the budget provide important concessions in this area. All new houses over 125 square metres will now attract stamp duty on the site value only, taking 25 per cent of the total value of the house as the minimum site value for this purpose. The benefit of this concession will amount to £5,000 on a £100,000 house which would have attracted full stamp duty prior to the budget.
Our commitment to start 3,500 houses this year has been well recorded. This will provide up to 4,000 jobs, direct and indirect. With the major expansion of the house building programme I wish to see special emphasis being placed on inner city housing needs and on the importance of avoiding large greenfield estates. Detailed guidelines have been issued to local authorities to assist them in meeting these aims. Taking account of the full range of social housing measures, including local authority housing, voluntary housing activity and the measures introduced in the Plan for Social Housing, I expect that the housing needs of almost 7,000 households will be catered for in 1993, an increase on the figure of 6,200 in 1992. In the next couple of years we should be catering for the housing needs of 9,000 households per annum.
As regards remedial works, a major advance has been made by the Government in recent years. The budget in this area has been increased by £1 million which will not only provide essential employment but will go towards the refurbishment and renewal of existing schemes.
This is a good budget, good for employment and good for meeting urgent social needs. It strikes the right balance in meeting these objectives as well as in regard to managing the national finances.
I wish to give the remainder of my time to Deputy Brendan Smith.
Mr. B. Smith Mr. B. Smith
Mr. B. Smith: I thank the Minister for sharing his time with me and allowing me to make my first contribution to the House in this important debate. The 1993 budget was framed in the context of a difficult international economic situation.  The main characteristics of that budget, namely, keeping our public finances in order, specific provision for much needed job creation, and maintaining and safeguarding the position of those on social welfare, are a welcome and necessary response to the many problems and issues facing us.
There appears to have been a view among some commentators that the national purse strings could have been opened more. That was not a realistic option when one considers that the public sector borrowing requirement rose to 4 per cent. I welcome the increase of £500 million in the public sector investment. The Government has maintained the necessary financial discipline to ensure that we have one of the lowest Exchequer borrowing requirements in the European Community. I trust that the financial disciplines continued in this budget will lead to economic and employment growth.
Unfortunately, a set of measures in one budget will not adequately address the scourge of unemployment and the social deprivation and hardship that follows from lack of jobs. Past responses to unemployment are not sufficient to tackle today's problems. As a trading nation we are particularly vulnerable when the markets of our nearest neighbours are hit by a prolonged international recession. Regardless of international recession there is always room for improvement in home production and in subsequent marketing abroad. A person need not travel abroad to identify possible improvements in a range of our products. A look through the shelves of any of our supermarkets will highlight the many inadequacies in our food processing industry. As a representative of a Border constituency with a very important agri-business I urge the Government and the Minister for Agriculture Food and Forestry to substantially increase investment to properly fund research and development in food processing. There have been some major successes in producing and marketing new food products but that success has been limited when one considers that employment in the food industry declined by 10,000 between 1980 and  1990. By its nature, the agri-business has a regional spread and it can contribute significantly to arresting the serious decline in our rural population. In the context of Cohesion and Structural Funds I would urge the Government to give priority funding to this industry which is based on the natural strengths and raw materials of our country.
The budget provided extra funding for housing and for the improvement of our transport links. This is welcome and necessary from a social and economic viewpoint. The serious difficulties with county roads, particularly those in County Cavan, must be addressed. I urge every member of the Government to support the Minister for the Environment in his efforts to secure funding from the Cohesion and Structural Funds for this purpose. Access to farms, to small industries and to our tourism product, especially our lakes and rivers in Cavan and Monaghan, is being hindered by poor road conditions. Substantial progress is needed to improve regional and county roads. We are not looking for a social handout but for equality of access to our homes, to farms and to places of employment. The people of County Cavan who have a strong work ethic are concerned at the damage being inflicted on the economic life of the county by the inadequate transport infrastructure. I trust that the Minister for the Environment, through future additional sources of funding and possible reclassification of roads in the county, will be able to substantially improve the outlook for everybody concerned.
Special schemes can contributed to job creation. I favour the provision of such schemes on area-based needs and opportunities with a mix between public and private sector participation. There is enough initiative and enterprise to devise public works schemes for people who want employment. That would eliminate many of the deficiencies throughout the country. It is evident from the Budget Statement that the next tranche of Structural and Cohesion Funds will be of crucial importance to the development of our economy. I appeal to the Government  to discriminate positively in favour of the North-West because it is at the extreme periphery of the European Community and needs special assistance. I commend the budget to the House.
Mr. Currie Mr. Currie
Mr. Currie: I congratulate Deputy Smith on his first contribution and I share his disappointment and the disappointment of the House that because of the time restriction he had to rush his contribution.
I am not in favour of personality politics and I never have been. Politics is about ideals and policies. Therefore, I find it a bit stomach-churning to read some of the hypocrisies expressed by the media last weekend, concentrating on the personalities rather than on the policies. I tend to think it is the old story all over again: what they build, even if it is built with straw, they also feel a necessity to pull down. There are, however, members of the Government who have contributed to this and have brought it upon themselves by what I can only describe as a “holier than thou” attitude, by the adoption of a high moral tone, pointing the finger at everyone else. Any sympathy I may have for individual members of the Government is balanced by the reflection that the critics are only applying the standards and judgments which the same Government Ministers would apply and did apply when in Opposition and which they have sermonised about in the past. Unfortunately, it is not only members of the Government who suffer.
The overwhelming cynicism among the public in regard to the hypocrisies affects all of us in public life irrespective of parties. I have, on a number of occasions, referred to that public cynicism and I have expressed my fear that it is a threat to our democratic institutions. In recent times that cynicism has increased substantially. Recent antics have had the effect of increasing it. Public indications of it are already all too obvious and I fear that that criticism represents only the tip of the iceberg. I am reminded of Thomas Hardy's reference to the Titanic: “As this smart ship grew in stature, grace and hue,  in shadowy silence grew the iceberg too”. I am very much afraid that that is what is happening at the present time, that the cynicism we recognise as being there is only the tip of the iceberg and it is growing almost daily.
It has been the almost universal response that this budget was one of the worst ever. That is not the judgment of political opponents but of impartial and independent commentators and economists. This was a budget not with a bang, but with a whimper, it was an elephant that laboured long and in the end produced only a mouse. As the creation of jobs has been recognised as our top political priority, and as we have the worst unemployment record in the history of the State, this budget must be a colossal disappointment for all of us irrespective of party. It is not in the interests of any of us that so many people should be unemployed. Except for the social services here and in other countries there would be revolutions. People would not be prepared to tolerate the unemployment which is their lot except for the caring and social services. I do not understand how anyone in Government can pretend that this budget did anything for jobs. The Fine Gael policy did not go down too well with the electorate but it made sense. Fine Gael policy was that it should be profitable for an employer to create a job and made worthwhile for an employee to accept that job. That was the basis of creating a climate for job creation. That has not happened in this budget. There is nothing in it which is pro-jobs. Indeed, everything in it, particularly the 1 per cent levy, is negative in relation to jobs and to that extent it is an anti-jobs budget.
