Thursday, 2 February 1989
Dáil Éireann Debate
Mr. Boylan: When we adjourned the debate last night I was talking about the people's expectation of reasonable reform in the tax system. People are leaving because of our penal tax system. This morning I listened to one of our more popular sports people being interviewed. He criticised our tax system. He mentioned the amount of money it would cost him to stay here and said that some slight reform might have induced him to live here — and he has a case. It may be said that these sports people are exceptionally well paid. That may be so but the vast bulk of it is earned outside the country.
While I have great concern for people like that, I have even greater concern for people who are leaving the country to earn a living in England where there is substantial income to be earned in the building industry. I can relate the story of a married man who, having lost his job last September, went to London to work in the building industry rather than go on the dole. He was able to earn £480 sterling per week. When he came home at  Christmas the Revenue Commissioners informed him that he must pay the difference between the tax paid in England and what would have been due here on the money he was good enough to earn so that he would have something reasonable in his home for the Christmas period. That is unjust and unfair.
A young person told me the other day that he had worked in this country for 26 weeks from April to September, and then went to England where he earned a considerable amount of money. When he came home the Revenue Commissioners were looking for the difference in the tax paid. This must be looked into. This situation is arising more often now when people find that, come autumn, jobs are closing down. They could go on the dole and if they do, the strange fact is that they could reclaim the tax they paid for the first half of the year, but because they have the initiative to go outside to seek work and bring home an income to their families they are penalised.
With regard to the description of the tax reforms as being modest, I would say that is being polite; they are meagre. The top rate of tax has dropped from 58 per cent to 56 per cent. Therefore the higher the income the better off people are. That is what happens when one deals in percentages, and until we get away from that the people at the higher end of the scale will always have greater benefit than the people at the lower end. The standard rate has improved by 3 per cent from 35 per cent to 32 per cent. Further down the scale there were allowances and other initiatives. However all of them are taken away immediately when we look at things like mortgage relief and relief on life insurance premiums because now one can claim relief on only 80 per cent of the premium whereas two years ago one could claim 100 per cent. There is no clawback for people who have mortgages and life assurance premiums — and those who have not are few and far between. Any young man starting up a home will have a mortgage and he should get recognition for his initiative rather than expecting the local authority to provide him with housing.
 Then we had the Minister making vague references to the proposal to withdraw child benefit. Immediately there was an uproar and Government Ministers, one after another, poured cold water on this proposal saying that it was only floated, that it was not a definite proposal and that it would only affect those at the higher end of the scale; but no figure was mentioned in the budget of where the cut off point would be. The Taoiseach clarified this yesterday by saying that the cut off point would be above £30,000 a year income. This obviously was not the intention originally, but because it was seen to be such a hot potato and there was so much reaction from the housewife who spends most of her time looking after her children — and surely she was entitled to this little income without the Government trying to get their hands on it — it was seen to be a bad development and should never have been suggested.
Deputy Ellis made great play last night of the fact that we had free fuel and free electricity for our old aged pensioners and various other categories. I accept that but they are hard got. I do not know what Deputy Ellis' experience is, but my clinics are taken up with people whose social welfare payments have been cut, causing grave hardship. These unfortunate people with the minimum income, living in poor homes, look forward to free fuel to keep them warm over the winter months. Fortunately we had a mild winter. I believe if this were not so the consequences would have been tragic.
I have had widowers and old age pensioners coming to me and saying that because they had a bit of ground — not land but rocks and bushes — they were expected to provide a certain amount of fuel. Able bodied people would not be able to go out and get it, and it would not burn in the first place; but these people were assessed as having an amount of ground around the house which could supply a certain amount of fuel. Nothing could be more miserly. Nothing could be more disheartening for old people who have given their life to this country. I  hope there will be a change of heart in our approach to social welfare and that those people who are not in a position to fight their case will not be put through the hardship they are going through at the moment.
I want to refer now to 1992. Being a Border Deputy I am particularly concerned. Some five or six months ago the Government were on a hobby horse with Ministers all over the place saying we must prepare for 1992. There were seminars everywhere. There was one in Monaghan which was exceptionally well attended. Minister Brennan came and gave an excellent outline of how we were to approach it. There were various spokespersons from key businesses all over the county and from senior development organisations all over the country. We were led to believe that this business was being taken seriously. However, there was not even a line in the budget with regard to 1992.
In fact, we have turned in the opposite direction. Instead of trying to achieve harmonisation in the taxation system, duty on petrol — the one important ingredient so far as the Border areas are concerned — was increased by 5p per gallon. If we had taken 5p off we would be heading in the direction of 1992, we would be helping to achieve a balance between prices North and South, but there is more to it than that. This whole business of cross-Border trade should be addressed now if we are looking forward to 1992 rather than waiting until the night before to do all that will have to be done when the barriers are lowered and people can come here freely and trade, and we will be expected to go abroad and do likewise. We will have to face a certain amount of competition but we will not be prepared.
People in the Border areas were living in the expectation that there was light at the end of the tunnel with the approach to 1992 and that their businesses could hold out until then. They hoped that between now and 1992, with a movement towards the equalisation of the tax system, they would receive benefits and that gradually their incomes would  improve but this has not happened. Nothing has happened to give them any ray of hope and they no longer see any light at the end of the tunnel. With the announcement of an additional 5p on a gallon of petrol their hopes were dashed. That increase may seem small and people may say it will be absorbed with the forthcoming decrease of 5p a gallon by the oil companies but I do not accept that. If the reduction by the oil companies, which was to be announced on the eve of the budget, had been announced and if the Government had reduced the price of a gallon of petrol by 5p rather than increasing it, the difference between the price per gallon in the North and that in the South would be less than 60p.
The question of the Structural Funds also rises. The Government have apparently decided that they will not devote any more time to setting up regional committees. The people have responded to this. In the area which I represent — Cavan-Monaghan, Sligo-Leitrim and Donegal — a number of meetings have been held. At least ten meetings were held in Cavan and on each occasion people attended in their hundreds. Husbands and wives attended in the hope of getting some information. There is an amount of confusion in regard to this matter. People believed that 70 or 75 per cent grants would be made available for improving their homes or renovating old dwellings in tourist regions. They thought they would receive grants of 70 to 75 per cent for setting up mushroom units or for breeding turkeys, chickens or suckling herds. This was the drift of the message that was coming from these meetings but no such grant aid is available. We have been told that we will receive from the EC funds 70 to 75 per cent of the amount that we make available. There is no mention in the budget of how much money will be set aside to match the funds from Brussels.
It is interesting that the true facts regarding the increase of the EC Structural Funds are being presented by the Government in order to create a false feeling of well being. Members of local authorities, development organisations  and the public generally are being misled and will be disappointed as a result of wild statements that large amounts of money will be received from the EC Structural Funds. It has been mentioned regularly that we will receive an extra £4 billion in the next five years.
Yesterday I spoke to the chairman of the regional committee in my area who told me that he has received at least 300 applications for funds from individuals and groups but he has no office and no back-up service to deal with these applications. That chairman is an exceptionally capable chairman of the regional committee. He has had great experience in Europe and was a former national figure in this country. He told me he is depending on the goodwill of the local co-operative, Killeshandra Co-op, to make available to him their staff and offices to help him to get into some semblance of order the applications that have been received. I would like to put it on record that he has received much help from the Cavan county development officer but the staff available to him is minimal and they are quite busy.
Likewise, the county manager who is a capable and dynamic man, whom we are proud to have in the county and who has brought about great changes in the short period he has been there is also making his staff available but that is not a well organised system for dealing with what is undoubtedly a very important development, the increased Structural Funds that are being made available to us. If we are serious about this matter surely we would set up an office in the region with clerical staff. I presume not more than three or four people would be willing and able to deal with the applications. We should ensure that the efforts of the people who made applications get fair recognition.
Many groups are concerned about the development of tourism, about developing their local areas and making amenities more accessible to tourists. Farmers come together to develop areas of land for plantation. I believe “drainage” is not a very popular word to include in an application for Structural Funds, that agricultural production is not favoured,  but a number of farmers have waste land which, with some development, could be used for planting, pony trekking and hiking. Those applications have been detailed and costed. The people are doing the best they can, given that they have not the back-up service and the knowledge that is needed.
What I and many people cannot understand is if on the third day of February these applications are still lying in a room in Cavan and have not been opened due to lack of staff, how will they be considered in the drawing up of a county plan and a national plan? Will the efforts of these people be wasted? In fairness to the people, a clear and definite answer must be given so that they will not be totally disillusioned. They have shown a keen interest and awareness in this area. If there is any motivation at all the people will respond. That has been proven by the numbers of honest people who attended meetings to ensure that they would get a grasp of what is available to them.
An agreement has been reached that the total amount of money in the three funds will be doubled by 1993 but no guarantee has been given that Ireland's share will be doubled although there is a good prospect of that happening. This means funds will be increased by approximately 15 per cent annually and will amount to about £700 million in 1993. In the past the Regional Fund was allocated on a quota basis with Ireland's share at 3.2 per cent. Last year we did not receive that amount because we did not provide enough money to match that sum. We receive about the same amount from the Social Fund as from the Regional Fund. We received 10 per cent in 1987 and we can hardly expect this to be doubled. We received 10 per cent from the Agricultural Fund, one area in which we could have collected at least double the amount but we did not avail of all the opportunities. There are good prospects for a large increase in this area.
There is also misunderstanding as a result of statements about 75 per cent funding, as I have said earlier. Agreement has been reached only in relation  to the Regional Fund but it is hoped that it may extend to the Agricultural and Social Fund in future years. It will not however apply to the cost of a project and that is the important message that we must get across. People should not be misled into thinking that if they put up 25 per cent of the cost of a project, 75 per cent will be received from the EC. It would be great if that was the case. These people are well entitled to that type of grant aid. I have no doubt that 100 per cent grant aid has been handed out to foreign industrialists to come to this country but they close down within a number of years for tax reasons. Having got all they can from the system they close their doors and leave the country. If grants are made available to small, family-run businesses these people will stay and make every effort to succeed.
In future years the grant aid will not apply to the cost of projects but to the amount of public finance involved. The Structural Funds have gathered much support; people are keenly interested but the Government have a lot of work to do and explanations to give so as to ensure that the applications sent in will get a fair hearing, that they will be judged on their merits and that the funds which these people are seeking will be available to them.
There is another important aspect of the Structural Funds and that relates to the county councils and, therefore, the roads. The Minister for Health, Deputy O'Hanlon, on the other side of the House is equally aware of the state of the roads in Cavan-Monaghan. They are no better than in any other county and are worse than most other counties. People might say I am making a meal out of the potholes in Cavan but I make no apology to anybody for that. We have a unique problem. We have no other means of transport. We do not have an airport as yet and I do not suppose we will. We had a rail service but it was taken away in the mid-sixties. Therefore we are solely dependent on our roads and they are in a deplorable state.
I think it was Deputy Ellis who paid  tribute to the Minister for the extra moneys he has made available in this budget. I am sorry to say I do not see it. There may be extra money but it is not sufficient to make a reasonable impact on the serious situation that exists. There are unfortunate people who live in long laneways. Before leaving the house children going to school must first put on their wellingtons and carry their little shoes in their hands to the end of the main road to meet the bus. They must then take off their wellingtons and hide them behind a gatepost or a tree and put on their shoes. If they travelled in their shoes their legs and their stockings would be destroyed and they would be soaking for the day. That is the situation we are faced with apart altogether from the unsightly mess to be faced by tourists who we are trying to attract to the country.
Long ago, and I am sure it is still the case, there was always a general clean up before inviting guests, to make sure that every place was looking well. By way of all sorts of promotions — many of them hare-brained — we are bringing people here who, because of the state of our roads, will not return. Nothing sells better than a good product and a good product needs no advertising; the word will spread quickly. If you treat a customer well he will bring ten customers back. If you treat a customer badly he will prevent 100 from coming. Many of the people involved in tourism would also be involved in clubs of one kind or another and there are general comments when they return as to whether they enjoyed the holiday. If it was good then more people will come but if it was bad it will turn people away. That is an aspect with which I am concerned.
I am primarily concerned about the people who are using our roads every day and who are depending on them and have to put up with existing conditions. The rate support grant has been cut by half and that has been the sole reason for the serious deterioration of our roads. The problem started in 1977 and it is now with us 12 years and it is getting worse. Like a wild teenager our potholes are creating havoc all over the place. This problem  must be tackled; it cannot be allowed to continue any longer.
Yesterday I was in Cavan at the launch of Local Awareness for the eradication of TB. It was a meeting that was exceptionally well presented. The local district veterinary officer, Seamus Griffith, gave an excellent outline of what they expect to do within the next three to four years. Eradication of bovine TB is a major problem. We have been working at it — if working is the correct description — for the past 35 years. We made rapid progress in the early years but for the last few years we seem to have become bogged down. It is a serious setback to any farmer, married or single, when the veterinary surgeon announces on the morning of the test that he has a reactor or a number of reactors in his herd. It is devastating. It was probably a lifetime of work building up a good herd of dairy cows and then they are gone by the way-side.
I do not think it has been appreciated by the powers that be, by the Government, by the Minister for Agriculture and Food or the Minister for Finance how these people are expected to live when their herds are taken from them and when their farm is totally destocked. Nobody has come up and said, here is an income as in the case of an industrial worker who has been made redundant. They are just left. Their cattle have been taken from them and they are told that in six months they may be allowed to get back into stock again but it could be a period of 12 months. Nobody has said how they are to live in the meantime. I know there is compensation for the cattle but I do not have to spell out here the enormous losses suffered by people as a result of putting small cattle into factories and good dairy cows in their full term of milking. Certainly they would not be in great condition and the moneys received would represent a loss, on average, of over £700 per cow.
I recognise that some improvement in the new scheme has taken place regarding an income of £45 per month being offered for depopulation grants. A good  dairy cow producing four gallons of milk per day would bring in £124 per month to the farmer. Now he is getting only about a third of that amount. We are now talking about small pockets of areas afflicted with the disease. It is not good enough that farmers who are not affected, because of some good luck and the grace of God, should turn a blind eye to those who are hit with this serious problem. A fund should be set up and I believe the farmers would be the first to respond, and the Government should also put in a major capital investment in the fund. I would expect the meat factories and the co-ops to respond likewise.
In conclusion there is one important aspect that I would like to mention and that relates to a bypass for Cavan town — not a surgery bypass. I have no doubt the Minister for Health, Deputy O'Hanlon, would support me in that. We have a major problem and the bypass has been on the cards for the past ten years. It is a bottleneck for people, for businesses and for lorries travelling to Dublin or to the West who have to pass through Cavan town and who are seeking a bypass.
