Ceisteanna—Questions. Oral Answers. - Film Company's Submission.
Ceisteanna—Questions. Oral Answers. - Guildford Four Committee Meeting.
Ceisteanna—Questions. Oral Answers. - Integrated Programme for EC Funds.
Ceisteanna—Questions. Oral Answers. - Inishmore (Galway) Piers.
Ceisteanna—Questions. Oral Answers. - Central Bank Annual Accounts.
Ceisteanna—Questions. Oral Answers. - Regional Development.
Ceisteanna—Questions. Oral Answers. - Public Service.
Ceisteanna—Questions. Oral Answers. - Confectionery Products VAT Yield.
Ceisteanna—Questions. Oral Answers. - Amalgamation of Civil Service Grades.
Ceisteanna—Questions. Oral Answers. - Integrated Development Projects.
Ceisteanna—Questions. Oral Answers. - National Lottery Funds.
Ceisteanna—Questions. Oral Answers. - Revenue Commissioners Report.
Ceisteanna—Questions. Oral Answers. - Register of Commercial Interests.
Ceisteanna—Questions. Oral Answers. - Payment of Fines.
Ceisteanna—Questions. Oral Answers. - Format for Financial Accounts.
Ceisteanna—Questions. Oral Answers. - Prosecution Statistics.
Ceisteanna—Questions. Oral Answers. - Public Service Statistics.
Ceisteanna—Questions. Oral Answers. - Implications of High Court Case.
Ceisteanna—Questions. Oral Answers. - National Museum-National Library Repair Works.
Order of Business.
Financial Resolutions, 1989. - Financial Resolution No. 8: General (Resumed).
Private Members' Business. - VHI Recovery Programme: Motion.
Financial Resolutions, 1989. - Financial Resolution No. 8: General (Resumed).
Adjournment Debate. - Thurles Sugar Factory.
Written Answers. - Tax Rebate.
Written Answers. - Bandon River Drainage.
Written Answers. - Dublin Regional Plan Report.
Written Answers. - County Louth Grant Aid.
Written Answers. - Tax Amnesty.
Written Answers. - Public Sector Remuneration Report.
Written Answers. - Protection of Endangered Species.
Written Answers. - Income Tax Act.
Written Answers. - Drogheda (Louth) Garda Barracks.
Written Answers. - Cavan Garda Headquarters.
Written Answers. - Garda Síochána Accounting Procedures.
Written Answers. - Taxes from Farmers and Self-Employed.
Written Answers. - Banks' Lending Policies.
Written Answers. - Survey Analyses of Feeds.
Written Answers. - Redesign of Metal Currency.
Written Answers. - Baking and Confectionery VAT Levels.
Written Answers. - Interest Free Tax Arrears.
Written Answers. - Construction Developer Competitions.
Written Answers. - National Botanic Gardens.
Written Answers. - Canal Towpaths.
Written Answers. - Irish Life Privatisation Proposals.
Written Answers. - CELEX Computers.
Written Answers. - Erection of Radio Mast.
Written Answers. - Tax Exemption.
Written Answers. - Shannon River Interests Co-ordination.
Written Answers. - Outstanding PRSI.
Written Answers. - Exchequer Tax Losses.
Written Answers. - Tax Concession Incentive Area.
Written Answers. - Social and Regional Development.
Written Answers. - Paper Currency.
Written Answers. - Boyle-Bonet Rivers Drainage Scheme.
Written Answers. - Redundancies/Retirement Lump Sums Cost.
Written Answers. - White Paper Proposals.
Written Answers. - Harmonisation of Irish/UK VAT Rates.
Written Answers. - Irish Steel Development.
Written Answers. - Brian Keenan Abduction.
Written Answers. - Dean of Diplomatic Corps.
Written Answers. - Turkish Human Rights Policy.
Written Answers. - Land Purchase Agreement Application.
Written Answers. - County Cork Garda Station Vacancy.
Written Answers. - County Clare Merchandise Licence Application.
Written Answers. - Weekend Road Passenger Licence.
Written Answers. - Aran Islands Ferry Vessel Proposals.
Written Answers. - Development Programme Co-Ordinators.
Written Answers. - Grant Payments.
Written Answers. - Pig Expansion Programme.
Written Answers. - Grant Payments.
Written Answers. - Social Welfare Benefits.
Written Answers. - National Programme of Community Interest.
Written Answers. - Tax Rebates.
Written Answers. - Residential Property Tax.
Written Answers. - Tourism Development.
Written Answers. - EC Regional Development Fund.
Written Answers. - Public Service Employment Statistics.
Written Answers. - Tax Amnesty.
Written Answers. - Withdrawal of Tax Incentives.
Written Answers. - Importation of Vehicles.
Written Answers. - Grant of Relief.
Written Answers. - VAT Rebates.
Written Answers. - Payment of Pension.
Written Answers. - Occupation of Premises.
Written Answers. - Drainage of River Lee.
Written Answers. - OPW Land.
Written Answers. - Brosna Catchment Drainage Scheme.
Written Answers. - Lease of Griffith Barracks.
Written Answers. - Below Cost Selling.
Written Answers. - Verolme Dockyard.
Written Answers. - Road Construction Funds.
Written Answers. - Grant Payments.
Written Answers. - Dublin Youth and Social Club Funding.
Written Answers. - Anti-Pollution Fireplace Appliance.
Written Answers. - House Improvement Grant.
Written Answers. - Whitegate (Cork) Sewerage Scheme.
Written Answers. - Grant Payments.
Written Answers. - Domestic Waste Disposal Costs.
Written Answers. - House Improvement Grant.
Written Answers. - Notified Redundancies.
Written Answers. - Hospital Charges.
Written Answers. - Medical Schools Curricula.
Written Answers. - Medical Card Eligibility.
Written Answers. - Long-Term Illness Designation.
Written Answers. - Pharmaceutical Products Regulations.
Written Answers. - Payment of Pension.
Written Answers. - Use of Image Intensifiers.
Written Answers. - Defence Force Statistics.
Written Answers. - Portlaoise Prison Duty Roster.
Written Answers. - Payment of Allowance.
Written Answers. - Library Assistant Appointment.
Written Answers. - Dublin Clubs Funding.
Written Answers. - VEC Redundancy Package.
Written Answers. - Grant Payment.
Written Answers. - County Dublin School.
Written Answers. - County Waterford Club Funding.
Written Answers. - ESB Grant.
Written Answers. - Return of Certificates.
 Chuaigh an Ceann Comhairle i gceannas ar 2.30 p.m.
Mr. McCartan: asked the Taoiseach if his Department have considered the submission of Film Makers Ireland, dated 14 December 1988; if he will outline his views on the issues raised; and if he will make a statement on the matter.
The Taoiseach: This report is being considered in consultation with the other Departments concerned.
Mr. McCartan: I am glad to learn from the Taoiseach's response that he has received the report, but what I had hoped to elicit were the Taoiseach's views with regard to the issues raised in the main proposals. What is the Taoiseach's position with regard to the main premise of the submission, that the ultimate and best solution for the development of an indigenous Irish film industry would be the establishment of a single State agency?
The Taoiseach: There are three main elements in the report. The first two involve an additional State expenditure,  either in cash or in tax foregone, and the other relates to placing an obligation on RTÉ. These matters are being examined in consultation with the Departments concerned.
Mr. McCartan: I appreciate that the three main proposals are the establishment of a development fund, improved tax incentives and an expansion of the responsibility in RTÉ to cover indigenous films, but the first statement in the submission is to the effect that the best solution in the long term would be the establishment of a single State agency. Has the Taoiseach a view on that matter?
The Taoiseach: No, I have not come to any decision on that. Many people favour the idea of the IDA having a role.
Mr. Quinn: No, do not give it to them.
The Taoiseach: It is in the report. The Arts Council is another body that could be given responsibility. The whole thing is still under examination.
Mr. M. Higgins: In view of the fact that the Taoiseach has acknowledged his receipt of the submission by Film Makers and that he is considering action as a result, would he not agree that the failure to make any reference to amending section 35 of the Finance Act for example means that there is no prospect of alternative seed money for the industry, which is what the industry is seeking and not commercial development money? What alternative proposals has the Taoiseach now that the amendment of section 35 seems not to be on the agenda?
An Ceann Comhairle: The Deputy is injecting new matter into this question.
The Taoiseach: As the Deputy knows we responded to approaches from Film Makers to introduce the section which provides for certain tax concessions for the making of films and everybody acknowledges that that has had some success.
Mr. M. Higgins: That is at post-production stage. It is the seed money they are interested in.
The Taoiseach: The provision enables people investing in film making to write it off against their tax, which is a fairly major concession. I know that an argument has been put forward that it is the seed money that is required and that what is needed is some support for scripts and the preliminary work. That is under examination.
An Ceann Comhairle: A final and brief supplementary, Deputy McCartan.
Mr. McCartan: In view of the good worth-while proposals in the submission from Film Makers Ireland and their urgent request for meetings, will the Taoiseach assure the House that meetings will be arranged with the Departments considering the different aspects for the personnel involved? I appreciate that the structures require a number of different Departments to look at it, but Film Makers are seeking an opportunity to meet the Departments and advance their case further. Will the Taoiseach assure the House that that will happen?
The Taoiseach: The key Department is the Department of Finance. I am sure it can be arranged for them to be met at official level.
Mr. McCartan: The Department of Communications and indeed the Taoiseach would be involved with regard to the development fund.
The Taoiseach: I know nothing.
An Ceann Comhairle: Question No. 2, please.
Mr. McCartan: asked the Taoiseach, in view of his agreement to meet a representative or a delegation from the  Guildford Four Committee, the reason the meeting has not yet taken place; if he will give a firm indication of a date for the meeting; and if he will make a statement on the matter.
The Taoiseach: A meeting arranged for the latter part of last year had to be deferred for personal reasons.
If, after the decision of the British Home Secretary to refer the Guildford Four case to the Court of Appeal, a meeting is still required this can be arranged at any time.
Mr. McCartan: On behalf of the committee I am putting on record their appreciation and indeed the appreciation of everyone concerned with these cases of the work of the Taoiseach's Department and of the Department of Foreign Affairs in this regard. Nevertheless, the committee are disappointed that they have not——
An Ceann Comhairle: A question, please.
Mr. McCartan: ——yet had an opportunity to meet. Will the Taoiseach urgently arrange a meeting and confirm that the Department and indeed the Taoiseach will be available to meet a delegation of the committee at the earliest opportunity?
The Taoiseach: As the Deputy knows, this is an ongoing matter. In fact, I had very informally arranged to meet one individual who subsequently changed his mind and suggested that I should meet other people. Then, when I arranged to meet the other people, that fell through. I am available to meet them, as is the Tánaiste, at any time that would appear to be useful. I did feel, however, that because of the decision of the Home Secretary, perhaps they were not pressing for a meeting as much as they had been but that is a matter for them.
Mr. McCartan: Doubtless the decision of the Home Secretary constitutes a major advance but the committee are  anxious for the Taoiseach to meet a delegation of the relatives because there are ongoing and other issues involved.
Mr. Quinn: asked the Taoiseach the basis for the statement made in a report (details supplied) by the Minister of State at his Department to the effect that to her knowledge each county manager had reported back to their respective local authorities after each meeting of the working groups of which they were members, established for the purposes of the preparation of Ireland's integrated programme for application for assistance to the EC; and whether he is aware that the statement is at variance with the experience of many elected representatives of local authorities; and if he will make a statement on the matter.
Minister of State at the Department of the Taoiseach (Mrs. Geoghegan-Quinn): The basis of the statement is the fact that each manager is an officer of his local authority and, in accordance with normal practice, would give the authority all advice and assistance they need to carry out their duties. The Minister of State indicated in her interview that managers had, so far as her knowledge went, followed this practice.
Mr. Quinn: I listened with attention to the extensive interview the Minister of State gave the public at large. Arising out of what she said, and what is contained in the official transcript from RTÉ, would she not now admit that she and the rest of the Government have grounds for grevious concern at the failure of county managers throughout the country to report “after each meeting of the working groups to the elected representatives”? No doubt, since Fianna Fáil are substantially represented on local authorities — indeed in many instances holding a majority — she will be aware that such reports have not been given?
Mrs. Geoghegan-Quinn: It is unfair to  label every county manager in the country as being a person who does not come back and report after each of the working group meetings. Perhaps it was unfortunate that I accepted that every county manager would be as enlightened as my own — I am sure Deputy Michael Higgins will bear me out on that — in reporting back on the working groups. If the Deputy has specific instances where he would like to have greater co-ordination between the work of the working group, through the county manager to the local authorities, that is something I am prepared to follow up, but I would remind the Deputy that the involvement of the local authorities in the preparation of these programmes is not part of their legal functions and, as such, there is no legislative provision on how county managers should carry out their activities. However, I would feel — and it has been the normal practice established — that in relation to all of the work they carry out as county managers on behalf of their elected public representatives, they would be reporting back in the normal course of events.
Mr. Quinn: Would the Minister of State be prepared now — having regard to the magnitude of the project in hand — to make available to this House, or to the elected representatives of the various local authorities, the formal reports which no doubt the managers must have, if not the minutes, of the working groups' meetings they attended on behalf of the elected representatives?
Mrs. Geoghegan-Quinn: It would be a matter for the chairperson of each local authority, in full co-operation with each of the elected members of that local authority, to request their county manager to provide that information for them.
Mr. Quinn: Would the Minister of State so direct?
Mr. J. Bruton: Would the Minister of State not agree that no Government have ever been in a better position to ensure that county managers report to local  authorities in view of the fact that so many Ministers of State continue to act as members of local authorities despite the fact that they are also members of the Government? Would the Taoiseach instruct these continuing public representatives to make use of that facility to ensure that these reports are presented?
Mrs. Geoghegan-Quinn: As the Deputy is aware, no Minister of State is a member of the Government.
Mr. J. Bruton: They serve the Government in a page capacity.
Mrs. Geoghegan-Quinn: That is not what the Deputy said. In reply to the final supplementary I should say to Deputy Quinn that, as he knows, I would not have a legal function in directing any county manager to report back to his local authority.
Mr. Quinn: One does not necessarily——
An Ceann Comhairle: I want to deal with other questions also. I take it the Deputy will be brief?
Mr. Quinn: I do not think any other question has a price tag of £4,000 million attached to it as has this one.
An Ceann Comhairle: All questions are important to the Chair.
Mr. Quinn: Having regard to her role vis-á-vis this co-ordinating exercise would the Minister of State request every county manager to make available to public representatives a report——
An Ceann Comhairle: We are having repetition. The Deputy has already made that point.
Mr. Quinn: The Minister said she had not the legal powers.
An Ceann Comhairle: Let us not enter into the realm of argument now.
Deputies Quinn and M. Higgins rose.
An Ceann Comhairle: There are two Deputies offering. I am afraid I cannot facilitate them.
Mrs. Geoghegan-Quinn: For the information of the House perhaps I might say that — as Deputy Quinn is aware — I attended the inaugural meeting of each of the working groups. One question asked at each of the inaugural meetings was what should be the basis of reporting back to local authorities? I strongly advised each of the county managers at that stage that they should report back on a regular basis to each of their publicly elected representatives.
An Ceann Comhairle: I am calling Question No. 4.
Mr. M. Higgins: The Minister of State has made reference to the local authority of which she and I are members——
An Ceann Comhairle: The Deputy must find another way of raising that matter——
Mr. M. Higgins: There has been one report that has not yet been discussed.
Mrs. Geoghegan-Quinn: It has been on the agenda of the last two meetings.
Mr. M. Higgins: There has been no regular reporting; I know because I have been at the meetings.
Mr. Molloy: asked the Taoiseach if he will make the necessary arrangements for the construction of an extension to the pier at Kilmurvey, Inishmore, County Galway.
Minister of State at the Department of the Gaeltacht (Mr. D. Gallagher): Faoi mar a mhínigh mé don Teachta roimh an Nollaig cheadaigh Roinn na Gaeltachta  deontas lánchostais chun suirbhé struchtúrtha a fháil déanta ar an bpiara sin. Tá torthaí an suirbhé sin, a fuarthas le linn Saoire na Nollag, á meas anois mar ghnó phráinneach.
Mr. Noonan: (Limerick East): Before moving to Question No. 5, a Cheann Comhairle, I should say I am unhappy with your decision to rule out three priority Questions in my name today to the Minister for Finance.
An Ceann Comhairle: I am sorry, Deputy, that does not arise now.
Mr. Noonan: (Limerick East): I should like to take up your offer to discuss it with you subsequently. I want to inform you that the one you ruled out on the grounds that it conflicted with the budget debate we will be raising at the Committee on Procedure and Privileges.
An Ceann Comhairle: Deputy Noonan, my office will be glad to facilitate you but it is not in order to raise the rulings of the Chair at this stage or indeed at any time.
Mr. Noonan: (Limerick East): We will be raising at the Committee on Procedure and Privileges the ruling that one question was in conflict with the budget debate.
An Ceann Comhairle: That is the Deputy's privilege.
Mr. McDowell: asked the Minister for Finance if his attention has been drawn to the fact that the annual accounts furnished by the Central Bank in the form required by regulation are inadequate to determine whether the resources used by the bank are properly allocated and whether the expenditure on salaries and other items by the bank are necessary; that the bank's reports including the proceedings at the Central Bank set out therein afford no opportunity for public representatives to judge the efficiency of  the bank and the necessity for the expenditure made by it; whether he has had consultations with the bank as to the level of reserves held by it; and the procedures which exist between his Department and the Central Bank in respect of determining the necessary level of reserves; and if he will make a statement on his Department's view on the present level of reserves held by the Central Bank and their possible repayment in part to the Exchequer.
Minister for Finance (Mr. Reynolds): The Central Bank is an independent body established by statute. Since its formation in 1942, it has been generally accepted that the bank should be afforded a large degree of autonomy in the conduct of its operations. I do not agree that the bank's annual accounts and report are inadequate.
The reserves of the bank belong to the bank, and have been accumulated over the years through the bank's normal operations. I do not determine the size or the adequacy of the reserves. My role relates to the surplus income of the bank, the bulk of which is paid by the bank into the Exchequer, under regulations made by me.
Mr. McDowell: Would the Minister not agree that independence and autonomy are one thing but accountability is another and that the public are entitled to know whether the Central Bank — which is a substantial financial institution with many resources at its disposal — is giving value for money? I have got to suggest to the Minister that, for instance, it is not even visible from the reports furnished for the last three or four years even what their employees are doing, or how they are assigned, even though that had been their habit until then. Surely the public are entitled to know whether this institution is giving value for money? To explain that does not compromise its independence or autonomy in any way.
Mr. Reynolds: The accounts of the Central Bank are audited by the Comptroller and Auditor General. Its  report and accounts are laid before both Houses of the Oireachtas. The board of the bank are appointed by the Minister for Finance and its Governor by the President. I can require the Governor and the board to consult and advise me in regard to the execution of their general functions and duties. I do not see that any additional legislative provision is required. I might also remind the Deputy and the House that they will have an opportunity in the very near future, on the Central Bank Bill, to discuss some aspects raised by the Deputy here.
Mr. McDowell: Is it right that any Deputy of this House, putting down a question as to how the resources of the Central Bank are deployed, or what their staff work at in broad terms, is told that that is a matter for an independent body established by statute since it is the Minister for Finance who appoints, and will appoint, all the members of the board of the Central Bank? In addition, is it right that the accounts of the bank should be such as to present two gross figures — the total amount paid in staff costs and the total amount in other expenses — as the only way in which the elected members of this Parliament can ascertain whether money is being properly spent or otherwise in that institution? Is it fair, proper or compatible with parliamentary responsibility and public accountability that that is the sum total of what we are told?
Mr. Reynolds: As the Deputy will agree, the question of salaries and what people are paid is a matter for day-to-day running. If the bank is to retain its independence, and surely the House would agree that it is entitled to run its institution on a day-to-day basis and be totally responsible for it, it must have responsibility for the day-to-day running of that business. I might add also that the bank has full regard to the public service norms in its approach in this regard. If the Deputy wants to discuss the matter further and make additional suggestions I should advise him that he will be  afforded an opportunity in less than two weeks.
Mr. McDowell: Would the Minister agree with me that the Director of Public Prosecutions and the Ombudsman are also independent institutions of the State but that does not mean we cannot find out what they are doing, what their staff are doing and whether the offices under their control are being efficiently run? Surely it is entirely wrong that no Member of this House can even query the expenses and the management of, say, the Mint at Sandyford, and that the Minister abdicates responsibility and refuses to answer any questions in relation to such issues.
Mr. Reynolds: The accounts are audited by the Comptroller and Auditor General. Is the Deputy suggesting that there is something amiss in the way the Central Bank is carrying out its functions? If that is what he is saying, I cannot accept it.
Mr. McDowell: No. That is the whole point. I want to know about value for money.
Mr. Allen: asked the Minister for Finance if he has any plans to establish bodies with executive responsibility for required planning, along the lines of resolutions thereon by the European Parliament.
Mrs. Barnes: asked the Minister for Finance the implications for the regional plans being prepared for European funds, of the Hume report adopted by the European Parliament.
Mr. J. Bruton: asked the Minister for Finance if the European Parliament has adopted a resolution in respect of the Hume report on regional development in Ireland, to the effect that regional development organisations similar to SFADCo should be established in each region; if so, the status of this resolution;  its implications for the likely attitude of EC authorities to applications for funds from Ireland which have not been prepared in conformity with its terms; and if he will make a statement on the matter.
Mr. McGahon: asked the Minister for Finance if he proposes to modify the regional structure for the preparation of plans for the EC, in the light of the Hume report of the European Parliament.
Miss Flaherty: asked the Minister for Finance if he has had any discussions with members of the European Parliament concerning the implications for Ireland of the resolutions of the Parliament concerning regional development in Ireland.
Mr. Reynolds: I propose to take Questions Nos. 6, 7, 25, 34 and 59 together.
The European Parliament adopted a resolution on the Hume report on 13 October 1987 which recommended that regional authorities with executive and planning powers should be created in Ireland and that, as an interim measure, regional development bodies similar to the SFADCo model in the mid-west region should be established in suitably designated regions. The resolution has no legal effect.
Structural Funds assistance will be sought from the Community on the basis of the national development plan and a number of operational programmes. These are being prepared in accordance with the EC regulations governing the new Structural Funds arrangements which were adopted in 1988. Under these regulations, it is a matter for the national authorities to determine who should prepare operational programmes.
It should be noted that the normal procedures involving consultation with the European Parliament took place before these regulations were adopted.
I have no plans to modify the arrangements put in place by the Government for the preparation of the sub-national operational programmes for the purposes of EC Structural Funds. These are fully in line with the relevant regulations.
 I have had no discussions with members of the European Parliament concerning the implications for Ireland of the resolution of the Parliament concerning regional development in Ireland.
Mr. J. Bruton: Will the Minister confirm that the Government disagree with the Hume report and believe that it was wrong in its recommendation that regional development authorities be established in Ireland?
Mr. Reynolds: I have not said that. Creation of elected regional authorities with devolved executive and planning powers covered by the nine regional development authorities were suggested as a basis: increased use of programmes, and particularly integrated programmes for the most disadvantaged areas and for Dublin are also recommendations of the report in addition to transfer of Government Departments from Dublin. We have already gone well down the road to transferring Government Departments out of Dublin. That would not suggest that we totally disagree with the recommendations.
On the question of programmes, particularly integrated programmes, that is precisely what is taking place on the working groups and advisory groups for preparation of submissions to Brussels for funding under the Structural Funds.
Mr. J. Bruton: I refer the Minister to the first paragraph of his own reply where he stated that the Hume report had recommended that regional development authorities similar to SFADCo be appointed in Ireland. I am asking him again does he disagree with that recommendation in view of the fact that he is apparently not prepared to implement it? I would further ask the Minister if he considers that the European Parliament has no influence on the budget and that, therefore, he can easily ignore its recommendations.
Mr. Reynolds: First, the Hume recommendations, as the Deputy is well aware, have no legal basis whatsoever.
Mr. J. Bruton: Is the Minister aware that the European Parliament, while it passes resolutions of this kind which may not have a direct legal basis, has considerable influence on the policy of the Community, and if a unanimous recommendation is made in favour of regional development authorities, that for the Irish Government either to say that they agree or disagree but propose to ignore it is, to say the least, reckless and puts in jeopardy the possibility of obtaining our maximum funding from the EC?
An Ceann Comhairle: This seems to be leading to debate. We cannot debate this matter now.
Mr. Reynolds: I want to repudiate the use of the word “reckless” in relation to anything this Government do. Secondly, the Deputy is fully aware that those recommendations have no basis——
Mr. J. Bruton: No basis.
Mr. Reynolds: ——and thirdly, the Commission, before they drew up these regulations, had full consultation with the Parliament. We are going along with what the regulations demand, and as Ireland is a single region, we are dealing with it on that basis.
An Ceann Comhairle: Deputy Bruton, we must have finality on this question. I will allow a brief question from Deputy Alan Shatter.
Mr. J. Bruton: Is the Minister saying the Hume report has no basis?
Mr. Reynolds: No legal basis.
Mr. J. Bruton: No basis is what you said.
Mr. Shatter: The Minister referred to the arrangements that have been put in train for the processing of the integrated programmes to be completed by 31 March. Does he recognise that the recommendations of the Hume report in regard to the establishment of regional  authorities related not merely to the processing but to the putting in place of structures to monitor and supervise the application of regional funding? What proposals does the Minister have as an alternative to those in the Hume report as to what structures should be put in place after 31 March next?
Mr. Reynolds: That is a separate question. The Deputy himself has a similar type question later on. The question in relation to it is that the national plan is being put together by the Government and will be lodged with the Commission on or before 31 March and that the integrated programmes which form part of that plan will be the basis on which we will be looking for funds——
An Ceann Comhairle: I was contemplating going on to another question but I will facilitate Deputy Desmond.
Mr. Shatter: What happens after 31 March? The Minister has no idea what happens after 31 March.
Mr. Reynolds: Maybe I would like to take some advice from Deputy Shatter as to what to do. We are all aware of what we are going to do both before and after 31 March.
Mr. Desmond: Would the Minister accept that in relation to the greater Dublin region there does not exist a regional planning authority, either elected or non-elected at present?
An Ceann Comhairle: That is a deviation from the question.
Mr. Reynolds: They are all deviating from the question. The Deputy is well aware that there is a working group and advisory groups and consultants drawing up a report. Both the advisory groups and the working group are looking at the report at the moment.
Mr. Desmond: There is no planning authority.
Mr. Reynolds: Is the Deputy saying that Dublin County Council and Dublin Corporation are not planning authorities or that the Borough of Dún Laoghaire is not a planning authority?
Mr. Desmond: I would point out to the Minister that in the greater Dublin region there is no co-ordination and no planning whatsoever.
An Ceann Comhairle: I have indicated on a number of occasions that I am going on to another question. I will allow Deputy Noonan a question if he will be very brief.
Mr. Noonan: (Limerick East): In the Minister's reply there was no reference to the Minister for the Environment, Deputy Flynn. On the day of the reshuffle the Taoiseach announced a role for Deputy Flynn in these matters. Could the Minister for Finance confirm that he maintains that role and what exactly that role is?
An Ceann Comhairle: That is a separate question.
Mr. Noonan: (Limerick East): According to the Taoiseach he is the central coordinator of economic planning. Where has he gone?
Mr. Reynolds: If Deputy Noonan wants to ask me about my role I will be glad to answer him at any time but I will not answer questions about Deputy Flynn's role.
Mr. Noonan: (Limerick East): I am fearful that his role is encroaching on yours.
Mr. J. Bruton: The Minister was happy to to have him out defending his budget on RTE.
Mr. Noonan: (Limerick East): Have you got him under control?
Mr. Pattison: asked the Minister for Finance the steps he has taken to implement the various proposals set out in the White Paper on reform of the public service; and if he will make a statement on the matter.
Mr. Reynolds: The most urgent problem facing the Government in the area of public service management has been and, for the time being continues to be, the need to bring under control and keep down the costs of administering the public service. As I indicated in my Budget Statement of 25 January last, considerable progress has been achieved. Resolute action to reduce staff numbers, measures to achieve greater efficiency and to end overlapping and duplication between agencies and the negotiation of a public service pay agreement which recognises the realities of the Government's position have all contributed greatly to the overall strategy for national recovery.
Much still remains to be done. As I indicated in my budget speech, policies to reduce staff numbers are still in place. Computerisation, management training and management reviews are all contributing to the drive for better managerial standards at both the personal and the organisational level. The efficiency audit group is charged with developing an efficiency strategy for the public service. As I indicated in my budget speech, and I quote:
I believe that a crucial element in any such strategy will be to find imaginative ways of getting organisations and individuals to manage better and of rewarding those who do. I am proposing fundamental changes in the financial procedures governing administrative and running costs. My aim is to try to  find the right balance between, on the one hand, ensuring that expenditure does not begin to creep upwards and on the other, allowing greater delegation of responsibility to, and encouraging greater cost consciousness on the part of, Departments and managers. I am examining the possibility of fixing administrative budgets on a three-year cycle at a level which would involve a real reduction in funding each year because of greater efficiency but which would allow greater managerial flexibility within those budgets. I believe that this could lead to greater motivation and release some of the dynamic talent that is widespread throughout the Civil Service.
The proposals contained in the White Paper, Serving the Country Better, are being kept under review in my Department. To the extent to which these proposals may prove to be consistent with the Government's priorities in this area, they will be taken into account.
Mr. Noonan: (Limerick East): I would like to ask the Minister, against the background of a continuing embargo in the public service, if the posts embargoed are counted as posts vacant within individual Departments or are they counted as posts suppressed?
Mr. Reynolds: The best answer I can give the Deputy is that in relation to the embargo there are vacancies that are left unfilled and in some cases there are vacancies that are suppressed.
Mr. Noonan: (Limerick East): Could the Minister give an idea how many posts are vacant in the Civil Service, if there is a view that the Government will move to fill these posts in the future or if the Minister has a policy to restructure the public pay bill by restructuring the numbers and allocating complements to each Department of the Civil Service regardless of the embargo?
An Ceann Comhairle: The Deputy is  going from the general content of this question to the particular.
Mr. Noonan: (Limerick East): It is a general matter.
Mr. Reynolds: It is not as general as the Deputy might like it to be. I do not have the information available to me on the numbers of vacancies in each Department. If the Deputy wants to put down that matter as a separate question I would be only too glad to answer it.
Mr. Desmond: In relation to the continued operation of the embargo and the reduction of 3,000 jobs in the public service in 1989, has the Minister any information as to the areas in which those reductions will occur?
Mr. Reynolds: Not as yet.
Mr. Enright: Arising from the Minister's reply——
Mr. Reynolds: That is a separate question from the one which was put down.
Mr. Desmond: It is not. If the Minister wants to answer the question he should have——
Mr. Reynolds: With all due respect, if the Deputy wants that type of information he should please put down the question and I will be glad to give it to him.
Mr. Desmond: The Minister said——
An Ceann Comhairle: It should not lead to argument. It is clear that if Deputies want particular information they should put down a specific question.
Mr. Noonan: (Limerick East): We might as well put down written questions if we cannot ask supplementaries.
Mr. Reynolds: That is a very general question and the Deputy knows that as well as I do. If he wants to know the  numbers he should ask for them and I will give him that information.
Mr. Desmond: May I put my supplementary question?
Mr. Noonan: (Limerick East): The Minister should be able to answer supplementary questions.
An Ceann Comhairle: Order. There are two Deputies on their feet. One must resume his seat.
Mr. Desmond: The Minister announced in the budget that there would be a reduction of 3,000 jobs and he has provided £25 million. Is the Minister seriously saying that he does not know yet where those jobs will be reduced?
Mr. Reynolds: What the Minister is seriously saying, if the Deputy was listening correctly, is that this is a separate question. If the Deputy wants specific information he should put down a question and I will be only too delighted to answer it.
Mr. Desmond: The Minister does not have the information.
Mr. Reynolds: It is not included in this brief. The Deputy should put down a specific question if he wants a specific answer.
Mr. Desmond: The question will be put down next week but the Minister——
Mr. Reynolds: There is no reference, good, bad or indifferent, to anything about numbers in 1989 or about how many jobs will be lost.
Mr. Desmond: This is 1989.
Mr. Reynolds: The Deputy is referring back to my statement in the budget and not to the question that is down on the Order Paper. If the Deputy does not do his homework properly he should not blame me.
Mr. Enright: Arising from the Minister's reply and realising that it is as difficult to get information from him as it would be from Salvador Dali, I would like to know what the Minister means when he speaks about a right balance. One of the areas in the public service which was making money was the Land Registry. It made a profit of almost £1 million last year and this year it looks as if it will lose money.
An Ceann Comhairle: Again, the Deputy is deviating into the particular realm of the Land Registry which is worthy of a separate question
Mr. Enright: I appreciate that, a Cheann Comhairle——
An Ceann Comhairle: I hesitate to refuse the Deputy but I think I have dwelt long enough on this question.
Mr. Enright: I want to put to the Minister——
An Ceann Comhairle: Sorry, Deputy Enright. Deputy McDowell.
Mr. Enright: With respect, a Cheann Comhairle, I am putting a question to the Minister and I believe I am perfectly entitled to do so.
An Ceann Comhairle: I will decide that, Deputy.
Mr. Enright: The position I am making to the Minister is——
An Ceann Comhairle: A question.
Mr. Enright: ——that there are areas in the public service which are making money. This is one such area and I would ask the Minister——
An Ceann Comhairle: The Deputy has already made that point very eloquently.
Mr. Enright: I say to the Minister that this area which is making money is close to breaking down at present due to staff  shortages which leads to great problems for people who want to have their titles——
An Ceann Comhairle: Sorry, Deputy, this is not the time to raise that matter.
Mr. Enright: I would like to know what remedy the Minister has for this problem.
An Ceann Comhairle: Deputy Michael McDowell, a brief question.
Mr. Enright: It is a scandal——
An Ceann Comhairle: Please, Deputy Enright.
Mr. Enright: It is a scandal and the Minister is aware of it.
Mr. McDowell: Arising from the Minister's remarks about controlling costs in the public service and bearing in mind the figures he gave in his budget speech to this House last week, would he agree that he faces special pay increases of £150 million this year to be negotiated? He is planning to get rid of 12,000 public servants in 1988 and 1989. Special pay increases next year will cost——
An Ceann Comhairle: Again, the Deputy is injecting new matter into the question.
Mr. Reynolds: The figure for special increases this year is £40 million, of which £12 million was already allocated to the Defence Forces. The balance represents the claims that have been adjudicated on so far. The £150 million does not accrue in 1989. As I indicated in my Budget Statement, I have invited the Irish Congress of Trade Unions, under the ambit of the Programme for National Recovery, to come in and discuss with us the whole question of special pay awards to ensure that the programme for economic recovery or the recovery that is taking place in the economy is in no way jeopardised or endangered by payment of special pay increases.
Mr. McDowell: The Minister should admit he cannot pay it.
Mr. Durkan: asked the Minister for Finance (a) the total amount of VAT accruing to the Exchequer in respect of the last full year for which the information is available, from the baking and confectionery industry (b) the estimated cost of a reduction of 50 per cent in the coming year.
Mr. Reynolds: The VAT yield for 1988 from confectionery products, including sugar confectionery, chocolates and sweets, is estimated at £89 million. The estimated cost of reducing the rate on confectionery generally by 50 per cent would be about £46 million in a full year.
Mr. Durkan: May I ask the Minister, in view of the general theme of harmonisation in anticipation of 1992, whether he can foresee any changes taking place in the level of VAT charged at present to the baking industry?
Mr. Reynolds: The question of harmonisation of taxes within the European Community in preparation for the single market in 1992, is one in which there is a wide divergence of opinion as to what each member state would like to see in place. I could not even contemplate to judge at this stage what rates might be eventually agreed. I would remind the House that a new word has come into this whole discussion and that is the approximation of taxes. I have attended only one meeting since becoming Minister for Finance and I will attend another in the next two weeks. It has been mooted there that priorities should be given to harmonisation of investment tax. It would be very early days for me to speculate as to what VAT rates there might be at the end of the day. Basically, that is the reason I took no steps in last week's budget to move along that road and do not intend to do so until the position is crystallised somewhat.
Mr. McDowell: I wish to ask two supplementary questions. I understand Deputy Durkan's question to relate to the fact, if we are to believe the submissions received by Members of this House, that there is a very large thriving black market in VAT-free confectionery and baking. This is undermining the possibilities of the registered traders in this area. I notice that the Minister's Estimate takes no account of any buoyancy by means of taking on the black market. It seems to go in the opposite direction — the more that is given away in tax, the higher the proportion of VAT not recovered. The Minister seems to suggest — and I want to know if this is Government policy — that there is nothing to be said about VAT harmonisation because the matter is unclear and this country will not pursue its own private interests in the matter and make these known to Irish traders.
Mr. Reynolds: I want to make the position quite clear. Things will not happen overnight with regard to changes which might have to take place. This would be done on a phased-in basis. I would remind the Deputy that there are still three budgets to be put through this House before 31 December 1992. It is not tomorrow that this must be done and nobody in this House would seriously suggest that at the start of negotiations I should put all my cards on the table. That would be a very foolish tactic to adopt.
Mr. Durkan: Notwithstanding what the Minister has said, surely some preparatory work at least should now be undertaken in regard to harmonisation, with particular reference to the kind of concern that has been expressed in the baking industry in relation to present VAT levels. Surely the Minister would accept, rather than having a decision at midnight on a particular night in 1992, that it would be far better to undertake planning and make proposals in the meantime which would have the effect of reassuring the industry concerned.
Mr. Reynolds: I can assure the Deputy  that planning is taking place. If he refers back to the answer given, he will see that the cost of £46 million is a sizeable amount of money. It must be found somewhere. If it is given away in one place, it must be found somewhere else. If the Deputy would like to suggest where we could find that money it would be just another input into the planning that is in progress. I would also remind the House that VAT has no effect on the competitive position of Irish products as against foreign products because under the VAT system the VAT applicable is in accordance with the rate in the country of final sale.
Mr. McDowell: It is over to the black economy.
Mr. Reynolds: If it is the black economy, it must be black at two ends, at the wholesale end and at the retail. Reducing VAT rates is not necessarily the way to get at this problem. There are other ways and means.
Mr. McDowell: The motor industry did well out of the reduction in the VAT rates.
Mr. Reynolds: I know that. They are very happy with the way I am handling the situation.
Mr. Durkan: A very brief question.
An Ceann Comhairle: I am sorry, I call Question No. 10. I have given the Deputy a great deal of latitude. He must appreciate that.
Mr. Durkan: The Minister has asked that I suggest an alternative.
Mr. Reynolds: If the Deputy can suggest where to get £46 million he is welcome, but he cannot just ask the Government to take £46 million without saying where it should come from.
Mr. Durkan: Within the next couple of years——
Mr. Shatter: Does the Minister want us to provide every solution to his problems?
Mr. Deenihan: asked the Minister for Finance the present position regarding the amalgamation of the staff officer and executive officer grades in the Civil Service.
Mr. Boland: asked the Minister for Finance whether the discussions with staff interest in relation to the amalgamation of the staff officer and executive officer grades have concluded; and, if so, when these grades will be amalgamated.
Mr. Boland: asked the Minister for Finance whether arrangements have been made for the amalgamation of the staff officer and executive officer grades; and, if so, when it will occur.
Mr. Reynolds: I propose to take Questions Nos. 10, 37 and 121 together.
Clearly, the amalgamation of the grades in question would involve considerable additional costs for the Exchequer and its implementation would have to be accommodated within budget-ary constraints. In addition, as indicated by my predecessor, it involves a number of personnel, structural and organisational issues of concern to both Civil Service management and staff interests. Discussions with the latter are continuing.
Mr. Deenihan: In view of the fact that over 800 staff officers have been waiting patiently for this decision for some time and are being told, I understand, that the order is on the Minister's table awaiting implementation, would the Minister soon make a decision as to whether he intends going ahead with this proposal? It is very unfair to keep these people in suspense for such a long time.
Mr. Reynolds: I assure the Deputy that this order is not on my table for approval  or signature. If it were, it would not be very long on my table; I would approve it. It is still being discussed between the staff officers' union representatives and others and when it comes out of those negotiations I will gladly deal with it as quickly as possible.
Mr. Deenihan: Would the Minister put any time limit on this? Could he say that a decision could be made before the summer of this year?
Mr. Reynolds: As soon as the two associations finish their discussions with management and the matter comes to my table I will deal with it expeditiously.
Mr. Noonan: (Limerick East): Could the Minister give us an idea of the total cost per annum of the proposal that has been put to the staff associations?
Mr. Reynolds: Approximately £1 million.
An Ceann Comhairle: A final supplementary question from Deputy Deenihan.
Mr. Deenihan: The initial cost would be about £1 million but there would be a long term saving benefit involved, which would balance out that initial cost.
Mr. Reynolds: There is the question of cost to be considered on the one hand and the question of negotiations to be finalised between these two associations on the other. As soon as those discussions are out of the way and the matter comes to my table, as I have already said, I will deal with it expeditiously.
Mr. Shatter: asked the Minister for Finance the reason for the delay in the Government submitting to the European Commission integrated development projects for the seven designated regions for which structural funding is to be sought; the consultation which will take place with elected local authority  members prior to each development project being finalised and submitted to the European Commission; and if it is intended to publish and submit plans for each of the seven regions to Dáil Éireann for debate and approval.
Mr. Barry: asked the Minister for Finance when it is proposed to publish the national and regional plans which are to be submitted for assistance from the EC Structural Funds.
Mr. Howlin: asked the Minister for Finance, in respect of the seven working groups preparing draft plans for the seven sub-regions of Ireland which together make up the national region for the purpose of financial assistance from the European Structural Funds, if he will have those draft plans published; and if he will make a statement on the matter.
Mr. Reynolds: I propose to take Questions Nos. 11, 55 and 57 together.
There has been no delay in submitting operational programmes for the seven sub-regions designated by the Government for purposes of EC Structural Funds. The preparation of these programmes has been in train since October last. The regulations under which they can be submitted to the European Commission for funding, however, were adopted in December 1988 and only came into effect from 1 January 1989. Under these regulations, we must first submit a national development plan to the Commission — by 31 March 1989. The programmes will set out in more detail how the general development strategy identified in the plan will be implemented. We intend to submit the programmes at the same time as the national development plan, or soon afterwards.
The Government have set in place the arrangements which were outlined by the previous Minister for Finance, Mr. Ray MacSharry, in reply to a Dáil Question on 25 October 1988 to ensure that local elected representatives are provided an opportunity to make an input to the preparation of the operational programmes.  The membership of the advisory groups established in each of the seven subregions includes the chairpersons of the main local authorities in each area. These advisory groups are being given an opportunity to review the sub-regional programmes as they are being drafted and they can also make their own submissions for consideration in connection with the preparation of the programmes. The presence of county managers on the working groups preparing the programmes provides further scope for the views of members to be reflected in the inputs of their councils to the programmes. Direct submissions can also be made by any person for consideration by the various groups.
I am satisfied that these arrangements comply fully with the requirements of the relevant EC regulations. At the discussions held between a delegation of Government Ministers and EC Commissioners in Brussels on 16 January 1989, the Commission welcomed these arrangements.
It is not the Government's intention to submit the programmes to Dáil Éireann for approval in advance of submission to the European Commission. The question of publication of the national plan and the operational programmes will be considered at a later stage.
Mr. Shatter: Would the Minister indicate whether the seven sub-regional plans, including the Dublin plan, will be submitted or made available in completed draft form to the local authorities within the regional areas so that the plans are publicised and a public discussion can take place on the developmental and infrastructural priorities identified within each of the seven regions?
Mr. Reynolds: When those plans are completed, I expect that the priorities will be decided by the working groups after full consideration by the advisory groups. The plans, if available, will then be submitted to the Commission in Brussels, at the time of the development plan being put in place, or very shortly afterwards. I am sure the Deputy is as aware  as I am that it is the national development plan which is the first priority. We are aiming to have the sub-regional plans ready at the same time, if at all possible. If not, they can be submitted very shortly afterwards.
Mr. Shatter: Is the Minister aware that the time limit for the submission of plans is 31 March and that this time limit applies to the national plan and the sub-regional plans?
Mr. Reynolds: It does not apply to the sub-regional plans.
Mr. Shatter: Is the Minister telling the House that neither the national plan in draft form nor the sub-regional plans in draft form as prepared by the working groups, the advisory groups, the Dublin consultants, members of his Department, members of the Department of the Environment and members of the Taoiseach's Department since the Minister of State at that Department has an input, will be published for open discussion by Members of this House or members of local authorities in the State?
An Ceann Comhairle: That is a long question. We must have finality.
Mr. Shatter: Is the Minister keeping it under wraps in secret? Is he involved in a secret process?
An Ceann Comhairle: Deputy Shatter, please resume your seat. You have made your point.
Mr. Reynolds: I repeat that the question of the publication of the national plan and the operational programmes will be considered at a later stage by the Government. I would remind Deputy Shatter that the regulations do not provide that the operational programmes have to be in by 31 March.
An Ceann Comhairle: A brief question from Deputy Shatter. Other Deputies are offering.
Mr. Shatter: With respect, this is only my second supplementary.
An Ceann Comhairle: The Deputy is tending to debate this matter. That is not in order.
Mr. Shatter: In the context of the Dublin region, would the Minister confirm that an interim report has been made available to the Government by the Dublin consultants? Is the account of that report contained in today's edition of The Irish Times an accurate one and does the Minister regard it as satisfactory that the only information obtained by elected Members of this House about the Dublin consultancy report is through the leak of a portion of it to a national newspaper? In the light of that leak, will the Minister consider publishing the interim report and will he indicate when the final report will be made available?
Mr. Reynolds: I am not responsible for leaks to the newspapers. The interim report is being considered by the working groups and the advisory groups. Wherever the leak came from, the Deputy should not look at me.
An Ceann Comhairle: Deputy Desmond.
Mr. Shatter: Will it be officially published? It is farcical.
An Ceann Comhairle: These interruptions must cease. Deputy Desmond has been called.
Mr. Desmond: In view of the fact that the Minister has received the Dublin consultancy report as published in today's edition of The Irish Times, would he agree that this report, dated 18 January, is to say the least an inadequate and very disturbing report of rather slim proportions? In the light of that document there are grave grounds for concern and our forebodings are well and truly justified regarding what is to emerge in the greater Dublin region.
Mr. Reynolds: I will not comment on a leak in a national newspaper. Leaks can be very selective from time to time.
An Ceann Comhairle: Deputy Desmond, you have asked the question. You should listen to the reply.
Mr. Reynolds: I did not have the opportunity of establishing whether everything in the report was published in The Irish Times.
Mr. Desmond: It was all in The Irish Times.
Mr. Reynolds: If the Deputy does not want me to answer, let him keep interrupting. He wants to ask a question and answer it himself.
An Ceann Comhairle: The Chair is doing his best. This is leading to disorderly argument.
Mr. Reynolds: The report is being considered by the working groups and the advisory groups and then we will hear more about it.
Mr. Shatter: When does the Minister expect the final report from the consultants and will it be published? The sum of £300,000 in public money has been spent on the preparation of these reports.
Mr. Reynolds: Seeing that the interim report was published, I will leave it to the Deputy to speculate as to whether he expects to read the next one in The Irish Times as well.
Mr. Shatter: The Minister is in charge of these reports.
Miss Harney: asked the Minister for Finance whether, in light of the report of the all-party informal committee on the disbursement of the national lottery funds, he will propose to the Government  changes in the manner of disbursement; and if he will make a statement on the matter.
Mr. Sherlock: asked the Minister for Finance if the Government have considered the report of the all-party committee on the national lottery presented to him recently; if it is intended to implement the recommendations of the report; and if he will make a statement on the matter.
Mr. Spring: asked the Minister for Finance if it is intended to accept and implement the interim report of the all-party committee on the national lottery.
Mr. Reynolds: I propose to take Questions Nos. 12, 19 and 112 together.
The report is currently being considered by the Government and I hope to be in a position to make a statement on the matter at an early date.
Mr. McDowell: Would the Minister agree that it was deliberately decided by this House last term that the report would be prepared before the budget so that it would influence the budget debate? Is it not a pity that the Minister is not in a position, while the budget debate is in process, to indicate Government thinking as to whether the report is acceptable? Bearing in mind that a very senior member of the Minister's party, no less than the Leas-Cheann Comhairle, participated in this committee and agreed to its unanimous report, would the Minister agree that he should be in a position to indicate that the Government accept that the scandal of lottery fund abuse can be terminated in accordance with the proposals made by the all-party committee?