I am in favour of the partnership concept. This is supposed to be a partnership Government. We have a Programme for a Partnership Government and, on an idealistic level, it is a concept I entirely support. It is a concept of the haves and have nots getting together and of the powerful and the powerless getting together creating a bridge. The concept, for example, that Fine Gael put forward that every person counts, emphasising  the importance of the individual in society but also emphasising the importance of those who are in a position to do something for those who have little in society, is one of partnership. During the election campaign we heard much about the necessity to empower those who were powerless, were alienated, were marginalised, the disadvantaged, and to give them a say in society, to make them believe that they counted for something, that it should be power rising from the bottom up. What is in the budget for those people? Where is the concept of partnership or power sharing between the haves and have nots? Where is the concept of empowering the powerless, the disadvantaged, the marginalised and the alienated? There is nothing in the budget about that. There is not even a promise in it in that regard. For those who put their faith in those concepts in the election campaign the budget must be a huge disappointment.
I welcome the fact that the Minister of State, Deputy Burton, is in the Chamber at present. I welcomed her appointment, as a colleague from the constituency of Dublin West, as Minister for poverty. I am not sure if she objects to that description but I would not object to being described so if I were in her position because the job facing her is to tackle the problem of poverty in our community. In a statement I issued on her appointment I said that it was apt that a TD from Dublin West should be Minister for poverty because we have much poverty, in north Clondalkin and in the greater Blanchardstown area in particular. I suggested at that time that if she could find a solution to the problems of poverty and disadvantage in her constituency, she would have found a solution to the problem nationally. I wished her well as, indeed, I continue to do but I will judge her by results.
During the election campaign a north Clondalkin plan was launched in Neilstown and we were honoured to have the then Leader of the Labour Party, now Tánaiste, Mr. Spring, present. I hope the promises made on that occasion by Deputy Spring will be implemented. If  they are we will have a solution to the problem of poverty in north Clondalkin and elsewhere. That area suffers from serious deprivation. Up to 90 per cent of the population is under 44 years of age and more than 60 per cent of the population falls into the category of manual rather than skilled worker. In 45.9 per cent of cases the source of income of the principal earner in the family is unemployment assistance or unemployment benefit. The area is physically, economically and socially marginalised. In educational terms it must be given the greatest priority. I hope that will happen. The standard responses from the Government will not be adequate. North Clondalkin has been designated a pilot area and I envy the Minister of State the responsibility she has been given to tackle the problems in her own constituency and elsewhere. It is a responsibility, but also a privilege to address problems in an area which, in so many respects epitomises the problems of poverty throughout the country. I hope the Minister of State will be successful in her task and I encourage her in that respect.
Members of the House received correspondence last December from Mr. David Kingston of Kerry Road, Cork. There was much publicity in the newspapers at the time concerning this matter. Deputies received copies of articles printed in the Sunday Independent and other newspapers in which the plight of this unfortunate individual was highlighted. In his letter to Deputies, David Kingston explained that his wife, the mother of five young children, had died three months earlier and referred to the understandable effect this had on him and the children. He went on to deal with the circumstances of his case, that he was now to be taxed as a single man, despite having five children. He said:
I will now be taxed 48 per cent after £7,400 instead of £14,800 when my wife was alive. The net drop in my salary is £1,500 p.a. At the same time I employ a housekeeper in order to keep my family together without any subvention/tax concession of any kind.
 Adding insult to injury, my mortage interest relief decreases from a maximum of £3,200 to £2,320. The State has willed that in my hour of greatest need the State takes at an increased rate. So much for the family being a core value in the Constitution:
In writing to you and all TDs in the Dáil, on behalf of all widowers/widows so affected, I ask you to adopt these issues as your own. With your support they will be addressed in the forthcoming budget.
Minimum changes and improvements were made in the budget but what has been done in relation to the plight of this individual and many like him? If we are a caring society, which we purport to be, and if we have a caring Government, which it purports to be — particularly the Labour element — what has been done for this individual and many like him in society? Those of us who are fathers should take a personal interest in this matter because no one knows how many of us will be in the same situation as David Kingston in the future. At some stage someone should tell me what has been done about this matter.
I welcome the new housing proposals outlined by the Minister for the Environment. However, I am also concerned about another aspect of housing. I tabled a question to the Taoiseach on 23 February last seeking information about the number of private households and dwellings in permanent housing units, distinguishing those with no inside toilet, those without the use of a fixed bath or shower and without a hot and cold water supply.
I found the reply extremely worrying. I accept that the figures I was given relate to the 1981 census and I hope the situation has improved since then. The 1991 census of population should be available soon. Those figures are very disturbing and other inquiries I have made suggest that the position has not improved much over that period. Indeed, because of the passage of time other houses which were in reasonably good condition ten or 11  years ago have now deteriorated. Houses that had a hot water supply still have a hot water supply but they have deteriorated in other respects.
The Government ought to pay more attention to the condition of houses in both the public and the private sector. The Minister talked about what they were doing in the public sector. If a proper house condition survey were to be carried out, as is done in other countries within the European Community, I think the position would be extremely disturbing. Indeed, Members of the Government ought to be particularly disturbed. I notice, for example, in the Taoiseach's constituency that in 14.78 per cent of local authority houses, at the time of the last census, there was no inside toilet, that in 19.78 per cent of public authority houses there was no fixed bath or shower, that in 18.56 per cent there was no hot and cold water while in private houses 26.25 per cent had no inside toilet, that 28.8 per cent had no fixed bath or shower and that 26.98 per cent had no hot and cold water supply.
An Ceann Comhairle Seán Treacy
An Ceann Comhairle: I intervene to advise the Deputy that his time is well nigh exhausted. Perhaps he would bring his speech to a close.
Mr. Currie Mr. Currie
Mr. Currie: I am sorry to say that the same applies to the Tanaiste's constituency and the constituency of Kildare where we have the Minister of State at the Department of the Environment who has responsibility for housing. I hope something will be done on this matter in the near future and that priorities will be recognised.