Minister for Health (Dr. O'Hanlon): I agree with Deputy Boylan, and anything that would be good for the regions outside Dublin, and particularly for Cavan-Monaghan — I am sure Deputy Boylan and myself would be allowed to be a little parochial — I would certainly support it. Indeed, for many years I have advocated not only a bypass for Cavan but a major road north of Dublin from, say, Sligo to Dundalk which would be beneficial to the whole north-west, north-east and all the Border counties.
On the question of double taxation I have a certain sympathy in cases where  a husband is working in the Twenty-six Counties and a wife is working in the Six Counties. They are both paying PAYE and the wife finds she is obliged to pay a higher rate of tax at this side of the Border. I am unaware that a person working abroad and who would be longer out of the country than six months would be asked to pay the higher level of tax.
On the question of the social welfare allowances, the free electricity and the free fuel guidelines are laid down. These guidelines are to ensure that people who are entitled to these services have the services provided for them. I do not think it would be acceptable that somebody who only had — to use Deputy Boylan's words —“a bit of ground” and did not have any means of providing fuel from, say, a garden would be denied free fuel vouchers provided that in all other ways they qualified.
As a Border Deputy I was surprised that Deputy Boylan raised the issue of the excise duty on petrol and the 5p. What is important about that 5p is that the price of petrol, following this budget, did not change at the pumps. It is no harm to reflect back to 1983. In January of that year, the first month the Coalition were in office, the price of petrol increased on three different occasions by 35p. in all. This had an effect on petrol stations in towns along the Border, and in a sizeable town like Clones there are now no petrol stations and the public have to travel seven miles to buy petrol for their vehicles. As I have said, during their first term of office, the Coalition increased the price of petrol by 35p.
Not alone did it effect petrol sales, but there was an exodus of people from every town along the Border to the Six Counties to do their shopping. This had devastating consequences for all traders along the Border. In the months leading up to the last general election and during the general election campaign, this was a very important issue. We, in the Border areas, were very pleased when the then Minister for Finance, Mr. Ray MacSharry, found a simple solution to the problem. He introduced the 48 hour rule for travellers. I am very glad to say  that that has had a major impact on improving business in each town along the Border. One or two towns that are surrounded on three sides by the Border like Clones and Belturbet still have some problems; but, the other Border towns which suffered when the Coalition were in power, have now reaped the benefit of that decision. We have all reaped the benefit of the improvements in the economy that have come about as a result of the Government's programme.
On the question of Structural Funds, I think it is important to recognise that Ireland is seen as one region in Europe. It is an indication of the Government's commitment to devolved administration and to decentralisation that they decided to set up seven regional committees, giving them the opportunity to represent their area and to submit to Government what they would see as priorities and developments that might be taken into account in our application for the Structural Funds that become available. I believe that was a wise decision. This reflects the difference in approach between ourselves and the Fine Gael Party. The Fine Gael Party are not very much in favour or supportive of decentralisation. Not so long ago we had a Private Members' motion in the name of a Fine Gael Deputy to centralise the health administration and to abolish the health boards. That is an indication of Fine Gael's approach to the question of how we should administer the country. Against that background, perhaps it was understandable to hear Deputy Boylan's comments. Deputy Boylan is aware that the largest sum ever provided for roads has been provided in the current year. The Minister for Finance has announced in the budget a very sizeable increase in what had been previously allocated for roads.
In this limited debate, I would like to deal with the health services. The post-budget non-capital provision for health is £1,251.4 million. The budget adjustments account for about £9.1 million made up as follows: £8 million in lieu of income generating measures through increased charges; £1 million to allow a  3 per cent increase in cash allowances to disabled persons with effect from July; and £100,000 towards the agreed restructuring of the Dublin Rape Crisis Centre. The Exchequer contribution included in the overall provision amounts to £1,109.9 million and appropriations-in-aid account for the remaining £141.5 million.
The provision for health services, expressed as a share of total funds for non-capital supply services, has increased in 1989 over 1988. This represents a clear recognition by the Government of the high priority of our public health services. The amount of Exchequer funding provided for the health services represents one-fifth, or 20 per cent, of total Government spending — which is a very sizeable amount — and is a 1 per cent increase over last year.
When account is taken of local income of £107 million available to the health agencies, total expenditure of £1,363 million can be generated. This level of expenditure will allow for the continuation of key services at existing levels and provides for the phased introduction of some major new facilities in the acute hospital area. In notifying the agencies of their allocations I made specific provision for the commissioning of new hospital facilities, which I will refer to later. At the same time, the allocations were structured so as to afford protection of services at other existing major centres such as the regional hospitals and key Dublin hospitals.
In relation to the source of expenditure on our health services, it must continually be recognised that the public, in whatever shape or form it is paid for, is the ultimate funder of health services and, indeed, of all Exchequer funded services. In such circumstances, it behoves all who are involved in the planning, managing and delivery of health services to ensure that the investment by the Government of public money in our health services ensures the most productive return. This  must be the basis of all expenditure by health agencies having regard, of course, to the needs of patients, which have to be the priority. Agencies must be satisfied on all occasions that their investment in personnel, infrastructure or on any other aspect of service delivery is producing the results in terms of service delivery which is the best that can be achieved.
In their determination of the 1989 Health Vote the Government have decided that every effort should be made to achieve efficiency savings in the health services next year. Specifically they have decided savings totalling £10 million should be achieved through additional cost containment measures including, where appropriate, additional use of contract services. A target saving in this area has been reflected in each health agency's allocation for 1989.
My Department and I will continue to encourage innovative, practical and workable developments in the cost containment area which will achieve worthwhile results in the short, medium or long terms. My Department's cost containment unit has been strengthened and will continue to provide all necessary support and assistance, and I have taken steps to implement another central recommendation of the Trident report in relation to product evaluation. The unit will also continue to assist agencies in assessing alternative arrangements in regard to more cost effective purchasing.
A study undertaken in 1986 into purchasing arrangements found that there was considerable variation from hospital to hospital in relation to similar items purchased particularly where a number of alternative brands are available on the market. A central ingredient of an effective and efficient approach to supplies is to ensure that as much information as possible is made available on a regular basis to those involved at individual agency level in order to assist in obtaining the best price for goods. My Department's cost containment unit concentrated considerable effort in this direction in 1988.
 As a result of such efforts a liaison system with health agencies has been established in order to facilitate the effective flow of information on market prices in specific areas of health care. My Department are advised in this important initiative on purchasing by an informal committee of supply officers.
Efforts continue to be made to improve general purchasing efficiency, stock control and buying strategies. The sheer bulk and range of purchasing which is carried out on a daily basis throughout the health services lends urgency to their efforts and requires that greater effort should be made to improve efficiency. While a good start has been made this year, much work, application and initiative are still required.
Dr. O'Hanlon: The Voluntary Health Insurance Board produced a plan and the Government supported that plan. The Fine Gael Party put down a motion that could have been carried and had we accepted it and gone back to the VHI, it would have wrecked their plan. That is what the Opposition tried to do.
Dr. O'Hanlon: An important feature of the recovery plan is that it is based on controlling the cost factors which have caused the VHI's problems, rather than on substantial premium increases. The premium increase for the majority of members is only 3 per cent. The higher premium increases which have been applied to certain plans are to ensure greater equity, after taking account of differences in the average age of membership.
I am now considering the longer term corporate plan, which has also been prepared by Mr. Fox, the recovery manager, and the VHI Board. The purpose of the plan is to ensure that the VHI are in a position to meet whatever challenges may emerge in the coming years. In the meantime, the prompt and decisive action which was necessary to secure the VHI has been taken.
Despite the critics our hospital service have responded with efficiency, innovation and in a most positive way to the demands placed on them. It remains a service we can be proud of and one which serves our people professionally and with quality.
The increased productivity in our acute hospital system has ensured that a figure for the hospital bed complement so frequently used in the past as the measure of service availability is no longer reliable. Instead, attention must be focused on the outputs of our hospitals to determine the quantum of service provided. The changes in the methods and types of services are becoming a more important barometer of activity. The increasing concentration of resources by most hospitals on day case treatment and out-patient services has also ensured that the services available within a hospital are assessed by a greater number of people. For example, although bed numbers in the Dublin area have been reduced, the number of patients treated has increased overall.
In one major Dublin hospital, although the number of acute beds has been reduced by about 25 per cent the number of admissions actually increased by 7 per  cent in January to August 1988, as compared with the same period in 1987. In the same hospital, day activity both surgical and medical, has increased by 25 per cent. Indeed, I am glad to say that one week ago in the same hospital I opened an x-ray unit with equipment that cost £5 million, the most up to date available anywhere in the world. What is important is that the State is providing the most sophisticated hi-tech equipment for public patients in public hospitals, although some people would like us to believe otherwise.
Since coming into office our efforts have been successful in eliminating facilities that were clearly surplus to requirements, to clarify the role and responsibilities of each hospital and where appropriate, to promote the grouping of hospitals, particularly in urban areas. This is necessary to ensure, in so far as resources permit, that we have a cost effective, rational and fully productive acute hospitals service throughout the entire country. Indeed, the statistics I have used in relation to increased productivity are but some examples of concrete evidence available to show that the rationalisation programme, first was required and secondly, that it is producing the desired results in the interests of patient care.
The year 1988 has seen important new initiatives in the area of health promotion. Underlining my programme has been a concern that a fresh approach was required which concentrated on the promotion of positive health and prevention strategies. The structures which  I established during 1988 have addressed in a positive and purposeful manner the important role that health promotion must continue to play in our approach to health and health services generally. The health promotion unit in my Department are responsible for developing a policy on health promotion and, as the House is aware, have launched several important campaigns in their own right and in conjunction with the health boards and voluntary agencies. Included among these are participation with the Irish Cancer Society in the Europe against Cancer Week; a community based approach to combating alcohol and drug abuse entitled `Drugs Questions — Local Answers; and the `Cleanwatch' campaign which concentrated on food hygiene within the food trade in particular.
The international efforts at health promotion are evident in the Europe against Cancer campaign which will involve specific involvement by my Department and by the community generally. I will be announcing my Department's programme in that regard shortly.
An important campaign which is currently in progress concerns the MMR — measles, mumps, rubella — immunization programme. While I am satisfied at the uptake of the MMR vaccine, much progress still needs to be achieved if we are to meet the targeted uptake of 90 per cent of children in the 15 month to 5 years age group. I am asking parents to ensure that their children receive this important vaccine which is safe and available free from family doctors.
The second level is the Advisory Council on Health Promotion which represents the main economic and social interests whose activities impact on health. The council have been meeting regularly in addressing their objective of recommending to me changes in public policy which would have a positive impact on the health of the community generally.
The third level in the structures is a committee of Ministers which ensures that issues which impinge on the health of the community can be addressed and resolved at the highest level and given the intersectoral dimension of health policy.
Under my chairmanship, the committee include the Ministers for Agriculture, Education, Energy, Environment and Labour. The establishment of such a committee is a concrete expression of each individual Minister's commitment to, and the collective emphasis of, the Government on health promotion.
A further recognition of the central position of health promotion is the sponsorship by my Department of a new Chair of Health Promotion at University College, Galway. A sound academic research base for work in this area is an added dimension to the concrete initiatives that I and my Department have taken.
Last year I established a working party to examine the organisation of screening for cervical cancer in this country. The working party, chaired by the chief medical officer of my Department, recommended a number of changes to improve the service. I shall shortly be circulating that working party report to the various agencies involved in the provision of the service to see how we can improve that service of cervical screening.
One of the reasons I established the working group was due to concern about delays in analysing cervical smears in some public laboratories, in particular the laboratory at St. Luke's Hospital, Dublin. I am glad to say that this problem has now been resolved and reports are issued from St. Luke's Hospital within a week of receipt of the smear.
In the psychiatric sector, progress is continuing with a further reduction in the number of in-patients during 1988 and further development of alternative, community-based services. Similarly, additional residential places have been  provided for mental handicap patients, notably with the replacement of inappropriate accommodation by more homely and suitable provision.
Indications are that the level of availability of child and school health services has continued largely unchanged over the past number of years. Our child care services have been able to respond to an increase in the level of reporting of child abuse and we have taken steps to provide a more comprehensive and effective specialist service to cope with that problem in two of our children's hospitals in Dublin and a further centre in Cork.
We have made progress in tackling the very serious AIDS problem by strengthening the new, specialist services in that area. Furthermore, the opening in 1988 of the new Drugs Treatment Centre in Dublin is a major boost to our services for this very much at-risk group who are a cause of major concern because of their vulnerability to AIDS. The availability of a high standard of care to the entire population remains the central objective of health policy, together with continuing emphasis on policies to promote and maintain the health of the community. Any impartial observer must conclude that, in large measure, these objectives have continued to be met in 1988 and will guide policy in 1989 also.
Of course there are areas of particular difficulty and areas of unmet need or need which might be met in more appropriate ways. I am very much aware of the need to continue the momentum to provide a more satisfactory framework of services for the mentally ill. I acknowledge that further provision of residential and day places for the mentally handicapped is necessary. With the new framework for child care which is contained in the Bill currently being debated, it will be necessary to review and strengthen our services in that area. I am also aware that the broad framework of community support services could be strangthened to the benefit of the health care system as a whole.
However, I would maintain that progress in these areas is being maintained and that it is necessary for us to continue to pursue all possible options for greater  efficiency and effectiveness in the way in which the very substantial resources devoted to health care are spent. It will also be necessary for us to keep under continuing review our priorities within the health care field. Every developed country has the same problems and none is able to provide the level of funding that would satisfy all the needs of the health service. I have already referred to the fact that 20 per cent of Government spending goes on our health services.
Against this general background of the maintenance of our key objectives in health policy, there is a number of developments which I would highlight as being of particular significance for the future of our policy in 1989 and beyond. First, with regard to personnel in the health services, I would point out that as part of the general review of public service numbers, a significant reduction has taken place in the numbers employed in the health services, notably through the voluntary redundancy and early retirement scheme. This reduction has been made possible by the rationalisation of services and activities which agencies have been undertaking in the past two years.
The general policy on the non-filling of vacancies in the public service has been applied sensitively and rationally to the health services. We have carefully considered applications from agencies for the permanent filling of key posts and, as a result, approval has been given to the recruitment of staff to these sensitive, priority areas. In addition, because of an imbalance which was emerging in the ratio of permanent to temporary staffing in the health services, I approved the conversion of 850 staff to permanent posts in priority areas as a particular initiative to reduce the reliance of services on an undue number of temporary staff. My Department are continuing to review the position of the remaining temporary staffing with the Alliance of Health Service Unions and if necessary further conversions of temporary staff to permanent status will be approved by me. In addition, during 1989, my Department will be maintaining close contact with the  various agencies in order to ensure that critical vacancies in the services are filled and it will be my policy to ensure that all appropriate services are properly staffed within the framework of the resources available to each agency. The efficient use of personnel is of critical importance to the health services, given the extent to which staff costs account for the expenditure of our health care agencies. I have instructed all health managements to pursue with vigour all of the potential savings which exist in the way in which activities are organised and staff are deployed. I am confident that the progress which has been made in this area will be continued.