Mr. Reynolds: I received the report very close to the budget and I was extremely busy during those days in relation to it. There is a procedure to be gone through before submitting a report to Government for a final decision. That procedure is in place. As soon as the Government have an opportunity to consider it I will be making a statement on  the matter. The budget debate is wide ranging and some of the funds collected in the budget are related to the lottery. This matter should not be precluded from the budget debate.
An Ceann Comhairle: I should have called Deputy Sherlock earlier since he has a question tabled in respect of this specific matter. Apologies, Deputy.
Mr. Sherlock: As a member of that all-party committee, I am very disappointed that the Minister cannot indicate whether he is giving consideration to the recommendations of the committee, in view of the fact that they worked very hard to have the report submitted prior to the budget. From his initial perusal of the report, can the Minister give some indication that he is prepared to recognise the recommendations and implement them?
Mr. Reynolds: The Deputy will appreciate that I would not be so foolish as to anticipate and comment in advance on what the Government may decide.
Mr. Noonan: (Limerick East): In view of the Minister's assurance that this is under active consideration and his subsequent assurance that procedures have to be followed, would he confirm that the decision of the Taoiseach to transfer responsibility for certain disbursements of money from his Department to the Arts Council in advance of consideration by the Government is in breach of these procedures?
Mr. Reynolds: That is a matter for the Taoiseach to comment on. It is not a matter for me.
Mr. Noonan: (Limerick East): Is the Taoiseach's decision to transfer some of his functions to the Arts Council a unilateral decision or does it arise from this report?
An Ceann Comhairle: We are dealing now with matters appertaining to the Minister for Finance, not the Taoiseach.
Mr. Noonan: (Limerick East): He is responsible for the lottery.
An Ceann Comhairle: The Deputy is referring to the Taoiseach's responsibility.
Mr. Noonan: (Limerick East): You are too easy on the Minister. We have to be allowed ask him a question now and again. I know he is short on answers.
An Ceann Comhairle: The Deputy may not impute partiality to the Chair.
Mr. Noonan: (Limerick East): The Minister has ultimate responsibility for the disbursement of lottery funds. The figures are entered in his Estimate. Some of the money goes from his Department to the Taoiseach's Department. The Taoiseach has transferred his share to the Arts Council, as the committee recommended. Why have the other Ministers not done the same?
Mr. Reynolds: The report has gone to all Ministers in all relevant Departments. The Government will consider it in due course and I will make a statement on behalf of the Government when the decision has been finalised.
Mr. Desmond: Can the Minister give any indication as to how much will be available for disbursement in 1989 from the lottery funds generally.
Mr. Reynolds: The Deputy must not hold me to tight figures, but I would say very little at this stage. The estimates for the lottery must take into consideration commitments given last year on a twoyear and three-year basis. Those estimates will almost take up the projected revenue receipts which will be available for allocation from the lottery. In other words, the amount of resources available to me in relation to allocating any more from the national lottery in 1989 are so minimal they are not worth talking about.
Mr. Shatter: The gravy train has come to a halt.
Mr. Reynolds: I am referring to unexpended moneys in the areas to which it had been allocated in 1988 and which had to be accounted for in the budget.
Mr. Shatter: One great year.
Mr. Reynolds: The amount I have to worry about this year is so minimal that nobody on the Opposition benches should be kicking up a row about it.
Mr. McDowell: It is no wonder the Minister agreed to an all-party committee on the subject.
Mr. Reynolds: Deputy Shatter is so well paid for talking elsewhere I am surprised he does not talk here for nothing.
Mr. P. O'Malley: asked the Minister for Finance, in relation to the annual report furnished by the Revenue Commissioners, if his attention has been drawn to the fact that there is considerable dissatisfaction at the delay in furnishing the report; and the proposals he is making to expedite its production.
Minister for Finance (Mr. Reynolds): I have been advised by the Revenue Commissioners that they have been addressing the problem mentioned by the Deputy. While there has been some improvement in the publication dates of the annual report in recent years more needs to be done.
The commissioners set up a working group to determine what steps are necessary to enable the annual report to be produced and published at an earlier date and to consider the content and presentation of the report. The aim is to achieve a further improvement in the publication date for the 1988 report.
Mr. McDowell: Will the Minister agree  that it is perfectly feasible for an organisation like the Revenue Commissioners to come up with that report within three months of the end of the year to which it relates? Perhaps it would take them four months, that is giving them a bit of grace. If the Minister directed them to do so it would happen. Will the Minister, on an interim basis, without paying attention to any of the other format of the report, say that in future it should be produced within four months of the end of the year to which the report relates?
Mr. Reynolds: Looking back over the past six years I accept that the publication leaves a lot to be desired, to say the least. There has been an improvement in recent times in that the report up to 31 December 1987 was published in November 1988. I will take the Deputy's suggestions on board to improve still further on the position.
Proinsias De Rossa: asked the Minister for Finance if there are any plans to introduce legislation establishing a register of commercial interests for Members of the Houses of the Oireachtas.
Mr. Reynolds: I have no plans to introduce legislation on the lines suggested by the Deputy.
Proinsias De Rossa: Has the Minister given any serious consideration to the matter and, if so, why has he taken this position? Does he not accept that it would enhance the standing of public representatives if such a register existed?
Mr. Reynolds: I have already said that I have no plans at present for introducing legislation on the lines suggested by the Deputy.
Proinsias De Rossa: In view of the fact that a committee of the House examine the affairs of semi-State companies, will the Minister agree that it is important that members of that committee should have a register of their interests, if any?
Mr. Reynolds: I have no plans to introduce legislation in that regard and I have no further comment to make.
Mr. T. Fitzpatrick: asked the Minister for Finance if it is the policy of the Revenue Commissioners not to extend the time for payment of fines imposed by the courts for revenue offences regardless of the circumstances of the defendant, in contrast with the practice of the Minister for Justice who exercises his discretion and grants extensions where circumstances warrant this; and if he will make a statement on the matter.
Mr. Reynolds: I am informed by the Revenue Commissioners that they have been advised that they have not the power to extend the time imposed by the courts for payment of court fines in respect of revenue offences.
Mr. Noonan: (Limerick East): Is the Minister aware that the Revenue Commissioners frequently reduce the fines imposed and that if the fines are not paid by a designated date, they will not accept payment of the reduced amount and the fine reverts to the original amount, causing all sorts of problems, delays and extra costs to the offender and those administering the scheme?
Mr. Reynolds: The Revenue Commissioners have been advised that they have no function in extending the time for payment of fines or penalties imposed by the courts for revenue offences. Indeed, they have received legal advice to that effect. If they were to specify payment dates which differed from those imposed by the courts such action could prejudice subsequent enforcement action relating to the commital of offenders for non-payment of fines. The commissioners have power and discretion to mitigate fines or penalties incurred. Section 35 of the Inland Revenue (Regulations) Act, 1890 and section 512 of the Income Tax Act, 1967, confer this power  on the commissioners. The word “mitigate” in these legislative enactments means the power to reduce the severity of the sentence by a reduction of the amount of the fine or by a reduction in the length of a prison sentence and that is the best legal advice in relation to it.
Mr. G. Mitchell: asked the Minister for Finance the stage his Department are at in preparing a new format for the financial accounts of the State in order that these are more easily read by TDs, Senators and members of the public, in view of comments made on the layout of the accounts by the Committee of Public Accounts.
Mr. Reynolds: I understand that the Deputy raised the matter of the format of the annual finance accounts with the accounting officer of my Department at a meeting of the Committee of Public Accounts in February 1988 and that this is the subject of the Deputy's question.
The format of the finance accounts has been under review in order to make them more easily comprehensible and a start was made on this in the 1987 accounts with the inclusion of a new format for the account dealing with Exchequer receipts and expenditure and a new summary of the national debt statement. The review is continuing in consultation with the Comptroller and Auditor General; a working party of officials from his office and my Department have been set up for the purpose of making further presentational improvements in future accounts.
I would, of course, welcome any views Members of the House might have on the subject and I will convey them to the working party for consideration.
Miss Kennedy: asked the Minister for Finance, in relation to the regulations requiring travellers to remain outside the jurisdiction for 48 hours in order to qualify for full entitlement to carry goods into  the State, the number of prosecutions which have been initiated since the introduction of the regulations up to 31 December 1988.
Mr. Cullen: asked the Minister for Finance, in relation to the 48 hour rule in respect of persons carrying goods from Northern Ireland to the Republic, the number of seizures which occurred for breach of the rule in 1988; the number of prosecutions which were initiated; the number of prosecutions which were concluded; the number of persons who were convicted; and the total amount of fines imposed by the courts in respect of the regulations.
Mr. Reynolds: I propose to take Questions Nos. 17 and 31 together.
I am informed by the Revenue Commissioners that, while comprehensive statistics are not available, it is estimated that 118 seizures were made in 1988 on foot of the 48 hour rule from persons entering the State from Northern Ireland. There have been no prosecutions arising from the rule and consequently no convictions or fines.
It is quite clear that the 48 hour rule has virtually eliminated the serious distortion of trade that was occurring.
Mr. McDowell: Will the Minister agree that the fact that the Revenue Commissioners have made 118 seizures, that no prosecutions have commenced and no fines imposed, indicate the simple fact that the Government know that if they brought somebody to court the measure would be struck down at European level? That is why they are resorting to the strong arm tactic of seizing the goods but admitting quietly that they could not enforce the procedure by way of criminal proceedings because they could find themselves before the European Court within days.
Mr. Reynolds: The Revenue Commissioners — not the Government — decide whether there should be a prosecution.
Mr. McDowell: Will the Minister agree that the Revenue Commissioners have decided not to prosecute any of these cases because they know they would not succeed? They are resorting to seizure of goods because they know that criminal proceedings would invalidate the whole scheme as there would be an immediate appeal to the European Court.
An Ceann Comhairle: There has been an element of repetition.
Mr. Reynolds: The Deputy is not entitled to assume the reasons for the decisions of the Revenue Commissioners in prosecuting offenders. I am sure he will agree that the 48 hour rule has been extremely successful. Something in the region of goods worth £300 million were brought back to the South from the North by shoppers in 1986. The 48 hour rule has almost eliminated this distortion of trade and there have been many expressions of appreciation from traders whose businesses were badly depressed prior to the introduction of the 48 hour rule. As the Deputy is aware, the 48 hour rule will be taken to the European Court in due course and the Government will be defending it.
Mr. Barry: asked the Minister for Finance the number who left the public service in 1987 and 1988; the cost of same to the Exchequer in each of these years; and the pension costs to the Exchequer in 1989.
Mr. Reynolds: The information sought by the Deputy could not be obtained in the time available. If the Deputy wishes to put down the question again, I will be able to supply the information at that stage.
Mr. Noonan: (Limerick East): Will the Minister agree to supply the information to Deputy Barry and me when it becomes available without the necessity to put down a further question?
Mr. Reynolds: Yes. However, I should like the Deputy to be a little more specific regarding the information he requires. The question seeks information regarding the number who left the service in 1987 and 1988. This could relate to people who died or who have retired. If the Deputy will be more specific I will be delighted to give him the information.
Mr. Noonan: (Limerick East): I presume the Minister can break the information down into categories?
Mr. Reynolds: The Deputy wants every single item regarding those who left for whatever reasons?
Mr. Noonan: (Limerick East): Yes, because they all cost money if they had pension rights before they left.
Mr. Reynolds: If the question had been more specific I would have been able to answer it. For instance, if the Deputy had been referring to the voluntary redundancy/early retirement scheme, which I thought he might have been, 1,135 people left under that scheme in 1987 and approximately 7,500 more people left in 1988. Payments from the Exchequer in respect of employees who left the public service under this scheme amounted to £8.416 million in 1987 and £95.839 million in 1988. If the Deputy wants more information I will be only too glad to supply it without his having to put down a question.
Mr. Noonan: (Limerick East): If it is in order with the Minister I may contact somebody in his Department directly in order to get more specific information.
Mr. Reynolds: That is all right with me.
Mr. D. O'Malley: asked the Minister for Finance the steps the Government propose to take arising out of the decision of the High Court in a case (details supplied) and if he will make a statement on the implications of this case.
Mr. Reynolds: I have nothing to add to the statement on this matter made by the Taoiseach in responding to the Deputy during the debate following the budget on 25 January on financial resolutions under the Provisional Collection of Taxes Act, 1927. Further legal advice is awaited by the Government on the implications of the High Court decision concerning the Imposition of Duties Act, 1957, and the steps, if any, to be taken will be decided in the light of this.
Mr. McDowell: Apart from the 1927 Act completely and just dealing with the 1957 Act for the moment would the Minister agree that many of the difficulties which the judgment creates for the Government could be obviated if the actual rate of individual duties could be varied by statutory instrument? Would the Minister agree that legislation would be required if that is to be done and that the debate on the Finance Bill which is coming up is the time to do it rather than postpone the issue for another year and prevent the Minister from introducing mini-budgets when necessary?
Mr. Reynolds: With regard to the question of mini-budgets and making it easy for the Minister for Finance of the day to make regulations to vary duties in advance of the budget or throughout the year, I would not be prepared, until we get legal advice, to go on the record as saying what will be done. If I have clear legal grounds for doing so I will certainly consider moving in relation to the Finance Bill, 1989.
Mr. Enright: asked the Minister for Finance if his attention has been drawn to the present condition of the main exhibition hall in the National Museum, Dublin 2; when he anticipates that this exhibition hall will be reroofed in view of its present dangerous condition; and if he will give details of the plans he has for the restoration of this exhibition hall.
Mr. Spring: asked the Minister for Finance if he will outline the exact nature of the works being carried out by the Office of Public Works in the National Museum and the Natural History Museum; the total costs involved and the proportion of the cost being borne by the national lottery; if the Office of Public Works have any plans to carry out necessary refurbishment of the National Library; and if he will make a statement on the matter.
Minister of State at the Department of Finance (Mr. N. Treacy): I propose to take Questions Nos. 21 and 23 together.
I am aware of the present condition of the Central Court in the National Museum in Kildare Street. The roof over this area, while it is not dangerous as the Deputy states, is in need of extensive repair. It is proposed to commence the repair works later this year. The necessary planning is currently in progress. When the roof repairs are completed the Central Court will be redecorated and a carefully designed and co-ordinated exhibition with appropriate lighting and showcases will be mounted there. The complete renewal of the electrical wiring in the National Museum was completed at the beginning of last year. The cost of approximately £400,000 was met from the Vote for the Office of Public Works. Most of the exhibition galleries had to be closed to the public during the work in the interests of the safety of the public and for the protection of the artefacts.
An exhibition featuring materials recovered in the various excavations around Dublin especially the one in Wood Quay was opened in the aisle of the Central Court last August. The total cost of mounting that exhibition, including the cost of decoration and segregating the aisle from the wall of the Central Court, was in the region of £130,000 of which approximately 35 per cent was met from the national lottery.
Work on the redecoration of the 1916 room, the 1798 room, the Ceramics Room and the Chinese Room and on the installation of suitable lighting is well advanced. The total cost of these works  will be in the region of £150,000, of which approximately 25 per cent is being met from the national lottery funds. The preparation of the exhibitions in all of these galleries is also well advanced and they will reopen to the public within the next few months. Some improvements are being made in the Japanese Room and the Music Room at an estimated cost of approximately £20,000 — 50 per cent of the cost is being met from the national lottery. These galleries will also be reopened in the next few months.
An extensive outbreak of dry rot was discovered in the building. The necessary treatment work and consequent making good has been carried out. The cost was met from the Vote for the Office of Public Works. Planning is in progress for the repair of the roof over the Central Court and it is intended to undertake the work this year. The cost is estimated at £400,000 — 50 per cent of this will be met from the national lottery.
It is also intended to develop the Rotunda area to provide an improved and expanded museum shop and better visitor reception and information facilities. This work is estimated to cost £70,000 and will commence very soon. Fifty per cent of the cost will be met from the national lottery. Full regard will be had to the high architectural quality of the Rotunda in carrying out the work. Planning is well advanced for the improvement of the entrance approaches to the National Museum from Kildare Street. The proposed works will include the provision of an invalid ramp. They will cost approximately £15,000, of which 50 per cent will be provided from the national lottery funds. Planning is also in progress for the provision of improved conservation laboratories to serve all areas of the museum's activities. The first stage in this development will commence shortly at an estimated cost of £40,000 which is being met from museum funds.
The Natural History Museum is being electrically rewired at a cost of £86,000 approximately which is being met from the national lottery.
A new reception desk and cloakroom were provided in the National Library at  the end of last year. The building was completely electrically rewired in recent years. I have no further plans for the refurbishment of these premises.
An Ceann Comhairle: Deputy Tom Enright. I want to advise the Deputy that as the time allowed for questions is exhausted supplementaries of necessity must be brief.
Mr. Enright: Is the Minister aware that the roof of the main exhibition hall appears to be totally rotted, that a number of the metal straps have frayed and broken and that there is a danger that some of the roof will collapse? If the Minister is aware of these problems, will he state if he is taking expert advice on them? May I further ask the Minister if he is aware that the main exhibition hall in the National Museum is at present being used as a workroom and can he say the length of time he envisages this work will take? Finally, may I ask the Minister when the display units which had been used in this exhibition hall, for example, Irish antiquities, the art and industrial exhibition, the armoury section and the silver collection——
An Ceann Comhairle: I asked for brevity, please.
Mr. Enright: ——will be restored to the main exhibition hall?
Mr. N. Treacy: I am fully aware of the condition of the roof. I have inspected it along with my officials and, as I have said, remedial works are to be carried out. I am sure the Deputy will agree that the wide range of works I have outlined are long overdue and he must accept the fact that these works may create some inconvenience and the relocation of existing artefacts for a certain period. Major remedial works are being carried out and I expect they will be concluded this year.
An Ceann Comhairle: That concludes Questions, both priority and ordinary, for today.
The Taoiseach: It is proposed to take Nos. 6 and 7. It is also proposed that the Dáil shall sit later than 9 p.m. today and business shall be interrupted at 10.30 p.m. Private Member's Business shall be No. 33.
An Ceann Comhairle: Are the proposals for a late sitting today agreed? Agreed.
Mr. Spring: In relation to promised legislation, and I refer specifically to the legislation promised by the Minister for Finance in the budget with regard to anti-avoidance measures, may I ask the Taoiseach if the Government have decided at this stage what the operative date for those measures will be: will it be the day of the budget or the date the Finance Bill passes through this House?
The Taoiseach: I will deal with that matter tomorrow, but the date of the budget has been the practice for many years. If it is announced in the budget then it can be made retrospective to the budget by the Finance Act. I think the statement made by the Minister in his budget speech will be sufficient to cover anything we would wish to do.
An Ceann Comhairle: Deputy Noonan, (Limerick East), the same subject matter.
Mr. Noonan: (Limerick East): Prior to Christmas the Taoiseach promised legislation to reduce the rate of corporation tax for certain activities in the Custom House Dock to zero per cent or to eliminate it completely. This commitment was not repeated in the Budget Statement. Is it still the intention of the Government to reduce the rate for certain activities to zero and will this be introduced by way of the Finance Bill or by some other mechanism?
The Taoiseach: It is really a matter for the Minister for Industry and Commerce——
Mr. Noonan: (Limerick East): It is a financial matter.
The Taoiseach: ——but it is intended to proceed with the legislation.
Mr. Noonan: (Limerick East): This was promised before Christmas. It would be normal that this kind of commitment would be reaffirmed in the Budget Statement. It was not. It is a financial matter. The Minister for Finance is responsible for revenue under the Constitution. It is not the Minister for Industry and Commerce, so what is the position?
The Taoiseach: The position is that the provision will be proceeded with as promised.
Mr. Noonan: (Limerick East): May I ask what statutory vehicle will be used? Will it be the Finance Bill or a separate Finance Bill?
The Taoiseach: That will be decided.
Mr. Noonan: (Limerick East): Has this become an embarrassment? Should I sit down? Am I embarrassing the Taoiseach?
An Ceann Comhairle: We have passed  from Question Time. This is not Question Time.
The Taoiseach: The Deputy has a great capacity for making mountains out of molehills.
The Taoiseach: The Government have already taken a decision and announced the decision, and the Deputy can be assured it will be enacted in the appropriate legislation.
Mr. Noonan: (Limerick East): The Taoiseach's molehills frequently turn into mountains when we explore them. We have had that experience. We want to get to the bottom of this. He is right to move off it. He is ruining his reputation. He is right to pass the ball. It is a good idea——
Mr. Desmond: With the Sugar Company, Larry Goodman and zero rating for the dock site you are home and dried——
Mr. S. Barrett: In relation to the Dún Laoghaire Harbour Review Group report which was commissioned by the Taoiseach, what is the status of that report and will we have an opportunity of debating it in the Dáil——
An Ceann Comhairle: That is hardly relevant now. Could we put down a question on that matter?
Mr. S. Barrett: ——before any development takes place at the harbour? Could we have an indication of whether a debate will take place?
An Ceann Comhairle: It is clearly out of order, Deputy Barrett, and you know that.
Mr. S. Barrett: It is not. This was a commitment given by the Taoiseach that he would set up this review group.
Mr. McCartan: Sir, with your permission, I seek to raise on the Adjournment the closure of a company at Clonshaugh Industrial Estate, Toho (Ireland) Company Limited, on Friday last with a loss of 36 jobs, in the absence of any response or comment from the Minister for Industry and Commerce and the need for some programme of job replacement for the jobs lost and, indeed, for many people who are unemployed in the Coolock area.
An Ceann Comhairle: I will communicate with the Deputy.
Mr. Spring: I seek permission, Sir, to raise on the Adjournment the pending closure of the Sugar Company in Thurles.
An Ceann Comhairle: I will communicate with the Deputy.
Mr. Griffin: In County Tipperary this January will be recorded as black January from an employment point of view. With your permission, I wish to raise on the Adjournment the unemployment issues in both North and South Tipperary with specific reference to Tipperary town.
An Ceann Comhairle: I will be in touch with the Deputy on these matters.
Miss Colley: In the light of the legislative requirement for a report and review of the extradition procedures between this country and Britain and the Minister for Justice's repeated commitment to this House that such a report would be prepared as soon as possible after the beginning of the New Year, why does this not figure in the legislative programme for the Government which has been circulated?
The Taoiseach: It is not legislation; it is only a report.
Miss Colley: When does the Taoiseach envisage time may be made available for such a report?
The Taoiseach: Fairly soon, within the next month or so.
Mr. Yates: Is the Taoiseach aware of the difficulties arising in the dental service out of the dentists withdrawing from today from the PRSI treatment benefit scheme? Will he allow Government time to bring forward any proposals the Government might have to resolve this problem?
Mr. Spring: There are no proposals.
An Ceann Comhairle: It might be a matter for the Whips.
Mr. Yates: I would like to raise this matter on the Adjournment.
An Ceann Comhairle: I will communicate with the Deputy.
Mr. S. Barrett: When is it proposed to introduce the necessary legislation to transfer responsibility for the management and control of Dún Laoghaire Harbour from the OPW to the Department of the Marine?
An Ceann Comhairle: Is legislation promised in this area?
The Taoiseach: I am not sure if legislation is needed on that. It may be done by an order, but I will let the Deputy know.
Debate resumed on the following motion:
That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.
—(Minister for Finance.)
An Ceann Comhairle: Deputy Jim Higgins is in possession. The Deputy has seven minutes left of the time allowed to him.
Mr. J. Higgins: The week just past has seen much of the lustre that seemed to surround and embellish the budget disappear. Now as various facets of the budget come under closer scrutiny and analysis and as the microscope is applied to them much of the verbiage is being stripped down, a great deal of the reality is beginning to sink home and many of the pressure groups who thought they had been generously bestowed with additional cash in the budget find it is a case of the swings and roundabouts, the gains and the losses, and that at the end of the day it is very much even Stephen. Despite the fact that the Government claim they have made considerable inroads in getting the key components of the economy right and that our stabilisation of the GNP-debt ratio etc. will eventually cause the rising tide to lift all boats, it is obvious there is no deadline, no target, and the light is still very far down the tunnel, if visible at all.
It is very much a case of the Minister producing a medical report that the patient is still very sick but the doctor, unfortunately, has gone away. As our spokesman for Finance said in his very fine budget reply, if ever a Government missed a golden opportunity, it was this Administration. They failed to take advantage of the consensus. They failed to cash in on the amnesty in relation to the handling of the economy and they failed to carry out many of the structural changes that would be and are necessary if we really are to get the show on the road again.
We are given to understand that there has been a radical reform of taxation. There is a consensus on all sides of the House that taxation is the greatest single inhibiting factor to economic growth. We have had no reform of taxation. We have had a traditional taxation budget; in other words, we have tinkered around with the various bands — reducing the 58p band to 56p, broadening the 35p band — and  that is about the extent of it. In relation to removing the real deterrent factor in the budget itself, which is generally acknowledged as being an inhibiting factor to economic growth, nothing substantially has happened.
The reform of local authorities or the powers devolved in them, centres still very much around whether we are to have refuse labels, refuse bags or refuse bins. There is no real devolution of power, no real giving of fund-raising or finance-raising powers to local authorities. They are, by and large, being strangled by whatever bit of local autonomy they have.
In relation to creating jobs in the economy, we are left with the Programme for National Recovery which is very much a paper exercise. In terms of the counting of the heads the heads are not there. We have broad general assertions in relation to tourism, industry and commerce, service areas and so on but tangible jobs which call for itemisation are not there. The social employment scheme introduced by the last Government had a lot to commend itself. It topped up the dole and assumed that because a person was registering for unemployment benefit he was available for and capable of work and genuinely seeking it. It was our suggestion that an additional £20 should be put into that person's hand, that he be given a pick or shovel or a scheme to work on so as to restore the dignity of employment to that person. We did not want people to lose the will to work. However, there was been a cutback on that scheme.
Let us look at the components of the economy. Our trade surplus is at a record level. The lastest figures issued by the Central Statistics Office show that for the 12 months, January to December 1987, there was a surplus of £1,568 million and for the 12 months, January to December 1988, there was a surplus of £2,090 million, a very commendable performance. However, there is no buzz, no economic activity, no job fall-out or real economic achievement. We measure real economic achievement in the following way: (1) job  creation and (2) the cutting down or the phasing out of emigration. The national scene is in chaos. Let us look at the education system as a result of the savage cutbacks in the last 12 months. At primary level, as a result of the infamous circular 87/20, schools throughout the country have lost teachers. There is a further threat of a diminution in the pupil — teacher ratio. In second level education, an area that we thought sacrosanct, for the first time there is rationalisation, redeployment and people being moved from one town to another at considerable cost. Every time a teacher is moved it invariably means that a subject is dropped in his or her former school. As we approach 1992 it is a sad indictment of our priorities that in certain schools in the west French and German has had to be dropped. In fact, some schools have been unable to offer a full range of continental languages. Fees for third level colleges have escalated to such an extent that they are outside the range of the vast majority of middle income families.
We have had a litany of broken promises in regard to education. The plans for regional technical colleges for Thurles and Castlebar have been scrapped. The health services are in chaos. People have to be accommodated in corridors in hospitals. A patient admitted to the general hospital in Castlebar on 22 November was told that there would be no X-ray facility available before 8 December. She has since died. Morale is at an all-time low in the Army. The ebb and flow in regard to Army pay is causing members to buy themselves out in advance of the embargo announced by the Minister for Defence. The same applies to the Garda Siochána. The Minister for the Marine proposes to erect jetties and marinas throughout the country but the big single factor that is vital if we are to improve tourism in the west, the rod angling dispute, has not been dealt with by him. It looks as if we are in for another stalemate, another confrontation and another year of unwelcome notices for foreign tourists on the rivers and lakes of Ireland.
 The tourism figures released recently reveal that there has been a net loss in that more people spend time and money outside the country than are catered for here. When the Minister for Industry and Commerce announces a job package there is a major hullabaloo but none of them has been for more than 500 jobs. God be with the days when, under a former administration a Minister for Industry and Commerce on returning from a visit to the United States would announce a package of 5,000 or 6,000 jobs. That is an indication of the slump in our ambitions for industrial growth.
I accept that communications are vital if we are to attract industries and promote Ireland as an industrial base, but Telecom Éireann are not working efficiently. By and large the performance of Telecom Éireann, compared to that of their predecessor, the much maligned Department of Posts and Telegraphs, has not been successful. Our telecommunications system is not as good as that of other countries. God be with the days when a letter posted in the town of Westport would reach the GPO in Dublin the following day but now, although we have had mechanisation and speedier means of conveyance, it takes two, and possibly three days for a letter from the west to reach its destination in Dublin. We are not the thriving, booming economy that some people would have us believe. We are not on the road to recovery. We have made very modest progress but it is very tenuous. It is so tenuous that a variation in interest rates on the international scene, or a bad harvest, could blow the ship of State off course. It has not been a good budget.
Minister for Industry and Commerce (Mr. R. Burke): The 1989 budget is a further step in the measures which the Government have been taking to rectify the financial situation of the country and put it on the road to recovery. It tackles all of the problems which face the country, the imbalance in the public finances and the root causes of unemployment, emigration and poverty. It is firmly in  line with the Programme for National Recovery, the framework within which the Government and the social partners are working together on the measures needed for development.
There is now a widespread recognition that a major transformation of the Irish economy has occurred. Two years ago this country faced an economic crisis. We knew that things could not continue on the same downward slope of the previous four years. What was needed was an integrated and practical programme of economic recovery which would have widespread support. We had no false illusions that there were simplistic answers to economic problems that were deeprooted and serious but we knew that solutions had to be found within a comprehensive framework. We recognised that any programme of recovery would have to encompass five main elements and that progress would have to be made on each element.
The first essential requirement was to bring public expenditure under control by reducing it to a level consistent with the capacity of the economy to pay for it through reasonable levels of taxation and prudent levels of borrowing; secondly, we needed to create an investment environment which would encourage and promote increased investment and the achievement of improved competitiveness by the business sector leading to job creation; thirdly, we recognised that there was a major need to reform the taxation system to make it more equitable, more efficient and more widely-based; fourthly, new policies were required to support employment creating development initiatives in different sectors of the economy; and fifthly, there was a need to achieve a greater degree of social equity in society; the creation of employment opportunities and taxation reform were important components in achieving that end.
The sum total of these measures was to restore the country to the path of wealth creation with much better prospects of sustainable jobs for more of our people.
While the Government had a clear view of the areas where action needed to  be taken to achieve economic recovery we also recognised that the precise nature of the action to be taken could take a number of forms. We saw the vital importance of achieving widespread support throughout all sections of the community for decisive action to stop the downward slide into economic anarchy and to release again the potential for significant growth and development that existed throughout the economy. We knew that the action that needed to be taken would require sacrifice and understanding on the part of many sections of our people but the Government were determined to ensure that the burden of adjustment did not fall unduly on those least able to bear it. We, therefore, worked closely with the social partners to draw up a comprehensive national recovery programme drawing on the combined knowledge of Government, the public service, employer and worker representatives to produce a pragmatic and realistic blueprint for development.
The recovery programme has now been in operation for a little over a year. Already we are beginning to see worthwhile results: in 1988 inflation was down to a rate of just over 2 per cent on average — the lowest level for over 25 years and less than half that of the UK; prime overdraft interest rates are down by up to six percentage points since March of 1987. They are now some 5-6 percentage points below equivalent rates in the UK; an Exchequer borrowing requirement of 8.2 per cent of GNP was set in the 1988 Budget. The 1989 Budget sets a figure of 5.3 per cent of GNP — well within the targets set in the Programme for National Recovery; output in manufacturing industry was up by 11½ per cent in 1987 and I expect a similar two digit level of increase in 1988; the turnaround in trading performance of the economy has been spectacular; in 1987 we had a surplus on the current account of the balance of payments for the first time in 20 years; and in 1988 this surplus doubled; the improvement enabled the Government to repay over £440 million of foreign debt during 1988;
 The significant reductions in Government borrowing and in inflation and the turnaround in trading performance have been important factors in maintaining the downward pressure on interest rates. Competitive interest rates are crucial to the increase in employment and living standards which are the key ultimate objectives of Government policies. The improvement in economic performance has also contributed significantly to the actual and projected stability of the Irish pound within the EMS which has reduced a significant area of uncertainty in business planning for Irish firms engaged in internationally traded operations.
The turnaround in the investment climate is now beginning to come through in terms of employment creation. The year to mid-April last saw the first increase since 1980 in the total number of people employed in the Irish economy. The increase recorded in the CSO's Labour Force Survey is the most encouraging sign yet that the Programme for National Recovery is beginning to have the impact sought by all the social partners. Some may consider that the level of increase relative to our needs is small. The crucial fact, however, is that the haemorrhage of falling employment has been halted and turned about. In the industrial sector we achieved last year the target of 20,000 additional gross jobs per year set in the Programme for National Recovery. The growth of the small industry sector has been particularly impressive with the number of new start ups — more than 500 over the past year — breaking all previous records. This is a clear indication of widespread confidence by the business sector in the future economic prospects of this country.
I am confident that in 1989 we will again achieve 20,000 new jobs in industry and international services and that, as a result of the measures taken in the budget, we will have an even higher net outturn for industrial employment this year. In this, we will be running against the international trend. There are very few countries internationally where direct employment in manufacturing is  increasing. This is due mainly to industrial restructuring and new technology. It is particularly gratifying, therefore, to see the current performance of industry in Ireland in this positive way.
In considering industry's contribution to job creation, we cannot simply look at the direct jobs provided in industry itself. We need to look beyond that to the jobs and wealth created indirectly in the wider economy. More than £9,000 million is now spent in Ireland by industry each year on wages und salaries, the purchase of Irish goods and services and raw materials. This level of spending demonstrates the important interaction between industry and other sectors of the Irish economy. It shows that, in addition to the 208,000 factory jobs the manufacturing sector now sustains some 150,000 non-manufacturing jobs in the economy. We saw some practical evidence of this in the 1988 Labour Force Survey which showed an extra 10,000 employed in the services sector over the previous year.
The progress which has been made to date, although significant, is nothing like enough to meet our needs. A great deal more need to be done. We need more sound, sustainable jobs so that all our people can live here with reasonable prospects for themselves and their children.
For this reason, we remain firmly committed to the goal of developing a strong internatinally competitive industrial sector which maximises its contribution to employment growth and higher living standards in Ireland. We must position Irish industry to face the increased challenges that will arise with the completion of the internal market. This will demand a continuing improvement in the competitiveness of the economy and strengthening and expansion of its productive capacity. This is what the additional capital spending announced in the budget will do, with the further support to be drawn from the EC Structural Funds.
The measures already announced, and the further elements to be included for future years in the national plan now  being finalised, will address the needs of the industrial and other productive sectors, and our infrastructural requirements. The improvement of our roads network and the strengthening of our external trade links have been identified as key elements in overcoming cost penalties arising from our island location. These aspects will feature largely in the national plan.
We are now dealing with a new vigour with all the areas of potential for growth and development. This extends right across the economy: industry and services, agriculture and food, fishing and forestry, tourism and leisure, rural and urban.
In the areas in which I am most directly involved, the various aspects of industrial and services development, the various State agencies are now working with clearly focused objectives. Jobs are the priority and the key areas for growth are being strategically addressed. Small industry, for example, is now being supported by simpler employment related grant schemes which minimise bureaucracy and maximise productive output. As a result, the IDA small industries programme broke all records in 1988 in terms of start ups, over ten per week. The positive outlook for this sector is reflected also in the optimism displayed in CII/Small Firms Association surveys.
The scope for building on progress to date is being strengthened by making use of Community enterprise initiatives, business innovation centres and new steps such as the mentor, patron and academic support programmes launched by the IDA in recent months.
Small industry offers the possibility of creating new jobs quickly, frequently in response to short term growth in demand of the sort which can follow from the positive measures announced in last week's budget.
Industrial incentives for indigenous firms generally are increasingly being targeted to deal with key business weaknesses in management, marketing, product development and technology. Programmes such as company development and linkage are regularly refined to  generate the optimum return from market opportunities.
There has been a wide recognition that the most substantial part of the growth of industry in the past two decades has come from overseas companies locating here. Happily there are now clear signs that this imbalance is being corrected. Substantial developments are coming forward from indigenous companies. These arise in food, for example, where we must have considerable natural advantages, and also across a range of other sectors. As a result, we can expect the downward trend of jobs in this sector over the past decade to be reversed.
The Government have taken the necessary steps to create the right conditions for profitable investment here. I am particularly keen to see more developments taking place in Ireland by Irish companies, and it is for this reason that I held a special forum yesterday with the leaders of 33 of Ireland's most prestigious businesses to encourage a major push by them for new projects to create wealth and employment in Ireland. We had a very useful exchange of views, and as a follow-up, the IDA and SFADCo will be in contact with each company, and will report back to me on developments, before the end of March.
Our future wealth and prosperity will depend most of all on what we can do for ourselves. That is why we want Irish industry to invest in Ireland. But we will also continue to seek out overseas industry to create wealth and employment because that is of mutual benefit to overseas companies and to us. We offer particular attractions to American and Far Eastern investors seeking a base in Europe in preparation for 1992. I have already been able to announce this year a number of important new projects which will be located here. I am confident that a number of other substantial negotiations will be successfully concluded before long.
In our search for overseas investments the State agencies are careful to seek out those which are likely to prove of lasting benefit to us. We concentrate on sectors showing significant growth, offering as  full as possible a range of business functions and with possibilities for developing worthwhile linkages here. That approach can continue to pay increasing dividends to us as it increases our industrial output and exports, the consumption of Irish supplies and sevices and strengthens our management, technological and other business capabilities.
We must hold and take advantage of the new business confidence now apparent. In this context there is one announcement in the budget with which I am especially pleased. This is the special allocation of £3.5 million to upgrade the industrial infrastructure and to promote industrial development in the Tallaght area. Tallaght, with a population of over 70,000 people, suffers from one of the highest rates of unemployment in the country. A special effort is needed to make some headway in dealing with the problem. For this reason I am allocating £3.5 million to the IDA for the upgrading and development of industrial property in the area, the construction of a 40,000 square foot special advance factory and the building and development of an enterprise centre in the Whitestown Industrial Estate. This will be additional expenditure which will give rise to construction jobs this year and provide essential facilities to attract significant new industrial projects to Tallaght in subsequent years.
We are also making additional provision in the budget for an increased allocation to CTT to enable them to improve their support services to, and upgrade the marketing capacity of, Irish companies with good export prospects in the lead-up to the completion of the internal market by 1992.
One of the most exciting aspects of my Department's work in the last few years has been the development of the new science and technology programme. The Government have decided to make substantial further investments in science and technology in 1989. This year will see the commencement of a number of major new programmes.
 One of these is the optoelectronics programme. Optoelectronics is fast becoming indispensible to all aspects of communications from telephones to cable TV. This new technology has an estimated world market of £6 billion and is growing at 20 per cent per annum. Other new programmes which will be developed this year include a national programme for the mouldmaking industry and a technology development programme in SMEs.
Turning now to Structural Funds, the Government intend to make a further £5 million available in 1989 for capital expenditure programmes in science and technology infrastructure. This additional money will be used to strengthen the technological infrastructure for industry.
A number of sites and proposals are under examination in relation to the development of a science park at a central location in Dublin. The objective is to promote industrial development by linking high-tech industry to the expertise and facilities available at third-level institutions and ultimately to create a whole new community of advanced industries in Dublin, with a significant spin-off of new products, processes and manufacturing facilities and employment opportunities for graduates of higher education institutions and for workers at technician and services level.
Deputies will be aware that the capital allocation for Bord Telecom Eireann for 1989 is £160 million, compared with an outturn of £135 million in 1988. The increased allocation will not be a drain on the Exchequer as the investment programme will be funded entirely by the company from their own resources. In addition, grants of over £6 million from the EC STAR Programme will be available. It is expected that a number of BTE's investment projects will qualify for substantial assistance under the European Structural Funds.
Telecom Eireann's investment proposals for the current year contain two major additions to those of last year. There will be a substantial investment of  £20 million in the private trans-Atlantic optic fibre telephone cable and an extra £10 million is allocated to deal with the problem of “long lines”, i.e. connections mainly along the western seaboard requiring more than 0.5 km. of new pole route and the problem of inadequate cabling in the Dublin area.
Investment in the private trans-Atlantic telephone cable will provide Telecom Eireann with 630 telephone voice channels to and from the US and to and from the UK and Europe. As no existing trans-Atlantic cable lands in Ireland, this investment represents great potential for new business opportunities for the company and will be of particular significance in the development of the Financial Services Centre. It is expected that the trans-Atlantic cable will be commissioned in 1989.
Telecom Éireann also own 1 per cent of two new trans-Atlantic cables which will land in Cornwall, in England. These new developments, together with the provision of optical fibre cable links between Ireland and the UK and, internally, between the main population centres of Ireland, ensures that Ireland's telecommunications network is firmly placed among the leaders. The remainder of the programme relates to provisions for expected growth, necessary replacements and essential improvements to system security in basic services along with provisions for accelerated development of advanced data and mobile communications systems.
Ireland now has a fully automatic telephone system of 750,000 subscribers who can dial direct to over 84 countries worldwide and, with operator assistance, to over 120 more. Telecom Éireann are continually striving to further improve both the technical quality and the reliability of the network. Nearly 50 per cent of customers are attached to digital exchanges. The average waiting length for service has improved to 3.3 months from date of application and telephone connections in the west and North-west of the country increased by 40 per cent. The company's target of not more than 3 per cent failure rate for trunk calls was  achieved and the target of not more than 2 per cent failure rate for local calls was well surpassed at a failure rate of 1.2 per cent.
I was particularly pleased that in addition to returning a profit of £17 million for the year ended 31 March, 1988, the company repaid, ahead of schedule, part of their indebtedness to the Exchequer. Current trends indicate the company will return an even greater profit in the year ended 31 March, 1989. The Board should be congratulated for the manner in which they have achieved a turn around in the telecommunications operations here.
Turning to broadcasting matters I am glad to be able to report significant progress since this time last year. Two very important pieces of legislation have successfully been steered through this House. Already we are seeing the hectic activity which has been generated as a consequence.
The Independent Radio and Television Commission are to be congratulated on the speed with which they have set about their task. The Commission have not allowed any grass to grow under their feet and I am delighted by their business-like and professional approach to the task in hand. The enactment of the legislation and the activities of the commission have released a surge of energy throughout the country. The interest shown by the general public in the developments suggest that an audience is there waiting for the new services to commence.
The successful applicant for the national radio service has already been chosen by the commission. I understand that the parties involved are now down to discussing the details of the contract. In this case there were four very professionally prepared applications and newspaper reports of the public hearing suggest that the contest was very competitive and that there was little to choose between them. I have heard a commencement date of early summer for this service and I hope that this can be achieved.
In the case of the local stations the commission have released the names of  the 85 applicants for the 25 service areas. The commission are currently lining up public hearings to help them make decisions about the successful applicants. Again the big numbers of groups chasing franchises is heartening. I have no doubt that the quality of the proposals by the majority of the applicants will be of a high standard.
It is also heartening that many of the applicants for franchises have no past connections with illegal broadcasters. I believe that the fact that so many people, not connected with pirate operations, have come forward justifies the stand taken by the Government in closing down pirate stations at the end of last year. The Government took action and were seen to take action against illegal stations. I am satisfied that this gave many people the confidence to come forward with applications that they might not have submitted otherwise.
If the Commission continue their work with the speed with which they have commended, I would be hopeful of the first local stations being on air before long.
We must not forget also that side by side with all this activity on the radio side the commission have sought applicants for a television programme service. I understand that there are two very strong applications before the commission for this service.
Indeed it has been quite a hectic 12 months for broadcasting in this country. The next 12 months should see the hard work put in by the Oireachtas and by the new commission come to fruition. I look forward, with some justification, to a varied and competitive broadcasting scene in this country in the not too distant future. Diverse sources of news and current affairs will be available to the listener and viewer for the first time. I believe that this can only stimulate healthy interest in public affairs. The chaotic situation on the airwaves which is now thankfully a thing of the past will be replaced by a vibrant, competitive and healthy broadcasting environment.
An important consequence of these broadcasting developments is the fact that secure full-time employment will be  on offer to many of our young people. I have said before that I expect that up to 600 jobs will be created by the new services. I remain confident that the target can be achieved and may even be exceeded with spin-off jobs being created in the whole audio-visual area. Indeed I am convinced that the new broadcasting environment will pave the way for a major expansion of opportunities for Irish producers, directors, writers and performers.
An allocation of £9 million has been provided in the 1989 Public Capital Programme for An Post, as compared with an outturn of £8.2 million in 1988. The 1989 allocation will be spent on the company's building programme, fleet replacement and provision of items of equipment and machinery. There will be no draw on the Exchequer as An Post will provide the necessary funds from their own resources, borrowing and an EC grant of £0.45 million. In the period 1984 to 1987 An Post had made satisfactory progress and achieved improved financial results each year. While mail volumes grew they did not reach the expected levels. In addition pay costs were higher than anticipated. It is too early yet to indicate the financial outturn for 1988. There was no increase in postage charges last year. Those charges have remained unchanged since March 1986 which means that there has been a reduction in real terms in the level of postage charges.
During 1988 An Post gave a high priority to the introduction of measures to resolve the serious problems of the parcels service which has been a substantial loss-maker. The company have now launched a recovery plan for that service and new premises for a central parcels office to handle that traffic have been acquired.
Another area in which An Post have been particularly active is in a study of public electronic mail services. The company have received approval for grant assistance under the EC STAR Programme for the initial development phase of an electronic mail service. I hope  to issue the necessary licences to An Post very shortly.
During 1988 An Post made major changes in the systems of mail handling in order to alter out-of-date practices. These changes were introduced side by side with a productivity scheme which resulted in pay increases for mail staff.
In implementing the new systems certain problems arose which resulted in a downturn in the speed of mail deliveries. These were exacerbated in late September/October when the end of the UK postal strike resulted in the receipt of 8,000,000 items of a mail backlog which delayed the processing of normal mails. Again in early January of this year there was a major problem in the mail which was due to serious absenteeism in the post-Christmas period.
I have indicated to An Post that I am very concerned at the deterioration in the quality of service. An Post share my concern in this area and are taking steps to improve the situation. The company monitor the delivery standards by means of internal checking procedures and independent surveys. Recently An Post launched a restructured survey system. A market research agency are carrying out quarterly surveys, the results of which are being published.
The first survey, carried out in November 1988, showed that overall An Post achieved a next day delivery rate of 82 per cent for letter mail. Neither I nor An Post regard this level of performance as satisfactory. The House can be assured that I will continue to press for greater efficiency as nobody can be satisfied with the current level of delivery. In this regard, An Post have indicated that they do expect to improve their prformance significantly in the current year.
The continued success of the national lottery is evidence of An Post's expertise and capacity in the provision of agency services. In the collection of television licence fees An Post's record in recent years has also been satisfactory. The company continue to seek out new agencies in both the public and private sectors.
The Government have clearly demonstrated over the past 18 months their  capacity to manage the affairs of our country with competence and flair. We are entering a new period of opportunity and change and the foundations for success have been well laid over the past 18 months. We have started to make modest inroads into the unemployment problem and are committed to make further progress in this area. As a trading nation exporting over three quarters of what we produce the Single European Market will provide significant new opportunities for those firms who are competitive and well prepared. The information and awareness campaign conducted by the Government on 1992 has meant that the business sector are well informed on the changes coming into place, on their implications and on the measures firms will have to take to avail of the new opportunities which are already arising. I believe that the transformation achieved in business confidence in this country over the past 18 months, the concrete progress made in dealing with our economic problems and opportunities arising from the Single European Market will together give rise over the next ten years to a major step forward in economic and social progress in this country. The 1989 budget will give a further impetus to the confidence of investors in the Irish economy, leading to job creation which is what we all want to see. Our aim as a Government is to ensure that those who wish to stay at home and have a job here can do so. With that, a Leas-Cheann Comhairle, I thank you.
Tomás Mac Giolla: That was quite an impressive speech by the Minister and quite an impressive outline of the great performance of the Government to date.
Of course the Minister did not follow up by telling us what he was told by the captains of industry whom he called together the other day. The last Government maintained, as do this Government although they do not say so quite so clearly, that it is not the job of Government to create jobs but to create the climate and that then private industry will create the jobs. The Minister has been talking about the great climate that has  been created. The climate is there but the jobs have not turned up.
The Minister said that the target of 20,000 additional gross jobs per year has been achieved. It is interesting that he uses the word “additional” because it is very hard to know what exactly the programme intended. I understood it to mean additional jobs over and above job losses. The phrase normally used now is “new jobs”, not “additional jobs”. The Minister says 20,000 “additional” jobs have been created. This is not the case at all because when the job losses are taken into account it is reduced to about 3,000 or 4,000 extra jobs in the manufacturing area.