I should like to refer to one other matter, that is, the VAT of 12.5 per cent on newspapers. This is a disgrace. From the time Caxton first set up a press, a tax on knowledge has been something that responsible politicians have always abhorred. It is disgraceful that rather than reducing VAT on newspapers it has been increased. As a spokesperson on communications for my party, I emphasise the importance of a media policy rather than a broadcasting policy. The  decision by the Minister to remove the cap on RTE advertising without taking into consideration the position of other sectors of the media was a bad one, a decision taken in isolation. I hope this tax on knowledge will be the first item to be removed.
Mr. Hughes Mr. Hughes
Mr. Hughes: I cannot say this is my maiden speech because on the occasion that Deputy Enda Kenny had the opportunity to congratulate Commissioner Flynn on his appointment to the European Parliament, I found that after a total of approximately 48 hours in the House I was expected to second that appointment which, of course, I was delighted to do. So I have had my opportunity to get on the record, albeit for a few moments.
An Leas-Cheann Comhairle Joe Jacob
An Leas-Cheann Comhairle: I wish you well Deputy with your first speech on economic matters.
Mr. Hughes Mr. Hughes
Mr. Hughes: I am not sure whether the economic content is all that high but in any event I welcome the general thrust of the budget. A week or two before the budget was introduced, the media gurus reported that it would be tough, that the Minister had very little flexibility having regard to the economic background — over 300,000 people unemployed, currency instability and high interest rates. It was being said that in effect we had to baton down the hatches. However, I am delighted that the Minister has been able to introduce a budget which in the main has been welcomed by the people we represent. It was not the disappointment or the hairshirt budget we had come to expect from the media economic writers. I am delighted that they have been proved wrong particularly so far as last Sundays papers, etc. were concerned. The commentators got it wrong and they could not swallow their medicine. In fact the Minister did an excellent job in introducing a budget which was fair, the economic thrust of which was right for the time having regard to the financial constraints under which he was operating.
I welcome particularly the social content of the budget. Having regard to our  inflation rate the social welfare increases were practically within a point of a decimal place equivalent to the inflation rate. That is worthy of comment because we have many people in Ireland who depend on social welfare for the basic necessities of life. I am delighted the Minister had the flexibility to ensure those people got the necessary increase to maintain a decent living standard.
There are many worthy aspects of the budget which have to be reiterated. Far too often we are inclined to point to what may be perceived as negative aspects on a budget. As public representatives we have a responsibility to be constructive and to give encouragement to the people who have elected us to this House rather than being negative and opposing all the time.
I should like to deal first with the new jobs fund for which £260 million is to be made available, made up mostly of Cohesion Funds. I understand this is the first time the Cohesion Fund is available for distribution in Ireland. We have had Structural funding in the past but we now have both Structural and Cohesion funding. I welcome the £148 million worth of Cohesion funding which is available for infrastructural expenditure to lift what is best described as a depressed building-engineering industry here. In looking through the programme of proposed expenditure for the Cohesion Fund I regret that little or none of it is being spent west of the Shannon, that most of it is being spent east of the Shannon on roads, water, sanitary services, ports and CIE. If that trend is continued in 1994 and for subsequent years I will have something to say about it.
As a country we are on the periphery of Europe but is there anywhere more peripheral than the west coast of Ireland where there has been an ever increasing fall-off in population and where a large number of people have emigrated to the east coast of Ireland because of the perceived job opportunities here. Deputy Gilmore will appreciate that such job opportunities do not necessarily exist on the east coast. I regret that the west is sometimes seen as a problem area rather  than an area of opportunity. I would like to think that in 1994 there will be a more equitable distribution of the Cohesion Fund west of the Shannon. In regard to my own constituency I will be asking for a capital allocation for the Westport regional water supply scheme. The Minister in a speech in the House some time ago referred to this scheme. I look forward to it going ahead in 1994. The jobs fund will give a necessary economic boost to the country. The Minister gave a figure for the number of jobs which the fund will create. I hope they will be divided equally throughout the country though job creation in any part of the country is welcome.
I wish to refer to the county enterprise boards. I think there are more Leader programmes — five or six — in County Mayo than in any other county. The programme for south-west Mayo is operated in my area. I do not have the same faith in county enterprise boards as other people seem to have as I am afraid they will not get the amount of funding they appear to be entitled to, having regard to the faith we are attaching to them. The Leader programmes in County Mayo receive considerably higher funding at present than the new county enterprise board there can expect to receive. If one takes a national allocation of £2.5 million for the county enterprise boards, each one will receive less than £1 million. Under the Leader programme, south-west Mayo receives £2.5 million in funding which is rapidly being taken up under the various categories. In fact, there is not enough funding for tourist related projects. It is expected that the entire funding which is in excess of £2 million will be taken up. Hopefully, the Leader programme, which is only a pilot programme, will be continued in 1994.
The county enterprise boards are a worthwhile mechanism but they have to be adequately financed. I note that there is provision for approximately £100 million from financial institutions, but obviously — we do not have the full details of this — that money will not be given to the boards without some strings  being attached. From reading the Minister's Budget Statement, I can only presume that the £100 million which will be made available from financial institutions will be by way of loans rather than grants or otherwise. The seed capital, the grant element, to create small enterprises is, in effect, the £25 million. The Minister responsible for the county enterprise boards should look again at the representation on those boards. As a public representative and county councillor, I have no objection whatsoever to community and business groups and the social partners being represented in the main on those boards but I believe there is room for more public representation on them. We are the people who have to stand for election and we can be elected or rejected as the people see fit.
I am extremely critical of one aspect of the budget, that is the increase from 16 per cent to 21 per cent in VAT on adult clothing. This is totally unnecessary. If the Minister wanted to introduce a budget which was directed towards the creation of jobs he should have kept that rate of VAT at 16 per cent whereas it is now at the luxury rate. To suggest that clothing is a luxury in this day and age is only playing into the hands of the Taiwan and Hong Kong manufacturers and the multi-nationals who have decimated small shopkeepers throughout the length and breadth of this country since last November. The Minister has misjudged the strong feeling being generated within that manufacturing sector which employs between 16,000 and 25,000 people. At the Futura Fair last Sunday, Irish manufacturers complained loudly and harshly about the small number of orders being placed with them. Those orders equate to half their production for the year and that fair is held twice yearly.
There are two factors which have militated against Irish manufacturers since the start of the Single Market. A person who imports clothing from abroad does not pay VAT at the point of entry, they only pay VAT as a retailer on their sales, and some clothing may not be sold for six months. However, if they buy from an Irish manufacturer, apart from paying  VAT at the increased rate of 21 per cent, 5 per cent more than they are used to paying, they must pay VAT to the Irish supplier within 30 days, the normal credit limit. Accordingly, people who are sourcing clothing have a decided advantage and incentive to purchase from manufacturers abroad. This will add to our balance of payments problems and put at risk our clothing industry, an industry which has been put at risk anyway as a result of the strong exchange rate for the Irish pound over the past four or five months.