At this point I would like to make some comment on the new arrangements to be introduced for the general medical service. As the House will know, I concluded agreement with the Irish Medical Organisation on a new form of agreement for doctors participating in the general medical service. This new agreement provided for a change in the method of payment of participating doctors to one which emphasises payments per patient rather than per visit. It also contains important provisions to support the development of the quality and range of services provided by general practitioners. For example, provision is made for regular study leave, for supporting the employment of nursing and secretarial staff and the purchase of equipment. The more appropriate recognition of the need for annual and sick leave and for superannuation has met a legitimate concern of the profession. The very convincing majority which accepted these proposals in two successive ballots conducted by the IMO augurs well for the future operation of the scheme. I am confident that the new arrangements will provide a very firm foundation for the realisation of the full potential of general practice to deal with a wider range of medical problems and provides a satisfactory basis to plan a transfer of care from institutional to community-based services. I would emphasise, of course, that patients retain full choice of doctor  in the new arrangements and will experience no diminution in the quality of care. Health boards will be in a position to assess trends in the delivery of care by participating doctors and new and innovative arrangements have been agreed to ensure that problems which may arise are dealt with speedily and effectively. I have no doubt that this new arrangement will prove very satisfactory both to participating doctors and to patients and we have an agreed arrangement to review its operation to ensure that the objectives which I share with the health boards and the IMO in entering this new contract are fully met.
I have been considering in detail the report of the working group I appointed to review the delivery of dental services. This report was prepared under the chairmanship of Deputy Terry Leyden, Minister of State at my Department. In my Department's recent letters of allocation to health boards I have sought specific information in relation to the dental services which will enable me to devise and cost a plan for the improvement of the services. My Department's deputy chief dental officer is currently engaged in discussions with the Eastern Health Board and with the Dental Hospital to see how that hospital might play a greater role in the provision of services for public patients.
My priorities as Minister for Health are to ensure that the level of resources available is allocated in such a way and is utilised to the best advantage in the bests interests of patient care. Resources must continue to be invested in priority services to ensure that those most in need of care receive care in a timely fashion, in the appropriate setting and in a cost effective manner. Initiatives that I have taken to date and will continue to take this year will ensure that these core objectives are met.
Mr. Shatter: It is my understanding that the next speaker should be from this party, in view of the number of speakers who have spoken to date from the various parties and the proportionality of Deputies.
Mr. Shatter: On a point of order, my understanding is that in this debate, as in others, a degree of proportionality is to be maintained in regard to the representation of parties. I must protest that you are proposing to call a member of the Progressive Democrats as opposed to a member of Fine Gael.
Miss Quill: At the outset it seems that there is little merit in making a budget speech and I am quite mystified as to why Deputy Shatter got so upset about the order of speakers because I am sure little new remains to be said.
Last night as I attempted to frame my speech, the first question I asked was how will this budget rate among those who evaluate budgets one year from budget day? Will those who sit down to evaluate the effects of the budget one year from now say that this was a good budget and that it brought about significant improvements in every area of life? Will they be able to say that Ireland in January 1990 will be a better place in which to work and live as a direct result of the provisions in this budget? Sadly, I do not think that will be so.
There is little in the budget that convinces me that many major changes will be brought about one way or the other. I see no strategic planning that will bring about major social or economic change. There is not even one single, strong, strategic measure that I can identify that would lead me to predict with certainty that the budget will break the spiral of rising unemployment, stem the tide of youth emigration or eradicate the root causes of wide scale poverty.
The new Minister was well positioned to bring in a budget specifically geared to growth. He brought with him a bundle of advantages denied to his predecessor. Two tough budgets had prepared and created the conditions for growth in the real economy. The tax amnesty and the availability of funds from lottery sources had given extra cash at Exchequer level and the prospect of vast sums of money  accruing through the Structural Funds certainly gave the Minister an opportunity to plan creatively, courageously and strategically for real growth in the real economy. By “the real economy” I mean the economy in which ordinary people try to earn a daily living, raise their children, improve their standard of living and have some kind of a decent lifestyle for themselves. I do not mean the paper economy of bankers and stockbrokers which we are assured is doing extremely well.
As a result of the budget and all the advantages to which I referred, I was looking for significant directions to create more jobs and growth in the real economy. Unfortunately, the Minister ignored this opportunity. Instead of going for growth he opted for a policy of appeasement, giving a morsel here and a morsel there. We had a “keep them ignorant but happy” kind of budget, the only certain outcome of which will be a continuation of the status quo.
The Progressive Democrats have long argued that radical tax reform is an absolute pre-condition to any growth in the real economy. We are not alone in this as every major scientific report on the Irish economy hammers home the fact that Ireland tops the list of European countries where taxation and the social welfare system combine to sap the will to work and stifle enterprise, initiative and investment. The Minister had an ideal opportunity to begin to dismantle the taxation system that hangs like an albatross around the neck of the Irish nation, but he failed to bite the bullet. One more financial year is lost and with it will surely go another 32,000 young Irish people, the real casualties of our anti-work taxation system.
It is a cruel irony on the nation and its taxpayers that in this time of deep economic difficulty thousands of our brightest and best young people are effectively excluded from participation in the economy and are forced to emigrate. Taking with them excellent educational qualifications, they are being enthusiastically conscripted into the labour forces of our competitor countries in a  tough world market and quickly, like the Wild Geese of the 18th century, fight in everyone's battle except their own. I warn the Minister that this country is in for a period of national degeneration unless strong measures are taken soon to stem the tide of youth emigration. There is nothing in the budget that gives hope to the rising generation. I think it was Sean O'Casey who once said that Ireland is an old sow that eats her farrow. That statement could also be applied to this generation of planners and politicians, more than to any previous generation, which is a sad commentary on us all.
Recent surveys all over Europe show that the lack of highly qualified personnel is the greatest single barrier to economic development, more serious by far than the scarcity of capital or the high cost of production. We have no such scarcity, our third level colleges are turning out graduates second to none but, because of the failure of successive Governments to match major advances in education with parallel strides in other areas of life, these highly qualified, well motivated young people are precluded from working for the betterment of their own people and the advancement of their own country.
The budget gives a commitment to create 3,000 new jobs in 1989 through developments in tourism, fisheries and industry. I hope this target will be met and, in this context, I appeal to the Minister for the Marine to give some political leadership and to bring to an end the rod licence row that is having such an adverse impact on our tourist industry. Equally, I appeal to the Minister for Tourism to take all necessary steps to put the Swansea-Cork ferry service in place on a permanent basis. Scientific studies carried out by the members of the economic department of UCC confirm that this service is capable of making a major contribution to the local economy in the Cork-Kerry region. There is ample scope for further growth and expansion of the tourist industry in this region, yielding hundreds of jobs directly and indirectly, but if access to the region is not improved jobs will not accrue in large numbers. The putting in place of the Cork-Swansea  car ferry on a permanent basis is essential in the improving of access to this region.
If this service is to attain its full potential its timetable must be made available not later than September in any given year in advance of the time when block bookings are made by travel agents and when brochures and marketing strategies are designed and implemented. We cannot go into another tourist season with the sad spectacle of this year when the ferry service will be put in place long after the 1989 brochures have gone to print and long after leisure fairs and all sorts of marketing occasions at which the service could be marketed have been held. No service would be able to compete with another if it were to be marketed on that basis. It must be confirmed not later than September in any given year that the service is in place. If this service is to be successful that is a most essential pre-condition.
The number of jobs the Minister predicts will be created will not accrue if we continue to carry on in the way we have been carrying on up to now. Certain steps must be taken if these jobs are to accrue, such as the putting in place on a permanent basis of the ferry service and the improvement of access generally to the Cork-Kerry region. Such steps are vital if we are to adequately promote that region. In this respect I appeal to the Minister for the Environment to do something about the condition of the roads in that region. We are talking about tourists who bring their cars with them but the condition of our roads will do little to encourage them to return or to tell their friends that this is a good country to visit.
A natural follow on from the putting in place on a permanent basis of the ferry service is a proper road structure. The Minister now has an opportunity, because of the funds that will be made available from Europe, to improve the condition of the roads in this region and to bring them up to standard.
We also need improvements at the airport. During the past year there was significant improvement there and for that we are grateful but there is room for  further improvement. If there is evidence to suggest that this will be done I will have some credence in the Minister's prediction that 3,000 new jobs will be created in the tourism sector this year. Unless those steps are taken his prediction will just amount to another piece of fiction.
There is very little in this budget that touches on education. The modest increase in capitation grants for primary school children is to be welcomed and in fairness it must be said that this is the first such increase for a number of years, that it will make some small difference and improve conditions in primary schools. For this reason I welcome it.
In the lead-up to the budget there was much talk about poverty. The Minister stated that this was one of the key issues he was going to set about tackling. In fairness, it must be admitted that provision is made in the social welfare area for those hardest hit. I welcome all of these measures, especially the introduction of the new social assistance payments for widowers and deserted husbands looking after their children. This move was long overdue. I also welcome the extension of the child dependant allowance to 19 year olds in full time education. This will be of help to families who are struggling to keep their children in education and bring our benefit schemes into line with other European countries.
While all of these are worthwhile measures in the short term they will do nothing to eradicate poverty in the long term. This budget is not a poverty fighter. We in the Progressive Democrats have argued consistently that the best weapon against poverty is a job. In this context I want to point to our continued failure to recognise the role which our education system plays, inadvertently perhaps, in the perpetuation of poverty. There is ample evidence to suggest that large numbers of early school leavers, who leave school without any qualifications, very soon become unemployable. This is the exact term used by the YEA in a report they published on the results of a survey they had carried out in 1986. Clearly these are the disinherited in our education system  and are condemned to living in poverty. I am aware that the Minister has introduced the Youthreach scheme and for this she deserves our congratulations but I have grave fears that this programme which is tagged on to the tailend of an unsatisfactory school experience will do little to help young people whose standard of education is deficient in the first instance.
The problem must be tackled at source. More resources must be put into primary education, especially in areas where long term unemployment has become endemic. In many local authority housing estates the unemployment rate is as high as 80 per cent. A generation of young people are growing up in homes which are dependent on the State, where they have never seen a parent, or even a neighbour, get up in the morning to go to work and where the concept of the breadwinner is as alien as the concept of a ballet dancer. Our resources must be targeted at areas such as these as a matter of extreme urgency if we are serious about tackling poverty at source. I appeal to the Minister for Social Welfare and the Minister for Education to draw up a package to help needy families with large numbers of school going children so that they would be able to cope when the time comes to fit their children out for school. The cost of uniforms and school books must be taken into account in any such package. I also suggest that the free books scheme must be better targeted than it is at present and I appeal to the Minister for Education to ensure that no child is prevented from continuing in education because of the demand for examination fees.
There are two very demanding periods for families with large numbers of school going children, the first is the first week in September when children have to be fitted out for school. I appeal to the Minister for Education and the Minister for Social Welfare to be sensitive to the needs of parents during these two periods. If we were to target many social welfare benefits much better much of the poverty we are now witnessing in housing estates  could be alleviated. Last September children went back to school one full week before child benefit moneys became due for payment. I would argue that had these moneys become due for payment one week in advance of schools reopening much of the hardship experienced by mothers in trying to fit their children out for school could have been averted. All that was needed was a minor adjustment but because this was not done a number of parents were forced to go to money-lenders for money to provide their children with books, uniforms and shoes. That money then had to be repaid along with interest. Such a problem could be averted if our social welfare system was more sensitive to the needs of parents at the times when there are exceptionally heavy demands on them. The second period when exceptionally heavy demands are put on parents is the time when examination fees fall due for payment, usually in February.
There is now evidence to suggest that young people are dropping out of school as they see no reason for them to continue. One reason they drop out is that do not think the examination, especially the intermediate examination as we knew it, is worth the cost, and rather than put up the money they are drifting away and dropping out of school, and these elements are leading to wide scale poverty.
Throwing social welfare at that problem is welcome in the short term and no doubt will blunt the sharp edge of want in many homes, and that needs to be done, but it will do nothing to hit at the root source and tackle poverty and eradicate it bit by bit. Therefore, my major appeal today is to the Minister for Education and the Minister for Social Welfare to come together to do exactly as I have recommended.
The grant in the budget for the Dublin Rape Crisis Centre is very welcome, but it does more to highlight the financing problems of the centre than to solve any problem. The Minister for Health and the Minister for Justice must face up to the fact that rape crisis centres perform  an essential community service and their funding will have to be put on a statutory basis. They will have to be brought in for funding either directly under the Department of Health or the health boards as part of a community care programme. We cannot leave to chance or to charity the work being carried out by the rape crisis centres. No civilised country would do that; let it not be done in this Christian country. I appeal to the Minister in framing his Finance Bill to provide for that and to talk to his colleague in the Department of Health to make sure that is done. The figure of £100,000 sounds great; it looks great on paper, but it means nothing in the long term.
When I examine this budget from the point of view of its long-term effects and whether it will lead to a betterment of our society on social and economic levels, I argue that handouts of the nature given in it are only stopgap measures and indicate the main, most fatal flaw in it, that is, its lack of any central direction. We are well poised to plan for the future. The onset of 1992 with all the obligations that puts on us as a country should spur us to put our plans in place for the kind of taxation system and regional policy we will have in five years' time. What kind of regional policy will we have in five years? What progress will be made in decentralisation in conjunction with the Structural Funds, or will the Structural Funds just be brought in to this country in a conspiratorial manner and will the moneys be spent in the same way as the millions of pounds from the Regional Funds were spent?
We are being told the climate is right for growth now. That is good, but that is only a precondition of growth. Any farmer in the west who has experienced a very fine summer will say it is a great climate, we had a great summer but having a great summer on its own will not make grass grow in the fields of Connemara. The soil must be right and you must sow the seed, if you are to reap the harvest. I see no seeds of growth, of job creations or of social justice in this budget, and for that reason it disappoints me.
Mr. Dempsey: I would like to take the opportunity of congratulating publicly the new Minister for Finance on two counts. First, his elevation to the post of Minister for Finance, a promotion richly deserved and well earned, and I have no doubt that he will bring the skill, flair and enthusiasm that has marked all his ministries up to now to the Department of Finance. I am not entirely sure everyone in the Department of Finance will appreciate the Minister's industry, flair and enthusiasm, but I feel that Department could do with a little more of that type of skill and flair.
The second congratulation is on the budget he presented to Dáil Éireann on 25 January. Congratulations are due on the production of a very well balanced — in every sense of the word — budget which confronted the four major areas of concern — poverty, reform of taxation, creation of employment and control of the public finances. Practically all independent and responsible commentators have welcomed the budget and acknowledged it as being reasonable and fair and that it will continue the progress towards economic recovery started by the Government two years ago.