What the captains of industry said to the Minister was precisely what the Government said. It was said on television that their job is to manufacture a product or to provide a service, that they are not in the business of creating jobs but that if jobs come along in the course of what they are doing that is fair enough. They are there to provide a service and manufacture a product. So it seems it is not the Government's responsibility to create jobs and it is not the responsibility of the private sector to create jobs, and I am sure that is what they told the Minister.
The Minister's statement outlines clearly what he meant. The Minister said that output in manufacturing industry was up by 11½ per cent in 1987 and the he expected a similar two digit level of increase in 1988. We may ask why, with manufacturing industry achieving that magnificent output, with fewer jobs and lower pay, they would be in the business of creating jobs? Obviously they are not in the business of creating jobs; they are in the business of making profit, and unless the Minister and this Government and the Taoiseach understand that, there is no way they can provide the jobs for the 240,000 or so people who are unemployed and for the additional 35,000 to 40,000 people who are leaving our country every year. It is the job of Government to create jobs, to provide work for people who have the right to work. All citizens have a right to work and it is up  to the Government to ensure that they can do that as is done in other countries, for example, Sweden and Norway; the Governments there ensure that jobs are provided. That is what government is all about. That is what the taxation system and every Act of legislation is about.
The Minister for Finance, in his budget, did the very minimum he could do and get away with. He had to appear to act on the question of poverty because of the great campaign that was carried out for a couple of months before the budget on the issue of poverty in our society. The issue of the inequity of the taxation system and the need to do something about that has been with us for a long time. The third area where the Minister had to appear to be doing something was the area of jobs.
Let me deal with those three areas of poverty, tax and jobs. I suppose they are the key areas on which the citizens of this country expect the Government to act and on which they should act.
The increases in social welfare of 3 per cent, just in line with inflation, are not adequate given the level of poverty, and we have been clearly shown the level of poverty that exists. Increasing social welfare in line with inflation would be fine if the existing basic levels of social welfare were adequate and satisfactory, but they are not. Keeping the levels of social welfare in line with inflation is simply keeping the level of poverty at the disastrous level at which it is. The fact that this increase of 3 per cent might put some people into a different bracket as regards, say, differential rent, means that most of the 3 per cent increase could be clawed back. The additional increase for the long-term unemployed was very welcome but let us look at what it does. A single man or woman will get an extra £5 a week; that will allow them to have, say, meat for Sunday dinner, something which they may not have had for a number of years now but they are still 80 per cent short of the amount that the Commission on Social Welfare identified back in 1985, four years ago, as the basic minimum necessary. No real step has been taken  by the Minister in regard to the long-term unemployed, and everybody should know the effects of the constant level of poverty on these people, whether single or married, because each year they are poorer. They cannot live on their income. They have had to sell various articles in their houses since they became unemployed three, four, five or even six years ago. Each year they have less to sell and each year they are poorer.
The Minister for Social Welfare is very proud of his actions against fraud in the social welfare system. He placed great emphasis on the effective management of the resources devoted to social welfare. He introduced a range of management and control of activities to eliminate fraud and to prevent abuse of schemes. This is something he was delighted with and he had saved the Government millions of pounds in what he called action against fraud. The Minister is only beginning to deal with the real fraud. The only real area of fraud that exists in social welfare is that with which he is now dealing, that is, the fraud of employers who drive people to the labour exchange to draw their dole, bring them back to work and pay them their wages, less the amount they received on the dole. These fraudulent employers are ripping off the social welfare system and their employees by paying them low wages and getting them to draw the dole to make up the full amount. It was only now that the Minister is dealing with the real fraud.
What has the Minister been dealing with for the last couple of years with the setting up of the new external control unit and the joint investigation unit? He has been dealing with families earning £60, £65 or £70 a week. Families cannot live on those amounts. They cannot provide sufficient food and clothes for their children or meet the various demands their children make for school items. The husband or the wife has to go out and do some job for £10, £20 or £25 to feed their families and to survive. The external control unit and joint investigation unit go around harassing people who are trying to earn a couple of pounds for their families. Those investigators stand in the  labour exchanges and watch how the people coming in are dressed. If today a person is well dressed or has a new coat he is approached and asked how he could afford the new clothes. These people at the labour exchanges are being harassed. The investigators tell them they are not looking for work and they ask young people why they are not working. We all know why they are not working; they cannot get a job. Yet they are being harassed at labour exchanges by public servants, people whose wages are paid by the public who pay taxes. They are treating the unemployed like dirt. They try to get into people's houses to see what they have. People come to me and ask if they are entitled to refuse entry to these people and I tell them they are and that they should tell those people to get a search warrant.
I know a family who have never taken a drink and who never go out for entertainment. Any penny they ever had is put into improving their house. They have a beautiful house but they are being harassed and asked where they got the money to do that work. It is often forgotten that people worked for 20 or 30 years before they were let go from their jobs and they are now being harassed because they are unemployed. The special external control unit and joint investigation unit were set up specially to harass the unemployed about what they call fraud.
One has only to think of the enormous fraud in the taxation area, as was proved when £500 million was received in one or two nights, stuffed through the letter boxes, to save a few more millions in interest rates. That £500 million was only the tip of the iceberg. A whole series of investigation units that were operated by the Revenue Commissioners have been closed down because of embargoes on employment in the public sector, but new units have been set up to deal with the long term unemployed, for whom this Minister for Finance said he did something wonderful.
The area of poverty and social welfare has not been addressed by the Government. I do not know if they are aware of  what happens at unemployment exchanges, how the unemployed are treated or how they live. People often ask how do families manage on £70 or £80 a week. The only way they can manage is by getting a “nixer” and in that way put food on the table or buy shoes or clothes for the children. They should be allowed to do that work because it is their duty to provide for families but they are being prevented from doing so.
In the area of taxation, the Minister has done the very minimum to appear to be keeping up a tax reform line. Tax reform has never been tackled by any Minister. The present Minister has tinkered with the tax bands in the same way as the last Minister. He has given a higher reduction of tax to those in the highest income bracket and a lower reduction to those in the lower income bracket. The obvious thing to do when dealing with poverty and unemployment is to raise the threshold. It is unbelievable that people earning £3,000 a year are put in a tax bracket. How could a person live on £3,000 a year? That is a poverty level yet those people have to pay tax on every pound earned above £3,000. That area has not been dealt with. The Minister has reduced the 58 per cent tax rate to 56 per cent. In 1976-77 the highest tax rate was 77 per cent and that rate has been reduced to 56 per cent. The richest people in society get the greatest relief, whether it is the Michael Smurfits or the O'Reillys. These people do not need tax relief, but they know so many ways of evading tax that when we tax them it should be at the highest rate possible.
The decrease in the tax rate from 35 per cent to 33 per cent, while welcome, is also applied to non-earned income such as bank interest, the DIRT tax, and the professional fees covered by withholding tax. There is no need whatever for such tax relief. Surely the intention in reducing the 35 per cent to 33 per cent was to reduce the level of income tax on the lower paid workers, and that is a good thing, but to include the DIRT and the withholding taxes is missing the original point one would think the Minister had in mind.  All these matters do not deal with tax reform. One area of tax reform that has been recommended and that we have advocated for many years is tax credits. No Minister for Finance has had the guts to address that issue.
On the subject of the Minister's changes in the area of mortgage interest relief, the issue of tax credits again becomes wide open. Let us take the example of somebody who had a very good job in Irish Shipping as first mate, captain or whatever. He has a good house, worth £50,000 to £70,000, with a high mortgage. When Irish Shipping was disbanded he was out of a job. He and his family managed all right for the first couple of years on benefit but after that he is on long-term unemployment and there is no relief whatever on his mortgage because he is not in the tax bracket. The higher your tax bracket, the more relief you get. Why not give tax credits? Why not ensure that such credits are given where relief is not available to people with mortgages etc? The whole area of tax reform is not being dealt with when areas such as this are not dealt with.
Everybody, even the economic gurus, expected that there would be some aditional tax on corporate incomes and on property. The Irish Times of Friday, 30 December 1988 included an article anticipating that enormous tax changes were on the horizon. How mistaken that article was. The table in the article showed that tax on corporate income fell from 9.1 per cent in 1965 to 3.2 per cent in 1985, down to one-third in 20 years. It fell each year until it reached 3.2 per cent in 1985, the lowest taxation on corporate income in Europe. Similarly, on property the tax was 15.1 per cent in 1965 and was down to 3.9 per cent in 1985. In 20 years that tax was down to one-quarter what it had been in 1965. Again, taxes on property are the lowest in Europe.
The Minister for the Environment raised the question of taxes on property last summer and was so badly mauled that he withdrew the proposal and has not been heard of since. When the Minister was talking about property, he was  simply considering houses. The only property that one has is considered to be a house; that is nonsense. What the Minister was really talking about was rates, a different matter altogether from property tax. Property in its real sense, which should be taxed, concerns the area in which surplus wealth is invested. This is a whole wide area. The property invested in can be a second house, or you might have 20 houses for that matter, as many landlords have, or apartment blocks, or office blocks, or land, or fine art. Investment in fine art, in jewellery and in stocks and shares amounts in cases to thousands and perhaps millions of pounds. That is the area to which property tax should have been applied.
When we are talking about tax reform we talk about widening the tax area to ensure that all pay their fair share of taxes and so reduce the amount on labour and increase the amount on capital. This is what we have been saying for years. People like the Progressive Democrats are now saying that taxation on labour is too high but, of course, they do not use the phrase “taxes on labour”, or the phrase “taxes in capital”. They say that taxes on personal incomes are too high. We say that taxes on labour are too high and taxes on capital are too low; that is the real area of tax reform that must be addressed.
I come now to the question of jobs, the most important area of all. All the Minister had to say on this matter in his entire speech was what he expected from the Euro-slush fund which they are preparing at the moment which I described in this House before Christmas as the Irish stew, this big pot into which everything is being tossed. This includes roads and hospitals, and the Minister for Education, Deputy O'Rourke, said that she was throwing in the Tallaght Regional Technical College as well. This mixture was being sent to Europe and money was expected back. From the Euro-slush fund, according to the Minister, 3,000 jobs would be created. Yet, because of the continuation of his embargo on jobs in public employment there is an indication that 3,000 jobs in that area will be  lost, so absolutely nothing has been done on job creation.
The most important thing the Minister could have done in this area would have been to restore the capital programme, particularly with regard to the construction industry. When people working in the construction area voted for Fianna Fáil they thought they would do something about jobs in construction. That is an area in which there have been huge job losses and thousands of people are travelling to Britain, as they did in the fifties, to work on construction sites there. The Channel Tunnel construction site is full of these people. The Minister has done absolutely nothing on the capital programme.
In 1989 Exchequer capital expenditure will actually be less than in 1980. Even though employment numbers were far lower in 1980, in that year £660 million was invested by the State in the economy while only £617 million is planned for this year. When you take account of inflation and so on, it should be more than double that amount. Yet, that is all that is planned for this year in the construction area. At the same time, there is a huge gap in the area of housing. In 1989 we are still not going to have any local authority houses built, which indicates that the Minister is happy that emigration will continue at an even higher rate and houses will not be necessary. Nothing is being put into local authority housing, or into hospitals which are required.
The whole western area of this city of Dublin, from Tallaght right across to Finglas, a whole new area which was planned many years ago to contain three major new cities with a population of 100,000 has been totally abandoned by this Government, as by the previous Government. The town centres have been untouched, while huge shopping centres have been built in other areas of the city and are planned for areas outside the city. The Government in this budget have done nothing to ensure that these three new town centres will be built. The people living in those areas have been  abandoned, without town centres, without transport, without a DART system, without a hospital, Plans for Tallaght hospital have been abandoned and the James Connolly Memorial Hospital in Blancharstown which was to be upgraded has been downgraded and will continue to be downgraded. The regional college has not been built although a number of secondary schools have been rebuilt. None of these matters has been attended to in the western area of the city: it is time for us to look at the west of Dublin as the most totally deprived area in the country rather than the west of Ireland. On a visit to Lucan last week I heard of many job losses as places of employment were closed down, such as Hill and Sons Limited of Lucan, Leixlip meat factory and Clondalkin Paper Mills. Not one new job came to the area, despite the fact that the Tánaiste represents the constituency. The western area of the city of Dublin is an absolute disaster so far as this Government are concerned. New jobs are required in town centres, hospitals, schools etc.
This budget has been totally lacking in the areas of poverty and social welfare, taxation reform and jobs, despite the fact that the Minister talked continually about poverty and the disadvantaged. He also talked about tax inecuity and the need for jobs but talk is of no use. The Minister had the power to make the money available. He had more money available than any Minister ever had. The £500 million taken in last September was money which had been outstanding for the previous year and probably for two years before that. Due to the fact that those moneys had not come in when due, massive cuts were imposed in the areas of education and health in particular. There were also cutbacks imposed on local authorities and so on. When the money became available to the Minister, people felt that at least some of it would be put back into the health and education areas.
Everyone welcomes the increase in capitation grants to the primary schools which will ensure that children will not have to look to their parents to help to run the schools, as has been the case  for the past two years. That enormous burden on parents will now be reduced but nothing has been done in respect of second level schools. Nothing has been done about disadvantaged areas, which the Department of Education know all about. They are aware of the need for special remedial teaching in the primary and second level areas. They must know aobut the enormous damage which has been done by the cuts to the vocational education system, which provides an essential educational facility for people in disadvantaged areas. This is the only area of education which is non-selective. All pupils, irrespective of who or what they are, irrespective of their disadvantage, are welcome. There is selection in the secondary schools; they decide who they will or will not take. Everybody is accepted by the VECs, but they have been smashed to pieces by the most severe cutbacks. We had expected something to be done in this area.
The health care system in 1989 will be far worse than in 1988. During the past few months warnings have frequently been given by consultants, junior hospital doctors and nurses who have spoken about the deterioration in medical care facilities and the huge queues of people waiting for treatment. These are people who have not the money to pay for it. The two-tier health system which has been created will grow. Many people expected that the Minister would put back into the health service some of the money which had accured to ensure that people would not die from heart, liver or other ailments while awaiting treatment.
This is definitely a rich man's budget. Certain people are very happy with the budget. The Taoiseach is the man who is running this whole show and he tells the Minister what to put in and what not to put in. The Taoiseach is happy so long as the majority are kept happy. He will keep his 50 per cent support and to hell with the deprived and the unemployed and those who will not be voting for him anyway.
Minister of State at the Department of Education (Mr. F. Fahey): The main thrust of this year's budget is to provide for increased economic growth. It is a developmental budget with the major emphasis on job creation in several sectors of the economy. The budget provides for substantial capital investment to be made in areas which have been identified in the Programme for National Recovery. One of the most significant areas is that of tourism, which will receive significant support for capital investment. The Minister for Finance has provided £3.5 million in the budget for tourism projects which he is confident will obtain approval for increased aid from the European Regional Fund. In addition he has proposed that a new scheme of grant assistance for the tourism sector will receive funding of £14.5 million direct from the ERDS without involving the Exchequer. This will help the development of new tourism projects such as outdoor pursuit and activity centres, recreational facilities in resorts, marine facilities and cultural centres.
Many of the projects will be sports based projects or will have close relationship with various types of sporting activity. The Government have recognised that an essential part of tourism development in Ireland is the improvement and development of our tourism product. Sport and special interest holidays are now an integral part of that product and consequently it is most significant that in this year's budget there are significant amounts of money for the development of sporting, recreational and leisure facilities which are part of the development of our tourism product.
In the next five years sport will make a major contribution to economic growth. As a result of the initiative in this budget, major private sector development is now set to take place in the provision of state of the art, sport and recreational faciities such as sub-tropical water and aqua sport centres, theme parks, equestrian centres, multi-purpose sport and leisure centres, watersports and marine facilities, and championship golf courses. This major development programme will transform the face of Irish  tourism and will make Ireland the most attractive sport and activity holiday centre in Europe.
From an Exchequer point of view many thousands of jobs can be created at a low cost to the State in the development of those facilities. For instance it is interesting to note that 56 people are at present employed in Ballybunion Golf Club. Due to the success of Bord Fáilte's marketing of Ireland as a leading golf destination there is now a need to develop several championship standard golf courses to cater for the ever increasing demand.
In addition to the measures announced in the budget the Government's investment programme in sports facilities continues at full pace with a £50 million programme of facility development now at various stages of planning and construction. This huge amount of development is as a result of moneys which have been made available to the Exchequer from the national lottery and I am glad to announce today that the development of the national sports centre is proceeding according to plan. Land acquisition is in progress and the completion of the development brief will be taking place within the next couple of weeks. The national indoor centre which incorporates a 50-metre swimming pool will be a major contributor to economic growth in Dublin.
The centre, which will be one of the most modern and finest in Europe, will be designed to cater for not alone sporting activities but a whole range of activities which will generate significant amounts of international tourism. The objective of the Government is that the centre will compare with the best in Europe and will be managed by a professional facility management company which will be one of the top class such companies in the world. From the point of view of tourism the centre will attract a variety of events during the course of the year which will bring at least 5,000 or 10,000 people to Dublin at various shoulder periods of the tourism season.
The Department of Education recognised that the development of prestigious  sporting events in Ireland can have a significant impact for tourism and the economy. The recent Emerald Isle Classic is an example of a sporting event being the focus of attracting tourists into the country. This event attracted approximately 10,000 people to Ireland from the United States and Europe and generated revenue of the order of $20 million. It was seen on cable channel right across the United States by an estimated 10 million people. Indeed, there was a half hour special on Ireland on American television as a result of that event. Many of the major newspapers in the United States covered the event and, consequently, that sporting event made a major contribution towards the enhancement of Ireland throughout the United States.
It is interesting to note that the Budweiser Irish Derby this year was seen by 150 million people worldwide on television. The event was televised to approximately 70 countries, and was watched in 40 million homes in the United States alone. It was a 20 minute television special on Ireland as well as on the race. This shows the promotional impact a sporting event can have for Ireland in the United States and indeed throughout the world.
We are at present endeavouring to attract several other events in a number of sports which will have a similar impact and generate significant tourist traffic in the years to come. An example is the 1991 world boxing championships which are now at an advanced stage of negotiation and which will involve over 10,000 people coming to this country during a shoulder period in the tourism industry and will involve television crews from all over the world coming here. They will represent the 78 countries which will take the television pictures of this event. It is worthy of note that RTE will have control of those pictures and, therefore, will be able to show the best of Irish to the world through the medium of a sporting event.
It is interesting to note that some of our existing sporting events, such as the all-Ireland hurling and football finals and the rugby and soccer internationals, have  the potential to attract a minimum of 50,000 foreign visitors to Ireland in any one year, generating in the order of £100 million in tourism revenue. A week in Ireland taking in the rugby international involving Ireland and France would be a very attractive holiday package on the French market as, in the most recent game between Ireland and France, there was a huge black market demand for tickets. A person who paid £80 for a £15 ticket informed us that he could sell thousands of tickets in France to people who wanted to see the game. This is an opportunity to market Ireland around this event and to have people take in the game as part of a package. A similar package involving England, Scotland or Wales would be equally attractive.
A two week holdiay in Ireland, including a ticket to the all-Ireland hurling and football finals in September, would also be a very attractive holiday package in the United States and in Britain for the ethnic Irish community. The time has come for sporting organisations, like everybody else in the community, to see what contribution they can make to economic growth and job creation. Of course, stadium capacity at present does not allow for sporting tourist traffic to rugby or GAA events to which I have just referred, but perhaps the time is opportune for sporting organisations to get together with us at Government level to examine the potantial which exists in this respect. It is also interesting to note that several people from the United States and Europe are now talking to us and to organisations about the possibility of locating further major events in this country which will have a very significant economic spin off for us. We have a natural amphitheatre for many events which would become world class. We have some of the finest golf courses in the world. The Nissan Classic has shown that we have very suitable terrain for several sports—cycling is only one.
We are at present engaged in negotiations with the world body for motor rallying to have Ireland earmarked as a location in the first event for a round of  the European rally championship. I hope in future Ireland will be earmarked for a round of the world rally championship. This would show — especially in regard to the west — the most scenic parts of our country in a very professional way on European and world television. What better way is there to market our country than through the staging of an event such as this? These are the kinds of options now being considered by the Government to enhance our image abroad and to generate more tourist traffic.
It is quite clear that sport can make a major contribution towards economic growth. Thousands of jobs can be created in the development of sporting events and facilities. Such jobs would be created at a very low cost to the State. The international tourism market is clearly a lucrative one with inflation here firmly under control and VAT rates on tourist related activities among the lowest in Europe. With a healthier and competitive access transport environment, Ireland is well positioned to attract its share of the growing tourism market.
Grants to sporting organisations in 1988 have, for the first time, allowed us to address the whole area of long term development for sporting bodies. An increasingly sophisticated sporting environment has resulted in the need for increased professionalism in organisation, marketing and administration. Nineteen eighty eight saw the appointment of ten new development officers to ten sporting organisations. These officers will be responsible for the ongoing growth and development of efficient and effective administration structures. Similarly the House of Sport, which opened in 1988, provides an effective and efficient administration structure for smaller organisations who could not sustain the cost of a full time administrative structure.
Allied to those developments, during the last year with the increase in annual grants to sporting organisations of 22 per cent, now more than ever I see the need for effective and efficient management and marketing structures among the governing bodies of sport to cope with  growth and change. My Department will continue to support and encourage the governing bodies to develop efficient, effective and commercially orientated organisations. In line with overall Government policy, I wish to develop a reduced dependence by sporting organisations on State funding by encouraging them to become commercially viable through the development of marketable events, teams and products to attract the support of the private sector through sponsorship.
Sport sponsorship represents a powerful marketing communications medium for many companies while, at the same time, providing essential funding and exposure for many sporting organisations. There is now a need for a much more professional approach to event management and I want to say in this respect that we are now looking again at a further area where sport can make a very useful economic contribution and a contribution towards job creation, that is, the very quickly developing area of the sports marketing sector.
It is evident that in the United States sports marketing companies are now a very important and essential part of the international service sector. At present we in the sports section of the Department of Education are talking to a number of companies in an effort to attract them to come here with a view to setting up their European headquarters in Ireland. We have a very attractive package to offer in the context of Ireland's entry into the single market in 1992. There again the evidence is clear that sport has now become a vital marketing tool for the commercial sector. We have ensured that so far as this country is concerned we are up with the best in Europe in being in a position to accommodate the requirements of such service industries.
My second area of responsibility is youth affairs. Like sport, the past year has brought significant developments to the youth service through substantially increased funding from £3.7 million in 1987 to £10 million in 1988. Of particular note was the allocation of £4 million to  new projects in deprived and disadvantaged areas. This allocation facilitated projects in areas which were substantially under-funded in the past and, in particular, it was aimed at the most deprived and disadvantaged young people in our community. New programmes have now commenced for the homeless, drug abusers and young people in trouble with the law. A combination of six departments have got together in the first ever joint attack by the various departments dealing with young people to try to improve the lifestyle of the most deprived among us. It was with much satisfaction that during the past 12 months we were involved with people like Sr. Stanislaus and Focus Point, Fr. Peter McVerry and a number of others who over the years have provided a very worthwhile service for under-privileged young people but with very little support from the State. It is clearly evident now that the £4 million which has been allocated to those organisations from the national lottery has done much to enhance the lifestyles of those young people and to give them a worthwhile lifestyle to look forward to.
The other important development which has taken place is in the increased funding which has allowed for the development of youth services and programmes in new and existing areas to the tune of £4 million. Major developments in 1989 will seek to maintain and support those developments which have taken place in 1988. Of prime importance, and one which we are actively addressing at present, will be the recruitment of additional voluntary leaders in the youth service; improving the image of the youth service generally; enhancing the training opportunities for leaders and members and establishing a responsive local youth service through the medium of local voluntary youth councils.
“Take A Leading Role” is a slogan which Members will have become familiar with during the past few weeks. This awareness exercise is specially designed to attract more voluntary youth leaders to help sustain and develop the considerable work that has taken place in the youth  service during the past year. Now more than every we need voluntary leaders at local level to support and develop our youth services.
There are currently over 1.5 million people under the age of 25 living in this country. In fact it is the largest young population in Western Europe. Of this number 500,000 are members of youth organisations. There are an estimated 15,000 voluntary youth leaders active with the various organisations. This is not sufficient to service the anticipated large increase in membership arising from the major expansion in operation which has been made possible through the increased financial support made available with the advent of the national lottery. I have set a target for this campaign to attract a further 2,000 adult voluntary leaders into the service.
To coincide with the general awareness campaign a series of short introductory courses will be run in 53 centres in February, under the auspices of a training working group which I established last year, as a move towards a more co-ordinated local voluntary youth service. The course is designed to give an overall view of the youth service and to introduce potential volunteers to the variety of youth groups they may join. I should like to add that this exercise represents the first of its kind in Ireland where all the various organisations are putting their resources together for a common aim, namely, the recruitment of additional voluntary youth leaders. It is heartening to see the co-operation and synergy which exists between all of the youth organisations in this exercise. However, the major difficulty for the youth service in this country at present is trying to ensure that the general public have an understanding of what youth work is all about. This campaign is designed with a twofold objective: first, to inform the general public of what is being done by the youth services — in particular, to get across the message that much important preventative work is being carried out by way of the out-of-school activities of  youth services, that much important personal development work is being carried out to enhance the lives of young people through their involvement in the youth services, and, as I mentioned earlier, that those in our community who are deprived and under-privileged are being given a much improved chance of having a more reasonable lifestyle than they would otherwise have had if the youth service provision was not in place. One of the main difficulties the organisations have is that when one mentions youth work people tend to wonder what is youth work. The “Take A Leading Role” campaign has succeeded in putting youth work to the forefront in the past number of weeks and the response to the campaign has been very significant, with several thousand people coming forward to offer their services to the youth organisations.
The second objective is to take up the offer being made by those several thousand people who want to become involved as adult leaders. It is important to state that the most significant aspect of youth work to the State is that it is a most cost effective service from the State's point of view. Because of the voluntary nature of the youth service, a very comprehensive mainline service is being provided throughout the length and breadth of Ireland for £10 million. There is a very good return on investment to the State for the amount of money being spent and this is because the mainstay of the youth organisations is the reservoir of “volunteerism” which is to be found throughout the country. We now want to build on that reservoir of “volunteerism”; we want to raise the status of youth service by an increase in the number of people involved and the attraction into the youth service of many people, particularly older people and professional people, who have a contribution to make. It is noteworthy that this campaign has succeeded in bringing about an interest by several thousand people to become involved. The first step of their involvement will be an induction course which, as I have said, will run during the month of February and will  give those people an introduction to the youth services, to the work involved and to the role they can play. It is hoped that after having had that induction course many of them will become full time adult leaders in the various organisations such as Foróige. The National Federation of Youth Clubs, the Boy Scouts, the Girl Guides, the Junior Chambers of Commerce, Macra na Feirme and a whole range of youth organisations, 33 in all, who are working in various aspects of the youth service at present.
The final area of youth service provision which has been considerably expanded in the past 12 months is the service being provided to those who are deprived and under privileged. This is the one area in which we can claim the lottery has made most impact on people's lives. Four million pounds has been spent specifically on people from deprived backgrounds. This money has been spent in deprived areas with the emphasis on the deprived areas of our cities and towns and also in some deprived rural areas. The national lottery has proved to be a great source of finance and my intention is to see that source of finance increase in the present year as a result of the very good work that has been done in that respect in the last 12 months.
The last number of years has seen a very serious emigration problem arising from job opportunities not being available to young people. The Government have tackled this problem on two levels, one with regard to the difficulties in the US, and in that respect it is gratifying to see that the work carried out by the Taoiseach and the Minister for Foreign Affairs is now bearing fruit with a considerable number of extra visas becoming available. In this budget the Government have recognised the difficulties in Britain by doubling the amount of money being made available to DÍON from £250,000 to £500,000. This is definitely a welcome increase to an organisation or group of organisations who are doing very significant work in Britain. It is a recognition by the Government of the work they are doing and the value for money which is  being got from that work. It is a recognition that there is a problem in Britain among young Irish people.
However, it is interesting to note that, certainly in the west, many people who came home last Christmas remained at home and are now taking up employment opportunities which are becoming available, particularly in the construction industry where many tradesmen had to leave in the last number of years. With the improvement now taking place in the construction industry, many of those people who returned home for Christmas found that job opportunities were again becoming available on the ground and they can now stay at home. Again this Government in this budget have tried to ensure that similar opportunities are created. Aside from the various opportunities which will be created as a result of capital investment in various projects, again one of the more important ones for young people is the scheme to make funding available from the commercial banks to young entrepreneurs. As Minister for youth affairs I welcome this initiative particularly. It will have significance for young people and I ask that young people who have emigrated look at the possibilities of coming back to Ireland and taking up the employment that is becoming available or perhaps setting up their own employment opportunities with the help of schemes such as that announced in this budget.
There has been much discussion about the budget and its impact in the last week. This budget has set out to build on the sound economic foundation which has been laid over the past two years. We are now into the second stage of that economic development which is the development of an enterprise economy and of opportunities for job creation. The most important objective in the Programme for National Recovery was the creation of jobs. The most important target group in that document were young people. I welcome the opportunities this budget has provided for the creation of those jobs and I am confident that 1989 will see one of the most significant improvements in job creation we  have seen since the Lemass years of the sixties.
Mr. J. O'Keeffe: It is now very clear that the 1989 budget debate is much ado about nothing. Like the attractively presented book in the shop window the budget last week brought initial superficial favourable reaction, but cooler analysis of its contents confirms that its impact on the great economic and social problems of our day will be minimal. Even within the octave of its presentation informed commentators are beginning to question the timid, cautious conservative nature of the Budget Statement. The real question then is why the Government avoided tackling the major issues and why they have virtually ignored the huge problem of unemployment, the horrendous depths of poverty affecting levels of our society, the crippling burden of PAYE taxation and the momentous changes that are needed to prepare the country for 1992. Essentially, therefore, the budget is noteworthy for what was not in it coupled with some measures which are not actually to be implemented this year but were promised or, to be more accurate, threatened for next year.
It is fair to say that on the periphery there were minor improvements in our tax and welfare systems. I am thinking in particular of such as the removal of the anomaly affecting widowers and deserted husbands with dependent children which I strongly advocated and the small changes in tax exemption limits for the low paid, but no explanation has been forthcoming as to why the consensus potential for major structural changes was not exploited.
Very simply the Government succumbed to the temptation to tinker with minor changes in the tax system and modest adjustments to social welfare payments. They have ignored the fact that unemployment and poverty are inextricably interlinked. They have passed up the historic opportunity to both reform the tax code leading to much greater employment opportunity and to make a real assault on poverty. The consensus is  now available in the Dáil to support the kind of radical approach needed to make a significant impact on both fronts.
The real failure of this budget, therefore, is that it has missed the opportunity to introduce meaningful measures for which there is such substantial support. Instead the Government have produced an unimaginative and uninspiring response with modest adjustments resulting in merely tinkering with the system. Unfortunately, the consequences of this approach will be continuing high levels of unemployment and unacceptable levels of poverty in our society.
In addition, of course, the Government have totally funked the 1992 issue. The Minister for Finance admitted that changes in indirect tax will have to be phased in over a number of years and then promptly postponed any action into the next decade. The lack of wisdom and foresight involved in this approach will become fully evident when attempts are made to concentrate all the changes required by Community harmonisation on VAT and excise into a couple of years. Again a further opportunity has been missed when there is substantial agreement in the House on the need for action, and on an approach which ensures that we do not opt out of Europe or fall behind in the opening up of the internal market or seek long-term derogations for Community harmonisation proposals.
The question whether real progress can be made by the politics of consensus and compromise is more than a philosophical one. Evidence of the success of such an approach in solving deep-seated national problems is available from the United States and some continental countries. No one will deny that we have enormous problems here which were compounded over the years by the old tradition of adversarial politics. There is no need for me to remind the Minister of State, Deputy Lyons, of what I have in mind. The approach of the Opposition in the last Dáil is well known. At every hand's turn when the last Government made an effort to deal with the enormous problems facing the country they were tripped up and a head of steam was built up in  the country to block them. The Minister of State will be aware of the advantage of a more responsible approach by an Opposition, which he has got from this side of the House.
That new approach was enunciated by Deputy Dukes in Tallaght in late 1987. The pity now is that the potential for national progress opened up by that approach has not been availed of to its full extent by the Government. We have seen its advantages in relation to debt management. I am sure the Minister of State will agree with me that there was progress made by the Coalition in regard to that and that progress has been made and continued by the Government, facilitated to a great degree by the approach of our party. However, the Government have been too timid in lifting their horizons and exploiting the possibilities for significant advance in other major areas.
I accept, as Professor Basil Chubb said in the Brian Farrell edited book, “De Valera's Constitution and Ours” that:
Compromise and consensus politics will not easily replace adversarial politics in Ireland.
He went on to say:
The fact is though, that the dichotomy of the De Valera epoch has disappeared, and Irish governmental and parliamentary practices need to be adjusted to this fact.
The Government, unfortunately, have not yet fully appreciated that fact and consequently the budget we are debating is a non-event which will rapidly sink into oblivion as simply a missed opportunity.
Within the narrow parameters decided on by the Government there are changes of which I approve. They are minor in the overall context but, to be honest, they are of importance to those directly affected. The Government sensibly saw the error of their ways in imposing in the Estimates such an anti-employment measure as the proposed £20,000 ceiling for employers' PRSI and, thankfully, have moderated that ceiling to £18,000. That is not as far as I would have liked them to have gone but at the very least  the voices of protest raised by me and others, have been listened to. The encouragement to those on social welfare to maintain their children at school is to be welcomed and the payment of child dependent allowances up to 19 years of age for those in full-time education is a step in the right direction. It is proper social policy and I hope that step will be extended in future years to the age of 21.
The establishment of a minimum payment of £10 per week in the child dependent allowance is the right approach but the Minister should also have taken the opportunity to establish similar minimum payments for all applicants and spouses. There is much dispute about the actual level of poverty in our society. In truth, there are different levels since poverty is relative. My approach is that the first priority must be those at the bottom of the pile, those at the lower end of the social welfare spectrum. That is why I advocated a minimum payment of £45 for all applicants and £30 for all dependent spouses. This approach, apart from helping in particular the poorest of the poor, would have the additional advantage of establishing a basic minimum income for all recipients at the lower end of the social welfare spectrum by combining and raising the rates for a number of those on assistance and benefit and those on supplementary welfare.
While the approach adopted by the Minister has at least maintained the real value of welfare payments for recipients, and in relation to the long-term unemployed recipients has produced some improvement, the same cannot be said for dependent spouses — mainly women though not exclusively — and in particular children whose lot has been disimproved. The additional increase for long-term unemployed does not apply at all to spouse or child dependants. At that level therefore the best that can be said is that some payments are maintained in real terms, but since indexation was only applied to weekly payments and not to the monthly child benefit payments, the lot of many children has in fact been disimproved by the budget. The child benefit payments have been further  reduced in real value as a result of no indexation again this year, something that is compounded by the fact that there was no indexation last year. It is important that we note the erosion of the real value of such benefits as a result of the failure to apply indexation.
I proposed, on behalf of Fine Gael, prior to the budget, a minimum child benefit of £20 and £30 for sixth and subsequent children in a package with a price tag little more than the amount the Government say they are allocating to social welfare measures in the budget that is an indication of the support in Fine Gael for the family income supplement. The Government have taken a different tack by both disimproving the lot of children in real terms and also by threatening to remove child benefit altogether next year from families above a certain income level.
It is now very clear that this was a completely ill conceived proposal with little appreciation of its implications or consequences. This is borne out by the fact that different interpretations on the proposal are being supplied by different Ministers, each one of whom appears like a fish on a hook when questioned on the issue. The enthusiasm of the Minister with principal responsibility in this area, the Minister for Social Welfare, Deputy Woods, is evidenced by the 25 page script from which he spoke in this debate with not a single mention of the issue.
The latest justification for the proposal — not originally mentioned — is that it will result in getting more money to those on middle and low incomes. This defence is of course ridiculous when one examines the figures. If, as suggested, the cut-off points is to be £30,000, savings of £1.82 million per annum would result. The re-allocation of this sum would involve increases totalling 12p a month or 3p a week, the price of one lollipop. The Government should learn their lesson from the reaction to this ill considered proposal. First, it is obvious that piecemeal changes to our tax and social welfare systems will run into trouble. We have pointed this out in the past. The  Government should reconsider their attitude to the Fine Gael proposal of an all-party approach leading to radical reform.
The Government should now decide on their attitude to family income support. Demographic trends clearly indicate a decline in the fertility rate and in fact a projected fall in the child population under 15, of around 16 per cent over the next ten years. We cannot be unaware of the efforts much too late to encourage a reversal of such a trend in Germany and now in France and indeed elsewhere. I accept that we cannot afford the generous children's allowances of the European pattern. In Germany they run to about £13.50 a week for every child. However, we cannot be unaware of the policy considerations underlying such apparent generosity. Any consideration of child benefit cannot be in isolation from other aspects of family income support including child tax allowances or tax credits if we ever get around to implementing that system. There are no tax concessions of any importance for children at the moment other than in special cases. We also have to consider the social welfare child dependency rates, the family income supplement and non-cash benefits and we have to consider the position of women for many of whom child benefit is the only direct income. The role of child benefit is to redirect income from childless individuals and families to families with children. Therefore, the main idea is what is referred to by the experts as horizontal equity, and this highlights the importance of child benefit in the absence of tax allowances for children. It is clear that child benefit is not a policy instrument for vertical distribution across income groups. There are other policy instruments specifically designed for this purpose, principally the tax code and the means tested social welfare code. What is very clear is that as between families where the income is the same the idea of child benefit is to give some support to a family with a child or a number of children as opposed to the position of the couple who have no children. That is essentially the concept of horizontal equity and that is really the main concept  behind the theory of child benefit for all children in this State.
The Government obviously have not considered the well-researched paper on family income support submitted by John Blackwell to the Conference of Major Religious Superiors last September where he concluded his examination of this policy option now being proposed by the Government by indicating that the result would be a worsening of the poverty trap and its extension up the income scale, more administrative complexity and costs of administration and less than full take-up of the benefit in a means-tested form. He also concluded that this option would dampen the impact of child benefit in achieving horizontal redistribution towards families with children at a time in their life cycle when outgoings are relatively high and also would dampen the redistribution of income within the family towards the mother. This proposal clearly does not have any social or economic merit and should not be proceeded with.
It is also worth noting that in the tax changes the position of families has not been recognized and relative to single people they have fared badly. For instance, a single person on PAYE earning £10,000 a year will save £235 per annum or £4.51 per week whereas a married couple with four children earning a similar amount will save far less — £144.22 per annum or £2.77 per week. How any government can agree that that kind of approach is just and equitable and at the same time indicate support for the rearing of children is beyond me. To give a saving of £235 to the single person in that income bracket and £144 to the married person with four children just does not make sense. This type of anomalous treatment of families is further evidence of an ill-thought out policy, if there is any policy at all.
When we are dealing with family income support we are obviously involved in a very complex area. I am proposing to the Government that the Combat Poverty Agency be asked to fully investigate all aspects of family income  support including tax, family income supplement, child benefit and other related areas and to report this year with recommendations on a realistic policy in this vital area.
The other controversial proposal in the budget concerns the extension of full PRSI cover to all public servants. At the moment there are 140,000 public servants who are insured at the full rate and there are a further 160,000 who are paying at a reduced rate. I have no objection in principle to the extension of full PRSI to all public servants. I am, however, concerned that the move may fuel claims for special pay increases since the justification for the lower rate in the past has been that it is reflected in salary scales.
It is also suggested that because they are unlikely to avail fully of the benefits that is another justification for the lower rate. It is important, since I am concentrating my remarks on children and the family, that the Government should bear in mind the impact of that proposal particularly on lower paid public servants. It could impose considerable hardship on lower paid public servants with children. However, I note that there are to be discussions with the public sector unions concerned and I will reserve judgment on this issue pending the outcome of these discussions.
In conclusion, I do not see this budget as having any significant impact on levels of unemployment or poverty. Ludicrous claims have been made in particular about the impact this budget will have on levels of poverty in our society and about the priority being accorded by this Government to the underprivileged. The figures speak for themselves. The Social Welfare Estimate last year was £1.627 million which, when revised to cover the budgetary provisions for 1989, totals £1.543 million. This Government, who contend that they place such high priority on the elimination of poverty, have actually cut the financial provisions available for that purpose by £84 million.
I accept that there are financial constraints and, accordingly, I have refrained from making extravagant demands  which clearly cannot be paid for in our present circumstances. On the other hand, we need a comprehensive programme to eliminate poverty, one which should be well researched and cover all aspects of the problem. The Government should recognise the serious concerns of so many of our people on this issue, not just those directly affected by it but so many others, fortunate enough to be above the poverty level, who have genuine, caring concern for those less well off. Because of this concern, widespread among our people, I contend the Government should publish a White Paper setting out a comprehensive, integrated policy on poverty. Such a White Paper should be produced as soon as possible and its proposals implemented within the shortest possible time.
Minister of State at the Department of Tourism and Transport (Mr. Lyons): Ag tagairt don cháinaisnéis a mhol an tAire Airgeadais, tá sé thar a bheith soiléir gur sliocht eile é as an dul chun cinn atá déanta agus á dhéanamh in eacnamaíocht agus bainistíocht na tíre. Luaigh sé san ráiteas a thug sé an toradh iontach atá againn agus go bhfuilimid chun leanúint ar an chúrsa céanna sin chun tuilleadh dul chun cinn san eacnamaíocht a dhéanamh ó thaobh bochtanais, fostaíochta agus rudaí eile nach iad.
The budget introduced in this House by the Minister for Finance on Wednesday last sent a clear message to all concerned and involved in the economic development of this country whether in the public or private sector. By reference to a number of key economic indicators the Minister was in a position to present an impressive record of achievements to date as evidence of the basic soundness of the Government's economic policies. Furthermore, he pledged unequivocally that there would be no deviation from the overall strategy outlined in the Programme for National Recovery which would continue to provide the vital framework for our future economic and social progress. The budgetary course the Minister charted for the year ahead not  only reflected but served to validate and inspire the spirit of renewed confidence in our economy to which he referred.
Within my area of responsibility I should like to deal with tourism first. No where does that spirit, referred to by the Minister for Finance on Wednesday last, find a clearer reflection than in the turn-about wrought in tourism since we assumed office. The basis for that success was the realisation that tourism constitutes a major industry here with enormous potential for job creation and foreign earnings. We must carefully identify—at both State and private sectoral levels—objectives and opportunities and vigorously pursue a specifically targeted programme of investment if that potential is to be fully realised. Past policies which often serve to generate temporary surges only have been reviewed and reassessed. One might contend that tourism has been rescued from a Cinderella existence, set on a definite path to future wealth and prosperity. There will be no more stop-go, hit and miss attempts; no more lack of identification of the industry and its potential; no more tagging on to other Departments for the sake of convenience —Industry, Trade, Commerce and, as an afterthought, Tourism; Forestry, Fisheries and again Tourism stuck on as an afterthought. We realised the benefits and potential of tourism so that the relevant Department is now known as the Department of Tourism and Transport, integrating two sectors of our economy very much inter-related.
Ireland's strengths have been identified and policies tailored to capitalise and concentrate on them. There has been new emphasis placed on activity holidays using our abundance of open spaces, fine scenery, mountains, rivers, lakes and other indoor and outdoor recreational assets which now dominate our marketing approach. Moreover, we have changed course to a targeted salesmanship strategy, concentrating on carefully selected markets to maximise results. Considerable progress has been made in meeting the challenging but necessary targets we have set for the  industry. Since they were set it has often been contended that those targets were over-ambitious. I might suggest that ambition is the method by which we aspire to such targets. We know our targets are set high but we are convinced they are attainable. For instance, we have set ourselves the target of an increase of £500 million in tourism revenue and the creation of 25,000 new jobs over a five year period.
The information available to date for 1988 suggests a 13 per cent increase in visitor numbers over the corresponding 1987 figure; indeed an overall increase of almost £500,000 or 26 per cent over the two years 1987 and 1988, resulting in the direct creation of an additional 12,000 jobs and a substantial increase in tourism revenue in 1988 over the record £1 billion earned in 1987.
I must avail of the opportunity to express my satisfaction at the positive response of the sea and air carriers to the Government's policy of low access fares. That response played a vital role in the achievement of those very encouraging results. For example, in the case of air carriers, it is now possible to fly to Dublin from Birmingham for £65; to Cork from Manchester for £81; to Dublin, Shannon or Cork from Paris for £120 or to Dublin, Cork or Shannon from Dusseldorf for £199.
The budget builds on the measures already in place go give a major fillip to tourism development in 1989. For example, some £3.5 million will be spent providing vital elements of the Irish holiday package, such as the archaeological sites, historic houses and national parks under the Office of Public Works, and £0.5 million has been allocated in the budget for improvements in access to and basic facilities at beaches throughout the country; £2 million has been set aside for the environmental upgrading of urban renewal areas. A further £250,000 will be spent boosting the recycling of waste materials thereby assisting in the achievment of a cleaner and more visually appealing environment. More important, the budget has made a timely provision of £14.5 million with which Bord Fáilte  and SFADCo will grant aid tourism development. This will offer financial assistance to promoters willing and able to operate amenities open to the public which will contribute to enhancing the total package of attractions for foreign visitors. It is essential that the developments which secure assistance will offer the best long term potential for improving Ireland's range of visitor attractions and its appeal to the tourist.
The business expansion scheme which has proved to be a very valuable incentive in promoting the development of our tourist infrastructure will continue to have an impact in 1989. The decision to extend that business expansion scheme, which was previously only available to manufacturing industry, through the tourism sector, has been of tremendous importance to the industry because already some £45 million have been invested by the private sector in tourism amenities since the scheme was extended in 1987. For example, in the south-west region every hotel has undertaken extensions, modifications, refurbishments, etc., and much of this work is undoubtedly as a result of the very wise decision on the part of the Government to extend the business expansion scheme to the tourism sector. All this investment by the private and public sectors in tandem implies a solid vote of confidence in the future of tourism here.
I have long been conscious of the importance of allying all sectors of activity both public and private in support of our common goal of a prosperous and expanded tourism industry here. It is essential that all hands are on deck in this important objective and it is imperative that we all keep our eyes on the target. One of my roles as Minister of State at the Department of Tourism and Transport has been the chairmanship of the interdepartmental committee who work to co-ordinate policy and expenditure in the areas of Government activity that impinge on tourism.
The promotion of tourism must not be seen as tangential to the operation of our cultural institutions, our forests, our employment training courses and our  environmental awareness efforts. They all form part of the crucial jigsaw puzzle as far as the industry is concerned and it is important that their significance in that context be constantly identified and emphasised. My committee have aired many important ideas and initiatives and, in a way never attempted before, have focussed attention within State agencies on the manner in which policies and expenditure over a wide area impact on our efforts to upgrade tourism.
For too long the development of the tourism infrastructure and its promotion abroad were seen as desirable but insignificant elements of Government policy. That has all changed radically in the past two years. Not alone is tourism now a top priority on the Government's agenda and one which ranks high amongst its many successes, but the tourism content of numerous State activities is now prominent in the policy formulation and expenditure planning of every Government Department and agency.
I should like to draw the attention of the House in particular to a measure in the budget which has a direct relevance to our tourism promotion efforts, the special provision in relation to unleaded petrol. In last year's budget the Government brought the price of unleaded petrol down to that of the leaded variety and great strides have been evident in the past year in the provision of a steadily growing national network of unleaded petrol outlets. Indeed, I had the pleasure of officially opening some of those outlets in Dublin and in Cork. This year's budget has now made unleaded petrol cheaper than the leaded grades and I hope that this will help to provide an impetus towards the use of unleaded petrold by Irish motorists leading to a wider retail availability of unleaded supplies. Quite apart from the benefits to our health and to the environment, this will facilitate our efforts to attract continental tourists, motorists in particular, a growing number of who are users of unleaded petrol only, and will help to promote the image of Ireland abroad as a clean, healthy, quality destination.
 I should like to move to some of the transport activities in our Department. The spirit of optimism and positive achievement that has characterised our efforts in the tourism area is readily apparent in the transport sector also. Given the underlying importance of this sector of the economy ws a whole, the quality of the transport product has a crucial significance for our overall drive towards greater productivity and efficiency. Here, I am happy to say, the transport companies operating under the aegis of my Department continue to rise to the challenge of the Programme for National Recovery.
My colleague, speaking in the House last Thursday, gave an account of the recent developments in the field of aviation and referred in particular to the very satisfactory performance recorded in a tough competitive environment by Aer Lingus, the State airline, in terms of increased passenger numbers, the creation of additional sustainable jobs and the advance of their fleet development programme. The company are to be complimented on their contribution to tourism growth and on their financial performance. It is particularly satisfactory that the airline have been able to make such an impressive start on the upgrading on their cross channel/ European fleet without any assistance from the Exchequer.