I have with me a fax message received from Gaeltarra Éireann. I will not read out the contents but, for the first time since it was set up, that company makes an appeal to have this VAT increase reversed. I support this call and I hope I get the opportunity to impress on the Minister why I believe this increase is unnecessary and will raise only a small amount of money. This is a traditional indigenous industry, supported by the thrust of Culliton, and we should give every possible support to it, having regard to the small sum of money the VAT increase will bring in.
I ask the Minister to keep a very close eye on the market development fund. This issue was discussed at Question Time today. It would appear that a small number of companies which heretofore exported into the English market in particular, managed, as a result of the Exchange rate imbalance to successfully argue that they were worthy of funding under the market development fund. That small number of companies sold a large percentage of their exports to the large multi-national type shops in England, and were quite successful there. Because of the currency imbalance, their operations became increasingly more unprofitable. They received a weekly subsidy for each of their employees under the market development fund. However, with the help of a Government subsidy, some of them turned around and dumped their manufactured products on the Irish market at a reduced rate, thus putting at risk profitable clothing firms which were not eligible in the first place to receive  assistance under the market development fund as they were profitable and were in the main gearing their market approach towards Irish companies. The Minister, in funding these companies, should, on a bi-monthly basis, check that the percentage of exports of these companies is continued at their previous level. If there is an increase in the level of goods they supply to the Irish market, the subsidy given to them should be cut immediately. It is wrong to subsidise companies which put other native industries at risk.
As I said at the outset, I welcome the general thrust of the budget, particularly the very substantial boost which is being given to the building industry. That industry was very depressed, not least because of the uncertainty in relation to the interest rate market. I am delighted that this market has now stabilised — the rate is between 14 per cent — 15 per cent and one would like to think it would come down further. In this regard, the lending institutions and, in particular, the building societies, who are the big players in this field should be congratulated for supporting the Government and not raising their interest rates immediately rather they suffered a loss over a period of a few months and ensured that they played their part, thus helping the building industry.
I support the Minister's initiative to build 3,500 new local authority houses this year. This initiative is long overdue. I believe all of us would agree that the housing lists were increasing all the time, they were getting out of hand, and were causing extreme hardship. Local authorities were unable to do anything about this problem as the social housing programme did not meet all the needs and cater for all the categories of people who required housing. This initiative is only a start but I am satisfied that it will be continued. If it continues at the same level in future years, it will make a substantial impact in reducing local authority housing waiting lists.
I welcome the increase in the new house grant from £2,000 to £3,000. Unfortunately, what was given with one hand was taken back with the other  through the increase in the rate of VAT on the building industry. I believe the building industry should have been given the opportunity to get up off its knees. That industry employs many thousands of people, as Fianna Fáil have always recognised, and it has been proved right. We should continue to support the building industry which supports many subcontractors and service-type industries. Perhaps we should be more restrained in seeking a VAT increase there.
It is very important that we retain in Government budgetary strategy the incentive to work. I welcome the increase in social welfare but it is important that there should be a reasonable gap between social welfare payments and the take-home pay of those who are fully employed. There are people for whom it is more worth while to be in receipt of social welfare payments than to work. There are factories in my town which continually advertise vacancies, particularly for females, but they cannot attract applications. That is because they cannot provide the necessary return for 38 or 40 hours' work. More restraint could have been shown in the budget to ensure that those at work get the maximum return. It costs an employer £2.59 for every £1 given to an employee by way of wage increase. That is a large amount of money, made up of many different elements — not least the various levies. We now have a new levy of 1 per cent on salaries over £9,000. A single person who earns £10,661 pays the top rate of tax. That is the lowest salary in Europe to be taxed at the highest rate. We must continue the trend towards lowering tax rates and widening the tax bands in order to encourage people to stay at work and to enable them to have a decent take-home salary.
I come from the west and it is important that there is equity in the division of Cohesion and Structural Funds. That has not been the case this year. I look forward to seeing what the Minister for the Environment will do regarding the distribution of road grants. He has given us the global  figure but not the distribution on a county by county basis. Regarding the discretionary road grant which covers main and county roads, County Mayo has 7 per cent of the roads in that category and last year we got 5.9 per cent of the funding. That was not an equitable share and the Minister must make up that ground, especially since we have not received any Cohesion Funds in my county. I look forward to the Minister's ensuring that we get our fair share. We have problems, particularly because of the number of people migrating from the west to Dublin and elsewhere. It is important to keep the higest possible population in the west.
Mr. Gilmore Mr. Gilmore
Mr. Gilmore: I compliment Deputy Hughes on what has been described as his first economic speech in the House and on making a very eloquent case for County Mayo. His first contribution was to congratulate his former colleague, Mr. Flynn, on his appointment as EC Commissioner. I do not know what the former Deputy Flynn did with all the roads money available to him as Minister for the Environment. Many of us thought that it was spent in Mayo and I am disappointed to hear that there would appear to be some inadequacy in that area of spending.
Deputy Currie referred to the growing disillusionment and cynicism with regard to public life. He returned to a theme he has repeatedly dealt with — his concern about the effect of that on democratic politics. I share that concern. During the week I received a letter from a constituent who had fought fascism in Belgium during the war as a member of the resistance. He expressed in the course of his letter the same kind of concern as Deputy Currie about the growing cynicism and alienation of the public and the consequent dangers for social and political life.
The term “exclusion” was used during the week in two different but related contexts. In its commentary on the 1993 budget the Conference of Major Religious Superiors stated:
 The 1993 Budget has failed to produce a comprehensive integrated programme to tackle the exclusion being experienced by large numbers of Irish people.
The same term was used in a somewhat different but related context by the EC President, Jacques Delors, when he talked about the increasing level of unemployment in the EC, the implications of that in terms of social exclusion and its effect on society generally.
In addressing this budget we would do well to reflect on the problem of exclusion. One third of the population are living in poverty, by any of the objective criteria. They are, by definition, excluded from the material benefits of what should be a prosperous State. One in every five is out of work and by definition excluded from a meaningful role in the day-to-day working of society. Many of the people who in the election expressed a wish for change in political life now feel excluded from political representation as they find, with each passing appointment of cousins, brothers and party hacks to the new inner circle, that they are excluded from access to the political system.
In the aftermath of the Digital debâcle and of the humiliation we experienced with the devaluation of the punt, the entire country feels excluded from the concept and type of European union and solidarity that we were promised last June during the Maastricht referendum campaign.