It is easy for any Member of the Opposition to highlight areas that should have got more attention or to say, as Deputy Quill has just said, that the Minister spread things evenly over a wide scale, and that, therefore, the budget was not effective. If the Minister concentrated, for instance, on employment creation or on some other aspect of budgetary policy, the same Deputies would say he was neglecting every other area. A Minister cannot win, but Minister Reynolds has produced a budget that is reasonable and has spread the fruits of our improved economic circumstances over a broad section of the community.
One fact that underlines how well balanced and fair the budget is is that the Opposition parties have been able to criticise only two items mentioned in the budget speech, but not part of the budget. I am referring to the child benefit scheme and extending PRSI payments to public servants. The Opposition parties have  made a great deal of play on those two items which, as I say, are not part of this year's budget.
On budget day and since then, we have seen the classic example of Opposition parties clutching at straws and desperately looking for something of which they could be critical. Deputy Noonan in his prepared script which, as was pointed out to him, sounded surprisingly similar to the contributions he made here following the two previous budgets, used a sporting analogy to describe what he felt the Minister had done in the budget. Maybe a more fitting analogy in the Deputy's case would be that of the star player who showed much promise in a practice match and who got his opportunity on the first team but did not live up to his star billing. Now the Deputy finds himself relegated to the subs' bench and, like most people who end up on the subs' bench cooling his heels, does his best to denigrate the man who has taken his place——
The criticisms and predictions Deputy Noonan and his party made about the budget should be seen in the context of his previous responses to the Budget Statements in 1987 and 1988. In 1987 he predicted the fall in interest rates would not be sustained because of the budget that was introduced by the then Minister. He also predicted that there would be no growth in the economy. Further, he predicted that the Fianna Fáil Government would not sustain their programme to control public expenditure. He went back into the mists of time and mentioned precedents showing that Fianna Fáil would not maintain a tight rein on public expenditure.
In 1988 again he predicted that as a result of the budget there would be no growth and he said the budget would be deflationary. He also said it would not inspire confidence in any sector of the  community, nor would it inspire any kind of national consensus. He said this too would deflate the economy. I do not think there is any need for me to underline the fact that all his predictions in the last two years proved wrong and I have no doubt that he will be proved wrong in the coming year. The Deputy's reference to the need for national consensus is rather hypocritical when one considers that he spent most of the last two years trying to undermine the national consensus that had been arrived at by the social partners through their Programme for National Recovery.
Deputy Noonan is aware that this has been the most successful Government in the history of the State, that they have achieved the stabilisation of the debt/GNP ratio two years ahead of the ambitious target originally set — one he said would not be achieved — and that the Exchequer borrowing requirement is the lowest for 30 years. Deputy Noonan tried to claim credit for a reduction in the EBR but no matter how creative his mathematics are he must accept that the Coalition only succeeded in reducing the EBR from 15.5 per cent to just under 13 per cent in their four years in office.
Mr. Dempsey: I am referring to the EBR, a different thing entirely. In addition, the current budget deficit is the lowest for ten years but, more important, it is only half the level that pertained in 1986 after four years of Coalition Government. The achievements by the Government have led to a massive upsurge of confidence in our economy and the resultant boom experienced in industry and commerce has led to a greater degree of stability and realism not just among the business community but among workers.
In the course of his contribution, in response to the speech of the Minister for Finance, Deputy Noonan told us what Fine Gael stand for. He told that they stood for social justice but I am sure he  will accept we all stand for that. He told us that Fine Gael expect the development of sectoral policies for agriculture, tourism and so on but I should like to ask him where he has been for the last two years. I thought he was an expert on all Fianna Fáil policy documents, from The Way Forward onwards——
Mr. Dempsey: I do not think Deputy Noonan read any of the Fianna Fáil documents but based his comments on one or two lines from them. In the course of the last election campaign Fianna Fáil produced policy documents for the sectors referred to by Deputy Noonan and many other sectors but the Deputy got so caught up in trying to knock the Programme for National Recovery, and the element of the national pay agreement in it, that he neglected to take note of the initiatives taken in the various sectors to develop the economy. I can only conclude that he did not read the document or that he missed out on the important items in it. I suggest that, as Opposition spokesman on Finance, he should have a good look at that document.
I should like to refer to the social welfare provisions in the budget. The House will agree that one of the main aims of the budget was the launching of a concerted effort to tackle poverty. Very often when people refer to the poor or to poverty they only think of those in receipt of social welfare or health board payments. I agree that those in purely monetary terms could be classified as poor and the thrust of the Government's policy is to make the maximum amount of resources available to help those people, but it can be fairly argued that in many cases they are not the poorest in our socoety.
Very often the poorest are those on low incomes, those who may be in receipt of an income in excess of social welfare recipients but who lose out on the benefits social welfare recipients obtain without question. For example, what value can be put on a medical card given to a couple with four children? In my view it is of  considerable benefit to a family if they do not have any medical expenses. We can put a monetary value on fuel vouchers, about £130, but we canot put such a value on reduced rents, reduced service charges, clothing and footwear vouchers and so on. Those benefits are available, almost as of right, to those in receipt of social welfare benefits but not to those on low incomes, those who are slightly above the guidelines for medical cards.
It is my experience, and I am sure it is the experience of most Members, that those on social welfare find it easier to obtain the supplementary welfare allowances paid by health boards through community welfare officers than those who are in employment, even if their income is the same. Most community welfare officers say that the fact that a person has a steady income from a job, irrespective of the level of the income, means that they will not be given assistance under the supplemetnary welfare allowance scheme, footwear vouchers or clothing vouchers. That raises a serious problem but I am pleased it has been tackled in some way in the budget.
The family income supplement scheme, introduced by the Coalition, is a worthwhile one but I should like to know why the uptake under the scheme is abysmally low? Why, from the outset, was that scheme never fully utilised? Is there a problem about advertising it? Do we need to give more information to employers? In my view something will have to be done to publicise the scheme. I suggest that a mobile information unit, as was used to publicise the Single European Act, be used throughout the country to publicise the scheme. I am pleased that the Minister intends to improve the benefits under the scheme but it should be publicised more. I suggest that the Minister increase the number of children taken into account for payment under the FIS. At the moment the limit is five children and there is no allowance for any further children.
Despite the attacks that have been launched from various sides, this budget has been instrumental in assisting those especially in need. I accept that increases  in social welfare are never sufficient when poverty still exists, but the budget underlines the Government's commitment to tackling poverty. The yardstick that should be used is how generous the increases are in relation to our economic climate. Taking that as the yardstick, the Minister has been very generous.
In relation to poverty generally, the school of politics that believes we can solve poverty by throwing money at it is very wrong and misleading. Perhaps many of the amateur economists who were making submissions and statements prior to the budget, might have been better employed drafting a proper poverty programme rather than indulging in amateur economics. Over the past week I have listened with some amazement to the contributions by Opposition Deputies relating to social welfare increases and the general thrust of the budget towards helping the poor. I could be forgiven for wondering it any Opposition Deputies had actually read the budget speech. In a time of major cutbacks the Minister has succeeded in putting together a package costing about £71 million. That is a significant figure because the submission made by the Catholic Social Services Council prior to the budget suggested that 20 per cent of the windfall tax amnesty payments that came the Government's way last year should be devoted to the alleviation of poverty. That figure of £71 million is approximately 20 per cent of the windfall to which they referred.
It is clear from the budget that the Government have been mindful of the various responsible submissions made prior to the budget. In the CSSC document to which I referred earlier, concern was expressed about those on low incomes and special treatment was recommended for them. This was acknowledged in the budget by way of a new scheme of tax exemption limits for familities on low incomes. The same document expressed the opinion that public servants should be brought within the PRSI scheme. The Minister indicated that he would hold talks on that matter over the next few months. These are just  a few examples of where recommendations made prior to the budget have been considered. These examples adequately illustrate and underline the Government's commitment to tackling poverty.
Poverty cannot be tackled in isolation from the remainder of Government policies. Over the past two years the Government have shown their commitment to tackling the problem by implementing a wide range of measures to alleviate poverty. Many of the groups who made submissions prior to the budget recommended the implementation of the recommendations in the Report of the Commission on Social Welfare, but most groups seem to have only read the recommendation on a minimum income level. If they read the whole report they would see that the Government, not just in this budget but in other budgets and in social welfare legislation, are implementing many of the recommendations and are committed to implementing all the recommendations in this report. The criticisms levelled at the Government relate not so much to the implementation of the recommendations as to the fact that they have not committed themselves totally to all the recommendations and to a time scale for introducing them. It is unreasonable to expect the Government in the current circumstances to say that all the recommendations will be implemented by a certain date. We are in a very volatile situation with 1992 fast approaching. Changes will take place and many of the recommendations, if implemented, may not even be relevant in two or three years' time.
Many groups have been calling for tax reforms in the context of social welfare increases and have advised that increased expenditure on social welfare by widening the tax base is desirable. They suggested that the corporate sector should be more heavily taxed, that accelerated capital depreciation, section 84 relief and export sales relief should be abolished, that we should increase the 10 per cent corporation tax rate, reintroduce the wealth tax and a variety of measures  aimed at increasing the tax take. There is merit in the proposal to widen the tax base or to get greater tax from the corporate sector, but if we were to implement all the recommendations made by these groups, who would pay for the increased unemployment when many firms go to the wall or decide to invest where the tax régime is much more favourable? We cannot isolate certain areas without looking at the wider effects.
Only two and a half years ago when people with money to invest lost confidence in this country a sum of £1.5 billion was leaving the economy annually. Do we want to return to that? We cannot afford to return to that. While I am not against increasing and widening the tax base it would be impossible to do all the things that have been called for.
Some of the statements made in relation to tax reform have amazed me. Fianna Fáil made one commitment in their last election manifesto in relation to tax and that was that two thirds of taxpayers would be put on the standard rate of tax. Last year as a result of changes in the tax system 63 per cent of taxpayers were put on the standard rate. That percentage is held this year but the important change is that the standard rate has now been reduced to 32 per cent for the first time in 20 years. One can juggle with tax reform proposals but what really counts is the proposal that puts money into the taxpayer's pocket.
Some of the people criticising the Government were in Government previously and their record is nothing to boast about. They abolished the 25 per cent tax rate, created a 65 per cent tax rate and now they are lecturing us about the disincentive of a 58 per cent tax rate. This rate was reduced and although 56 per cent is still too high a tax rate, it cannot be changed overnight. The Government's policy of a steady reduction rather than a hasty reduction to 25 per cent, as some parties are advocating, is the appropriate one for this country.
The main Opposition party criticised the 1988 budget on its one short reference  to unemployment and employment. There was criticism of the then Minister for Finance that those budgetary provisions would do nothing to alleviate the problem of unemployment, another prediction proved wrong because, in the year to end April 1988, 6,000 additional people were employed. All the indications are that that growth will be sustained throughout the year. Whether that figure be 6,000 or 3,000 is important because it constitutes the first increase there has been in employment since 1980. There were 20,000 jobs created in industry last year and the budgetary initiatives taken this year are likely to increase that figure.
Confidence in our economy is being restored, underlined by the fact that over 500 small industries were established last year generating increased employment. The sectoral initiatives and developments proposed in this year's budget will also help to increase employment. One of the new features of this year's budgetary provisions is the initiative announced by the Minister with regard to young entrepreneurs seeking bank loans. That announcement is most encouraging and should be of great assistance to such people. I would appeal to the banks to adopt a more entrepreneurial attitude to prospective participants in that scheme. My fear is that that initiative will be drowned in the bureauracy of paperwork in the banks, and be lost or buried by a plethora of bank managers who, having been stung in the early eighties or late seventies, may be most reluctant to incur any chance or risk. My major criticism of the banks is that they are reluctant to incur such risk. They are somewhat similar to insurance companies who will insure one as long as one does not lodge a claim.
I would appeal to the banks to make every effort to ensure the success of this scheme. I would go so far as to suggest that the Minister might encourage them to err on the side of the young entrepreneur rather than engage in a book-keeping exercise. Indeed the Minister might encourage banks to offset any losses that might be incurred under the  provisions of this scheme against the bank levy now obtaining. In other words, if, after two years' operation of this scheme, it transpires that banks have suffered losses of, say, £1 million, there would be notice taken of that fact and the bank levy correspondingly reduced. Some such provision might encourage banks to take a broader view of young people's suggestions.
Much of the talk we hear about the creation of employment reminds me somewhat of what has pertained with regard to tackling poverty. Of course, some people contend that the solution to all of these problems is merely to throw money at them and they will disappear. But real sustainable jobs will arise only as a result of economic expansion. Since the early seventies there has been a stable relationship between variations in economic output and jobs. Experience since then underlines the fact that a growth rate of approximately 3 per cent is essential merely to maintain employment. It has also been well established that every 1 per cent growth above that level creates approximately 10,000 extra jobs; the relationship is clearly defined. That link has been established not merely here but within the EC generally and in Japan. Therefore, a growth rate of 2 to 3 per cent annually is essential in order to maintain employment levels and that will have to be augmented further if we are to eat into the problem of unemployment.
Mr. Shatter: I am obliged to Members. This debate affords time not only to look at the future but also to reflect on the financial realities we face at present and how we got here. Having listened to numerous speakers on the budget giving what is now, from the Government side,  their new version of financial orthodoxy, it does one a degree of good — indeed it brings the debate back into the realm of reality — to put on the record of the House again that the foundations of our current financial difficulties were laid by Fianna Fáil, in Government, in the period 1977 to 1981. In 1982 they came into Government and failed to confront the issues again within that brief period of administration. Between the years 1982 and 1987 Fianna Fáil, in Opposition, did everything possible to aggravate our economic difficulties.
It is very curious to listen to the protestations of innocence at the problems we have on the part of members of the party opposite and indeed Government Ministers at the highest level. Shortly after his appointment as Minister for Finance we had the proud boast from Deputy Reynolds that in 1977 he had not actually read the Fianna Fáil Election Manifesto. That was an interesting public admission. I wonder how many other Members of this Government will have to make similar public admissions? For example, will we hear from the Ministers for Social Welfare, the Environment and Health, will we hear from the current Minister for Defence, when he makes an offering on the budget, as to whether he read the 1977 Fianna Fáil Election Manifesto? I suspect it is an essential prerequisite to be a member of this Cabinet to swear that one was politically illiterate in 1977 and that from then onwards all the way through to 1987, like the three monkeys, one heard no evil, spoke no evil and saw no evil. What Members of Fianna Fáil were actually telling this House during the years 1981 to 1987 apparently is to be removed from political consciousness. That is a very curious approach to Irish politics but, of course, it has a precedent.