While still on the subject of aviation, I should like to put on record my appreciation of the tremendous performance and achievement of Aer Rianta both as regards their management and operation of State airports and their efforts to diversify and win new markets abroad. Passenger throughput at three airports in 1988 amounted to over 6.3 million persons which represented an increase of 21 per cent on the 1987 figures. The most significant increase was recorded at Dublin Airport where passenger traffic amounted to 4.4 million persons, up by almost 25 per cent on the previous year. By any standards these are remarkable achievements. They directly reflect the vigorous growth in passenger numbers to  UK and European destinations experienced by the airlines in the new competitive environment which this Government's policies have fostered. The traffic picture at Cork and Shannon was equally encouraging with substantial increases of 23 per cent and 12 per cent, respectively. On the financial side, while final figures are not yet available, I am confident that the company's results for 1988 will show another record performance.
I would like to pay tribute to Aer Rianta's pioneering success in securing the contracts for the Moscow duty-free shops and the painting of the Aeroflot fleet at Shannon Airport. These achievements are regarded as milestones in the Irish-Soviet trade relations and a superb example of what it is possible for Irish companies to achieve in new and untested markets. The company are continuing to capitalise on their success in the Soviet Union and have recently announced further joint venture projects relating to duty-free shops at Leningrad and Viborg on the Finnish border. Both of these projects will be modelled on the duty-free shops at Moscow Airport which, last November, won the Airport Retailer of the Year Award at the world tax-free trade show at Cannes, only six months after they commenced operations. Aer Rianta are also pursuing a wide range of other possibilities for joint ventures in the Soviet Union.
Aer Rianta's successes in Moscow remind us that the Programme for National Recovery aims at achieving a general three-fold expansion of turnover in overseas consultancies by relevant State agencies. This is a market which has been enthusiastically embraced by the State transport companies, with earnings of approximately £35 million from this source projected up to 31 March 1989. For example, the establishment of a special consultancy division, CIE Consult, was one result of the reorganisational changes that took place in CIE in 1987. This is clear evidence of the spirit of enterprise and market awareness which we have come to expect from the  CIE group. The group's subsidiary companies continue to face very daunting challenges on all fronts. The difficulties faced by Bus Átha Cliath in providing a reliable, cost-effective service for the capital city immediately spring to mind. In this task the company have the support of the reconstituted Dublin Transportation Task Force whose 1988 investment programme of approximately £170,000 included a considerable element of bus priority and managment measures.
Our concern to ensure that State-sponsored transport companies perform to the best of their ability is of course only one part of our strategy. In the interests of overall economic wellbeing and progress we must continually strive to ensure that the necessary conditions exist to enable all transport modes to contribute effectively to the national effort and that transport costs imposed on industry and in particular on the exporting sector, are minimised. These concerns are sharply focused as the goal of a single European market becomes a reality. Our island location on the edge of Europe highlights the need for a sufficiency of low-cost, high quality and efficient access transport services to serve Irish industry if we are to survive as an exporting nation and to facilitate the growth of Irish tourism.
In the context of the Single European Act objectives of integration, convergence and cohesion of member states, it is absolutely vital that the competitiveness disadvantages inherent in our geographical position be recognised and taken into account, particularly in the context of the Structural Funds. This is a key element in our negotiation in Brussels. In the lead-up to 1992 we must continue with our efforts to ensure that good quality road and rail links are provided to our ports and airports and that we are ready to capitalise on such external developments as the channel tunnel.
We will be drawing on the EC Structural Funds to assist in funding the necessary infrastructural investment in the transport sphere so that we can gear up for the challenges of the internal market. The announcement in the budget of an  additional £34 million of direct Exchequer expenditure on necessary road improvements, in the confident expectation of increased funding from the Regional Fund, is a case in point. In the sphere of aviation for example, the State is making £2 million available this year to up-grade regional airports. This investment is in addition to the £1 million provided last year and the £1 million subscribed from local resources. A total of £4 million will enable the regional airports to be up-graded and to contribute to the Government's target of doubling tourist numbers. In addition, it will provide improved transport links for industry and industrialists in the region in which the airport serves.
At the same time the State airports are not being neglected. Aer Rianta have built a manificent new runway at Dublin Airport which will come into service in the middle of this year. Cork Airport has had its first runway extension in 25 years of its existence, with an addition of 1,000 feet to the main runway, allowing larger and fully-laden aircraft to land and take off and so serve the city and the region. These projects involved expenditure of £35 million and further major investments in the State airports, totalling £18 million, are also planned for 1989.
An investment programme, costing £30 million, is also under way to up-grade the radar and navigational facilities at our airports and in our Irish airspace. Tenders for the radar equipment are being evaluated and a contract will be placed in the next few months. That contract will represent the largest single investment ever undertaken by the State in our air navigational sphere. The upgrading of the system will ensure and enhance the provision of safe, regular air transport operations. Hand in hand with these infrastructural developments we are continuing to pursue a liberal air transport policy in the interests of improving the quantity and quality of our access transport services and of reducing the cost of air travel to Ireland. The success of this policy to date and our determination to keep up the pressure for  favourable developments were outlined in the House by my colleague last week.
Liberalisation has also been a feature of the road haulage area. Road freight carrier licences have been and are being granted under the Road Transport Act, 1986. The licences which are unrestricted are being granted to all applicants who meet th EC-wide qualitative criteria of good repute, appropriate financial standing and professional competence. On the international front and to serve the growth in economic activity we have been seeking new openings and opportunities for the Irish haulage industry. To this end we have consistently advocated and supported policy measures for the liberalisation of the industry and obtained an increasing number of international licences for our hauliers. We are working in the belief that after 1992 intra-Community transport will be subject to qualitative criteria only. We must therefore gear ourselves for the opportunities which will be presented by the opening up of a huge new market for Irish hauliers.
The budget which is the subject of this debate is a clear affirmation of the success of th Government's policies on the economy. That these policies are on course is evident all over the country but nowhere more so than in my own native Cork. If the people of any other part of the country or beyond suffered the same trauma as we experienced in Cork due to the closure of three traditional labour-intensive industries like Fords, Dunlops and the dockyard, not to mention the many supporting service industries which depended on them, I doubt very much if any area anywhere would have bounced back in the same manner as we have done.
It is clear that the Government, by the confidence, the hope and the commitment they have shown played their part in not only lifting the morale of the people but, by their leadership and co-operation, ensuring the ingredients for the turnaround of our economy. For example, following the very successful tourism forum in Kilmainham I organised a similar exercise for the south west and it, too, proved very successful. Many  initiatives emanated from that forum and the spirit of co-operation with the local economy, the business people and commercial life generally was evident. There are many other practical examples I could enumerate ranging from the establishment of the free port at Ringaskiddy to the extension of the hours of broadcasting for Cork local radio. The conditions are ripe for the kind of development we need to put Cork and its hinterland back on its feet.
A further instance of this co-operation, when the need was greatest, was the unique response to public meetings in raising funds to help ensure the continuance of the Cork-Swansea ferry. I recently conveyed to the company the decision of the Government in relation to the company's request for further Exchequer assistance. In doing so I reiterated the stance which the Minister and myself have consistently adopted— that no more than £500,000, by way of grant from the Exchequer, could be made available to the company. However, bearing in mind the importance of the Cork-Swansea service to tourism in the Cork-Kerry region and having regard, in particular, to the funds raised and pledged by local interests, the Government are prepared to provide an additional £500,000 loan to be repaid by September 1989. I would like to compliment the fund raising committee who went from town to town to raise that money.
Finally, I am very pleased to have been offered the opportunity of contributing to a most important debate. I speak from the standpoint of an area of ministerial responsibility of which we have come to take a much more realistic view, first, of the practical inter-relationships of tourism and transport and, secondly, of their importance to the economy as a whole. From this realisation has flowed a new sense of optimism and confidence about what we can achieve. This is a process I believe has taken place in many other areas, both public and private. The budget serves to underline and encourage that positive forwardlooking spirit and is yet another affirmation of this Government's intention to maintain a course  whose underlying wisdom has already been clearly vindicated by results. Leanaimís go léir ar aghaidh leis an obair fónta.
Mr. Connaughton: I could not help thinking that Cork seems to have won everything except an All Ireland medal.
Mr. Lyons: That is on its way, too.
Mr. Connaughton: I want to take this opportunity to highlight a major disturbing development which has taken place as a result of the speech by the Minister for Finance on budget day last week. The Minister made the following point on special pay increases; as reported at column 229 of the Official Report for 25 January 1989:
An allocation of £30 million will be made for 1989 in a Vote for increases in remunerations and pensions in respect of special pay increases. This is in addition to the £12.5 million cost of the package of increases agreed for the Defence Force which is already reflected in the adjusted position for non-capital supply services which I referred to earlier. I will return to the question of special pay increases later in my speech.
The Minister returned to the topic again and I quote from column 237 of the Official Report:
The £30 million allocation for special pay increases, to which I already referred, will meet the cost in 1989 of settlements which, however, could ultimately cost £150 million a year.
A situation cannot be allowed to develop where there would be an unrealistic roll-up of increases both generally and for particular groups. I have decided, therefore, to invite the Irish Congress of Trade Unions to meet me to discuss the whole issue of special increases with a view to arriving at a mutually acceptable solution.
I should mention that the cost in 1989 of the package of increases for the Defence Forces recommended by  the inter-departmental committee, whose report was adopted in full by the Government with one small adjustment, will be £12.5 million and that the annual cost of the package when fully implemented will be £25.7 million. These costs are in addition to the costs I have already mentioned and are so substantial that offsetting savings including the closure and disposal of military barracks have to be made. It should be clear to all that, in the general context of public service pay, the Defence Forces have been treated as a special case.
It must be now obvious to everybody in the Defence Forces that the original announcement of the Defence Forces pay deal by the Minister for Defence misrepresented the facts as stated by the Minister for Finance. A clear indication was given on that occasion that the lower paid members of the Defence Forces would receive a 12 per cent increase. However, all the bad news has since begun to be known. There will be no increase in basic pay until 1 July 1989 when 4.8 per cent of the award will be paid. This is an increase of 2.4 per cent over the entire year. That is what the Defence Forces got in 1989. However, while the press statement did not carry any definite date for the payment of the second instalment the message was that the entire increase would cost £25 million in a full year.
Despite my best efforts to get clarification, the Minister for Defence almost went underground for the entire month of January. My efforts at raising this urgent matter of vital national interest by way of a Private Notice Question failed as did my plea to the Government to provide time to discuss the matter in the Dáil. The reason for all this dodging and side-stepping became abundantly clear in the budget speech. The Minister for Finance states that there is a build up of £150 million in special pay claims and that this must be renegotiated with the trade unions. My reading of the position is that there will be a dramatic curtailment of  the amounts to be paid by way of the special deals and we can imagine the pressure that will be exerted, by the pressure groups, for the much smaller cake on offer.
Mr. N. Treacy.: They were badly neglected for four years.
Mr. Connaughton: Who will argue the case for the Defence Forces? They will have no direct input into the negotiations and they will hardly get excited at the prospect of the Minister for Defence carrying the can for them. The stark reality for the Defence Forces is that the second part of the pay award of 7.2 per cent is not coming as they had been led to believe and it might be years before they get their hands on even the most minute part of that. This is deplorable conduct by the Government and it illustrates the lack of clout of the Minister for Defence at the Cabinet table. Obviously, that Minister is not taken seriously by the Government and, worse still, the Government do not take the Defence Forces seriously.
Mr. N. Treacy: What were you doing for four years?
Mr. Connaughton: The truth is bitter but that is it.
Mr. N. Treacy: What were you doing for four years?
Mr. Connaughton: Fianna Fáil are in office long enough to have done the job if they wanted to do it. I want to place on record that the storm clouds that are gathering over the Defence Forces pay issue will not go away. Two recent events clearly indicate that morale in the Defence Forces has reached a dangerous level. The spectacle of Army spouses taking to the streets and the mass resignations of Army sergeants are matters of great concern. However, the response from the Minister for Defence was swift, negative and, in my view, deplorable. I believe he has made a most insensitive move by signalling his intention to  increase the buy-out fee, or discharge fee, from the Army. What the Minister has actually done is to commit the time-honoured labour relations principles to the dustbin and to introduce a heavy handed, shortsighted, oppressive policy that is sure to extract minimum goodwill from the members of the Defence Forces.
Even with the particular command structure of the Defence Forces, it is still not obvious to the Minister that a good working environment is conducive to having a contented labour force. I wonder, will the Minister ever learn? We Irish possess an individual stubborn streak, which is an absolute plus if harnessed properly, but certainly it can be a huge impediment if it is used the wrong way. If the Minister persists with this policy of coercion—as I call it—very few young people will want to join the Army. After all, who would want a job that would impose severe penalties on your decision to leave it of your own free will? Let there be no doubt in anybody's mind of the extent of the problem in the Army. Over 70 technicians left the Air Corps in 1988, so many in fact that the Air Corps was able to show a saving of over £9 million in its subhead for aircraft parts in that year. The personnel was not available to use the parts and this is only the tip of the iceberg as far as the Air Corps is concerned. Indeed, were it not for the fact of a High Court judgment, several more pilots would be taking flight from the force at present.
Everybody now accepts that the problems emerging in the Defence Forces are entirely linked to low basic pay.
Mr. Roche: It was not very high when you were in office.
Mr. Connaughton: It is a hell of a lot lower now.
Mr. N. Treacy: You did nothing for four and a half years.
Mr. Connaughton: This is the bitter part, the bad part of the budget and you know it, Minister. What has annoyed the members of the Defence Forces is that  this very element has not been addressed in the pay deal. The increase in the rates of allowance is very welcome but let there be no trumpeting about it; the allowances were so low that any increase would seem high as a percentage rise. However, increases in allowances do not substitute for an increase in basic pay. Not everybody can avail of allowances as these are paid for certain selective duties. When the pay deal of 12 per cent was first announced there was reasonable acceptance of it in the Defence Forces. Many understood that the special public service pay deal, believed to amount to 10 per cent and payable in June-July of 1989, would apply to the commissioned officers as well. Indeed many officers believed, despite the Government's sleight-of-hand, that the award pending in June would be safe. After Deputy Reynolds's statement last week, it is far from safe and instead of a possible 22 per cent rise in pay, the only additional increase in pay this year will be 2.4 per cent over a period of 12 months.
Do the Government believe the Defence Forces merit this type of treatment? It is widely rumoured that after the interdepartmental committee requesting an Army input into the pay deal, the considered view of the Defence Forces was that a 25 per cent hike for the lower ranks was necessary and desirable. Will the report of the interdepartmental committee be made public? Surely this document should be laid before both Houses of the Oireachtas immediately? If this does not happen, the lack of confidence currently displayed by the Defence Forces in this body will increase. Indeed, after the question of low basic pay, the next priority of many members of the force is their perception that their views are not taken into account and that nobody speaks for them. Certainly, after the debacle of recent times, the announcement by the Minister that the present committee will stay in operation rings very hollow. Shades of the fox guarding the chickens comes to mind.
Many Defence Forces personnel do not see the existing committee as being independent of the Department of  Defence, or indeed the Government. Most experts agree that any type of trade union involvement must be ruled out of order as far as the Defence Forces are concerned but surely the Government must see the need for some outside expertise to head a commission to explore the current situation and then put its report to the Government. Irrespective of what the existing committee will do, I believe they will not be taken seriously by the Defence Forces.
The debate on the Army pay crisis has captured the public's attention. The concept of security is uppermost in people's minds and for the first time in many years the Defence Forces are not being taken for granted as they normally were. That in itself is good; after all, the defence budget is approximately £300 million per year, inclusive of pension payments, and by any standards this is a lot of money. I believe we should have a debate on what we require our Defence Forces to do and, having decided on the priorities, we should then invest in the areas that need expansion and withdraw funding from areas deemed to have a low priority. This whole question must have a European dimension. What will be our stance if and when the Americans cut their European defence budget?
Mr. Roche: Perhaps Deputy Connaughton can tell us if we need to cut the numbers in the Defence Forces?
Mr. Connaughton: Have we thought about our role in Europe? What is wrong with Deputy Roche is that nobody in his party has bothered to think of the role of the Army in the future. The Deputy has forgotten about them as the Army spouses who are on the streets, will tell him. Do we use our neutrality to our best advantage? Those are the questions that the Minister for Defence should be looking at. What type of society do we expect to see here in 25 years time? Obviously, the free movement of capital and labour in Europe will change our profile somewhat. Will we need more naval protection vessels to police the high seas  against illegal shipment of arms and illegal drug trafficking? Everybody is aware of our great contribution to UNIFIL and to world peace and this has been commented on favourably by world experts. We sincerely hope that will continue.
The question of our commitments to the Border has to be looked at. There is no doubt it is important that we have a strong presence there. Subversive activity has to be looked at, and this is something that every national army has to contend with.
Our search and rescue service obviously needs reorganisation and I am very disappointed that the Minister has not acted on the issue of relocating the Dauphin helicopters at Shannon. Everybody on the west coast wants this and it seems to make very little sense to have the helicopter fleet based at Baldonnel when a huge proportion of the accidents take place on the western seaboard. For the life of me, I cannot understand why the Government have not acted on this issue. It would make great sense and it appears that Members on all sides of the House would agree to it, but yet it has not happened. If the Minister for Defence is replying in the Dáil, I hope he will let us know the reason this has not happened.
May I put on record that recent events and accidents on the west and south west coast—indeed one not too far away from the shores of my own County Galway— show that we need helicopters of that type in close proximity. Might I add that we have an ideal opportunity of ensuring that we have an adequate rescue service. We are starting from a greenfield situation. Until we had a fleet of Dauphin helicopters and had trained pilots to fly them night and day, there was no point in talking about a security rescue strategy, because we did not have the equipment to fulfil that role. That has been changed. We now have the staff complement and the machinery, and all that is required is the political will to locate the helicopters in a strategic position to ensure that we get the best value from the service.
The Dauphin helicopters have a limited range but I do not accept the criticism  of some experts as I believe they are very useful and are needed. However, we need a much bigger craft such as the British Sea King to effect long-range rescue, with a capacity to hold 20 to 30 people.
At present, we do not have that type of helicopter, I do not think the Exchequer could be expected to purchase such a machine but there is no reason whatever why it cannot be leased out on a private basis. This has been done in many other countries and there is no reason for the Department or politicians to feel threatened by it. The oil rigs have had such facilities for many years and there is no reason it cannot be done. It would not be that costly. I believe an opportunity was lost when some announcement of this type was not made so as to ensure that in the event of relocation it would be effected some time in 1989, because the years are beginning to slip by.
Government speakers referred to the fantastic upsurge in growth in the economy. I accept that; we all rowed in behind them. My party put that foundation there. I sincerely hope that the graph will continue in this direction. I cannot reconcile the Fianna Fáil statements of the past week with the fact that emigration never ran at such a high level as today. That party went to great lengths two years ago, before the last general election, to inform the electorate at large that once they held the reins of power this stream of emigration, as they called it, would be down to a trickle. If the statistics which I have prove correct—it can be accepted that about 30,000 people leave our shores every year through emigration—around 70,000 people had emigrated by 1988. If this is correct, that stream has not become a trickle but a river. Ask any young people what they think is happening in Ireland, after the so-called good times, that they are forced to emigrate. That will bring us back to reality. The budget did not address this issue in any shape or form.
With regard to the social welfare aspect, I genuinely believe that credit should be given where it is due. I was particularly grateful to see the Minister  addressing the question of deserted husbands and of widows. That is terribly important. I hope that the remedy will be brought in quickly, because there are very many people caught in that particular poverty trap.
As far as agriculture is concerned, the Government hid behind the fact that, due to no great effort on their part, incomes rose by 16 or 17 per cent in 1988. No great thanks to the Government at all. The acid test will be the type of increase that agriculture is likely to witness in 1989 and 1990. The signs are there and there are so many people, as the Minister of State will be well aware, who do not share in this huge uptake as far as agricultural incomes are concerned. It is true to say that there are certain categories of small farmers who did not share at all in the increased incomes because they had to buy in their stock by way of calves for weaning. That type of farmer is under greater pressure now than ever he was. As a result of the decision by the Minister for Agriculture and Food to accept the Brussels deal on intervention, I understand that this very week a tremor has been felt going through the cattle trade. I am told that there has been a fairly substantial reduction at factory level in the price of cattle. I hope that this will be only a temporary shiver, but confidence could not be there.
The Minister for Agriculture and Food said before Christmas that he would have no trouble whatever in using the veto in this vital national interest. Three or four weeks later, everything is accepted by him. Many farmers will want to meet Minister O'Kennedy and ask the reason for such a dramatic change in his tune. If the tremor that is understood to be going through the agricultural industry at the marts and factories in the last few days continues, a great many more people will want to see the Minister.
I was extremely disappointed that no reference whatever was made in the budget speech or any recent speech by any Government Minister, and particularly by the Minister for Agriculture  and Food, to the reclassification of the disadvantaged areas.
Mr. Yates: Hear, hear.
Mr. N. Treacy: The Deputy is not reading the speeches.
Mr. Connaughton: This is something that I hope Minister Treacy will do something about. He knows very well that the application was put in two years ago.
Mr. Yates: What about Rosslare Strand? They are still waiting.
Mr. N. Treacy: It is still there. Deputy Yates told me that it would be gone.
Mr. Yates: Thanks to the county council.
Mr. Connaughton: His Government never did a thing about it since.
Mr. Connaughton: At the European election, the Government will be getting it out all right. It is cheques that should be given, not promises.
Mr. N. Treacy: The Deputy said in 1987 that it was coming. It was a gimmick.
Mr. Connaughton: The Government lost two years. It was there and they did nothing about it. They should be ashamed of themselves.
Mr. N. Treacy: It was not even ratified. It was disgraceful.
An Ceann Comhairle: I call Deputy Roche. The Deputy appreciates that we shall be coming to deal with Private Members' Business at 7 p.m.
Mr. Roche: In the closing paragraph of the Minister's Budget Statement the aims are very clearly stated. These aims accord with the general consensus that has emerged in recent times as to the economic,  social and fiscal priorities facing the nation. The budget sets out to achieve, first, a more equitable distribution of the national cake through improved social welfare payments. It also sets out to achieve a further stage in the reform of our taxation system. The third priority is a boost to economic activity and to jobs. Finally, the budget aims at achieving a further reduction in Exchequer borrowing, directed both at stabilising the nation's finances and at enhancing and consolidating the growing confidence in the economy which is evident in many, indeed in all sectors.
These potentially conflicting objectives could be aimed at because of the very real success of Government economic policies over the last two years. In the short 23 months since Fianna Fáil took over office from a hapless, a hopeless and a divided Fine Gael-Labour Coalition, there has been a quite remarkable transformation in our economy. Stabilisation of the debt-GNP ratio has now been achieved. Moreover, the stabilisation has been achieved two years ahead of schedule. Two short years ago I doubt if any Member of this House would have believed that that situation could have been achieved.
The Exchequer borrowing requirement, which in 1986 under the Coalition Government peaked at £2,145 million, has been more than halved. It is worth while reminding ourselves and putting again on the record that the Exchequer borrowing requirement peaked during the last years of the Coalition Government. The actual Exchequer borrowing requirement for 1988 was the lowest for 30 years. During the years when the Coalition Government mismanaged the economy, Exchequer borrowing requirement fell, not from the fictional figures of 21 per cent to 10 per cent as suggested by that master of digital dexterity, Deputy Noonan, last week, but from 15½ per cent to 13 per cent, while at the same time the debt-GNP ratio rose inexorably year after year. What we have seen in Deputy Noonan's contribution last week and in his party's political graffiti decorating so many expensive poster sites at  present is an interesting example of the new genre of politicians.
Mr. Yates: Such as health cuts hurt the old, the sick and the handicapped.
Mr. Roche: Yes, an interesting example of a new genre of politics, the emergence at national level of the hardneck school of politics.
Mr. Yates: The Government have not been up there for a long time.
Mr. Roche: This type of politics has long flourished in council chambers, where frequently members who are noteworthy for their singular lack of contribution or achievement call for support for this project and yet oppose any measures aimed at financing these activities. Then they go on to illustrate their lack of familiarity with both truthfulness and integrity by claiming credit for all that has been achieved. That is how it is at present with the main Opposition party.
Fine Gael have elevated the hardneck type of politics from local to national level. In spite of a disastrous period in Government which witnessed the highest ever budget deficit, a disimprovement in personal taxation, a downturn in economic activity, through their financial spokesman and their poster designers, they now seek to claim some credit for all that has been achieved by Fianna Fáil since they came to office. They even try to claim credit for not sabotaging the good work being done by this Government, and that surely is an old thing for politicians who are supposed to be dedicated to the national interest.
As the polls show, the public are still acutely aware of the gulf between Fine Gael aspirations and Fine Gael achievement. Another major achievement of the Fianna Fáil Government has been the taming of the current budget deficit.
Mr. Yates: I move:
That Dáil Éireann calls on the Government to ensure that the VHI Recovery Programme is altered so as to rescind the decision to abolish the drugs refund scheme by availing of alternative policy options which would remove cross subsidisation of plans and allow a more actuarial approach to health insurance.
During the Dáil recess the Government announced a recovery programme for the VHI. The public and this House were already aware that due to the complacency and delays of the Minister for Health in dealing with the financial crisis in the VHI there would have to be a very severe package of measures but no one ever supposed that it would involve the abolition of the drugs refund scheme. It seems incredible that this Government should inflict such hardship on over 40,000 families in such a callous way.
In moving this motion the Fine Gael Party, with the assistance of the rest of the Opposition, will seek to rectify what has been an appalling proposed injustice on people who have not caused a problem for which they have been asked to carry the principal burden in rectifying. In my contribution I wish to outline in detail the hardship that many patients will suffer because of the abolition of this scheme; the reasons why this is the wrong option to resolve the VHI's problems; why our total drugs situation is in chaos in this country without any response from the Minister; alternative VHI options in terms of financial recovery and the future direction of the VHI.
There are umpteen long term illnesses or recurring illnesses that require expensive treatment and drug usage to control. Perhaps the best highlighted of these is asthma. There are at least 100,000 asthmatics in this country. It is estimated that 10 per cent of GMS drugs expenditure in 1987 was for asthmatics. Somewhere between 10 per cent and 15 per  cent of all children are asthmatics and 6 per cent of adults are asthmatics. It is very common for families who have asthmatics to have more than one child suffering from it. It is also common for monthly drugs expenditure to be of the order of £70 per month. Yet, because of the expense of inhalers and tablets there is substantial evidence of under-treatment with the proper drugs. It is simply vital that asthmatics get their proper drugs with the proper financial assistance if they are not to become so ill as to require hospitalisation.
Kidney sufferers require very expensive and continuous medication and treatment to deal with renal failure. I have received many individual letters from people suffering from what I term minority illnesses that do not have such a high public profile or public awareness. Specifically I refer to Chrohn's disease; people suffering with colostomies and other long term illnesses that break down immunity in the body; heart disease and arthritis are two very common ailments, particularly among the elderly, which require constant medication. Hypertension or blood pressure equally requires a steady constant flow of medication to control. People who are unfortunate enough to have a glaucoma or high cholesterol levels require regular monitoring and drugs. We have the whole series of psychiatric illness in which we have seen in recent decades a transformation in the type of care from institutions to a community care approach simply because of the evolution of drugs and injections to cater for mental illness.
All of these people have been specifically targeted by the VHI, the Minister for Health and the Government as being the scapegoats for their mismanagement and incompetence resulting in the financial position of the VHI and the subsequent proposal to abolish their entitlement to a drugs refund up to the level of the State drugs refund scheme i.e. £7 a week maximum. This is a fundamental injustice because it cannot be argued in any way that this aspect of an out-patient scheme which has an excess  policy of £170 only caters for cases of hardship and which is not open-ended is the cause of the VHI's problems.
The cost of the drugs refund scheme last year was £7.6 million. If one analyses the VHI accounts prior to, during, and after their financial difficulties one sees that there are a number of factors whereby changes have taken place. I am referring to the increase in expenditure on administration, the huge claims now being made under diagnostic services, the advent and exploitation by high technology private hospitals through new claims and the increase in moneys paid to public hospitals for pay-beds. How it is that those factors, which can be directly attributed to the changing circumstances of the VHI are not items for the single largest saving in their recovery programme but rather instead they go for the soft target of a scheme that has been in operation since 1967 which operated for almost 20 years without causing the VHI financial difficulties and which was not a major factor in the transformation of circumstances for the VHI?
The consequences for the VHI of this proposal if it is allowed to go ahead will be first, that many people whom I have referred to with long term illness will instead not maintain their membership of the VHI simply because they need that money to pay for their drugs. Thus, the increased membership which the VHI obtained over the years because of the drugs refund scheme and for which they actually canvassed at the asthma organisation and other functions, will move away in disillusionment and reduce VHI premium income.
The second effect of this ill-conceived proposal is that those patients with long term illness in the community who are controlling their health care and maintaining their quality of life through proper and adequate provision of drugs will be unable to afford such medication and will relapse into a greater spiral of sickness and ill-health resulting in very expensive in-patient hospitalisation, often in beds costing £1,200 per week. The whole thrust of agreed health policy of successive Governments over the past ten  years has been to develop the primary care, community care and out-patient services within the health system. This decision flies in the face of all that thrust. This serves to underline that this Minister has no palpable overall health policy or strategy that is based on optimum care for the public and maximum cost effectiveness.
The drugs refund scheme as operated by the VHI is one of the few schemes for which there is a maximum possible payout for any individual subscriber, as the maximum anyone can claim is £336 a year. This is even in spite of the fact that a lot of health boards are charging £5 per month to administer the drugs refund scheme, resulting in the State drug refunds scheme only commencing at the level of £396 per year.
I have many times publicly referred to the unacceptable situation in relation to drug costs in this country. This Government persist in an agreement with the Federation of Irish Chemical Industries that allows for UK prices plus 10 per cent to be paid for most drugs. Many drugs that are commonly used and paid for under the VHI drug subsidy scheme can be bought at least half the price in many EC member states, if not a majority of those states. It is not acceptable to wait until 1992 or in the nebulous expectation or hope of some parallel imports to rectify this situation. The Minister has not only not got a good deal for the taxpayer in terms of the price paid for drugs but also has allowed a situation where there is no effective competition or price control for private drug usage. The common mark-up of drugs among pharmacists is 50 per cent for both the long-term illness scheme and the provision of drugs through sales directly to the public. It is simply anomalous that the State pays a different price for drugs through different schemes. We have at the moment the medical card scheme whereby drugs are paid for, the long-term illness scheme for some 15 classified illnesses and the State drugs refund scheme operated through the health boards. There is an urgent need for some rational approach to this.
I am referring specifically to the fact  that a chemist is paid £1.24 per item through the medical card scheme but he gets a 50 per cent mark-up on the same item if it is done through the long-term illness scheme. It makes no sense. CEOs in health boards are replacing medical cards with long-term illness cards.
In the last election Fianna Fáil specifically referred to hardship for individuals with a high drug requirement. In the Programme for National Recovery under the ironic heading “Caring for Basic Values” they specifically say:
we will take immediate steps to ... search out ways to improve the system for individuals yet at minimal or no cost to the State. An example is the problem of sufferers from long-term illness using the drugs refund scheme who are now expected to make large outlays each month. Most of this money is eventually refunded by the State. Having to provide money for several months is often difficult for limited eligibility patients.
What is being done by this Government to assist those individuals? Nothing except a total worsening of the situation by an increase of the threshold for the drugs refund scheme and the proposed abolition of the VHI drugs refund scheme.
Again, we see a delay and inaction from this Minister in relation to the introduction of a proper national formulary for generic drugs and effective guidelines to ensure their operation so that people do not have to pay for the same drug using a more expensive brand. All aspects of the medical profession are agreed on the potential savings in this area.
Similarly, it is now quite obvious that of the 800 over-the-counter drugs that were delisted from the medical card scheme when Deputy Woods was Minister for Health, there are still some 40 drugs out of that list which have caused the taxpayer a lot more expense by virtue of the fact that because cheap over-the-counter drugs such as antacids are no longer available and very similar products such as Tagamet costing a multiple of  those referred to are being prescribed by doctors.
If we analyse the drug situation in Ireland and if the Minister has any real genuine concern for those with long-term illness there is a variety of different options he can pursue to help them. They are a renegotiation of the deal that allows for excessively high prices to be paid for drugs in Ireland relative to costs in Europe; a rationalisation of the number of State drug schemes ensuring a uniform system of payment to pharmacists; new effective guidelines for the greater use of generic drugs for all patients and a greater usage of limited over-the-counter cheap drugs for some basic illnesses. The Minister recognised these problems in Opposition and yet almost two years later had done nothing to rectify the system but unfortunately instead exacerbates it through this proposed abolition of the drugs refund scheme.
It is important in this debate to reflect on the VHI position in order to ensure a proper reversal of the decision relating to the drugs refund scheme. It is undoubtedly true that if the Government had produced their present recovery programme—or any recovery programme —a year earlier, in December 1987, the saving to the VHI subscriber alone would have been of the order of £13 million. In any business a problem undetected and not rectified is exacerbated if accumulated losses are allowed to develop and in this instance deplete reserves to an extraordinary low level of £4 million from a February 1987 high level of £29.3 million. Right throughout last year the Minister for Health denied the existence of a financial crisis in the VHI and accused the media, myself and others of being alarmist and scaremongering when we suggested net losses of £22 million for the two year accounting period. As it transpired his complacency in awaiting more reports on the VHI board from the team of consultants and others as well as his general inaction have resulted in the present recovery package having an excess of severity because of these accumulated losses.
 The reasons for the VHI crisis are, first, the lack of proper cost control in the VHI. It is quite obvious that the VHI entered into commitments in recent years which were not properly costed. They simultaneously failed to negotiate with key elements of the health service including the Department of Health, private hospitals and the medical profession, and were, therefore, wide open for exploitation by all concerned. This resulted in all claims jumping at a multiple of the rate of inflation and at a far greater rate than any possible premium and revenue increase.
It has been argued that lack of premium increases is the problem in the VHI. I have heard it suggested by those in private hospitals and elsewhere that Deputy Desmond's refusal to give premium increases was the nub of the problem. I reject that because, prior to the recovery package, fees increased in the VHI by 53 per cent since 1984 while the consumer price index for the same period was some 17 per cent. We had a fee increase of 8 per cent in December 1987 and a further proposed fee increase now between 3 per cent and 25 per cent all of which is above inflation. The VHI have increased fees very rapidly over recent years. It is wrong to say that denial of fee increases by successive Governments is the reason for the problem.
Secondly, it is undoubtedly the case that the mismanagement of the public health sector resulting in indiscriminate loss of beds and wards had a direct knock-on effect on the VHI with more people claiming on the VHI and demanding services that were becoming inaccessible through the public health service. This, coupled with the very large increase in the per diem rate in pay-beds in public hospitals were a major drain on VHI resources. Some private hospitals would argue that this per diem rate increase was the major problem. I disagree. I have to point out that on any comparative costings there is no doubt that this private daily rate charge in public hospitals to VHI subscribers is still heavily subsidised and good value relative to private hospital care. The capital and equipment  charges are not included and therefore, it is not an economic charge.
Thirdly, the VHI allowed a huge increase in hospital capacity in recent years. I am referring to the provision of two new high-tech private hospitals, Blackrock Clinic and the Mater Private Hospital. These are drawing down in the order of £20 million per annum from VHI funds. Blackrock Clinic were allowed an open-ended claim system that was completely non-viable in insurance terms and which bears such scrutiny. When D and E plans were first negotiated it was agreed that if a patient covered under those plans went to the Blackrock Clinic all maintenance charges would be paid. I know that the VHI legally tried to resist some of the whopping bills that came in but found that they could not overcome the problem. I am glad that because of the public outcry in this regard, negotiations that the VHI have been trying to conduct in relation to cost control are now meeting with success. Open-ended insurance of this kind could never have been viable.
The Mater were allowed to increase fees at a critical stage and predominantly gave cover to people who were not insured for it in the B and C plans. Unfortunately—and this is the tragedy and reality of health economics at home and abroad in any report one reads—it is very clear that need equals capacity. If capacity is increased in an uncontrolled and unbridled way it will be fully utilised because the managers of those hospitals will ensure virtually 100 per cent bed occupancy.
The VHI wrongly projected that the hospital claims rate from their subscribers for those under D and E plans would be the same as was the case across the other plans of approximately 14 per cent per annum. They were wrong in their calculations. This did not apply as people consciously got extra cover if they suspected that they would require expensive in-patient hospital treatment. Moreover, the target of 10 per cent of VHI subscribers joining plans D and E has not materialised to date. All this  allows hospitals to compete on technology, which is very expensive, without competing on prices. Simultaneously the medical profession, most notably consultants, were allowed to inflict on VHI subscribers a situation where full indemnity was not being offered for consultants' services and extra payments had to be paid by patients over and above what the VHI would cover them for. It is quite common now for someone having a cardiac bypass to have to pay £1,000 to the surgeon on top of what the VHI allow. Little cost control was exercised in the area of diagnostic fees in relation to pathologists who, through new technological developments, were obtaining in some instances huge incomes because of an unfair system of payment. Also, it seems that there was no comprehensive medical audit to monitor the necessity for the increased level of diagnostic testing generally which seems to have been of minimal benefit to patients but which was extremely costly. Once one has a machine one should ensure that it is used in such a way that it pays for itself.
Fourthly, administration costs have increased at a rather excessive rate. I am aware that the VHI argue that they are in line with international comparisons. However, it does seem that they were more competitive heretofore. In the latest accounts we see that administration costs rose during the past year by over 21 per cent. In comparative figures, between 28 February 1975 and 28 February 1985 administrative costs per insured member rose from 99p to £5.54. This change of over 460 per cent seems to be unjustified and well in excess of inflation for the same period.
It is quite obvious on any fair analysis that it is impossible to include that the VHI drugs refund scheme which had been in operation for over 20 years was responsible for the present mess. Consequently, it is simply unfair and unjustified to make this unwarranted attack on the long term ill in this recovery programme. It is this inherent injustice, rather than any political consideration, that has motivated this motion tonight and must  surely oblige the Government to rethink their position.
I would now like to outline some alternative recovery measures for the VHI. When one looks at the financial returns for 1987-88 for the VHI one will see that claims rose by 28 per cent to £141.6 million, and income by just under 13 per cent to £126.4 million. One can see therefore that there is an urgent need to increase income and control costs, to put it in its most simplest terms. In relation to raising income, one has to accept that premium increases cannot be the sole basis for increasing revenue as premiums can reach and probably are reaching unaffordable levels, especially in the context of trying to gain new membership from middle to low income families who perhaps need the VHI most. There is substantial growth potential in membership; 34.1 per cent of the population are members of the VHI. Before I continue, a Cheann Comhairle, I forgot to mention at the outset that I would like to give ten minutes of my time to Deputy De Rossa.
An Ceann Comhairle: I would have preferred if the Deputy had mentioned this at the commencement——
Mr. Yates: I forgot to mention it.
An Ceann Comhairle: Is that satisfactory to the House? Agreed.
Mr. Yates: It also seems from analysing the figures that the average age of the membership is the key to future growth. The present trend is that the age profile is increasing, with the average age last year rising from 30.43 years to 30.67 years. It seems obvious, if one takes a more actuarial approach, that it would be possible to give limited incentives to people in their twenties and thirties for a limited period to join. These are the people who are not joining the VHI and who are taking the conscious decision that they can afford not to join the VHI in their early years. They make this decision on the basis that they receive no  benefit whatsoever from ten to 20 years continuous VHI premium payments without any claims. I believe therefore that a limited no claims bonus, say, up to 25 per cent should be introduced right across the board. I wish to emphasise that this would not alter the principle of community rating which I very much support and will continue to support. I support those Deputies who have stated that this must be the only basis on which foreign competitors are allowed to offer health insurance in this country. It is the only fair principle. I am saying that we should target new membership and encourage young people to join. I do not believe that we should penalise illness but at the same time we should try to attract more revenue into the VHI without increasing premiums. These two issues are not mutually exclusive.
Similarly, the VHI should give discounts to those who look after their health and operate personal programmes of preventive medicine. Here I am referring to those who annually or biannually voluntarily go for comprehensive health check-ups, to have their blood pressure and cholesterol levels tested, and so on and also, to those who consciously do not smoke or drink excessively. It should be possible to devise a system of discounts, even on a pilot basis, to again have a greater actuarial approach, so that those who look after their health are not subsidising those who are abusing theirs. This approach will have to underlie future public health policy as international experience shows that real health goals, such as increasing life expectancy, can only be attained through improved preventive medicine.
In relation to claims, greater cost control will have to be exercised. I referred earlier to the need for competition between hospitals on price and the only way to resolve this is through the introduction of a fixed cost per treatment system of payment by the VHI to private medicine. I am referring to the international experience of the establishment of diagnostic related groups whereby fixed payments are made for different categories of treatment with a peer group  review committee made up of medical experts to establish average bed stays with a disaster clause for unforeseen circumstances. Once a fair basis has been established for such a table of costings, hospitals would have to conform to that price structure or else the VHI would not be able to prop up their inefficiencies or cost overruns.
The practice heretofore of paying different prices at a multiple of their cost for high volume extras such as drapes, gloves and syringes was simply lunacy in financial terms. There has been much public comment and even resentment in relation to the level of cross subsidisation by 94 per cent of VHI members in plans A, B and C of the more expensive luxury plans D and E. The Minister has admitted that this is a problem and it is self evident from the varying proposed premium increases that a subsidy has been paid to date. I believe that the only way to effectively root out cross subsidisation between plans is to reorganise the plans into three simple categories of cover which would conform to the three different types of hospital care, that is, private or semi-private beds in public hospitals, be they voluntary or owned by the health boards; low technology private hospitals, such as the Bon Secours in Cork, Galvia in Galway and Mount Carmel; and the high technology private clinics, such as the Blackrock and Mater private clinics. People would then know in advance by paying into these different categories what type of cover they could expect, and, accordingly, would pay for it.
I very much support the concept of greater fee control in relation to the finance paid to consultants and others for certain services, such as diagnostic work. A per case method of payment must be vigorously pursued by the VHI for routine operative work carried out by biochemists and technicians in our hospital laboratories. A streamlined system should be introduced to ensure that different hospitals are on the same system of payment and that anomalies of distorted mega incomes are not allowed so that revenues to which hospitals are entitled are genuinely paid and a level  of competition is introduced, especially within the Dublin area, for such services. Administrative expenses will have to be trimmed through greater levels of computerisation and through a streamlining of paper work. I call on the Minister to look at areas where the public health service administration overlaps with the work of the VHI to see if unnecessary duplication can be eradicated. All in all, I believe that these proposals represent a sensible, reasonable and responsible approach to the VHI crisis which is based on identifying the factors which caused the crisis that currently needs to be addressed. Failure to address these and to tackle other elements, such as the VHI drugs refund scheme, may leave the fundamental problems unresolved.
The Minister for Health has attacked the Fine Gael Party on this motion on a number of grounds. He has referred to the proposals Fine Gael made during the last election campaign relating to prescription charges. I am very pleased that the Minister can remember that far back as many of us had thought he had completely erased from his memory the role he played as Opposition spokesperson for health in the putting up of posters which stated that “health cuts hurt the old, the weak and the handicapped” and the specific commitments he made in relation to converting the drugs refund scheme into a subsidy scheme to avoid cash flow difficulties for patients. The Minister would have a lot more credibility in attacking my party if he acted on his own pre-election promises. I emphasise that the people Fine Gael are trying to protect in this motion do not form an élite group in our society. The only factor that distinguishes this middle income group is that they have to depend on the VHI as they do not hold medical cards. Many may only be marginally over the medical card income and in an established poverty trap within the health services vis-á-vis entitlement. They could not afford to have a serious bout of illness in their family. We are talking here about the average industrial worker, about postman, garage mechanic or office worker. They are appalled to see through  mismanagement and no fault of theirs, despite increasing premium payments, the insolvency of the VHI.
Fine Gael favour a mix of private and public health services, based on the principle of equality of clinical services and access to health care. Because of the negative effects of the Government's public health policies this equality is deteriorating. A further attack on the middle income group will not rectify this problem, only exacerbate it, as the public health services could not cope in the circumstance of a collapse of the VHI. It is, therefore, vital that the VHI recovery programme is carried out in a particularly sensitive way so as not to reduce VHI membership and to maintain the perception that the VHI are really a worthy organisation who care for people as they have done heretofore. The Minister's action has jeopardised all of this in an unfair way.
Finally, we in Fine Gael in this debate have an open and constructive attitude towards what steps the Minister can avail of to rectify this problem and injustice. I have outlined in my speech a number of different options within existing drugs refund schemes operated by the State how a rationalisation and reorganisation of those schemes would give resources to assist the people that this motion seeks to help. We have also constructively put forward a series of varied alternatives as to how the VHI could alter their recovery programme more equitably. The purpose of this motion is not to score politial points but to rectify a callous, heartless and badly thought out decision to abolish the drugs refund scheme.
In conclusion, I call on the Minister to concede from the discussions, representations and correspondence he has received from the very many organisations and individuals who are affected by this decision that there is a case for meeting their needs. He must now through his Department take the necessary action to alleviate hardship.
Proinsias De Rossa: I want to thank Deputy Yates for the time he has given  me out of his allocation so that I can speak on this motion and The Workers' Party amendment. Obviously The Workers' Party amendment seeks to retain the drug refund scheme but indicates that how it might be done is different from or additional to the proposal put forward by Deputy Yates. While obviously we do not agree with everything the Fine Gael Party propose in relation to the health services, I believe the parties in Opposition have an obligation to demonstrate to the Government that they cannot simply abolish or allow to be abolished the drugs refund scheme for those who need to have insurance cover for the £28 which the health boards do not refund.
The VHI were set up specifically to assist people who were not covered by medical cards and hospital services cards or who were not on the long-term illness list. It is not appropriate to simply try to resolve the problems of the VHI by attacking those who are least able to carry the burden. The VHI have done a very good job over the years in filling the gap I have referred to. However, in recent years they have increasingly fallen into some difficulties as a result of two trends: one is the trend for those in the medical business to treat health as a means of making large profits and to milk the VHI as indeed they have milked the long-term illness scheme and a whole range of other medical services which the taxpayers either pay for or subsidise. Also, the Government have pushed more and more people into the private sector through cutbacks in the health services, thus putting strains on the VHI which they have not been able to carry. I have to say also that in principle I am not in favour of having a two-tier health service, the general public health service and that provided by the VHI. Nevertheless until such time as an equitable public health service is implemented, which provides health care on the basis of need and which provides choice as well, then clearly we have to defend the service provided at present.
There is a fairly major problem for those of us who oppose the cuts in the  health services and indeed there is a problem for patients generally because it has been demonstrated in the past few years that various interest groups who have opposed various aspects of the cuts and who have had their particular needs satisfied or their demands deflected in some way, have gone away satisfied or otherwise, but patients by and large are left to paddle his or her own canoe. It is not satisfactory that, as the Minister admitted here in the House some months ago, there are over 700 children waiting for ear, nose and throat operations in Temple Street Hospital while the Minister continues to argue that public health services are adequate. It is extraordinary that there is not a greater row about this fact, but it would appear that if various major interest groups are satisfied, then by and large the patient is not thought of.
It is not acceptable either that the Minister should allow the VHI to penalise their subscribers in the way it is being proposed to do by abolishing the £28 refund scheme. In our amendment we propose that the cost of that scheme could be greatly reduced by looking at the way in which drugs are paid for by the VHI and health boards. Under the VHI scheme and the health board scheme refunds sought on drugs bought on prescription from chemists are paid for at full retail price as distinct from drugs under the general medical services being paid for at wholesale price plus a prescription charge. As I said earlier, it is not acceptable that various interests in the medical business should be allowed to rip off the taxpayer in this way, and that effectively is what it is. It is a known fact that some of the drugs being prescribed on which refunds can be claimed have a mark-up of almost 100 per cent. That is not acceptable and some form of restriction has to be introduced on the mark-ups and prices which chemists are entitled to charge.
I have also argued that the VHI should not be involved in the business of providing cover for luxury hospitals under schemes D and E. We have opposed this  from the very beginning. What is particularly galling about it is that the taxpayer subsidises this cover for those who go to luxury hospitals because those who take out the cover for these hospitals are entitled to a tax rebate based on their taxable income and in general these people are the ones who were paying the 58p rate of income tax up to the last budget but who will now be paying 56p in the £. The generality of VHI subscribers are subsidising those who wish to use luxury hospitals and the general taxpayer subsidises them as well with regard to tax refunds which they can claim.