The budget can be considered at a number of different levels. It is the most directionless and most timid budget that has been presented in many a day. It is a failure on a number of levels. First, it is a failure because of the high expectations of many people with regard to this budget. Many people who had been depressed by the economic circumstances of the country, by the poverty and unemployment I have described, and by the behaviour that they had seen in public life, had very high expectations of the new Government. We were told that the programme for Government would be  the most radical one ever presented to this House. I felt, not withstanding many of the elements of the programme with which I agreed, that the advanced billing that that programme got was somewhat of an exaggeration.
We had high expectations that we were going to get open Government but, even within the last two hours, we have had yet another example of how that expectation of open Government has been shattered. Today on the Order of Business, a number of Members raised questions about the Government's intention with regard to Greencore and whether it was the Government's intention to sell its share in Greencore. At the very least the response was evasive. If my memory is correct, it was to the effect that the Government did not have an intention to dispose of its share in Greencore.
In his response to a direct question the Taoiseach stated that no legislation was promised. By implication he said there was going to be no change in the status of Greencore and that the Government had made no decision on the matter. Within one hour the Minister for Finance announced that the Government had decided to sell its shares in Greencore. One question must be asked in regard to this. As we consider a budget which has been described as one that fails to address exclusion, and as Members express concern about what is happening to politics and to accountability here, we must ask, when was that decision made. If it was made before the Order of Business today, then the Taoiseach should explain to the House the reason for giving the misleading impression that he gave this House about Greencore. We are owed that much at least.
We were led to believe that very high standards would be set by this Government. The best that can be said about the Government's behaviour over the past few weeks is that it has sunk to the shoddiest, grubbiest kind of jobbery that this country has seen in a long time. It may be argued — and no doubt members of the Government will argue — that they are being judged very unfairly and superficially on some of the matters that have  been the subject of public controversy in recent times.
I took the view that the Government should be given some opportunity to show what its real intentions are. My attitude was to wait until the budget to see whether the Government had any kind of a strategy to lead the country out of its difficulties. I expected to see in the budget some strategy, some leadership and some indication that the Government knew where it was going. Unfortunately, all we find in it is a recipe for drift. It fails to tackle the problems of poverty and unemployment and fails to set out any kind of strategy to take this country out of the depression.
Let us look at the various elements in the budget. For example, 1.4 million people here are dependent on social welfare. The basic increase given in the budget amounts to a little over £2 per week and that will not benefit people until the end of next July. Already that small increase has been eroded. Many local authorities notified their tenants of increases in rents in the course of the past couple of weeks. In my constituency people on pensions, those on the lowest incomes, have been notified of rent increases which fully erode the social welfare increases announced in the budget. Therefore there is no increase for people on social welfare. That is all the more regrettable given that the Government did have an opportunity in the budget to implement the recommendations of the Commission on Social Welfare. The Government has simply passed on it.
We have heard a great deal about employment and we have been told that the central aspect of Government policy has been and is to create employment. Again, there is no evidence in the budget of how that is to be done. The budget anticipates that there will be 26,000 extra people on the dole by the end of this year. Within 24 hours of the budget speech being delivered, the Minister for Enterprise and Employment made significant changes to the community enterprise development programme which many of us believed would replace the  social employment scheme and that it would operate on a more flexible basis, would allow more people participate in worthwhile work than the present social employment scheme. The Minister for Enterprise and Employment has effectively frozen the community enterprise development programme and has put it on hold until 1994 when, presumably, he believes he can fund it with some of the European money.
We heard about the county enterprise boards on three or four occasions. Those boards were promised almost 12 months ago and have still not been established. In my constituency a man who runs a small metal fabrication business, employs himself and one other full time and a third person part time, needs some working capital. He has all the orders in the world that he can fulfil. There are no problems in the area and there is a demand for the product he is making. However, he needs some working capital. I explained to him a couple of months ago that the new county enterprise boards seemed to be the solution he had been looking for. He asked me how they would work and I explained that they had not been set up yet, that first a board would have to be established, that a manager, director or chief executive would have to be appointed and then, presumably, some staff would have to be appointed. I told him he would probably have to make an application, that it would go before the board and, eventually, he might get something. That man said he would probably be out of business by the time all of that happened.
On foot of that I wrote to the Minister for Enterprise and Employment and asked him if there was any interim measure that could be taken to give some assistance to somebody who was providing three jobs and who could not continue in business without assistance. The Minister kindly agreed to send out an official from the IDA to talk to the man. The official explained to him that there was nothing the IDA could do for him as he was not producing an import substitute. He is, therefore, back to square one.
 While the Government are dithering about establishing a method of providing assistance to people who are trying to create employment many of those people are going out of business. If the Government wishes to commit itself to the county enterprise board format, which is a doubtful solution anyway, it should get on with the work rather than indulging in the kind of dithering we have seen over the past number of months.
There has been great talk in the House about the question of tax. I agree with what Deputy Currie said on the David Kingston case. Mr. Kingston also wrote to me. I would like the Minister for Finance to have a serious look at the problem Mr. Kingston raised when he is formulating the Finance Bill.
I would like him to address the problems cohabiting couples are experiencing. The Department of Social Welfare considers them to be a couple for the purposes of the social welfare system and regards one as dependent on the other but, unfortunately, the tax system does not regard them in the same light and insists on taxing them as if they were single people. If those involved, very often people in long term relationships, are both out of work they are treated as a couple but if in work they do not get the taxation benefit of the married allowance.
Housing has been referred to. I certainly acknowledge that the 3,500 house starts promised for this year are a significant improvement on the number of houses built in past years, but this has to be put in context. There are to be 3,500 house starts, yet we have about 30,000 people on housing waiting lists throughout the country. I must also express considerable disappointment at the manner in which those 3,500 house start allocations were made. The whole of County Dublin, with a population of 500,000, was allocated 270 house starts. My own area of Dún Laoghaire-Rathdown was allocated 110 house starts, yet that area has 1,300 people on the housing waiting list.
This country had been expecting some leadership from this Government. The  people wanted to know that the Government had some idea for leading the country out of its economic difficulty. We had expected the Government to show in its budget that it had a strategy but, unfortunately, that has not happened. It is my belief that the people would have been much happier with the budget had the Government taken firm decisions and shown that it had a strategy to deal with the economic problems.
The old idea of the redistribution of income has gone very much out of fashion in recent times but it is an idea that will have to be put firmly back on the political agenda. No matter how one looks at the issue, the levels of inequality that exist both on a global level and on a more local level cannot be sustained. At a global level the gap in incomes between north and south cannot continue to be sustained. Jacques Delors has already spoken about the difficulties within the European Community that are being produced by inequalities of income. Here at home the inequalities that exist in our society cannot be sustained. The question of the redistribution of wealth and income in our society will have to be faced up to and tackled. Those of us — and I deliberately say “those of us” — who enjoy marginally better standards of living than the rest of society will very soon have to come to terms with the necessity to reduce our standard of living in order to bring about a redistribution of income and the development of a fairer and more equitable society.