I would recommend as essential reading to all members of the current Cabinet George Orwell's book entitled 1984 which, despite its title, is not out of date. In the appendix to that book — which I particularly commend to the Ministers for Finance, the Environment and others — there is reference to what are known as the principles of “new speak”. “New  speak” was a language invented by Orwell for a particular political régime that could turn facts on their head, in effect providing a formula for pretending that everything they did in the past never happened.
Mr. Shatter: It would seem to me that “new speak” is the order of the day from the Fianna Fáil Party. Fortunately the Official Report for the period 1977 to 1987 is littered with comments by the present Taoiseach and his Cabinet colleagues confirming — lest there by any doubt about it — that the difficulties we experienced derive from their behaviour. We have been led to believe that there is now a revolution in Fianna Fáil economic thought. There is a sort of political double think now. The creators of our problems have become our political heroes because they are now doing something to solve those problems. The reality is that what they are doing to solve the problems is being done solely because of the approach taken by Fine Gael in Government and in Opposition and because Fianna Fáil are in a minority Government and are forced to face the economic realities. Occasionally this new political philosophy escapes them, and on occasions when Ministers in this Administration are let loose and when this House is not exercising controls, they regress to their old ways in the best traditions of Fianna Fáil of circa the seventies and early eighties.
We now have another incipient financial scandal that no one has as yet taken any major notice of. I was very interested to hear the contribution made to this debate by the Minister for the Environment. What was curiously lacking in his speech was any reference to lottery moneys. Lottery moneys were disbursed and promised at a great rate during 1988 by members of the current Administration. Indeed the way they dealt with lottery moneys became such a scandal that the matter had to be brought into  this House and, if the Labour Party had not bolted on the night in question, the Government would have lost a vote in regard to the manner in which they were dealing with lottery moneys. There were proposals that were supported by all parties other than the Labour Party to force the Government to take a different approach. The Labour Party got a deal which was that an all-party committee would be formed to look at how future lottery moneys would be disbursed and this committee have now reported. The Minister for Finance has been very careful to avoid confirming that Fianna Fáil in Government would implement any of the recommendations made by that committee and was notably evasive on that issue during Dáil questions that he had to deal with this week. What has not yet publicly emerged is the reason Fianna Fáil would be willing to set up a committee at all. Once they had their hands on the loot, were they not going to distribute it around the country in whatever way they thought was politically beneficial and expedient to their own party? Why, all of a sudden, this new approach, the holding of hands with the Labour Party? Of course, we have now sussed out the reason. I am reliably advised that the Minister for the Environment in 1988 not merely spent all the lottery moneys that accrued to the State in 1988 but has already spent any moneys that might accrue in 1989 and 1990. I am told that the Minister for the Environment has overspent on lottery funds to the extent that any group who now approaches the Department of the Environment in any part of the country, even in County Mayo, seeking lottery moneys for a worthwhile local project are being advised that there is no point in making application because in 1989 the Department of the Environment will have no new funds to allocate from the lottery and will probably have no new funds in 1990, because the 1988 allocations cover the projected income from the lottery that would be siphoned through the Department of the Environment for the years 1989 and 1990.
I want a Government Minister to come  into this House to explain how it is that the Minister for the Environment has, in 1988, spent the total projected lottery moneys not just for 1988 but for 1989 and 1990. I want to know what other Minister in this Government has been so profligate with lottery moneys. I want to know if any new organisation, through any particular Department, will get any assistance through lottery funds in 1989 and 1990. Has it all been promised? What happens if there is a reduction in the income from the lottery? Will it be the case that some of the promises will not be met because the funding will not be there? Will some of the European structural funding be siphoned off to meet lottery promises already given?
This is an extraordinary situation. Could it be the Government are now willing to agree to new procedures for the disbursal of lottery funds because they know some Departments will have no lottery funds to disburse this side of the next general election? I want an explanation. Before this debate finishes in this House at 5 o'clock this evening I want an explanation as to why groups and individuals who are contacting the Department of the Environment are being told there is no point in seeking lottery moneys for any projects. I want to know if there is a similar problem in other Government Departments. I want to know exactly what new moneys this Government project will be available for new disbursement through lottery funding in 1989 and 1990; or I want confirmation that they have so overspent lottery money that there will be no new allocations in 1989. That is not a difficult one for the Government to respond to. It is not a difficult one for the Minister for the Environment to explain himself on. We have had no mention of the lottery from any Minister in any speech delivered on this budget debate to date. The absence of any such mention indicates to me that the problems of the Department of the Environment are replicated in other Government Departments.
This budget which was so well hyped  on the day it was published and which appeared to give all things to all people has now collapsed like a lead balloon. It is a budget that will be remembered for one thing and one thing only. It will be remembered for the attempt made by Fianna Fáil to abolish child benefit. We have heard in the last few days different Ministers saying different things as to what the Government's intentions were. Yesterday we heard the Taoiseach's so-called clarification. We have had seven days of Government confusion and the Taoiseach's clarification of yesterday simply added to the confusion. Who are we to believe at this stage? Are we to believe the Minister for Finance, the Minister for the Environment, the Minister for Social Welfare or the Taoiseach? What really are the Government plans as regards child benefit?
Outside this House child benefit is recognised as the only substantial recognition of the expense incurred in families rearing young children. For many mothers it is a symbolic, albeit financially inadequate, recognition of the work they do in the home. For people in employment it is the only major recognition of the fact that it costs more to support a family with children than a family without children. The couple who have £15,000 gross per annum and no children and the couple with £15,000 gross per annum and two or three children currently pay exactly the same tax. Even in the very modest proposals made for those on incomes of £6,000 or less, the vast majority of young couples will get no recognition of the expense of rearing a young family. I believe it is the policy of this Government to phase out and abolish child benefit. I believe the Government have given no consideration to the social implications or the implications of that for mothers in the home. We have heard that various limits will be fixed. The latest limit is £30,000. Any family with a gross income over £30,000 per annum will not get child benefit next year and will not get child benefit the following year, if and when the Government make a decision; anyone under this limit will continue to get it. The reality is there are so few  families with incomes over £30,000 that any financial saving from not making payments to families over that limit would be offset by the administrative costs of implementing a new system to stop making child benefit payments to such families. Administratively it could cost more to change the whole system in that context. The £1 million that would be saved would be offset by major administrative expenditures in restructuring the child benefit scheme. If it was truly the Government's intent to affect only those in the £30,000 and upwards bracket I do not believe this would have been suggested or floated at all.
What the Government intend to do with child benefit is what they also intend to do with mortgage interest allowance. Mortgage interest allowance was reduced to 90 per cent in the 1987 budget. It has been reduced to 80 per cent in the 1989 budget. Presumably next year it will come down to 70 or 60 per cent. If one starts abolishing child benefit for people in the higher income groups it is a very easy thing, having put the legislation on the Statute Books to come into one's next budget and reduce the limit to incomes of £20,000 or more, and then reduce it to incomes of £10,000 or more. At the end of three budgets the child benefit would be effectively abolished. What we should be doing is ensuring that we have a coordinated social welfare and tax system which recognises the reality that families with children incur more expense than families without children and ensures that families with children have some additional leeway financially. This Government have not addressed that issue just as they have not addressed most of the issues that are relevant to this area.
A number of other matters arise. As I said, I wish to give my colleague Deputy Sheehan an opportunity to speak. One area in which there is ongoing concern — and which was not in any way offset by the contribution made by the Taoiseach yesterday — is that of the European Structural Funds. There is an extraordinary veil of secrecy hanging over the specifics of what the Government are going to do in this area. The Taoiseach,  in his speech yesterday, listed a series of objectives for the Structural Funds. The Minister for the Environment, our super-Euro co-ordinator, said nothing of substance in his speech about the European Structural Funds. He made a vague mention of roads plans that he has not yet published.
The Taoiseach listed a series of objectives, but they are not the specifics, or the meat of the integrated national programme that must go to Europe by 31 March. They are not the meat or the specifics of the seven designated regional programmes. It is not acceptable that secret plans be submitted by the Government to Europe for the expenditure of between £3 billion to £4 billion on the economic development of this country without this House having an opportunity to see those plans, debate them, identify priorities in them, amend them if necessary and ultimately, after the plans have gone to Europe, conduct a monitoring role to ensure that the objectives laid down for the Structural Funds are being met.
It is not acceptable that seven sub-regional groups, working parties, advisory groups, and a group of consultants in Dublin are preparing plans without knowledge as to whether any of the content of those plans will ever see the light of day in Europe and whether they will ever form part and parcel of the submission the Department of Finance will make on 31 March 1989. It is not acceptable that local authorities throughout the country will be excluded from playing any monitoring role after 31 March 1989. It does not all stop on 31 March. There is a need to ensure that the objectives and the priorities laid down are truly being met during the four to five year period of operation of the different integrated programmes, be it the national programme or the regional programmes. The Government, for reasons best known to themselves, want to keep the whole matter secret and that is not acceptable in a democratic society. Contrary to what the Taoiseach said, it does not comply with the strict criteria laid down in Europe that there be a degree of local  input and democratic debate as to the content of plans.
An extraordinary admission was made by the Minister for Finance in reply to a Dáil question regarding the Dublin consultancy programme. About £300,000 of public money has gone into appointing consultants to prepare a draft integrated programme for the Dublin region. The Minister of State with responsibility for European Affairs announced in October that those plans would be completed by the end of December. This week it emerged a brief plan had been put together which was leaked to The Irish Times and it has not been officially published. We do not know to this day whether that is the total plan or whether more is available. That brief draft plan was leaked, indicating certain identified priorities for Dublin.
We are now told that the full plan the consultants have been instructed to prepare will not be available until some time in March 1989. What input can a plan prepared by consultants, which will not be completed by the middle of March have into a national plan or the Dublin regional programme that has to go to Brussels by 31 March? What public debate can take place on that? What political priorities can be identified? What will happen in some of the other regions? In Cork and Waterford considerable work has been done by the local authorities in putting together draft programmes. Some local authorities have gone to the trouble of employing consultants to assist them in preparing proposals for their own integrated sub-regional programmes. What input, in reality, can any of these programmes have to a national programme that is to go to Brussels by 31 March?
The Minister for Finance was confused in this House as to whether or not the sub-regional programmes had to be completed by 31 March. The reality is that they do if they are to have any relevance to the national programme. Otherwise the sub-regional programmes will become incidentals of the national programme. In so far as there is something  in them that coincides with a Government or Department of Finance decision, they may have some chance of being implemented; in so far as they vary from the national programme, they will have no chance of being implemented. My belief is that a cosmetic exercise is being conducted by the Government. Local authorities, county managers and consultants are working at a great rate to give an appearance of democracy to the planning process that the Government have put together, but the reality is that Government will take absolutely no notice of any of the plans that are being prepared. It is absolutely scandalous the way the plans for the structural programmes are being dealt with.
The ineptness of the Government is seen in the context of something that is of very great importance in regard to the national plan and the sub-regional plans. The National Roads Authority were formed in the summer and advised by the Minister for the Environment that the Government wanted their recommendations for the national roads programme by September because a blueprint for roads was to be published in the autumn. The blueprint for roads is relevant to the major infrastructural building works that are required and that were referred to by the Taoiseach in the context of the structural programme. The blueprint did not appear before the end of 1988. We were told by the Taoiseach yesterday that it may be published in June. The plans have to be in Brussels by 31 March. What relevance will that blueprint have to the national programme or the sub-regional programmes? How will any county manager or local authority know what the Government's roads priorities are in the context of putting together the programme that is to go to Europe? They will not know. This is another example of the totally insane secrecy that is attached to the Government's approach.
The profligate nature of the way the Government and some Ministers have dealt with lottery funds gives rise to great concern that the Structural Funds will be  misused and abused, ultimately, in the same way.
Mr. Shatter: I would hope, in the weeks coming up to 31 March, this Government will reconsider their position and their approach and will allow a true democratic input into the proposals to be made to Brussels. I also hope they will recognise that, in the area of a major economic programme such as this, this Dáil has an input, is entitled to an input and is entitled to see in draft form the proposals the Government intend to furnish in the name of this State to Brussels for financial help. That is absolutely essential. If it is not done the State will be clearly at a major disadvantage compared with the regions in the rest of Europe which require structural funding.
In the context of roads, we have already seen the Government's inability to come to terms with what is necessary in Brussels. Speakers on the Government side have been boasting about the additional allocation to roads made in the budget. What nobody has said is that the Government reduced the 1988 capital allocation on roads to £120 million. In 1987, when this Government inherited Estimates prepared by Fine Gael in Government, it was £136 million. The £120 million allocated in 1988 was again repeated in the 1989 Estimates. The additional financial allocation makes up the difference between the inflation rate in 1987 and the value of money today.
When the Government Ministers went to Brussels a couple of weeks ago they discovered that if they did not make an additional financial allocation, we would not get additional funds from Europe for our roads. They learned that you cannot replace the normal domestic expenditure, the roads expenditure we had in 1987, with European funding and that the Structural Funds are all about additionality and allowing infrastructural development to take place for which otherwise there would be no funding.
 An alarming report which, apparently was confirmed by a Government Minister, appeared in The Irish Times on Friday last where a spokesperson for the Department of Finance confirmed that a 5.4 per cent allocation to Ireland was the allocation out of 80 per cent of the total funds for the EC Regional Fund. This grossly inadequate allocation due to the Government's failure to publish their road plans and their failure to have a clear view of what matching finance could be provided vis-à-vis regional funds coming from Europe has resulted in less moneys being allocated under the Regional Fund than would have been available if the Government had done their job properly.
Mr. Shatter: Thank you, a Leas-Cheann Comhairle. I have been advised by Deputy Sheehan that he will be speaking later and I will not be sharing my time with him. This Government's record in the manner in which they have been dealing with matters relating to the European Communities gives no confidence that they will get it right in the area of the Structural Funds.
Mr. Shatter: The reality is that they are keeping it secret because they do not want the inadequacies of their approach to become public knowledge. The issue of European Structural Funds is too important to be exploited by Fianna Fáil for the benefit of the Euro election candidates. I hope that a different approach will be taken by the Government.
In the area of taxation and social welfare in this budget the Government have clearly failed to make the radical choices they should have made. The need for a total overhaul of our tax and social welfare system, if we are to truly boost employment and take major steps towards the elimination of poverty, was not recognised. The essential need to  remove inbuilt poverty traps within our system and to eliminate employers disincentives to job creation was not confronted. The failure of the Government was very adequately summed up by the Conference of Major Religious Superiors in their response to the budget which states:
In its 1989 Budget the Government has failed to grasp the possibilities of this historical moment. All Government decisions can be judged on the gospel guideline that “By their fruit you shall know them.” The Budget is no exception. Evaluated on this basis we believe that Budget 1989 will result in a third of our population continuing to live in poverty.