I urge the Minister to rethink the way in which he is enabling the VHI to recover. I urge the Opposition parties in this House to come together and demonstrate to the Minister that we want to retain this refund scheme and the only way we can do that is to vote tomorrow night as a single body against the Government's amendment.
Minister for Health (Dr. O'Hanlon): I move amendment No. a1.:
To delete all words after “Dáil Éireann” and substitute the following:
“acknowledges that under the legislation establishing the VHI, responsibility for the management of its affairs is vested in the Board, subject only to the approval of the Minister for Health and accepts that the Minister had no alternative but to approve the Board's Recovery Programme which was prepared in accordance with the best actuarial advice available and designed to ensure the continued viability of the VHI”.
The original motion put to the House tonight is self-contradictory and shows a fundamental misunderstanding of the nature of health-insurance and of the realities underlying the recovery programme of the VHI Board. Indeed, yet again, we hear Deputy Yates coming forward with simple answers to some of the most complex health problems that exist and, as he often does, he produces simple answers to problems that have taxed the  minds of some of the greatest health administrators in the developed world over the last 25 years. Tonight again he made the allegation that he was telling us about the crisis in the VHI and we were denying it. Before Deputy Yates became spokesman for his party I had already appointed consultants to the VHI as an indication of my concern. Wild statements such as Deputy Yates made on TV one night, that the VHI are insolvent, are not very helpful to what Deputy Yates obviously recognises are a very important limb of the health services. It is important that nobody would try to undermine the recovery plan or to erode confidence by making wild statements that cannot be substantiated.
The motion proposes that the VHI board should be required to rescind their decision to abolish the drugs element of their out-patients scheme. It also calls for a more actuarial approach to health insurance. I have made it clear on a number of occasions in recent weeks that the board's decision in relation to the drugs benefit was, in fact, taken on actuarial grounds. It is in line with the firm advice of the international actuarial experts engaged to advise the board in the preparation of their recovery plan, and it is in line with the advice given to the then Fine Gael Minister for Health, Deputy T.F. O'Higgins, in 1956 by the advisory body which led to the formation of the VHI.
To put the matter into perspective, I will put on the record of the House the circumstances which led to the VHI recovery plan. Although the VHI recorded a small surplus in the financial year March 1986 to February 1987, the underlying relationship between their claims expenditure and their subscription income was deteriorating rapidly in the course of the year, due to a number of cost factors which I will discuss in more detail later. The emerging problem was greatly exacerbated by the action of the previous Government who refused to sanction a necessary premium increase in 1986. I do not know how Deputy Yates can come in here tonight and justify that  decision not to give an increase. Consequently, the board incurred losses of £12.3 million in the year March 1987 to February 1988. Indeed, a similar loss is expected in their current year.
Mr. Howlin: You were Minister—
Dr. O'Hanlon: I monitored the situation closely when I took office and, following discussions with the VHI board, I authorised an average premium increase of 8 per cent, almost three times the rate of inflation, which took effect in December 1987, yet Deputy Yates seems to feel that increase should not have been allowed at the time——
Mr. Yates: I did not say that.
Dr. O'Hanlon: ——because it was so much above inflation, and he complained again that the 3 per cent on plans A and B at present is above inflation.
Mr. Yates: I did not oppose that. This motion does not oppose it.
Dr. O'Hanlon: The first problem, as I see it, with regard to premium increases was in 1986 when the then Minister refused an increase. Despite the increase I allowed, it became apparent in June of last year that costs were still escalating above the projected levels. With the agreement of the VHI board, I, therefore, in July 1988 appointed consultants to carry out an extensive examination of all aspects of the board's operations and to recommend measures which would achieve two objectives, to ensure the board's finances remained in a sound position and to ensure that the board's structures, plans and business practices were geared to enable them to survive in the more commercial environment which may well emerge in the years ahead.
For the benefit of the Members of the House I will record the terms of reference for the review:
That having regard to the fact that the Minister for Health considers that the Voluntary Health Insurance Board  has an important role to play in the health services in Ireland, its health insurance scheme should at all times accurately reflect the thrust of public health policy; that it should be managed in an effective and efficient manner and having regard to the introduction of a more commercial environment and a probable greater liberalisation of insurance markets in 1992; to examine all aspects of the VHI operations, in particular:— (a) the board's financial position; (b) structures at board and management levels; (c) schemes and methods of payment; (d) accounting systems and procedures; (e) compuerisation; to make recommendations in two phases regarding
Phase one, by mid-October 1988
the capacity of the VHI structure, including those at board and management levels to cope with the current environment.
Phase two by the end of December 1988
the entire range of functions performed by the VHI and the extent to which these would require modification in the light of possible competition from other EC health insurance companies in a free market situation from 1992 onwards.
As the House is aware, Mr. Noel Fox was appointed consultant and he consulted with the firm. He is a member of Oliver Freaney and Company, with Spicer and Oppenheim and R. Watson and Company consulting actuaries.
When I received the first phase of the report in October 1988 it was clear to me that an immediate recovery programme would be necessary to achieve the first of these objectives since the ongoing level of losses was such that without prompt action the board would have exhausted their reserves during 1989. I do not have to remind the House how serious it would have been had the reserves been exhausted because then the VHI board would  have been insolvent. That, obviously, would have been very serious for our health services and for the subscriber.
The VHI board appointed Mr. Noel Fox of Oliver Freaney and Company, who was leading the team of consultants, to the post of recovery manager and to facilitate the preparation and implementation of the recovery plan I appointed Mr. Fox as a board member. In December 1988 the VHI board's recovery plan produced by Mr. Fox in conjunction with other members of the board and the senior management of the VHI was submitted to me and announced in late December. It is very clear, therefore, that prompt and decisive action was taken in order to avert a potential crisis for the VHI board and their 1.2 million members and to ensure the balanced provision of public and private health services of which the VHI are in integral and essential part.
Again I remind Deputy Yates, who referred to action not being taken, that I have outlined the action that was taken, and I am quite satisfied that I, my Department and the Government acted expeditiously in, first of all, allowing the increased premium of 8 per cent, which was almost three times as much as inflation, then in appointing a consultant as soon as we realised, in June that finances were not to our satisfaction. As soon as we had this report the VHI board appointed the same consultant recovery manager and I appointed him as a member of the board to facilitate the recovery plan.
As I said, the VHI are an integral part of our health service and of the public and private mix. They account for approximately 10 per cent of the spending on our health services at £140 million per annum. In the light particularly of what Deputy De Rossa was saying, it is important to recognise that 4,000 bed days are provided for private patients through the VHI but four million bed days are provided for public patients through the public health services. In addition 1.5 million patients in a population of 3.5 million are seen in public outpatient departments each year. Therefore, I am satisfied that  we have an excellent public service. Those figures do not take account of the 400,000 bed days for private patients or those who attend their own doctor and do not find their way to hospitals.
I should like to say something about the causes of the VHI's financial difficulties. There has been considerable discussion, much of it very badly informed, concerning the causes of those difficulties. The difficulties arose from a number of inter-related factors. These were: two new high-technology private hospitals came on stream at the same time in May 1986; the technology available in existing hospitals also improved and was used more intensively; payments to consultants rose sharply due to the nature and volume of work being done; payments to the public hospital sector also rose significantly and out-patient claims, particularly those relating to drugs, also rose rapidly.
In regard to the two new high-technology private hospitals it is no harm to remind the House that they were built during the term of office of Deputy Barry Desmond of the Labour Party. Indeed, he was Minister for Health in the Coalition Government who accepted the D and E plans which Deputy Yates seems to cast some doubt on tonight.
Mr. Howlin: Is the Minister saying that those hospitals should not have been built?
Mr. Yates: The Minister sanctioned extra beds for Blackrock when he came to office.
Dr. O'Hanlon: It is unreasonable to suggest that the two high-tech hospitals were solely responsible for the financial problems of the VHI. That is not the case. I should like to refer to the technology that is available in existing hospitals, which is being used more intensively and is being improved as time goes on. In fact, last week I opened a new Xray unit in a public hospital and the cost of the equipment was £5 million. It is the most modern equipment in the world.  Indeed, some of the specialist equipment available in St. James's is not available anywhere else in Ireland or Britain. It is the first equipment of its kind to be installed in any hospital in the world. It is important to recognise that in our public service we are providing for public patients in a public hospital the most sophisticated high-technology equipment. In regard to bed closures I should add that while St. James's closed some beds last year their throughput of patients increased by 7 per cent, an indication of efficiency in the hospital.
Mr. Yates: There was a strike then.
Dr. O'Hanlon: Payments to consultants rose sharply due to the nature of the work being done. For example, there is much more demand now for by-pass surgery and hip replacements. The latter has become a much more popular type of high-tech surgery. They all play their part in putting pressure on the finances of the VHI. None of the factors I have mentioned on their own were primarily responsible for VHI's difficulties. They arose from the cumulative effect of so many upward trends in claims costs. In particular, I must refute the allegation which has been made by some interests that VHI's difficulties can be blamed largely on cost increases in public hospitals. In fact, less than 20 per cent of VHI's claims expenditure goes to public hospitals, a share that has actually fallen over the past five years, despite the fact that the previous Government increased public hospital charges by 150 per cent during their period in office. Since I became Minister, however, public hospital charges have only risen by 3.5 per cent.
Mr. Howlin: And 4,000 public beds were closed.
Mr. Yates: And there are more private beds.
Dr. O'Hanlon: It has also been suggested by some commentators and implied in the wording of the Fine Gael  motion, that the removal of the drug benefit is in some way a consequence of VHI's losses on the plans which provide full cover for the new high-technology hospitals. This also is quite untrue. Each area of VHI's insurance coverage was examined by the international actuarial experts and changes were recommended where they were found to be necessary. The detailed study of claims experience showed that three of the five hospital plans were significantly under-priced. This related to the existing plan C as well as to the new plans D and E. The weighted premium increases which have been applied to each plan are designed to counter this.
There has been talk of one plan subsidising another but it is not as simplistic as Deputy Yates would have us believe. Of all the patients who were admitted to hospitals last year under the D and E plans only 36 per cent were in the high-technology hospitals. The other 64 per cent were in other private hospital accommodation. They could rightly argue that they subsidised the other hospitals rather than the two high-tech hospitals. Those in plans B and C have also had access to the two high-tech hospitals in this city. The decision to withdraw the drugs benefit is based solely on a very careful study of both the rationale for, and the claims experience of, that particular benefit, taking account of the most expert advice available.
The purpose of health insurance is to provide cover against unexpected and non-routine health costs. The international consulting actuaries who participated in the study of the VHI board's operations, firmly recommended the withdrawal of the drugs benefit element from the out-patient scheme. These experts pointed out that an insurance scheme should cover only those events which are of sufficient uncertainty to meet the accepted definition of an “insurable event”. It should not cover predictable costs which could be claimed persistently by the insured parties. They found that costs under the out-patient scheme were running out of control, and concluded that the withdrawal of the  drugs benefit was essential to the financial recovery of VHI. It is interesting to note that the original advisory body in 1956 which led to the formation of the VHI also recommended strongly that out-patient drugs and medicines should not be covered. The following is an extract from their report:
In the case of persons who are not hospitalised, the cost of these items should be regarded as normal household expenditure capable of being met from income. If benefit were included in a scheme in respect of them there would be obvious possibilities of abuse. An insured person would be disposed to avail himself of the benefit in the knowledge that he would be able to recover his outlay. Furthermore, the incidence of claims would be frequent, and administrative costs would be unduly high, as it would be necessary to require the production of medical certificates, receipts and so on before claims could be paid. We are of the opinion that it is not feasible to include a benefit for drugs and medicines supplied outside hospital.
That statement was made by the advisory body on a voluntary health insurance scheme that advised the Fine Gael Minister for Health, Mr. T.F. O'Higgins in 1956. It is interesting to look at how their predictions were borne out in practice.
Mr. Yates: The scheme has been in operation for 20 years.
Dr. O'Hanlon: Historically the VHI had included in its out-patient scheme a drugs benefit designed to assist the minority of members who might have exeptional drug costs in any one year. What had developed in effect was a system whereby a relatively large number of members were receiving, on a virtually permanent basis, large refunds for ongoing drug costs for long term conditions. In other words, the benefit which was designed to meet exceptional drug costs had become in effect a regular annual benefit for many members.
 As an illustration of the difficulties inherent in the drugs element of the out-patient scheme, an individual with a chronic illness, who had not been a subscriber to VHI, could join the lowest-priced plan for an annual subscription of about £110. He would then automatically be entitled, immediately, to an annual refund of between £231 and £336 for drugs and medicines. Such a member could thus be guaranteed an annual return considerably in excess of his premium— in addition, of course, to having cover for hospital care. I would be very interested in Deputy Yates's actuarial assessment of that incentive to join VHI and its long-term implications for the entire scheme.
Mr. Yates: You are selective in your example.
Dr. O'Hanlon: It will be clear from what I have just outlined to Members that the VHI board's decision to phase out cover for out-patient drugs and medicines, as policies come up for renewal, was in fact based entirely on expert actuarial advice. I am sensitive to the needs of those with chronic, long-term illnesses, but this is not the way to provide for them. Furthermore, the restoration of the VHI drugs benefit would do nothing for the 30 per cent of the population who have neither a medical card nor VHI cover — people unable to afford VHI. This sizeable part of our population also deserve consideration in any examination of how best to provide for exceptional drugs costs.
Mr. Yates: I will support you if you bring forward something to deal with it.
Dr. O'Hanlon: It is necessary, I believe, that Deputies should fully understand the terms of the various drugs schemes including that of VHI, before making any judgments. A drugs refund scheme is administered by health boards  under which any person incurring expenditure of more than £28 a month on prescribed drugs and medicines is entitled to a refund from the health board of the amount in excess of £28. This scheme is, of course, not affected by the VHI decision. Indeed, the vast majority of patients who are on long-term treatment have to pay their £28 per month because they are not in the VHI, and many are not able to afford it.
Mr. Howlin: The Minister was about to abolish that last year and notified the health boards accordingly.
Dr. O'Hanlon: This scheme is not affected by the VHI decision. Those who were members of the VHI could claim the first £28 a month under the VHI drugs benefit, subject to the overall threshold on out-patient expenses of £170 per year for a family and £105 per year for an individual. Therefore, the cost of the one prescription for a VHI member was partly paid by VHI and partly by the health board. No Member in the House believes that two agencies under the aegis of a Department of State should process claims for the same drugs so that one would pay up to £28 and the other would pay the remainder. No sane Deputy would suggest that that should be done.
Mr. Yates: Let us have your proposals, we are all ears.
Dr. O'Hanlon: Indeed the £28 threshold was not increased by our Government as Deputy Yates said. It was increased by 50 per cent from £16 by the Coalition Government in their first year in office.
Mr. Howlin: Hear, hear.
Dr. O'Hanlon: It will be quite some time before the impact of the withdrawal of the VHI drugs benefit is felt by most members. The removal of cover will affect them only when their policy comes  up for renewal — every member's existing insurance contract will be honoured in full. Since claims under the out-patients scheme are normally made in arrears at the end of the year it will in fact be next year before any financial impact is felt by most members. For the small number of members who receive refunds on a six-monthly basis, it will be at least August before any impact is felt.
I have for some time been reviewing the operation and rationale of all the community drugs schemes, including the drugs refund scheme and the long-term illness scheme. At present the annual cost of these two schemes is £21 million. In looking at the existing arrangements it is clear to me that there are a number of aspects which must be addressed.
A major difficulty is caused by the need for patients under the drugs refund scheme to pay the full retail price of the required prescriptions and then having to wait some time for reimbursement. In many cases this can cause hardship and in my review I will be examining possible alternatives.
Mr. Yates: When?
Dr. O'Hanlon: As Deputies know, patients may have to pay £100 and wait three or four months for a £72 refund or pay £160 and wait for a month or three months for a £132 refund. In any drug refund scheme which is designed to meet the needs posed by continuous medication or particularly high costs, it seems to me that the existing open-endedness in relation to the range of drugs covered is not defensible. Under the general medical services scheme there are restrictions in relation to the drugs which are available to patients, based on medical requirement. It is hardly equitable that under the drugs refund scheme non-medical card holders are entitled to reimbursement without such restrictions. It is no harm to remind the House that 9 per cent of the total cost of the health bill is spent on drugs — almost £120 million — which is a large subsidy on drugs, so people should not get the impression that they are paying the full cost of their drugs.
 These are the main issues which I am considering to see how the available funding can best be deployed and targeted towards the areas of real need. I will be announcing my proposals in due course. Indeed, I will not select a number of illnesses as Deputy Yates did because I believe that everybody who is on continuous medication has a long term illness. Whatever scheme is in place will be equitable. I would now like to turn to the second part of the Fine Gael motion, which calls for “alternative policy options which would remove cross-subsidisation of plans and which would allow a more actuarial approach to health insurance”. The motion would thus seem to be demanding an end to the VHI's policy of community-rating.
There are only two restrictions on joining VHI. First, there is a waiting period for cover for hospital treatment for conditions which existed before joining. Secondly, one cannot join after the age of 65 unless one has already been in continuous membership. In every other respect, however, insurance cover is available on the same terms to all who require it, regardless of age and medical condition. VHI varies its premiums only in line with different levels of cover sought by its members.
The differences in the average claims expenditure per member under VHI's various plans are made up of two components: differences in the level of cover chosen by the member, and differences in the average claims rate. The first of these is a matter of choice on the member's part and can, therefore, be reflected in the premium. The second factor arises because of differences in risk factors between the memberships of the plans — principally because the average age differs from plan to plan. This cannot be reflected in the premiums without infringing the principle of community rating. One must therefore be very careful in considering the question of cross-subsidisation of VHI plans. As long as factors such as the average age of members differ from plan to plan, the claims pattern and the relative profitability of the plans will also differ. This  is inevitable under community-rating. It is, of course, a different matter if the premium structure does not adequately reflect the costs of providing the different levels of cover chosen by members. This can be remedied by premium adjustments, as has been the case with the recent weighted premium increase.
The question of the extent of cross-subsidisation of those using the high-technology hospitals is a particularly complex one. Usage of specific hospitals is not related solely to membership of particular plans. While plans D and E provide full cover for the Blackrock Clinic and the Mater Private Hospital, members of these plans make extensive use also of the other private hospitals and, indeed, of public hospitals. Those on the lower-cost plans also make very considerable use of the two high-technology hospitals.
Commercial health insurance companies in countries where they operate do not, of course, apply community-rating at all. Instead, they determine premia on the basis of an actuarial assessment of the risk associated with each category of client. Those who are older, or present a greater medical risk, must pay more, or may even find that their cover will not be renewed at all.
VHI was not established to be an independent commercial insurer. It was set up as an integral part of our national health policy, and as such, operating on the principles of community rating and non-profit, secured recognition of its monopoly status by the European Commission. It has, of course, been suggested that it will not be possible to preserve this status in the context of the general liberalisation of insurance markets in the European Community after 1992. This may yet have to be the subject of negotiation but even if there is no monopoly status, the principle of community rating can and will be preserved, so as to ensure that voluntary health insurance remains available, on equitable terms, to all who require it.
In relation to the more specific details of the future role of the VHI board and of voluntary health insurance in general,  I am at present considering the corporate plan submitted by the VHI board. This is a five-year strategy to enable the board to meet any challenges which may emerge. I will also have, within the next few months, the report of the Commission on Health Funding, which is also relevant to this area. I will take account of both of these reports in deciding on the policy proposals which I will put to the Government regarding the longerterm role of the VHI.
In conclusion, I would stress again that the VHI recovery measures were based on the most expert actuarial advice, arising from an extensive study of the board's operations. They will ensure the viability of the organisation so that it can continue to play an important role in the funding of health care. It would be entirely wrong to jeopardise this by interfering with the recovery strategy in the manner proposed by Fine Gael. Their proposals show as much understanding and sensitivity as did their decision, when in Government, to impose a £1 per item prescription charge on medical card holders——
Mr. Yates: What about the promises of Fianna Fáil?
Dr. O'Hanlon: ——a measure which, if implemented, would have taken over £20 million a year from the most vulnerable groups in our society. Indeed, the Deputy himself said there might be a number of asthmatics in one household. If there were six asthmatics in a large family, with a medical card, it would have cost them £30 per month, £5 per prescription per person holding a medical card.
Mr. Howlin: Fianna Fáil charge £10 for every visit to an out-patients' department.
Dr. O'Hanlon: Fine Gael abolished rural dispensing so that elderly people living in rural areas right down the west coast had to travel sometimes 20 miles to a chemist shop to get their drugs. That is the approach of Fine Gael.
Actuaries have stated that any change  in the plan would have very serious consequences and should not be made until reserves are built up. This is a crash recovery plan with a balanced approach. The corporate plan to which I have referred is on the way. Hospital benefits for people will be the same in 1989 as they were in 1988. I am satisfied that, in the circumstances obtaining, there was no alternative but to approve the recovery plan proposed by the Voluntary Health Insurance Board prepared with the best actuarial advice and expertise. I commend the amendment to the House.
Minister of State at the Department of Health (Mr. Leyden): That will burst the Deputy's balloon.
Mr. D. O'Malley: This is the third time in six years that a debate has taken place in this House on an Irish insurance company which, by any standards, I am afraid, is insolvent. I am not trying to create any scares in saying that. The Minister suggests that perhaps we should not say things like that. I am referring to the VHI's own report and accounts for the year ended 29 February 1988 where, in note 4 to the accounts, the auditors point out that, at 29 February 1988, the minimum solvency margin amounts to IR£26.9 million while actual reserves are IR£17.5 million, a deficiency of IR£9.4 million. The minimum solvency under the EC's regulations is a figure that is frequently very low indeed. Most non-life companies would have reserves and assets which far exceeded it. It is very distressing to find this position obtaining today in an Irish State company which has a total monopoly of its market — 100 per cent and no opposition whatsoever.
If one looks at the accounts, in particular at the comparative results for the last eight years, on page 12, for instance, one finds that this most regrettable position obtaining today in respect of this company has all come about in two years because on 28 February 1987, the VHI had stronger reserves and larger net assets than they had at any time in their history; that is just under two years ago. Apparently the estimates available unofficially — and which nobody seems to deny — are that for the year that will end in a few weeks time the underwriting loss will be in the region of IR£25 million for the year ending 28 February 1989 and the reserves that will then be left, in three or four weeks time, will be IR£4 million; IR£4 million when the board have accepted the minimum requirement under EC regulations, which will probably be somewhere in excess of IR£35 million. Therefore, the company, by any standards, is in an insolvent position. I take no pleasure in saying that but it is necessary to say it to illustrate the position.
It is regrettable that, for many of us, this is the third time in six years we have talked in this House about a position of that kind. At least the other two insurance companies that went down were competing in the marketplace; they did not have 100 per cent of their market. The fact that this board have got themselves into this position warrants some examination. Indeed, what they are now trying to do, very belatedly, to get out of that difficulty also warrants some examination and consideration of whether they should receive the appropriate support.
There are some very startling things contained in this report. This board — which has been getting into the most appalling financial difficulties over the past couple of years — announce in this report, published within the last month or two, that they have decided to establish a medical audit function which will be introduced in the coming year. They say this will establish criteria for justifying admission to hospital and for necessary length of stay. They say the audit unit will closely monitor both areas and will take action to ensure that their recommendations are adhered to. It is incredible that at this stage, 32 years after their establishment, the board are actually doing that. It is incredible that — I suppose almost uniquely among medical insurance companies of this type throughout the world — they have no fixed amounts for routine activities, fixed payments, but pay hugely different amounts of money for exactly the same procedure depending on where it is carried out and,  inexplicably, allow certain hospitals to operate on a open-ended basis so that, no matter what they charge the client, the VHI pick up the tab in full anyway. For example, an operation which I heard the Minister describe this evening as common — which unfortunately is common only in this country in the private sector — is an orthopaedic hip replacement widely needed by many people suffering from arthritis and similar-type complaints but for which public patients who have medical cards have to face a very long waiting period. It was two years; I am told now it is often three years and longer while the suffering and pain incurred by such people during that time is appalling.
Mr. Yates: They are trauma cases.
Mr. D. O'Malley: They just have to wait because they are not private patients or subscribers to the Voluntary Health Insurance Board. Were I to be afflicted with such a complaint in the morning and was a subscriber to the VHI, I could have my choice of ten or 20 hospitals in this country any one of whom would take me in and operate on me next week. There is something fundamentally wrong in that. It is extraordinary that if I go for that operation to a private hospital in the city of Galway I can have the operation carried out for £2,000 and the VHI will pay that; but if I go to a particular institution in the city of Dublin to have exactly the same operation done in exactly the same way and in the same period and, apart from the capital involved, with the same running costs, the bill will be £6,500 and the VHI will pay that in full, too. That is wrong. They should say that if it can be done for less than one-third of the cost somewhere else one has to go somewhere else, and if one insists on going to an institution that charges £6,500 for a £2,000 operation that they will pay the £2,000 but that one would have to pay the £4,500 oneself. I would have thought things like that were self-evident. They could pay a basic fee for something that is identifiable and is precise, but they do  not do it for some extraordinary reason. It is only now that they are beginning to bring in some kind of audit system on these matters which exists everywhere else.
To that extent one at times feels that they are the authors of their own misfortune to a great extent, but when one looks back over their history, particularly over the last two years, it would be quite unfair to suggest that the VHI are the sole authors of their own misfortune. They are very seriously affected by Government policy of the last two years and it is no coincidence that the reserves of that company should drop from an all-time high of £29.5 million to an all-time low of £4 million in the two years that the present Minister for Health has held office and pursuing the policies he is pursuing.
We have heard tonight from Deputy Yates, Deputy De Rossa and others as to all the various possible causes of the difficulty and virtual demise of the VHI. I have no doubt that there is a contribution made to the present situation by various factors such as those mentioned by Deputy Yates and others but to my mind the biggest single one, when one examines it, is the sudden upsurge in the number of private beds in public hospitals which has arisen in the last year or so, that were in fact public beds before where medical or surgical work was being carried out at public expense for the benefit of the people who were not in a position to pay for it themselves. Those wards in many of those hospitals were closed down. The hospital became frantic and approached the Minister for Health and were told, in many cases, that they could reopen these wards provided they did not let in a public patient and provided that every patient that occupied a bed on that floor was a guaranteed paying patient, that they had better check that such a patient had full membership of the VHI before being allowed in because it was only on that basis that they were being allowed to reopen these wards.
Mr. Howlin: You supported the Estimates that closed them.
Mr. D. O'Malley: The result of that decision has been a huge upsurge in the cost of claims against the VHI who are suddenly being asked to pay for a whole lot of things that they would not have been asked to pay for before. Undoubtedly, there are other factors. There is a major complication with the two high-tech hospitals in Dublin that are frequently mentioned. One cannot make a definitive judgment, from what I can see, in regard to those two hospitals because the Voluntary Health Insurance Board and the Minister for Health have both refused to disclose the total amounts received under and paid out under these plans D and E. As a result one cannot make a final and definite judgment in that regard and there is every possibility that the allegations against those hospitals as to the influence they have had on the Voluntary Health Insurance Board are too strong. It is very possibly quite different in fact. So far as one can estimate, about £20 million was paid out last year to those two hospitals, and that is not the enormous proportion of the total VHI claims we have been led to believe.
What has happened now in the last number of weeks that has led to this motion is that at long last something is beginning to be done in regard to the VHI to try to steady it up and at least slow down its headlong plunge towards oblivion. Curiously enough it is not in some of the more obvious areas where it could clamp down on expenditure that the first real step has been taken. It has been taken in relation to the drugs refund scheme which is not a major financial factor within the VHI Board's finances because the total cost of it in the year ending February 1988 appears to have been £7.6 million, and that is a very small proportion of their total expenditure in that year. It is a scheme which is not as valuable as has been alleged in recent weeks. If one looks at the figures for which it gives cover, they are all relatively small. Because there is a drugs refund scheme for expenditure in excess of £28 a month the maximum amount that could be covered by the VHI scheme is £336 a  year but an excess of £170 for a family exists under the VHI scheme.
Mr. Yates: That is out-patient expenses, including doctor's expenses.
Mr. D. O'Malley: That leaves a balance of £166——
Mr. Yates: No.
Mr. D. O'Malley: ——that can be received under this heading and that amounts only to £13 per month by my calculation.
Mr. Yates: That is not correct.
Mr. D. O'Malley: The figures are somewhat higher, strangely enough, if it is for an individual but it does not amount to an unusually large sum of money.
One has to look at the number of people who are within the VHI scheme at the moment. It amounts to 34 per cent of the population. Thirty per cent of the population have medical cards and are therefore fully covered and 36 per cent of the population, amazingly enough, have no cover either from the VHI, the general medical services or under the medical card scheme, and that is an enormous proportion. One has to ask oneself, at a time like this, where the hardship is greatest, and the hardship is unquestionably greatest on those who have the misfortune to suffer from long-term and chronic illnesses, who are going to be ill over a lengthy period and who have to take, for the necessary treatment of their condition, expensive drugs. We have listed in our amendment a number of these, illnesses that are not already covered under the long-term illness scheme. They include cancer, heart disease and chronic asthma. The expense of those is enormous. It has been suggested to me that perhaps one of the most expensive of all are patients who have had a kidney transplant and who, for the rest of their lives, have to take extremely expensive drugs to ensure that the transplant is not rejected by their bodies. They are the people on whom the Minister  should be concentrating his attention now. I am glad to see from the Minister's script that he is thinking at last in those terms. I fully agree with the point he made earlier tonight that it is ridiculous that we have this duplication at present where one has to have two sets of receipts, one for the VHI and one for the health board in order to get back the excess over £28. It seems bureaucratic madness to continue all this. These things should be amalgamated as quickly and as effectively as possible. We should not have a continuation of the rather ridiculous and complicated position we have had up to now. Provision should be made for those who are in need and these include a large number of people who unfortunately have no support at all, either from the State or from an insurance company, for their medical expenses. I do not think ordinary inexpensive drugs for short-term and minor illnesses should be covered. They should not be put in the same category as essential life-preserving drugs for long-term illnesses.
For that reason I find it difficult to disagree with what is at last said in the amendment which the Government put down today. Nonetheless, I greatly regret that they have caused, by their policies, such an incredible deterioration in the position of this board in the past two years. Their attempts to begin to put it right are extremely belated but at least I have the advantage of seeing in what they are now doing in respect of this, perhaps one of the smallest and least important aspects of the continuing losses of the VHI, a determination to begin to do something about the matter.
Debate resumed on the following motion:
That it is expedient to amend the law  relating to customs and inland revenue (including excise) and to make further provision in connection with finance.
—(Minister for Finance.)
Mr. Roche: As I said before the adjournment of the debate, the budget sets out to achieve four basic objectives; a more equitable distribution of the national cake, a further stage in the reform of our tax system, a boost in economic activity and a further reduction in Exchequer borrowing, the latter being particularly important in the achievement of the former. These potentially conflicting objectives could be aimed at because of the very real success of Government policies in the past two years. In the 23 months since Fianna Fáil took office from a hopeless, hapless and a divided Coalition, we have witnessed a quite remarkable transformation. As I mentioned, one of the measures of that transformation was the stabilisation of the debt-GNP ratio which has now been achieved. Moreover it is remarkable that that stabilisation has been achieved two full years ahead of schedule. The Exchequer borrowing requirement which in 1986 under the Coalition Government has passed the £2,000 million mark has now been more than halved. The Exchequer borrowing requirement for 1988 was the lowest for 30 years. These are very real and substantial achievements and give us all reason to feel confident.
I have pointed out that we have witnessed in the past few weeks and months an extraordinary resurgence of what I call the hard neck school of politics. Under the hard neck school of politics, by doing nothing or having done nothing, you claim credits for everything that somebody else has done. This can be witnessed in the pronouncements in this House from time to time by Deputy Noonan, in the unctuous statements from time to time by Deputy Dukes and, in more recent times, on the graffiti which Fine Gael chose to append to poster sites up and down the country. It is quite extraordinary that the senior partner in one of  the most disastrous Governments of this State should have the brass neck to try to claim credit for what has been achieved in very difficult circumstances in the past two years.
As I have said, Fine Gael have elevated brass neck politics from the local level where it has always had a very healthy living to the national level. In spite of their disastrous period in Government in which we witnesses the highest ever budget deficit, a disimprovement in personal taxation throughout the period of that Government and a downturn in all measures of economic activity, that party through their Finance spokesmen and the poster designers, now seek to claim some credit for all that has been achieved by Fianna Fáil in office in the last 23 months. What we get from Fine Gael from time to time is a sort of verbal patting of themselves on their back because they have not sought to damage what the Government have done. As the polls show, the public are still aware of the gulf between Fine Gael aspirations and their achievements. Another major achievement of this Government has been the taming of the current budget deficit which is now at its lowest for over a decade. It is at half the level it was in 1986 when a Fine Gael Minister held the Finance portfolio. These economic indicators are of interest not just to academic economic commentators; they have a real impact on the lives of people.
Interest rates are a barometer which reflect confidence in Government and, more importantly, in a nation. Since March 1987 when Fianna Fáil took office, interest rates have been reduced by 6 percentage points. They are now a full six points behind the levels pertaining in the United Kingdom. It is not long since we would have failed an economics student in first, second or third year of any degree course if they had suggested that we could sustain that differential over a protracted period of time but yet that is a real measure of the confidence that exists in Ireland at present. That confidence was built day by day by hard working Ministers and a hard working Government.
 As I have said, this has had a real impact on the lives of ordinary people. It means there is a saving of up to £1,800 per annum on a £30,000 loan. People buying their homes benefit from this decrease in interest rates. Businessmen and businesswomen can now contemplate investment, which a year ago would have been unthinkable, because of the threshold levels of interest. Farmers interested in expansion or in financing loans which were raised in earlier, harder times also benefit from this change. Rather than the sort of carping, innuendo and insinuation that flows backwards and forwards here, we should all in this House rejoice and feel somewhat boastful because this is progress for the nation.
There is an abundance of other positive signs in our economy. Foreigners, particularly Germans, have shown very bullish interest in Irish gilts in recent times.
Mr. Carey: And Irish land, too.
Mr. Roche: The purchase of Government gilt stocks last year rose to £855 million. That exceeded Ireland's entire borrowing requirements and allowed us to repay over £400 million in foreign debt. That is a very real achievement. The foreign debt that is now being wiped out was a milestone around the neck of this economy. It was a milestone around the neck of every unfortunate taxpayer, everybody who sought a job, who sought equity or who sought social or economic progress in this nation. While that debt lay as a dead hand it soaked up money from the economy and it meant that progress could, at best, be limited.
Economic growth, which has been stagnant throughout the arid Coalition years and which was zero throughout the period when Deputy Alan Dukes and Deputy John Bruton held office as Minister for Finance, now averages 3 per cent. That is the average over the period 1987 to the end of 1989. That is very real progress about which we can rightly be boastful.
In 1988 inflation, which bore down heavily on the Irish people and which robbed from the wage packets of each and every  wage earner their value, dropped to the lowest level since 1960. Five years ago, not to talk of ten years ago, inflation rates of 2 per cent seemed like a thing of the past and yet last year the inflation rate was 2 per cent. That did not happen because Fine Gael, the Progressive Democrats or the rainbow-bright coalition on the left was prattling on in this House about what they would do and how they would do the job better if they were in a position to do so. It happened because Fianna Fáil are in Government.
Exports which are another vital indicator have also reached new heights. They were up 14 per cent in 1987 and we achieved a further 14 per cent increase in export levels in 1988. Burgeoning exports mean that we now have the biggest balance of payments surplus in modern times. I realise that the export figures from time to time can be infected by a degree of creative accountancy among major companies but nonetheless these figures are very real and we have reason to be confident that they will start to turn fairly rapidly into jobs.
The only point and the only purpose in managing an economy is to improve the lot of the people. Our job, on all sides of this House, is to improve the living standard and well-being of the Irish people. We are not just concerned with balancing books and improving statistics.
In this budget the Government, by the selective use of tax benefits, by the improvements in social welfare and by an imaginative combination of both tax benefits and welfare improvements, have made very real progress in the fight against poverty. That progress should, with a smidgen of political generosity, be welcomed on all sides of the House. Certainly, we can all say that not enough has been done there or too little has been done here, but the reality is, when times are tight — and times are tight now — this budget achieves a great deal. They are the first major steps in social progress in particular, progress in combating poverty which we all wish to see.
In all, the budget provides an extra £71 million in social welfare improvements.  The budget provides across the board improvements at or above the rate of inflation with special additional benefits for the long-term unemployed and, in particular, with special additional benefits for families. I believe that in their hearts and souls all the Members of the Opposition parties believe this is the right direction. We may argue at the margin between ourselves as to precisely how far we have gone in the right direction, but the reality is that something is being done this year and something was done last year for the long-term unemployed. They are the people who are at the biting edge of poverty, who feel the brunt of the economic downturn and it is incumbent on us all to look after them. Something novel is being done this year for families particularly those at the margins, and for the families of low paid workers where the benefit of work is marginal — and it is very welcome indeed.
These increases have been criticised by Fine Gael and Labour. It is worth while looking at their record while in Government. In 1988 Fianna Fáil provided an extra 11 per cent for the long-term unemployed. In 1989 the same Fianna Fáil Government are providing an extra 12 per cent for the same long-term unemployed. Between 1983 and 1986 there were no special increases for either the long-term unemployed or for the families for whom Fine Gael are now craw thumping. It strikes me that when you look at the history of family income and family income treatment in successive budgets throughout the eighties, the criticisms which have come from the benches of Fine Gael and Labour are stinking in their hypocrisy, because the reality is that when that group were in power they did nothing for those people. The only thing they did was to introduce the family income supplement scheme. Every Deputy knows that one of the great mysteries of humanity is how you actually negotiate your way around that scheme. Every Deputy who was in the House between 1982 and 1987 knows full well that the take up of that scheme was so low in the early years that it made little  or no difference. It was cosmetics at its worst.
Just how far out of touch Fine Gael are with the reality of poverty was well sign-posted last week when the party proposed a basic minimum weekly payment of £45. If they had looked at the budget they would know that the long-term unemployment payment in urban areas will rise to £47 per week. What then is Fine Gael's answer to poverty? It is a novel one. Fine Gael's answer to poverty is to propose a cut in the benefit rate which this budget pays to the most under-privileged. I wonder if we will see that on the expensive signposts and posters up and down the country. I doubt it.
I want to point out another interesting example of Fine Gael's lack of touch with the reality of Irish life when Deputy Dukes was making his contribution last week. He asked why a penny was put on the pint. The Taoiseach pointed out that a penny was put on the pint but no decent pint drinker would object because that penny was going to do something for the unemployed, the long-term unemployed and old age pensioners. Deputy Dukes then suggested that perhaps the Minister for Finance should consider seriously not increasing the price of the bottle of wine by 4p or whatever, but that he should increase it by roughly the same amount as that on the pint, a penny on the bottle of Beaujolais. He suggested that perhaps that would persuade the working man — the pint drinker of Ireland — to move from Guinness to Beaujolais nouveau. I can imagine the situation in Kennedys or in the Old Court Lounge when the lads walk in and say: “What will you have — I will have a pint and a glass of nouveau”. It goes to show how out of touch with reality that party and their leadership have become.
Families, particularly those on low incomes, benefit from a wide range of measures in this budget which have been very skilfully put together. The higher rate of child benefit is being permitted to the fifth child. We would all accept that that is an overdue improvement. Low income earners are to receive a special additional tax exemption of £200 per  child. That again is a very welcome sign of progress. That, plus giving child benefit to the fifth child will assist many low income earners whose families are large and on the margin, will take them out of the tax net. We should welcome that.
The child dependant allowance is to be given for 19 year olds who are in full-time education. I welcome that and I think other Deputies will too. There has been an anomaly when a child passed the age of 18, and was still in full time education, he was considered to be independent of the family and that fact could affect the benefits due to a family. That is a step in the right direction and is an improvement that is long overdue. This is particularly welcome because before this was introduced the existing arrangements were an impediment to keeping children in second level education. It was a disincentive for parents who were on the margins of poverty and wished to educate their children.
Higher rates of child dependant allowance are also provided, and again that is a welcome move forward. One of the things that has happened in our taxation system and in our welfare system over the years is that the family unit has not been properly recognised and child benefits have been diminished. For those who are on the most marginal rates of tax, the lowest rates of tax and the lowest rates of income there are some improvements and they are very welcome.
There are other welfare benefits to assist families who are disadvantaged because of family breakdown or bereavement. In particular, I welcome the fact that the Government recognise the plight of widowers and deserted husbands who are seeking to bring up their children. I am sure I am not the only Deputy who has had this group's plight brought forcibly to his or her attention over the years. The widowers or deserted husbands have told us that the options facing them are grim and sometimes there is a chance that their children may be taken into care when they cannot provide for them. This measure is very welcome and I am sure it has the support of Members from all sides of the House.
 The Government are committed to improving the family income supplement scheme, which has suffered from a very poor take up rate since it was established. As I said earlier, the family income supplement scheme is something of a mystery. There is a very low level of take up. It is questionable whether we should have such a scheme, when it has such a low take up rate. There is no doubt that there are many families living in poverty, families who should have been helped by the family income supplement. However, the reality is that the scheme has never commended itself to the people at whom it is aimed. These people have had difficulties in availing of it. However, I hope that with the additional resources available to the Minister for Social Welfare there will be an improvement in the take up rate of the family income supplement scheme and that the people for whom it was put in place will benefit from it.
An Ceann Comhairle: I intervene to advise the Deputy that some five minutes now remain of the time available to him.
Mr. Roche: Other improvements in social welfare are welcome, in particular the additional funds for the homeless, for emigrants and for the St. Vincent de Paul Society. At this point I should like to take the opportunity to deprecate the language which was reportedly used by Deputy Taylor last week in an attack on the grant to the St. Vincent de Paul Society. Deputy Taylor is reported — I did not hear his speech, but it is reported in the press—as suggesting that the grant to the St. Vincent de Paul Society was sectarian. To my mind that is language beneath contempt. In my constituency this fine society attack poverty where they find it. I have yet to find a case where the St. Vincent de Paul Society have refused to help any person because of sectarian considerations. I challenge Deputy Taylor or any other Member of this House or any other elected group in this State to find cases where there is a sectarian bias in the way the St. Vincent  de Paul Society go about their job. The language used was unfortunate, intemperate and probably unintended and I am sure many in this House will join with me in calling on Deputy Mervyn Taylor to apologise to the St. Vincent de Paul Society and to withdraw his remarks.
I hope Deputy Carey does not disagree with me in this regard.
Mr. Carey: The Deputy has got the facts wrong.
Mr. Roche: On the tax side, the budget builds on the foundations laid last year. While other parties talk about juggling with the tax system, Fianna Fáil are proceeding with the most progressive restructuring of the tax system in the past quarter of a century. In the budget the Government have introduced a dramatic package of tax relief. For the first time the standard rate of tax is being reduced. The tax band at the standard rate of tax is being widened. The 48 per cent tax band is being widened, too, while the top rate of 58 per cent is being reduced. These changes are very welcome. I wonder why Deputy Carey is so exasperated by this? During the past four years when Fine Gael were in office, the personal tax rates were jacked up.
All taxpayers benefit from the changes. The lower income families, in particular, benefit and almost 600,000 taxpayers will enjoy a decrease in their marginal tax rates. That must surely be a step in the right direction. These are significant achievements, particularly in a difficult time. The achievements are complemented by ongoing improvements in tax administration and are underpinned by a concerted drive on tax evasion.
The achievements in this year's budget together with the achievements in last year's budget underscore the difference between the Government party and other parties. It is easy to talk of tax reform. It is another thing to achieve it. When the Coalition were in office, they steadily increased the burden of personal taxation, that is an undeniable fact. They abolished the low rate of 25 per cent and increased the top rate. A continuation of  their policies would have produced more, not less, personal taxation. This is what Coalition stood for and this is what they achieved. That is their record.
Unemployment is the ultimate cause of poverty. It is the force which drives young people from our shores and robs the nation of so much of its potential. The best way to achieve lasting employment is to build a real economy which will form the foundations on which real jobs can be created. In this budget the Government are building a real economy and are laying daily foundations for real jobs. For the first time in five years there was an increase in employment, in 1988. It was small, but very welcome. The numbers employed fell by 65,000 between 1982 and 1987. In the year to April 1988 employment increased by 6,000. People will say this is too little, and of course it is, but it is a start. The signs are now right. The seasonally adjusted unemployment figure has been falling since last August.
An Ceann Comhairle: The time available to the Deputy is now exhausted. He might bring his remarks to a close.
Mr. Roche: The unemployment statisics that are available point in the right direction. This is a progressive budget. It benefits taxpayers, lower income families and the economy and has a great deal to commend it.
Mr. Cullen: I am fortunate in that I have had some days to reflect on the contents of the budget, to sit down and carefully read the Minister for Finance's speech and the Principal Features of 1989 Budget. I have been able to give some thought to the real impact of the budget, its merits and what will be achieved in time. I have even gone so far as to try to stand outside the politics of the situation and to look at myself as being in someway representative of young people rearing a young family and looking forward to the years ahead. I have tried to see what steps this Government, as a responsible Government, should be taking at this point. However, I am afraid that what strikes me about the whole tenor of the  budget is that the Government have abdicated totally their responsibility to the people.
In simple terms I think the budget is a total failure in that it deals with the cosmetic, the gloss. It appears to be doing something but when one wipes away at what it seems to have set out to do there is very little substance left. This saddens me greatly because I had understood from the two budgets I had been privileged to be here for that the Government were trying to get the public finances into some real order and to desist from increasing the spiralling external debt which has been amassed over the past decade and a half. In previous budgets this was what the Government had set out to do. Indeed, results were achieved in that area. However, that is not the only answer to what we are trying to achieve. It is very far from what the overall picture needs to be; it is but a fragment of the jigsaw puzzle and of itself is not even 50 per cent of the picture.
What should the Government be trying to achieve in 1989? I accept that within a two year period there is no opportunity for huge giveaways to the private individual, nor do I believe that in the years ahead that a fairy godmother is going to appear in the shape of some Minister for Finance, no matter what party he belongs to, who will be in a position to make everybody substantially better off overnight and that there would be substantial sums of money available to each individual to spend as he or she sees fit. What could the Government be trying to achieve in the budget? I believe they had arrived at a situation where they were trying to set in train a number of desirable objectives that we all accept cannot be achieved in a period of 12 or even 24 months but which perhaps could be achieved in a period of four to five years. Clear objectives could have been laid down in this budget that would have given a clear signal to industry, the business community and indeed to the public at large, many of whom are supportive of this Government and indeed of my own party, the Progressive Democrats, or of Fine Gael and who recognise the need  for a consensus of some degree in Parliament, who recognise that there was no such consensus for many years but that a consensus is now in place.
Why have this Government refused to use the opportunity available to them in this House today? I do not understand why they did not have the courage and did not seize the opportunity of taking some major steps forward, making some major commitments in the budget for the next four to five years, so that a light would emerge at the end of the tunnel we have been in for a very long time. It is a consensus in this House that is not given lightly, yet it is not reciprocated by the Government. The Progressive Democrats as a party are willing to support this Government on many measures but there must be imagination shown, courage and clear foresight into what the Government want to achieve.
The worst possible budget has been drawn up at this time when greater depth and scope are needed in designing a forward planning budget in the national interest. This has been a weak, cosmetic exercise shirking a commitment to giving the economy any real impetus.
I am not decrying the benefits given to the long-term unemployed and to the socially disadvantaged. However, to be hailing these measures as the be-all and end-all of what a budget should be about at this time of great opportunities is pathetic in the extreme. The gloss has already gone from this budget and the media reception given within 24 hours of the budget had suddenly begun to change by even last weekend. The attitude of the individual in the public place has also begun to change. Even the business community are beginning to sound certain warnings in this direction.
Dr. McCarthy: They do not need to, any more.
Mr. Cullen: Curtailing public finances cannot work on its own. It must be accompanied by a major reform in many other areas. I would like to deal with  some of these areas now. It has been said and must be said again and again that there is a huge need for taxation reform. Let the lie be nailed in this House that a taxation reform package has been put forward by this Government. It is far from a reform of the taxation system that exists here today. The Government have failed at the very first turn to do something worthwhile in the taxation area. When we look at the high levels of personal taxation and the huge disincentive to be productive, to work harder and to work longer hours, when compared with the rest of the European Community, we wonder why we lag so much behind with regard to productive enterprise. That is not the whole of the picture. I do not understand why the employers, who after all employ great numbers of people, should have penal levels of PRSI maintained against them. That is the greatest curse of the whole taxation system. Yet Minister after Minister comes into this House and talks about job creation or genuflects in its direction. They know in their own hearts and souls that if an employer cannot pay an employee a pound note without having to fork out £3, there is no incentive to provide new permanent employment.