Mr. B. Fitzgerald Mr. B. Fitzgerald
Mr. B. Fitzgerald: As a new Deputy, I am very disappointed at the standard of contributions coming from the Opposition benches in this debate. Some of the cynical remarks and the complete lack of positive contributions must come as an even greater disappointment to so many people who do not have a job. Perhaps the Opposition can find no real fault in the budget and instead has to resort to attacking personalities, in particular those in The Labour Party. The sooner the Fine Gael Party realises that The Labour Party will no longer be used as its mudguard — or, indeed, anybody else's  mudguard — the sooner that party might start to act as a constructive Opposition.
As with every budget, this budget has its share of winners and losers. The winners in this budget have had to be the most vulnerable in our society, and there are clear indications that a genuine effort has been made to ensure that and to implement the first stages of the Programme for a Partnership Government.
The decision to build 3,500 new houses will be welcomed by many families on local authority housing lists. Of course that number is not big enough, but it represents a more than 300 per cent increase on the number built last year or in the past few years and is a clear indication of the Government's intention to tackle the housing problem head on. Is the main Opposition party saying that those houses should not be built?
The Government proposes to provide £20 million specifically to reduce the waiting lists in our public hospitals. I have no doubt that the measure will be welcomed by the many people who have been waiting for years, some of them in constant pain, for hip replacement operations and other elective surgery. Do Opposition Members say that that is wrong, or is it that the people they represent are able to avail of private services and therefore do not have to wait — in other words, that it is just tough luck if one cannot pay? The provision of an extra £8 million for additional services for the mentally handicapped will go some way to help those in need and is clear recognition of the Government's commitment to handicapped people and their families. Perhaps if the Government's critics were to visit some of this country's institutions they would acknowledge how unsuitable and how inadequate the facilities are at present.
The severe shortage of geriatric facilities for the mentally handicapped, above all, is causing considerable stress to the parents of mentally handicapped children whom they look after in their own homes. Along with the stress of the day-to-day care of their children, they have the continual worry of what will become of their  children when they themselves pass away.
The £2 million committed to the public dental services will be welcomed by the health boards as an opportunity to improve their facilities and to help reduce the waiting lists for orthodontic treatment, to ensure that no child will be at a disadvantage when they get older.
The shortage of geriatric beds has caused great hardship to many families who are forced to avail of accommodation in private nursing homes they cannot afford. The £4 million provided in the budget for the elderly will help in some small way to subsidise those payments. The need to increase the daily payments in public hospitals and to change outpatient charges is disappointing. However, I wonder whether the Opposition and some sections of the news media are more concerned at the £20 per day increase for private beds than they are at the increase for public beds.
Even in a tight budgetary position money was found to increase social welfare benefits in line with inflation and, in many cases, above that rate. The increase of 27 per cent in the child benefit is the first child benefit increase in years and is another concrete indication of the Government's concern for families and delivery of part of the Programme for a Partnership Government. The child benefit was increased in just one budget from 1987 to 1992, by 3 per cent. In this budget the present Government has increased the benefit by nine times that amount. The 11.7 per cent increase in the carer's allowance is welcome. However, I ask the Minister to examine means of extending the scope of that scheme to more people who devote themselves to caring. The most severe cuts contained in the Social Welfare Act, 1992, have been reversed and a commitment has been made to introduce major changes to minimise the effects of other cuts.
In a year in which it seemed impossible to make any adjustments to relieve the income tax burden on the pay-as-you-earn sector, some changes are made that will help those on low incomes, and these changes come together with the increase  in the personal allowance and the widening of the standard tax band.
Our commitment to help those most affected by mortgage interest rates has been honoured and first time and recent buyers have been given most help. Indeed, the grant to first time buyers has also been increased. In the recent election we gave a commitment to lower interest rates, below 10 per cent, which will be honoured despite the difficulties caused by the Bundesbank policies on interest rates.
The introduction of the temporary levy of 1 per cent is not welcome. However, the £9,000 exemption limit, and the increase in income tax allowance, will help to avoid major hardship. Despite all the cries from the Opposition they did not make one suggestion as to where extra revenue would be found although there was a veiled suggestion with which I will deal later.
In education, the sum of £3.3 million directed towards the disadvantaged is another example of a caring Government. There was also the major increase in the capital programme. I thank the Minister for Education for providing funding for the Ashbourne second level school and Kilmessan national school, which is very welcome.
I agree with the Opposition that an insufficient amount has been allocated in the budget to create jobs. There will never be enough — in any budget — to satisfy me while so many of our people are unemployed. The Opposition's failure to put forward constructive suggestions is even worse and their inept contributions were a disgrace. It is time that Fine Gael came clean and spelt out what their income policy really means. Are they saying that wage agreements reached with workers in the public service should not be paid? Are they saying we should welsh on those agreements? If that is not the case they should say so. Are they saying that local authority, hospital and Office of Public Works employees, the Garda, the Defence Forces, civil servants, teachers and health board workers should not get an increase? Fine Gael has a proposal to  halve the employers' PRSI contribution but we have not been told from where the £500 million would come to fund a social welfare scheme. Are they saying that the people dependent on social welfare payments will have their benefits cut to make up the shortfall? If that is the case, they should say so.
I worked for many years in the private sector and over the past number of years I represented workers employed in the public and private sectors, where I learned a great deal. On many occasions I was told by employers in the private sector that there is neither a moral nor a social obligation on them to produce jobs, that their first and only obligation is to earn the maximum profit for their shareholders. They will reduce costs wherever and whenever necessary and if that means reducing the number of people employed, so be it. They will only take on workers when they feel it is necessary to increase production to fill additional orders. I know that the major advances in technology and mechanisation have not been matched by the necessary reduction in the average working week, thereby resulting in thousands of job losses. These two critical areas are totally ignored by many when they talk about the jobs crisis, this applies particularly to those on the Opposition benches. I do not intend to be negative and I suggest that other areas must be explored in the short term.
The increase of £500 million in the capital programme should create 3,500 additional jobs. The proposed enterprise boards, with a £25 million budget, should be able to identify areas of expansion in small indigenous industries and create local jobs. The veiled suggestion that unemployed people should be made do environmental work for their dole money is not only an insult to those unfortunate enough to be unemployed, it is an even greater insult to the many local authority workers who do this work at present and appears to demean the quality of their jobs. Unemployed people want the dignity which a job brings and do not want to be marginalised even further. The social employment schemes may seem, on the  surface, to make a contribution in the short term but my experience tells me that they merely provide a ready-made pool of workers in many cases for the black economy. After one year the participants are back on unemployment assistance. These schemes are not an answer to long term unemployment; more than 175,000 people have been unemployed for over six months or more and they need permanent, not temporary, work.