The steps taken in the budget will have very little impact on employment creation at all, if any, it will be marginal. I think it is very sad that the Minister for Finance did not have the imagination to take the radical steps necessary to ensure that in the area of taxation and social welfare a very real contribution will be made, both to job creation and to the elimination of poverty. He identified three priorities which he wished to address: to reduce poverty, to increase jobs and to transform taxation.
This budget has abysmally failed to meet any of those priorities or objectives. It is my belief that when we come to the 1990 budget — if this Government are still in office — and we look back over the 12 months we will see 12 months of lost opportunities, 12 months sacrificed by a Government afraid to make imaginative decisions, a 12 months sacrifice by a Government afraid to allow a real input  by elected representatives in this House and outside to the development of the EC structural programmes. They have tinkered with the system and have run away from taking decisions that could have dramatically tackled the problem of unemployment. In other areas they have reneged on their social responsibilities. In the area of housing, for example, the lack of funding means that this Government are relying on emigration to solve the housing problem. To those who are unemployed they are saying, we cannot provide you with the jobs and we will not provide the economy with the stimulus necessary to create jobs — the Government cannot provide jobs but they can stimulate the economy by economic decisions taken; when we do not have the imagination to do that we will not even guarantee you will have a roof over your head.
This is a very sad budget and one of lost opportunities but within it there are worries and dangers as to what will happen to us in 1992. If this Government do not get their integrated programme correct, if the wrong decisions are made, and if the wrong priorities are identified, instead of 1992 proving to be a major opportunity for this country it will prove in the end to create additional economic difficulties for us. That must not happen and we, on this side of the House, will do everything possible to seek to ensure that it does not.
Minister for Defence (Mr. Noonan,: Limerick West): There is an old adage which has particular relevance to the economic strategy being pursued by the Government: “If it works don't fix it”. I can think of no more appropriate response to those who feel that the budget introduced by my colleague, the Minister for Finance, on last Wednesday, should have pursued some different course. The 1989 budget is part and parcel of a strategy which will restore this country to prosperity. There is no point in anybody contending that they support the Government's overall strategy on the  one hand while disagreeing with the specific measures necessary to pursue that strategy on the other.
There is always a danger that success can go to your head. In this instance, the danger is that the Government's success may have such an effect on the Opposition. It is true that our borrowing requirement has been reduced; that unemployment has begun to fall; that exports are booming. It is also true that the national debt remains at a staggering £24 billion; that emigration continues at an unacceptably high level; that this coming year the deficit will be £819 million. The Government's room for manoeuvre remains limited.
The cornerstone of the Government's economic policy is, of course, the Programme for National Recovery. In order to succeed in the task of rebuilding the economy, it is essential that the programme be adhered to. I am confident that it commands widespread support among all parties in the House and that no responsible Deputy would wish to undermine it either directly or indirectly. One of the central factors of the agreement is the procedure for settling public service pay claims. My colleague the Minister for Finance has already spoken of the need to maintain strict control of the public service pay bill which currently stands at approximately £3,000 million. Should cost of pay in the public service run out of control, all of the gains which have been made in the last few years would be eroded. Our economic targets would become unattainable and all of our sacrifices would have been in vain. For this reason, the programme strikes a fair balance between the legitimate right of public servants to just pay levels and the need to control spending.
This issue is of particular importance in my own area of responsibility. I would like to take this opportunity to set the record straight with regard to the issue of Defence Forces pay and how the recent special pay award fits into the Government's overall budgetary strategy.
Before saying any more I would like to say that I fully understand how Defence Forces personnel and their families may  have become thoroughly confused over this issue. Never has the settlement of rates of pay for any group of State employees become the focus of such a barrage of ill-informed and, at times, contradictory comment. I am sad to say that certain Members of this House have played prominent roles in generating the fog of confusion which surrounded the whole issue of Army pay.
Prior to the setting up of the interdepartmental review, Defence Forces pay had been linked to middle management civil servants for many years. This arrangement was adhered to throughout the last Coalition Government. Apparently Deputies Bell and Connaughton had no trouble supporting this arrangement between 1982 and 1987.
The pay and conditions of members of the Defence Forces continue to be maintained at a high standard. The remuneration of the Defence Forces has kept pace with that of other sectors of the public service. The pay of a recruit is now almost £121 a week rising after about 14 weeks basic training to just under £140. On advancement to Private 3 Star, which usually takes place during the first year of service, gross pay rises to more than £145, while after 3 years' service the gross pay of a private is more than £159. I am sure that the House will agree that these rates of pay are reasonable
The year before, on 10 July 1985, (Volume 360, No. 6, column 1329) his predecessor expressed similar sentiments. Deputy Connaughton was a member of the Government on whose behalf those statements were made and Deputy Bell was a supporter of that Administration as his party participated in it. What was said on those occasions about public services increases being passed on to the Defence Forces was of course true, in other words the Defence Forces maintained their relative position in the pay area.
Over the years all standard and grade awards provided for the Civil Service have been passed on to the relevant ranks of the Permanent Defence Force. The last special review — over and above those increases which were routinely granted — was undertaken in 1979-80, again by a Fianna Fáil Administration. That review culminated in substantial increases being given by the Government in April 1980. The next special review was the one undertaken by the present Government. In between, I repeat, all other awards were as a matter of routine passed on. The net effect of this was that the Defence Forces maintained their relative position and as stated by the Minister for Finance in his Budget Statement, the Defence Forces in the recent review have been treated as a special case and indeed rightly so. Suggestions to the contrary are misleading and indeed irresponsible in the circumstances. The extra cost this year will be £12.5 million; in a full year it will amount to £25.7 million. This puts in perspective the special position of the Defence Forces. On two occasions, in 1979 and again this year, Fianna Fáil have made special awards to the Defence Forces over and above the awards that have been passed on routinely. It rings very hollow that Members of the Opposition parties are criticising the present pay awards.
The Fine Gael spokesman on finance in his contribution on the budget referred to Army pay. He talked about the Army being treated disgracefully and asserted that the situation is dangerous. If it were — and I do not accept that it is — it would be due to the sort of disgracefully irresponsible nonsense put out by the Deputy and some others of his party. The genuineness of his concern may be  gauged against his record on behalf of the Defence Forces while in Government. Playing politics in this matter is deplorable and is not in the best interests certainly of the Defence Forces. The Defence Forces have served this nation and successive Governments nobly and well. They are not to be treated as a political football.
Considering the sensitivity of the issues involved I would have expected that Deputies opposite who have been condemning the recent award would have exercised some restraint and would have at least ascertained the facts and put them in their correct national perspective, instead of trying to make political capital out of the Defence Forces and doing so on quite wrong assumptions and interpretations. The assertion that Defence Forces pay was allowed to fall way behind that of other public servants during the eighties is untrue. Indeed, to say so is an unfair criticism, of the last Coalition Government.
In June of last year, as I have said, the Government decided to set up an inter-departmental review to consider the whole area of Defence Forces pay. The recommendations of this committee have been implemented in full, with one minor exception. In addition to the committee's recommendations, Defence Forces personnel will also receive the general round increases provided for by the public service pay agreement. All in all, the average total remuneration of other ranks personnel was increased by about 9 per cent from 1 January 1989. By 1 July 1989 the cumulative increase will be around 10 per cent rising to slightly more than 21 per cent on full implementation. This then is the factual position with regard to Defence Forces pay. I would like now to deal with some of the myths and allegations which have grown up around this issue.
The first of these myths is that the Defence Forces pay award is really worth only 2 per cent because they would have received 10 per cent in any case under the system of linkages which already applied. Deputies will be interested to know that to implement the  system of increases which would have been granted had the pay committee never existed would have cost £2.5 million in 1989. To implement the committee's recommendations will, in fact, cost £12.5 million in 1989. To suggest therefore that a package of measures costing five times as much is worth only 2 per cent is certainly pure nonsense. Given the persistence of the misrepresentation on this point, I must conclude that those responsible know nothing about the system of pay and allowances in the Defence Forces and that, having been told the facts, do not wish to acknowledge the true position.
The second myth that I should like to dispel is that there was some alternative open to the Government on the issue of phasing. All but one of the increases in allowances for duties of a military nature are being implemented immediately and have been paid, as have all arrears from 1 January last. In the area of basic pay, the Government do not have the complete freedom of movement implied in many of the comments which have been made. Deputies either support the provisions relating to public service pay set out in the Programme for National Recovery or they do not and are prepared to tolerate a free for all on public service pay. The Government's position is clear. We stand for restraint, tempered with fairness.
It has also been alleged that, by increasing the cost of obtaining discharge by purchase, I have sought to make prisoners of the Defence Forces. This is utter rubbish. The decision to increase these charges was taken in principle at the end of last year. The cost of discharge by purchase was last increased in April 1981 and I am sure that a review was long overdue.
Much has been made of the decision to increase the maximum rate of discharge by purchase from £1,200 to £5,000. I would point out, however, that this rate applies only to personnel who have received full-time apprenticeships with the Defence Forces and who wish to leave before their term of engagement is completed. These are personnel with  very valuable skills. The cost to the taxpayer of training these personnel greatly exceeds £5,000 and in some cases can reach £70,000. Again I want to emphasise of course, nobody is obliged to buy his way out of the Defence Forces; the personnel concerned are entitled to free discharge once their terms of engagement expire. There are, therefore, no financial prisoners in the Defence Forces.
It has been alleged that because of the controversy surrounding pay, there is a crisis in the morale of the Defence Forces. Many commentators, both inside and outside this House, have sought to inject the maximum amount of drama into the situation. Many inaccurate and indeed misleading statements have been made using intemperate language. Today, for example, a national newspaper carries a completely misleading statement about numbers leaving the Defence Forces. The factual position — and I want to place on the record of this House that I must deal in facts — is that during January the total number who left was 81. To add to this the number who applied for discharge, that is, those who may leave in February, is to engage in double counting. I have to deal in facts and I intend doing so.
I would strongly ask all who feel obliged to make public statements on this issue to stop and consider the consequences of their actions. I would particularly appeal to Opposition spokesmen to reflect on the wisdom of using the Defence Forces as a platform from which to attack the Government. The Defence Forces occupy a unique position of importance. They should not be used as a political football. This principle has been accepted since the foundation of the State. I hope that it will continue to be observed.
Since the Government announced their decision with regard to Defence Forces pay, I have refrained from commenting on many of the more absurd allegations which have been made. I have felt constrained, not because I regard the issue as unimportant but, on the contrary, because I regard the Defence Forces as too important to be dragged into a party  political dog fight. I would ask Deputies to reflect on this. If they are sincere in their protestations about Defence Forces morale, they should weigh carefully the long-term effects of their own actions in that regard.
During the seventies and early eighties, we as a people were unwilling to wait until our economy could afford to provide the standard of living and social services which we observed in other, wealthier countries.
Mr. Noonan: (Limerick West): Now that the Government have succeeded in repairing much of the damage to the economy, we need patience as never before. I hope Deputy Kelly will understand that. There has been talk that, since the immediate crisis in the public finances has been overcome, the agenda needs to be broadened. I fear this could very easily become a pressure to increase spending beyond affordable limits, or to reduce the level of taxation below what is necessary to pay for State services. I repeat, we must remain patient. The economy is not yet in a position to afford substantial give-aways to any group.
Mr. Noonan: (Limerick West): In the budget, the Minister for Finance has had to reconcile many conflicting objectives. He is to be particularly commended for making an extra provision of £57.5 million to ensure that the most vulnerable groups in our society are protected. It goes without saying that in order for more resources to be deployed in this area, restraint is required in others.
We in Government are besieged by claims that the system of taxation in this country is unduly harsh on ordinary working people with modest incomes. In this year's budget, further improvements are made, particularly with regard to those in the low or middle income groups. Increases in the income tax exemption limits, with a particular emphasis on families with children, will remove 24,000 taxpayers from the tax net completely. In addition, the standard rate of income tax will be reduced below 35 per cent for the first time in decades. To those who would ask for more relief and sooner, I can only reiterate the need for patience. There is no denying the fact that there are many people in this country who pay a higher level of taxation than they can comfortably afford. The Government cannot solve all problems at the same time.
There is, of course, more to economic management than financial reform at the centre. There are many specific initiatives which a Government can encourage at local level to encourage employment. In this year's budget the Minister for Finance has announced a number of such measures. These include a special scheme of bank loans for young people who are innovative, measures to encourage urban renewal and initiatives in the area of tourism. I am particularly pleased with the allocation of £100,000 towards the cost of restoring King John's Castle and its environs in Limerick. This project is of major importance to the Limerick area. When completed, I am certain it will help  in the development of tourism throughout the mid-west region.
All in all, the general economic outlook has improved enormously since this Government introduced their first budget in 1987. At that time the entire country was in a mood of despair. People were beginning to believe that the economic stagnation of the early and mid eighties was a permanent feature of life in Ireland. Business confidence was at an all time low and many despaired of our ability to correct the mess which had been created. However, the results of three decisive budgets, coupled with many other initiatives, have transformed the situation. Public spending has been reined. Interest rates have been brought down and held down. In 1988 average registered unemployment fell by almost 6,000 compared with 1987, the first such decline since 1979.
We can face 1989 with a certain degree of optimism. The level of inflation is set to remain below 3 per cent. Interest rates are likely to remain reasonably stable —at levels below UK rates. The world economy should continue to grow, albeit at a slightly reduced rate. Exports should continue expanding. All in all the forecast of a 3 per cent growth rate for 1989 seems quite reasonable.
In conclusion I would point out that when considering the economy we must judge both its condition and its direction. The condition of the economy may be deficient in some respects. However, the direction is correct. If we persevere in the right direction, then the condition of the economy will inevitably improve.
Mr. Kelly: The Minister eloquently exhorted the Irish people to patience. I was the first of the Irish people to hear his exhortation and I must confess to feeling fairly impatient at the terms in which he expressed this pious desire. He said that in the seventies and eighties we as people were unwilling to wait until our economy could afford to provide the standard of living and social services we observed in wealthier countries. The poor old people of Ireland have to take the blame for the prodigality of those  years. The old sow has to get another lash across its back for sinking to its knees under the burden of debt laid on it in those years. Who were to be seen, photographed shaking hands with, clapping on the back, flattering, sluthering and pandering to every section and group who wanted a few extra quid during those years but members of the Fianna Fáil Party when they were out of office? Now they are in and we are all to be patient. When they were out there was no talk of patience. If a Fine Gael Minister spoke about patience or restraint he was told he was a Thatcherite, obsessed with book-keeping. In the interests of a dead ideology he was planting his foot on the neck of the Irish people and destroying the hopes of the younger generation. That is the kind of language we heard from the far side.