It is right to say that there is increasing investment, that interest rates are substantially lower, that the rate of inflation is much lower and that our exports are increasing at a temendous rate. However, jobs are not being created and why is that? One of the clear reasons is that the biggest disincentive to job creation is the taxation system, taken from the point of view of the employer wanting to employ people and from that of the employee wanting to go out to work. There will never be a major gain in employment, which is so badly needed, until those issues are tackled. I accept that this cannot be achieved in one, two or three years. However, there is a reasonable chance that over a five-year period most if not all of these objectives, could be achieved. It is difficult to understand the fear on the Government side in not outlining in this House their proposals over the coming years.
 We have seen a move to 32 per cent as the bottom rate of taxation, which is, ironically, the figure that the Progressive Democrats published in a document some two years ago. I am glad that the Government took that on board, but I am sorry to say that it is irrelevant in the context of what we were trying to say because it is not accompanied by any further changes in PRSI or of planning over a five-year period. We all accept that the taxation base must be widened. It might be strange for somebody like me, with the philosophy I am supposed to espouse, to say that there are many extremely viable companies in this country which, because of the corporation taxation system in operation with incentives and allowances, are paying no taxes at all. Is that equitable or even fair? Is it even what many of these companies desire? I do not believe it is.
There is an opportunity for the Government to set out a minimum tax take for companies. This idea has been nailed down in a policy document that my party have published. It has been met with a reasonable and realistic response by the business community. They may not like to have to pay more taxation or to have to pay taxation at all and this is designed mainly with regard to the companies that do not pay any tax whatsoever. They fully realise that through a quirk of circumstance they are in a false situation. A minimum tax take of a small percentage would be acceptable across the board but you cannot take these items on their own, throw them up like a kite and hope that somebody will catch on to them. It must be part of a much larger package. It must be part of a total reform of the taxation system.
There are other areas in serious need of reform. I turn to local government and the European Structural Funds. I know, and the majority of Members in this House know, that local government is in serious need of structural and financial reform. Again, no attempt has been made by the Government to look at the increasingly important role that local government will play in the years ahead because of our integration in Europe and  because of the local government role in the regionalisation of our country with the aid that can be received.
The financing of local government is in total disarray. The central Exchequer has failed to achieve what Fianna Fáil claimed in 1977 would be achieved. Local government is effectively null and void; it has no voice, no power, no financial base. It is simply an administrative body doing basically what it is told to do. Local authorities are not even in a position to do what they perceive to be right in their own community due to the way things are structured. This is a great tragedy which the Government are failing to address.
The Government are paralysed by a lack of clear thinking with regard to European integration. They have failed to put in place any programme to smooth our passage into a single industrialised market. I fear we are slipping in a vacuum of our own making. If we miss this great opportunity the chance of our becoming the third world country of Europe, an irrevelance in European economic terms, is a very real prospect. I wish some Minister would explain to major civic figures, civil servants and public representatives in local bodies why there is such a shroud of secrecy about what is going on. It is not in the interest of proper regional planning that local groupings should be kept totally in the dark. My suspicion is that there is not the capability within the Government, within the leadership of the Departments to put a proper plan in place. That is possibly the greatest tragedy facing us. Already we are missing the boat.
I do not want to harp on the date 1992 since an integrated Europe is already a fait accompli and we will see bonuses coming in some years' time. While there are so many needs for infrastructural development, the Government have failed in a miserable and quite appalling way even to attempt to put a sheen on what is to happen in regard to the Structural Funds from Europe. There is a doffing of the cap to it in some of the speeches I have heard. The Minister for  Finance and the Minister for the Environment, who has some mysterious involvement in this area, as well as the other Ministers do not seem to know what is going on or how they are to get sufficient programmes in place to obtain realistic funds from Europe. It is simply not happing and the Government know it. That is the sad factor.
I have spoken to city and county managers and they are not being informed about what is happening. They have attended numerous meetings at Government Department level and there is no clear indication from the officials who are supposed to be telling them what is going on. Other countries are getting their act together and we will once again be left behind. The Government will rue the day if they allow that to happen. Their failure will become apparent to the public who will begin demanding serious answers about potential developments, bearing in mind the total waste of the funds we received from Europe after 1973.
No attempt has been made to outline a plan for job creation. This is the single greatest and most catastrophic failure of the budget. There is no point in continually doffing the cap to the unemployed while failing to tackle areas in need of reform which are central to job creation. I came into the House this afternoon specifically to be present for the speech by the Minister for Industry and Commerce, but he had no follow-up on the passing remarks made by his colleague, the Minister for Finance, in the budget. He had no new ideas or initiatives to announce. He simply applauded what is already in place and said it would solve the problem of unemployment. If the Minister thinks that is sufficient he has a severe shock coming.
The Minister for Finance, the former Minister for Industry and Commerce, should let his successor know that we are not achieving the targets which are desirable in respect of unemployment. The Minister said in his speech that in the industrial sector we achieved last year the target of 20,000 additional gross jobs per year. That speaks volumes. He knows  quite well that the net gain in employment in the past 12 months has been extremely low and bears no relation to the opportunity provided by low interest rates, low inflation, increased investment and increased exports. There is no correlation between the two.
Dr. McCarthy: It has been a gain.
Mr. Cullen: The Minister had to state the gross jobs figure, knowing that he could not stand over the net gains in 1988. That says it all. He is failing, as are many other Ministers, to realise that there must be an inter-relationship between many of the Departments. No one issue is isolated. No one Department is an island which has no bearing on what is going on in other Departments. There must be a cross fertilisation between the Departments. On numerous occasions the inter-departmental committee has been mentioned. How many times has the committee ment and what has been decided upon? Perhaps we could be enlightened about the plans drawn up for future development.
In relation to privatisation, Ireland stands alone not only in the western world but in the communist world. Given the opportunity and the support the Government would have from the majority of the Opposition, I cannot understand their failure to being even in a very small way some semblance of a programme of privatisation. The Government seem to be trapped into some traditional ideological stance on this issue. I have never considered Fianna Fáil a left-wing party, although they may not be right-wing either. They are certainly broadly in the middle ground.
Mr. Carey: All things to all men.
Mr. Cullen: Perhaps this is the problem. They want to be all things to all men but the reality is that all men are suffering because nobody has benefited. They can see the difference in France, Australia, New Zealand, in the great so called arch  enemy of the western world, Russia, and even in Poland and Czechoslovakia where major reform has taken place because there is economic reality.
This problem will not go away and the day is not too far away when the Government and the Fianna Fáil Party will have to bite the bullet in regard to this matter. The Minister may smile but he knows that this is the reality and not something on which the Progressive Democrats ideologically want to hang their hat. It is only part of a programme we have set out; in real terms it is achievable and, in terms of the economy, desirable. There could be gains to the Exchequer in the sale of major assets and State companies by releasing funds back to the Exchequer, perhaps for some repayment on our foreign debt but even perhaps for reinvestment by the State in new companies. I do not say that the State and the Government should not be involved in public enterprise companies, quite the opposite. There is certainly a role for the State to play in developing companies but, when they are developed, up and running and profitable, the Government should seek to capitalise on that by getting their money back with profit for further reinvestment in State enterprise. That would certainly complement the private sector. I am not one of those people who say that all the answers are in the private sector, they are not. There is a role for the public sector but it should be a more imaginative and forward looking role. The Government have failed to grasp that nettle but they know they will have to do so because it is political and economic reality. It will have to happen whether we like it or not but the problem is that, by not tackling it now, the opportunity is being missed. Why not take it now when it will have to be taken in a year or two anyway so that the rolling benefits will accrue to create a strong economy for integration with Europe?
There is still a great opportunity for the Minister for Finance and the Government to redress the balance substantially in the Finance Bill which is obviously now in preparation and which will be brought  before the House in the months ahead. If the Government were to make certain strategic changes they would have tremendous support in the House. They would probably increase their support outside the House because the public are highly educated and articulate and want to see this kind of thing happening. The budget is a failure because it is a standstill one. That was the worst possible thing to happen. Budgets in the past which were disastrous did something, even if they went in the wrong direction. The Government nearly had a seizure and decided that the best thing to do was to hold the tiller firm and see which way the wind might blow over the next six to 12 months——
Dr. McCarthy: The Deputy fairly froze on the Barringtons bullet.
Mr. Cullen: When the opportunity is presented the Government must accept the reality and the goodwill available to them in the House. They do not have to run in fear, they can hold their head high and have the confidence to go ahead. The simple reason they can do so is that they are being allowed to do it by the generous co-operation of the Progressive Democrats and other parties in the House. This opportunity should not be lost as even a majority Government may not have been given the opportunity this Government have been given, more than has been given to any Government in the past 20 years. Now is the time for imagination and courage and for dynamism of the highest order from the Department, the Ministers involved and the Government. If they do not take this opportunity the sorry road to ruin will recur.
Mr. T. Kitt: Like Deputy Cullen, I have had time to take an objective and independent look at the Minister's speech. I cannot say I have come to the same conclusions as Deputy Cullen because I am convinced that this is a good budget. I will speak about it in  conjunction with last year's budget to some extent because it is important to look at it from that viewpoint.
Broadly speaking, the budget has won the approval of the financial market which I am sure Deputy Cullen will accept. It has meant a substantial reduction in personal taxation, in particular for the lower paid and has, when looked at in conjunction with last year's budget, meant that we have now in place significant, progressive and historic changes in our social welfare system that can only bring about very necessary improvements for those in need in our community. It is the issue of the needy I should like to address at the outset.
The social welfare measures introduced in this budget — and that of last year — must be viewed in the context of the report of the Commission on Social Welfare which was published in 1986. I am using the commission as a yardstick because it is a fair analogy and a most objective way of analysing the social welfare measures in the budget.
The commission's report provides a very useful framework against which progress can be measured. The commission indicated that the social welfare system had developed in a piecemeal manner over several decades and recommended greater rationalisation of the entire system. While the commission made about 65 recommendations, they summarised them into four priority areas. I will deal with each of them in turn and in doing so will indicate the substantial progress that has been made as a result of this and last year's budget.
The first priority recommendation of the commission was that there should be an improvement in the basic payment for those on the lowest payments so as to narrow the differences which exist at present in payment levels between the different categories of recipients. Those on the lowest payments are the long term unemployed and, as Deputies will be well aware, last year there was an 11 per cent increase to those recipients as compared with the 3 per cent increase for all other recipients. This year that trend has been  continued with a further 12 per cent increase for the long term unemployed and a 3 per cent increase for all others. The net result of this is that the difference between the highest social welfare payments and the lowest have now been narrowed substantially. In 1986, the lowest payment, i.e. that for a person on unemployment assistance, was 58 per cent of the highest payment, the old age contributory pension. As a result of this budget and last year's the lowest payment is now 65 per cent of the highest payment. By any standard that represents considerable progress and in the process those recipients with the lowest payments have benefited substantially. They have also benefited in other ways as I will point out later.
The second priority recommendation of the Commission on Social Welfare was the provision of more adequate support for families especially those long term dependent on social welfare. Once again this year's budget, combined with last year's measures, has brought about a substantial improvement here. The commission referred to the fact that there were no fewer than 36 different rates of child dependant allowance with the amounts varying, depending not only on whether the child was that of a widower or an unemployed person but also on whether the child was first, second, third, fourth, etc. in the family. The lowest payments were for the children of the unemployed. Not surprisingly the commission recommended that this complex system be rationalised. Last year the number of rates was reduced to 18 and the lowest rates were increased so that families of the unemployed benefited most. This year further rationalisation will occur with the introduction of a minimum payment of £10 per week per child. The main effect of these measures over two years is to substantially simplify the system of child dependant allowance and to bring about more equity between all categories of social welfare recipients and, in the process, to improve the relative position of those who are on the lowest payments.
The other measures affecting families  announced by the Minister, such as the extension of the child dependent allowance to children of the unemployed up to 19 years of age as opposed to 18 years of age previously where they are in full-time education and the payment of the highest rate of child benefit for the fifth child as opposed to the sixth child, will also be of considerable benfit to the families concerned.
The third priority area of the Commission on Social Welfare was to broaden the social insurance base. They recommended that immediate action should be taken to include in the social insurance system those groups who are currently excluded. The commission had pointed out that the social insurance system in Ireland was not comprehensive, and that certain groups, mainly the self-employed, were outside the social insurance system and therefore were not liable for PRSI contributions. In this respect Ireland was very different from other European countries. The view of the commission was that all income earners would contribute to the social insurance fund. The basis of social insurance is that it should be an expression of social solidarity in our community in which the risks, costs and benefits should be shared as widely as possible. In this context, the decision by the Government last year to extend social insurance to the self-employed, including farmers and other groups, such as all ministers of religion and members of religious orders, must be considered to be the single most important development in the social welfare system for decades.
Since the mid-seventies various references had been made to extend social insurance to these groups but no action had been taken. As a result of last year's historic decision we now have a comprehensive social welfare system. Under social insurance, people will have entitlement to benefits as a right, and with the extension of social insurance the necessity for means tested payments will decline over the coming decade. I have no doubt that in time this measure will be seen as one of the most significant in  the development of our social welfare system.
Furthermore, the decision in principle by Government to extend the full social insurance cost to 160,000 public servants, who are currently paying only the modified rate, and to raise this matter with the Irish Congress of Trade Unions with a view to implementation in 1990, is further proof of the Government's commitment to make our social insurance system comprehensive and fair so that all income earners, irrespective of the source of their income, will contribute to the social insurance fund and benefit accordingly.
The forth and final priority recommendation of the commission was to improve the delivery of the social welfare service, for example, through the development of computerisation. Strictly speaking, while developments in this area are outside the ambit of the budget, it is fair to say that much progress has been made during the past two years. The Minister for Social Welfare has taken measures and provided the resources to streamline the system and further measures are now being considered. A key factor, however, is the simplification and rationalisation of the system along the lines recommended by the Commission on Social Welfare.
There is little point in having a very efficient service if at the same time people applying for social welfare payments are confused by the various conditions of legibility and see little rationale for the different payment levels. In this regard it can be rightly claimed that the system is being rationalised and simplified. This will make a substantial difference to those claiming social welfare payments. One example of this is the decision of the Minister to introduce a payment for widowers and deserted husbands with dependent children so as to put them on a par with widows and deserted wives. At present the payments they receive are lower than those of widows and deserted wives and as a result of the Minister's proposals the system will be simplified and rationalised to make it fairer to all applicants irrespective of the cause of their income needs.
 In summary on this aspect of the budget it can be said that the social welfare measures introduced in this year's budget and in last year's budget can be judged favourably against the yardstick of the main recommendations of the Commission on Social Welfare. As a result of these measures those on the lowest payment levels will benefit substantially and the gap between them and those on the highest payments will have narrowed considerably. Relatively speaking, therefore, those on the lowest payments are now much better off than they were two years ago, and this is very much in line with the thrust of the report of the Commission on Social Welfare. It can also be said that these reforms in the social welfare system will in time be regarded as the most significant in the development of the system. It is worth noting that these measures are being introduced at a time when the public finances are being brought under control. Many would have argued that this was not possible, but in fact it has been achieved.
I am by no means suggesting that everything is perfect and that all is well. We live in imperfect times and there is plenty of evidence of this imperfection all around us. Many people are poor, principally because they cannot find gainful employment. The younger ones, the unattached and those with a responsibility for bringing in a weekly or monthly wage have emigrated. Many of them have been lost to our country, some perhaps forever but we hope others will come back. The responsibility of giving these people the option of returning lies heavily on our shoulders as legislators. Others do not find it possible to go. They choose or maybe are forced by circumstances or temperament to stay. The great majority of the unemployed who stay bitterly regret their enforced idleness, they feel the ebbing away of their self-esteem, and they see their position in the local community slowly but surely going from bad to worse. The time will come when all hope, self-esteem and motivation will go, and they will become part of what we call  the long-term unemployed. As I pointed out earlier, the Minister for Finance has made a very brave effort — and in my view has succeeded — to help those who most need it.
Social welfare is one means through which wealth can be redistributed but of course social welfare does not create wealth nor does it provide jobs. There are conflicting political arguments as to what percentage of the wealth of the nation should be taken from those who have and given to those in need. There is a degree of intervention by the State which is among the highest in Europe, yet this alone does not seem to be solving our problems of poverty and waste. Some Members in this House, obviously unimpressed by the clear lessons of history, are willing to see the well established trends in other countries, and still shackled to the failed old-fashioned reactionary ideologies of the extreme left, prescribe an even bigger dose of State intervention as the solution to our difficulties. It is reasonable to subscribe to a particular political philosophy and it is acceptable to seek to persuade others that they also should support that philosophy, but it is neither reasonable nor acceptable that those who subscribe to the philosophy of the left should attempt to lead astray those who are most vulnerable, or should stand in this House and offer false hope to people who need real hope.
Above all else, it is the duty of Government to so order the affairs of the nation that the economic and social well being of ordinary people is safeguarded. It is the duty of Government to maintain law and order. Our present position in this regard is by no means perfect and much more remains to be done, but generally we can truthfully say that we live securely under the rule of law. It is also the duty of Government to provide a stable and progressive environment in which the enterprise and self-esteem of the people is permitted to flourish. Can we truthfully say that such conditions exist? I think much needs to be done.
It is popular nowadays to speak of the need for Government to create new jobs.  Governments do not create new jobs; it is wrong and monstrous for the likes of Deputy Higgins of the Labour Party to hold out to the unemployed the prospect that if only the Government were to spend a lot more money they would all find the jobs they want. It is also wrong for the same Deputy to argue that the private sector should invest more and more while at the same time demanding that the resources of that same sector be diminished by imposing higher rates of corporation tax. Even Deputy Higgins will have a sufficient grasp of reality to know that one cannot provide investment unless one has the money to invest. The answer lies in the measures already taken by this Government. One cannot save the harvest on a wet, stormy day. No matter how long one works one cannot succeed as well as the person who has the weather on his side. Governments do not control the weather but there is another climate which Governments do control — the economic climate, a climate which is as essential for reaping a good economic harvest as the weather is for saving corn. The Government have worked wonders on economic climatic control over the past two years and I will repeat a list which has been referred to here many times already: low interest rates, the balance of payments in handsome surplus, inflation at a remarkable 2½ per cent, debt-GNP ratio stabilised. The dark winter days of the famous doom and gloom have been left behind us and there is a touch of spring in the air, a feeling of hope. It is fragile, there is much to be done, the harsh winds of unemployment still blow and spring can be a hard season, but it is spring and hope and confidence have been restored.
How will this hope manifest itself this year? What should we look for? We are certainly entitled to look for some progress in reducing the number of people out of work and a corresponding increase in those at work. It is not acceptable for us to go on solving our unemployment problems by exporting our fellow countrymen and women. If we could put even 10,000 extra people to work the effects would be real and tangible for the whole  economy. It would mean up to £40 million less in social welfare payments and a tax yield of, say, £20 million for the State. It makes good sense in so many ways to put people to work — good economic sense and even better social sense.
We are also entitled to look for a continuation of the trend towards equity in the tax system which has been a feature of recent budgets. The admittedly small but nonetheless welcome reduction in the direct tax burden on PAYE workers is part of that trend and I welcome the acceleration of the move towards self-assessment throughout the corporate and self-employed sectors. In passing I note that the rate of corporation tax will go down from 47 per cent to 43 per cent from 1 April next as a consequence of decisions made in last year's budget. I welcome very much the moves, as yet limited, towards a simplified tax code for all taxpayers. Subject to reasonable safeguards it is better that allowances be curtailed and rates reduced than to have a proliferation of complex allowances and a resulting high rate of taxation. I urge the Minister to continue this trend as part of the reform of the tax code.
I was somewhat surprised that the Minister has decided to allow what he defines as “small businesses” to remit PAYE and VAT annually. I do not think this is a wise provision. Twelve months is too long a period. Whatever argument could be made for a longer period in which to remit VAT there are no reasonable grounds for allowing employers to retain PAYE and PRSI for a whole year. VAT is a trade-generated revenue and many traders must wait three or four months in order to collect the VAT charged to their customers. Therefore, it would be reasonable to allow them to make returns quarterly or even half yearly. There is no valid reason why any employer should hang on to PAYE and particularly PRSI for any longer than they do at present. If traders argue that the paper work is too onerous then it should be very easy for the Revenue Commissioners to devise a scheme involving the use of direct debit mandates which would meet this objection by the  traders and still ensure that revenue was being returned promply. Allowing traders to retain PAYE and VAT for 12 months will be of marginal assistance to profitable traders and will be a real temptation to people with cash flow or other trading difficulties. Perhaps the Minister would re-examine what I regard as an unwise concession.
I do not object to the moderate increase in excise duties imposed this year. They are generally less than the rate of inflation and, therefore simply maintain the status quo. I was disappointed that the Minister did not go further in encouraging the use of unleaded petrol by introducing a meaningful differential between the price of leaded and unleaded petrol. One extra penny duty imposed on leaded petrol would have enabled the Minister to reduce the price of unleaded petrol by up to 20p per gallon. This is the kind of figure necessary if a real swing to unleaded petrol is to be encouraged. I ask the Minister to go even further in getting the lead out of petrol.
The Minister rightly restated the Government's concern for our environment. A major public debate on the environment has been taking place in Ireland over the past number of years and will most definitely continue into and beyond the next millennium. The real political issue that must be tackled sooner rather than later is how to expand this country industrially while at the same time protecting our clean environment. Well publicised and controversial examples of this struggle between the industrial and environmental lobbies are popping up monthly all over the country. We had the Merck Sharp and Dohme versus John Hanrahan case. We should all be greatly indebted to Mr. Hanrahan for singlehandedly taking on this major corporate body.
An Ceann Comhairle: I am sorry to interrupt the Deputy but the Chair would much prefer it if no refence was made to persons of that kind who are outside this  House. The matter may well be sub judice.
Mr. T. Kitt: I accept you ruling on that, a Cheann Comhairle, and I will move away from that case. The debate on the environment versus industry began in earnest as a result of issues such as the one I mentioned. Other examples are now cropping up, for example, the Merrill Dow Chemical Plant proposal for Cork. This proposal was welcomed by the unemployed but suspected and not trusted by the environmentalists and some of the farming community. Another example is the Goodman processing plant for Tuam. This was welcomed with open arms by the Tuam Chamber of Commerce but opposed by some local residents. In this case An Bord Pleanála, to their credit, included so many conditions when granting permission for the plant that the health of the local residents and indeed the life of the local rivers appear to be more than protected. The dilemma which has resulted from these cases is how we are to know for certain if these industries are safe and will remain safe.
A very predictable and dangerous trend is emerging. The industries in question have environmental and health consultants to defend and promote their side of the arguments and the environmental lobby bring forward specialists and experts who tell us the opposite. The end result is that the public are confused and do not trust the industrialists regardless of the support and backing they get from the IDA. They are not convinced that the local authorities have the resources or the expertise to carry out the monitoring of waste treatment and disposal. Seeing that my colleague from Cork is here, I should point out that Cork is an exception. The local authority in Cork have a number of chemical plants within their jurisdiction and I am aware that they have always managed to carry out a proper monitoring service but this does not exist in many local authority areas. I should like to see the establishment of a recognised independent agency who would carry out research and arbitrate in cases such as those I have mentioned  where industries want to set up in Ireland but meet with opposition on health and environmental grounds. We need the jobs but we also need assurances that these are safe industries. If anything goes wrong with one of these new chemical plants then the damage done will be irreparable to our image as a clean air and clean food producing country. Our bottom line must be to protect this major marketing image. If public conflict between industry and local environmental and health interests cannot be resolved, the Government should be able to call on the expertise of an independent national research institute to act as consultants in helping the Government to decide whether particular projects should go ahead. Such an independent agency could work closely with the university research units and internationally recognised health and environmental institutes in ensuring that new industries would not effect our environment adversely. This agency or institute should also have the power to monitor and control the disposal of waste, waste emission, incineration etc.
A reconstituted EOLAS, a body who, to their credit, have always acted in an independent manner and have laid down specific guidelines in these areas but who have not enough flexibility or power when it comes to the monitoring process once the industry under investigation is set up and running, could liaise closely with international and health environmental institutes, our universities here and universities throughout Europe and abide by agreed international environmental and health safety standards. We are heading into a European dimension in the run up to 1992 on this issue. It is no longer an Irish issue; it is very much a European issue — in fact it is an international, worldwide issue. The establishment of such a body, I am convinced, would lead to a more co-ordinated and planned approach to industrial expansion and would allay the genuine fears of those who are concerned about lack of proper planning and monitoring of the new plants setting up here on a regular basis. The business community I referred to  should contribute financially to this monitoring and research process.
I do not for a moment underestimate the task of the Minister for the Environment in dealing with this issue. Tough decisions will have to be made. We produce 2.13 million tonnes of industrial waste every year and of that 52,500 tonnes are toxic; 15,000 tonnes of hazardous waste are exported for dumping and burning while the remaining two thirds are disposed of here. It has been estimated that 20 per cent of toxic waste produced here went unaccounted for last year. Much of our waste is dumped off the Irish coast. The Minister will have a difficult decision to make regarding the issue of a national disposal plan and the option of a national incinerator or national waste disposal site. However, he has faced up to difficult decisions in the past and I know he will not be found wanting on this issue in the future. The time is ripe for the establishment of an independent research and monitoring agency who would have powers and would strengthen the Government's hand in ensuring that we can expand industrially, provide the necessary jobs and at the same time protect our invaluable and precious environment.
On the issue of protection of our environment and our health we must move towards the concept of an international monitoring forum. For example, the approach could be applied to this proposal by BNFL to construct a cavern under the Irish Sea where they would dispose of their nuclear waste. Such a proposal would constitute a major threat to our environment and health on this side of the Irish Sea, when one considers the record of accidents at the Sellafield plant. Since all countries within the EC are endeavouring to harmonise taxes etc. in the run up to 1992, why can we not also harmonise our health and environmental safety standards on a European basis and establish a monitoring body within the EC who would have real powers to protect countries like Ireland from a proposal such as that made by BNFL?
The Government have rightly placed an emphasises on the EC Structural  Funds. They were quite right to send a ministerial team to discuss their plans with the Commission on 6 January, and I would go as far as to say that the Government are the first administration who have really got their act together in relation to European funds. They have negotiated the doubling of the Structural Funds and moved quickly to set up the different regions so as to maximise the advantage for our country. These additional funds will change the face of Ireland in the next five years. I hope that by the end of the five years we will have a ring road around Dublin, to include the Southern Cross route, as this is, after all, part of the European route from Belfast to Rosslare to Le Havre. Also I hope we would have built by then, if you will forgive me for being parochial — I am sure the Minister of State, Deputy Brennan will not mind — a by-pass for Dundrum village, with the aid of the EC.
An Leas-Cheann Comhairle: You have not enough time to go any wider.
Mr. T. Kitt: This budget has been a good one for young people in that it has placed a strong emphasis on job creation. I welcome greatly the involvement of the main banks who have agreed to make £10 million available to young entrepreneurs. The doubling of the allocation to DÍON is very significant.
In conclusion, I compliment the Minister for Finance on a very fair and progressive budget. He has managed to continue the historic achievements of his predecessor in his handling of the public finances, the Exchequer borrowing requirement and the current budget deficit. The measures he has introduced with regard to personal taxation mean this Government have more than fulfilled the commitments made in the Programme for National Recovery on this issue. The most significant aspect of the budget is the area of social welfare. The reforms in the social welfare system this year, combined with last year's budget, will be regarded in time as probably the  most significant in the development of the social welfare system.
Mr. Carey: I always like to speak on the budget when it arises. I come here and listen particularly to speakers on the Government side. I find some of them entertaining, some of them factual and some totally erroneous. They are all sucked into this hype and expectation that was raised about the 1989 budget and the largesse the new Minister, Deputy Albert Reynolds, would have to give away when this great day, 25 January 1989, would dawn, when the Opposition would crumble because of the generosity of the Minister. He had so much to give away. He was going to give PAYE people the major relief they have sought down the years. He was going to relieve poverty in the way the clergy had sought through the Conference of Religious Superiors. All this was to be done with a stroke.
The media play a big part in establishing reality. In this case they have gone very far from it, but I must compliment the editor of the Donegal People's Press whose leading article in his edition of Friday, 27 January 1989 began “Was it Doctor Johnson who reassured us all with the quote: `A woman is only a woman but a good cigar is a smoke'?” Another remark about tobacco is, “A cigarette is just long enough to leave you dissatisfied”. That is the sort of budget produced last week by Deputy Reynolds. He made a valiant effort to do everything and nearly succeeded in doing nothing. Under strict orders to maintain fiscal rectitude he tried also to tickle the tax system, boost employment, help the poor and skim a little more cream off the blosoming financial institutions without frightening them away altogether. Faced with a multitude of deserving causes, he offered help to some and inevitably ended up offending others. Of course, as a Minister in a middling popular minority Government, he had his positive actions all construed as political window dressing in preparation for a possible general election.
I would like to congratulate Deputy  Reynolds on his new assignment as Minister for Finance. He is an amiable and affable person and one of the first industrialists to hold the post of Minister for Finance. I am disappointed the Minister did not grasp that nettle. Deputies on the Government side have been suggesting to the House that the performance of the previous Government was very poor. They have told us that the Coalition failed in their task but I would ask them to reflect on some of the problems we faced when in Government.
Deputy Kitt referred to emigration and I should like to draw his attention to the figures issued last week which show that approximately 73,000 people left our shores last year. To me that represents disaster stakes. Immediate action is required to remedy that. My party have generously offered to participate in a conference with other parties to discuss tax reform with a view to producing a package in preparation for 1992. We must have a medium and long-term strategy. The budget was designed in case there will be a general election in the next few months, in case the Opposition combine to vote down a beleaguered Government.
I do not think the Government can afford to ignore what has been a feature of Irish political life since March 1987, the stability that this institution has given to all sides of the economy. I listened to Deputy Roche pouring scorn on the actions of the Fine Gael Party when doing their national duty in regard to the national debt. The Minister for Industry and Commerce, in the course of an interview on television tonight, was optimistic about the future but I am sure he will admit that since the Government took office there has not been any drastic effort by us to destabilise the institutions of the State. I should like to remind the Fianna Fáil Party of the actions they took between 1982 and 1987 to try to bring about the downfall of the Coalition Government.
Between July and November of 1986 Deputy Séamus Brennan, now Minister of State, forecast that there would be a budget overrun of almost £1,000 million.
 He told us that we could not meet our budgetary targets. Deputy Harney made a similar forecast. I cannot say that members of my party were silent because Deputy Skelly was active with his shopping basket, as was Deputy Cluskey of the Labour Party. There is no doubt that there was a run on currency and that Government securities were sold but Fine Gael faced up to their task and produced the 1987 budget which was implemented by the former Minister for Finance, Deputy MacSharry, almost word for word.
If Deputy Roche wants to criticise he should refer to March 1987 when Fianna Fáil were converted to the need for financial rectitude. I am not saying that Deputy Brennan was not aware of the meaning of solvency or of the need for the country to meet its debts but in his efforts to get Fianna Fáil to power he said anything that came to his mind if he thought it would ruin the Fine Gael-Labour Coalition. I am not complaining about that and I have no doubt that if I did I would be told that that was politics. However, as a result of the actions of Fianna Fáil during our term of office we have had the greatest exodus of young people from our country. Cynicism still abounds and the budget, with all its cosmetics about social welfare being increased and income tax reduced, is not of much use to the unemployed. There is a need for a major reform before we can achieve long-term growth.
I appreciate that Fianna Fáil must portray themselves as the only party who can instil confidence in the economy. I should like to tell them that our spokesman on Finance, Deputy Michael Noonan, when he addressed the national conference of chambers of commerce in Ennis last year, was given the loudest applause. He gave industrialists hope for the future because he offered more of the Tallaght strategy which allowed the country to progress. I do not expect Fianna Fáil members to acknowledge the success of the Tallaght strategy but the Minister for Finance should acknowledge the rapport that exists in this House. He should give us the opportunity to suggest different  schemes to improve the lot of our people. The offer by Fine Gael to prepare, in conjunction with Fianna Fáil, a package of tax reforms should be accepted by the Government. It represents our best hope for the future. The Minister for Finance and his colleagues are aware that there is little difference in the income of the lowly paid and those in receipt of social welfare benefits. In most cases it is more attractive for the lowly paid to go on the dole because if they do they can avail of many benefits. The whole system is in need of change. I do not know where the confidence Deputy Kitt spoke of will come from.
A person interviewed after the budget was asked if he thought there were more jobs available now than in the previous year and replied that he thought the Minister was on the wrong bus. That man was telling the truth. I do not wish to get involved in an argument with the Minister of State or the Minister for Industry and Commerce about the validity of the figures for new jobs but I wonder if they are aware that at my weekly clinics many people ask me to help them obtain employment. Others seek my assistance to get them to Australia or to get a visa for the United States. It is pathetic that our young people have to leave. We should be ashamed of ourselves. We are turning our backs on those young people. The budget, which is a sham, does not help them.
Deputy Kitt told us that the financial sector had welcomed the budget. Deputy Brennan is aware of how critical current budget deficits are and how critical Exchequer borrowing requirements are to interest rates. He will be aware that for 1989 the Minister has estimated that our borrowing requirement will be £1,057 million and that the financial market told us that a borrowing requirement of £1,100 million would be critical. We are budgeting for a borrowing requirement that is less than £50 million off a critical figure. A slight jerk in interest rates could bring our total over the top.
Will Fine Gael make a show of themselves shouting of over-runs or lack of  confidence in the economy? Will they encourage the emigration we have seen over the past few years? Fine Gael will not do that. From what I hear an election my come sooner rather than later and I ask people to remember when they vote what responsibility to the nation means. Fine Gael put the 1987 budget to the people and we were told that it could not be countenanced. We were thrashed, because on the other side of the House the Fianna Fáil Party offered self-financing tax breaks and other things like that.
The Taoiseach did not make any real promises. However, economic correspondents, particularly in the Irish Independent, were saying that the Taoiseach had won the debate. The Taoiseach said nothing. In the interests of honesty the Fine Gael Party put up and were prepared to be shut up in the national interest. There is a big challenge for Fianna Fáil.
This cosmetic budget does not address any of our real problems and it does nothing to combat the cynicism and the attitude to politics and to politicians. This kind of massaging that is going on will be utterly rejected by the people. The opinion polls are saying nice things about Fianna Fáil and I wonder why they do not go to the country so that the Taoiseach can get his mystical overall majority. The reason they do not go to the country, and I give the Taoiseach credit for it, is because as long as they have a majority on this side of the House and a majority on the Fianna Fáil side there will be no trouble and the country has a reasonable chance of getting on.
The Taoiseach was against the 1977 manifesto as was the present Minister for Finance who is even on record as having said that he never read it. Imagine that Deputy Reynolds who was first elected for the Fianna Fáil Party in the 1977 general election never read the Fianna Fáil manifesto. Little children in schools around the country knew what was in the 1977 Fianna Fáil manifesto. The Minister knew what was in it, too.
This country is virtually insolvent. It is time we looked at reality. It is right that Fianna Fáil should boost confidence.
 There has to be life after the debt crisis, but it is how one eliminates the debt that counts. The budget published last Wednesday is not a great leap forward. We have not too long to wait until we are into the single market. Trains will be going from the top of Scotland to the bottom of Italy at rates of 180 miles an hour and in Ireland, Irish Rail will operate at an average speed of 50 miles an hour and we will have 60 miles of sea between us and the mainland. Ireland's cost structures will be totally out of line with the rest of Europe and we will be trying to compete. I sympathise with Deputy Brennan in trying to persuade Irish people to buy Irish.
An Leas-Cheann Comhairle: Minister Brennan.
Mr. Carey: Sorry, Minister Brennan. The Minister is making a valiant effort. He has more than once appeared on television exhorting people to buy Irish and he has produced schemes for which I commend him. He should talk to the Minister for the Environment who has imposed a hidden tax. Less than 15 months ago the Minister for the Environment produced a Bill to make sure that the ESB would pay £24 million in rates on their buildings. The ESB must recover that sum from their customers. Ironically that money will be collectd by the county councils to be handed over to the Minister for the Environment and the spending of it is controlled by the Minister for Finance.
In my constituency the Moneypoint project was a major project. The roads were uprooted and people drove from every corner to Moneypoint. The roads are now pitted with potholes. There is no reference in the budget as to what will happen in relation to this £24 million in taxes from the ESB. When the Department of the Environment decided to impose those rates the buildings in question were under-valued. The correct rate would probably be more like £48 million. I suppose a future Minister for Finance will be inspired about that aspect of it. However, I reject the whole programme  because it is an added cost factor in the production of goods and services which we need to improve our economy. The Minister has not looked at that aspect in the budget at all.
None of the newspaper commentators dealt with the likely inflationary effects of this budget. Fianna Fáil Deputies have talked about 2 per cent inflation. This budget will lead to an addition of 1½ per cent on inflation and at the end of next year we will have at least 4 per cent inflation. The Minister did not say anything about that because it might lead to wage demands which he will have to resist.
During the lifetime of the previous Government we had demands for wage increases. Ireland at that time was virtually insolvent, too. The teachers were invited into this House; they were crowded into every nook and cranny and Fianna Fáil said “Pay them £75 million”. They roared at us. Was that responsible Opposition? Was that responsible politics and did it show responsibility towards Ireland Incorporated? One might well ask: should Fianna Fáil even be shareholders on account of what they did? Where are the teacher union leaders now? Why are they not claiming their £75 million? I am afraid they have gone to ground; they have got more lucrative posts. I believe some of them are even changing political parties. I read in the papers the other day an account by one of the jazzy correspondents that, following on the budget, she had noticed that the mohair suit brigade was back in Leinster House, that seven or eight Deputies were wearing the same coloured suit with the same stripe. I have to say I support the Minister for Finance and am wearing one of his company suits.
The position is that all of the vigour displayed in protesting at the harsh treatment of the Thatcherite Fine Gael and Labour Government has ceased. I wonder could the same vigour be resurrected and brought to bear on the Government to increase employment? Could it be brought to bear on the Government in an endeavour to keep costs down? For instance, could it be  brought to bear on the Minister for Energy to have petrol companies reduce the cost of a gallon of petrol to its real value because we are now paying at least 70p more a gallon than we should? Where is the report of the committee he had been reporting on? Imagine the political kudos for the Government were they able to bring the price of petrol down by 70p per gallon because 70 pence a gallon is being extracted by the cartel of petrol companies supplying our economy. We have an awful lot to do.
In retrospect one can only say that we offered a consensus to Fianna Fáil they would not accept. That is not different because during the last war between the years 1940 and 1945 — when there were no political kudos to be won or lost — this country failed to utilise its best resource, its land. Rather than being owed millions by Britain and the USA at the end of the war we had to go cap in hand, for Marshall Aid. In the sixties under the leadership of the late Deputy Seán Lemass — described as the greatest period of Irish industrial history — we went mad and had wage inflation. In a Cork by-election the same Deputy Seán Lemass, the great judge, allowed a pay award for which there was no need, that was in the Mrs. Galvin by-election.
An Leas-Cheann Comhairle: Deputy Carey will accept that he is taking a long distance view of matters.
Mr. Carey: Again — and Fianna Fáil have failed to recognise it — there is now a consensus in this House they have failed to utilise. Indeed, this budget illustrates the degree of nervousness, the unsteady position in which they find themselves. I would surmise that was the real reason the former Minister for Finance decided to go to Brussels. He could see that people in Fianna Fáil did not want to face up to taking the hard decisions, did not want to arrive at a consensus, did not want to improve this economy so as to ensure that a similar number of people would not be forced to emigrate this year.
I agree with the sentiments expressed  by the editor of the Donegal People's Press to the effect that the Minister for Finance made a valiant effort by way of this budget to do everything and nearly succeeded in doing nothing. That summarises this budget for me.
Mr. Flood: I congratulate the Minister for Finance on his first budget. I might refer to a few points relevant to this budget and the previous one and draw Deputy Carey's attention to what can happen when real decisions are taken in budgetary terms. For example, last year the then Minister for Finance took the decision to designate part of my constituency for the purpose of incentives for urban renewal. Arising out of that decision I am happy to report that the Tallaght Town Centre project is now under way, with men working in what had been, heretofore, green fields, where there are machines on site and worth-while employment is being provided. I understand that the labour force on that site will total at least 400 over the next three or four months. That is a direct result of the decision taken in the 1988 budget. We look to the provision of this budget to move on, particularly in the area of investment in infrastructure which is extremely important and capable of linking the public and private sectors, resulting in the creation of substantial numbers of jobs.
There is also in the same area, resulting from finance having been provided in the 1988 budget — as Members of the House will be aware — considerable road construction such as the project to which I have just referred and in respect of which a sum in excess of £30 million has been set aside by this Government to build the western parkway. Taken in conjunction with the Tallaght Town Centre project, considerable jobs are being created which, when both projects have been completed, will change the whole of the south side of Dublin city. I might add that those projects constituted demands made on successive Governments over a long period. For example, the Tallaght Town Centre project has been on the  cards for over 12 years. However, a particular developer found it impossible to organise the requisite financial package until such time as he was able to work with a Government capable of taking the appropriate decision to allow the public and private sectors to work together. The same applies to the motorway to which I have referred where the private sector is funding what I believe to be one of the largest bridges to be constructed in Europe, forming part of that motorway.
While on local matters I applaud the Minister on having made special mention and provision in his budget for Tallaght. As Deputies will know, last autumn we had a major debate on Tallaght, courtesy of the Labour Party, which proved helpful in focusing on the needs of Tallaght, of which we are all conscious, but which were neglected by successive Governments over many years. The Government are now recognising that there is a problem in Tallaght which must be tackled. Consequently, I welcome the commitment of £3.5 million for the provision of industrial infrastructure, particularly on the west side of the town which is the most disadvantaged part of the overall area.
The social welfare changes announced will be important for that constituency also because of the large numbers of long-term unemployed. Of course these changes, which are welcomed by all of us, have implications nationally. The debate prior to the budget indicated that something special would have to be done this year, as last year, for those on the lowest social welfare payments. I am particularly pleased that the Minister has been able to provide additional help for this category of social welfare claimant. I hope this process will continue in future budgets so that we can make up the big gap between those on the lowest form of social welfare payment and what is a decent livable income for those on social welfare.
An Ceann Comhairle: Deputy Spring gave me notice of his intention to raise on the Adjournment the subject matter of the pending closure of the Sugar Company factory at Thurles.
Mr. Spring: At the outset I wish to inform you that I am prepared to share my time with Deputy Lowry, if that is in accordance with the wishes of the House.
An Ceann Comhairle: Is that satisfactory? Agreed.
Mr. Spring: I also thank the Minister for Agriculture and Food for being present for what I consider to be a very important issue.
There are certain matters in relation to the announcement that was made by the Sugar Company board in recent weeks which need to be addressed. I have to say with some regret that the behaviour of the Minister for Agriculture and Food in the weeks since the announcement was made has been nothing short of disgraceful. It is impossible to escape the conclusion that his only interest has been in preserving his own political career. Now that we hear today he has sent in consultants to the Sugar Company yet again, I can only conclude he is further fudging the issues involved in the Sugar Company.
We must ask why at this stage, after all these years, the Government consider it necessary to appoint more consultants? Are there any facts in relation to the Sugar Company that are not known at this stage? Is the Minister simply trying to buy time? Rumour has it that members of the board are due to be replaced by members who might be more compliant with the Minister's wishes. There have been rumours of interference with the independence of the board in relation to making commercial decisions. The Minister must inform this House tonight about the manner in which he is approaching this issue. We are entitled to some  reassurance that the Minister is dealing with this in the most above-board way possible and that his only concern is for the long term survival of the sugar industry here.
I do not believe we are talking only about Thurles in this debate. The last two weeks have been absolutely disastrous from the point of view of the Thurles plant and from the point of view of the morale of the Sugar Company itself. It is hard to reconcile the facts in this case. I have before me the Minister's statement of 9 February 1987 which makes very interesting reading when compared with the lack of statements on the Minister's part in the last two weeks. The Minister said that Fianna Fáil would commit themselves to the development of new byproducts in agriculture and to the strengthening of each semi-State enterprise to achieve maximum employment and added value in this sector and that Thurles sugar factory was just such an enterprise.
An Ceann Comhairle: Perhaps the Deputy would give the reference.
Mr. Spring: It is a statement made by “Michael O'Kennedy, TD, Fianna Fáil spokesman on Finance”, in Thurles on 9 February 1987.
An Ceann Comhairle: What document is it?
Mr. Spring: It is a document which I do not think the Minister denies issuing. It was signed by Deputy Michael O'Kennedy and was requesting votes for O'Kennedy and Smith. It makes rather ironical reading two years later. It goes on to outline how Thurles would be developed, how the factory in Thurles was opened by Fianna Fáil and would be preserved by Fianna Fáil, how the company would develop, how they would have new by-products in agriculture and how they would strengthen the company. It is startling reading in view of what has happened in the past two weeks.
We have now got to the ludicrous stage  where on Sunday last the Minister would not even answer questions in relation to the Sugar Company. It is hard to credit that a Minister could actually have a statement made on his behalf in London on Sunday that he would not be answering questions on the Sugar Company because he would not answer such questions in the absence of Minister Smith.
There are questions to which the public, the workers in the Sugar Company and the country as a whole are entitled to have answers. What are the terms of reference of the latest consultants who have been appointed? Who is in charge at this stage? The Minister for Agriculture and Food has responsibility for the Sugar Company. What directives have been given to the board of the Sugar Company? What consultations has the Minister had in relation to the Sugar Company? Are they entitled to make decisions as a board in regard to the future of the company? What are the prospects of the Thurles sugar factory surviving? Many people in Thurles are totally confused by what has happened in the past two weeks.
Will the Minister outline to this House tonight whether he is committed to the future of the Sugar Company not just in Thurles but as a commercial State enterprise? What plans does he have for the expansion and development of a company who have made substantial profits in the last number of years? They had profits in the region of £11 million two years ago and they look like heading for the same level of profits this year. Perhaps the Minister would enlighten us on what is happening in relation to alternative projects for Thurles? In regard to the negotiations taking place with Finn sugar, are they serious or are they spurious? Are they a distraction? What has taken place to date? Are the Government in favour of a joint venture with an outside body? Perhaps the Minister could also outline the state of negotiations in relation to those people who are going to lose their jobs if the Sugar Company close.
I have said in the past that I am opposed to the privatisation of semi-State  bodies. In a case like this where profit is being made things may have to be done, but that does not necessarily mean that we have to forego the interests of the Government, the taxpayers and the State in these companies. If the Minister has plans in mind for the privatisation of this company I would ask him to make those known to the House now rather than having it done and then informing the House later. If that is going to happen this House should be informed and a debate should take place here as to what the Government intend for the Sugar Company. If the Minister sets out on the road to privatisation I, for one, will question his motives. I will be asking if they are for his preservation within the constituency of North Tipperary, or if they are for the preservation of the Sugar Company as we have known it.
Before anything happens this House is entitled to be informed of what the Minister has in mind. How do we know, if discussions on privatisation have taken place, that the sugar quota — an invaluable item within the restrictions of the EC at present — is not the main target? What guarantees do we have on job preservation, because jobs are an integral part of the Sugar Company? Can the Minister tell us tonight if jobs will be preserved? Will there be job losses? Exactly what does he, as Minister for Agriculture and Food, as the person responsible to the people of this country for the sugar industry, have in mind? What does he and the Department of Agriculture and Food foresee happening at this point?
If the Minister is going down the road of privatisation could he inform us whether the Sugar Company are more valuable with the Thurles plant in operation or without it? Is it not a possibility that if the Sugar Company as we know it is sold with the Thurles plant as a struggling part of that company it would tend to under-value the company? Is the Minister going to face up to his responsibility? Can he give an assurance to this House that privatisation is not being considered or, if it is being considered, on what terms is it being considered? What guarantees  will be given to him as Minister in relation to jobs, investment, marketing and the future viability of the company? If there is private sector involvement, are we talking about three sugar plants or two? I raise these questions because of the uncertainty and the lack of clarity over the last number of weeks.
The board made a statement in relation to their plans. The Minister's statements to date have been very incoherent. Perhaps he will inform us whether the board are entitled to make these decisions or if the commercial decisions are within the ambit of the Sugar Company board. If they have made decisions in relation to closure, do they have the final say or have the Government decided that the Sugar Company plant in Thurles will continue in operation? Does it have a future? In the event of it closing, I would like to ask the Minister what is the state of play in relation to alternative industries. Will the jobs be guaranteed or will there be job continuity?
From the views being put forward from Thurles — a town which is probably divided in relation to what is happening at present — people are unsure, insecure and absolutely at sea in relation to the lack of clarity in the statements that have been made in the last number of weeks. I would like to think that the Minister responsible could inform this House on the matter. Let us have a rational debate in this House on the future of the Sugar Company. I have grave doubts whether we are talking about the Thurles sugar factory only or whether this debate is the beginning of the end for the sugar industry as we know it in this country.