There must be a radical new approach to the jobs crisis which the Government, employers and trade unions must recognise. I suggest the following measures as part of the solution to give unemployed people a proper job with benefits, good conditions and a reasonable degree of security: a voluntary job-sharing scheme should be introduced whereby every four workers would agree to share their jobs and gross income with one other person, thereby working four days per week and creating one extra job for a suitable, unemployed person. The Government should be required to introduce a once-off net payment as an inducement to workers to participate in such a scheme. If even 20 per cent of the workforce participated it would create 40,000 jobs immediately and provide employment in a wide range of areas in the public and private sectors. It would also help to expand the ever growing leisure industry. Tax incentives should be given to employers and employees to offset some of the loss in their incomes; also all replacements could be based on the same formula in addition to any new industries setting up. In many areas in the public service a scheme of composite jobs could be created, for example, local authorities, forestry, vocational education committees and the Office of Public Works require additional workers at certain times of the year, but, unfortunately, those bodies are not in a position to employ them for the full year. If a combination could be agreed between the various bodies permanent jobs could be created for many more workers.
This Government will not be judged  on the number of their advisers, as some people believe, but on the number of people who obtain employment during their period in office. If that requires the best advice available to reduce substantially the numbers unemployed it will be seen for what it is — money well spent.
Mr. Boylan Mr. Boylan
Mr. Boylan: I welcome the opportunity to speak in the budget debate. However, I am in two minds in regard to the whole exercise because of the recent leaks to the effect that the finances of the State are not what we thought they were. We have been told that further black holes have been discovered and that countless millions are being taken out of the country and are not accounted for. The budget has been built on figures which were not relevant on budget day or in the weeks leading up to it. We were told that the economy is healthy and that gross national product in relation to our debt ratio was excellent. Ordinary people were wondering if this was the case why so many people were unemployed. It is not fair to blame officials when — as the Ceann Comhairle and the Leas-Cheann Comhairle often said — they are not here to defend themselves. It is really the Minister who is to blame. An American President said that the buck stopped with him.
It is quite obvious that successive Ministers for Finance were negligent and we now know that there was a rip-off by multi-nationals who understated the unit cost of the product they were producing here to increase their profits, thereby gaining more from our generous tax concessions given to multi-nationals to encourage them to come here. Nobody seemed to be able to detect this and we do not even know the amount of the rip-off. There were generous tax concessions, rates remissions and other incentives given to encourage these people here to create jobs while local employers, people with an idea who wanted to do something, were not given any money to create employment. Budget calculations were based on figures that do not stand up and we do not know the real position. I do not know if  these figures are accurate or if the true figures are higher than those stated. In 1979 92,000 people were unemployed and the national debt figure quoted was £6.5 billion. Perhaps the number out of work then was 100,000 and the national debt figure was higher than £7 billion. I presume that must have been the case if the figures quoted now are so understated. Obviously, the figures in 1979 were also understated, as it has been the trend here to try to paint the best picture. I do not disagree totally with that aspiration, as I am not a pessimist and I do not believe in gloom and doom. We must look on the bright side but, at the same time, we must accurately state the facts because if we do not know the real figures it is impossible to assess the effect of the budget.
In 1992 there were 269,000 people out of work and the national debt was £25.3 billion. Perhaps £26 billion or £27 billion would be more accurate for our national debt. There are now more than 300,000 people unemployed, perhaps 310,000 or 320,000. Nobody can say definitely what the real figure is because we do not have a system for compiling accurate figures even though we are a small country with a population of only three million, or perhaps less than three million. We are discussing a budget and a strategy for the next 12 months built on figures that we cannot be sure are accurate. The national debt has increased by £5 billion or £6 billion since last September because of an indecisive Government which did not have the ability to make decisions. It tried to defend the punt which was obviously overvalued and in the meantime destroyed many good businesses in my region, all for the sake of waving the green flag and being seen to defend to the bitter end, even to the point of spilling blood, the interest of the Irish nation. When the Government claimed that “we will defend the punt”, who was it referring to? One would imagine that the money was coming out of the pockets of the Taoiseach, the Tánaiste — who was then in limbo — or the Minister. Those defending the punt were the ordinary householders, the people in the street,  business people, people with mortgages and overdrafts and people with accounts here who were hard pressed by creditors and who were paying high interest rates. They were penalised because of the Government's foolish policy which put an extra £5 billion, £6 billion or £7 billion on to our national debt. Nobody knows the real figure because our accounting system is totally out of line and we are not in a position to give factual figures on a daily or even on an annual basis.
The budget is anti-agriculture, anti-employment and anti-Border regions. It is pro-social welfare and I welcome that. I welcome any benefits that assist the less well off. On my way to Dublin this morning I noticed a very sad sight in the town of Kells. There were approximately 30 or 40 young men queuing on the side of the street waiting to get into the local social employment office. It was snowing and bitterly cold and those men were hopping from one foot to the other in an effort to keep warm and some were dragging on a cigarette. Those were fine young men, clean shaven, well dressed and willing and anxious to work. Instead they were in the degrading position of queing along the main street of Kells waiting for a handout from the State and none of us know how to go about providing jobs for those people. I am sure the same can be seen in every town throughout the country. I have brought the question of queuing outside social welfare offices to the attention of my leader.
Could we not introduce a better system for these payments? Must we humiliate the unfortunate people who have to queue for handouts from the State when we are unable to create employment or a mechanism by which they might secure employment? It is not their fault that they do not have employment. It is a sad reflection on this country that the Leader of the Labour Party — a party which claims to represent the under-privileged and the working class — surrounds himself in grandiose accommodation with plush carpets, swivel chairs and all the comforts of the day, while the people he claims to represent queue along our  streets for a meagre handout. Could we not use our community centres or parish halls for this purpose? That would mean that people would be in from the rain and cold. Is it believed that if this humiliation continues some of them might stay at home and go hungry? I hope this situation will be improved.
I welcome the improvements in the area of social welfare. Any assistance which can be given to those people and to those who are incapacitated or in any way dependent on health board contributions is to be welcomed.