I hope it will be seen to the credit of this party—I suppose it is a vain hope because in politics there is no gratitude —that at least the Government are not getting that kind of talk from us this time. We are not identifying with every pressure group who come to the door, agreeing with them that the Government should produce a few more million and that they are Thatcherite and book-keeping obsessed to refuse it. We do not flatter them. I had an intimidatory group of teachers on my doorstep—I call them that not because of their manners, which were impeccable, but because of their excessive numbers, in the region of 30 or 40. This did not happen when Fine Gael were in Government but rather when the Minister opposite and his colleagues were in office. I did not give them one inch, nor did any of my colleagues. I fought the Government's battle for them. I said I considered the Government had done all the country could afford at that time and that I did not consider they should go any further. I refused to go into the lobby against my own party merely to embarrass a Government who, for once, were trying to do the right thing. When did a Fianna Fáil Deputy ever treat people on his doorstep like that? When did he ever tell them the truth, although he probably had the same kind of insight about the  conditions of the mid-seventies or the mid-eighties when he was out of Government? Such considerations go to the wall when it is a question of doing down the other side, getting them out and getting one's own party in. That is the kind of village pitch and toss school political morality which, if we are not very lucky, will leave this country in the hands of the Cubans before we are finished.
We are back on the old budget debate again. I have often complained about the budget fetish which, needless to say, is due solely to the fact that the English have it. The Chancellor of the Exchequer in the old days used to show up with his silk top hat, his spats and his striped pants and his battered despatch box. It was a lady's day in the spring. Spring breezes fluttered the silks and muslins of the ladies as they crowded through the visitors' entrance at Westminster. Naturally, the Irish Free State and the Irish Republic when it followed on the heels of that polity had to ape the same manners. There is not a battered despatch box but no doubt if Ministers leave it behind for their successors it will become battered in time. The current Minister for Finance and his predecessors are not above the old fetish concerning budget secrets in a little box which will have to wait until the afternoon. The gallery is filled with their families, the ladies not wearing silks and muslins at the beginning of the year but certainly dolled up for the day. It is a big occasion because the English treat it as a big occasion. No other country in Europe has this absurd fetish of budget day when the entire Government programme in fiscal terms has to be put on paper and delivered in the course of a speech. It is an idiotic fetish which we should get rid of.
Not a single measure announced in the budget could not as easily be announced on any other day of the year, including Christmas Day, as far as the law of the State is concerned. There is not a single financial resolution imposing excise duties which could not be imposed on any other day of the year. In the past such resolutions have frequently been  imposed. No law and no clause of the Constitution prevents an infinite number of Finance Bills, one amending or modifying the other, introducing changes in income tax, VAT rates or any of the financial measures which require a legislative basis. These could be spread through the year and we would not be brought here for this big occasion on budget day when people fight for tickets to hear a dull speech for an hour and a half. The most recent was as dull as I have ever heard. They have all been dull, from both sides, since I became a Deputy almost 20 years ago.
The mentality of producing the Government's measures for the year on a particular day is damaging. The Government should realise that they are in control of a much more finely tuned set of mechanisms and should not feel committed to producing the whole thing on a particular day. They should say at the beginning of a year and for reasons of convenience to do with calendar and so forth, that they will make a certain number of changes and that they are not pre-empted from making further changes later as they could make changes of a beneficent kind or of a kind which will profit the economy or whatever the perceived necessity at the time may be. This idea that everything has to be forced into this single big occasion of Westminster dimensions is something we should get away from.
A budget debate is useful because, by tradition, one can talk about more or less anything which either approximately or remotely has to do with the economy and its management. The Minister is a reasonably taciturn Member of the House and—I must admit—he does not bore the ears off us very often or offer to speak unless he has to. He does not intrude wantonly on the time of the House either in Government or Opposition. Since I do not know him very well, he may genuinely be under the impression that people on this side of the House object to what he calls “the Government's overall strategy”.
 I have no objection to the Government's overall strategy so far as that consists of controlling expenditure. That cannot be done without hurting people and it may be—I do not want to appear to be indifferent to this—that some of the hurt is being borne by the wrong people. If that were—and is—the case I would be anxious to see it corrected. However, in general terms, I have no objection at all to it. The only objection I have—and it is one I have had in and out of season no matter which party are in Government—is to the callowness of the effort which a pure budgetary operation represents. We need something a great deal more in the nature of deep ploughing of the economy and of the society which subtends the economy, to use a word which I know Deputy McCartan is fond of—I remember it from my days of learning geometry.
The society subtends the economy, it stretches beneath it so to speak, and the economy is built upon it. Many of the weaknesses in our economy essentially arise through the disposition of our society, some of them related to demography, family size, life patterns and so on, which are not amenable to Government interference — nor do I suggest such a thing—but more of them are matters related to the national psychology which can be turned around and changed over a period. Huge changes can be achieved in people's outlook and the way they look at the world in a short period. I do not want to produce an instance which is too disastrously and exaggeratedly larger in scale than what I am talking about, but let us, for example, look at an event in European history like the Reformation. I am not taking sides, all I am saying is that there is a huge difference between the European world as it was before the Reformation and— certainly a very large section of it, the Protestant section—afterwards.
In the 15th century European man was terrified of this shadow. He thought there were devils, witches and beasties around the place and crazy old women were burned as witches. He savagely persecuted any lack of orthodoxy according  to his own frequently extremely ignorant, superstitious and ruthless precedent. He believed things that no one now believes, whether they wear a clerical collar or not. However, during that time, man not only believed in these things but he was terrified of their shadow and sound. He celebrated about one day out of three as a saint's day, he went on pilgrimages and worshipped relics of a kind which, if they were all gathered together, would have represented one thousand times the bulk of the original saint's body or bones for which they were being sold, bartered and marketed. That was medieval man.
One hundred years later the spell was broken, at least for a large part of Europe, and these were the same people, the same blood, the same Germans, French and English, their minds had been changed, they were no longer willing to believe things which were absurd and were no longer willing to enforce those beliefs by cruelty. The burning of witches and all these things went out of fashion although they were the same people with the blood of their grandfathers and greatgrandfathers coursing through their veins.
I am not pretending that we are faced here with a problem which is in any sense —except an absurd one—comparable with the immense convolution I have just referred to in talking about the late Middle Ages. Of course, I am not making any such suggestion but I am saying that it is possible to change a people's mentality, not by blood, fire and sword, but by careful Government and by inspired and understanding Government. That is something of which I am afraid I saw no sign in the Minister's budget last week. Equally, I saw no sign of it in the budget produced by this side of the House when we were in office.
At present there is huge emigration. I have frequently said inside and outside the House that I see no harm in emigration provided it is rational and not permanent. In particular I have advocated that we should look towards the European Continent which is only an hour or an hour and a half away by air, and flights are getting cheaper all the  time. We should almost think in terms of commuting there because there is a centripetal tendency in the Community, against which we have to fight. We are on the outer periphery of it and no amount of investment will counteract that. We must understand our position as being on a periphery which, like all the other peripheries of the Community, tends to become drained of its resources towards the centre. We should not fight it but roll with the punch as it were and try to make the most of it. If we cannot employ our people here at home except at an unacceptably low standard, let us think of the possibilities there are for them an hour to the east so that we can see them at weekends and not merely once a year.
I heard our Deputy Noonan make an excellent speech delivered at no notice in response to the budget. He talked about a commentator—I knew immediately who he meant—who is a great admirer of the Taoiseach and has been shouting “hurrah” for him for the last 20 years. This commentator gave the last Government an unmerciful lashing day in day out because of their presiding over a sinking economy and so on, and who is chiefly remarkable and notable in the literary sense for having documented the decline of an Irish town back in the fifties.
Only a couple of days before our Deputy Noonan made his speech, I had read articles—as it turned out he had also read them—which ran for two or three days in The Irish Times about the human desolation in the eastern parts of County Mayo at present. I am rather out of touch with rural Ireland living where I do but my colleagues in the party tell me that it is the same everywhere else. There is a great silence over the place and Knock Airport is used mostly for returning emigrants and for funerals. The big hospitality dispensed by the publicans in that area is to funeral parties. The remains of loved ones are brought in from abroad. I am not producing this as a stick with which to beat the Government, I am quite certain that the underlying causes were there in our time too, but if that is so, we should try to understand why it  is so. It is not all because of financial economic necessity.
I can quite understand it where you suddenly get a factory closure and the people in the district have been conditioned to expect employment only in terms of being found a place in a factory. Naturally there will be devastation, human as well as everything else, and naturally the only thing people can think of, if they cannot easily get another job, is to emigrate. The descriptions of the awful rushing and clambering to try to get any kind of a little job in whatever other little business might be nearby are heart-rending. I am sure the Minister had the same reaction if he read the articles. However, it is not all like that.
I saw the response of the Conference of Major Religious Superiors to the budget. It was a very disappointed response and they assert—I do not question their sincerity—that the big end of emigration is involuntary emigration. I question that, I am not contradicting it because I do not have the facts necessary to do so authoritatively. The truth is that nobody really knows why this or that percentage of people emigrate. My two elder sons, in their early and mid-twenties, are abroad, one in London and one in America. They were not driven out of the country by economic necessity and neither of them ever looked for a job in Ireland. The temperament of one is such that he finds it more exciting, interesting, amusing and promising to live in London while the other is pursuing further studies in America which he cannot pursue here. These are two perfectly ordinary boys who are not distinguishable from tens of thousands of others of their age but they are not involuntary emigrants. I hope that one or other of them will come back. If they do not return they must be counted as emigrants but no one has driven them out.
What then leads to such people leaving the country? That is the sort of question the Government should ask themselves. It is not simply a matter of putting a factory at the end of every boreen so that every mother can have each of her sons home for tea but rather of delivering a  country which is exciting, interesting and open enough, with frontiers within itself which recede into the distance, which will excite young people and get them to see that this is a country which has a buzz of a different kind from that in England or America. If our young people want to look abroad I think they should look towards continental Europe where they can go as of right. We do not have to skulk around Germany or Holland as illegals waiting for someone to make up ballads such as the one about the illegals of 1988 which, incidentally, has a grand truculent ring to it. We do not need to skulk around Europe as illegals as we are entitled to go there but who thinks along those lines? If one were to visit a school they could say, statistically, that between 30 per cent and 40 per cent of the leaving class will be abroad in Baltimore or in Camden Town in 12 or 18 months' time. If one were to ask the students why they do not think in terms of going to Eindhoven or Frankfurt, natural politeness would prevent them from saying this, but they would think that one was taking leave of their senses.
A Government should try to discover what exactly it is that makes people leave as in most cases it is not economic necessity and they should ask themselves whether a silent judgment is not being passed on the style and atmosphere of the society over which they so smugly preside and see whether something can be done about it at that level. People find this country boring, which it does not have to be and which it is not for those who have been lucky to find a fulfilling niche, occupation or profession but for many it is. Why is it boring and what can a Government do to enlighten themselves about what they are doing wrong, and about the way in which they are steering their society and presiding over it?
There is another dimension which the Government ought to address. There is a resistance to anything which is not employment of a kind in which you do what you are told or of a kind which traditionally is of the middle class, white collar professional sort. No Government have ever made a serious attempt to bring  forward a tradition of craftwork, of skilled and highly individual work done by hand. I am not talking about the making of souvenirs but rather about the whole range of individualised craftwork on which the modern world is placing an increasing importance. The Waterford Glass enterprise is the one big exception to the rule but what is happening with that company? Their order books are full and their customers are angry and disappointed because they cannot get deliveries. That company do not seem to be able to get their act together. I am aware that there are other crystal factories but there should be 100 such different trades and specialised, individualised enterprises. The modern world is becoming homogenised, everybody now uses the same makes of sports equipment, listens to Walkman radios and drives the same types of car. This is something that the human spirit rebels and revolts against. When people have any discretionary income they are willing to spend it on things which are not homogenised and they value something which is individual and produced by hand.
At the beginning of January I spent three weeks in Germany. I have an old Aran sweater which one of my sons gave me. It is now getting a bit seedy and run down as it has been washed and worn so often but I wear it when I am working. More than one German spotted me wearing it—it was dilapidated in the sense that perhaps they would not be seen dead in it—but they recognised it as being hand made and that gave it a value quite independent of its calorific or aesthetic qualities. It was the work of an individual human eye and hand and this raised it above the homogenised level of industrial products. That is a perception which was documented about 15 years ago by Dr. Kieran Kennedy who was then head of the ESRI in an absolutely marvellous report on the Danish economy. In many respects the Danes have to contend with some of the peripheral problems we have to contend with but they have thrived as a result of concentrating on what was individual, small scale and high quality. They are associated in people's minds  with those values and that is a large part of the secret of their success.
An Irish Government ought to put their minds to that matter seriously and in doing so they should run their eye around the things in this country which prosper and which get written about in the inflight magazine, Cara, such as the making of harpsichords in some out of the way place, or making an unusual kind of sheep's cheese. Such activity may be easy to sneer at and laugh at but these are the high quality products which mean prosperity. More than likely they are being made by foreigners—an English woman running a hotel, a German raising a herd of deer, a Canadian running a shall fish farm or a couple of Belgians producing quality woollen products. Very rarely will it be a person of native Irish blood who sees an opportunity such as that and makes the most of it. This is not because we are worse than anybody else or are defective in any way but rather that we are not trained or encouraged to think like that and are shy about inviting people in, as we should do and which is what many countries have done in the past, to show us how these things are done. A Government who are struggling —I suppose the Government with their awful record in creating the problem must be struggling—with the problems of unemployment and emigration ought to ask themselves whether there is a level in the Irish psychology which needs to be addressed and to see, as a consequence, whether our education system, including linguistics education and industrial education, needs to be, in a crash programme, rapidly overhauled before we have the social and psychological infrastructure on which a healthy economy can be built.
In half an hour I am by no means able to draw up a complete list of the things I think are important to mention but perhaps most damaging of the items is our idiotic complacency, the formal official complacency of the Irish. We are not, as individuals, complacent. Talking over a drink or in conversation with our friends or family we are not complacent but we  feel publicly and officially that we have to be complacent. There is an awful lot of second to noneism in this country. Publicly we say that everything here is second to none. We say that the streets of Dublin are second to none. About three years ago I remember making a very disparaging speech about the vile, dilapidated and run down condition of this city which is certainly the scruffiest between here and Calcutta, and I was attacked by a colleague of mine in my own party, a member of Dublin Corporation, who said that Deputy Kelly was an elitist and spends too much of his time abroad in the university cities and does not understand that Dublin is second to none in this, that and the other.
I know that it is not second to none and as long as the public keep me here in the Dáil I will go on saying it and perhaps somebody will have the modesty to say no, it is not second to none. We ought not to run millennia when we are a public reproach and when one cannot walk 100 yards in any direction from O'Connell Bridge without seeing something which would make one cry with shame and which ought to make a city councillor hang himself with shame. We ought not to be running millennia when that is still true, but the complacency, the second to noneism, does not allow us to look at it like that.