Mr. Lowry: Firstly, I thank Deputy Spring for his generous gesture in sharing his time. On a number of occasions the Minister and I have exchanged views and pleasantries on this major issue for both of us in North Tipperary. I warned him in this House in November 1987 that his acceptance of the Irish Sugar Company's five year corporate plan effectively spelt doom for the Thurles plant. The board of that plant clearly stated that the company were actively seeking an alternative  industry. I requested the Minister then and on several occasions since to intervene and instruct the company to desist from that course of action. At that time my position was ridiculed. I was accused of scaremongering and told there was no foundation for my views.
Unfortunately, my worst fears have become a reality. The decision to close the Thurles plant has now been taken by the board. Since the announcement we have been treated to an unseemly and distasteful public wrangle between the Minister and the Sugar Company, with charge and counter-charge the order of the day. It is clearly obvious that there are serious discrepancies and conflicting reports in the Minister's version and that of the company on the sequence of events leading up to the decision to close the Thurles plant. Tonight I call on the chairman of the Irish Sugar Company board to officially respond and to clarify all the issues recently raised.
Subsequent to the closure decision I stated locally in North Tipperary that the Thurles plant could be saved only by Government intervention. I called on the Minister, together with his colleague in the Department of Energy, Deputy Michael Smith, to bring this matter to the attention of the Cabinet with a view to instructing the company to review their decision. The Minister responded publicly by stating that as the principal share-holder he had the final decision. I understand from press reports that yesterday in London he changed that view and stated that it was a Government decision. Assuming that this is now the Minister's official position, I would ask when can we expect a Government decision. What are the Minister and Deputy Smith doing to influence the outcome? The all too predictable decision to appoint consultants is a sham. It is a cynical ploy to stall making a decision and will do nothing other than prolong the agony.
It is imperative that the Government clarify their intentions regarding the Thurles sugar plant. It is time to set aside the semantics and the charade and to  come clean on this issue. The unfortunate permanent and part-time workers and their families who pin such faith in the Minister's promises and those of the Fianna Fáil Party are entitled to know where they stand. They feel let down. Morale is at an all time low. They are bewildered and confused.
Farmers, agricultural contractors and hauliers who have invested heavily in the beet crop and growers who rely on this vital income to maintain viable holdings wish to be informed urgently of the contract system for the current year. The business community are paralysed with the prospect of the demise of the plant and the local economy. We need decisive and positive action and a sense of direction. I would say, please face up to the decision. Tell us if the Thurles sugar plant will be saved and, if so, the level of investment to be made in modernising the plant. In the event of the Government failing to deliver and reneging on their commitments, let us work to achieve alternative viable and sustainable jobs for an area that is devastated by unemployment, emigration and a depressed economy.
Further deliberate fudging of the issue will spell disaster for Thurles. Not only could we lose the plant but the alternative jobs on offer from the Sugar Company will also be placed in serious jeopardy. I am aware that in view of the public controversy, two of the promoters of new industry are today seriously contemplating abandoning their proposals for Thurles. The Goodman and Finn offers being pursued for whatever reasons by the Minister are not practical or feasible. In one form or another they would ensure the dismantling of the Irish Sugar Company and spell ruin for the Irish sugar industry. It is my view that after unnecessary and expensive consultancy reports and protracted debate, the Minister will have initiated a futile and meaningless exercise because he will stand no chance of receiving the support of the Taoiseach and his Cabinet colleagues for such inane proposals. I have no doubt that any proposals in the line of privatisation or disposing of part of the  national sugar quota to a private enterprise would meet with a hostile reaction from almost everybody involved in the company's operations.
In response to the appointment of consultants, the Irish Sugar Company have tonight stated their intention to proceed with the closure of the Thurles plant. I would ask the Minister one simple question: what is he and the Government going to do about that statement? Will they allow the Sugar Company to close the Thurles plant? In line with questions which have been asked by Deputy Spring, I would like to know what are the terms of reference for this consultancy report? I do not see the necessity for additional consultancy reports. There have been several reports on the Irish Sugar Company and everybody is aware of the problems.
Earlier this year the Minister for Finance — in line with a directive which he gave to all other semi-State bodies — issued a directive to the Irish Sugar Company stating that they must be run on a commercially viable basis, that they cannot depend on the Government for further equity and that effectively they must get their house in order. Everybody is fully conscious of the problems facing that industry. I would say to the Minister that it is absolutely essential that whatever terms of reference he has given the consultancy committee, they should be asked to report back not in a matter of months but in a matter of weeks.
Nobody in Thurles or in Tipperary is prepared to wait any longer for the Government to make a decision on the matter. The facts are quite clear. As far as the people of Thurles are concerned the plant there is viable and profit making and is absolutely essential to the local economy. It is the hub of industrial activity in that area. Without it Thurles would be a wilderness. I am asking the Minister to exercise his ministerial authority and to ensure, together with his colleagues, that the Government make a decision with haste in favour of the Thurles plant.
Mr. Byrne: On a point of order, I  would like to ask the Minister if he would give me a few minutes to make a case on issues that have not been highlighted in this instance.
An Ceann Comhairle: It is a matter for the Minister to share his time as he so desires. Is that satisfactory? Agreed.
Mr. Byrne: As a beet grower supplying the Thurles Sugar factory and as a former beet growers' representative I would have to say that the semi-State Irish Sugar Company's recommendation to close the Thurles plant is a narrow, self-interest matter. The proposed closure must be looked at from a national point of view. The implications of such regressive action are of serious national importance, first, in terms of the destruction of our road system. There are 200,000 tonnes of beet currently being drawn by rail from south Wexford and this will obviously move onto the road. That means there will be 100 extra articulated trucks on our already decimated road system in the frosty winter months with consequent further damage and danger. Who will foot the bill in this instance to the county councils of Wexford, Kilkenny, Carlow, Waterford, Tipperary or others? The empty promise of the beet being taken by rail from the highly successful beet reception depot at Wellington Bridge in south Wexford to Mallow is seen by all of us for what it is, a sop to sell the closure. Second, the beet season — 67 days long this year — will stretch into January, making it over 100 days long, with consequent losses to the beet growers and sugar loss to the company because their highly funded research and development programme failed to produce a method of beet storage. The farmers of south Wexford have invested enormously in machinery to handle beet for rail transport. The Sugar Company have invested over £1 million in Wellington Bridge. Is all this investment to become redundant?
Mr. Spring: Will there be any chance for the Minister to speak?
Mr. Byrne: Third, the closure of the  Thurles Sugar factory will meet with favour from CIE because it will render the rail line less viable. Since CIE are anxious to close that rail line it may be closed. There is no rail line to the west from the biggest passenger port. I am asking the Sugar Company to take off the blinkers and I urge the Minister and the Cabinet to delay a decision for a year and let us all have a proper and open-minded debate on this whole issue.
Minister for Agriculture and Food (Mr. O'Kennedy): I welcome the chance to reply very briefly to the debate and to the points made by Deputy Spring and Deputy Lowry. I should like to ask the two Deputies to make up their minds as to what exactly they want me to do. I understand that Deputy Spring is suggesting that I am interfering too much in the affairs of the Sugar Company. While Deputy Lowry, on the other hand, insists that I should interfere directly and tell the Sugar Company what to do. It is typical of what is being done in this debate here tonight, everyone is demanding that one thing or the other be done. In response to what Deputy Spring has said, I propose to indicate the commitment of this Government to the Sugar Company generally and to all elements, including Thurles, of that Sugar Company.
Deputy Spring has accused me of behaving disgracefully not just in this House but on our news media this evening. I will leave that to the judgment of the people who listen to those kinds of charges. However, I will merely say that for a man who has only recently become so concerned for the future of the Sugar Company generally, and Thurles in particular, the Deputy's record and now that of his Coalition colleagues — they rejoined the Coalition this evening — speaks for itself.
Mr. Sherlock: Why not give us the facts.
Mr. O'Kennedy: I want to put the facts on the record. I did not interrupt anybody  in the course of this debate. During Deputy Spring's period in Government the investment in Thurles was £3.5 million, while it was £12 million in Mallow and £17 million in Carlow. During the previous four years under the Fianna Fáil Government the investment in Thurles was £7.8 million, in Carlow £8.1 million and in Mallow £10.9 million. Deputy Spring now comes in here crying crocodile tears about what has happened to Thurles.
Mr. O'Kennedy: In the same connection may I tell Deputy Lowry that he talked about the five year plan being the deathknell of Thurles. If that is the case I would remind Deputy Lowry that the five year plan was passed and adopted during the period of the Coalition Government in which Deputy Spring was Leader of his party and in which that party were participating fully.
Mr. Lowry: That is a completely false and inaccurate statement.
An Ceann Comhairle: Please, Deputies.
Mr. O'Kennedy: I might point out to the Deputies — if they would listen, as I listened to them, — that by contrast this year again under Fianna Fáil, the level of investment in the various plants was, £5.25 million in Carlow, £4.635 million in Mallow and £4.108 million in Thurles, plus £3 million in a reserve fund for the Thurles plant area for alternative development, if appropriate.
Mr. Lowry: For the alternative industry.
An Ceann Comhairle: Please Deputy Lowry, you had your say.
Mr. O'Kennedy: Both Deputies have asked me what our concern is. This Government have signalled very clearly that we are conscious of our commitments to all concerned as outlined in  the Programme for National Recovery. At a meeting in May 1987 with the board of the Sugar Company I indicated that we would be particularly anxious that they would promote the interests of employment, market development and product development to maximise, in accordance with our commitments to the partners in the Programme for National Recovery, employment opportunities at every level through the State sector as in the private sector. The commitment in that programme is that the State-sponsored bodies will be actively encouraged and facilitated to develop and diversify their economic employment creating activities. That remains the priority of this Government in accordance with our commitment in that programme and in accordance with our obligations to the community generally. I should like to answer Deputy Spring that our commitment is not just to Thurles but to the workers, the people concerned and to Siúicre Éireann generally. I want to see a situation where, under this Government, the whole agri-food exports have expanded to a point well in excess of anything experienced under the previous Government to the equivalent of the rest of manufacturing industry. I want to see every sector, private and semi-State, playing a full part in that development. I should like to say to the Deputies who queried why I did not say this or that during the past two weeks that they must not have been aware that in the past five or six days I was engaged, at the invitation of my German counterpart, at Green Week in Berlin and in London promoting a very important Irish programme. I do not choose — and I say this deliberately — to comment on domestic issues when I am engaged in a major promotion such as that. I adhere to that position.
Mr. Spring: In the absence of Minister Smith.
Mr. O'Kennedy: I did not say that at any time. I repudiate totally any such comment and I am glad the Deputy gave me the opportunity of doing so. I wish  that whoever misled the Deputy would now repudiate what they said.
Mr. Spring: I will pass on the cutting from the Irish Press.
Mr. O'Kennedy: Press cuttings do not always tell the full story. Regarding the interests of the Government our only interest is the maximisation of employment guaranteed with a very effective market development, product development policy through all of this company, not just in Thurles but in Mallow, Carlow and wherever else. What we have in the private sector is what we have in the public sector. The same standards apply. The issue remains one of major consideration for this Government.
Mr. Sherlock: What about privatisation of Thurles?
An Ceann Comhairle: Please Deputies, let us hear the Minister without interruption. His time is limited.
Mr. O'Kennedy: Interests have been expressed and they are a matter for the people concerned to publicly indicate as they have done. If interests are expressed matters can be discussed. There are no firm proposals but if people express interest they are free to discuss matters. I do not suppose there is any objection unless we are entering into a new state of discussions to see how best we can sustain, in the interests of the workers and all concerned, a viable enterprise that can beat the best as in other sectors, such as the agri-food sector. We are not always cast in the role of having to react or retrench. We have a capacity to be proactive and to march ahead of others. That is the issue here.
Mr. Lowry: Can the Minister tell me if Thurles is going to remain open and leave the waffle out?
An Ceann Comhairle: Please Deputy. The time is almost up.
Mr. O'Kennedy: Finally, the Irish  Congress of Trade Unions indicated that they have some concern. Statements have issued from bodies concerned. If they are anxious to meet me or any member of this Government I will not only be anxious but very willing to meet them to discuss all the issues involved. I would say to those who presided over the downturn in investment and who are now crying——
Mr. Lowry: Is Thurles to remain open?
Mr. O'Kennedy: ——that they can be guaranteed a much better, more positive,  more vigorous and confident response from this Government than anything they got from the Coalition when they had responsibility.
Mr. Spring: Perhaps the Minister will tell us in one line what the consultants functions are.
An Ceann Comhairle: The Minister's reply has concluded the debate.
The Dáil adjourned at 11 p.m. until 10.30 a.m. on Wednesday, 1 February 1989.
Mr. Farrelly: asked the Minister for Finance when a tax rebate will be paid to a person (details supplied) in County Meath.
Minister for Finance (Mr. Reynolds): The Revenue Commissioners have advised me that two cheques in settlement of refunds due to the taxpayer were issued in December 1988. He may claim further refunds of tax at four-weekly intervals so long as he remains unemployed in the current year.
Mr. J. O'Keeffe: asked the Minister for Finance where on the priority list for arterial drainage the Bandon river catchment, County Cork stands at present.
Minister for Finance (Mr. Reynolds): The Bandon River is No. 25 to 28 catchments on the priority list of major catchments to be considered for treatment under the Arterial Drainage Act, 1945. So far schemes have been completed in ten and are in progress in two of these catchments. At this stage I cannot say when the Bandon River might be reached in the drainage programme.
Mr. Shatter: asked the Minister for Finance whether the consultants asked to prepare a draft report for the Dublin Regional Plan for the purpose of EC Structural Funds have completed their report; if not, when the report will be completed; and when the report will be published.
Minister for Finance (Mr. Reynolds): The consultants who have been engaged by the Government to prepare a report in the context of the preparation of a  programme for the greater Dublin area for purposes of EC Structural Funds expect to complete their report during March 1989. No decision has been taken on the publication of the report.
Mr. Bell: asked the Minister for Finance if his attention has been drawn to the fact that County Louth has been determined by the ESRI as meriting the highest priority for designation for grant purposes during 1988; that there is a reluctance to allow any access to the western development fund or the committee to the fund; if he will urgently intervene in this serious matter and thereby ensure that County Louth is given its just rights and assistance to industrial development which is being interfered with by other vested interests; and if he will make a statement on the matter.
Minister for Finance (Mr. Reynolds): The central development committee was set up to co-ordinate the activities of county development teams which were established to promote economic development in western counties as a result of recommendations in the 1962 report of the Interdepartmental Committee on the Problems of Small Western Farms. The western development fund was set up to assist the central development committee and the county development teams in that task.
There is no connection between the designation of an area for the purposes of the Industrial Development Acts and the inclusion of that area within the scope of the central development committee. The question of granting County Louth access to that committee or to the western development fund does not therefore arise.
Mr. McDowell: asked the Minister for Finance, in relation to sums recovered in the tax amnesty, the approximate proportion of the money which related to (a) income tax (b) VAT (c) social  insurance contributions (d) capital taxes (e) corporation taxes (f) stamp duties and (g) other forms of taxation.
Minister for Finance (Mr. Reynolds): The tax amnesty applied to arrears of income tax, PAYE, PRSI, levies, VAT, corporation tax and capital gains tax. The following is the estimated breakdown, in so far as it is available, of the revenue which was received by the Revenue Commissioners in 1988 on foot of the tax amnesty and related factors:
|Income Tax (excl. PAYE)||189|
|Capital Gains Tax||18|
Mr. Molloy: asked the Minister for Finance when it is proposed to introduce legislation to implement report 31 of the Review Body on Higher Remuneration in the Public Sector.
Minister for Finance (Mr. Reynolds): The legislation referred to by the Deputy is being drafted at present, and it is proposed to introduce it in the current parliamentary session.
Mr. Gibbons: asked the Minister for Finance if he will outline the Government's policy with regard to the Convention on International Trade in Endangered Species of wild fauna and flora and the products arising therefrom; whether the Government supports the resolution passed overwhelmingly by the 96 member nations of that convention, which endeavoured to counteract the illegal trafficking of products based on materials such as ivory and rhino horn created from the destruction of elephants  and rhinoceroses; whether the Government will ensure that there is a serious effort made by Irish customs officials to stop the illegal importation of endangered species or their products; if his attention has been drawn to the fact that such products as turtle soup are readily available in Dublin restaurants, though it is well known that these animals are being taken from the wild; that crocodle skin watch straps and harp seal key rings are on sale in this country; and the action he proposes to take to ensure that the Government introduces a ban on the importation and sale of all such products.
Mr. Gibbons: asked the Minister for Finance whether he has given any consideration to the possibility of discouraging the sale of coats and other clothing made from the skins of some endangered species; if his attention has been drawn to the fact that in recent years tens of thousands of foxes, were taken from the wild having been gassed, shot or snared; and his views on the use of such furs, particularly from imported endangered species, for such purposes.
Minister for Finance (Mr. Reynolds): I propose to take Questions Nos. 30 and 63 together.
The Government support fully the objectives of the Convention on International Trade in Endangered Species of wild fauna and flora. I am satisfied that the customs authorities are ensuring that endangered species or their products are not imported illegally. The provisions of the convention are implemented in Ireland under EC regulations which provide for licensing controls on the trade of endangered species and products. There are no plans to ban totally such trade. I am aware that wild foxes are hunted in Ireland for their skins.
Mr. G. Mitchell: asked the Minister for Finance the plans he has to introduce a consolidated Income Tax Act.
Minister for Finance (Mr. Reynolds): As the Deputy has already been informed by my predecessor in response to previous parliamentary questions on this topic, a substantial volume of work would be involved in consolidating the Income Tax Act, 1967 and the related legislation in the Finance Acts enacted since then. It has not been possible in present circumstances for the Revenue Commissioners to allocate the necessary senior and experienced staff to enable such work to be undertaken.
Major changes in tax assessment and collection procedures were introduced last year and will have an ongoing impact on the taxation system for a number of years to come. As the Deputy will be aware from my Budget Statement, these changes are being followed by others, such as the extension of self-assessment to corporation tax this year. Attempting to consolidate tax law when the system is in such a state of flux — even if available resources permitted this — would not make sense.
Mr. Bell: asked the Minister for Finance the reason for the continuing delay in the provision of the new replacement Garda barracks, Drogheda, County Louth; when sanction will be given to this much needed development; and if he will make a statement on the matter.
Minister for Finance (Mr. Reynolds): The legal formalities involved in the purchase of the site for a new Garda station in Drogheda which are complex and time consuming are in the process of being completed. The site adjoins the remains of an ancient monastic foundation and for this reason it is proposed to carry out an archaeological investigation of the site early this year. Pending the completion of this work detailed planning of the scheme cannot be finalised. It is not possible, therefore, to indicate at this stage when the erection of the Garda station will commence.
Mr. Boylan: asked the Minister for Finance the plans, if any, he has to build a new Garda headquarters in Cavan town, County Cavan; when the said building will commence; if his attention has been drawn to the cramped and outdated conditions in which the gardaí in Cavan are operating at present; and if he will make a statement on the matter.
Minister for Finance (Mr. Reynolds): Planning is under way for a new Garda district headquarters in Cavan town. It is hoped to complete the contract documents for the project this year with a view to inviting tenders and placing a contract as soon as possible thereafter, funds permitting. I am fully aware of the conditions in which the gardaí in Cavan are operating at present and the Deputy may rest assured that there will be no avoidable delay in the advancement of this scheme.
Mr. P. O'Malley: asked the Minister for Finance if he will amend the accounting procedures of the Garda Síochána in order to appoint the Commissioner of the Garda as the Accounting Officer for the Garda.
Minister for Finance (Mr. Reynolds): Accounting Officers are appointed by the Minister for Finance under the Exchequer and Audit Departments Act, 1866. The Civil Service head of the Department or Office administering a Vote is normally appointed Accounting Officer on the basis that he is in the best position to discharge the financial and administrative responsibility of the Office. The Secretary of the Department of Justice has traditionally been the Accounting Officer for the Garda Síochána and other Justice Votes and I have no proposals to alter this practice.
Mr. Connaughton: asked the Minister for Finance the amounts collected for each of the following taxes from farmers and the self-employed (i) value added tax (ii) PRSI (iii) youth employment levy and (iv) health contributions in each of the years 1983 to 1987 inclusive.
Minister for Finance (Mr. Reynolds): I propose to circulate in the Official Report a statement giving the information sought by the Deputy.
Following is the statement:
(i) Value-Added Tax
Only farmers who have opted for VAT registration are obliged to account for the tax. I have been advised by the Revenue Commissioners that for the years in question those farmers accounted for VAT as follows:
|Year||Payable on Sales||Deductible on Purchases||Net Repaid|
Accordingly, no net VAT was collected from registered farmers for the years in question. This reflects the fact that most farm output is zero-rated for VAT purposes. The amount of VAT collected from registered self-employed other than farmers cannot be isolated in VAT returns data.
PRSI for the self-employed, including farmers, was introduced for the first time with effect from 6 April 1988 and consequently is not relevant to the years in question.
(iii) Youth Employment Levy and (iv) Health Contributions
The health boards are responsible for collecting health contributions and the employment and training levy, previously  known as the youth employment levy, from full time farmers for the years up to and including the year ended 5 April 1984. The Revenue Commissioners are responsible for collecting these charges from part time farmers and other self-employed persons for those years and  from all farmers and self-employed for subsequent years. I am advised by the Revenue Commissioners that the information requested in so far as it is available in respect of the Revenue Commissioners' area of responsibility is as follows:
|Amount collected in year|
|Employment and training levy||(a) Farmers||3.03||1.2||1.1||1.9|
|(b) Other self- employed||Breakdown not available||2.75||3.1||3.3|
|Breakdown not available|
|Health contributions||(a) Farmers||1.87||0.95||0.9||1.7|
|(b) Other self- employed||Breakdown not available||1.45||2.1||2.1|
I am advised by the Ministers for Health and Labour that the following amounts were collected by the health boards from full time farmers in the years in question:
|Health Contributions||Employment and Training Levy|
Proinsias De Rossa: asked the Minister for Finance if his attention has been drawn to the reports of banks discriminating against women in the allocation of home loans; if any representations have been made to the banks on this matter; if it is intended to take any action to have this practice ended; and if he will make a statement on the matter.
Minister for Finance (Mr. Reynolds): I have no function in the day-to-day regulation of banking practice, which is a matter for the Central Bank. However, the Central Bank has advised me that it has not received any representations or complaints about discriminatory practice between men and women in the allocation of home loans. Apart from one isolated case reported in the media, the Central Bank has no evidence of such discrimination.
The Central Bank has been assured that the lending policies of the banks operating in the home loan area are based on the customer's income level and on his or her ability to repay. If the Deputy has a specific case in mind he should pass the details to me and I will refer it to the Central Bank for examination.
Mrs. Hussey: asked the Minister for Finance the reason the State laboratory does not publish survey analyses of feed raw materials and compound feeds annually in view of the fact that feed is the single largest input at farm level.
Minister for Finance (Mr. Reynolds): The State laboratory provides an analytical service to all Government Departments and offices. Feeding stuffs are analysed on behalf of the Department of Agriculture and Food, the bulk of whose samples is submitted to the laboratory to ascertain their compliance with Irish and EC law.
The Minister for Agriculture and Food may initiate legal proceedings on the basis of the laboratory's analysis which may show that a particular sample is not in conformity with legislative requirements. In such circumstances, publication by the State laboratory of analyses which are carried out by them on behalf of a client, in this case the Department of Agriculture and Food, would not be appropriate.
Mr. Kelly: asked the Minister for Finance the plans, if any, there are for a total redesign of the metal currency, including more rational coin sizes and denominations and the use of less unattractive alloys; and if he will give an assurance in regard to the design of images and inscriptions for the coinage that (a) a public and internationally advertised competition will be held and (b) the adjudication will be entrusted to a committee of persons competent to judge on aesthetic as well as on practical criteria.
Minister for Finance (Mr. Reynolds): The Government are considering the redesign of the coinage, including the issue of a £1 coin. Whatever proposals emerge from this examination will be put before the House in due course. The Deputy can be assured that in selecting the designs, and in other aspects, the correct procedure will be followed and the relevant practical and aesthetic advice will be obtained.
Mr. Durkan: asked the Minister for Finance the current VAT levels applicable to the baking and confectionery  industry in each of the 12 EC countries in the current year; the countries in which the rates have altered in the past three years; the effect, if any, of such changes on the Irish baking industry; and if he will make a statement on the matter.
Minister for Finance (Mr. Reynolds): I propose to circulate in the Official Report a statement giving the information sought by the Deputy.
Under the VAT system, imported and domestic products are taxed at the rates in force in the country where the products are finally sold. Consequently, changes in other countries have no effect on the competitive position of Irish producers of confectionery.
|Country||VAT rate per cent on|
* Countries in which rates have altered since 1/1/1986.
Mr. Desmond: asked the Minister for Finance the number of persons who raised mortgage bank loans to pay off interest free tax arrears under the recent amnesty and who intend to claim mortgage interest against their future tax liability.
Minister for Finance (Mr. Reynolds): Mortgage interest tax relief is given under section 496 of the Income Tax Act, 1967, as amended, for interest paid on a loan which is used for qualifying purposes only. “Qualifying purposes” means the purchase, repair, development or improvement of the sole or main residence of: (a) the claimant, (b) a former  or separated spouse of the claimant, (c) a relative of the claimant (or a relative of the spouse of the claimant) in respect of whom the claimant is in receipt of an income tax dependant relative allowance and the residence, if provided by the claimant, is provided free of rent or other consideration.
A loan which is used solely to pay off another qualifying loan may also be regarded as a qualifying loan. Accordingly, the interest on any loan used to pay off tax arrears under the recent amnesty would not qualify for tax relief under section 496 of the Income Tax Act, 1967.
Mr. Quinn: asked the Minister for Finance if his attention has been drawn to the fact that institutions representing the professions in the construction industry are gravely concerned with the problems of wastage and exploitation which are imposed by the increasing use of developer competitions as a means of procurement of new buildings by State and semi-State bodies; if, at the meeting which is being arranged between him and representatives of those institutions, he will give an assurance that abuses within the system will not continue and that the legitimate concerns of the professions and the taxpayer will be properly met; and if he will make a statement on the matter.
Minister for Finance (Mr. Reynolds): I am aware that institutions representing the professions in the construction industry have expressed dissatisfaction with regard to developer competitions. There are, however, no arrangements being made for me to meet with representatives of these institutions. On 28 June 1988 I stated in the Dáil, in reply to a parliamentary question, that design-and-build contracts have always been admissible on a competitive basis and that the use of these is encouraged in appropriate cases. There has been no change in that position. Any arrangements to be made between a developer and the professions  concerned in developer competitions are a matter to be settled between themselves.
Mr. Spring: asked the Minister for Finance if he has any proposals in mind to alleviate the serious conditions of many of the buildings and facilities of the National Botanic Gardens, Dublin 9; and if he will make a statement on the matter.
Minister for Finance (Mr. Reynolds): I am aware of concern about the condition of some of the glasshouses in the National Botanic Gardens. The most serious deterioration has occurred in the curvilinear range of glasshouses. Planning for the restoration of these important houses is in hands. Progress to date had been hampered by the lack of funds but I am happy to state that following the announcement in the budget of additional funds for the Office of Public Works it will be possible to commence work on the project towards the end of this year.
The palm house range will require refurbishment before too long and there are a number of smaller buildings throughout the gardens which are also in need of replacement. Availability of funds will determine when these works can proceed. Despite the severe pressure in recent years eight of the 12 propagating houses have been replaced over the last four to five years.
At present a glasshouse transferred from Thorndale is being erected in the Botanic Gardens. This will help to alleviate the pressure on the other buildings in the gardens.
The feasibility of providing a building in the gardens to accommodate a shop, restaurant and improve reception and information facilities for visitors is being examined. Progress with this proposal is also likely to depend on the availability of funds.
Mr. Enright: asked the Minister for Finance if he will outline the policy of his Department regarding the use of canal towpaths for horse riding; if his attention has been drawn to the fact that canal towpaths throughout the country have been used for generations for horse riding because of their safety as distinct from riding along main roads; the reason his Department is interfering with this privilege which people have hitherto had the freedom to enjoy; the policy which was recommended in the Brady Shipman Martin Report on management and development of the canals; and if he has satisfied himself with the policy recommended or if he will reject the policy regarding the use of the canal banks for horse riding.
Minister for Finance (Mr. Reynolds): The canal towpaths are an important part of the canal property and it is the policy of the Office of Public Works to protect them from potential sources of damage. Experience has shown that continued use of the towpaths by animals, including horses, does cause damage which could, in turn, affect the stability of the canal banks in certain areas. There is also the possibility of conflict with other users of the canal property, such as anglers and walkers. For these reasons, the Brady Shipman Martin report on management and development of the canals does not generally recommend the use of the towpaths for horse riding or pony trekking and I am in agreement with this.
Mr. Desmond: asked the Minister for Finance the present position regarding the various proposals to privatise the whole or part of the Government share-holding in Irish Life.
Minister for Finance (Mr. Reynolds): No decisions have been taken concerning the privatisation of the company. As announced last July, the Government decided that Irish Life Assurance plc should be restructured to facilitate its development into an Irish based international  services company in the insurance field and that consultants should be appointed to advise in this regard. The consultants have been appointed and their examination is in progress.
Mr. Quinn: asked the Minister for Finance if his attention has been drawn to the fact that the Houses of the Oireachtas are experiencing enormous difficulties because of the failure of his Department to provide adequate funds and staff resources to maintain the CELEX computers stored data base of EC directives and other legal proposals; the enormous difficulties that this absence is causing; the steps that he will take to ensure that the Government maintains its obligations of ensuring that Dáil Éireann has direct and adequate access to all information pertaining to the completion of the Internal Market and the full implementations of the Single European Act; and if he will make a statement of the matter.
Minister for Finance (Mr. Reynolds): I understand that it was not possible to access the CELEX database because of technical difficulties with the communication equipment required to make the link to the European Community. The resolution of these problems was hindered by the departure of the Houses of the Oireachtas computer manager to take up a post with the OECD.
However, a new computer manager was appointed shortly before Christmas and the technical problems associated with accessing the CELEX database have now been resolved. The question of access to other database and the best ways of providing for the information needs of Members of the Oireachtas will be examined by the computer manager whose responsibility it will be to continue implementing the information technology plan for Leinster House. A provision of £100,000 for that purpose has been made in the 1989 Estimates and I am hopeful that this will allow progress to be made this year.
Mr. J. O'Keeffe: asked the Minister for Finance if his attention has been drawn to major local objections to the erection of a radio mast in the location selected at Clonakilty Garda station, County Cork, by the Office of Public Works; and if he will arrange to relocate same.
Minister for Finance (Mr. Reynolds): The Commissioners of Public Works are not aware of major local objections to the erection of a radio mast at Clonakilty Garda station, County Cork.
The erection of such radio masts is the responsibility of the Department of Justice.
The Commissioners of Public Works provided the base for the mast on a site selected in consultation with an authorised officer of the Department of Justice and, having regard to all the factors involved, the site chosen was regarded as the only one suitable.
The commissioners have no plans to relocate the radio mast.
Tomás Mac Giolla: asked the Minister for Finance the total cost to the Exchequer of the exemption from tax of co-operative companies.
Minister for Finance (Mr. Reynolds): Statistics are not recorded in such a manner as would enable the information requested by the Deputy to be provided. Such information could not be obtained without undertaking inquiries which could be carried out only at a disproportionate cost.
Mr. Naughten: asked the Minister for Finance if he intends to set up a Shannon river authority to co-ordinate all the different interests along the River Shannon and its catchment areas.
Minister for Finance (Mr. Reynolds): At the launch of the IFA consultant's  report on the River Shannon, in Athlone, I announced the establishment of a forum to co-ordinate the views of the various bodies interested in this great natural watercourse. I am now happy to report that I have since written to the various interests, inviting all concerned to take part. So far the response to my letters has been positive and, in the circumstances, I would hope to be in a position to call the inaugural meeting of the forum shortly.
Mr. Clohessy: asked the Minister for Finance the amount of money which is outstanding to his Department by way of employer and employee PRSI; and the length of time such money has been owed.
Minister for Finance (Mr. Reynolds): The most recently published statistics of outstanding PRSI declared by employers on their P35 end-of-year returns relate to the position at 31 May 1988, and cover employers' and employees' PRSI liabilities. These statistics provide a separate figure for the year 1986-87 and an aggregate figure for all years up to 1985-86, as follows:
|All years to||1986/87||28|
As these figures relate to 31 May 1988 they do not take account of the effect of the 1988 tax amnesty which will have reduced the amount outstanding for the periods in question. The figures quoted above include the employment and training levy, income levy and the health contribution. The income levy was abolished with effect from 1986-87.
Mr. O'Sullivan: asked the Minister for Finance the estimated annual tax loss to the Exchequer in (a) income tax (b)  indirect taxes (c) employer PRSI contributions (d) employee PRSI contributions arising from redundancies under the Redundancy Payments Acts for the years 1980 to date; and the estimated total cost to the Exchequer each year of tax relief on lump sums paid in the case of redundancies covered by the Redundancy Payments Acts for the years 1980 to date.
Minister for Finance (Mr. Reynolds): Changes in direct tax revenue and in revenue from pay-related social insurance from year to year consequent on changes in the level and composition of employment are a function of individual earnings before redundancy, the incidence of re-employment and the duration of unemployment. Since statistics are not available which would enable the information requested by the Deputy to be compiled, it is not possible to indicate the loss in these areas in respect of the years in question.
Information on the loss of indirect tax revenue arising in respect of persons who were made redundant is also unavailable; there would of course have been some offsetting indirect taxation revenue generated by the expenditure by the persons who were made redundant of redundancy payments received by them.
Following are the figures of the estimated cost to the Exchequer in terms of tax foregone of the exemption of statutory redundancy payments:
|Year||Estimated Cost to Exchequer|
The figures for each year are compiled on the assumptions (i) that the exemption from tax would have been immediately and fully withdrawn, (ii) that there would have been no change in the rest of the  income tax code and (iii) that there would have been no consequent change in the behaviour of taxpayers who stood to benefit from the relief.
Mr. Taylor: asked the Minister for Finance if he will make a statement on the progress which has been made in concluding the designation of a part of Tallaght, Dublin 24 as a tax concession incentive area; and if he will make a statement on the matter.
Minister for Finance (Mr. Reynolds): I made an order on 30 November under section 27 of the 1987 Finance Act which declared a specified area in Tallaght to be a designated area for the purposes of incentive tax reliefs for urban renewal provided for in the 1986 Finance Act. These reliefs comprise capital allowances for commercial buildings, an owner-occupier allowance for certain dwellings and a double rent allowance for commercial premises. The order also prescribed, in relation to this area, the period for the availability of these incentives, which is from 9 July 1987 until 31 May 1991.
Mr. McCartan: asked the Minister for Finance if he will give details of the outcome of the meeting held on 16 January 1989 with representatives of the European Commission to discuss the use of increased funding for social and regional development; if, in view of the criticism of the steering committees on the grounds that they are undemocratic and unrepresentative, he intends to review the composition of the committees; the reason Army officers have been brought in to act as secretaries of a number of the committees; and if he will make a statement on the matter.
Minister for Finance (Mr. Reynolds): On 16 January, my colleagues and I met members of the EC Commission to discuss the preparation of the national plan,  which is to be submitted to the Commission for assistance from the Structural Funds.
I wish to draw the Deputy's attention to the joint declaration which was issued after the meeting and, in particular, to the following extract from that declaration:
The Commission welcomes the thorough and comprehensive work presented by the Irish Government today. This will prepare the ground well for the Commission to process the forthcoming plans and programmes for Ireland and thus ensure that the execution of the Structural Funds for 1989 and the years ahead will be done efficiently and in coherence with medium term planning.
This was discussed against the background of the reform of the Structural Funds, the increase in the volume of resources and the consequences of the transition to the new system. Against this background agreement was reached on the objectives and programme headings to be covered by the Plan submitted by the Irish Government. Progress with the Plan was reviewed and it was clear that the progress being made would enable the Plan to be submitted by 31 March 1989.
I do not intend to alter the composition of the working groups and advisory groups established in connection with the prepararion of sub-national programmes for the purposes of the EC Structural Funds. I do not accept the criticisms of them referred to in the question.
I would refer the Deputy to the following further extract from the joint declaration issued after the meeting on 16 January:
The arrangements for sub-regional programmes to supplement the National Plan were welcomed by the Commission as giving the opportunity to spread the projects within the Programmes throughout the country.
Mr. Kelly: asked the Minister for Finance if his attention has been drawn to the increasingly insanitary condition of the paper currency in circulation in this country, particularly in the case of £1 and £5 notes; if his attention has further been drawn to the fact that no other EC country permits banknotes to remain so long in circulation as to become dirty; the reason this undesirable situation obtains in this country; and the proposals he has in this regard.
Minister for Finance (Mr. Reynolds): I am aware that, due to the decline in the value of money in the last decade or so, the lower denomination notes are being used more frequently in ordinary, everyday transactions. As a result, they tend to recirculate rather than return to the banking system for replacement. This has made it difficult to control the deterioration in the quality of the notes. I do not subscribe, however, to the use of the term “insanitary” to describe the currency in circulation.
To cater for the increased usage of the lower value notes, the Government has included an amendment to existing legislation in the Central Bank Bill, 1988, to allow for the issue of a £1 coin to replace the £1 note.
Mr. Naughten: asked the Minister for Finance the amount of short-time work which was introduced on the Boyle-Bonet drainage scheme, County Roscommon; the amount of money originally allocated; and if additional finance has been allocated.
Minister for Finance (Mr. Reynolds): Short time working was operated on arterial drainage construction works for a period of a week in October 1988 in order to curtail the excess in expenditure which would otherwise have occurred. Additional finance was provided thus removing the necessity for further short time. An amount of £1.3 million was  originally provided in 1988 for construction works on the Boyle-Bonet Scheme.
Mr. O'Sullivan: asked the Minister for Finance the estimated total cost to the Exchequer of tax relief on lump sums paid in the case of redundancies/retirements under the Government's redundancy scheme for public servants to date.
Minister for Finance (Mr. Reynolds): Lump sum payments under the public service early retirement/severance programme were subject to the normal income tax regime governing retirement lump sums, severance payments etc. and no special tax reliefs were applied in respect of them. Any estimate of the impact on the Exchequer of the present tax treatment of such payments would depend on what system of taxation were introduced and the effects of the introduction of any such system on the uptake of such payments.
Assuming (i) that the full payments had been made chargeable to tax in full and (ii) that there had been no change in the uptake of the scheme, it is estimated that taxation of the payments would have yielded £62 million. These assumptions are unlikely to be realistic.
Miss Colley: asked the Minister for Finance, in relation to the Government's White Paper A Better Way to Plan the Nation's Finances if it is his intention to implement the proposals set out in summary form on pages 43 to 46 of the document; the progress already made in relation to the implementation of these proposals; and if he will make a statement on the matter.
Minister for Finance (Mr. Reynolds): The Deputy is referring to a discussion document published in 1981 by a previous Government. The document put forward  a large number of proposals covering different areas. A number of the proposals in the document were implemented either fully or partially. Others were found to be impracticable for one reason or another.
It is, however, my intention to seek ways to improve those financial procedures which come within my competence as Minister for Finance and in doing so I would have regard to some of the proposals in the 1981 document.
Miss Colley: asked the Minister for Finance the estimated cost to the Exchequer of harmonising Irish and UK VAT rates in the year 1989.
Minister for Finance (Mr. Reynolds): I am informed by the Revenue Commissioners that the Exchequer cost of harmonising Irish VAT rates to UK levels would be of the order of £550 million in 1989 full year terms.
Mr. Sherlock: asked the Minister for Finance the Government's plans for the future development of Irish Steel.
Minister for Finance (Mr. Reynolds): As announced by the Minister for Industry and Commerce on the occasion of the Annual General Meeting of Irish Steel Ltd. on 10 November 1988, the Government feel that the best way of securing the future of Irish Steel is by way of some form of association with another steel company. To this end, discussions are taking place with a German company, Korf KG., which has expressed an interest in the purchase of Irish Steel. Negotiations have taken place, and a feasibility study, with a view to establishing the overall viability and acceptability of Korf KG's plans for Irish Steel, is in hands. If that feasibility study turns out to be positive, the Government have decided in principle that they would be prepared to transfer the company to Korf KG, subject to certain conditions.
 Among these conditions are that the debts of the plant would be paid off, and that suitable guarantees would be obtained in respect of employment at the plant.
Mr. T. Kitt: asked the Minister for Foreign Affairs if he will take a new initiative in relation to the Brian Keenan affair.
Minister for Foreign Affairs (Mr. Lenihan): Mr. Brian Keenan, a native of Belfast, has been missing in Beirut since 11 April 1986. To date no group has claimed responsibility for his abduction. The Deputy will appreciate that I am not in a position to detail all the efforts which have been made to locate Mr. Keenan. As the Deputy is aware from my replies of 9 November 1988 and 25 January 1989 I myself have raised the matter formally with my Syrian and Iranian counterparts and sought their assistance. I have met the Iranian Foreign Minister, Dr. Velayati, on two occasions, most recently on 8 January. Dr. Velayati has assured me that Iran is making inquiries on our behalf.
As the Deputy is aware the Taoiseach raised Mr. Keenan's case with the Iranian Foreign Minister when he met him in New York last year. On 25 January I met with the family of Brian Keenan and briefed them on developments in the case and the actions taken by the Government on behalf of Mr. Keenan.
In the past week Ireland's Ambassador to Iraq, who is also accredited to Lebanon, travelled to Beirut to investigate reports of developments in relation to the hostages. In addition Ireland's Ambassador to Saudi Arabia, who is also accredited to Syria, held talks with the Syrian authorities. I can assure the Deputy that I will continue to give this matter my close personal attention.
Mr. Quinn: asked the Minister for  Foreign Affairs if, having regard to the vacancy of the position of the Dean of the Diplomatic Corps and the deletion from the Constitution of the recognition of the special position of the Catholic Church, he will propose that henceforth the position of Dean will be filled on the basis of seniority in accordance with the Diplomatic Relations and Immunities Act, 1967 and the Vienna Convention on Diplomatic Relations, 1961; and if he will make a statement on the matter.
Minister for Foreign Affairs (Mr. Lenihan): The precedence of the Apostolic Nuncio as Dean of the Diplomatic Corps in Ireland dates from the appointment of the first Apostolic Nuncio to Ireland in 1930. This is the practice in many European countries and is in conformity with the Vienna Convention on Diplomatic Relations.
Mr. Dempsey: asked the Minister for Foreign Affairs if he had discussions with the Turkish Government with a view to pressing them to improve their human rights policies and practices.
Minister for Foreign Affairs (Mr. Lenihan): The Turkish Government are well aware of our views regarding the need for full human rights. In our regular contacts with them they assure us that it is their policy fully to implement Western standards in the human rights field and to improve their practices in this regard.
Mr. Griffin: asked the Minister for Justice the reason for the delay experienced by the executors of the will of a deceased person (details supplied) in County Tipperary in having the necessary paperwork finalised.
Minister for Justice (Mr. Collins): I am informed by the Registrar of Titles that this is an application for registration of a Land Commission Purchase Agreement which was lodged in the Land Registry on 2 February 1988. Such applications  are not generally as urgent as other applications because registration of title takes effect retrospectively from the date of vesting. There is at present an unavoidable delay in completing registration in these cases due to the pressure of other more urgent applications.
The Deputy will, of course, appreciate that it would not be possible to give favourable treatment to any particular application except at the expense of other applications. I am informed however, that as a matter of policy the Land Registry will expedite cases in which the applicants or their solicitors bring to its attention the fact that special circumstances of urgency exist. Accordingly, a request for expedition in this case will be considered if details of the reasons for urgency are submitted to the Land Registry.
Mr. E. O'Keeffe: asked the Minister for Justice when he will appoint a Garda sergeant to a Garda station (details supplied) in County Cork.
Minister for Justice (Mr. Collins): The Garda authorities inform me that they are not in a position at present to assign a sergeant to the station referred to but that the policing needs of the subdistrict served by the station are being adequately met at present and are being kept under review. The service provided by the gardaí assigned to the station is supplemented by mobile units operating from the relevant district and divisional headquarters. The question of filling the vacancy for sergeant will be considered when additional sergeants become available.
Mrs. Taylor-Quinn: asked the Minister for Tourism and Transport when a person (details supplied) in County Clare will receive a merchandise licence; and the reason for the delay in issuing same.
Minister for Tourism and Transport (Mr. Wilson): The Department's consideration of the application by the persons named has now been completed and a carrier's licence was issued to them on 27 January 1989.
Mrs. Taylor-Quinn: asked the Minister for Tourism and Transport when he intends issuing a person (details supplied) in County Clare with a weekend road passenger licence.
Minister for Tourism and Transport (Mr. Wilson): The person concerned holds a road passenger licence to operate a weekend service on the route between Dublin and Kilrush serving various points in County Clare. The licence is valid until 22 March 1989. The question of renewal of the licence beyond that date, with certain modifications as requested by the licensee, is under consideration in my Department and a decision on this matter will be made as soon as possible.
Mr. Molloy: asked the Minister for Tourism and Transport the reason for the delay in deciding on the proposed new ferry vessels to serve the Aran Islands, County Galway.
Minister for Tourism and Transport (Mr. Wilson): I have received a report from CIE in the matter, including proposals for the long term replacement of the Naomh Éanna. The report, including the CIE proposal, and other proposals are being examined as a matter of urgency.
Mr. Begley: asked the Minister for Agriculture and Food the reason a co-ordinator was not appointed for the south-west Kerry development area which was declared a pilot area by the Government.
Mr. Begley: asked the Minister for Agriculture and Food the number of co-ordinators who were appointed for the special areas which were designated.
Minister for Agriculture and Food (Mr. O'Kennedy): I propose to answer Questions Nos. 74 and 75 together.
Eleven co-ordinators have been appointed to date under the pilot programme for integrated rural development. No candidate to whom an appointment was offered was prepared to accept an assignment to the south Kerry area following the first competition to fill the vacancy. A second competition has now been held and it is expected that an appointment will be made in the very near future.
Mr. Yates: asked the Minister for Agriculture and Food when a calf subsidy payment will be made to a person (details supplied) in County Wexford.
Minister for Agriculture and Food (Mr. O'Kennedy): The person named will be paid his 1988 calf premium as soon as the batch which includes his payment is processed. Under the 1988 suckler cow scheme an applicant's farm income must be at least 50 per cent of his total income. As the person named has an off-farm income, his farm income is to be assessed shortly to determine whether he is eligible for payment under the scheme.
Mr. Yates: asked the Minister for Agriculture and Food when a calf subsidy payment will be made to a person (details supplied) in County Wexford.
Minister for Agriculture and Food (Mr. O'Kennedy): The person named has already been paid his 1988 calf premium scheme grant. He did not apply for grants under the 1988 suckler cow or special beef premium schemes and he is not eligible for grants under the 1988 cattle and equines, beef cow or sheep headage schemes as his lands are outside the disadvantaged areas.
Mrs. Doyle: asked the Minister for Agriculture and Food if he will give up to date details of employment increases in, and expenditure outlay on the pig expansion programme announced in July 1987; and the benefits which have accrued to the pig industry from this programme to date.
Minister for Agriculture and Food (Mr. O'Kennedy): The objective of the development programme for the pigmeat sector which I announced in July 1987, is to create a modern efficient industry in Ireland which will be on a par with the highest standards available elsewhere. The aim of the programme is to ensure that the Irish pigmeat industry is competitive on home and export markets under Single Market conditions. In the past year two modern, sophisticated plants, with a combined slaughtering capacity of 14,000 pigs per week, have come on stream under the programme. Also other projects have been developed and, to date, total investment expenditure of around £17 million has been incurred. It is anticipated that this figure will exceed £30 million by the end of 1989.
The development programme as a whole has a job creation target of about 1,000 in the processing area by 1992. The investment projects, which have already been approved by my Department, will bring a high proportion of these jobs on stream. About 100 new jobs were created in the industry in 1988. It is expected that job creation will accelerate in the years ahead as more value added processing facilities are completed under the programme
Mr. Molloy: asked the Minister for Agriculture and Food if he will arrange for immediate payment of headage grants to a person (details supplied) in County Galway.
Minister for Agriculture and Food (Mr. O'Kennedy): The person named has been  paid his 1988 calf premium scheme grant already. He will be paid his 1988 cattle and equines headage and suckler cow schemes grants when the batches which include payments are processed.