The only substantial increase in the Estimates for the Department of Agriculture, Food and Forestry is that for afforestation and the buzz words in agricultural circles at present are “plant the land.” The perception is that our land and climate is ideal for afforestation and that ten or 20 years from now farmers will have a gold mine. That is ideal for bureaucrats in Brussels because when the land is planted the problem of the family farm is over, the gate is closed and the people are gone. Anyone travelling around the country at this time of year will see new forests coming up through the rotting grass. In five years' time such forests will be well developed on many acres of arable land. I am not anti-afforestation on poor land. Such afforestation should be encouraged but farmers should not be encouraged to plant good agricultural land. The afforestation trend seems to be penetrating into other areas. Many urban Deputies may not understand the reasoning behind this trend, but when 30 or 40 acres of forestry develops in an area, the land alongside it is rendered useless. The only alternative for neighbouring farmers is to plant their land. In this way, afforestation gradually spreads; more land is planted, more farmers are driven off the land and the family farm disappears, as will life in rural Ireland.
We have been seeking an extension of the disadvantaged areas scheme in counties Cavan and Monaghan since our accession to the EC in 1973. I see no reason why the entire counties of Cavan and Monaghan could not have been  classified as severely handicapped at that time. In the meantime small portions of the lands in that area have been included in that scheme, but a large portion of the two counties is still excluded. Yet, in the neighbouring counties of Roscommon and Longford, where the land is much better and easier to manage, all of it is considered severely handicapped. I know one farmer in that disadvantaged area who has a milk quaota of 420,000 gallons, he is an excellent farmer and I congratulate him. The Taoiseach, when he was Minister for Finance, decided that that man, and his neighbours, needed support from the EC and declared their area severely handicapped. Those people are now eligible for headage payments on top of the income from his milk quota of 420,000 gallons. Neighbours of mine have milk quotas ranging from 5,000 to 20,000 gallons but the present Taoiseach and the then Tánaiste decided they were well off. I would like somebody to explain that to me. Can it be explained to those unfortunates who are trying to survive on very low incomes?
There has been talk about raising incomes to a national or European standard. The average income on the small family farm in my region is £2,400 per annum, which is less than £50 per week. These are not my figures but were compiled by the Department of Agriculture, Food and Forestry. The national farm income at £5,500 is nothing to write home about either. The Minister for Education described her secretary's income of £8,000 per annum as a mere pittance but farmers and others in my constituency are getting by on this level of income. Many farmers are not getting any aid or social welfare because when the social welfare officer calls he tells them they do not qualify. Many people are expected to live on much less than the £8,000 which the Minister for Education described as a pittance.
I am not anti-urban — indeed everybody came from the land — but many urban dwellers say that farmers are not paying enough tax, are getting away with millions and it is time to go after them. Where is all this money? I have given  the figures but nobody is listening. When everybody is driven off the land and rural Ireland is depopulated perhaps they will be happy then.
Deputy Briscoe appears to understand what I am saying.
Mr. Briscoe Mr. Briscoe
Mr. Briscoe: They are off to Bangkok.
Mr. Boylan Mr. Boylan
Mr. Boylan: I thought Deputy Briscoe was going to support me. I doubt if those people are going to Bangkok.
The budget is anti-Border region as is the Government. The area from County Louth up to County Donegal has no Minister and one Minister of State, the Minister of State at the Department of Arts, Culture and the Gaeltacht, Mr. Gallagher, a very capable man. I congratulate him on his appointment. He visited my county recently and he was made very welcome. The Government decided that it was not worth giving representation at ministerial level to our area. What has the budget done for people in the Border areas? Extra VAT on building materials will have a greater impact in the Border region than on the rest of the country. It will be devastating. We talk about creating jobs and the most positive way to do that is to get the building industry up and running. Everybody recognises that.
I will illustrate how desperate the problem is. Some substantial builders have said that development here is nearly over, that there is not much left to do. Ireland is twice the size of Denmark and we have approximately half their population. Denmark has a population of five million. People who are ambitious are desperate, they think there is nothing left to do. This country has not been developed. We have massive potential if only we had a Government willing to lead us and generate the activity. Putting VAT on building materials was not the road to go down to create jobs. In towns within 50 miles of the Border this will have a devastating effect on people in the block making business, those producing lintels, cement and so on. These commodities can be bought in Northern Ireland at a fraction of the cost.
 Before the present VAT increase competition was keen but was beaten off thanks to the industry of the local people. I suggest that Members read the Sunday Press of last Sunday which paid tribute to my county and its industrious people. But for those people there would not be any level of employment in the area. The Minister should bear in mind that it is easy for people living within 50 miles of the Border who intend building a house or an extension to get a quotation in counties Fermanagh, Tyrone, Down or Armagh. The work can be done at a fraction of the cost on this side of the Border. How can we compete with that?
We will have the same problem in regard to clothing. People will flock to Northern Ireland as they did when petrol prices were so out of line that it was worthwhile to travel distances of 30 or 40 miles to fill the tank with petrol. People are being encouraged to travel across the Border to buy their hardware and clothing.
It is generally accepted that the growth potential in jobs at present is in tourism. We have much to offer and my region, the lakeland region, has a great deal to offer. Many small farm enterprises were able to keep up to six tourists but the Government has decided to tax this enterprise, thus increasing unemployment. It is generally accepted that to get people to give up a bad habit like smoking you price the commodity out of their reach.
That is the attitude of the Government in relation to job creation, it is taxing people to prevent them getting work.
We had great hopes for tourism. We printed brochures to attract visitors from England, France and other continental countries but they are out of date because the Government did not see anything wrong about increasing the VAT on small enterprises that were being developed. That is a blow to tourism promotion in my region and to the county development team which, I understand, will be replaced by county enterprise boards. There will be other occasions when I will develop those points. Many people will  be saddened by the budget and the statistics published in the past two days.
Mr. Briscoe Mr. Briscoe
Mr. Briscoe: Everybody was geared for a savage budget but what emerged was anything but savage. Unfortunately, the attitude at present is to knock everything. The knocking starts on a Monday morning at 8 a.m. when “Morning Ireland” comes on air and lists the bad news about anything and everything. We seem to be concentrating only on the bad news and to be oblivious to the fact that the world is going through a great recession, that jobs are being lost in the Community and in the United States. Markets are dwindling and we have done extremely well to have increased our exports. When we were told that our exports were up on last year, were in the region of £16 billion and that we can look forward to an increase of £1 billion this year, in spite of our setbacks, we should have heard people saying, “well done Ireland, you are doing very well in difficult circumstances”.
I look forward to having an opportunity when this debate resumes to develop those thoughts. I will wind up by saying that we have a lot of work to do. The unemployment issue is a priority for all of us. We are all conscious of this problem. Recently we received a letter from the St. Vincent de Paul Society expressing their concern about unemployment. No-one is more concerned about unemployment than are the Members of this House.
Dáil Éireann 427 Financial Resolutions, 1993. Financial Resolution No. 10: General (Resumed).