At the other end of the scale we had an example here of a miniature but very illuminating thing two days ago. In mentioning the Minister, Deputy Reynolds, I do not want to single him out because I am certain he did only what he was recommended to do by his officials or what another Minister in his position would have done. I put a question down here about the leprous condition of the bank notes, particularly the £1 notes. Let me show the House what I got in change in the restaurant of Leinster House this afternoon. Look at that. That is the place where they sell food. Look at that £5 note. I sometimes get a bundle of £1 notes into my hand and I can smell them and I am perfectly certain, though everybody else here in the House may be  laughing at it, I am only repeating an experience everybody else here has had. Do you know the answer I got from the Minister, Deputy Reynolds? He rejected my use of the word “insanitary” to describe the banknotes. He said they are circulated more now than they used to do. That is perfectly true, but he would not use the word “insanitary”. What word would he use when banknotes smell up at you from your hand? They stink from your hand. What kind of impression can that create on tourists when they come in and produce a glittering, clean German 100 DM note and get a filthy, leprous, crawling pile of these horrible little filthy rags into their hands in exchange? But no, we are second to none. Our currency is second to none and if any consideration is being given to improving the matter it will be all the better when the consideration is complete. They are thinking now of a £1 coin. It is harder to make a coin permanently filthy than a piece of porous paper. They are thinking of it because the English, of course, have a £1 coin. We should be thinking ahead of them; we should be thinking of £2 and, yes, £5 coins because that is where we are going to end at the rate of the depreciation of currency.
Many people will think this is just eccentric elitism once again. It is not. It is a scandal that a Minister could pretend or think it was his job to pretend that our currency is not a reproach to us. Let me add as a footnote to this complacency that it is backed up and made worse by a streak of mandarinism, official and ministerial. I put that question about the banknotes down in this form: “To ask the Minister for Finance if he has noticed the increasingly insanitary condition of the paper currency.” When the question appeared on the Order Paper that had been changed to read “To ask the Minister for Finance if his attention has been drawn to the increasingly insanitary condition of the banknotes”. Therefore, a Minister is not allowed to notice. The silly ass solemnity which is part of this complacency is such that somebody feels it his job not to allow a Minister to notice  things. He is not supposed to touch currency himself. He is like old Queen Mary in England or another of the Royal Family who would saunter up through Harrods or Marshall and Snelgrove's picking up an umbrella here, a reticule there, and ten steps behind went a detective discreetly paying. He had the banknotes in his pocket. The Queen, naturally, must not be allowed to touch or even see money; or, as is the case in this country, to smell it, and the Minister must not be allowed to notice it. He has to have it at best drawn to his attention. That is the kind of silly ass solemnity and complacency I want us to get away from, and until Government go into retreat and examine their consciences about the psychology from which we all spring and which we all have to fight — I the same as everybody else — and ask about our level of imperviousness to proper standards of cleanliness, punctuality, delivery, of being at a place when you say you will be there, keeping something tidy, we need not be amazed when tourism does not explode or explodes only in terms of returning emigrants.
That is nothing like all I have to say but it is all I have time to say. The budget debate is useful enough and I have no objection to the overall effort of the Government to save money, but if they think that strategy by itself is going to rescue this economy they are making a serious mistake. Only when they address their minds to education in particular and to whatever other levels on which it may be possible to approach the national psychology in order to achieve our turn around in as deep and radical a way as, for example, the Reformation in the 16th century in regard to the psychology of the European Continent, will we be able to look forward, situated as we are on the rim of the world, to the prosperity we all talk about.
Mr. Leonard: I congratulate the Minister for Finance on his first budget. He is in a unique position because fully 80 per cent of this House accept the main thrust of the budget, according to their comments now. All the debate, therefore, is about small details of the budget. It is a good budget. It is responsible. It is sympathetic towards those on very low incomes and those with particular problems. It started on the road to getting personal income tax down to a reasonable level. That is only a start, it is true, but it is the first move in that direction for many years. We have had an effort to whip up concern about a proposal that the better off families, probably those with an income over £30,000 per year, would lose the children's allowance. I doubt if many tears will be shed in the majority of homes if such a proposal were to be implemented. It is not the function of the Minister for Finance to share out between husband and wife the income of the country's top earners. If that is the most serious criticism of the budget then it is away and flying.
The Opposition have complained about changes in house loan interest relief but, to be fair, their protest has been very muted. Well it might be, as an examination of the proposals under this heading will show. The scheme was never intended to give relief to a well off person purchasing a luxury property. Such a person is not entitled to help from the ordinary taxpayer. If the purchaser is moving upmarket just to keep up with the Joneses he should pay for such a move and not expect support from the taxpayer, the ordinary man. The interest relief is intended to help the taxpayer in the purchase of a decent three or four bedroomed house and that type of relief will never be at risk from Fianna Fáil. We must keep in mind the easement on loan repayments arising from the present low level of interest here as a consequence of very low inflation. Low interest is a much better contribution than interest relief. The economy has  steadied, as is recognised at home and abroad. Irish interest rates are holding independent of the repeated increases in Britain and are a clear indication of the healthy state of the economy. The Government's steady handling of the economy explains the state of the economy, and the budget and its benefits are a logical result.
Sir, I should have said at the commencement that I propose to share part of my time with Deputy Denis Foley. If we can afford more benefits we can treat ourselves to more benefits, but only then. Our greatest single need is the creation of real, productive jobs in industry, tourism, service industries and anywhere a productive job can be created. The atmosphere is coming right; indeed, the creation is now in hand. Like everyone else, I find the pace too slow but we are on the right road. The budget is an essential part of the recovery plan. It provides a sound base from which to move. The most important thing is confidence and we have at present partly restored belief in ourselves. Many industries lost in recent years could be revived. It is incumbent on us to make the most of our resources.
When I was first elected to this House in 1973 I sought support for an ailing tanning industry which at that time was providing more than 100 jobs in County Monaghan. I continued my fight for that industry over many years but the concerns collapsed. Since then we have produced a better quality of animal hides because of the success of our warble fly eradication scheme but in excess of 90 per cent of them are exported. At the same time we import more than 90 per cent of our footwear requirements. The manufacture of footwear has been a tradition in my area for generations. We had many small family concerns and some of them continue to flourish. It is our duty as public representatives to bring to the attention of Ministers any industry that is capable of even providing one job. If we do that we will succeed in creating many small industries throughout the country.
In the course of his speech the Minister  dealt with the development programme and the aid from the Structural Funds. He told us that it was the Government's intention to make maximum use of the increased funding decided at the Summit Meeting of February 1988 in preparation for the single market in 1992. It is appropriate that we should examine the allocations under the Structural Funds and compare them with those paid out under the ERDF since it was established in March 1975. The criteria under the ERDF are laid down in Regulation 724/75 of the Council of 18 March 1975 which established that fund. That regulation states:
Whereas regional development requires investment in industrial or service activities ensuring that new jobs are created and existing jobs maintained on the one hand, and on the other, investment in infrastructures directly linked to the development of these activities; whereas it is necessary to contribute to the creation in certain less-favoured agricultural areas, of adequate, collective facilities to ensure that farming is continued and a minimum population maintained;
Whereas the principle should be adopted that the fund's assistance should be allocated according to the relative severity of regional imbalances; whereas account should also be taken of other factors determining the interest of investments from the point of view of the region concerned as well as from that of the Community;
Since 1975 we have received £565 million under the ERDF. Counties Cavan, Leitrim and Monaghan, which have been seriously affected by the Border troubles, fared worst of all of the 26 counties with a total allocation of £12.7 million. That amounts to about £1 million per year for the three counties or a little more than £300,000 per year per county. It is interesting to note that 14 other counties received more than the combined total of those counties, including our neighbours in Louth whose representatives are complaining that they are not getting an adequate share. There is no doubt that  we have grounds for complaint in regard to the distribution of those funds.
Let us look at the distribution on a regional basis. The entire province of Connacht and the three counties of Ulster received £105 million as against £98 million for Cork and £127 million for Dublin. The total for the six Border counties represents 10 per cent of the £565 million while that allocated to the counties of Connacht and Ulster represents less than 20 per cent of the fund. There is no basis, in regard to the population or the location of the counties, for the grossly unequal distribution of those funds. The Directive clearly states that special recognition should be taken of peripheral and disadvantaged areas. That was also the conclusion of the EC Social and Economic Committee following their visit to and survey of the Border region in 1983. However, their conclusions, and the terms of the Directive, were completely disregarded.
We are entering a new era and we are being told that the EC will be concerned with programmes rather than projects. We have advisory groups, working groups, regional and national plans but in my view they will amount to no more than the same as before. Now is the time to set guidelines so that there will be a fair distribution of EC funds in Border counties.
The Regional Fund to date has provided 50 per cent of estimated project cost. At the Summit meeting in February last is was agreed that not alone would additional funding be provided — a doubling of the fund was mentioned — but that the percentage would be increased to a maximum of 75 per cent in some cases. The problem with matching funding, be it 25 per cent or 50 per cent, is that it has to be provided from three sources, the Exchequer, local authorities or private subscription. The applications must come from development agencies in the region and local authorities. We must remember that double nothing does not amount to anything. In my view the EC have a responsibility to ensure that these funds are devoted to areas most in need of them. The EC study stated that  Leitrim, Cavan and Monaghan were the most disadvantaged counties in a disadvantaged region. Particular attention was paid to the town of Clones and the group singled it out for special attention because trading in it had collapsed due to the Border troubles. A project has been put forward for the area and I hope it is given sympathetic consideration.
We have heard a lot about studies but in my view too many studies are being carried out. We can rest assured that the EC will provide money for all the studies we want to carry out but I wonder if we need to carry out any more. I have the results of many studies carried out in the Border region in my possession but what we want now is money and action. Local sources are not in a position to provide money for the matching funding scheme and as a result of that we are losing out heavily.
I compliment Deputy Seamus Kirk on the work he has done in relation to An Bord Glas. When reviewing the year's activities it is seldom that a Minister can look back and say that he has met the job targets which he set himself. It looks as if An Bord Glas with a five year plan are well positioned to reverse the trend of massive fruit and vegetable importation. No one has been more critical of the importation of fresh vegetables and fruit than I have been. When we were in Opposition a number of Fianna Fáil Deputies travelled north and south of the border to study fruit and vegetable growing techniques and it is on those studies that the Minister has based his plan. The Minister has had a terrific measure of success.
Recently Monaghan Mushrooms announced development proposals which should lead to an expansion by more than 40 per cent in mushroom production. This, together with other expansion plans currently in preparation, indicates that the mushroom industry will double in the next three to four years. This will result in exports valued at about £20 million and it will give increased employment of about 300 in the mushroom companies and of another 1,200 in the growing and  harvesting of crops. In relation to the nursery stock, over the next five years it is hoped to create an additional 400 jobs giving an increase in production worth £7 million.
In 1986, 104,000 tonnes of potatoes valued at £12 million were imported. Over the last two years the imports have reduced dramatically and we are now importing only 30,000 tonnes of potatoes. There was a weakness in this sector with regard to chipped potatoes but Donegal Foods are now hoping to capture 30 per cent of that market. The Government are looking to the EC with regard to producer group regulations and for assistance in providing storage for potatoes. We need storage capacity for 80,000 tonnes of potatoes. I support the Government in that aim. I was involved in the potato business and 20 years ago I visited Scotland to look at their storage facilities.
An Bord Glas has recently taken over Lairds of Drumshanbo and this can be interpreted as a vote of confidence in the soft fruit industry. As a result of meetings in Monaghan and Cavan it has been ensured that there will be enough growers to substantially increase the throughput there. We visited orchards in Kilkenny and we saw great opportunities there also for expansion in production.
On a number of occasions over the last few years there were media scares about disease, the most recent, a month before Christmas about salmonella in eggs. This was a false alarm because no trace of it was found in commercial eggs. Since that scare producers suffered heavy losses due to reduced prices because they had to export much of their products as they could not sell them on the home market. Most of these producers have to make repayments on housing, equipment and replacement stock. The Department should ensure that there is no media hype in relation to allegations of disease in future. Unless an allegation is well substantiated it should not get the damaging  publicity which salmonella got on the last occasion.
In my constituency replacement and new poultry sheds are being built on a continuing basis. All of those poultry sheds are imported. I have raised this with the IDA. The sheds have a very sophisticated system of ventilation and so on. The Confederation of Irish Industry are moaning about lack of work. They should apply themselves to this area and they should arrange with the IDA for the manufacture of those sheds. This is a very obvious need which I have brought to the notice of the authorities and I will continue to bring it to the notice of the authorities until action is taken.
Mr. Foley: I am glad to have this opportunity to speak on the budget and I congratulate the Minister on introducing his first budget. The budget confirms the commitment of this Government to bringing order to the public finances and to build up the economy. This commitment is consistent with the overall strategy set out in the Programme for National Recovery. That programme which has the support of the major social partners will continue to provide a framework for economic and social development and thus will reduce the burden of taxation and provide extra resources for those most at risk in our society. In under two years in office the Government have succeeded in lifting the country from doom and gloom. We are in a new phase of growth and we have confidence in our ability to succeed.
The Government have once again demonstrated their commitment to tourism in real and practical terms in the budget. The Government came to office two years ago with a programme to develop tourism — the first Government to recognise the potential for tourism and treat it seriously. The policies have been specifically geared to free tourism from some of the fetters which limited its capacity to grow. There has been a dramatic improvement in the fare structure from Britain and from some European countries. This has been reflected in major increases in the number of visitors  coming to Ireland. The fact that we have dramatically reduced inflation has helped restore competition to the industry. Additional incentives matched by extra funds have meant a dramatic improvement in the quality and level of marketing being done not just by Bord Fáilte but by individual operators. We have got the message across that tourism is competing in a very difficult world. We must be competitive and aggressive in our marketing. Bord Fáilte have been given new direction and are providing sound leadership to the industry. The results are being seen.
In the Programme for National Recovery the Government set clear targets for tourism — to double tourism numbers in five years, to generate a further £500 million in foreign revenue and in the process to create 25,000 new jobs. At the end of the first year of that programme tourism has achieved a growth of 13.5 per cent. It is very close to the target and it is almost double the international rate of growth. While revenue figures are not yet available it is evident that there will be a substantial growth in foreign earnings. The review of the Programme for National Recovery has stated that industry has created 25,000 new jobs in the year. This performance should be applauded and welcomed. The prophets of doom and gloom seem to take more pleasure from decrying what this country does well rather than applauding our achievements. Tourism has suffered more than most industries in this respect but despite the problems — rapid inflation, high costs, the damage done by the situation in Northern Ireland and the absence of product renewal or improvement, not to mention the growth of international competition, the tourism industry has continued to attract foreign revenue and create new jobs. That is not to say we have any reason to be self-congratulatory or complacent, far from it. The tourism industry constitutes an integral part of the solution of our economic problems and the rate of progress towards achieving the requisite targets must be accelerated.
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