Mrs. Taylor-Quinn: asked the Minister for Agriculture and Food the reason a person (details supplied) in County Clare received a reduction in headage payments this year, in view of the fact that he increased his herd.
Minister for Agriculture and Food (Mr. O'Kennedy): As a result of changes for headage payment purposes in the forage area limit which were made at the insistence of the EC Commission and which affected the herdowner in the disadvantaged areas with high stocking rates, the person named was paid less grants in 1988 than in 1987 despite a small increase in his herd from 18 to 18.8 livestock units in that period. A letter explaining in detail how the forage area limit affected his entitlement is being issued to the person named.
Mrs. Taylor-Quinn: asked the Minister for Agriculture and Food when a person (details supplied) in County Clare will receive payment of a headage grant.
Minister for Agriculture and Food (Mr. O'Kennedy): The person named will be paid his 1988 calf premium, suckler cow premium and special beef premium as soon as the batches which include his payments are processed. He has been requested to produce documentary evidence of the lands and acreage owned and farmed by him and when he does the question of payment of grants under the 1988 cattle and equines headage scheme will be considered further.
Mr. J. Fahey: asked the Minister for Agriculture and Food when payment of a slurry grant will issue to a person (details supplied) in County Waterford.
Minister for Agriculture and Food (Mr. O'Kennedy): The grant has been paid.
Mr. E. O'Keeffe: asked the Minister for Agriculture and Food when payment of EC calf subsidy will be made to farmers.
Minister for Agriculture and Food (Mr. O'Kennedy): Payments for calf premium on calves born before 15 June 1988 commenced earlier this month. It is expected that the bulk of payments will be made by the end of March. Approximately 110,000 applications are involved.
Mrs. Taylor-Quinn: asked the Minister for Agriculture and Food when a headage payment will issue to a person (details supplied) in County Clare.
Minister for Agriculture and Food (Mr. O'Kennedy): The person named has already been paid his grant under the 1988 EC special beef premium scheme. He will be paid his grants under the 1988 cattle and equines headage, EC suckler cow premium and calf premium schemes when the batches which include his payments are processed.
Mrs. Taylor-Quinn: asked the Minister for Agriculture and Food when a headage payment will issue to a person (details supplied) in County Clare.
Minister for Agriculture and Food (Mr. O'Kennedy): A payable order in respect of cattle grants under the 1988 disadvantaged areas schemes was issued on 13 January 1989 to the person named (the present herdowner) in lieu of an earlier payment issued in error in the name of the previous owner. The person named will be paid her 1988 special beef premium and calf premium schemes grants shortly.
Mr. Molloy: asked the Minister for Agriculture and Food the reason for the delay in making payment of headage grants to farmers in the Cornamona area, County Galway.
Minister for Agriculture and Food (Mr. O'Kennedy): There was no particular delay in the payment of cattle, sheep and equines headage grants under the disadvantaged areas schemes in the Cornamona area. Payments commenced there as soon as in other areas of the country. Payment of sheep headage grants commenced last October and payment of cattle headage grants commenced in December. The bulk of payments under both schemes has now been made.
Mr. Crowley: asked the Minister for Agriculture and Food when a person (details supplied) in County Cork will receive payment of a suckler grant.
Minister for Agriculture and Food (Mr. O'Kennedy): The person named will be paid his 1988 suckler cow premium, calf premium and cattle and equines headage schemes grants as soon as the batches which include his payments are processed.
Mr. Molloy: asked the Minister for Agriculture and Food if he will arrange for the immediate payment of headage grants to a person (details supplied) in County Galway.
Minister for Agriculture and Food (Mr. O'Kennedy): The person named is not the registered herdowner of the herd number quoted. He has been requested to forward documentary evidence of ownership of lands but has not done so to date. When he does, his applications for cattle and equines headage scheme grants, suckler cow premium, calf premium and special beef premium will be considered further.
Mr. Farrelly: asked the Minister for Social Welfare the reason pay-related benefit was not paid to a person (details supplied) in County Meath; and if he will make a statement on the matter.
Minister for Social Welfare (Dr. Woods): The person concerned claimed disability benefit from 10 September 1988. Payment issued from 14 September 1988, the fourth day of incapacity. The Social Welfare Acts provide that pay-related benefit is not payable where the total amount of disability benefit payable equals or exceeds 75 per cent of a claimant's average reckonable weekly earning in the relevant income tax year. The person concerned does not qualify for payment of pay-related benefit as the total amount of disability benefit payable, £93 per week, exceeds 75 per cent of his reckonable weekly earnings of £120.82 in the 1986-87 tax year which governs his claim.
Mr. Molloy: asked the Minister for Social Welfare the number of Permanent Defence Force personnel who are in receipt of family income supplement.
Minister for Social Welfare (Dr. Woods): At present 46 members out of a total of 11,650 personnel in the Permanent Defence Forces are in receipt of family income supplement. These members have an average family size of over five children.
Mr. G. Mitchell: asked the Minister for Social Welfare if he intends to cut alleviation payments to married couples such as persons (details supplied) in Dublin 12 who receive a payment since the introduction of EC equality legislation.
Minister for Social Welfare (Dr. Woods): The equal treatment alleviating payments were introduced on a temporary basis in November 1986 to cushion the effect of the EC Directive on Equal Treatment for men and women in social security matters. Payments of £20 per week were originally made to recipients where, at November 1986, both spouses were in receipt of a social welfare payment. Payments of £10 per week were made to people whose spouse was working and could no longer qualify as a dependant.
The previous Government had  intended that the arrangement would cease in November 1987. However, in view of the hardship that would have resulted for families by the abrupt ending of the payments, the Government decided that they should be phased out over a period by reducing them to take account of budget increases. In this way there is no loss to persons who had been receiving an alleviating payment. This was done last year and will apply again this year in the context of the budget increases from next July.
Mr. G. Mitchell: asked the Minister for Social Welfare if he will review the case of a person (details supplied) in Dublin 12 who was in receipt of unemployment benefit for 15 months until the week before Christmas 1988 and who has unemployment assistance and assistance from the local health centre but who is not in receipt of any income since his last payment before Christmas; and if he will ensure that entitlement is given in this case without further delay.
Minister for Social Welfare (Dr. Woods): The person concerned made a claim for unemployment assistance on 6 December 1988. His papers were sent to a social welfare officer for investigation of his means. He failed to provide full details of his means at the initial interview with the social welfare officer and further investigation of his claim is therefore necessary. This is being pursued at present.
He claimed supplementary welfare allowance through the Eastern Health Board on 4 January 1989 but his claim was disallowed as he failed to provide the community welfare officer with the necessary information to enable his claim to be processed. He appealed against the disallowance and a decision on the appeal is awaited. If he provides the required information his claim will be processed as soon as possible and he will be notified of the outcome at the earliest available opportunity.
Mr. Hegarty: asked the Minister for Social Welfare the reason a person  (details supplied) in County Cork has not been approved for unemployment assistance.
Minister for Social Welfare (Dr. Woods): Following investigation, the unemployment assistance claim of the person concerned was disallowed on the grounds that, by failing to furnish details of his means, he failed to show that his means did not exceed the statutory limit. He appealed against the disallowance on 14 September and arising from contentions raised by him in support of his appeal, his papers were referred to the social welfare officer for further inquiries.
These inquiries were completed recently and his case was submitted to an appeals officer who also disallowed his claim. The person concerned was notified of this disallowance on Tuesday 17 January 1989.
Mr. Bell: asked the Minister for Social Welfare the reason for the delay in processing the application for free electricity of a person (details supplied) in County Louth.
Minister for Social Welfare (Dr. Woods): A reapplication for a free electricity allowance from the person concerned has been approved and the ESB has been instructed to restore the allowance to her account from 1 September 1988.
Mrs. Taylor-Quinn: asked the Minister for Social Welfare when a person (details supplied) in County Clare will receive payment of the full rate of disability benefit.
Minister for Social Welfare (Dr. Woods): Payment of disability benefit was disallowed from 26 September 1988 following an examination by a medical referee who expressed the opinion that the person concerned was capable of work. He appealed against this decision and was examined in connection with his appeal by a different medical referee on  12 January 1989 who also considered him capable of work.
He was supplied with a form on which to set out the grounds for appeal if he wished to have his case against the disallowance of disability benefit referred to an appeals officer for determination. His case will be reviewed on receipt of this form.
Mrs. Taylor-Quinn: asked the Minister for Social Welfare if he will arrange immediate payment of a free fuel allowance to a person (details supplied) in County Clare.
Minister for Social Welfare (Dr. Woods): Fuel allowances are paid by my Department to persons in receipt of long term social welfare payments provided certain other conditions are fulfilled. The person concerned is not in receipt of a qualifying payment and is not, therefore, entitled to a fuel allowance from the Department.
It is understood from the Mid-Western Health Board that the person concerned was given assistance towards her heating needs under the supplementary welfare allowance scheme previously. She has not applied for such assistance this winter and if she does so her case will be sympathetically considered by the board.
Mrs. Taylor-Quinn: asked the Minister for Social Welfare when an old age pension will issue to a person (details supplied) in County Clare.
Minister for Social Welfare (Dr. Woods): A decision was made in this case on 30 January 1989. The deciding officer awarded an old age pension at the weekly rate of £28.50 with effect from 11 November 1988, i.e. the Friday following receipt of a claim from the person concerned. This is the rate to which he is entitled having regard to his means which consist of capital and free lodgings assessed at a weekly value of £24.28. A pension book will be issued this week to the post office of payment nominated by the pensioner.
Mrs. Taylor-Quinn: asked the Minister for Social Welfare if he will arrange for the acceptance of monthly certificates for a person (details supplied) in County Clare for the purpose of disability benefit payment.
Minister for Social Welfare (Dr. Woods): The person concerned is in receipt of disability benefit since April 1987. He has been examined by a medical referee on a number of occasions but has not been considered suitable for monthly certificates. He will be examined again during the week commencing 20 February 1989 and his request to be put on monthly certificates will be reviewed in the light of the result of this examination.
Mrs. Taylor-Quinn: asked the Minister for Social Welfare when a person (details supplied) in County Clare will receive a free telephone rental allowance.
Minister for Social Welfare (Dr. Woods): An application for the allowance from the person concerned has been approved with effect from 23 February 1988.
Telecom Éireann are at present implementing a new billing system in the Limerick contracts area which gave rise to the delay in applying the allowance to the telephone account of the person concerned. Telecom Éireann have confirmed that the allowance will appear on her next telephone bill with a full retrospective rental credit.
Mr. Durkan: asked the Minister for Social Welfare if a person (details supplied) in County Kildare qualifies for a free telephone rental allowance; and if he will make a statement on the matter.
Minister for Social Welfare (Dr. Woods): There is no record in the Department of receipt of an application for this allowance from the person concerned. An application form was issued to him on 31 January 1989. On receipt of the completed application form in the Department an early decision will be  given in his case and he will be notified of the outcome.
Mr. Yates: asked the Minister for Social Welfare if dependant's allowance payment for a person (details supplied) in County Wexford who is on invalidity pension will be continued in view of the fact that the person's daughter is still in full-time education.
Minister for Social Welfare (Dr. Woods): Child dependant allowance is payable to invalidity pensioners in respect of children aged under 18 years of age. As the daughter of the person concerned reached 18 on 1 December 1988, he is no longer entitled to be paid an allowance for her from that date.
Provision will be made for payment of a child dependant allowance in respect of a child who is in full time education up to the age of 19 years in the forthcoming Social Welfare Bill. This legislation will be introduced in the Dáil shortly.
Mr. Stagg: asked the Minister for Social Welfare when pay-related benefit will be paid to a person (details supplied) in County Kildare who is in receipt of unemployment benefit since 6 November, 1988.
Minister for Social Welfare (Dr. Woods): The person concerned claimed unemployment benefit on 7 November 1988 and is in receipt of £43.60 weekly. This is the maximum rate of unemployment benefit payable to a person without qualified dependants. He is not entitled to pay-related benefit with flat-rate unemployment benefit, as he has insufficient earnings for this purpose during the relevant income tax period 6 April 1986 to 5 April 1987.
Mr. L. Fitzgerald: asked the Minister for Social Welfare, in view of the case of a person (details supplied) in Dublin 13 who has appealed against his Department's decision to discontinue payment of disability benefit to her, whether there is a case supporting her appeal for the restoration of disability benefit; and if an  early appointment will be made for the hearing of her appeal.
Minister for Social Welfare (Dr. Woods): The person concerned was paid disability benefit to 22 October 1988 after which date payment was disallowed following examination by a medical referee who expressed the opinion that she was capable of work. She appealed against the disallowance of benefit and was examined by a different medical referee on 29 November 1988 who also expressed the opinion that she was capable of work. Her appeal will shortly be referred to an appeals officer for determination.
I must point out that decisions in relation to entitlement to benefit are given by deciding officers and appeals officers who are statutorily independent of me in the exercise of their functions and I have no power to interfere with their decisions.
Mr. O'Dea: asked the Minister for Social Welfare whether a person (details supplied) in County Limerick is being treated unfairly as he has been put back on short term unemployment assistance due to the fact that he availed of the opportunity of employment for a limited period last year; and whether he intends to remedy the inequity which arises in cases such as this.
Minister for Social Welfare (Dr. Woods): Payment of unemployment assistance at the long term rate is payable in respect of any day of proven unemployment which forms part of a continuous period or interruption of unemployment during which the applicant has received payment for at least 390 days. A continuous period of interruption of employment for this purpose is defined in social welfare legislation as any two periods of unemployment not separated by an interval of more than 20 weeks. This interval of 20 weeks is regarded as generally reasonable. In recent years, however, the legislation has been amended to provide that periods of participation of up to one year in certain training and employment schemes are to  be disregarded in determining whether any two periods of unemployment may be treated as continuous.
The person concerned was in receipt of long term unemployment assistance until 15 September 1987 when he went abroad. He renewed his claim to unemployment assistance on 28 March 1988 which meant there had been a break of some 28 weeks. In accordance with the legislative provision referred to above, the claim was therefore authorised at the short term rate with effect from that date.
Mr. O'Dea: asked the Minister for Social Welfare when a decision will be made on the application for invalidity pension of a person (details supplied) in County Limerick; and in view of the fact that she has had ten medical examinations in the last five years in all of which she was found incapable of working, whether his Department has sufficient medical evidence to justify granting the invalidity pension.
Minister for Social Welfare (Dr. Woods): Invalidity pension is payable to insured persons who satisfy the contribution conditions and who are permanently incapable of work. The person concerned has been in receipt of disability benefit since 21 June 1982. She was examined on 26 October 1988 by a medical referee who did not consider her to be permanently incapable of work and asked to have her referred for a further examination in three months. The deciding officer decided that she was not, therefore, entitled to invalidity pension. As she was dissatisfied with this decision, arrangements have been made to have her examined by a different medical referee on 31 January 1989. Her entitlement to invalidity pension will be reviewed in the light of the report of this examination.
Mr. Molloy: asked the Minister for Social Welfare if he will arrange for the immediate payment of invalidity benefit to a person (details supplied) in County Galway.
Minister for Social Welfare (Dr. Woods): The person concerned was paid disability benefit to 7 May 1988 after which date payment was disallowed following examination by a medical referee who expressed the opinion that he was capable of work. He appealed against the disallowance of benefit and was examined by a different medical referee on 26 July 1988 who also expressed the opinion that he was capable of work. His appeal was refered to an appeals officer who decided following an oral hearing on 18 January 1989 that the person concerned was not incapable of work within the meaning of the Social Welfare Acts from 9 May 1988 and is not entitled to be paid benefit from that date.
Mr. J. Mitchell: asked the Minister for Social Welfare the assistance which is available from his Department to a person (details supplied) in Dublin 10.
Minister for Social Welfare (Dr. Woods): The person concerned is in receipt of invalidity pension at the rate of £50 per week, the maximum rate payable to a pensioner with no qualified dependants. The husband of the person concerned is in receipt of invalidity pension at the rate of £68 per week; that is, £50 personal rate and £18 adult dependant alleviation payment.
The person concerned was paid an increase of pension in respect of two qualified child dependants — a son and a daughter — to 8 December 1988 when these children reached 18 years of age. The son of the person concerned claimed, and is at present being paid unemployment assistance. It is understood that the daughter is in fulltime education.
Provision will be made for payment of child dependant allowance in respect of a child who is in fulltime education up to the age of 19 years in the forthcoming Social Welfare Bill. This legislation will be introduced in the Dáil shortly.
Mr. J. Mitchell: asked the Minister for Social Welfare in view of the case of a person (details supplied) in Dublin 22, the number of credits which have been  applied to this person in 1988 in respect of her application for disability benefit and her submission of certificates; the number of weeks for which disability benefit has been paid; the reason it has not been paid in respect of the remaining weeks for which certificates have been submitted; when this person, who is still in bad health, will qualify for disability benefit; and if he will make a statement on the matter.
Minister for Social Welfare (Dr. Woods): The person concerned made a claim for disability benefit from 10 May 1988. Before payment could be authorised, or credited contributions awarded, a medical opinion of her incapacity for work was required. She was examined on 7 September 1988 and was found capable of work. She appealed against this decision and was examined by a different medical referee on 29 November 1988 who also expressed the opinion that she was capable of work.
She has been advised of the result of this examination and a form has issued to her on which to set out the grounds for appeal if she wishes to have her case referred to an appeals officer for determination. Her case will be reviewed on receipt of this form. Payment of disability benefit issued for the periods 15-21 September 1988 and 19-25 October 1988, when the person concerned was hospitalised, and credited contributions were awarded for both periods.
Mr. Deasy: asked the Minister for Social Welfare if he will restore a free electricity allowance to a person (details supplied) in County Waterford who is in receipt of an invalidity pension.
Minister for Social Welfare (Dr. Woods): To qualify for a free electricity allowance a person in receipt of a qualifying payment must reside alone or only with persons who come within certain excepted categories. The person concerned lives with his daughter who is in receipt of unemployment assistance and does not, therefore, come within the  excepted categories for satisfying the living alone condition of the scheme.
Mr. Hyland: asked the Minister for Social Welfare the reason for the delay in payment of disability benefit to a person in County Laois.
Minister for Social Welfare (Dr. Woods): The person concerned claimed injury benefit on 25 October 1988 in respect of an incapacity from an alleged accident at work on 24 October 1988. Pending the completion of investigations arising from the accident, he was allowed disability benefit on an interim basis from 28 October 1988, the fourth day of incapacity.
Following an examination by a medical referee of the Department on 12 January 1989 who expressed the opinion that he was not incapable of work, payment of interim disability benefit was suspended from 20 January. No appeal against this decision was received. He has since been paid arrears representing the excess of injury benefit over disability benefit for the period in question.
Regarding the injury benefit claim, a form of inquiry to confirm the alleged accident was issued to his employers on 3 November 1988. The employers failed to reply to the inquiry or to a reminder which was issued to them on 23 January 1989. However, when contacted by phone, the employers confirmed details of the accident. Injury benefit was awarded from 24 October 1988, the date of the accident. Injury benefit over and above the disability benefit paid on an interim basis has now been paid.
Mr. Hyland: asked the Minister for Social Welfare the reason for the delay in dealing with the unemployment benefit claim of a person (details supplied) in County Kildare.
Minister for Social Welfare (Dr. Woods): Entitlement to unemployment benefit is subject to the condition that a claimant is available for and genuinely seeking employment. The person concerned claimed unemployment benefit on  30 November 1988, but her claim was disallowed on the grounds that she was not available for or genuinely seeking employment. She appealed against the disallowance and attended an oral hearing on 4 January 1989, at which she was afforded an opportunity to present her case. On the evidence available, the appeals officer disallowed her appeal.
She has continued to sign the unemployed register. Her entitlement to benefit from the day after the appeals officer's decision is currently under review and she will be notified of the outcome as soon as a decision is made in the matter.
Mr. J. Mitchell: asked the Minister for Finance if an application for a grant under the National Programme of Community Interest has been received from the Corduff Community Resource Centre, Blanchardstown, Dublin 15; when a decision will be made on the application; if, in view of the needs of the area concerned, he will undertake that the application will be given favourable consideration; and if he will make a statement on the matter.
Minister for Finance (Mr. Reynolds): A submission from the Corduff Community Resource Centre has been received in my Department. This is one of a very large number of submissions which have been received in connection with the preparation of proposals for assistance from the EC Structural Funds over the next five years, It will be taken into account in determining the type of measures which will be implemented in the Dublin area over this period and in preparing the development plan and programmes for EC Structural Funds.
It is not the intention that the plan and programmes will set out a full list of individual projects to be assisted. They will concentrate on the objectives being sought, the measures needed to achieve these objectives and the criteria to be  used for selecting the individual projects. The selection of individual projects within the measures put forward for assistance will be considered after the plan and programmes are approved by the Commission.
Mr. Yates: asked the Minister for Finance when income tax rebates will be paid to a person (details supplied) in County Wexford; and if he will arrange to expedite these payments.
Minister for Finance (Mr. Reynolds): The Revenue Commissioners have advised me that cheques in settlement of refunds due to the taxpayer will be issued shortly. The position with regard to the taxpayer's entitlement to a refund of deposit interest retention tax cannot be finalised until after the end of the current tax year.
Mr. Desmond: asked the Minister for Finance the estimated yield in a full year from the residential property tax on the basis of: (a) an increase in the charge on relevant property value from 1.5 per cent to 3 per cent, (b) a reduction in the market value exemption limit from £74,351 to £50,000, (c) a reduction in the exemption income limit from £25,795 to £20,000 and (d) the halving of marginal relief from £5,000 to £2,500.
Minister for Finance (Mr. Reynolds): I have been advised by the Revenue Commissioners that precise data are not available on the distribution of residential properties by value, or on the relationship between property values and household income. Subject to these important qualifications, it is estimated that the yield from residential property tax, on the basis of the Deputy's proposals, would be of the order of £13.5 million.
Proinsias De Rossa: asked the Minister for Finance the moneys which are likely to be available for tourism development under the expanded EC Social and Regional Funds; if any specific amounts for tourism were agreed at the meeting of the Council of Ministers on 24 October 1988; the way in which it is proposed to allocate this money in Ireland; and if he will make a statement on the matter.
Minister for Finance (Mr. Reynolds): No specific allocation of money from the Structural Funds for tourism has been established at European Community level. The member states' proposals for the allocation of funds will be set out in their development plans. The Commission will examine all member states' plans and, in agreement with each member state, will establish the broad allocation of funds in documents to be known as the “Community Support Frameworks”.
With regard to the provision of funds for tourism in the 1989 Estimates in the context of Ireland's development plan, I would refer the Deputy to my Financial Statement of 25 January.
Mr. Molloy: asked the Minister for Finance, in respect of projects in each county, the amount paid by way of grants from the EC Regional Development Fund in 1988.
Minister for Finance (Mr. Reynolds): Records are not maintained in a format which would allow total payments of European Regional Development Fund, ERDF, grant aid to be broken down in respect of individual projects in each county. The attached schedule, however, sets out a breakdown of ERDF commitments made on a project basis, county by county, for 1988. It should be noted that this schedule does not take into account the National Programme of  Community Interest — roads development in Ireland 1986-90, the STAR and VALOREN programmes and certain telecommunications projects, since these measures are multi-regional and cannot be broken down on a county by county basis. Non-quota measures such as the special border area's programme (Phase II) are also excluded.
|County||ERDF Commitments 1988|
|Value ('£ million)|
|SBAP (Phase II) (non-quota)||13.4|
Mr. Barry: asked the Minister for Finance the number employed in the Civil Service and the public service at 31 March in (a) 1986, (b) 1987 and (c) 1988.
Minister for Finance (Mr. Reynolds): Statistical data on the numbers employed in the Civil Service and the public service  are available only in respect of 1 January for each of the years in question. The information sought by the Deputy is set out below on this basis. Figures for part time employees have been converted to whole time equivalents.
|Year||Civil Service*||Public Service†|
* Includes industrial and non-industrial civil servants but excludes temporary clerical trainees.
†Includes Civil Service.
Figures for the public service do not include data on the numbers employed in the local authorities, who by convention are not included as part of the public service Exchequer pay bill. The relevant data for local authorities, as at 1 January each year, is set out below. Figures for part time employees have been converted to whole time equivalents: 1986, 32,804; 1987, 32,383; 1988, 30,282.
Mr. Spring: asked the Minister for Finance if the Revenue Commissioners received and accepted post-dated cheques in the course of the tax amnesty in 1988; if so, the total amount involved; and the total available for cashing in 1988.
Minister for Finance (Mr. Reynolds): I am informed by the Revenue Commissioners that they did not accept for the purpose of qualifying for the amnesty any cheque which post-dated the amnesty deadline. It is not possible to state the total amount involved in post-dated cheques accepted for amnesty purposes, which were dated on or before that deadline.
Mr. McCartan: asked the Minister for Finance if he will withdraw all tax incentive benefits and rates relief that  might accrue to a company (details supplied) in Dublin 22 or any subsidiary of that company, with regard to their development at Arran Quay, Dublin 1, in light of the demolition of a number of houses at Arran Quay at a time when no planning permission had been granted by Dublin Corporation.
Minister for Finance (Mr. Reynolds): I have no function in regard to rates relief or planning permission matters. The question of tax incentives at this site for the company concerned does not arise at this stage. If and when an application for any tax relief or incentive is made, it will be considered by the Revenue Commissioners in accordance with the relevant legislative provisions.
Mr. L. Burke: asked the Minister for Finance, in respect of the years 1984 to 1988, the actual or estimated number of (i) private cars and (ii) goods vehicles imported into the State without payment of excise duty on transfer of residence by the importers.
Minister for Finance (Mr. Reynolds): I am informed by the Revenue Commissioners that the total numbers of motor vehicles imported on transfer of residence without payment of import charges in the years in question are as follows. A breakdown of the figures between private and commercial is not available.
Mr. O'Dea: asked the Minister for Finance when top slicing relief will be granted to a person (details supplied) in County Limerick.
Minister for Finance (Mr. Reynolds): The Revenue Commissioners have advised me that the inspector of taxes expects to be in a position in the near future to finalise the taxpayer's income tax liability. A cheque in full settlement of the repayment due will be issued to the taxpayer as soon as possible.
A provisional review of the taxpayer's liability for the years 1979-80 to 1984-85 was recently dealt with and the resulting overpayment was refunded to him on 26 January 1989.
Mr. Sheehan: asked the Minister for Finance when a person (details supplied) in County Cork will receive payment of a VAT rebate for (a) 1986, (b) 1987 and (c) July-August 1988.
Minister for Finance (Mr. Reynolds): I have been informed by the Revenue Commissioners that 12 repayments of VAT claimed in 1986, 1987 and 1988 were made to the person concerned for the periods mentioned. Two repayment claims for 1986 were disallowed after an examination of the claims by the inspector of taxes.
Mr. J. Fahey: asked the Minister for Finance the reason for the delay in having a tax rebate paid to a person (details supplied) in County Waterford.
Minister for Finance (Mr. Reynolds): I am advised by the Revenue Commissioners that in order to calculate the top slicing relief due to the taxpayer in respect of a redundancy payment, it is necessary to review his liability to tax for the year 1987-88 and the previous five years. The taxpayer is also chargeable under Schedule D on trading profits. Consequently in order to finalise top slicing relief it was necessary to obtain supplementary information from the taxpayer. It is hoped to finalise the case in the near future when any refund due will be made to the taxpayer.
Mr. Deasy: asked the Minister for  Finance when payment of a tax rebate will be made to a person (details supplied) in County Waterford.
Minister for Finance (Mr. Reynolds): I am advised by the Revenue Commissioners that the inspector of taxes wrote a letter to the taxpayer on 3 May 1988 in connection with her claim for a refund of income tax but has not yet received a reply. The inspector will now write again directly to the taxpayer in order to elicit from her the information sought in that letter.
Mr. J. Mitchell: asked the Minister for Finance, in view of the service of a person (details supplied) in Dublin 8 in the Office of Public Works, the total amount of service to the Office of Public Works given by this person; in view of the fact that he will be 65 in March 1989, the deferred pension, if any, which will be payable to him on his retirement; and if he will make a statement on the matter.
Minister for Finance (Mr. Reynolds): Office of Public Works records show that the person in question was employed in a non-established capacity by that office's central engineering workshop from 10 October 1954 to 30 May 1967. There is no record of service prior to 10 October 1954. The service from 10 October 1954 to 30 May 1967 is not reckonable for pension purposes because the non-contributory pension scheme for non-established State employees did not become effective until 1 January 1970 and is applicable only to people employed on or after that date.
Mr. Spring: asked the Minister for Finance if the Government have any current plan to occupy the premises at present occupied by the College of Science in Merrion Street, Dublin 2.
Minister for Finance (Mr. Reynolds): The College of Science building is at  present used to accommodate certain Oireachtas services, some Government Departments and the School of Engineering of University College, Dublin. As the Deputy may be aware, new accommodation for the school is at present being constructed at Belfield, and it is expected that the school will be vacating the College of Science building later this year. This development will afford an opportunity to reorganise accommodation in the Government Buildings complex, and the Government have in mind moving the Department of the Taoiseach into accommodation in the College of Science. Planning of the scheme is at an early stage yet.
Mr. Spring: asked the Minister for Finance if the long awaited drainage of the River Lee, Tralee, County Kerry, is included in the Government's submission to Brussels for regional funding.
Minister for Finance (Mr. Reynolds): There are no immediate proposals to undertake an arterial drainage scheme for the River Lee, Tralee, County Kerry. Accordingly the question of EC funding does not arise at this stage.
Mr. Howlin: asked the Minister for Finance his proposals for the land owned by the Office of Public Works at King Street, Wexford; when development work will begin at this site; if he has satisfied himself that the present condition of this site does not pose any danger to children in the area; and if he will make a statement on the matter.
Minister for Finance (Mr. Reynolds): The proposal to construct centralised Government offices on the site at King Street, Wexford, is being evaluated by the Commissioners of Public Works. It is not possible at this stage to say when works might commence. The derelict buildings formerly on the property have  been removed and the site is regularly inspected to ensure its safety from the public's point of view.
Mr. Enright: asked the Minister for Finance the present position regarding the carrying out of works on the Brosna catchment scheme, County Offaly; the exact areas covered in this particular catchment drainage scheme; the number of acres of land involved; the number of farms which will be benefiting from this scheme; when further scheduled works will be carried out on the drainage scheme; and if he will outline his proposals in this regard.
Minister for Finance (Mr. Reynolds): The Brosna catchment drainage scheme was carried out by the Commissioners of Public Works during a seven year period between May 1948 and December 1955 when scheduled works were completed. Regular inspections of the completed drainage works are carried out by the commissioners and maintenance work is undertaken when required having regard to the resources available. The following table shows the total acreage which derived from the scheme; the number of farms involved is not available.
Brosna C.D.S. — Benefiting Acreage
Mr. J. Mitchell: asked the Minister for Finance if he has received from the Irish Amateur Boxing Association an application to lease part of the site on the defunct Griffith Barracks, South Circular Road, Dublin 8, adjacent to the National Boxing Stadium; if, in view of the proximity of the barracks to the National Boxing Stadium and the opportunity presented to extend the facilities of the  National Boxing Stadium, he will grant a lease on terms acceptable to himself and the association; and if he will make a statement on the matter.
Mr. Barry: asked the Minister for Finance if, on disposal of Griffith Barracks, South Circular Road, Dublin 8, he will make arrangements to lease portion of it to the Irish Amateur Boxing Association.
Mr. Deenihan: asked the Minister for Finance if he will lease a portion of the Griffith Barracks site, South Circular Road, Dublin 8, to the Irish Amateur Boxing Association.
Minister for Finance (Mr. Reynolds): I propose to take Questions Nos. 132, 133 and 134 together.
The Chief State Solicitor is examining title to the Griffith Barracks property prior to its disposal by the Commissioners of Public Works. In considering how best to proceed with this disposal the commissioners will give full consideration to the application made by the Irish Amateur Boxing Association.
Mr. Yates: asked the Minister for Industry and Commerce his intention in relation to renewing the ban on below cost selling after its one year period of operation; and if he will include a ban on below cost selling of potatoes in the Restrictive Practices Order to deal with trading difficulties being experienced by growers and producers of this product.
Minister for Industry and Commerce (Mr. R. Burke): The Restrictive Practices (Groceries) Order, 1987, which provides, among other things, for a ban on below cost selling of grocery goods is still in operation. On 2 December last, I asked the Fair Trade Commission to carry out a formal review of the order. This review will take some time.
The question of the inclusion of  potatoes within the scope of the Restrictive Practices (Groceries) Order, 1987, continues to be reviewed by me.
Mr. Barry: asked the Minister for the Marine the present position regarding negotiations for the reopening of Verolme Dockyard, County Cork, which An Taoiseach announced were going ahead in February 1988.
Minister for the Marine (Mr. Daly): As the Deputy will be aware, the legal responsibility for the disposal of Verolme Cork Dockyard rests with the official receiver who is currently engaged in active negotiations with a number of interested parties concerning the future of the yard. I would assure the Deputy that the continuing objective of the receiver is to dispose of Verolme in a way which will result in renewed and increased utilisation of the facility.
Mr. T. Kitt: asked the Minister for the Environment if funds will be provided for the construction of the Southern Cross route and the Dundrum by-pass, Dublin 14, in the current year.
Minister for the Environment (Mr. Flynn): The allocation of road grants for 1989 will be made within the next few weeks. The current position regarding these schemes is set out in my reply to Question No. 36 of 30 November 1988. Pending the completion of the necessary statutory procedures, the question of funds for construction work on these schemes does not arise.
Mr. Deasy: asked the Minister for the Environment the present position regarding payment of the third instalment of mortgage subsidy for persons (details supplied) in County Waterford.
Minister of State at the Department of the Environment (Mr. Connolly): The third and fourth instalments of the mortgage subsidy will be paid as soon as possible.
Mr. Deasy: asked the Minister for the Environment when payment of a new house grant for a person (details supplied) in County Waterford will be made.
Minister of State at the Department of the Environment (Mr. Connolly): An inspection, with a view to approval and payment of the grant, will be carried out as soon as possible.
Mr. J. Mitchell: asked the Minister for the Environment if he has received an application for national lottery funds from Cherry Orchard Youth and Social Club in respect of a clubhouse building programme at Ballyfermot, Dublin 10; if a grant of £60,000 will be made available to the project in the current year; and if he will make a statement on the matter.
Minister for the Environment (Mr. Flynn): I have received an application for a grant under the amenity grants scheme for this project. If further national lottery funds become available for the scheme, I will consider the case for funding for the project in conjunction with the many other applications which have been made.
Mr. Quinn: asked the Minister for the Environment if his attention has been drawn to the conflicting claims regarding the environmental effectiveness of a solid fuel burning appliance for open fires (details supplied); the action, if any, he has taken to clarify the position in order that the appliance, if satisfactory, can be installed by householders in smokeless/smog free zones or inner city  areas with his Department's or local authority approval and receive where applicable, a financial grant; and if he will make a statement on the matter.
Minister for the Environment (Mr. Flynn): Having regard to the evidence given at the relevant oral hearing in June 1988, fireplaces of the class known as the full burning open fire boiler have been authorised for use in the area to which the Special Control Area (Ballyfermot) Order, 1988, applies and have been included among the conversion options for which grants are available. As regards authorisation of this and other appliances and fuels for use in special control areas generally, I have asked EOLAS to carry out a short-term intensive smoke emissions testing programme, the results of which would enable the matter to be fully assessed. These results are expected in the near future.
Mrs. Taylor-Quinn: asked the Minister for the Environment when a decision will be made regarding an increase in a house improvement grant payment for persons (details supplied) in County Clare.
Minister of State at the Department of the Environment (Mr. Connolly): The grant paid is the maximum allowable for repairs to a pre-1940 house.
Miss Quill: asked the Minister for the Environment when sanction will be given for the Whitegate sewerage scheme, County Cork.
Minister for the Environment (Mr. Flynn): As indicated in my reply to Question No. 213 of 13 December 1988 the proposal is being examined in my Department. It is not possible to indicate at this stage when a decision may issue.
Mr. Stagg: asked the Minister for the Environment when payment of a new house grant will be made to persons (details supplied) in County Galway.
Minister of State at the Department of the Environment (Mr. Connolly): The receipt of additional documentation requested from the applicant is awaited.
Mr. Yates: asked the Minister for the Environment when a house improvement grant will be paid to a person (details supplied) in County Wexford; and if he will expedite the matter.
Minister of State at the Department of the Environment (Mr. Connolly): The grant has been paid.
Mr. Gibbons: asked the Minister for the Environment the current relative costings between a containment site and a municipal incinerator; and the possibility of such a facility being shared among adjacent local authorities.
Minister for the Environment (Mr. Flynn): I am advised that the disposal of domestic waste by incineration is at least five times as costly as disposal by landfill. The relative costings of a containment site and a municipal incinerator would of course be governed by the size and  location of the facilities as well as the types of wastes to be accommodated.
There is no reason why disposal facilities should not be shared by local authorities. The scheme of grants to local authorities for co-disposal of domestic and industrial wastes was based on the concept of disposal facilities being available on a regional basis.
Mr. J. O'Keeffe: asked the Minister for the Environment the reason for the delay in payment of a house improvement grant to a person (details supplied) in County Cork in respect of which final inspection took place in October 1988; and that payment is being made.
Minister of State at the Department of the Environment (Mr. Connolly): The grant has been paid.
Proinsias De Rossa: asked the Minister for Labour the number of redundancies notified to his Department during 1988, broken down by employment category.
Minister for Labour (Mr. B. Ahern): The number of redundancies notified by my Department under the Redundancy Payments Acts during 1988, broken down by employment category, are as follows:
|Employment Category||Number of employees||Total|
|Extraction Industry (Chemical Products)||1,991||218||2,209|
|Metal Manufacturing and Engineering||1,632||560||2,192|
|Agriculture, Forestry and Fisheries||400||127||527|
|Energy and Water||454||67||521|
|Building and Civil Engineering||1,548||401||1,949|
|Transport and Communications||1,344||270||1,614|
|Banking, Finance and Insurance||498||553||1,051|
Mr. Yates: asked the Minister for Health if he will clarify the situation in relation to hospital charges in the case of a road traffic accident where an insurance claim will apply; if such charges are uniform across the country; and if he will outline his policy in this area.
Minister for Health (Dr. O'Hanlon): The Health (Amendment) Act, 1986 enables charges to be made for in-patient and out-patient services provided for persons in respect of the treatment of injuries caused by the use of mechanically propelled vehicles in public places. The Act also makes provision for the waiving of the whole or part of the charge in certain circumstances. In general the charges are based on the actual cost of providing the services.
Mr. Allen: asked the Minister for Health whether changes should be made in the medical schools curricula.
Minister for Health (Dr. O'Hanlon): While acknowledging the deservedly high reputation of our medical schools, I am concerned that our medical students should receive an education which equips them to provide services which the community requires. A concern to promote better links between medical education and national health policies was shared by those, including myself, who participated last November in a World Health Organisation Ministerial Consultation on the subject. I have drawn the results of that consultation to the attention of the medical education authorities and of the Medical Council, which has statutory functions in that regard.
Mr. G. Mitchell: asked the Minister for Health the reason a person (details supplied) in Dublin 12 who applied for a medical card in October 1987 and who  was refused, based on his previous year's P60 but subsequently qualified has had his medical card withdrawn based on the current year instead of the P60 for 1987-88.
Minister for Health (Dr. O'Hanlon): The question of determining eligibility for a medical card in individual cases is the responsibility of the chief executive officer of the appropriate health board. Accordingly in this instance, the Deputy's question has been referred to the Chief Executive Officer, Eastern Health Board, with a request that he examine the matter and reply directly to the Deputy.
Mr. J. Mitchell: asked the Minister for Health if he will make a statement on the extent of the illness systemic lupus erythematosus; if he will designate this illness as a long term illness for the purposes of a long term illness card; the benefits such designation would have for the sufferers of that illness; if there are any other concessions he could make to those sufferers in order to relieve their anxiety and financial difficulties; and if he will make a statement on the matter.
Minister for Health (Dr. O'Hanlon): This condition is one which predominantly presents in female patients. The medical literature puts the incidence of systemic lupus erythematosus at one per 2,000 female population. These estimates would indicate a population of about 800 systemic lupus erythematosus patients here.
I am at present reviewing both the long term illness scheme and drugs refund scheme to ensure that the needs of those who require expensive drugs on a regular basis are met more equitably.
Mr. Barry: asked the Minister for Health if his Department was consulted by the IDA before a grant was given for the establishment of a soap manufacturing plant in County Wicklow.
Minister for Health (Dr. O'Hanlon): In March 1987 discussions involving officers of my Department and representatives of the IDA took place in the course of which the implications of the relevant regulations governing the manufacture and sale of pharmaceutical products were explained to the IDA. These discussions were held at the request of the IDA and I understand they were held prior to the approval of the grant.
Mr. J. Mitchell: asked the Minister for Defence, in view of the service of a person (details supplied) in Dublin 8 with the Air Corps, the total amount of service given by this person; in view of the fact that he will be 65 in March 1989, the deferred pension, if any, which will be payable to him on his retirement; and if he will make a statement on the matter.
Minister for Defence (Mr. Noonan,: Limerick West): The person involved enlisted in the Permanent Defence Force on 28 August 1940. He transferred to the Reserve Defence Force on 28 August 1949 and was discharged on 27 August 1952. As his total service in the Permanent Defence Force was less than 21 years he does not qualify for a pension under the Defence Forces Pensions Schemes.
Mr. Connaughton: asked the Minister for Defence whether he has satisfied himself that adequate precautions are taken to protect the eyesight of Army personnel using image intensifiers; and if he will make a statement on the use of this equipment.
Minister for Defence (Mr. Noonan,: Limerick West): There is no known medical hazard associated with this equipment and eyesight is not affected. However, long periods of continuous use may cause eye fatigue, although normal rest is all that is required to recover from this. No further precautions are necessary.
Mr. Molloy: asked the Minister for Defence the number of Permanent Defence Force personnel who have left the Defence Force since 1 January 1988.
Minister for Defence (Mr. Noonan,: Limerick West): During the period 1 January to 31 December 1988 a total of 1,026 personnel (52 officers and 974 men) left the Permanent Defence Force. During the same period 35 officers were commissioned and 1,143 other ranks were enlisted.
Mr. McCartan: asked the Minister for Defence if soldiers assigned to duty at Portlaoise Prison are required to work a total of 792 hours over two months, with all recreation and rest to be enjoyed within the confines of the prison; if a single private would receive £90 extra on pay and a sergeant £334, even though a civilian working a normal eight hour day would work 320 hours per two months; if he has any proposals to improve these conditions for the soldiers involved; and if he will make a statement on the matter.
Minister for Defence (Mr. Noonan,: Limerick West): It would be contrary to the requirements of security to disclose details relating to the duty roster of personnel serving in Portlaoise Prison.
The rates of pay and allowances of members of the Permanent Defence Force — including allowances for duty at Portlaoise Prison — have been revised recently following the acceptance by the Government of the recommendations in the report of the Inter-Departmental Committee on Defence Forces Pay, Allowances and Conditions. Full details of the revised rates were set out in reply to Questions Nos. 250 and 251 on 25 January 1989.
Mr. McCartan: asked the Minister for Defence the reason five out of six  soldiers at Cathal Brugha Barracks, Dublin 6 are not being paid the allowance for armed gate/police duties, when soldiers in other Dublin barracks are being paid this allowance; if he will have the matter rectified with respect to those concerned; and if he will make a statement on the matter.
Minister for Defence (Mr. Noonan,: Limerick West): I am not aware of the payment of an allowance to soldiers at Cathal Brugha Barracks or any other barracks, for armed gate/police duties. These duties are regarded as part of a soldier's normal duties.
Mr. Gregory: asked the Minister for Education when the vacancy of library assistant will be filled in St. Patrick's College of Education, Drumcondra, Dublin 9, and if she will make a statement on the matter.
Mr. M. Higgins: asked the Minister for Education if her attention has been drawn to the difficulties which have been created in St. Patrick's College of Education, Drumcondra, Dublin 9 due to the failure to fill a vacancy on the library staff; and the consequent curtailment of library facilities for students.
Minister for Education (Mrs. O'Rourke): I propose to take Questions Nos. 159 and 160 together.
My Department have sanctioned the filling of the vacancy for library assistant in St. Patrick's College through the redeployment of a staff member from within the public sector. The present difficulty relates to obtaining a suitable person to fill the post. Efforts to resolve the problem are continuing.
Mr. Taylor: asked the Minister for Education if an application has been received from the Cúchulainn Athletic Club, Tallaght, Dublin 24 for the location of a hard track on the existing grass track  at the 30 acres park, Bancroft Park, Tallaght, Dublin 24; and if she will make a statement indicating the present position of the application.
Mr. Taylor: asked the Minister for Education if she has received an application for a national lottery grant from a club (details supplied) in Dublin 24; when the urgently needed funds for this club will be provided; and if she will make a statement on the matter.
Minister for Education (Mrs. O'Rourke): I propose to take Questions Nos. 161 and 162 together.
No formal applications have been received on these cases. In any event, it is not possible to allocate grants to these projects as grants up to the limit of funds available have been allocated under the capital grants scheme for the provision of recreational facilities.
Mr. Birmingham: asked the Minister for Education whether she has satisfied herself that vocational educational committees around the country, in deciding which teachers should be offered the redundancy package, have made their decisions free from the influence of political representations or other extraneous conditions; and if she will make a statement on the steps she has taken to ensure that equity is achieved in this regard.
Minister for Education (Mrs. O'Rourke): Following consultations with vocational education committees about the numbers of teachers who should be granted voluntary redundancy my Department authorised a number of committees to apply the terms of the voluntary redundancy scheme in their respective areas. The Department issued guidelines to committees regarding the selection of teachers for voluntary redundancy, but the actual selection was left to the committees themselves in accordance with their responsibilities for the overall organisation of their educational programmes. I have no reason to doubt that  committees complied with those guidelines.
Mr. O'Dea: asked the Minister for Education when a grant of £4,176 in respect of repairs done to St. Patrick's national school, Bruff, County Limerick will be paid; and when action will be taken in respect of a report which the school manager has made concerning the need for a secondary roof for that school.
Minister for Education (Mrs. O'Rourke): Works costing a total of £4,171.64 were carried out to St. Patrick's national school, Bruff, County Limerick and payment of the appropriate grant will be made shortly to the chairman of the board of management of the school. The Department are awaiting a report from its local professional advisers on the question of the roof of the school. When this report has been received and examined a decision will be conveyed to the chairman of the board of management in the matter.
Mr. J. Mitchell: asked the Minister for Education the present and projected school population of Scoil an Chroí Ró-Naofa, Huntstown, Dublin 15; her views on whether there is a need for extra classrooms this coming year; in view of the lead-time for planned classrooms, if she will approve the extra classrooms; and if she will make a statement on the matter.
Minister for Education (Mrs. O'Rourke): Scoil an Chroí Ró-Naofa, Huntstown, Dublin 15 had an enrolment of 522 pupils on 31 December 1988. The staffing of the school is a principal plus 15 assistants and the accommodation consists of 16 permanent classrooms and a general purposes room. On 6 December 1988 the chairman of the board of management submitted a statement of his enrolment projections for the school for the years 1989 to 1992 and on foot of  this has applied for additional classroom accommodation. This matter is being examined in the Department in consultation with the local inspector and in the context of the other primary school facilities in the general area. A decision will be conveyed to the school authorities at the earliest possible date and I will communicate with the Deputy at that point in view of his interest.
Mr. Deasy: asked the Minister for Education if she will allocate funds from the proceeds of the national lottery to Clonea GAA Club, Clonea, Carrick-on-Suir, County Waterford for the provision of dressing rooms, as an application has already been submitted.
Minister for Education (Mrs. O'Rourke): It is not possible to accede to the Deputy's request as grants up to the limit of funds available have already been allocated under the capital grants scheme for the provision of recreational facilities.
Mr. Begley: asked the Minister for Energy the reason a person (details supplied) in County Kerry has not qualified for an ESB grant in the western package even though he is a fulltime farmer.
Minister for Energy (Mr. Smith): My Department are at present in correspondence with the person referred to by the Deputy with a view to determining his eligibility for grant aid. As soon as the necessary information has been received, a decision on the applicant's eligibility will be taken and he will be notified of the outcome as soon as possible.
Mr. E. O'Keeffe: asked the Minister for Energy when a birth certificate and a P45 will be returned to a person (details supplied) in County Cork; and  the reason for the delay in having same returned.
Minister for Energy (Mr. Smith): The person in question was one of some 280 forest workers who availed of the early retirement/voluntary redundancy scheme late last year. The processing of documentation in connection with these retirements entailed a considerable amount of work. Both the birth certificate and the P.45 have now been returned to the person concerned.